Fiscal 2018 Comprehensive Annual Financial ReportCITY OF
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR 2018 July 1, 2017 - June 30, 2018
CITY OF KALISPELL
ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letterof Transmittal............................................................................................................................................ 3-8
Government Finance Officers' Association Certificate of Achievement......................................................... 9
Organizational Chart........................................................................................................................................... 10
CityElected and Appointed Officials.................................................................................................................. I
FINANCIAL SECTION
IndependentAuditor's Report............................................................................................................................12-14
Management's Discussion and Analysis.............................................................................................................15-27
Basic Financial Statements:
Government -wide Financial Statements:
Statementof Net Position....................................................................................................................
28
Statementof Activities.........................................................................................................................
29
Governmental Fund Financial Statements:
BalanceSheet — Governmental Funds................................................................................................
30
Reconciliation of the Balance Sheet — Governmental Funds to the Statement of Net Assets ........
31
Statement of Revenues, Expenditures, and Changes in Fund Balances — Governmental Funds..
32
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds to the Statement of Activities......................................................................
33
Proprietary Fund Financial Statements:
Statement of Net Position — Proprietary Funds.................................................................................
34
Statement of Revenues, Expenses, and Changes in Net Position — Proprietary Funds ..................
35
Statementof Cash Flows — Proprietary Funds..................................................................................
36
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position — Fiduciary Funds...................................................................
37
Notesto the Financial Statements............................................................................................................38-89
Required Supplementary Information other than Management Discussion and Analysis:
Schedule of City's Total Liability and Related Ratios — Other Post -Employment
HealthcareBenefits..............................................................................................................................
90
Schedule of City Contributions — Other Post -Employment Healthcare Benefits ...........................
91
Schedule of Proportionate Share of the Net Pension Liability.........................................................92-94
Schedule of Contributions —Post-Employment Benefits....................................................................95-97
Budgetary Comparison Schedule — General and Major Special Revenue Funds ...........................
98
Notesto Required Supplementary Information...................................................................... 99-106
Supplemental Information:
Combining and Individual Governmental Fund Statements and Schedules:
Combining Balance Sheet — Nonmajor Governmental Funds.........................................................107-113
Combining Statement of Revenues, Expenditures and Changes in Fund Balances —
Nonmajor Governmental Funds....................................................................................................114-121
Budgetary Comparison Schedule —
OtherMajor Funds.........................................................................................................................122-123
Budgetary Comparison Schedule —
NonmajorGovernmental Funds....................................................................................................124-146
Combining and Individual Proprietary Fund Statements:
Combining Statement of Net Position — Nonmajor Proprietary Funds .........................................
147
Combining Statement of Revenues, Expenditures, and Changes in Fund Net Position — Nonmajor
Proprietary Funds..........................................................................................................................
148
Combining Statement of Cash Flows — Nonmajor Proprietary Funds ..........................................
149
Combining and Individual Agency Fund Statements:
Combining Statement of Fiduciary Net Position - Agency Funds ..................................................
150
Combining Statement of Changes in Assets and Liabilities - Agency Funds ..............................
151
CITY OF KALISPELL
ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
STATISTICAL SECTION
Financial Trends
NetPosition by Component..................................................................................................................... 152
Changesin Net Position........................................................................................................................... 153
FundBalances of Governmental Funds................................................................................................. 154
Changesin Fund Balances, Governmental Funds................................................................................ 155
Revenue Capacity
MarketValue of Taxable Property........................................................................................................ 156
Directand Overlapping Property Tax Rates......................................................................................... 157
PrincipalProperty Tax Payers............................................................................................................... 158
PropertyTax Levies and Collections..................................................................................................... 159
Water— Sewer - Sold by Type of Customer.......................................................................................... 160
Waterand Sewer Rates........................................................................................................................... 161
Debt Capacity
Ratiosof Outstanding Debt by Type...................................................................................................... 162
Ratiosof General Bonded Debt Outstanding........................................................................................ 163
LegalDebt Margin Information............................................................................................................. 164
Directand Overlapping Governmental Activities Debt....................................................................... 165
PledgedRevenue Coverage..................................................................................................................... 166
Demographics and Economics
Demographic and Economic Statistics................................................................................................... 167
PrincipalEmployers................................................................................................................................ 168
Operating Statistics
Full-time Equivalent City Government Employees by Function/Program.........................................
169
OperatingIndicators by Function..........................................................................................................
170
Capital Assets Statistics by Function/Program.....................................................................................
171
MajorWater System Users.....................................................................................................................
172
TaxIncrement Urban Renewal Bonds...................................................................................................
173
Major Taxpayers in the Airport TIF.....................................................................................................
174
WestsideTIF Operating Data.................................................................................................................
175
General Obligation Debt Ratios.............................................................................................................
176
REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS AND SCHEDULE OF EXPENDITURES OF FEDERAL
AWARDS AS REQUIRED BY OMB CIRCULAR A-133
Schedule of Expenditures of Federal Awards..................................................................................................
Notesto the Schedule of Expenditures of Federal Awards.............................................................................
Independent Auditor's Report on Compliance and on Internal Control over Financial Reporting
based on an Audit of Financial Statements Performed in Accordance with Government
Auditing Standards.................................................................................................................................
Independent Auditor's Report on Compliance with Requirements Applicable to Each Major
Program and Internal Control over Compliance in accordance with OMB Circular A-133 ............
Scheduleof Findings and Questioned Costs.....................................................................................................
177
178
179-180
181-182
183-184
INTRODUCTORY
SECTION
I S P E LJLi■�
MONTANA
January 15, 2019
City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903-1997
Telephone (406) 758-7701 Fax - (406) 758-7758
To the Honorable Mayor, members of the City Council, and Citizens of the City of Kalispell,
Montana:
CAFR TRANSMITTAL
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, 2018, 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, as
presented, is accurate in all material aspects; that it is presented in a manner designed to fairly
set forth the financial position and results of operations of the City as measured by the financial
activity of its various funds; and that 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 maintained an internal control system designed to ensure that the assets of the
City are protected from loss, theft or abuse, and to 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 a control should not exceed the benefits likely to be derived; and (2) the valuation
of costs and benefits requires estimates and judgments by management.
Independent Auditor
Wipfli 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, 2018, are free of material
misstatement. The independent audit involved examining, on a test basis, evidence supporting
3
the amounts and disclosures in the financial statements; assessing the accounting principles used
and significant estimates made by management; and evaluating the overall financial statement
presentation. The independent auditors concluded, based upon the audit, that there was a
reasonable basis for rendering an unmodified opinion that the City's financial statements for the
fiscal year ended June 30, 2018, are fairly presented in conformity with US GAAP. The
independent auditor's report is presented as a component of the financial section of this report.
Transmittal Letter
GAAP require that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management's Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement MD&A and should be read in
conjunction with it. The City of Kalispell's MD&A immediately precedes the City's basic
financial statements within this report.
Profile of the City of Kalispell
The City of Kalispell, incorporated in 1892, is the county seat of Flathead County located in the
western part of the State of Montana. This historically has been one of the top growth areas in
the state. The City of Kalispell is empowered to levy a property tax on both real and personal
properties located within its boundaries. It also is empowered by state statute to extend its
corporate limits by annexation, which occurs periodically when deemed appropriate by the
governing council.
The City of Kalispell is operated 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 City also operates as Enterprise funds: water, sewer, solid waste,
and an airport.
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 discretely 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 public hearings 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 individual department heads are responsible
for expending within individual fund budgetary limits.
Budget to Actual Comparisons
The State municipal budget law stipulates that money, other than payments from agency funds,
may not be drawn from the treasury of a municipality except pursuant to an appropriation.
Therefore, a legally adopted budget is required for all funds, with the exception of agency funds.
The City legally adopts a budget for the required funds. Consistent with past years, the City
established the legal spending level at the fund level for the fiscal year 2018 budget. The City
Manager and Finance Director may make transfers of appropriations within a fund. Transfers
between hinds, however, require approval of the City Council. Budget -to -actual comparisons
are provided in this 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.
Other Postemployment Benefits — GASB Statement 75
The City of Kalispell reported the net opeb liability, required under the Governmental
Accounting Standards Board (GASB) Statement No. 75, in this financial report and the related
financial statements. Although the City reported this liability, related deferred outflows, and
related expenses and expenditures, the City does not agree that this represents a legal liability
and further believes that the presentation of this activity in the financial statements will
eventually be misleading to the users of the statements. In this, the 2nd year of GASB 75
implementation, the recorded net opeb liability is $4,030,809. This liability was reported in
fiscal year 2016 as net opeb obligation ($2,110,870) under GASB 45 guidance. This very
significant increase is the result of no longer, under GASB 75 guidance, being able to amortize
the remaining liability over 30 years. The City is now required to record the entire liability.
The City plans to continue funding the employee health insurance plan on a "pay as you go"
basis, and does not plan to fund this liability. City management feels it would be fiscally
irresponsible to take an amount equal to the actuarially determined liability and place it in an
irrevocable trust fund that would never be used and would most likely increase as the City, and
the related number of employees serving it, continues to grow. Retirees can leave the plan at
anytime and the City would have unwisely used funds collected from its citizens. Insurance rates
have been historically set so each plan offered is fiscally sound. Rates can be changed and
benefits altered at anytime to ensure the plans remain properly funded.
Because the City will not be funding this liability, it will continue to increase. The financial
statements will reflect the impact of this very large net opeb liability. Management does not feel
it has legal substance as nothing in state law or any contractual agreement requires the city to
offer the same rates to retirees, spouses and their dependents as other participants.
Pension Liability — GASB Statement 68
The City implemented GASB Statement 68, Accounting and Financial Reporting for Pensions
for fiscal year 2015. This statement resulted in a net pension liability at the end of fiscal year
2018 of $13,405,679. The City participates in three State of Montana cost -sharing multi -
employer pension plans. The State legislature determines the rates all employers and employees
pay to participate. Each plan has a different level of net pension liability. GASB Statement 68
requires the City to record its share of the net pension liabilities even though we have made all
statutorily required contributions. See Note F for a description of the plans the City participates
in.
Factors Affecting Financial Condition
The City has started to see new construction comparable to the first few years of this century and
home foreclosures have slowed substantially. Kalispell Regional Medical Center continues to
grow and, although they are considered not for profit, their expansion helps the City's economy
in many other ways. Healthcare, in general, has grown over 180% since 1990 and now
employees over 6,300 people in Flathead County. Economist are predicting another 21 percent
increase in health care employment opportunities locally, over the next 10 years.
Although Kalispell is not in close proximity of a major metropolitan center, hundreds of
technology and manufacturing companies, from computer equipment to food and beverage to
pharmaceuticals, have found the area to be favorable for their operations.
Tourism is one of the area's major economic drivers. With Glacier National Park visitations
setting annual records, a major ski resort within a few miles, the proximity to Canada, and other
shoulder season draws, there is not many days of the year that visitors don't purchase services in
Kalispell and the Flathead Valley.
Montana experienced a population increase between the 2000 and 2010 census of 9.7 percent.
Kalispell, however, experienced an increase of 40.1 percent, while Flathead County experienced
growth equal to 22.1 percent. The July 1, 2015 (most current) estimated population of Kalispell
is 22,052 according to the U.S. Census Bureau, an increase of 2,125 (11%) from the 2010 census
population of 19,927.
The unemployment rate for the 2017 calendar year for Flathead County (City of Kalispell is not
available separately) was 5.2 percent. This compares to 5.6 percent for the 2016 calendar year, a
positive adjustment of about 8%. The most current unemployment rate (not seasonally adjusted)
available (October 2018) for Flathead County is 4.1 percent. In comparison, the State of
Montana's October 2018 unemployment rate (not seasonally adjusted) is 3.3 percent and the U.S.
rate is 3.5%. The County's unemployment rate has continued to improve from a high of 14
percent in January of 2011.
According to the United States Census Bureau, the per capita income for Flathead County was
$27,083. This is under 1% less than the State of Montana's estimated per capita income
($27,309), and 10% less than the Nation's estimated per capita income of $29,829.
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.
6
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, Courts 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.
New reappraisal values were used for property tax purposes in tax year 2017 (fiscal year 2018).
Statewide, taxable values rose about 8%. In Flathead County, reappraisals resulted a taxable
value increase of about 9%. The City of Kalispell also showed an increase of about 8%. The
next reappraisal is anticipated to be complete by the end of 2018 for the State legislature to
review during the 2019 legislative session. Any changes made will affect the 2019 tax year
(fiscal year 2020).
Major Initiatives
On April 21, 2014, the City Council voted unanimously to annex 40.69 acres located on the east
side of Whitefish Stage Road, north of East Oregon Street, and west of East Oregon Lane
(formerly McElroy -Wilkins gravel pit). The owner of this property, Flathead County Economic
Development Authority, intends to develop a rail -served industrial park that will be the new
home of several of the rail -served industrial business that are currently located within the City of
Kalispell's Core Area, as well as provide additional rail -served industrial land for other business
ventures. The proposed rail -served industrial park and relocation of industrial uses out of the
Core Area will facilitate removal of the railroad tracks from the Core Area and encourage
commercial investment in the recently expanded Westside Urban Renewal Tax -Increment
Finance (TIF) District.
In October, 2015, the City of Kalispell was awarded a $10 million Transportation Income
Generating Economic Recovery (TIGER) grant from U.S. Department of Transportation to help
fund the Glacier Rail Park and Kalispell Core Area Development projects. The emphasis of this
grant will be to remove the railroad tracks from the City of Kalispell to assist further
development without the tracks being an impediment, and to construct a Rail Park outside of the
core area, to accommodate establishments that need or prefer rail service for their business.
Awards and Acknowledgments
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of
7
Kalispell for its comprehensive annual financial report for the fiscal years ended June 30, 2017.
This was the 8th consecutive year that the City of Kalispell had submitted and achieved this
prestigious award. In order to be awarded a Certificate of Achievement, a government must
publish an easily readable and efficiently organized comprehensive annual financial report. This
report must satisfy both generally accepted accounting principles and applicable legal
requirements. A Certificate of Achievement is valid for a period of one year only. We believe
that our current comprehensive annual financial report continues to meet the Certificate of
Achievement Program's requirements and we are submitting it to the GFOA to determine its
eligibility for another certificate.
The completion of the Annual Financial Report on a timely basis was made possible by the entire
staff of the Finance Department and the cooperation of all City departments. I would also like to
give recognition to the mayor, governing council, and the city manager for their consistent
support for maintaining the highest standards in the management of the City of Kalispell's
finances.
Respectfully submitted,
Rick Wills
Finance Director
8
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Kalispell
Montana
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2017
ZI 3�04 � � - M �
Executive Director/CEO
MUNICIPAL JUDGE
Lori Adams
CITY OF KALISPELL, MONTANA
ORGANIZATIONAL CHART
CITIZENS OF KALISPELL
CITY COUNCIL
MAYOR
Mark Johnson
HARD I WARD II WARD III WARD IV
(an Gabriel Wayne Saverud Kyle Waterman Tim Kluesner
Sandy Carlson Chad Graham Rod Kuntz Phil Gu~a
^ CITY CLERK
Aimee Bmnckhorst CITY MANAGER
Doug Russell
PLANNING, PARKS &
FINANCE BUILDING 3 RECREATION
Rick Wills COMMUNITY Chad Fincher
DEVELOPMENT
Tom Jentz
HUMAN PUBLIC WORKS INFORMATION PUBLIC SAFETY PUBLIC SAFETY LEGAL
RESOURCES Susie Turner TECHNOLOGY FIRE POLICE Charlie Harball
Terry Milton Erika Billiet Dave Dedman Interim -Wade
Rademacher
ito]
CITY OF KALISPELL, MONTANA
CITY ELECTED AND APPOINTED OFFICIALS
TERM
ELECTED OFFICIALS EXPIRES
Mayor Mark Johnson 12/2021
Council members:
Kari Gabriel
Ward I
12/2019
Kyle Waterman
Ward III
12/2021
Sandy Carlson
Ward I
12/2021
Rod Kuntz
Ward III
12/2019
Wayne Saverud
Ward II
12/2019
Phil Guiffrida
Ward IV
12/2019
Chad Graham
Ward II
12/2021
Tim Kluesner
Ward IV
12/2021
Municipal Court Judge:
Lori Adams
12/2021
APPOINTED CITY OFFICIALS
City Manager
Attorney
City Clerk
Police Chief
Fire Chief
Finance Director
Public Works Director
Parks Director
Planning Director
Community Development Manager
Human Resource Director
City Treasurer
Doug Russell
Charles Harball
Aimee Brunckhorst
Interim — Wade Rademacher
Dave Dedman
Rick Wills
Susie Turner
Chad Fincher
Tom Jentz
Katharine Thompson
Terry Mitton
Julie Hawes
FINANCIAL
SECTION
INDEPENDENT AUDITOR'S
REPORTS
WIPFL1L..
INDEPENDENT AUDITOR'S REPORT
City Council Members
City of Kalispell
Report on the Financial Statements
We have audited the accompanying 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, 2018 and
the related notes to the financial statements, which collectively comprise the City's basic financial statements
as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly,
we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of significant accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business -type activities, the aggregate discretely
presented component units, each major fund, and the aggregate remaining fund information of the City of
Kalispell, as of June 30, 2018, and the respective changes in financial position and, where applicable, cash
flows thereof forthe yearthen ended in accordance with accounting principles generally accepted in the United
States.
12
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States require that the management's discussion and
analysis on pages 15-27, Schedule of City's Total OPEB Liability, Contributions and Related Ratios for the OPEB
plan on pages 90 and 91, Schedule of Proportionate Share of the Net Pension Liability on pages 92-94,
Schedule of Contributions on pages 95-97 , and Budgetary Comparison Schedules on page 98 be presented
to supplement the basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential
part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. We have applied certain limited procedures to the required supplementary information
in accordance with auditing standards generally accepted in the United States, which consisted of
inquiries of management about the methods of preparing the information and comparing the information
for consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or
provide any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The introductory section, combining and individual non -major
fund financial statements, budgetary comparisons, and the statistical section, are presented for purposes of
additional analysis and are not a required part of the financial statements. The schedule of expenditures of
federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards, and is also not a required part of the basic financial statements.
The combining and individual non -major fund financial statements, budgetary comparisons, and schedule of
expenditures of federal awards, are the responsibility of management and were derived from and relate directly
to the underlying accounting and other records used to prepare the financial statements. Such 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 financial statements orto the financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United States.
In our opinion, the combining and individual non -major fund financial statements, budgetary comparisons, and
schedule of expenditures of federal awards, are fairly stated in all material respects in relation to the financial
statements as a whole.
The introductory section and statistical tables have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance
on them.
13
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated January 15, 2019
on our consideration of the City's internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose
of that report is to describe the scope of our testing of internal control over financial reporting and compliance
and the results of that testing, and not to provide an opinion on the internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control over financial reporting and
compliance.
LLP
Wpfli LLP
Helena, Montana
January 15, 2019
14
MANAGEMENT'S DISCUSSION
AND ANALYSIS
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, 2018. 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 $173,955,907 (net position). Of this
amount, $16,846,063 (unrestricted net position) may be used to meet the government's
ongoing obligations to citizens and creditors.
➢ Total City net position increased by $9,541,070 over the prior fiscal year due to a Capital
Grants and Contributions of the Community Development program increase of over
$6,000,000, and building reserves for necessary future large projects in utility funds.
➢ As of June 30 the City's governmental funds reported combined ending fund balances of
$24,558,276, an increase of $3,361,163 over the prior year. Of this amount, $4,261,064
(18%) is available for spending at the government's discretion (committed, assigned, and
unassigned fund balances).
➢ At fiscal year-end, the total of the committed, assigned, and unassigned components of fund
balance for the general fund was $4,261,064, or 36% of total general fund expenditures.
➢ The City's total debt, excluding compensated absences, increased by $5,478,817 (30%)
during fiscal year 2018. The City bonded against the Westside TIF revenues to pay expenses
related to the Glacier Dail Park, and entered into a State of Montana WRF loan to remove
and replace the water main on 41h Avenue East from Center to 141h
AN 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 also
as a means to help the user better understand the information.
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad
overview of the City of Kalispell's finances. The way information is presented in these
statements is comparable to how the financial information of a private -sector business would be
presented.
The statement of net position presents information on all of the City of Kalispell's assets and
deferred outflows of resources, and liabilities and deferred inflows of resources. The difference
15
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 not 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 the majority 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, solid waste collection, and
an airport.
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 aide 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 net position and the
governmental fund statement of revenues, expenditures, and changes in fund balance 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 fund statements).
The City of Kalispell maintains numerous individual governmental funds. The
governmental fund balance sheet and statement of revenues, expenditures, and changes
16
in fund balance present information separately only for funds which are considered
major. Major funds are determined by a formula which considers the percentage of total
governmental assets, liabilities, revenues, and expenditures contained in each individual
fund. The City of Kalispell has three major governmental funds; the General Fund
(always a major fund), the Special Improvement District 344 (debt service) Fund, and
the Tiger Grant (capital project) 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 major special
revenue 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, solid waste, and the airport 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 more 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 airport fund or the solid waste fund,
because they are not classified as major funds.
➢ The City of Kalispell maintains four funds to account for resources held by the
government for the benefit of outside parties. These fiduciary funds are 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 these funds are used for their intended purpose. The accounting
method used for fiduciary funds is similar to 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 detail 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
17
Pensions schedules, and the general and major special revenue funds budgetary comparison
schedules is included in the section for required supplementary information on pages 90 - 106.
The combining statements for non -major governmental and non -major proprietary funds are
presented immediately following the required supplementary information section. Combining
and individual fund statements and schedules can be found beginning on page 107 of this report.
ANALYZING THE CITY AS A WHOLE
As mentioned prior, net position can be an important indicator of an entities financial well-being.
For the period ending June 30, 2018, the City of Kalispell's assets and deferred outflows of
resources exceeded liabilities and deferred inflows of resources by $173,955,907.
The largest portion of the City's net position ($134,109,235 or 76%) reflects its net investment in
capital assets (e.g., land, buildings, machinery and equipment, infrastructure). 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.
Current and Other Assets
Capital Assets
Total Assets
Governmental
Business -type
Activities
Activities
Change
Change
FY18
FY17 Inc(Dee)
FY18 FY17
Inc(Dee)
$32,681,631
$25,888,993 $ 6,792,638
$29,072,178 $ 25,316,957
$ 3,755,221
82,491,601
75,028,235 7,463,366
75,326,756 72,856,366
2,470,390
115,173,232 100,917,228 14,256,004 104,398,934 98,173,323 6,225,611
Deferred Outflows of Resource 3,344,741 2,796,962 547,779 590,556 428,710 161,846
Long -teen Liabilities Outstandi $24,627,714
Other Liabilities 7,033,578
Total Liabilities 31,661,292
$21,249,971 $ 3,377,743 $ 14,990,055 $ 15,050,929 $ (60,874)
975,448 6,058,130 2,716,106 477,351 2,238,755
22,225,419 9,435,873 17,706,161 15,528,280 2,177,881
Deferred Inflow of Resources 167,206 136,310 30,896 16,897 11,377 5,520
Net Position:
Net Investment in Capital Asse
72,196,186
69,120,365
3,075,821
61,913,049
60,491,421
1,421,628
Restricted
12,103,683
9,350,293
2,753,390
10,896,926
10,401,661
495,265
Unrestricted (deficit)
2,389,606
2,881,803
(492,197)
14,456,457
12,169,294
2,287,163
Total net position
$ 86,689,475
$81,352,461
$ 5,337,014
$ 87,266,432
$ 83,062,376
$ 4,204,056
An additional portion of the City's net position ($23,000,609 or 14%) represents resources that
are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net assets ($16,846,063 or 10%) may be used to meet the City's ongoing obligations
to citizens and creditors.
At June 30, the City is able to report positive balances in all three categories of net position, both
for the City as a whole, as well as for its separate governmental and business -type activities.
Net position of the City increased about 6% for fiscal year 2018 in comparison to fiscal year
2017 ($174 million compared to $164.4 million).
Changes in Net Position
Governmental
Business -type
Activities
Activities
Change
Change
FY18
FY17
Inc Dec
FY18
FY17
Inc (Dec)
Revenues
Program revenues (by major source):
Charges for services
S 8,271,650
S 7,613,019
S 658,631
$ 13,212,785
S 12,457,213 S
755,572
Operating grants and contributions
1,708,661
1,470,495
238,176
31,078
32,653
(1.575)
Capital grants and contributions
7,512,439
1,544,350
5,968.089
579,982
131,626
448,356
General revenuer (by major source):
Property taxes for general purposes
8,912,089
8,948,481
63,608
-
-
_
Video poker apportionment
63,900
63,950
(50)
-
Miscellaneous
137,677
130,740
6,937
-
19,631
(19,631)
Interest/investmentearnings
210,835
159,362
51,473
288,162
227,052
61.110
State entitlement
3,177,113
3,184,831
(7,718)
-
_
_
Gas Tax
522,832
371,303
151,529
Contributions & donations
5,325
(5,325)
Total revenues
S 30,517,196
S 23,391,846
S 7.125,350
S 14,112,007
$ 12,868,175 S
1,243,832
Program expenses
General government
S 6,251,409
$ 5,941,775
$ 409,634
Public safety
11,333,962
10,%8,010
365.852
Public works
3,341,768
2,660,513
681,255
Parks and recreation
2,554,634
2,184,222
370,412
Community development
1,275,659
853,455
422.204
Debt service -interest
226,588
242,110
(15,522)
Airport
S 333,572
S 155,876 S
177,696
Water
3,079,040
2,734,979
344,061
Sewer
5,482,339
4,955,925
526,414
Solid Waste
1,013,000
872,161
140,839
Total expenses
S 24,983,920
S 22,750.085
S 2,233.835
S 9.907,951
S 8,718,941 S
1,189,010
Excess (deficiency) before
special items and transfers
$ 5,533,276
S 641,761
S 4,891,515
$ 4,204,056
S 4,149,234 $
54.822
Gain (loss) on sale of capital assets (196,262) 22,183 (218,445) _
Transfers - net 35,000 (35,p00) (35,000) 35,000
Increase(decrease)in net position S 5.337.014 S 698,944 S 4,G38,070 S 4,204,056 S 4,114,234 S 89,822
Governmental Activities. Governmental activities in fiscal year 2018 increased the City's net
position by $5,337,014. In fiscal year 2017, governmental activities increased net position by
about $700,000. Specifically, revenues were up about 31%. Expenses also showed an increase
from the prior fiscal period of 10%. The key elements of the overall net position change were:
➢ Total program revenues increased substantially ($6,864,896 or 65%), while general
revenues increased ($260,454 or 2%). Capital Grants and Contributions (program
revenues) were up $5,968,089 from fiscal year 2017. All of this increase ($6,346,560)
can be attributed to community development. A grant from the United States Department
of Transportation to develop the new Glacier Rail Park ($6,196,091) more than offset
other decreases in the capital grants and contributions revenue for fiscal year 2018.
➢ Governmental activities program expenses increased by about 10% ($2,233,835). Public
works expenses increased by $681,255, or 31% of the total increase. The majority of this
public works increase is from an increase in the cost of pavement repairs performed by
the City's street department. Community development program expenses were up almost
50% ($422,204) and accounted for another 19% of the total increase. The majority of the
community development increased program expense relates back to the Glacier Rail Park
project. General government program expenses were up $409,634, another 19% of the
total increase. Most of the general government increase is related to OPEB and pension
liabilities.
19
The table and charts on the following 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 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.
Governmental Activities
by function (in Millions)
Total Cost Net Cost
of Services of Services
FY18
FY17
FY18
FY17
Public Safety
11.3
11.0
6.7
6.2
Public Works
3.3
2.7
(0.2)
(0.6)
Parks and Recreation
2.6
2.2
0.6
0.6
Community Development
1.3
0.9
(5.1)
0.7
General Government
6.3
5.8
5.3
5.0
Debt Service
0.2
0.2
0.2
0.2
Totals
$ 25.0
$ 22.8
$ 7.5
$ 12.1
Expenses and Program Revenues -Governmental Activities for fiscal year 2018
12000000
10000000
8000000
0
Q6000000
4000000
2000000
gen gov't pub safety pub works parks/rec comm dev
Activity
20
Revenue by Source - Governmental Activities fiscal year 2018
Other
State entitlemi
11%
grants/contributions
25%
Business -type activities. Business -type activities increased the City of Kalispell's net position
by $4,204,056, about $90,000 more than in fiscal year 2017. The factors leading to this 3%
increase were:
➢ Overall, revenues of the City's business -type activities increased $1,243,832. Most of
this increase is in program revenues of the City's business -type activities which increased
$1,202,353. The majority of this increase can be attributed to the above normal water
consumption in fiscal year 2018. The above normal water consumption because of the
dry weather affects charges for services revenue of both the water fund and the sewer
fund.
➢ Expenses increased over 10% from the prior fiscal year. Expenses of the sewer
department, which includes the treatment plant and storm sewer, were up $526,414
(11 %). Much of this increase is due to GASB 68 pension expense increasing about
$300,000. Another $200,000 sewer expense increase was for purchased services related
to the facility plan update. Expenses of the water department were up $344,061 (13%).
Most of this water department increase is for purchased services for the facility plan
update.
21
The following charts help illustrate the information presented above related to business -type
activities net position.
9000000
8000000
7000000
0
5000000
0
E
4000000
2000000
DOOD 0
0
Expenses and Program Revenues Business -type Achviges for 8soel year 2018
airport water sewer sold waste
Activity
Revenues by Source - Business -type Activities for fiscal year 2018
Operating grants/contribi
W'ti
Capital grants/contributions
4%
22
ent/other Earnings
2%
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 2018, the City of Kalispell's governmental funds reported combined
ending fund balances of $24,558,276, an increase of $3,361,163 in comparison with the prior
fiscal year. Of the ending fund balance, $19,979,102 (83%) is restricted, indicating that
constraints placed on the use of resources are externally imposed, or imposed by law because:
assets are limited by specific grant agreements ($3,278,657); assets are limited by specific voter
approved bonds ($30,141); assets are limited by bond agreement ($4,789,092);assets are limited
by specific special assessments ($4,133,623); assets are limited by state law ($7,947,400); assets
are limited by contribution restrictions ($118,299). $4,261,064 or 18% is available for spending
at the City's discretion. Following is a short analysis of each major governmental fund.
The general fund is the chief operating fund of the City of Kalispell. At the end of fiscal year
2018 unassigned fund balance of the general fund was $3,881,096, while total fund balance was
$4,512,102. The fund balance increased $368,775 during fiscal year 2018. Revenues and other
financing sources increased only slightly, about 2%, from fiscal year 2017. Expenditures and
other financing uses increased about 3%. At the end of fiscal year 2018, unassigned fund
balance represents 33% of total general fund expenditures, a 3% improvement from fiscal year
2017. The general fund balance of $631,006 is non -spendable and assigned as follows:
GENERAL FUND BALANCE -TOTAL $ 4,512,102
NONSPENDABLE
Long-term recievables $ 4,848
Prepaids $ 246,190
TOTAL NONSPENDABLE $ 251,038
ASSIGNMENTS
Capital Equipment $ 261,906
Downtown Parking $ 23,542
Misc. $ 94,520
TOTAL ASSIGNMENTS $ 379,968
UNASSIGNED $ 3,881,096
Special Improvement District 344 (debt service) fund was established by the City of Kalispell in
fiscal year 2006 for the purpose of servicing the debt attributable to the construction of the
infrastructure needed in the technical/industrial development known as Old School Station.
Fund balance at June 30, 2018, for SID 344 was $259,611, a decrease of $71,704 from fiscal
year 2017.
The City of Kalispell was awarded a $10 million Transportation Income Generating Economic
Recovery (TIGER) grant from U.S. Department of Transportation for the Kalispell Core and Rail
Redevelopment Project. The project begins with the construction of a rail park at a reclaimed
gravel pit, then relocating rail served businesses to the rail park and converting the old rail line
through Kalispell into a bike and pedestrian trail and opening up a number of north and south
connection streets that are currently blocked by the rail line. This funds primary income sources
are matching funds and grant revenue. This fund carries no fund balance.
23
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
°o of
Unrestricted
Funds total
Changein
%Change in
Net Position
Net Position
Net Position
Net Position
Water
$ 7,606,975
22%
$ 1,674,882
506
Sewer
5,934,505
12%
2,765,419
600'
Other
914,977
2690
(236,245)
-6%
Total
$14,456,457
17% $ 4,204,056
5%
For the discussion regarding major changes in net position of the proprietary funds see the
explanation above in the business -type activities of the statement of activities.
GENERAL FUND BUDGETARY HIGHLIGHTS
The City of Kalispell's general fund expenditures budget for fiscal year 2018 was $12,410,602.
Actual expenditures for the year were $11,865,276, a favorable variance of $545,326. Actual
general government expenditures were $358,470 less than budgeted, the result of most general
government departments making efforts to hold down expenditures where possible, and
unneeded contingencies.
Actual revenues of the general fund were $11,349,301, $58,782 more than the budgeted amount
of $111,290,519. Licenses and permits revenue ($199,551) was significantly over the fiscal year
2018 budgeted amount ($86,700). This positive variance was due to continued community
growth bringing in more than anticipated fees related to the growth.
24
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of 2018, the City of Kalispell has $157,818,357, 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.
CITY OF KALISPELL'S CAPITAL ASSETS
(NET OF DEPRECIATION)`
Governmental Business -type Total
Major Governmental funds capital asset events during the fiscal year 2018 included the
following:
➢ The police department purchased vehicles and other equipment at a cost of $123,523.
➢ The fire department purchased a new pumper at a cost of $467,684.
➢ The planning/building department purchased a vehicle at a cost of $29,244.
➢ The development of new fields continued at the City's youth sports complex thru the use of a
State grant. This approximately $2 million project will be complete in fiscal year 2019.
➢ The street department purchased equipment costing $376,074. This included an asphalt
paver and trailer ($243,583), a three quarter ton pickup ($44,159 — 80% light maintenance
department), snow plows, and mobile electronic reader board.
➢ Completed 41h Avenue East reconstruction from Center to 14th at a cost of $615,098.
➢ Completed construction of a sand/cold mix storage shed. Total cost of $197,872 shared with
business -type funds. Governmental (street fund) cost including prior fiscal periods was
$50,422.
➢ The parks department purchased equipment costing $61,527. This included a mower and a
spray gator. The forestry department purchased a new chipper for $48,180.
➢ Paved 7 alleys at a total cost of $29,467. Replaced 1,853', 6.2 blocks, of sidewalks valued at
$106,611.
➢ Developed dog park at begg park for $49,612.
➢ Over $65,000 of information technology equipment was purchased.
➢ Disposed assets with a cost basis of $1,393,217. 41h Avenue East from Center to 141h was
rebuilt/abandoned and had a cost basis of $525,575. Street equipment was sold and/or
scrapped with a cost basis of almost $125,000. Police department radios were scrapped with
an original cost basis of $321,554.
25
Major Business -type funds capital asset events during the fiscal year 2018 included the
following:
➢ Developer's contributed (6) fire hydrants valued at $35,278.
➢ Installed (15) fire hydrants on 41h Avenue East at a total cost of $88,194.
➢ Replaced 41h Avenue East from Center to 141h water main for $1,717,112.
➢ 1,624 linear feet of new water main valued at $180,328 was installed and contributed to the
City by developers.
➢ The water department installed 301 new meters, including 155 new domestic meters of
various sizes.
➢ Purchased and installed new generator at Noffsinger spring.
➢ 2,984 linear feet of new sewer main valued at $174,546 was installed and contributed to the
City by developers.
➢ Completed solids dewatering design and construction project. Total project cost including
prior fiscal periods, was $735,776.
➢ 986 linear feet of new storm water main valued at $125,982 was installed and contributed to
the City by developers.
➢ Completed construction of a sand/cold mix storage shed. Total cost of $197,872 shared with
governmental funds. Business -type fund cost including prior fiscal periods was $147,450.
➢ Purchased equipment including a meter reader vehicle (water), excavator (sewer), and three
quarter ton pickup (sewer).
➢ The sewer department has over $3 million in construction projects in progress as of June 30,
2018.
➢ Disposed assets with a cost basis of $421,643.
Additional information on capital assets can be found in the notes of the basic financial
statements (Note D. Capital Assets pages 51-53).
26
Debt
At the end of fiscal year 2018, the City of Kalispell had total long-term debt outstanding of
$26,040,531. Of this amount, $1,415,000 comprises debt backed by the full faith and credit of
the government and $5,775,000 (increase from fiscal year 2017, $4,960,000 West side TIF bond
issue) represents bonds secured solely by specific revenue sources (i.e., revenue bonds). The
remainder consists of $13,560,531 (increase from fiscal year 2017, $2,662,000 wrf loan for 4th
Avenue East) outstanding on State Revolving Fund loans for construction/expansion of the
wastewater treatment plant, the extension of sewer lines south on Highway 93, the construction
of a water storage facility and the related distribution/supply system, and the removal and
replacement of the water main on 4th Avenue East. There is also $2,045,507 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 $1,498,113 of loans for the purchase of other property and
equipment.
CITY OF KALISPELL'S OUTSTANDING DEBT
Governmental Business -type Total
activities activities
2018 2017 2018 2017 2018 2017
General obligation bonds $ 1.415.000 $ 1.885.000 $ - $ - $ 1
Assessments 2,045,507 2,427,060 2,045,507 2,427,060
Contract debt/loans 1,458,992 1,204,829 39,121 77,849 1,498,113 1,282,678
Total $10,811,259 $ 6,450,389 $13,482,892 $12,364,945 $ 24,294,151 $18,815,334
Other obligations of the City of Kalispell include accrued vacation pay and sick leave
(compensated absences). More detailed information about the City's long-term liabilities is
presented in the notes to the financial statements (Note E. Long -Term Debt pages 54-59).
ECONONHC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The City's elected and appointed officials considered many factors when adopting the fiscal year
2019 budget for tax rates and fees that will be charged by 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, and the
citizen's ability to pay. For the year, inflation rates continued to increase. The Bureau of Labor
Statistics of the U.S. Department Labor reported the Consumer Price Index -Unadjusted for All
Items at 2.9 percent for the calendar year ending June of 2018. The index for all items less food
and energy rose 2.3 percent for the 12 months ending June of 2018. The food index increased
1.4 percent over the span, and the energy index advanced 12 percent. Inflation rates have a
significant impact on the cost of City projects.
Request for Information
This financial report is designed to provide a general overview of the City of Kalispell's finances
for all those with an interest in the government's finances. Questions concerning any of the
information provided in this report or requests for additional financial information should be
addressed to the City of Kalispell, Finance Director, P.O. Box 1997, Kalispell, MT 59903-1997.
27
BASIC FINANCIAL STATEMENTS
GOVERNMENT - WIDE FINANCIAL
STATEMENTS
ASSETS
Cash and investments
Taxes and assessments receivable
Accounts receivable - net
Notes and loans receivable
Contracts receivable
Due from other governments
Prepaids
Inventories
Properties held for sale
Other debits
Restricted assets:
Cash and investments
Capital assets (net of accumulated depreciation):
Land
Construction in Progress
Depreciable
Total assets
DEFERRED OUTFLOWS OF RESOURCES
OPEB differences/changes
Contractually required contributions related to pensions
Total deferred outflows of resources
Total assets and deferred outflows of resources
LIABILITIES
Accounts payable
Retainage
Accrued payroll
Current portion of long-term liabilities
Bonds and notes - not capital
Bonds and notes - capital
Compensated absences payable
Other credits
Long-term liabilities, due in more tban one year
Bonds and notes - not capital
Bonds and notes - capital
Compensated absences
Net OPEB liability
Net pension liability
Total liabilities
DEFERRED INFLOWS OF RESOURCES
OPEB differences/changes
Diff. between est. and actual earnings on pension plan inv
Total deferred inflows of resources
NET POSITION
Net investment in capital assets
Restricted for capital projects
Restricted for debt service
Restricted for special projects
Restricted for other purposes
Unrestricted
Total net position
See accompanying Notes to the Financial Statements
City of Kalispell, Montana
Statement of Net Position
June 30,2018
Activities
$ 22,263,552 $
2,807,568
317,976
1,805,563
123,687
1,865,110
320,868
1,258,465
5,283
1,913,559
Component Units
Downtown Tourism
AiT AiT
17,040,937 $
39,304,489 $ 52,168 $
73,066
2,880,634 4,100
480,869
798,845
-
1,805,563
325,641
449,328
542,269
2,407,379 12,476
121,553
442,421
96,654
96,654
-
1,258,465
-
5,283
10,391,189
12,304,748
153,831
2,395,299
1,762,512
4,157,811
10,466,935
3,500,313
13,967,248
69,629,367
70,063,931
139,693,298
$ 115,173,232 $
104,398,934 $
219,572,166 $
68,744
$ 153,831
406,449
72,566
479,015
2,938,292
517,990
3,456,282
$ 3,344,741 $
590,556 $
3,935,297 $
-
$ -
$ 118,517,973 $
104,989,490 $
223,507,463 $
68,744
$ 153,831
$ 3,894,610 $
1,062,505 $
4,957,115 $
8,602
30,199
415,702
46,490
462,192
356,621
89,346
445,967
26,940
-
26,940
1,311,417
1,413,198
2,724,615
1,014,186
202,181
1,216,367
435
24,725
25,160
488,905
-
488,905
8,983,998
12,069,694
21,053,692
411,378
118,634
530,012
3,421,188
609,621
4,030,809
11,335,912
2,069,767
13,405,679
$ 31,661,292 $
17,706,161 $
49,367,453 $
8,602
$ 30,199
$ 167,206 $
16,897 $
184,103 $
$
$ 167,206 $
16,897 $
184,103 $
-
$ -
$ 72,196,186 $
61,913,049 $
134,109,235 $
$
3,638,080
7,453,532
11,091,612
3,699,946
1,394,594
5,094,440
4,765,757
1,858,800
6,624,557
-
190,000
190,000
2,389,606
14,456,457
16,946,063
60,142
123,632
$ 86,689,475 $
87,266,432 $
173,955,907 $
60,142
$ 123,632
WHO.
Functions/Proerams
Primary government:
Governmental activities:
General government
Public safety
Public works
Parks and recreation
Community development
Debt service - interest
Total governmental activities
Business -type activities:
Airport
Water
Sewer
Solid Waste
Total business -type activities
Total primary government
Component units:
tJ
1�0 Downtown BID
Tourism BID
Total component units
City of Kalispell, Montana
Statement of Activities
For the Fiscal Year Ended June 30, 2018
Net (Expenses) Revenues and
Changes in Net Assets
Program
Revenues
Primary
Government
Component Units
Indirect
Operating
Capital
Business -
Expense
Charges for
Grants and
Grants and
Governmental
type
Downtown Tourism
Expenses
Allocation
Services
Contributions Contributions
Activities
Activities
Total
BID BID
$ 6,250,460 $
949 $
909,259 $
40,977 $
18,919 $
(5,282,255) $
$
(5,282,255) $
$
11,075,368
258,494
2,816,588
1,600,290
202,304
(6,714,680)
(6,714,680)
3,022,540
319,229
3,155.932
25,381
365,869
205,414
205,414
2,488,368
66,266
1,334,208
32,835
578,787
(608,804)
(608,804)
1,251,376
24,283
55,664
9,178
6,346,560
5,135,743
5,135,743
226,588
(226,588)
(226,588)
$ 24,314,700 $
669,220 $
8,271,650 $
1,708,661 $
7,512,439 $
(7,491,170) $
- $
(7,491,170) $
$
$ 328,761 $
4,811 $
69,656 $
- $
- $
(263,916)
(263,916)
2,871.225
207,815
4,346,570
10,254
279,453
1,557,237
1,557,237
5,126,194
356,155
7,774,762
14,927
300,529
2,607,879
2,607,879
887,454
125,546
1,021,797
5,897
14,694
14,694
$ 9,213,624
694,327 $
13,212,785 $
31,078 $
579,982 $
- $
3,915,894 $
3,915,894 S.
$
$ 33,528,324
1,363,547 $
21,484,435 $
1,739,739 $
8,092,421 $
(7,491,170) $
3,915,894 $
(3,575,276) $
$
$ 76,559 5,619 $ 112,767 $ $
596,175 5,000 603,226
$ 672,734 $ 10,619 $ 715,993 $ $
See accompanying Notes to the Financial Statements
$ 30,589 $
2,051
$ 30,589 $ 2,051
General Revenues:
Property taxes for general purposes
$
8,912,089 $
$ 8,912,089
Video poker apportionment
63,900
63,900
Miscellaneous
137,677
137,677
Interestlinvestment earnings
210,835
288,162
498,997
266
509
State entitlement
3,177,113
-
3,177,113
Gas Tax
522,832
522,832
Gain (loss) on sale of capital assets
(196,262)
(196,262)
Total general revenues, special items and trans $
12,828,194 $
288,162
$ 13,116,346 $
266
$ 509
Change in net position
$
5,337,014 $
4,204,056
$ 9,541,070
30,855
2,560
Net position - beginning
$
81,352,461 $
83,062,376
$ 164,414,837 $
29,287
$ 121,072
Restatements
-
-
-
Net position - beginning - restated
$
81,352,461 $
83,062,376
$ 164,414,837 $
29,287
$ 121,072
Net position - end
$
86,689,475 $
87,266,432
$ 173,955,907 S.
60,142
$ 123,632
GOVERNMENTAL FUND
FINANCIAL STATEMENTS
MAJOR GOVERNMENTAL FUNDS
General Fund - this is 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.
SID 344 Debt Service Fund — this fund accounts for the resources accumulated and
payments made for principal and interest on the bonds sold to finance the development of
the Old School Station Industrial and Technology Park.
Tiger Grant Capital Project Fund — The City of Kalispell was awarded a $10 million
TIGER (Transportation Investment Generating Economic Recovery) Grant
(capital project fund) for the Kalispell Core and Rail Redevelopment Project. This
fund was established to account for the project which consist of the construction of a
rail park at a reclaimed gravel pit, then relocating rail served businesses to the rail
park and converting the old rail line through Kalispell into a bike and pedestrian trail,
opening up a number of north and south connection streets that are currently blocked
by the rail line.
City of Kalispell, Montana
Balance Sheet
Governmental Funds
June 30,2018
Other
Total
Governmental
Governmental
General Fund
SID 344
Tiger Grant
Funds
Funds
ASSETS
Cash and investments
$ 2,787,264
$ 259,611 $
2,607,719
$ 16,268,231
$ 21,922,825
Taxes and assessments receivable, net
273,985
1,947,675
-
585,908
2,807,568
Accounts receivable - net
-
-
317,976
317,976
Notes and loans receivable
-
1,805,563
1,805,563
Contracts receivable
72,040
-
72,040
Advances to other funds
1,300,000
-
1,300,000
Due from other funds
6,721
-
9,188
15,909
Due from other governments
411,011
710,686
743,413
1,865,110
Prepaids
246,190
-
67,072
313,262
Properties held for sale
-
1,258,465
1,258,465
Other debits
4,848
435
5,283
Restricted assets:
Cash and investments
$ -
$ - $
-
$ 1,913,559
$ 1,913,559
Total assets
$ 5,102,059
$ 2,207,286 $
3,318,405
$ 22,969,810
$ 33,597,560
LIABILITIES
Accounts payable
$ 102,584
$ $
2,928,121
$ 812,183
$ 3,842,888
Retainage
-
390,284
25,418
415,702
Accrued payroll
213,388
-
-
129,206
342,594
Due to other funds
-
15,909
15,909
Advances from other funds
1,300,000
1,300,000
Other credits
-
-
435
435
Total liabilities
$ 315,972
$ $
3,318,405
$ 2,283,151
$ 5,917,528
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable
$ -
$ $
-
$ 314,188
$ 314,188
Unavailable revenue - deferred taxes and assessments
273,985
1,947,675
585,908
2,807,568
Total deferred inflows of resources
$ 273,985
$ 1,947,675 $
$ 900,096
$ 3,121,756
FUND BALANCES
Nonspendable - not in spendable form
Long-term recievables $
4,848 $
$ $ $
4,848
Prepaids
246,190
67,072
313,262
Restricted
General Government
-
90,721
90,721
Public Safety
3,058,625
3,058,625
Public Works
3,429,026
3,429,026
Culture and Recreation
1,482,789
1,482,789
Community Development
10,451,340
10,451,340
Debt Service
-
259,611 1,206,990
1,466,601
Unrestricted Fund Balances:
Assigned
Capital Equipment
261,906
- -
261,906
Parking
23,542
23,542
Miscellaneous
94,520
-
94,520
Unassigned fund balance
3,881,096
-
3,881,096
Total fund balances $
4,512,102 $
259,611 $ - $ 19,786,563 $
24,558,276
Total liabilities, deferred inflows of resources, and fug $
5,102,059 $
2,207,286 $ 3,318,405 $ 22,969,810 $
33,597,560
See accompanying Notes to the Financial Statements
do]
City of Kalispell, Montana
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position
June 30, 2018
Total fund balances - governmental funds $ 24,558,276
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in
the funds. 82,245,976
An internal service fund is used by management to charge the costs of providing services within the
government. The assets and liabilities of the internal service funds are included in governmental activities
in the government -wide statement of net position 558,962
Deferred outflow of resources related to pensions.
- contributions made subsequent to the measurement date, recognized on the statement of net position 2,938,292
- OPEB differences and changes 406,449
Long-term liabilities are not due and payable in the current period and therefore are not reported as
liabilities in the funds.
- Bonds and notes (10,811,260)
- Compensated absences (1,404,670)
- Other post employment benefits (3,421,188)
- Net pension liability (11,335,912)
- Deferred inflow of resources - related to pensions (167,206)
Taxes, assessments and accounts receivable will be collected this year, but are not available soon enough to
pay for the current period's expenditures and, therefore, are reported as unavailable revenue in the funds.
- deferred taxes and assessments 2,807,568
- ambulance 314,188
Total net position - governmental activities $ 86,689,475
See accompanying Notes to the Financial Statements
31
City of Kalispell, Montana
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2018
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Miscellaneous
Investment earnings
Total revenues
EXPENDITURES
General government
Public safety
Public works
Parks and recreation
Community development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disposition
Transfers in
Transfers out
Total other financing sources (uses)
Net Change in Fund Balance
Fund balances - beginning
Restatements
Fund balances - beginning, restated
Fund balance - ending
See accompanying Notes to the Financial Statements
General Fund SID 344 Tiger Grant
Other Total
Governmental Governmental
Funds Funds
$ 5,827,859 $
255,578
$
$ 7,435,240 $
13,518,677
199,551
-
-
915,468
1,115,019
3,782,941
-
6,196,091
2,290,410
12,269,442
1,051,627
-
-
1,971,323
3,022,950
443,919
-
-
443,919
10,462
-
106,231
116,693
32,942
-
-
155,062
188,004
$ 11,349,301 $
255,578
$ 6,196,091
$ 12,873,734 $
30,674,704
$ 3,127,703 $
-
$ -
$ - $
3,127,703
8,470,837
2,173,349
10,644,186
39,168
2,818,093
2,857,261
-
1,986,322
1,986,322
83,069
-
1,192,590
1,275,659
-
225,000
1,562,726
1,787,726
-
102,282
-
124,306
226,588
144,499
-
8,396,091
3,037,087
11,577,677
$ 11,865,276 $
327,282
$ 8,396,091
$ 12,894,473 $
33,483,122
$ (515,975) $
(71,704) $
(2,200,000) $
(20,739) $
(2,808,418)
$ $
$ -
$ 6,148,597 $
6,148,597
20,984
20,984
901,000
2,200,000
1,014,790
4,115,790
-
-
(4,115,790)
(4,115,790)
$ 901'000 $
$ 2,200,000
$ 3,068,581 $
6,169,581
$ 385,025 $ (71,704) $
$ 3,047,842 $ 3,361,163
$ 4,143,327 $ 331,315 $ $ 16,722,471 $ 21,197,113
(16,250) - 16,250
$ 4,127,077 $ 331,315 $ $ 16,738,721 $ 21,197,113
$ 4,512,102 $ 259,611 $ - $ 19,786,563 $ 24,558,276
32
City of Kalispell, Montana
Reconciliation of the Statement of Revenues, Expenditures.
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30, 2018
Amounts reported for governmental activities in the statement of
activities are different because:
Net change in fund balances - total governmental funds
Governmental funds report capital outlays as expenditures while governmental activities report
depreciation expense to allocate those expenditures over the life of the assets:
- Capital assets purchased
- Depreciation expense
In the Statement of Activities, the loss or gain on the sale or disposal of capital assets is recognized. The
fund financial statements recognize only the proceeds from the sale of these assets:
- Proceeds from the sale of capital assets
- Gain on the sale of capital assets
Revenues in the Statement of Activities that do not provide current financial resources are not reported as
revenues in the funds:
- Donated capital assets
- Long-term receivables (deferred revenue)
The change in compensated absences is shown as an expense in the
Statement of Activities
Repayment of debt principal is an expenditures in the governmental funds, but the repayment reduces long-
term debt in the Statement of Net Position:
- Long-term debt principal payments
Long term debt proceeds provide current financial resources to the governmental funds, but issuing debt
increases long-term liabilities in the Statement of Net Position:
- Proceeds from the sale of long-term debt
Changes to net pension liability are shown as revenues/expenses on the Statement of Activities
The increase in other post employment benefits is shown as an expense in the
Statement of Activities
Internal service funds are used by management to share the costs of certain activities, to individual funds.
The net revenue of the internal service funds is reported with the governmental activities of the
Government -Wide Statement of Activities
Change in net position - Statement of Activities
See accompanying Notes to the Financial Statements
$ 3,361,163
11,577,677
(3,952,050)
(20,984)
(196,262)
30,337
(325,705)
(24,534)
1,787,726
(6,148,597)
(430,842)
(421,405)
100,490
$ 5,337,014
33
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.
City of Kalispell, Montana
Statement of Net Position
Proprietary Funds
June 30, 2018
Governmental
Business -Type Activities - Enterprise Funds Activities
Non -major
Internal
Water
Sewer
Enterprise
Totals
Service Funds
ASSETS
Current assets:
Cash and investments
$ 8,717,386 $
7,081,802 $
1,241,749 $
17,040,937 $
340,727
Taxes and assessments receivable
-
46,881
26,185
73,066
-
Accounts receivable - net
217,031
263,838
-
480,869
-
Contracts receivable
34,604
291,037
-
325,641
51,647
Due from other governments
1,283
479,116
61,870
542,269
-
Prepaids
41,745
59,580
20,228
121,553
7,606
Inventories
96,654
-
-
96,654
-
Restricted assets:
Cash and investments
2,421,425
7,969,764
-
10,391,189
-
Total current assets
$ 11,530,128 $
16,192,018 $
1,350,032 $
29,072,178 $
399,980
Noncurrent assets:
Capital assets (net of accumulated depreciation):
Land
$ 91,587 $
311,380 $
1,359,545 $
1,762,512 $
-
Construction in Progress
385,459
3,114,854
-
3,500,313
-
Depreciable
26,508,676
42,248,277
1,306,978
70,063,931
245,625
Total noncurrent assets
$ 26,985,722 $
45,674,511 $
2,666,523 $
75,326,756 $
245,625
Total assets
$ 38,515,850 $
61,866,529 $
4,016,555 $
104,398,934 $
645,605
DEFERRED OUTFLOWS OF RESOURCES
OPEB differences/changes
$ 33,100 $
33,881 $
5,585 $
72,566 $
-
Pension plan subsequent contributions/changes
170,908
248,801
98,281
517,990
Total deferred outflows of resources
$ 204,008 $
282,682 $
103,866 $
590,556 $
LIABILITIES
Current liabilities:
Accounts payable
$ 81,276 $
955,158 $
26,071 $
1,062,505 $
51,722
Retainage
7,842
38,648
-
46,490
-
Accrued payroll
26,308
46,304
16,734
89,346
14,027
Bonds and notes - capital
284,901
1,089,176
39,121
1,413,198
-
Compensated absences payable
54,397
93,070
54,714
202,181
13,931
Other credits
15,504
9,221
-
24,725
Total current liabilities
$ 470,228 $
2,231,577 $
136,640 $
2,838,445 $
79,680
Noncurrent liabilities:
Bonds and notes - capital
$ 3,073,155 $
8,996,539 $
- $
12,069,694 $
-
Compensated absences
29,036
49,693
39,905
118,634
6,963
Net OPEB liability
299,890
309,731
-
609,621
-
Net pension liability
682,908
994,153
392,706
2,069,767
Total noncurrent liabilities
$ 4,084,989 $
10,350,116 $
432,611 $
14,867,716 $
6,963
Total liabilities
$ 4,555,217 $
12,581,693 $
569,251 $
17,706,161 $
86,643
DEFERRED INFLOWS OF RESOURCES
Pension -dill. between projected and actual earnings
$ 2,838 $
5,268 $
8,791 $
16,897 $
-
Total deferred inflows of resources
$ 2,838 $
5,268 $
8,791 S
16,897 $
NET POSITION
Net investment in capital assets
Restricted for capital projects
Restricted for debt service
Restricted for special projects
Restricted for other purposes
Unrestricted
Total net position
See accompanying Notes to the Financial Statements
$ 23,627,666 $ 35,657,981 $ 2,627,402 $ 61,913,049 $ 245,625
2,000,956 5,452,576 - 7,453,532 -
420,469 974,125 1,394,594
505,737 1,353,063 1,858,800
- 190,000 190,000 -
7,606,975 5,934,505 914,977 14,456,457 313,337
$ 34,161,803 S 49,562,250 $ 3,542,379 $ 87,266,432 $ 558,962
34
City of Kalispell, Montana
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds
For the Fiscal Year Ended June 30, 2018
OPERATING REVENUES
Charges for services
Miscellaneous revenues
Special assessments
Total operating revenues
OPERATING EXPENSES
Personal services
Supplies
Purchased services
Building materials
Fixed charges
Depreciation
Total operating expenses
Operating income (loss)
NON -OPERATING REVENUES (EXPENSES)
Business -Type Activities - Enterprise Funds
Non -major
Water Sewer Enterprise Totals
$ 3,270,757 $ 4,552,376 $
256,517 7,324
1 227 SA 1
S,�Z /,Z /4 $ _,2592,241
1,091,453 $ 8,914,586 $
- 263,841
1 227 SA 1
Governmental
Activities
Internal
Service Funds
1,116,389
1,491
1,117,880
$ 1,088,186 $
1,739,921 $
546,944 $
3,375,051 $
403,665
72,684
172,668
78,203
323,555
316,764
619,257
1,097,057
321,904
2,038,218
235,293
56,026
61,429
-
117,455
-
248,878
472,270
156,189
877,337
26,316
906,884
1,698,431
241,629
2,846,944
48,325
$ 2,991,915 $
5,241,776 $
1,344,869 $
9,578,560 $
1,030,363
$ 535,359 $
650,465 $
(253,416) $
932,408 $
87,517
Intergovernmental income $
74,101
$ 14,927
$ 5,897 $
94,925
$ 9,992
Impact Fees
819,296
1,882,521
-
2,701,817
-
Interest revenue
117,645
157,540
12,977
288,162
2,981
Debt service interest expense
(87,125)
(240,563)
(1,703)
(329,391)
-
Total non -operating revenues (expenses) $
923,917
$ 1,814,425
$ 17,171 $
2,755,513
$ 12,973
Income (loss) before contributions and transfer: $
1,459,276
$ 2,464,890
$ (236,245) $
3,687,921
$ 100,490
Contributions of infrastructure - developers
215,606
300,529
-
516,135
-
Change in net position $
1,674,882
$ 2,765,419
$ (236,245) $
4,204,056
$ 100,490
Net Position - Beginning of the year
Net Position - End of the year
See accompanying Notes to the Financial Statements
$ 32,486,921 $ 46,796,831 $ 3,778,624 $ 83,062,376 $ 458,472
$ 34,161,803 $ 49,562,250 $ 3,542,379 $ 87,266,432 $ 558,962
61
City of Kalispell, Montana
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2018
Governmental
Business - Type Activities Activities
Non -major
Internal Service
Water
Sewer
Enterprise
Totals
Fund
Cash flows from operating activities:
Cash received from customers
$ 3,248,170 $
4,536,770 $
1,107,960 $
8,892,900
$ 1,107,665
Cash received from assessments
-
1,300,570
-
1,300,570
-
Cash received from miscellaneous sources
256,517
7,324
263,841
Cash payments for claims
(1,029,750)
(1,741,122)
(535,271)
(3,306,143)
(621,990
Cash payments to employees
(1,022,752)
(1,605,288)
(516,266)
(3,144,306)
(406,794)
Net cash provided (used) by operating activities
$ 1,452,185 $
2,498,254 $
56,423 $
4,006,862
$ 78,881
Cash flows from capital and related financing activities:
Principal paid on bonds, loans and advances
$
(277,933)
$ ($945,729) $
(38,728)
$ (1,262,390) $
Interest paid on bonds, loans and advances
(87,125)
(240,563)
(1,703)
(329,391)
Acquisition and construction of capital assets
(2,240,646)
(1,870,720)
(4,111,366)
(72,973
Proceeds from government grants
63,847
-
63,847
Proceeds from bonds, loans and advances
1,911,893
$71,914
1,983,807
Impact fees
824,327
1,802,495
2,626,822
Net cash provided (used) by capital and related financing activitic $
194,363
$ (1,182,603) $
(40,431)
$ (1,028,671) $
(72,973)
Cash flows from non -capital financing activities:
Hydrant meter deposits
9,764
-
$9,764
-
Intergovernmental revenue
-
-
-
9,992
Net cash provided (used) from non -capital financing activities
$
9,764
$ $
-
$ 9,764 $
9,992
Cash flows from investing activities:
Interest on investments
$
117,645
$ 157,540 $
12,977
$ 288,162 $
2,981
Net cash provided (used) by investing activities
$
117,645
$ 157,540 $
12,977
$ 288,162 $
2,981
Net increase (decrease) in cash and cash equivalents
$
1,773,957
$ 1,473,191 $
28,969
$ 3,276,117 $
18,881
Cash and cash equivalents at beginning
9,364,854
13,578,375
1,212,780
24,156,009
321,846
Cash and cash equivalents at end
$
11,138,811
$ 15,051,566 $
1,241,749
$ 27,432,126 $
340,727
Reconciliation of operating income (loss) to net cash provided
(used) by operating activities:
Operating income (loss)
$
535,359
$ 650,465 $
(253,416)
$ 932,408 $
87,517
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation
906,884
1,698,431
241,629
2,846,944
48,325
Pension Adj.
21,026
70,905
23,696
115,627
-
Other Post Employment Benefits Expense
36,730
38,219
-
74,949
Changes in assets and liabilities:
Accounts receivable - net
(22,587)
(15,606)
2,121
(36,072)
($10,215)
Increase in Inventory
16,771
-
16,771
Taxes and assessments receivable, net
-
(16,342)
(2,885)
(19,227)
-
Prepaid expenses
12,844
19,266
6,422
38,532
4,300
Increase Comp Abs
(2,315)
2,465
(1,756)
(1,606)
(10,582)
Decrease in due from County
(15,629)
17,271
1,642
Accounts payable
(62,520)
43,036
14,603
(4,881)
(47,917)
Accrued payroll
9,993
23,044
8,738
41,775
7,453
Net cash provided (used) by operating activities
$
1,452,185
$ 2,498,254 $
56,423
$ 4,006,862 $
78,881
The City received non cash contributions
of land and infrastructure as follows:
$
215,606
$ 300,529 $
-
$ 516,135 $
-
See accompanying notes to the financial statements
36
FIDUCIARY FUND FINANCIAL
STATEMENTS
AGENCY FUNDS
Agency Funds - used to account for assets held by the City as an agent for individuals,
private organizations, other governments, and/or other funds.
City of Kalispell, Montana
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2018
ASSETS
Cash and short-term investments
Total assets
LIABILITIES
Due to others
Total liabilities
Agency
Funds
$ 200,206
$ 200,206
200,206
$ 200,206
See accompanying Notes to the Financial Statements
37
NOTES TO THE FINANCIAL
STATEMENTS
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
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, 2018, and for the year then ended.
The more significant accounting policies of the City are described below.
Recently Implemented Accounting Pronouncements
For the fiscal year ended June 30, 2017, the City implemented GASB Statement 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions. This statements purpose is to improve accounting and financial reporting by
state and local governments for postemployment benefits other than pensions (OPEB). Another purpose is to improve the
information provided by state and local governmental employers about financial support for OPEB that is provided by other
entities.
For the fiscal year ended June 30, 2018, the City implemented GASB Statement 82, Pension Issues an amendment of GASB
Statements No. 67, No. 68, and No. 73. This Statement addresses certain issues regarding (1) the presentation of payroll -
related measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from
the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made
by employers to satisfy employee (plan member) contribution requirements.
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 its component units, entities for which the
government is considered to be financially accountable. These financial statements include all funds, agencies, boards,
commissions and authorities which meet the criteria for inclusion in the City's financial report. These criteria include
financial accountability, appointment of a majority of the secondary government and the financial benefit or burden derived
by the primary government from a secondary government.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JtJNE 30, 2018
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 two component units are reported in separate columns to
emphasize that they are legally separate from the City.
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. The annual budget of the BID is subject to approval by the City Council.
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 31 Avenue East to 31 Avenue West between Center Street and 5" 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. The annual budget of the TBID is subject to approval by the City Council. 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.
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 of 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 statements. Governmental activities, which normally are supported
by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant
extent on fees and charges for support. Likewise, the primary government is reported 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 is offset by
program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The general
government function of the City includes expenses which are, in essence, indirect expenses of other functions. These
expenses are allocated to each related function. 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) 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 instead as general revenues.
39
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Indirect expenses reported in the statement of activities must be allocated to the different functions of the City. These
expenses include administration, data processing, and central garage. The administrative cost allocation is based on each
functions percentage of total City expenses. Data processing is allocated based approximately on that functions usage of the
City's computer servers. Central garage expenses are allocated to the other functions of the City based on actual invoicing.
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 in regards to 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 transactions have been eliminated; however,
those transactions between governmental and business -type activities have not been eliminated.
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.
Fund Financial Statements
Basis of Presentation
Fund financial statements 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 the governmental and proprietary
categories. Each major fund is displayed in a separate column in the governmental funds statements. All of 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 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.
40
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
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
judgments 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. 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 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.
SID 344 is a debt service fund established to account for the resources accumulated and payments made for principal and
interest of the 20 year bonds sold to finance the construction of the Old School Station Industrial and Technology Park.
The City of Kalispell was awarded a $10 million TIGER (Transportation Investment Generating Economic Recovery)
Grant (capital project fund) for the Kalispell Core and Rail Redevelopment Project. This fund was established to account for
the project which consist of the construction of a rail park at a reclaimed gravel pit, then relocating rail served businesses to
the rail park and converting the old rail line through Kalispell into a bike and pedestrian trail, opening up a number of north
and south connection streets that are currently blocked by the rail line.
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 focus 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 f ind'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
41
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
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.
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.
All Fiduciary funds reported account for assets held by the City of Kalispell in a trustee capacity (agency fund). The agency
fund is custodial in nature and does not present results of operations or have a measurement focus. Agency funds are
accounted for using the accrual basis of accounting.
The KPD Evidence agency fund is used to account for assets that the City holds as evidence, but will be returned to the owner
when it is no longer required.
The Payroll Clearing agency fund is used to account for assets payable to providers of payroll benefits until such time as it is
due.
The Performance Bond agency fund is used to hold assets provided by individuals and businesses until they have completed a
task required by contractual agreement with the City of Kalispell.
The Tourism Business Improvement District agency fund is used as a pass thru for fees paid by patrons of participating
lodging facilities to fund the Tourism Business Improvement District.
As a general rule the effect of inter -fund activity has been eliminated from the government -wide financial statements, and the
internal service funds have been absorbed into governmental -type activities on the government -wide financial statements.
Exceptions to this general rule are charges for services between various functions of the government. Elimination of these
charges would distort the direct costs and program revenues reported for the various functions concerned.
Budget 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
42
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
unanticipated state or federal monies are received; or when a public emergency occurs which could not have been foreseen at
the time of adoption.
The City Manager is granted budget amendment authority for the expenditure of funds from debt service funds, enterprise
funds, internal service funds, trust funds, federal and state grants accepted and approved by the City Council, special
assessments, and donations.
The procedure to amend the budget in total can be made only after the City prepares a resolution, notice is published of a
public hearing, and a public hearing is held in accordance with state law.
All material budget amendments and transfers during FY 2018 are described below:
Governmental Funds
The SID 343 debt service fund was amended by the City Manager to allow the use of excess funds to pay down the
outstanding principal an additional $60,000.
A new fund was established by Resolution No. 5863. The Bridge and Road Safety and Accountability Act (BaRSAA) fund
accounts for increased gasoline tax revenues from the State of Montana to be used, along with a 5% local match, for
construction, reconstruction, maintenance, or repair of streets and alleys. Fiscal year 2018 budget for this fund was set at
$148,876.
Resolution No. 5872 authorized the sale of $4.96 million of tax increment urban renewal revenue bonds (Westside). The
Official Statement relating to these bonds required the transfer of $5,191,275 budget authority from the Westside TIF fund to
the Tiger Rail/Trail Construction fund ($4,973,291), and the Westside TIF debt service fund ($217,984).
Enterprise Funds
The Airport fund was amended by the City Manager by $181,317. This was necessitated by the City's agreement to turn over
all operations to the Kalispell Airport Association, Inc, Montana. This amendment facilitated the transfer, after satisfaction of
liabilities, of any remaining cash in the fund to KAA.
The Water fund expense budget was increased $415,000. This adjustment was made to facilitate the awarding of a bid to
complete the Section 36 Pump House.
The Sewer fund budget adopted for fiscal year 2018 failed to include certain detailed and itemized estimates of expenses of
the fund. Resolution No. 5847 increased the capital outlay of the sewer operations fund by $4,726,661 related to the
Westside Interceptor project.
The City Manager also made an administrative adjustment ($796,679) to the capital expenses of the treatment plant (Sewer
fund). The contractor's cost to complete the secondary digester covers and twas storage tank rehabilitation project exceeded
the engineer's cost estimate necessitating this adjustment.
43
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Assets, Liabilities, and Net Assets or Equity
1. Cash 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 as a result of pooling of 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.
Investments are carried at cost, which approximates fair value as described in Note 3, A, except for investments in State of
Montana Short Term Investment Pool (STIP) which is reported at fair value.
For purposes of the statement of cash flows, the enterprise and internal services funds consider all funds (including restricted
assets) held in the City's cash management pool to be cash equivalents.
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 tofrom 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 and are subject to penalty and interest charges.
An allowance for uncollectible accounts was not maintained for real and personal property taxes and special assessments
receivable. The direct write-off method is used for these accounts.
44
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2018
Ambulance
An allowance, based on history, for estimated uncollectible accounts receivable of 55% is maintained for the Ambulance
fund. This allowance account has been adjusted to $387,268 at June 30, 2018.
Ambulance accounts receivable $704,123
Times allowance percentage 55%
@ June 30, 2018 $387,268
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, 2018:
Water $ 16,372
Sewer $ 22,773
Contracts
The following are contracts payable to the City of Kalispell on June 30, 2018.
FUND
Source
Amount
General - Major Governmental
Municipal Court
$
72,040
Information Technology - Internal Service
Charter (formerly Bresnan)
$
51,647
Total Governmental Activities
$
123,687
Water - Major Proprietary
Impact Fees
$
34,604
Sewer - Major Proprietary
Impact Fees
$
291,037
Total Proprietary Funds
$
325,641
Total City contracts receivable
$
449,328
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 not significant. Enterprise Fund inventory of materials and supplies are valued at cost and the
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.
45
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
On June 30, 2018, the City reported prepaid expenses in the following funds.
FUND
Puroose
Amount
FUND Pur ose
Amount
General - Major Governmental
Workers Compensation
$ 106,082
General - Major Governmental
Health Insurance
140,108
Water - Major Proprietary Health Insurance
16,061
Parks
Health Insurance
11,691
Water - Major Proprietary Prepaid rent
25,684
Ambulance
Health Insurance
11,310
Sewer- Major Proprietary Health Insurance
21,054
Building Department
Prepaid expenditure
12,000
Sewer - Major Proprietary Prepaid rent
38,526
Building Department
Health Insurance
4,803
Solid Waste Health Insurance
7,386
Street Maintenance
Health Insurance
13,133
Solid Waste Prepaid rent
12,842
Street Maintenance
Prepaid rent
12,842
Total Proprietary Funds
121,553
CD Misc.
Prepaid rent
1,293
Total Governmental Funds
313,262
Total City prepaids
$442,421
Information Technology - Internal Service Health Insurance
2,224
Information Technology - Internal Service Prepaid maintenance contract:
2,195
Central Garage - Internal Service
Health Insurance
3,187
Total Internal Service
7,606
Total Governmental Activities
320,868
The City pays quarterly in advance for Health Insurance and Workers' Compensation insurance. Some information
technology maintenance contracts span up to three years. A number of City departments have prepaid office rent.
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. Capital assets are defined by the government 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. As required by GAS13, the City of Kalispell has retroactively reported its streets as part of capital assets in the
financial reports for fiscal year 2009. More detailed information on the City's streets and all capital assets can be found in
Note 3, D. Capital Assets.
Police vehicles are an exception despite a useful life less than 5 years. The City has determined that it is important to
capitalize and depreciate these because the total cost, as a group, is substantial.
The costs of normal maintenance and repairs that do not add to the value of the assets or extend asset lives are not capitalized.
Improvements are capitalized and depreciated over the remaining useful lives of the related assets. Major outlays for capital
assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of fixed
assets is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the
same period.
46
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
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
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 retiree 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 301h in the succeeding fiscal year (current). The City also assumes sick leave accumulated as of June 3011 will
remain accumulated in the succeeding fiscal year (long-term).
7. Long - Term 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 or not withheld from the actual debt proceeds received, are reported as debt service
expenditures.
47
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
8. Net Position/Fund Balance
Net position in the government wide and proprietary fund financial statements show the amount of the capital assets less any
outstanding debt issued to fund them as "net investment in capital assets." Restricted net position are those that have
constraints placed on them either 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 needs to formally adopt
a Resolution in order to establish, modify, or rescind a fund balance commitment.
Assigned fund balances are intended to be used by the government for specific purposes but do not meet the criteria to be
classified as restricted or committed. Assignments of fund balance are created 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 that is projected to be used
to fund expenditures and other cash outflows in excess of 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 classification should be used only to
report a deficit balance resulting from overspending for specific purposes for which amounts have been restricted,
committed, or assigned.
When both restricted and unrestricted resources are available, spending will occur in the following order, for the identified
fund types:
General Fund: restricted, committed, assigned, unassigned
Special Revenue Funds: restricted, committed, assigned
Debt Service Funds: assigned, committed, restricted
Capital Project Funds: restricted, committed, assigned
48
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2018
NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Excess of expenditures over appropriations
For the year ended June 30, 2018, all City funds expenditures were less than or equal to budgeted appropriations.
NOTE 3. DETAILED NOTES ON ALL FUNDS
A. Cash and Investments
At June 30, 2018, the carrying amount of the City's deposits in local banks and investments is $51,861,611. Interest bearing
account balances are covered by the Federal Depository Insurance Corporation (FDIC) up to $250,000 per bank, per
depositor. In addition, all noninterest bearing transaction account balances are fully insured by FDIC coverage. The
remaining balances are covered by collateral held by the pledging bank's agent in the City's name.
The City's cash and investments are reported as follows:
Unrestricted Restricted Total
Governmental activities $22,310,403 $1,866,708 $24,177,111
Business -type activities 16,535,200 10,896,926 27,432,126
Fiduciary funds 200,206 200,206
Component unit 52,168 52,168
$39,097,977 $12,763,634 $51,861,611
Custodial credit risk for deposits is the risk that in the event of a financial institution failure, the City's deposits 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
minimizes custodial credit risk by restrictions set forth in City policy and state law. Types of securities that may be pledged
as collateral are detailed in Section 17-6-103 of the Montana Code Annotated (MCA).
On June 30, 2018, the following interest rate risks were associated with the City's deposits and investments.
Credit Risk
Investment
Maturities
Rating
Cost.
Certificates of Deposit
Feb. 2019
N/A
$ 248,000
U.S. Government Bonds
July 2018-
Apri12022
S&P AA+
$15,550,000
State of Montana -
Short Term Investment Pool Account
N/A
N/A
$15,349,679
S & C Bonds - internal
2019-2026
N/A
$ 36,508
Demand deposits
N/A
N/A
$20,674,494
Petty Cash
N/A
N/A
$ 2,930
$51,861,611
Credit risk is defined as the risk that an issuer or other counterpart to an investment will not fulfill its obligation. The above credit
risk rating indicates the probability that the issuer may default in making timely principal and interest payments. The credit ratings
presented in the previous tables are provided by Standard and Poor's Corporation (S&P). The City's investment policy is to hold
investments to maturity with the contractual understanding that these investments are low risk, locked in to a guaranteed rate of
return, and are, therefore, not impacted significantly by changes in short term interest rates. The City has no formal policy relating
to interest risk and no formal policy relating to credit risk
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2018
The City voluntarily participates in the STIP (Short Term Investment Pool) administered by the Montana Board of Investments
(MBOI). A local government's STIP ownership is represented by shares, the prices of which are fixed at $1.00 per share, 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 2 years. Information on investments held in the STIP can be found in the Annual Report on
the MBOI website at hllp:Hinvestment.com/AmualReportsAudits.
B. Interfund Receivables and Payables (Due to/from Other Funds)
The composition of interfund balances and due to/from as of June 30, 2018, was as follows:
Receivable Fund Payable Fund Amount Purpose
General Fund - Major Governmental Law Enforcement Grants - Special Revenue Fund 642 S/T Loan
General Fund - Major Governmental Stonegarden Grant - Special Revenue Fund 6,079 S/T Loan
SID Revolving Fund G.O. Bonds - Debt Service Fund 5,111 S/T Loan
SID Revolving Fund SID 343 - Debt Service Fund 4,077 S/T Loan
Total - Due To Other Funds (Governmental Funds) $ 15,909
C. Transfers
The following is an analysis of transfers between funds during Fiscal Year 2018:
From
To
Amount
Purpose
West Side TIF - Special Revenue
West Side TIF - Debt Service
40,000
Operations
West Side TIF - Capital Project
West Side TIF - Debt Service
904,670
Operations
West Side TIF - Special Revenue
Tiger Grant - Major Governmental
2,200,000
Match
Old School Tech TIF
CD Misc
60,000
Operations
Old School Industrial TIF
CD Misc
10,000
Operations
Health
General - Major Governmental
901,000
Operations
S & C
SID Revolving
120
Operations
TOTAL
$ 4,115,790
50
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUKE 30, 2018
D. Capital Assets
Capital asset activity for the year ended June 30, 2018 was as follows:
Assets Contributed
In fiscal year 2018, Governmental Activities report contributed assets from private sources with a value of $30,337. These
contributed assets are sidewalk replacement or repair paid for by homeowner's directly or by Sidewalk & Curb assessments.
The water (major proprietary) fund contributed fully depreciated equipment with a historical cost of $36,162 to the
Governmental Activities of the City of Kalispell.
In fiscal year 2018, Business -type Activities report contributed assets from private sources with a value of $516,135. The
Water fund received contributions from developers in the amount of $215,606. Contributed to the Water fund were six (6)
new fire hydrants ($35,278), and one thousand six hundred twenty four linear feet (1,624') of water mains ($180,328). The
Sewer fund received contributions from developers in the amount of $300,529. Contributed to the Sewer fund were two
thousand nine hundred forty eight linear feet (2,948') of sanitary sewer mains ($174,546), and nine hundred eighty six linear
feet (986') of stormwater main ($125,982).
The Governmental Activities of the City of Kalispell contributed fully depreciated equipment with a historical cost of $20,614
to the sewer (major proprietary) fund.
Cain (Loss) on Sale/Disposal of Capital Assets
In fiscal year 2018, Business -type Activities report a loss on disposal of assets of $1,472. Residential and commercial meters
were replaced with a depreciated value of $1,472, resulting in a loss on disposal of capital assets in the Water fund.
Construction in Progress
Additions to construction in progress of governmental activities included construction of the Glacier Rail Park and related
pedestrian trail ($9,054,938) and construction of new field space at the Kidsports complex ($561,995).
Reductions to construction in progress of governmental activities was $35,145. The new sand cold mix storage shed, begun
in fiscal year 2017 and constructed with funds from both governmental activities (special street fund) and business -type
activities (water and sewer fund) was put into service in fiscal year 2018.
Additions to construction in progress of business -type activities was $2,470,109. This included replacement of water mains
($160,198), and improvements to a water well ($195,515) in the water fund. Sewer fund additions included continued
construction of the westside interceptor ($1,711,890), secondary digester lid project ($310,390), relocation and upsize of the
Grandview lift stations ($22,195), regional stormwater facilities design ($67,664), and other sewer repairs ($2,257).
Reductions to construction in progress of business -type activities included the sand cold mix storage shed discussed above
($103,134). Other reductions included completion of the 41h Avenue East water main ($60,883) and replacement of the
Noffsinger Spring generator ($58,943) in the water fund. Sewer fund construction in progress reduced by $646,739 with the
completion of the solids dewatering design and construction project.
51
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2018
Balance
Balance
Governmental Activities:
July 1, 2017
Additions
Contributions
Transfers Deductions
June 30, 2018
Capital assets not being depreciated:
Land (Asset type: 010)
$ 2,395,299
$ -
$
$ $ -
$ 2,395,299
Construction in Progress
$ 885,147
$ 9,616,933
$
$ (35,145)
$ 10,466,935
Total capital assets not being depreciated
3,280,446
9,616,933
(35,145)
12,862,234
Capital assets being depreciated:
Buildings (Asset type: 020)
17,229,272
86,969
17,316,241
Improvements other than buildings (Asset type: 030)
15,827,473
178,891
30,337
(15,004)
16,021,697
Machinery and equipment
General (Asset type: 040)
9,330,369
1,116,232
15,548
10,492 (782,573)
9,690,068
Ambulance(Assettype: 100)
560,266
-
-
- (140,610)
419,656
Parking (Asset type: 230)
120,896
-
(65,060)
55,836
Infrastructure (Asset type: 031)
83,135,184
615,098
(525,575)
83,224,707
Total capital assets being depreciated
126,203,460
1,997,190
45,885
10,492 (1,528,822)
126,728,205
Less accumulated depreciation for:
Buildings (Asset type: 020)
(9,059,872)
(589,877)
-
- -
(9,649,749)
Improvements other than buildings (Asset type: 030)
(8,702,547)
(600,819)
15,004
(9,288,362)
Machinery and equipment
General (Asset type: 040)
(5,489,802)
(647,165)
(15,548)
(10,492) 765,311
(5,397,696)
Ambulance (Asset type: 100)
(408,961)
(34,340)
140,610
(302,691)
Parking (Asset type: 230)
(115,875)
(1,470)
65,060
(52,285)
Infrastructure (Asset type: 031)
(30,899,591)
(2,078,379)
324,290
(32,653,680)
Total accumulated depreciation
(54,676,648)
(3,952,050)
(15,548)
(10,492) 1,310,275
(57,344,463)
Total capital assets being depreciated, net
71,526,812
(1,954,860)
30,337
(218,547)
69,383,742
Governmental activities capital assets, net
$ 74,807,258
$ 7,662,073
$ 30,337
$ $ (253,692)
$ 82,245,976
Balance
Balance
Internal service funds:
July 1, 2017
Additions
Contributions
Transfers Deductions
June 30, 2018
Information Technology (Asset type: 200)
$ 340,294
$ 65,953
$
$ $
$ 406,247
Less accumulated depreciation - Information Technology
(215,863)
(38,480)
(254,343)
Central Garage (Asset type: 220)
298,396
7,020
(10,492) (5,000)
289,924
Less accumulated depreciation - Central Garage
(201,850)
(9,845)
10,492 5,000
(196,203)
Internal service funds assets, net
$ 220,977
$ 24,648
$
$ - $ -
$ 245,625
Governmental activities depreciation was charged to functions/programs of the primary government as follows:
Governmental Activities:
General Government
$ 2,505,797
Public Safety
551,004
Public Works
417,022
Parks and Recreation
478,227
Total Governmental Activities
$ 3,952,050
52
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2018
Balance
Construction
Balance
Business -type activities:
July 1, 2017
Additions
Contributions in Progress
Deductions
June 30, 2018
Capital assets not being depreciated:
Land
Airport (Asset type: 210)
$ 1,347,867
$
$ $
$
$ 1,347,867
Water (Asset type: 070)
105,958
105,958
Sewer (Asset type: 120)
282,137
282,137
Sewer (Storm) (Asset type: 150)
26,550
26,550
Construction in progress
Water
183,950
355,713
(154,204)
385,459
Sewer/Storm
1,715,953
2,114,396
(715,495)
3,114,854
Total capital assets not being depreciated
3,662,415
2,470,109
(869,699)
5,262,825
Capital assets being depreciated:
Airport (Asset type: 210)
1,962,813
-
-
1,962,813
Water
General Plant (Asset type: 060)
1,318,795
44,729
(36,162) 34,378
(179,064)
1,182,676
Source of Supply (Asset type: 070)
4,792,054
-
- -
4,792,054
Transmision and Distribution (Asset type:
080)
28,851,363
1,822,113
215,606 60,883
(59,556)
30,890,409
Pumping Plant (Asset type: 090)
4,014,998
52,566
- 58,943
(3,821)
4,122,686
Sewer
General Plant (Asset type: 130)
956,160
82,619
20,614 34,378
1,093,771
Transmision and Distribution (Asset type:
140)
25,716,011
-
174,546 -
(1,659)
25,888,898
Storm Sewer System (Asset type: 150)
15,185,251
175,081
125,983 34,378
15,520,693
Treatment Plant Equipment (Asset type:
180)
404,368
-
- -
(4,000)
400,368
Treatment Plant (Asset type: 190)
39,530,566
153,982
646,739
(5,720)
40,325,567
Solid Waste
Buildings (Asset type: 111)
316,731
-
316,731
Machinery and equipment (Asset type: 110)
1,608,494
-
- -
(10,500)
1,597,994
Total capital assets being depreciated
124,657,604
2,331,090
500,587 869,699
(264,320)
128,094,660
Less accumulated depreciation for.
Airport (Asset type: 210)
(1,139,394)
(95,474)
- -
-
(1,234,868)
Water
General Plant (Asset type: 060)
(1,144,518)
(37,063)
36,162
179,064
(966,355)
Source of Supply (Asset type: 070)
(1,215,074)
(109,451)
-
-
(1,324,525)
Transmision and Distribution (Asset type:
080)
(9,578,770)
(671,016)
59,556
(10,190,230)
Pumping Plant (Asset type: 090)
(1,926,876)
(89,354)
3,821
(2,012,409)
Sewer
General Plant (Asset type: 130)
(857,072)
(21,421)
(20,614)
-
(899,107)
Transmision and Distribution (Asset type:
140)
(11,596,725)
(517,083)
1,659
(12,112,149)
Storm Sewer System (Asset type: 150)
(5,059,713)
(348,025)
(5,407,738)
Treatment Plant Equipment (Asset type:
180)
(350,237)
(8,434)
4,000
(354,671)
Treatment Plant (Asset type: 190)
(21,406,913)
(803,468)
5,720
(22,204,661)
Solid Waste
Buildings (Asset type: 111)
(291,181)
(9,292)
(300,473)
Machinery and equipment (Asset type: 110)
(897,180)
(136,863)
10,500
(1,023,543)
Total accumulated depreciation
(55,463,653)
(2,846,944)
15,548
264,320
(58,030,729)
Total capital assets being depreciated, net
69,193,951
(515,854)
516,135 869,699
70,063,931
Business -type activities capital assets, net
$ 72,856,366
$ 1,954,255
$ 516,135 $ -
$
$ 75,326,756
Business -type activities depreciation was charged to functions/programs of the primary government as follows:
Business -type Activities:
Airport $ 95,474
Water 906,884
Sewer 1,698,431
Solid Waste 146,155
Total Business -type Activities $ 2,846,944
53
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2018
E. Long -Term Debt
During the year ended June 30, 2018, the following changes occurred in liabilities reported in long-term debt:
Balance
Balance
Due within
July
1, 2017
Additions
Reductions
June 30, 2018
1 year
Governmental Activities:
G.O. Bonds
$
1,885,000
$
-
$ (470,000)
$ 1,415,000
$
475,000
Revenue Bonds
933,500
4,960,000
(593,500)
5,300,000
335,000
SRF
-
615,098
(23,338)
591,760
24,262
Assessments
2,427,060
4,288
(385,841)
2,045,507
259,422
Contract Debt/Loans
662,308
569,210
(288,373)
943,145
217,733
Intermediary Program
542,521
-
(26,674)
515,847
26,940
Compensated Absences
1,380,137
1,016,475
(991,941)
1,404,671
1,014,186
Governmental Activities Sub Total
$
7,830,526
$
7,165,071
$ (2,779,667)
$ 12,215,930
$
2,352,543
Internal Service Funds:
Compensated Absences
$
31,475
$
11,067
$ (21,648)
$ 20,894
$
13,930
Internal Service Funds Sub Total
$
31,475
$
11,067
$ (21,648)
$ 20,894
$
13,930
Business -type Activities
Revenue Bonds
$ 545,000
$ - $ (70,000)
$ 475,000
$ 70,000
SRF
11,742,096
2,380,336 (1,153,661)
12,968,771
1,304,077
Contract Debt/Loans
77,849
- (38,728)
39,121
39,121
Compensated Absences
322,421
213,148 (214,754)
320,815
202,181
Business -type Activities Sub Total
$ 12,687,366
$ 2,593,484 $ (1,477,143)
$ 13,803,707
$ 1,615,379
$20,549,367 $ 9,769,622 $ (4,278,458) $ 26,040,531 $ 3,981,852
In prior years, the general fund was used to liquidate compensated absences and claims and judgments.
General Obligation Bonds - The City issues general obligation bonds to provide funds for the acquisition and construction
of major capital facilities. General obligation bonds are direct obligations and pledge the full faith and credit of the City.
General obligation bonds outstanding as of June 30, 2018 were as follows:
Origination Interest Due Principal
Purpose Date Rate Term Date Amount
Pool/Fire Hall Refunding 6/13/2012 1%-2% 10years 2022 $4,145,000
Total G.O. Bonds $4,145,000
54
Annual Balance
Payment June 30, 2018
varies $ 1,415,000
$ 1,415,000
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2018
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. The City is authorized by State law to establish and has established a revolving fund to
ensure the payment of debt service on the bonds in the event that assessed property owners default.
Origination
Interest
Due
Principal
Annual
Balance
Purpose
Date
Rate
Term
Date
Amount
Payment
June 30, 2018
SID343
6/12/2001
3.6%-5.5%
20years
2021
1,581,500
varies
15,000
SID344
6/15/2006
3.7%-5.1%
20years
2026
4,520,000
varies
1,820,000
SID345
5/15/2014
3.00%
15 years
2029
242,000
varies
174,000
2010 S&C
1/6/2011
3.00%
8 years
2019
942
varies
117
2011 S&C
1/6/2012
3.00%
8years
2020
5,792
varies
1,448
2012 S&C
4/12/2013
3.25%
8 years
2021
3,981
varies
1,493
2013 S&C
1/2/2014
3.25%
8 years
2022
17,472
varies
8,736
2014 S&C
1/2/2015
3.25%
8 years
2023
7,845
varies
4,903
2015 S&C
1/4/2016
3.50%
8 years
2024
9,273
varies
6,954
2016 S&C
6/30/2016
3.75%
8 years
2025
9,792
varies
8,568
2017 S&C
3/20/2018
3.75%
8 years
2026
4,288
varies
4,288
Total Special Assessment Bonds
$ 6,402,885
$ 2,045,507
SID 344 Bonds
Pursuant to Resolution No. 5123, principal of and interest on the Bonds are secured by: (i) special assessments payable by
taxpayers in SID 344; (ii) certain tax increment revenues pledged to the Bonds; (iii) a bond reserve account ($226,000)
established in the SID 344 fund; (iv) the debt service revolving fund ($226,000).
In April 2015, the City of Kalispell became owner of six of the eleven unsold properties in Special Improvement District 344
by bringing the taxes current on those six properties. The City used these tax payments to replenish the debt service revolving
fund to its required amount of $226,000. These funds also allowed the City to make the fiscal year 2018 payments without
the use of reserve money, and replenish the district bond reserve account.
Revenue Bonds — Revenue bonds are directly related to and expected to be paid from the proprietary fund. The 2005 Airport
Tax Increment bonds and 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.
Purpose
Governmental Activities:
2018 - Westside TIF
2005A -Airport TIF
Governmental Activities Sub Total
Business -type Activities:
2004 Water Refunding
Business -type Activities Sub Total
Issue Interest Final Bonds Balance
Date Rate Term Maturity Issued June 30, 2018
May-18 3.0%5.0% 19 years
Sep-05 3.8%-4.40% 10 years
May-04 2.5%-4.85% 20 years
Total Revenue Bonds
55
2037 $ 4,960,000 $ 4,960,000
2020 1,445,000 340,000
$ 6,405,000 $ 5,300,000
2024 $ 1,840,000 $ 475,000
1,840,000 475,000
$ 8,245,000 $ 5,775,000
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Significant Provisions of the Series 2005 Airport Urban Renewal Tax Increment Bond
Reserve Account — The City shall maintain a debt service reserve account with a balance equal to the lesser of. (i) ten percent
of the sum of the original principal amounts of each series of Bonds of which any Bond is Outstanding or (ii) the maximum
amount of principal and interest due on the Outstanding Bonds (giving effect to any mandatory sinking fund redemption) in
the then current or any future calendar year.
101 o of the sum of the original principal amount $144,500
City's Reserve $144 500
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 3.000 o for the Bonds with stated maturities from July 1, 2019 through July 1, 2025 to 5.000 o
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
(1000) 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) 12500 of the average debt service on the Bonds payable in any fiscal
year.
1250 o of the average debt service
City's Reserve
Water Debt Required Information
$480,011
$480,011
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, 2018, 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 the lesser of 100.E of the original principal or
the maximum amount of principal and interest required in the current or any subsequent fiscal year. For the Water fund the
City complies with the maximum principal and interest in the current or any subsequent year.
Maximum P & I $ 420,469
Total Reserve Requirement $ 420,469
Reserve balance 6`30 18 $ 420,469
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.
56
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
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 in excess of such current expenses, equal to 125% of the maximum amount of principal and interest payable
from the Revenue Bond Account in any subsequent fiscal year.
Water Fund Cash Flow Debt Coveraoe
Water Service Charges
$ 3.270,757
*Misc. Revenue
554,162
Total Operating Revenue
3.824,919
Less: Operating Expense (excludes depreciation)
2,085.031
Available for Debt Service
$1.739,888
**Maximum Debt Service
$ 420,469
Estimated Coverage FY18
414%
*includes interest revenue and impact fees pledged to debt
—includes all water fund borrowings
State Revolving Fund --- the City has nine (9) loan agreements with the State Revolving Fund (SRF). These obligations are
to be repaid from the operating income of the fund.
SRF LOANS
Purpose
Governmental Activities:
2017 Streets - 4th Ave E
Governmental Activities Sub Total
Business -type Activities:
Interest
Origination Rate
FY18 2.50%
Amount Outstanding
Term Borrowed June 30, 2018
20 years $ 615,098 $ 591,760
$ 615,098 $ 591.760
2013 Sewer- WWTP Digester Lid
FY13
3.00%
20 years
$ 1,102,748
2012 Sewer - Hwy 93 S
FY13
2.25%
12 years
1,009,000
2012 Water - Sheepherders WelllStorage
FY13
2.25%
15 years
1,340,000
2012 Water - Main & Idaho Main
FY13
2.00%
8 years
404,000
2012 Sewer - WWTP System Improvements
FY13
2.25%
15 years
12,827,000
2017 Water - 4th Ave E
FY18
2.50%
20 years
1,974,988
2017 Storm Sewer - 4th Ave E
FY18
2.50%
20 years
71,914
2018 Sewer - Westslde Interceptor
FY18
2.50%
30 years
396,530
Business -type Activities Sub Total
$19,126,180
Total SRF Loans
$19,741,278
Sewer Debt Required Information
$ 876,000
538,000
857,000
126,000
8,206,000
1,900,056
69,185
396,530
$ 12,968,771
$ 13,560,531
Operating Reserve — The city shall keep in the operating reserve account an amount equal to one month's operating expenses.
As of June 30, 2018, the operating reserve account contains $190,000.
Debt Service Account - Monthly an amount equal to not less than 1 /6 of the interest due within the next six months and 1112
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, 2018, as all debt service payments were made as of the end of the fiscal year, leaving no
accrued interest or principal balance.
57
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Reserve Account - The City shall keep in the reserve account an amount equal to the lesser of 10% of the original principal
($1,493,875), the maximum amount of principal and interest required in the current or any subsequent fiscal year
($1,182,693), or 125% of the average debt service payable in any fiscal year ($10,782,920 / 15 years = $718,861 * 1.25 =
$898,577). The City is in compliance with the 125% of the average debt service payable in any fiscal year. As of June 30,
2018, the debt service reserve account contains $974,125.
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 in excess of such current expenses, equal to 125% 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 $ 6,009,886
Impact Fees Pledged for Debt 320,000
Total 6,329,886
Less: Operating Expense (excludes depreciation) 3,543,345
Available for Debt Service $ 2,786,541
**Maximum Debt Service $ 1,182,693
Estimated Coverage FY18 236%
*includes interest revenue
-includes all sewer fund borrowings
Loans/Contracted Debt
Origination
Interest
Due
Principal
Balance
Purpose
Date
Rate
Term
Date
Amount
June 30, 2018
Business -type Activities
BOI:Garbage Truck
6/13/2015
varies
5 years
2/15/2019
$ 172,988
$ 39,121
Total loans/contracted debt - Business -type Activities
$ 39,121
Governmental Activities
BOI:Dump Trucks (2) (St. Maint.)
2/28/2014
varies
5 years
2/15/2019
162,696
35,539
1301:201 1st Ave E -City Hall
9/11/2015
varies
5 years
8/15/2020
412,571
209,124
BOI:Chip Truck (Forestry)
1/8/2016
varies
5 years
2/15/2021
34,498
20,910
BOI:Flatbed Chevy (Parks)
11/23/2016
varies
5 years
2/15/2022
31,066
25,048
BOI:Mower (Parks)
3/31/2017
varies
5 years
2/15/2022
59,707
48,168
BOI:Woodland Bathroom (Parks)
6/30/2017
varies
5 years
2/15/2022
39,214
35,045
BOI:Mower (Parks)
2/16/2018
varies
5 years
2/15/2023
35,191
35,191
BOI:Spray Gator (Parks)
6/30/2018
varies
5 years
2/15/2023
26,336
26,336
BOI:Fire Pumper
3/16/2018
varies
10 years
2/15/2028
467,784
467,784
BOI:Chip Truck (Forestry)
11/3/2017
varies
5 years
2/15/2022
40,000
40,000
Sub total BOI
loans
$1,309,063
$ 943,145
USDA: Intermediary
Relending Program
10/12/2004
1.00%
30 years
10/12/2034
$ 520,000
$ 343,455
Relending Program
11/27/2006
1.00%
30 years
11/27/2036
257,500
172,392
Sub total USDA Intermediary
777,500
515,847
Total loans/contracted debt
- Governmental Activities
$ 2,086,563
$ 1,458,992
BOI - Board of Investments Intercap Loan Program
58
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUKE 30, 2018
Requirements to amortize debt
The annual requirements to amortize all long-term debt outstanding, excluding compensated absences payable, as of June 30,
2018, were as follows:
Governmental
Activities-,
SPECIAL
GO
ASSESSMENT
CONTRACTED
INTERMEDIARY SRF REVENUE
FOR FISCAL
BONDS
BONDS
LOANSOEBT
LOAN PROGRAM LOANS BONDS
YEAR ENDED
PRINCIPAL
INTEREST
PRINCIPAL INTEREST
PRINCIPAL
INTEREST
PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL
INTEREST
TOTAL
2019
475.000
27,113
259,423
98,577
217.733
29,709
26.940 5,159 24.262 14644 335,000
210.905
1.724.465
2020
485.000
18,800
246.305
06.341
184.420
22,851
27.210 4,889 24,956 14.032 365,000
182.625
1.662.429
2021
225.000
9,100
247,581
74.619
144.081
17.041
27.482 4,617 25.649 13.405 195,000
169.225
1.152,800
2022
230.000
4,600
247,084
62 663
96 444
12.503
27.757 4,342 26,573 12,758 205,000
163,375
1.093,099
2023
247,900
5D,626
59.054
9.465
28.034 4,065 27.266 12,088 210.000
157.225
805,723
2024-2028
777.214
80504
241.413
22.994
144.434 16,062 145.343 49.905 1,145,000
687.013
3.309.882
2029.2033
20,000
453
151.801 8,694 166,370 30588 1,350000
477512
2.205,415
2034-2038
82.189 1.621 151 341 8.458 1.495,000
153.000
1.891,609
TOTAL
$ 1.415,000 $ 59.613
$2.045.507 $ 453780
$ 943.145 $ 114.563
$ 515,847 $ 49,449 $ 591.760 $ 155878 $5,300.000 $2.200880
$13845,422
Business-tvT�gt
AcSivi ies:
SRF
REVENUE
CONTRACTED
FOR FISCAL
LOANS(1i
BONDS
LOANSIDEBT
YEAR ENDED
PRINCIPAL
INTEREST
PRINCIPAL INTEREST
PRINCIPAL
INTEREST
TOTAL
2019
1,194956
297.259
70,000
22.793
39,121
1,233
1.625,362 (1) The 2018 sewer fund SRF loan ($396,530) is
2020
1.221.262
269,745
75,000
19,643
1.585,650 included on this schedule. The City has not
2021
1,225.569
241,627
75,000
16,005
1.558.201 drawn all funds for this loan. An amortization
2022
1,227A45
213,577
80,000
12.368
1.533,590 schedule will not be available until all funds have
2023
1,253.952
185,138
85.000
8.488
1.532.578 been drawn Final loan amount will be approx-
2024-2028
5,189.745
500.641
90000
4,365
5.784.751 imately$14,400,000
2029-2033
953,718
165.982
1,119,700
2034.2038
569-748
55,645
625.393
2039-2043
66 088
18.000
84.088
2044-2048
66.088
9.000
75.088
TOTAL
$12,968 771
$1 929.614
$ 475 000 $
81662
$ 39.121
$ 1.233
$ 15.365.225
59
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
F. Employee Benefit Plans
Pension Plans
Substantially all City of Kalispell full-time employees participate in one of three statewide, cost sharing, multiple -employer
retirement benefit plans administered by the Public Employees Retirement Board (PERB). The authority to establish or
amend contribution requirements for all plans, and provide cost of living adjustments for defined benefits plans is assigned to
the State legislature. PERB issues a publicly available comprehensive annual financial report that includes financial
statements and required supplementary information for these plans. It is available from the Montana Public Employees'
Retirement Administration (MPERA) at 100 North Park Avenue, Suite 200, P.O. Box 200131, Helena, Montana, 59620-0131
or at their website, http: mpera.mt.gov.
The Montana Public Employees Retirement Administration (MPERA) prepares its financial statements using the accrual basis
of accounting. For the purposes of measuring the net pension liability, deferred inflows of resources and deferred outflows of
resources related to pensions, pension expense, 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 accounting period when due and payable in accordance with the benefit terms. Expenses are recognized the period
incurred. Investments are reported at fair value. MPERA adheres to all applicable Governmental Accounting Standards
Board (GASB) statements.
Contributions to pension plans are as required by state statue. Information about each plan follows:
PUBLIC EMPLOYEES' RETIREMENT SYSTEM — DEFINED BENEFIT
GASB 68 NOTES TO THE FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2017
(MEASUREMENT DATE), JUNE 30, 2018 (REPORTING DATE)
In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non -employer
contributing entity are required to recognize and report certain amounts associated with participation in the Public
Employees' Retirement System Defined Benefit Retirement Plan (the Plan). Employers are required to record and report their
proportionate share of the collective Net Pension Liability; Pension Expense; and Deferred Outflows and Deferred Inflows of
Resources associated with pensions.
Pension Amount Totals
Employers are provided guidance in GASB Statement 68, paragraph 74, that pension amounts must be combined as a total or
aggregate for reporting. This is true when employees are provided benefits through more than one pension, whether cost -
sharing, single -employer, or agent plans.
Net Pension Liability
The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). As GASB
Statement 68 allows, a measurement date of up to 12 months before the employer's fiscal year-end can be utilized to
determine the Plan's TPL. The basis for the TPL as of June 30, 2017, was determined by taking the results of the June 30,
2016, actuarial valuation and applying standard roll forward procedures. The roll forward procedure uses a calculation that
adds the annual normal cost (also called the service cost), subtracts the actual benefit payments and refunds for the plan year,
60
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
and then applies the expected investment rate of return for the year. The update procedures are in conformity with Actuarial
Standards of Practice issued by the Actuarial Standards Board.
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 counties; cities & towns; school districts & high schools; and
other governmental agencies.
Not Special Funding
Per Montana law, state agencies and universities paid their own additional contributions. These employer paid contributions
are not accounted for as special funding for state agencies and universities but are reported as employer contributions. The
state of Montana, as the non -employer contributing entity, also paid to the Plan coal tax contributions that are not accounted
for as special funding for all participating employers.
The proportionate shares of the employer's and the state of Montana's NPL for June 30, 2017, and 2016, 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 a particular employer to the total state contributions paid. The employer recorded a liability of
$8,836,349 and the employer's proportionate share was 0.4537 percent.
Percent of
Percent of
As of measurement
Net Pension
Net Pension
Collective
Collective
Change in
date:
Liability as of
Liability as of
NPL as of
NPL as of
Percent of
6/30/2017
6/30/2016
6/30/2017
6/30/2016
Collective NPL
Emp•oyer Proportionate
Share
$ 8,836,349.00
$ 7 348,266.00
0 4537%
0 4314%
0.0223%
State of M ntana
Proportioe ate Share
associated Wth the
Emp o er
$ 117,668.00
$ 89,787.00
0 5997%
0.5513%
0.0484%
Total
$ 8,954,017.00
$ 7,438,053.00
1 0534%
0.9827%
0.0707%
Changes in actuarial assumptions and methods:
Effective July 1, 2017, the following assumption changes were used:
• Lowered the interest rate from 7.75% to 7.65%
• Lowered the inflation rate from 3.00% to 2.75%.
• Updated non -disabled mortality to the RP-2000 Combined Employee and Annuitant Mortality Table projected to 2020
using scale BB, males set back 1 year.
• Increased rates of withdrawal.
• Lowered the merit component of the total salary increase.
• Lowered the wage base component of the total salary increase from 4.00% to 3.50%
• Decreased the administrative expense load from 0.27% to 0.26%.
Effective July 1, 2017, the following method changes were used:
• Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the
System. This amount will vary from year to year based on the prior year's actual administrative expenses.
• To be consistent with the wage base growth change, the payroll growth assumption for amortization as a level
percent of pay was reduced from 4.00% to 3.50%.
61
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Changes in benefit terms:
Effective July 1, 2017, the following benefit changes were:
• The interest rate credited to member accounts increased from 0.25% to 0.77%.
• Lump sum payouts in all systems are limited to the member's accumulated contributions rather than the present
value of the member's benefit.
Changes in proportionate share: Between the measurement date of the collective NPL and the employer's reporting date
there were some changes in proportion that would have an effect on the employer's proportionate share of the collective NPL
since the previous measurement date.
Pension Expense
As of reporting date
Pension Expense as of
Pension Expense as of
6/30/2017
6/30/2016
Employers Proportionate Share of PERS
$ 1,034,131
$
488,800
State of Montana Proportionate Share
associated with the Employer
$ 6,273
$
7,524
Grant Revenue - State of Montana Coal
Tax for employer
I $ 126,406
$
128,743
Total
1 $ 1,166,810
1 $
625,067
At June 30, 2017, the employer recognized $1,034,131 for its proportionate share of the Plan's pension expense and
recognized grant revenue of $6,273 for the state of Montana proportionate share of the pension expense associated with the
employer. Additionally, the employer recognized grant revenue of $126,406 from the Coal Severance Tax fund. (Two years
of pension expense are documented in the above table but are not necessary for the employer's disclosures.)
Recognition of Deferred Inflows and Outflows
At June 30, 2017, the employer reported its proportionate share of the Plan's deferred outflows of resources and deferred
inflows of resources from the following sources:
Outflows of
Inflows of
Resources
Resources
Ex cted vs. Actual Experience
$ 217,611
$ 12,790
Investment
Earnings vs.
$
$ 59,346
Changes in Assumptions
$ 1,207,836
$
Proportion
and
Differences
$ 255,222
$
Contributions
subsequent
$ 530,757
Total
$ 2,211,426
$ 72,136
62
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension
Expense as follows:
For the Reporting Year ended June 30:
Amount of deferred outflows and deferred inflows
recognized in future years as an increase or (decrease) to
Pension Expense
2017
$ 785.979.00
20, •`;
$ 313.005.00
2019
$ 690.964.00
2020
$ 537.420.00
2021
$ 188.078.00
2022
$
Thereafter
$
Plan Description (PERS)
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 covers the State, local governments, certain employees of the
Montana University System, and school districts.
All new 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. All new members from the universities also have a third
option to join the university system's Montana University System Retirement Program (MUS-RP).
The PERS-DBRP provides retirement, disability, and death benefits to plan members and their beneficiaries. Benefits are
established by state law and can only be amended by the Legislature.
Summary of Benefits
Eligibility for benefit
Service retirement:
Hired prior to July 1, 2011
Hired on or after July 1, 2011
Age 60, 5 years of membership service;
Age 65, regardless of membership service; or
Any age, 30 years of membership service.
Age 65, 5 years of membership service;
Age 70, regardless of membership service.
Early retirement, actuarially reduced:
Hired prior to July 1, 2011: Age 50, 5 years of membership service; or
Any age, 25 years of membership service.
Hired on or after July 1, 2011: Age 55, 5 years of membership service.
63
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Second Retirement (requires returning to PERS-covered employer or PERS services):
1) Retire before January 1, 2016 and accumulate less than 2 years additional service credit or retire on or after January 1,
2016 and accumulate less than 5 years additional service credit:
a. A refund of member's contributions plus return interest (currently .770 o effective July 1, 2017).
b. No service credit for second employment;
C. Start the same benefit amount the month following termination; and
d. Guaranteed Annual Benefit Adjustment (GABA) starts again in the January immediately following the second
retirement.
2) Retire before January 1, 2016 and accumulate at least 2 years of additional service credit:
a. A recalculated retirement benefit based on provisions in effect after the initial retirement; and
b. GABA starts on the recalculated benefit in the January after receiving the new benefit for 12 months.
3) Retire on or after January 1, 2016 and accululate 5 or moreyears of service credit:
a. The same retirement as prior to the return to service;
b. A second retirement benefit as prior to the second period of service based on laws in effect upon the rehire date;
C. GABA starts on both benefits in the January after receiving the original and the new benefit for 12 months.
Vesting
5 years of membership service
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 1100 o annual cap on compensation considered as part of a member's highest average
compensation.
Monthly benefit formula
Members hired prior to July 1, 2011:
• Less than 25 years of membership service: 1.7850 o of HAC per year of service credit;
• 25 years of membership service or more: 200 of HAC per year of service credit.
Members hired on or after July 1, 2011:
• Less than 10 years of membership service: 1.50 0 of HAC per year of service credit;
• 10 years or more, but less than 30 years of membership service: 1.78500 of HAC per year of service credit;
• 30 years or more of membership service: 200 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 other adjustments to the member's benefit.
• 300 for members hired prior to July 1, 2007
• 1.510 for members hired on or after July 1, 2007 and June 30, 2013
Members hired on or after July 1, 2013:
a) 1.5°o for each year PERS is funded at or above 9000;
b) 1.50 o is reduced by 0.10 o for each 20 o PERS is funded below 900 u; and
c) 01 o whenever the amortization period for PERS is 40 years or more.
rOTH
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Overview of Contributions
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 Montana Legislature has
the authority to establish and amend contribution rates. Member and employer contribution rates are shown in the table below.
State &
Fiscal
Universities
Local Government
School Districts
Year
Member
Employer
Employer State
Employer
State
Hired Hired
<7101/11 >7101/11
2018
7.9%
7.9%
8.570%
8.470%
0.10%
8.20%
0.370%
2017
7.9%
7.9%
8.470%
8.370%
0.10%
8.10%
0.370%
2016
7.9%
7.9%
8.370%
8.270%
0.10%
8.00%
0.370%
2015
7.9%
7.9%
8.270%
8.170%
0.10%
7.90%
0.370%
2014
7.9%
7.9%
8.170'%
8.070%
0.10%
7.80%
0.370%
2012-2013
6.9%
7.9%
7.170%
7.070%
0.10%
6.80%
0.370%
2010-2011
6.9%
7.170%
7.070%
0.10%
6.80%
0.370%
2008-2009
6.9%
7.035%
6.935%
0.10%
6.80%
0.235%
2000-2007
6.9%
6.900%
6.800%
0.10%
6.80%
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 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 an actuary valuation that shows the
amortization period of the PERS-DBRP has dropped below 25 years and remains below the 25 years following the
reduction of both the additional employer and member contributions rates.
b. Effective July 1, 2013, employers are required to make contributions on working retirees' compensation. Member
contributions for working retirees are not required.
c. The portion of employer contributions allocated to the PCR are included in the employers reporting. The PCR was
paid off effective March 2016 and the contributions previously directed to the PCR are now directed to member
accounts.
3. Non Employer Contributions:
a. Special Funding
i. The State contributes 0.1 % of members' compensation on behalf of local government entities.
ii. The State contributes 0.37% of members' compensation on behalf of school district entities.
b. Not Special Funding
i. The State contributes a portion of Coal Severance Tax income and earnings from the Coal
Trust Permanent Trust fund.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Stand -Alone Statements
The financial statements of the Montana Public Employees Retirement Board (PERB) Comprehensive Annual Financial
Report (CAFR) and the GASB 68 Report disclose the Plan's fiduciary net position. The reports are available from the PERB
at PO Box 200131, Helena MT 59620-0131, (406) 444-3154 or the MPERA website at
http: mpera.mt.gov'annualReports.shtml
Actuarial Assumptions
The TPL used to calculate the NPL was determined by taking the results of the June 30, 2016, actuarial valuation and
applying standard roll forward procedures to update the TPL to June 30, 2017. There were several significant assumptions
and other inputs used to measure the TPL. The actuarial assumptions used in the June 30, 2017 valuation were based on the
results of the last actuarial experience study, dated June 2010, for the six -year period July 1, 2010 to June 30, 2016. Among
those assumptions were the following:
Investment Return (net of admin expense) 7.65%
Admin Expense as % of Payroll 0.26%
General Wage Growth' 3.50%
'includes Inflation at 2.75%
Merit Increases 0% to 6.3%
Post Retirement Increases
Mortality assumptions among contributing members, terminated vested members, service retired members and beneficiaries
are based on RP 2000 Combined Employee and Annuitant Mortality Tables projected to 2020 with scale BB, males set back
1 year.
Mortality assumptions among Disabled Retirees were based on RP 2000 Combined Mortality Tables with no projections.
Discount Rate
The discount rate used to measure the Total Pension Liability was 7.650o. 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 establishes the contractually required rates under Montana Code
Annotated. The State contributes 0.10o of salaries for local governments and 0.37% for school districts. In addition, the State
contributes coal severance tax and interest money from the general fund. The interest was contributed monthly and the
severance tax was contributed quarterly. 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 2121. Therefore, the
long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to
determine the Total Pension Liability. A municipal bond rate was not incorporated in the discount rate.
Target Allocations
The long-term expected return on pension plan assets was reviewed as part of the regular experience study prepared for the
Plan. The experience study, performed for the period of fiscal years 2010 through 2016, was outlined in a report dated June
2017 and can be located on the MPERA website. The long-term expected rate of return on pension plan investments was
determined by considering information from various sources, including historical rates of return, rate of return assumptions
adopted by similar public sector systems, and by using a building-block method in which best -estimate ranges of expected
future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each
major asset class. These ranges were combined to produce the long-term expected rate of return by weighting the expected
future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of
arithmetic real rates of return for each major asset class included in the target asset allocation as of June 30, 2017, are
summarized below.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Asset Class
Target Asset Allocation
Real Rate of Return
Arithmetic Basis
Long -Term Expected Real
Rate of Return
a
b
a x b
Cash Equivalents
2.6%
4.00%
0.10%
Domestic Equity
36 0%
4 55%
1.64%
Forei n E u it
18 0%
6 35%
1.14%
Fixed Income
23 4%
1 00%
1 0.23%
Private Equity
12.0%
7.75%
0.93%
Real Estate
8.0%
1
4.00%
0.32%
Total
100%
4.37
Inflation 2.75%
Portfolio Return Expectation 7.12%
The long-term expected nominal rate of return above of 7.12% is an expected portfolio rate of return provided by Board of
Investments (BOI), which differs from the total long-term assumed rate of return of 7.65% in the experience study. The
assumed investment rate is comprised of a 2.75% inflation rate and a real rate of return of 4.90%.
Sensitivity Analysis
The sensitivity of the NPL to the discount rate is shown 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 7.650o, 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.
1.0% Decrease
Current Discount
1.0% Increase
(6.65%)
Rate
(8.65%)
Employer's Not Pension
Liability
$12,869,387
$8,836,349
$5,450,919
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 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).
PERS Disclosure for the defined contribution plan
The 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 Montana Legislature has
the authority to establish and amend contribution rates.
67
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
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, 2017, 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 300 employers
that have participants in the PERS-DCRP totaled $396,650.
MUNICIPAL POLICE OFFICERS' RETIREMENT SYSTEM
GASB 68 NOTES TO THE FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2017
(MEASUREMENT DATE), JUNE 30, 2018 (REPORTING DATE)
In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non -employer
contributing entity are required to recognize and report certain amounts associated with participation in the Municipal Police
Officers' Retirement System (the Plan). Employers are required to record and report the proportionate share of the collective
Net Pension Liability; Pension Expense; and Deferred Outflows and Deferred Inflows of Resources associated with pensions.
Pension Amount Totals
Employers are provided guidance in GASB Statement 68, paragraph 74, that pension amounts must be combined as a total or
aggregate for reporting. This is true when employees are provided benefits through more than one pension, whether cost -sharing,
single -employer, or agent plans.
Net Pension Liability
The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). As GASB Statement
68 allows, a measurement date of up to 12 months before the employer's fiscal year-end can be utilized to determine the Plan's
TPL. The basis for the TPL as of June 30, 2017, was determined by taking the results of the June 30, 2016, actuarial valuation and
applying standard roll forward procedures. The roll forward procedure uses a calculation that adds the annual normal cost (also
called the service cost), subtracts the actual benefit payments and refunds for the plan year, and then applies the expected
investment rate of return for the year. The update procedures are in conformity with Actuarial Standards of Practice issued by the
Actuarial Standards Board.
Sj?ecial Funding
The Plan has a special funding situation in which the state of Montana is legally responsible for making contributions directly to
the Plan on behalf of the employers. Due to the existence of this 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 proportionate shares of the employer's and the state of Montana's NPL for June 30, 2017, and 2016, 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 a particular employer to the total state contributions paid. The employer recorded a liability of $2,914,803 and
the employer's proportionate share was 1.6383 percent.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Percent of
Percent of
Change in
Net Pension
Net Pension
Collective
Collective
Percent of
As of measurement dates
Liability as of
Liability as of
NPL as of
NPL as of
Collective
6/30/2017
6/30/2016
6/30/2017
6/30/2016
NPL
Employer Proport to
Share
'..914 803
$ 2,822,947
1.6383%
1,5682%
State of Montana
Proportionate Sha e
associated with the
,Employer
$ 5,940,859
1 $ 5,603,673
1 3.3392%
3 1129%
0.2263%
Total
1 $ 8,855,662
1 $ 8,426,620
1 4.9775%
4.6811%
0.2964%
Changes in actuarial assumptions and methods:
Effective July 1, 2017, the following assumption changes were used:
• Lowered the interest rate from 7.75% to 7.65%.
• Lowered the inflation rate from 3.00% to 2.75%.
• Updated non -disabled mortality to the RP-2000 Combined Employee and Annuitant Mortality Table projected to 2020
using scale BB, males set back 1 year.
• Increased rates of withdrawal.
• Lowered the merit component of the total salary increase.
• Lowered the wage base component of the total salary increase from 4.00% to 3.50%.
• Decreased the administrative expense load from 0.27% to 0.26%.
Effective July 1, 2017, the following method changes were used:
• Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the
System. This amount will vary from year to year based on the prior year's actual administrative expenses.
• To be consistent with the wage base growth change, the payroll growth assumption for amortization as a level
percent of pay was reduced from 4.00% to 3.50%.
Changes in benefit terms:
Effective July 1, 2017, the following benefit changes were:
• The interest rate credited to member accounts increased from 0.25% to 0.77%.
• Working Retiree Limitations applies to retirement system members who return on or after July 1, 2017 to covered
employment in the system from which they retired.
• Second Retirement Benefit applies to retirement system members who return on or after July 1, 2017 to active
service coverd by the system from which they retired.
• Lump sum payouts in all systems are limited to the member's accumulated contributions rather than the present
value of the member's benefit.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Changes in proportionate share: Between the measurement date of the collective NPL and the employer's reporting date
there were some changes in proportion that may have an effect on the employer's proportionate share of the collective NPL.
Pension Expense
As of reporting date
Pension Expense as of
Pension Expense as of
6/30/2017
6/30/2016
Employer's Proportionate Share of MPORS
$ 408,990
$ 335,354
State of Montana Proportionate Share
associated with the Employer
$ 719,565
$ 600,458
Total
1 $ 1,128,555
1 $ 935,812
At June 30, 2017, measurement date, the employer recognized its proportionate share of the Plan's pension expense of $408,990.
The employer also recognized grant revenue of $719,565 for the support provided by the State of Montana for the proportionate
share of the pension expense that is associated with the employer. (Two years of pension expense are documented in the above
table but are not necessary for the employer's disclosures.)
Recognition of Deferred Inflows and Outflows
At June 30, 2017, 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
Resources
Resources
Expected vs. Actual Experience
$
$ 99,454
Projected Investment Earnings vs. Actual
Investment Earnings
$ 2,533
$
Chan es in Assum tions
$ 196,743
$
Changes in Proportion and Differences
Between Employer Contributions and
Proportionate Share of Contributions
$ 137,925
$
Employer Contributions subsequent to the
measurement date
$ 362,351
Total
1 $ 699,5521
$ 99.454
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension
Expense as follows:
For the Reporting Year ended June 30:
Amount of deferred outflows and deferred inflows
recognized in future years as an increase or
(decrease) to Pension Expense
2017
$ 500,276.00
2018
$ 4,148.00
2019
$ 83,119.00
2020
$ 63,838.00
2021
$ 42,987.00
2022
$
Thereafter
$
70
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Plan Description (MPORS)
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, 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. The MPORS provides retirement, disability, and death benefits to plan members and their beneficiaries.
Deferred Retirement Option Plan (DROP): Beginning July 2002, eligible members of MPORS can participate in the DROP
by filing a one-time irrevocable election with the Board. The DROP is governed by Title 19, Chapter 9, Part 12, MCA. A
member must have completed at least twenty years of membership service to be eligible. They may elect to participate in the
DROP for a minimum of one month and a maximum of 60 months and may only participate in the DROP once. A participant
remains a member of the MPORS, but will not receive membership service or service credit in the system for the duration of
the member's DROP period. During participation in the DROP, all mandatory contributions continue to the retirement system.
A monthly benefit is calculated based on salary and years of service to date as of the beginning of the DROP period. The
monthly benefit is paid into the member's DROP account until the end of the DROP period. At the end of the DROP period,
the participant may receive the balance of the DROP account in a lump -sum payment or in a direct rollover to another eligible
plan, as allowed by the IRS. If the participant continues employment after the DROP period ends, they will again accrue
membership service and service credit. The DROP account cannot be distributed until employment is formally terminated.
Summary of Benefits
Eligibility for benefit
20 years of membership service, regardless of age.
Age 50, 5 years of membership service.
2.50 o of FAC x years of service credit.
Second retirement: (applies to members re-employed in a MPORS position after July 1, 2017):
1) 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:
a. Is not awarded service credit for the period of reemployment;
b. Is refunded the accumulated contributions associated with the period of reemployment;
c. Starting the first month following termination of service, receives the same retirement benefit previously paid to
the member; and
d. 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.
2) 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:
a. Is awarded service credit for the period of reemployemnt;
b. Starting the first month following termination of service, receives:
i. The same retirement benefit previously paid to the member, and
ii. A second retirement benefit for the period of reemployment calculated based on the laws in effect as of the
member's rehire date; and
c. Does not accrue post -retirement benefit adjustments during the term of reemployment but receives GABA:
i. On the initial retirement benefit in January immediately following second retirement, and
ii. On the second retirement benefit starting in January after receiving that benefit for at least 12 months.
3) A member who returns to covered service is not eligible for a disability benefit.
71
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Vesting
5 years of membership service
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 1 100o annual cap on compensation considered as 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 January equal to 306.
Minimum benefit adjustment (non-GABA)
If hired before July 1, 1997 and member did not elect GABA - the minimum benefit adjustment provided is equal to 50% of
the current base compensation of a newly confirmed police officer of the employer that last employed the member as a police
officer.
Overview of Contributions
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 to the plan. Member and employer contribution rates are shown in the
table below.
Member
Hired
Hired
>6130/97
Fiscal Year
<7/l/75
Hired >6/30175
Hired >6/30f79 GABA
Employer State
2000-2018
5.80%
7.00%
8.50% 9.00%
14.41% 29.37%
1998-1999
7.80%
9.00%
10.50% 11.00%
14.41% 29.37%
1997
7.80%
9.00%
10.50%
14.36% 29.37%
Stand -Alone Statements
The financial statements of the Montana Public Employees Retirement Board (PERB) Comprehensive Annual Financial
Report (CAFR) and the GASB 68 Report disclose the Plan's fiduciary net position. The reports are available from the PERB
at PO Box 200131, Helena MT 59620-0131, (406) 444-3154 or the MPERA website at http: mpera.mt.gov'index.shtml
Actuarial Assumptions
The TPL used to calculate the NPL was determined by taking the results of the June 30, 2016 acturial valuation and applying
standard roll forward procedures to update the TPL to June 30, 2017. There were several significant assumptions and other
inputs used to measure the TPL. The actuarial assumptions used in the June 30, 2017 valuation were based on the results of
the last actuarial experience study, dated June 2017 for the six year period July 1, 2010 to June 30, 2016. Among those
assumptions were the following:
Investment Return (net of admin expense) 7.65%
Admin Expense as % of Payroll 0.24%
General Wage Growth' 3.50%
'includes Inflation at 2.75%
Merit Increases 0% to 6.6%
Post Retirement Increases
72
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Mortality assumptions among contributing members, service retired members and beneficiaries were based on
RP 2000 Combined Employee and Annuitant Mortality Tables projected to 2020 using scale BB, set back one
year for males.
Mortality assumptions among Disabled Retirees were based on RP 2000 Combined Mortality Tables.
Discount Rate
The discount rate used to measure the Total Pension Liability was 7.65%. 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 establishes the contractually required rates under Montana Code
Annotated. The State contributed 29.37% of 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 2124. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of
projected benefit payments to determine the Total Pension Liability. A municipal bond rate was not incorporated in the
discount rate.
Target Allocations
The long-term expected return on pension plan assets was reviewed as part of the regular experience study prepared for the Plan.
The experience study, performed for the period of fiscal years 2010 through 2016, was outlined in a report dated May 2017 and
can be located on the MPERA website. The long-term expected rate of return on pension plan investments was determined by
considering information from various sources, including historical rates of return, rate of return assumptions adopted by similar
public sector systems, and by using a building-block method in which best -estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges
were combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target
asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset
class included in the target asset allocation as of June 30, 2017, are summarized below.
Asset Class
Target Asset Allocation
Real Rate of Return
Arithmetic Basis
Long -Term Expected
Real Rate of Return
(a)
(b)
(a) x (b)
Cash Equivalents
2.6%
4.00%
0.10%
Domestic Equity
36.0%
4.55%
1.64%
Foreign Equity
18.0%
6.35%
1.14%
Fixed Income
23.4%
1.00%
0.23%
Private Equity
12.0%
7.75%
0.93%
Real Estate
8.0%
4.00%
0.32%
Total 100.0% 4.37%
Inflation 2.75%
Portfolio Return Expectation 7.12%
The long-term expected nominal rate of return above of 7.12% is an expected portfolio rate of return provided by Board of
Investments (BOI), which differs from the total long-term assumed rate of return of 7.65% in the experience study. The assumed
investment rate is comprised of a 2.75% inflation rate and a real rate of return of 4.90%.
73
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Sensitivity Analysis
The sensitivity of the NPL to the discount rate is shown 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 7.65%, as well as what the NPL would
be if it were calculated using a discount rate 1.00% lower or LOV o higher than the current rate.
1.0% Decrease
Current Discount
1.0% Increase
(6.65%)
Rate
(8.65%)
Employer's Net Pension
Liability
$4,244,065
$2,914,803
$1,849,014
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 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).
FIREFIGHTERS' UNIFIED RETIREMENT SYSTEM
GASB 68 NOTES TO THE FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2017
(MEASUREMENT DATE), JUNE 30, 2018 (REPORTING DATE)
In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non -employer
contributing entity are required to recognize and report certain amounts associated with participation in the Firefighters'
Unified Retirement System (the Plan). Employers are required to record and report their proportionate share of the collective
Net Pension Liability; Pension Expense; and Deferred Outflows and Deferred Inflows of Resources associated with pensions.
Pension Amount Totals
Employers are provided guidance in GASB Statement 68, paragraph 74, that pension amounts must be combined as a total or
aggregate for reporting. This is true when employees are provided benefits through more than one pension, whether cost -sharing,
single -employer, or agent plans.
Net Pension Liability
The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). As GASB Statement
68 allows, a measurement date of up to 12 months before the employer's fiscal year-end can be utilized to determine the Plan's
TPL. The basis for the TPL as of June 30, 2017, was determined by taking the results of the June 30, 2016, actuarial valuation and
applying standard roll forward procedures. The roll forward procedure uses a calculation that adds the annual normal cost (also
called the service cost), subtracts the actual benefit payments and refunds for the plan year, and then applies the expected
investment rate of return for the year. The update procedures are in conformity with Actuarial Standards of Practice issued by the
Actuarial Standards Board.
74
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Special Funding
The Plan has a special funding situation in which the state of Montana is legally responsible for making contributions directly to
the Plan on behalf of the employers. Due to the existence of this 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 proportionate shares of the employer's and the state of Montana's NPL for June 30, 2017, and 2016, 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 a particular employer to the total state contributions paid. The employer recorded a liability of $1,654,528 and
the employer's proportionate share was 1.4637 percent.
Percent of
Percent of
Change in
Net Pension
Net Pension
Collective
Collective
Percent of
As of rmeasurement
Liability as of
Liability as of
NPL as of
NPL as of
Collective
date:
6/30/2017
6/30/2016
6/30/2017
6/30/2016
NPL
Employer Proportionate
Share
$ 1,654,528
$ 1,594.992
1.4637%
1.39650/:
0.0672%
State of Montana
Proportionate Share
associated with the
Em :o er
1 $ 3,757,250
1 $ 3.613,749 1
3.324V.,
3.164,.%l
0.1600%
Total
1 $ 5,411,778
1 $ 5.208,741 1
4.7877%
4.5605/6
0.2272%
Changes in actuarial assumptions and methods:
Effective July 1, 2017, the following assumption changes were used:
• Lowered the interest rate from 7.75% to 7.65%.
• Lowered the inflation rate from 3.00% to 2.75%.
• Updated non -disabled mortality to the RP-2000 Combined Employee and Annuitant Mortality Table projected to 2020
using scale BB, males set back 1 year.
• Increased rates of withdrawal.
• Lowered the merit component of the total salary increase.
• Lowered the wage base component of the total salary increase from 4.00% to 3.50%.
• Decreased the administrative expense load from 0.27% to 0.26%.
Effective July 1, 2017, the following method changes were used:
• Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the
System. This amount will vary from year to year based on the prior year's actual administrative expenses.
• To be consistent with the wage base growth change, the payroll growth assumption for amortization as a level
percent of pay was reduced from 4.00% to 3.50%.
Changes in benefit terms:
Effective July 1, 2017, the following benefit changes were:
• The interest rate credited to member accounts increased from 0.25% to 0.77%.
• Working Retiree Limitations applies to retirement system members who return on or after July 1, 2017 to covered
employment in the system from which they retired.
• Second Retirement Benefit applies to retirement system members who return on or after July 1, 2017 to active
service coverd by the system from which they retired.
• Lump sum payouts in all systems are limited to the member's accumulated contributions rather than the present
value of the member's benefit.
75
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUKE 30, 2018
Changes in proportionate share: Between the measurement date of the collective NPL and the employer's reporting date
there were some changes in proportion that may have an effect on the employer's proportionate share of the collective NPL.
Pension Expense
As of reporting date
Pension Expense as of
Pension Expense as of
6/30/2017
6/30/2016
Employer's Proportionate Share of FURS
$ 255,153
$ 201,815
Employer Grant Revenue - State of Montana
Proportionate Share for the Employer
$ 713,568
$ 468,491
Total
1 $ 968,721
$ 670,306
At June 30, 2017 measurement date, the employer recognized its proportionate share of the Plan's pension expense of
$255,153. The employer also recognized grant revenue of $713,568 for the support provided by the State of Montana for the
proportionate share of the pension expense that is associated with the employer. (Two years of pension expense are
documented in the above table but are not necessary for the employer's disclosures.)
Recognition of Deferred Inflows and Outflows
At June 30, 2017, the employer reported its proportionate share of FURS' deferred outflows of resources and deferred inflows
of resources from the following sources:
Deferred Outflows of
Deferred Inflows of
Resources
Resources
Expected vs. Actual Experience
$ 10,900
$ 12,513
Projected Investment Earnings vs. Actual
Investment Earnings
$ 1,364
$
Chan es in Assum Lions
$ 206,333
$
Changes in Proportion and Differences
Between Employer Contributions and
Proportionate Share of Contributions
$ 36,802
$
Employer Contributions subsequent to the
measurement date
$ 289,905
Total
1 $ 545,3041
$ 12,513
# the employer's contribution subsequent to the measurement date must be entered by the employer.
These are the FY2018 contributions paid to the plan.
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension
Expense as follows:
For the Reporting Year ended June 30:
Amount of deferred outflows and deferred inflows
recognized in future years as an increase or (decrease)
to Pension Expense
2017
$ 326.705
2018
$ 16,716
2019
$ 87,667
2020
$ 57,077
2021
$ 1,179
Thereafter
$ 43,447
76
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUKE 30, 2018
Plan Description (FURS)
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, 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. The
FURS provides retirement, disability, and death benefits to plan members and their beneficiaries.
Summary of Benefits
Eligibility for benefit
Service retirement:
• Hired on or after July 1, 1981, or has elected to be coverd by GABA:
1) 20 years of membership service. 2.5° u 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:
1) If membership service is less than 20 years, 20 0 of the highest monthly compensation (HMC) x years of service
credit and
2) If membership services is greater or equal to 20 years, 50% of HMC •+• 2% of HMC x years of service credit in
excess of 20.
Early retirement:
Age 50 with 5 years of membership service.
Vesting
5 years of membership service.
Member's compensation period used in benefit calculation
Hired prior to July 1, 1981 and not electing GABA - highest monthly compensation (HMC)
Hired on or after June 30, 1981 and those electing GABA highest average compensation (HAC) during
any consecutive 36 months.
Part-time firefighter: 1500 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 part of a member's
highest average compensation.
Guaranteed Annual Benefit Adjustment (GABA)
Hired on or after July 1, 1997, or those electing GABA - after the member has completed 12 full months of retirement, the
member's benefit increases by 300 each January.
Minimum Benefit Adjustment (non-GABA)
If hired before July 1, 1997 and member did not elect GABA - the monthly benefit adjustment is provided equal to 5000 of the
current base compensation of a newly confirmed active firefighter of the employer that last employed the member as a
firefighter.
77
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Overview of Contributions
Member and employer contribution rates are specified by state law and are a percentage of the member's contributions.
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 to the plan. Member and employer contribution rates are shown in the table
below.
Member
Fiscal Year Non -GAGA GABA Employer State
1998 - 2018 9.50% 10.70% 14.36% 32.61 %
1997 7.80% 14.36% 32.61 %
Stand -Alone Statements
The financial statements of the Montana Public Employees Retirement Board (PERB) Comprehensive Annual Financial
Report (CAFR) and the GASB 68 Report disclose the Plan's fiduciary net position. The reports are available from the PERB
at PO Box 200131, Helena MT 59620-0131, (406) 444-3154 or the MPERA website at http.1/mpera.mt. ov index.shtml
Actuarial Assumptions
The TPL used to calculate the NPL was determined by taking the results of the June 30, 2016, actuarial valuation and
applying standard roll forward procedures to update the TPL to June 30, 2017. There were several significant assumptions
and other inputs used to measure the TPL. The actuarial assumptions used in the June 30, 2017, valuation were based on the
results of the last actuarial experience study, dated June 2017, for the six year period July 1, 2010 to June 30, 2016. Among
those assumptions were the following:
Investment Return (net of admin expense) 7.65%
Admin Expense as % of Payroll 0.23%
General Wage Growth' 3.50%
'includes Inflation at 2.75%
Merit Increases 0%to 6.3%
Post Retirement Increases
Discount Rate
The discount rate used to measure the TPL was 7.65%. 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 contributes 32.61% of salaries paid by employers. Based on those assumptions, the System's fiduciary
net position was projected to be adequate to make all the projected future benefit payments of current plan members through
the year 2124. 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 return on pension plan assets was reviewed as part of the regular experience study prepared for the
Plan. The experience study, performed for the period of fiscal years 2010 through 2016, was outlined in a report dated June
2017 and can be located on the MPERA website. The long-term expected rate of return on pension plan investments was
determined by considering information from various sources, including historical rates of return, rate of return assumptions
adopted by similar public sector systems, and by using a building-block method in which best -estimate ranges of expected
future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each
major asset class. These ranges were combined to produce the long-term expected rate of return by weighting the expected
future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of
arithmetic real rates of return for each major asset class included in the target asset allocation as of June 30, 2017, are
summarized below.
78
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
Asset Class
Target Asset Allocation
Real Rate of Return
Arthimetic Basis
Long -Term Expected Real
Rate of Return
a
b
a x b
Cash Equivalents
2.6%
4.00%
0.10%
Domestic Equity
36.0%
4.55%
1 64%
Foreign Equity
18.0%
6.35%
1 1.14%
Fixed Income
23.4%
1.00%
0.23%
Private Equity
12.0%
7.75%
0.93%
Real Estate
8.0%
4.00%
1 0.32%
Total 100.0% 4.37%
Inflation 2.75%
Portfolio Return Expectation 7.12%
The long-term expected nominal rate of return above of 7.12% is an expected portfolio rate of return provided by Board of
Investments (BOI), which differs from the total long-term assumed rate of return of 7.65% in the experience study. The
assumed investment rate is comprised of a 2.750 o inflation rate and a real rate of return of 4.900 0.
Sensitivity Analysis
The sensitivity of the NPL to the discount rate is shown in the table below. A small change in the discount rate can create a
significant change the liability. The NPL was calculated using the discount rate of 7.6500, as well as what the NPL would be if
it were calculated using a discount rate 1.000 0 lower or 1.000 o higher than the current rate.
1.0% Decrease
Current Discount
1.0% Increase
6.65%
Rate
8.65%
Employer's Net —Pension
Liability
$ 2,749.409
$ 1,654,528
$ 769,921
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 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).
79
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
G. Postemployment Health Insurance Benefits (OPEB)
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 as long as 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 as long as they are eligible for retirement
benefits accrued by the deceased member as provide by law unless they have equivalent coverage in subsection
(1)(a) or are eligible for insurance coverage by virtue of the employment of a surviving parent or legal guardian.
Funding Policy. MMIA health insurance rates are actuarially set annually and benefits altered to ensure the plans remain
properly funded. The City receives a monthly bill that it can allocate to participants as it wishes. The City pays MMIA the
monthly premiums and has no further liability for health claims. The City plans to continue funding the employee health
insurance plan on a "pay as you go" basis, and does not plan to fund this liability since it has paid the full amount due each
month.
OPEB Liabilities, OPEB Expenses, and Deferred Ouqflows of Resources Related to OPEB. The City's total other post -
employment benefit (OPEB) liability of $4,030,809 as of June 30, 2018, was determined by the application of roll forward
procedures to the liability determined as of June 30, 2017. The roll forward procedures included two steps:
1) Change the valuation date from June 30, 2017 to June 30, 2018.
2) Update the discount rate (3.4500) to reflect the S&P Municipal Bond 20 Year High Grade Rate Index as of a
date close to June 30, 2018.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2018
Actuarial assumptions and other inputs. The total OPEB liability in the June 30, 2017 actuarial valuation was determined
using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless
otherwise specified:
Inflation
Salary increases
Discount rate
Premium trend rate
Retirees share of benefit -related costs
3.00 percent
2.80 percent
3.13 percent
4.50 percent
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, 2017.
Mortality rates were based on the RP-2000 Combined Mortality Table Projection AA Fully Generational.
The actuarial assumptions used in the June 30, 2017 valuation represents a reasonable long-term expectation of future OPEB
outcomes. The assumptions are tested with each valuation for ongoing reasonableness and are updated if appropriate.
Changes in the Total OPEB Liability.
Total OPEB
Liability
OPEB Liability at June 30,2017
$ 3,985,328.00
Changes for the year:
Service cost
$ 298,579.00
Interest
$ 137,494.00
Difference between expected
and actual experience
$ (137,426.00)
Changes in assumptions
$ (253,166.00)
Changes in benefit terms
$
Contributions by employer
$ -
OPEB Liability at June 30,2018
$4,030,809
Changes in Assumptions — June 30, 2017 Valuation
• The discount rate was changed from 3.13% to 3.45%.
• The mortality rates were updated to include mortality improvements.
• The termination and retirement rates were updated to be consistent with the pension actuarial valuation assumptions
for 6/30/2016.
• The trend assumption for premiums and age -adjusted premiums was changed from 4.0% to 4.5%.
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
(2.45%) (3.45%) (4.45%)
Total OPEB Liability $ 4,894,409 $ 4,030,809 $3,355,960
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2018
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
(3.5%) (4.5%) (5.5%)
Total OPEB Liability $ 3,111,237 $ 4,030,809 $5,394,634
For the year ended June 30, 2018, the City reported deferred inflows and deferred outflows of resources related to OPEB
from the following sources:
Differences between expected
and actual experience
Current year amortization of experience
differences
Changes in assumptions or other
inputs
Current year amortization of assumption
changes
Total
Deferred Inflows Deferred Outflows
of Resources of Resources
137,426
1,252
253,166
$ 87,171
$ $ 479,015
Amounts reported as deferred outflows of resources related to OPEB will be recognized in OPEB expense as follows:
Fiscal Year Ending Actual to Expected Changes in
June 30:
Experience
Assumptions
Total
2018
$
(14,375) $
(26,482) $
(40,857)
2019
$
(14,375) $
(26,482) $
(40,857)
2020
$
(14,375) $
(26,482) $
(40,857)
2021
$
(14,375) $
(26,482) $
(40,857)
2022
$
(14,375) $
(26,482) $
(40,857)
2023
$
(14,375) $
(26,482) $
(40,857)
2024
$
(14,375) $
(26,482) $
(40,857)
2025
$
(14,375) $
(26,482) $
(40,857)
2026
$
(14,375) $
(26,482) $
(40,857)
2027
$
(8,051) $
(14,828) $
(22,879)
$
(137,426) $
(253,166) $
(390,592)
H. Amounts Due From/To other Governments
On June 30, 2018, the amounts due from other governments consisted of the following:
General Fund Amount Debt Service Funds Amount
Due from: Due from:
Flathead County -Taxes $ 410,411 Flathead County -Taxes $ 79,763
State of Montana -Video Gaming Fees $ 600
Sub Total -$ 411,011 Capital Project Funds Amount
Special Revenue Funds
Amount
Due from:
Flathead County -Taxes
$
371,032
Montana Board of Crime Control
$
9,217
EPA
$
7,248
Montana DPHHS
$
1,011
State of Montana -Forestry Grant
$
10,000
State of Montana-BOI
$
26,336
U.S. Department of Justice
$
30,022
School Dist. #5
$
931
Sub Total $
455,797
Due from:
State of Montana-BOI $ 207,853
USDOT $ 710,686
Sub Total $ 918,539
Total Governmental Funds $ 1,865,110
Funds Amount
Due from:
Flathead County -Taxes $ 145,739
State of MontanaSRF $ 396,530
Total Business -type Funds $ 542,269
Total City of Kalispell $ 2,407,379
82
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
I. Restricted Cash/Investments
The following restricted cash/investments were held as of June 30, 2018. These amounts are reported within the
cash/investment account on the Combined Balance Sheet.
RESTRICTED CASH:
Business-tvoe Activities
Water Bond Reserve (includes SRF & BOI)
Plant Investment/Impact Fees (1)
Sewer Operating Reserve (2)
Bond Contingency
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
Airport TIF Bond Reserve
Debt Service
SID 343 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, 2017 Additions Subtractions June 30, 2018
$ 260,216 $ 160,253 $ - 420,469
1,626,727 842,240 (468,011) 2,000,956
190,000 - 190,000
966,731 7,394 974,125
2,593,200 962,972 (1,476,954) 2,079,218
1,003,232 574,570 (255,000) 1,322,802
1,821,099 318,778 (89,321) 2,050,556
1,511,738 415,658 (574,333) 1,353,063
9,972,943 3,281,865 (2,863,619) 10,391,189
805,068
203,692
(71,208)
937,552
100,299
11,104
(9,929)
101,474
-
480,011
480,011
144,500
-
144,500
7,750
(7,000)
750
11,172
11,172
226,000
226,000
12,100
12,100
1,306,889
694,807
(88,137)
1,913,559
$ 11,279,832
$ 3,976,672 $
(2,951,756)
$12,304,748
(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 that "the collection and expenditure of impact fees must be reasonably related to the benefits
accruing to the development paying the impact fees..."
(2) Sewer operating reserve cash is restricted by ordinance no. 859 (1 month operating expenses).
(3) Treatment plant replacement cash is restricted by an agreement with Flathead County Water District (third party).
(4) Urban forestry receives cash from developers to be used to plant trees in new city developments (third party).
J. Restatements
During the 2018 fiscal year, the following adjustments relating to prior years' transactions were made to fund balance or
retained earnings accounts.
Fund
General Fund - Major Gov'tal
CD Misc.
Total - Governmental Fund Financials
Total Statement of Activities - Gov'tal Funds
Amount Reason
$ (16,250) Prior period revenues overstated - incorrectly recognized FY17
$ 16,250 Prior period expenditures understated- incorrectly recognized FY17
MK
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
K. Joint Ventures
Joint ventures are independently constituted entities generally created by two or more governments for a specific purpose
which are subject to joint control, in which the participating governments retain 1) an ongoing financial interest or 2) an
ongoing financial responsibility.
City -County Health Department
The City -County Health Department is operated under an interlocal agreement between Flathead County and the City of
Kalispell. The Department operates under the supervision and control of the City -County Health Board. The Board consists
of seven members, six of whom are appointed by the Board of County Commissioners. The Department is financed, in
addition to revenue generated by providing health services, by the City and the County levying an identical mill levy in order
that all property within the City of Kalispell and all property in Flathead County outside the City limits are taxed equally. The
operation is accounted for in the County Health Fund and is included in the general purpose financial statements of Flathead
County within the Special Revenue Fund.
2. 911 Dispatch Center
The 911 Dispatch Center is operated under an interlocal agreement between Flathead County, the City of Columbia Falls, the
City of Whitefish, and the City of Kalispell. The Center operates under the supervision and control of the Flathead
Emergency Communications Center Board. The Board consists of six members, the Flathead County Sheriff, a County
Commissioner chosen by the Board of County Commissioners, the County Attorney or other elected County officer, and an
elected official or designee from each of the cities of Kalispell, Whitefish, and Columbia Falls. The Department is financed
by funds received by all members from the State (9-1-1 fees) pursuant to Section 10-4-302, M.C.A. Any additional operating
funds needed will be shared proportionally by all members. Under the supervision of the Board, the Director shall hire and
direct staff to carry out the responsibilities of the County's Office of Emergency Services and the Flathead County Fire
Service Area.
L. County Provided Services
The City of Kalispell is provided various financial services by Flathead County. The County serves as cashier and treasurer
for the City for tax assessment collections and other revenues received by the County which are subject to distribution to the
various taxing jurisdictions located in the County. The collections made by the County on behalf of the City are accounted
for in an agency fund in the City's name and are periodically remitted to the City by the County Treasurer. The County
charges the City for fees associated with City Special Assessments.
M. Risk Management
The City faces a considerable number of risks of loss, including a) damage to and loss of property and contents, b) employee
torts, c) professional liability, i.e., errors and omissions, d) environmental damage, e) workers' compensation, i.e. employee
injuries, and f) medical insurance costs of employees. A variety of methods are used to provide insurance for these risks.
Commercial policies, transferring all risks of 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 state-wide health insurance pool administered by MMIA. Given the lack of coverage
available, the City has no coverage for potential losses from environmental damages.
84
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2018
Montana Municipal Insurance Authority, for workers' compensation and for tort liability coverage. Employee medical
insurance is provided through a state-wide health insurance pool administered by MMIA. Given the lack of coverage
available, the City has no coverage for potential losses from environmental damages.
Effective July 1, 1987 The City of Kalispell joined with other Montana cities to form the Montana Municipal Insurance
Authority, a self-insurance pool offering Worker's Compensation and Liability Coverage. Both public entity risk pools
currently operate as common risk management and insurance programs for the member governments. The liability limits for
damages in tort action are $750,000 per claim and $1.5 million per occurrence with an $11,250 deductible per occurrence.
State tort law limits the City's liability to $1.5 million. The city pays an annual premium for its employee injury insurance
coverage, which is allocated to the employer funds based on total salaries and wages. The agreements for formation of the
pools provide that they will be self-sustaining through member premiums. The tort liability plan and workers' compensation
program issued bonds in the amount of $4.41 million and $7.610 million, respectively, to immediately finance the necessary
insurance reserves. All members signed a contingent note for a pro rata share of this liability in case operating revenue was
insufficient to cover the debt service. The City's share is $201,445 for liability and $281,715 for Workers' Compensation to
finance the necessary insurance reserves. Based on the plan's current financial position, the City doesn't 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 with many other Montana Cities, since then extended, and through
the Montana Municipal Insurance Authority, to create a state wide health insurance pool. The City pays the total monthly
premium for employees who only choose to cover themselves. For employees who choose to cover additional dependents, the
City pays a percentage of the extra costs.
N. Pending Litigation
The following is a list of litigation pending against the City and the amount of damages claimed by the Plaintiff. The City
Attorney has made no evaluation as to the outcome of each case. The City has liability insurance that may cover all or part of
the damages. Accordingly, no provision has been made in the financial statements for these contingent liabilities.
Damages
Loss
Litigant
Requested
Potential
Status
Challinor
$ 50,000
unknown
State District Court
Ryan Pengally
unspecified
unknown
State and Federal Court
Michelle O'Neil
unspecified
unknown
State District Court
Patricia Tintinger
13000
likely
Filed -liability insurance
Mary Brown
15000
likely
Filed -liability insurance
Brian Peterson
3500
likely
Filed -liability insurance
Holly Oursland
13500
likely
Filed -liability insurance
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
O. Receivables
Taxes Receivable
The following governmental funds had taxes receivable at June 30, 2018.
FUND
Source
Amount
General - Major Governmental
Taxes
$ 273,985
Westside TIF
Taxes
15,637
Parks
Taxes
43,339
Old School "Tech" TIF
Taxes
24,731
Old School "Ind" TIF
Taxes
30,716
Health Levy
Taxes
44,696
Light Maintenance District
Taxes
15,395
Street Maintenance
Taxes
107,504
Urban Forestry
Taxes
18,320
G.O. Bonds
Taxes
23,528
Airport TIF debt service
Taxes
43,288
SID 344 - Major Governmental
Taxes
1,947,675
SID 345
Taxes
170,640
S & C's
Taxes
36,498
SID 343
Taxes
11,616
Total Governmental Funds
$ 2,807,568
Sewer - Major Business -type
Assessments
46,881
Solid waste
Assessments
26,185
Total Business -type Funds
73,066
Total City
$ 2,880,634
Accounts Receivable
At June 30, 2018, the Ambulance fund had accounts receivable deferred net of $314,188. Total net accounts receivable of the
Ambulance fund is $316,855. The difference is the result of $2,667 being receivable, and therefore recognized as revenue,
prior to the Ambulance fund conversion from a proprietary fund to a special revenue fund.
Loans Receivable
Community Development Loan Revolving
Hampstead Partners
In August of 2002, the City of Kalispell entered into 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, 2018, is $76,455, and $425,486,
respectively.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUKE 30, 2018
Community Development Block Grant Economic Development Program
In fiscal year 2007, the City entered into 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.
The following loans have been made by the City using the economic development program funds:
A 15 year loan at 5% to Distinctive Countertops in October 2006.
Original Loan amount
$ 288,619
June 30, 2018 balance
$ 158,590
A 15 year loan at 6% to AGAPE Home Care in May 2009.
Original Loan amount
$ 42,500
June 30, 2018 balance
$ 10,469
A 7 year loan at 3% to Norm's
News in August 2017.
Original Loan amount
$ 33,765
June 30, 2018 balance
$ 29,795
A 10 year loan at 6% to SMP,
LLC in August 2016.
Original Loan amount
$ 50,000
June 30, 2018 balance
$ 41,530
A 6 year loan at 3% to Wheaton's in May 2018.
Original Loan amount
$ 32,800
June 30, 2018 balance
$ 32,013
A 10 year loan at 3% to Sail MT & Ameriprise in April 2015.
Original Loan amount
$ 17,000
June 30, 2018 balance
$ 11,393
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.
The following loans have been made by the City using the Rural Development funds:
A 15 year loan at 6.5% to Distinctive Countertops in July 2006.
Original Loan amount $ 175,000
June 30, 2018 balance $ 96,756
87
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2018
A 6 month loan at 5.25% to Glacier Valley Endodontics, Inc. in January 2012.
Original Loan amount $ 35,000
June 30, 2018 balance $ 16,226
A 10 year loan at 3% to Whipps, LLC in December 2011.
Original Loan amount $ 50,000
June 30, 2018 balance $ 11,433
A 10 year loan at 3% to Bill and Jana Goodman in June 2013.
Original Loan amount $ 34,660
June 30, 2018 balance $ 15,416
SUMMARY COMMUNITY DEVELOPMENT LOANS RECEIVABLE
From
CD Loan Revolving
Rural Development Loan Revolving
To
Distinctive Countertops
AGAPE Home Care
Norm's News
SMP LLC
Wheatons
Sail MT & Ameriprise
Hampstead Partners'
Hampstead Partners - Interest Portion'
Distinctive Countertops
Glacier Valley Endodontics, Inc
Whipps, LLC
Bill and Jana Goodman
Total Governmental Funds
Amount Purpose
158,590 Jobs
10,469 Jobs
29,795 Jobs
41,530 Jobs
32,013 Jobs
11,393 Jobs
880,000 Low Income He
501,941 Low Income He
96,757 Small Business
16,226 Small Business
11,433 Small Business
15,416 Small Business
$ 1,805,563
'Long Term Loans Receivable - Matures 2032
P. City Court Contracts Receivable
Contracts receivable of the City Court, because of the uncertainty regarding when and if they will be collected, are no longer
booked as an asset on the balance sheet of the General Fund. These receivables, at June 30, 2018, amounted to $2,398,226.
Q. Wastewater Treatment Plant agreement with Evergreen
In 1990, the City of Kalispell entered into an agreement with the Evergreen Sewer District to convey sewage to the Kalispell
Wastewater Treatment Plant. This agreement expired in July of 2015. A new agreement was reviewed and discussed at a
City Council work session on July 13, 2015.
At a regular meeting of the City Council on July 20, 2015, the new agreement was approved. The new agreement provides for
a formula — based on prior fiscal year expenses. The City bills the District, monthly, a base charge per account. The City also
bills for maintenance and operation and replacement costs per the agreement based on metered flows. According to the new
agreement, the Evergreen Sewer District no longer has an equity interest in the reserve/replacement cash account which will
still be funded by the City.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2018
R. Fund Balance Classification by Major Purposes
The table presented below displays the City's fund balances by major purpose as displayed on page 29, the governmental
funds balance sheet.
Other Total
General SID Tiger Governmental Governmental
Fund 344 Grant Funds Funds
Nonspendable - not in spendable forth
Long-term recievables
Prepaids
Total nonspendable
Restricted
General Government -Health Insurance
Public Safety -
Public Safety -EMS
Public Safety -Budding Inspection
Public Safety Fire impact fees
Public Safety -Police impact fees
Public Safety -Police grants
Public Safety -Fire grants
Public Works -Street Maint
Public Works -Lighting District
Public Works -Gas Tax
Culture and Recreation -
Culture and Recreation -Park improvements
Culture and Recreation -Equipment
Culture and Recreation -Programs
Culture and Recreabon-Urban forestry
Community Development -
Community Development -Old School Station
Community Development -South Kalispell TIF
Community Development-Westside TIF
Community Development -Revolving loan fun
Debt Service-SID
Debt Service-S & C warrants
Debt Service-G O Bonds
Debt Service -Capital
Debt Service-TIF
Total restricted
Assigned
Capital Equipment
Parking
Miscellaneous
Total assigned
Unassigned
Total fund balances
S. Subsequent Events
4,848 -
r
- -
4,848
246,190
67,072
313,262
251,038
67,072
318,110
- -
- 90,721
90,721
- -
- 7,854
7,854
- -
- 3,615
3,615
- -
- 1.958,127
1958,127
- -
- 833.746
833.746
- -
- 103.806
103,806
- -
- 93,671
93,671
- -
- 57,806
57,806
- -
2.332,231
2.332.231
- -
- 320.335
320,335
- -
- 776,460
776,460
- -
- 356.634
358,634
- -
- 18.392
18,392
- -
- 75,405
75,405
- -
- 447.650
447.650
- -
- 584.708
584.708
520
520
- -
- 15,744
15,744
- -
- 2,073,847
2073,847
- -
- 4.990,782
4.990.782
- -
- 3,370,447
3.370.447
- 259.611
- 313,281
572.892
-
816
616
- -
- 30,141
30,141
12.435
850,317
850,317
259,611
19,719,491
19,979.102
261.906 -
- -
281906
23.542 -
- -
23542
94,520
94,520
379.968
379,968
3,881,096
3,881,096
4,512.102 259.611
19,786,563
24,558,276
Westside Interceptor SRF Loan
The Westside Interceptor (WSI) project is on schedule to be completed in 2018. This is a very large project and includes
over 42,000 feet of new sewer main installation. In fiscal year 2018, to pay the cost of constructing the Westside Interceptor,
the City entered into a $14.4 million loan agreement with the State of Montana Department of Natural Resources and
Conservation revolving loan fund program (SRF). Impact fees may be used to repay a portion of this 30 year loan.
City Airport
On April 6, 2018, the City of Kalispell and the Kalispell Airport Association (KAA) entered into a Kalispell Municipal
Airport Lease and Agreement to Assign. This agreement turns over the daily operations of the Municipal Airport to the KAA.
89
REQUIRED SUPPLEMENTARY
INFORMATION OTHER THAN
MANAGEMENT DISCUSSION AND
ANALYSIS
City of Kalispell
SCHEDULE OF CITY'S TOTAL LIABILITY AND RELATED RATIOS
OTHER POSTEMPLOYMENT BENEFITS
June 30, 2018
Total OPEB Liability
Service cost
Interest
Difference between expected
and actual experience
Changes in assumptions
Changes in benefit terms
Contributions by employer
Net change in total OPEB liability
Total OPEB liability -beginning (restated)
Total OPEB liability -ending
Covered -employee payroll
Total OPEB liability as a percentage of covered-
2017 2018
$ 332,296 $ 298,579
$ 79,695 $ 137,494
$
13,222
$
(137,426)
$
1,013,936
$
(253,166)
$
1,439,149
$
45,481
$
2,546,180
$
3,985,329
$
3,985,329
$
4,030,810
$ 10,456,215 $ 10,748,989
employee payroll 38.11 %
37.50%
Notes to Schedule:
Changes of assumptions. Changes of assumptions and other inputs
reflect the effects of changes in the discount rate each period. The
following are the rates used in each period:
discount
medical trend
6/30/2016 3.80%
4.00%
6/30/2017 3.13%
4.50%
6/30/2018 3.45%
4.50%
Governmental Accounting Standards Board, Statement 75 requires
this information to be provided for 10 years. Because this is the first
year of implementation, 10 years is not available.
See independent auditor's report
90
City of Kalispell
SCHEDULE OF CITY CONTRIBUTIONS
OTHER POSTEMPLOYMENT BENEFITS
June 30, 2018
Contractually required contribution
Contributions in relation to the contractually
required contribution
Contribution deficiency (excess)
City's covered -employee payroll
Contributions as a percentage of covered -
employee payroll
2017 2018
$ 10,456,215 $ 10,748,989
0% 0%
Governmental Accounting Standards Board, Statement 75 requires
this information to be provided for 10 years. Because this is the first
year of implementation, 10 years is not available.
See independent auditor's report
91
CITY OF KALISPELL
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Last 10 Fiscal Years*
* The schedules are presented to illustrate the requirement to show information for 10 years. However, until
a full 10-year trend is compliled, the schedules present information for those years for which information is
available.
City's proportion of the net pension
liability (asset)
City's proportionate share of the net
pension liabiltiy (asset).
State of Montana's proportionate share
of the Net Pension Liability associated
with the Employer
Total
City's covered payroll
City's proportionate share of the net
pension liability (asset) as a percentage
of its covered payroll
Plan fiduciary net position as a
percentage of the total pension liability
2015 2016 2017 2018
PIERS
0.4364% 0.4265% 0.4314% 0.4537%
$5,437,857 $5,961,419 $7,348,266 $8,836,349
$66,405 $73,226 $89,787 $117,668
$5,504,262 $6,034,645 $7,438,053 $8,954,017
$4,978,271 $4,976,919 $5,167,438 $5,628,154
111.22% 119.78% 142.20% 157.00%
79.87% 78.40% 74.71 % 73.75%
*The amounts presented for each fiscal year were determined as of June 30.
See independent auditor's report
92
CITY OF KALISPELL
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
MUNICIPAL POLICE OFFICERS' RETIREMENT SYSTEM
Last 10 Fiscal Years*
* The schedules are presented to illustrate the requirement to show information for 10 years. However, until
a full 10-year trend is compliled, the schedules present information for those years for which information is
available.
City's proportion of the net pension
liability (asset)
City's proportionate share of the net
pension liabiltiy (asset).
State of Montana's proportionate share
of the Net Pension Liability associated
with the Employer
Total
City's covered payroll
City's proportionate share of the net
pension liability (asset) as a percentage
of its covered payroll
Plan fiduciary net position as a
percentage of the total pension liability
2015 2016 2017 2018
MPORS
1.5019% 1.5255% 1.5682% 1.6383%
$2,359,962 $2,523,431 $2,822,947 $2,914,803
$4,767,405 $5,112,710 $5,603,673 $5,940,859
$7,127,367 $7,636,141 $8,426,620 $8,855,662
$2,015,102 $2,111,268 $2,213,762 $2,449,995
117.11 % 119.52% 127.52% 118.97%
67.01 % 66.90% 65.62% 68.34%
*The amounts presented for each fiscal year were determined as of June 30.
See independent auditor's report
93
CITY OF KALISPELL
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
FIREFIGHTERS' UNIFIED RETIREMENT SYSTEM
Last 10 Fiscal Years*
* The schedules are presented to illustrate the requirement to show information for 10 years. However, until
a full 10-year trend is compliled, the schedules present information for those years for which information is
available.
City's proportion of the net pension
liability (asset)
City's proportionate share of the net
pension liabiltiy (asset).
State of Montana's proportionate share
of the Net Pension Liability associated
with the Employer
Total
City's covered payroll
City's proportionate share of the net
pension liability (asset) as a percentage
of its covered payroll
Plan fiduciary net position as a
percentage of the total pension liability
2015 2016 2017 2018
FURS
1.4283% 1.4196% 1.3965% 1.4637%
$1,394,256 $1,451,892 $1,594,992 $1,654,528
$3,145,374 $3,233,749 $3,613,749 $3,757,250
$4,539,630 $4,685,641 $5,208,741 $5,411,778
$1,855,316 $1,907,689 $1,966,524 $2,188,185
75.15%
76.11 %
81.11 %
75.61 %
76.71 %
76.90%
75.48%
77.77%
*The amounts presented for each fiscal year were determined as of June 30.
See independent auditor's report
94
CITY OF KALISPELL
SCHEDULE OF CONTRIBUTIONS
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Last 10 Fiscal Years*
* The schedules are presented to illustrate the requirement to show information for 10 years. However, until a
full 10-year trend is compliled, the schedules present information for those years for which information is
available.
2015 2016 2017 2018
PERS
Contractually required contributions $ 430,109 $ 444,391 $ 471,085 $ 530,757
Contributions in relation to the
contractually required contribution 430,109 444,391 471,085 530,757
Contribution deficiency (excess) $ - $ - $ - $ -
Employer's Pensionable Payroll $ 4,976,919 $ 5,167,438 $ 5,628,154 $ 6,268,093
Contributions as a percentage of
covered payroll 8.64% 8.60% 8.37% 8.47%
*The amounts presented for each fiscal year were determined as of June 30.
See independent auditors report
95
CITY OF KALISPELL
SCHEDULE OF CONTRIBUTIONS
MUNICIPAL POLICE OFFICERS' RETIREMENT SYSTEM
Last 10 Fiscal Years'
* The schedules are presented to illustrate the requirement to show information for 10 years. However, until a
full 10-year trend is compliled, the schedules present information for those years for which information is
available.
2015 2016 2017 2018
MPORS
Contractually required contributions $ 306,050 $ 324,287 $ 353,045 $ 362,351
Contributions in relation to the
contractually required contribution 306,050 324,287 353,045 362,351
Contribution deficiency (excess) $ - $ - $ - $ -
Employer's Pensionable Payroll $ 2,111,268 $ 2,213,762 $ 2,479,350 $ 2,514,581
Contributions as a percentage of
covered payroll 14.50% 14.65% 14.24%
"The amounts presented for each fiscal year were determined as of June 30.
14.41 %
See independent auditors report
96
CITY OF KALISPELL
SCHEDULE OF CONTRIBUTIONS
FIREFIGHTERS' UNIFIED RETIREMENT SYSTEM
Last 10 Fiscal Years*
* The schedules are presented to illustrate the requirement to show information for 10 years. However, until a
full 10-year trend is compliled, the schedules present information for those years for which information is
available.
2015 2016 2017 2018
FURS
Contractually required contributions $ 279,275 $ 281,160 $ 314,224 $ 289,905
Contributions in relation to the
contractually required contribution 279,275 281,160 314,224 289,905
Contribution deficiency (excess) $ - $ - $ - $ -
Employer's Pensionable Payroll $ 1,907,689 $ 1,966,524 $ 2,188,185 $ 2,018,835
Contributions as a percentage of
covered payroll 14.64% 14.30% 14.36% 14.36%
*The amounts presented for each fiscal year were determined as of June 30.
See independent auditors report
97
RESOURCES (INFLOWS):
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Miscellaneous
Investment earnings
Amounts available for appropriation
CHARGES TO APPROPRIATIONS (OUTFLOWS);
General government
Public safety
Public works
Community development
Debt service - principal
Debt service - interest
Capital outlay
Total charges to appropriations
OTHER FINANCING SOURCES (USES)
Transfers in
Total other financing sources (uses)
Net change in fund balance
Fund balance - beginning of the year
Restatements
Fund balance - beginning of the year - restated
Fund balance - end of the year
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2018
General Fund
ACTUAL
AMOUNTS VARIANCE
BUDGETED AMOUNTS (BUDGETARY WITH FINAL
ORIGINAL FINAL BASIS) See Note A BUDGET
$ 5,860,250
86,700
3,780,221
982,848
505,000
28,000
47,500
$ 11,290,519
$ 3,486,173
8,533,909
41,302
88,263
25,000
15,000
220,955
$ 12,410,602
$ 5,860,250 $
5,827,859 $
(32,391)
86,700
199,551
112,851
3,780,221
3,782,941
2,720
982,848
1,051,627
68,779
505,000
443,919
(61,081)
28,000
10,462
(17,538)
47,500
32,942
(14,558)
$ 11,290,519 $
11,349,301 $
58,782
$ 3,486,173 $
3,127,703
8,533,909
8,470,837
41,302
39,168
88,263
83,069
25,000
-
15,000
-
220,955
144,499
$ 12,410,602 $ 11,865,276
$ 358,470
63,072
2,134
5,194
25,000
15,000
76,456
$ 545.326
901,000 901,000 901,000
$ 901,000 $ 901,000 $ 901,000 $
See independent auditor's report
98
$ 385,025
$ 4,143,327
(16,250)
$ 4,127,077
$ 4,512,102
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
for the year ended June 30, 2017 (as of Measurement Date)
A. Pension Plans
Changes of benefit terms
Public Employees Retirement System (PERS). The following changes to the plan provisions were made as identified:
2015 Legislative Changes:
General Revisions House Bill 101, effective January 1, 2016
Second Retirement Benefit
1) Applies to PERS members who return to active service on or after January 1, 2016. Members who retire before
January 1, 2016, return to PERS-covered employment, and accumulate less than 2 years of service credit before
retiring again:
• Refund of member's contributions from second employment plus regular interest (currently 0.250/0);
• No service credit for second employment;
• Start same benefit amount the month following termination; and
• GABA starts again in the January immediately following second retirement.
2) For members who retire before January 1, 2016, return to PERS-covered employment and accumulate two or more
years of service credit before retiring again:
• Member receives a recalculated retirement benefit based on laws in effect at second retirement; and,
• GABA starts in the January after receiving recalculated benefit for 12 months.
3) For members who retire on or after January 1, 2016, return to PERS-covered employment and accumulate less than 5
years of service credit before retiring again:
• Refund of member's contributions from second employment plus regular interest (currently 0.25° 0);
• No service credit for second employment;
• Start same benefit amount the month following termination; and,
• GABA starts again in the January immediately following second retirement.
4) For members who retire on or after January 1, 2016, return to PERS-covered employment and accumulate five or
more years of service credit before retiring again:
• Member receives same retirement benefit as prior to return to service;
• Member receives second retirement benefit for second period of service based on laws in effect at second
retirement; and,
• GABA starts on both benefits in January after member receives original and new benefit for 12 months.
Revise DC Funding Laws-- House Bill 107, effective July 1, 2015
Employer Contributions and the Defined Contribution Plan
The PCR was paid off effective March 2016 and the contributions of 2.37%, .47%, and 1.0% increase previously
directed to the PCR are now directed to the Defined Contribution member's account.
See independent auditor's report
99
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
for the year ended June 30, 2017 (as of Measurement Date)
2017 Legislative Changes:
General Revisions — House Bill 101, effective July 1, 2017
Working Retiree Limitations
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.
Terminating Employers Recovery of actuary costs
Employers who terminate participation in PERS must pay the actuarial liability associated with that termination.
Starting July 1, 2017, the terminating employer must also pay for the cost of the actuarial study used to determine
that liability.
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.
Family Law Orders
If a Family Law Order (FLO) is silent regarding the apportionment of post -retirement benefit adjustments such as the
Guaranteed Annual Benefit Adjustment (GABA), the FLO is presumed to require apportionment of the post -
retirement benefit adjustment in the same percentage as the monthly retirement benefit is apportioned.
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.
PERS Statutory Appropriation House Bill 648, effective July 1, 2017
Revenue from coal severance taxes and interest income from the coal severance tax permanent fund previously statutorily -
appropriated to the PERS defined benefit trust fund will be replaced with the following statutory appropriations:
1) FY2018 - $31.386 million
2) FY2019 - $31.958 million
See independent auditor's report
100
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
for the year ended June 30, 2017 (as of Measurement Date)
3) Beginning July 1, 2019 through at least June 30, 2025, 101% of the contribution from the previous year from the
general fund to the PERS defined benefit trust fund, as follows:
a. FY2020 - $32.277 million
b. FY2021 - $32.600 million
C. FY2022 - $32.926 million
d. FY2023 - $33.255 million
e. FY2024 - $33.588 million
f. FY2025 - $33.924 million
Montana Police Officers Retirement (MPORS). The following changes to the plan provision were made as identified:
2015 Legislative Changes:
General Revisions House Bill 101, effective January 1, 2016
MPORS DROP Survivor Benefits - Allow statutory beneficiary (spouse or dependent child) of a deceased DROP
Participant to receive a DROP benefit and a survivorship benefit rather than accumulated contributions or a lump
sum payment. 19-9-1206(1), MCA.
2017 Legislative Changes:
Working Retiree Limitations
1) Applies to retirement system members who return on or after July 1, 2017 to covered employment in the system from
which they retired.
2) Members who return for less than 480 hours in a calendar year:
-May not become an active member in the system; and
-Are subject to a $1 reduction in their retirement benefit for each $3 earned in excess of $5,000 in the calendar year.
3) Members who return for 480 or more hours in a calendar year:
-Must become an active member of the system;
-Will stop receiving a retirement benefit from the system; and
-Will be eligible for a second retirement benefit if they earn 5 or more years of service credit through their second
employment.
4) Employee, employer and state contributions, if any, apply as follows:
-Employer contributions and state contributions (if any) must be paid on all working retirees;
-Employee contributions must be paid on working retirees who return to covered employment for 480 or more hours
in a calendar year.
See independent auditor's report
101
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
for the year ended June 30, 2017 (as of Measurement Date)
Second Retirement Benefit
1) Applies to retirement system members who return on or after July 1, 2017 to active service covered by the system
from which they retired.
2) If a member works more than 480 hours in a calendar year and accumulates less than 5 years of service credit before
terminating again, the member:
-Is not awarded service credit for the period of reemployment;
-Is refunded the accumulated contributions associated with the period of reemployment;
-Starting the first month following termination of service, receives the same retirement benefit previously paid to the
member; and
-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.
3) 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:
-Is awarded service credit for the period of reemployment;
-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
-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.
4) A member who returns to covered service is not eligible for a disability benefit.
Terminating Employers Recovery of actuary costs
Employers who terminate participation in MPORS must pay the actuarial liability associated with that termination.
Starting July 1, 2017, the terminating employer must also pay for the cost of the actuarial study used to determine that
liability.
Refunds
I) 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.
Family Law Orders
If a Family Law Order (FLO) is silent regarding the apportionment of post -retirement benefit adjustments such as the
Guaranteed Annual Benefit Adjustment (GABA), the FLO is presumed to require apportionment of the post -
retirement benefit adjustment in the same percentage as the monthly retirement benefit is apportioned.
See independent auditor's report
102
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
for the year ended June 30, 2017 (as of Measurement Date)
Firefighters Unified Retirement (FURS). The following changes to the plan provision were made as identified:
2015 Legislative Changes:
General Revisions House Bill 101, effective January 1, 2016
If a PERS member transfers employment to a FURS covered position and fails to elect FURS membership within 90
days, the default is PERS membership.
2017 Legislative Changes:
General Revisions House Bill 101, effective July 1, 2017
Working Retiree Limitations
1) Applies to retirement system members who return on or after July 1, 2017 to covered employment in the system from
which they retired.
2) Members who return for less than 480 hours in a calendar year:
-May not become an active member in the system; and
-Are subject to a $1 reduction in their retirement benefit for each $3 earned in excess of $5,000 in the calendar year.
3) Members who return for 480 or more hours in a calendar year:
-Must become an active member of the system;
-Will stop receiving a retirement benefit from the system; and
-Will be eligible for a second retirement benefit if they earn 5 or more years of service credit through their second
employment.
4) Employee, employer and state contributions, if any, apply as follows:
-Employer contributions and state contributions (if any) must be paid on all working retirees;
-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
1) Applies to retirement system members who return on or after July 1, 2017 to active service covered by the system
from which they retired.
2) If a member works more than 480 hours in a calendar year and accumulates less than 5 years of service credit before
terminating again, the member:
-Is not awarded service credit for the period of reemployment;
-Is refunded the accumulated contributions associated with the period of reemployment;
-Starting the first month following termination of service, receives the same retirement benefit previously paid to the
member; and
-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.
See independent auditor's report
103
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
for the year ended June 30, 2017 (as of Measurement Date)
3) 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:
-Is awarded service credit for the period of reemployment;
-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
-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.
4) A member who returns to covered service is not eligible for a disability benefit.
Terminating Employers Recovery of actuary costs
Employers who terminate participation in MPORS must pay the actuarial liability associated with that termination.
Starting July 1, 2017, the terminating employer must also pay for the cost of the actuarial study used to determine that
liability.
Refunds
I) 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.
Family Law Orders
If a Family Law Order (FLO) is silent regarding the apportionment of post -retirement benefit adjustments such as the
Guaranteed Annual Benefit Adjustment (GABA), the FLO is presumed to require apportionment of the post -
retirement benefit adjustment in the same percentage as the monthly retirement benefit is apportioned.
Eligibility to Participate for FURS Part -Paid Firefighters
Part -paid firefighters become eligible to participate in FURS once they have earned $300 in a fiscal year. Previously,
statute was unclear on whether the limit applied to a calendar year or a fiscal year.
See independent auditor's report
104
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
for the year ended June 30, 2017 (as of Measurement Date)
Chan es in Actuarial Assumptions and Methods - all plans
Method and assumptions used in calculations of actuarially determined contributions
The following Actuarial Assumptions were adopted from the June 30, 2017 actuarial valuation:
General wage growth* - 3.5%
Investment rate of return* - 7.65%
*includes inflation at 2.75%
Merit increase 00a to 6.3% (MPORS 0% to 6.6%)
Asset valuation method - 4-year smoothed market
Actuarial cost method - Entry age normal
Amortization method Level percentage of payroll, open
Mortality (Healthy members) For males and females: RP 2000 Combined Employee and Annuitant Mortality
Table projected to 2020 using Scale BB, males set back 1 year
Mortality (Disabled members) For males and females: RP 2000 Combined Mortality Table
Admin Expense as % of Payroll**
PERS - 0.26%
MPORS -- 0.24%
FURS 0.23%
**Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the
System. This amount varies from year to year based on the prior year's actual administrative expenses.
See independent auditor's report
105
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2018
B. 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 ofthe receipt ofthe 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 oftaxable values from the Department of Revenue.
State statute limits the making of expenditures or incurring of obligations to the amount ofthe final budget as adopted or as amended.
Budget transfers and amendments are authorized by law, and in some instances, may require further public hearings. Any budget
amendments providing for additional appropriations must identify the fund reserves, unanticipated revenue, or previously
unbudgeted revenue that will fund the appropriations.
Appropriations are created by fund, function, and activity and may further be detailed by department. Expenditure limitations
imposed by law extend to the department level which is identified as the legal level of budgetary control.
BUDGETARY BASIS
The City's budgets are prepared on the budgetary basis (modified accrual) of accounting, which results in accounting for certain
funds, proprietary and internal service, on a basis other than generally accepted accounting principles (full accrual). The City's
accounting records are maintained on the basis of cash receipts and disbursements during the year. At year-end, certain
adjustments are made to the City's accounting records to reflect the basis of accounting described above. Reported budget
amounts represent the originally adopted budget and the final budget, which includes amendments. Total fund expenditures may not
legally exceed the budgeted expenditures. The budget lapses at the end of each year. Results of operations, on the budget basis of
accounting, are presented for the general fund and major special revenue funds with legally adopted annual budgets, to provide a
meaningful comparison of actual results with the budget.
See independent auditor's report
106
SUPPLEMENTAL INFORMATION
COMBINING AND INDIVIDUAL
FUND STATEMENTS
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Airport TIF - Accounts for monies received and expended for approved projects in
this TIF district.
Westside TIF - Accounts for monies received and expended for approved projects in this
TIF district.
Parks in Lieu Accounts for monies received by developer's for the purpose of making
improvements in specific City parks.
Parks — Accounts for the monies received and expended in the operations of the City's
Parks Department.
Ambulance - Accounts for the monies received and expended in the operations of the
City's Ambulance Department.
Old School TIF's -- Accounts for monies received and expended for approved projects in
these TIF districts.
Rail Park TEDD - Accounts for the monies received and expended for approved projects
in and related to the TEDD.
Health Levy --- Accounts for revenue from the permissive mill levy which provides
funding for the fiscal year 2003 health insurance premium rate increase.
Building Department -- Accounts for all activity of enforcing the building regulations
adopted by the City.
Impact Fees -- Accounts for street and 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 - - Accounts for revenues from State gasoline taxes apportioned from the State of
Montana Department of Highways.
Street Maintenance - established to account for the repairs and other costs incurred in
the maintenance of the City's streets. An assessment on the City of Kalispell's tax
payers is the main source of revenue for this fund.
Forestry - Accounts for special assessment revenues levied, received, and expended to
care for almost 7000 trees.
MACI Grant -- Accounts for grant monies received and City matching monies used to
purchase equipment (street sweeper) through the Montana Air & Congestion Initiative.
Community Development Loan Revolving Fund - this fund accounts for the lending and
repayment of monies loaned to businesses and individuals for approved community
development projects.
CD Misc. - originally established to account for Urban Development Assistance
Grants (UDAG). These federal dollars were loaned to businesses and individuals for
projects located in economic development zones and approved by the City
Community Development department. The main revenue source for this fund is
borrower's interest payments. In fiscal year 2015, this fund, with dollars borrowed
from the General fund, purchased six undeveloped properties from Flathead County
at the Old School Station Industrial/Technical Park, a City special improvement
district. Taxes on these properties were five to seven years delinquent, thereby
putting the City's SID debt service fund at risk of not making the annual payment.
The City intends to resell these properties for development.
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, CHRP) - Accounts for
multiple grants received by the Police Department and all related revenues and
expenditures.
Fairgrounds ADA Grant - pass thru grant to Flathead County for the upgrade of
restrooms at the County Fairgrounds.
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.
llazmat Grant -- Accounts for the grant monies received for and expenditures related to
respond and remedy hazmat calls of the City Fire Department.
DEBT SERVICE FUNDS
G.O. Bonds -- Accounts for the debt service payments associated with the Woodland
Water Park and the Fire Station #52 general obligation bonds.
City Hall Debt Service — Accounts for the debt service payments associated with the new
City Hall at 201 1st Avenue East.
Airport TIF Debt Service - Accounts for the debt service payments associated with the
Airport Tax Increment District.
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 343 - Accounts for the debt service payments associated with the Special
Improvement District #343 bonds.
SID 345 - Accounts for the debt service payments associated with the Special
Improvement District #345 bonds.
CAPITAL PROJECT FUNDS
Fire Pumper — accounts for loan funds accumulated and expended for the purchase of a
new fire pumper truck.
Westside TIF — bonds issued in fiscal year 2018 for the City's matching funds for the
construction of the Glacier Rail Park.
S & C Construction —Accounts for the monies received for and expenditures related to
sidewalk and curb construction.
Kidsports Grant -- Grant to provide funding for the infrastructure necessary to support the
development of eight new playing fields at the Kidsports facility.
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2018
Old School Tech
Airport TIF
Westside TIF
Parks - in - Lieu
Parks
Ambulance
TIF
ASSETS
Cash and investments
2,143,306
1,622,971
18,392
871,151
23,060
21,354
Taxes and assessments receivable, net
-
15,637
-
43,339
-
24,731
Accounts receivable - net
-
1,121
316,855
-
Notes and loans receivable
_
_
Due from other funds
-
_
Due from other governments
16,816
95,206
-
Prepaids
-
11,691
11,310
Properties held for sale
_
_
Other debits
Restricted assets:
Restricted cash and investments
Total assets
2,143,306
1,655,424
18,392
1,022,508
351,225
46,085
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
68,646
3
-
40,347
5,260
10,466
Retainage
-
_
_
_
_
Accrued payroll
813
1,634
47,442
16,852
Due to other funds
-
_
_
_
Advances from other funds
Other credits
-
-
_
_
_
Total liabilities
69,459
1,637
87,789
22,112
10,466
Deferred inflows of resources
Unavailable revenue - deferred accounts receivabl
-
-
-
314,188
-
Unavailable revenue - deferred taxes and assessnu
15,637
43,339
-
24,731
Total deferred inflows of resources
15,637
43,339
314,188
24,731
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
-
11,691
11,310
-
Restricted
General Government
_
_
Public Safety
3,615
Public Works
_
_
_
Culture and Recreation
-
-
18,392
879,689
-
Community Development
2,073,847
1,638,150
-
-
10,888
Debt Service
-
-
_
_
Total fund balance
2,073,847
1,638,150
18,392
891,380
14,925
10,888
Total liabilities and fund balance
2,143,306
1,655,424
18,392
1,022,508
351,225
46,085
See independent auditor's report.
107
ASSETS
Cash and investments
Taxes and assessments receivable, net
Accounts receivable - net
Notes and loans receivable
Due from other funds
Due from other governments
Prepaids
Properties held for sale
Other debits
Restricted assets:
Restricted cash and investments
Total assets
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
Retainage
Accrued payroll
Due to other funds
Advances from other funds
Other credits
Total liabilities
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2018
Old School Building Public Safet) Light
Industrial TIF Rail Park TEDD Health Levy Department Impact Fees Maintenance
4,856 516 17,328 1,981,972 7,854 314,445
30,716 - 44,696 - - 15,395
4 73,393 - 21,437
- - 16,803 -
435
- - - - 937,552 -
35,572 520 135,417 1,998,775 945,841 351,277
5,356 13,078
18,489 2,469
- 435 -
23,845 435 15,547
Deferred inflows of resources
Unavailable revenue - deferred accounts receivabl - - -
Unavailable revenue - deferred tares and assessmt 30,716 44,696 15,395
Total deferred inflows of resources 30,716 44,696 15,395
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
Restricted
General Government
Public Safety
Public Works
Culture and Recreation
Community Development
Debt Service
Total fund balance
Total liabilities and fund balance
See independent auditor's report.
16,803
90,721 - -
- 1,958,127 945,406 -
- - 320,335
4,856 520
4,856 520 90,721 1,974,930 945,406 320,335
35,572 520 135,417 1,998,775 945,841 351,277
M
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2018
ASSETS
Cash and investments
Taxes and assessments receivable, net
Accounts receivable - net
Notes and loans receivable
Due from other funds
Due from other governments
Prepaids
Properties held for sale
Other debits
Restricted assets:
Restricted cash and investments
Total assets
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
Retainage
Accrued payroll
Due to other funds
Advances from other funds
Other credits
Total liabilities
Community
Gas Tax - Street Development Loan
BARSAA Maintenance Urban Forestry MACI Revolving CD Misc.
796,768 2,438,823 464,561 21,006 468,897 286,950
- 107,504 18,320 - - -
1,665,730
155,922 44,590 -
25,975 - 1,293
- 1,258,465
- - 101,474 - - -
796,768 2,728,224 628,945 21,006 2,134,627 1,546,708
20,308 252,993 19,584 358 2,148
30,527 6,333
1,300,000
20,308 283,520 25,917 358 1,302,148
Deferred inflows of resources
Unavailable revenue - deferred accounts receivabl - -
Unavailable revenue - deferred taxes and assessmi 107,504 18,320
Total deferred inflows of resources 107,504 18,320
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
Restricted
General Government
Public Safety
Public Works
Culture and Recreation
Community Development
Debt Service
Total fund balance
Total liabilities and fund balance
See independent auditor's report.
25,975 1,293
776,460 2,311,225 - 21,006
- - 584,708 - - -
- 2,134,269 243,267
776,460 2,337,200 584,708 21,006 2,134,269 244,560
796,768 2,728,224 628,945 21,006 2,134,627 1,546,708
109
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30. 2018
Drug
Law
EPA
RD Revolving
Stonegarden
Enforcement
Enforcement
Brovvnfields
Loan (2)
Grant
Grant
COPS Grant
Grants
Grant
ASSETS
Cash and investments
752,578
6,330
66,035
Taxes and assessments receivable, net
-
-
-
Accounts mceivable - net
-
Notes and loans receivable
139,833
Due from other funds
-
-
-
-
-
Due from other governments
13,554
9,217
16,468
931
7,248
Prepaids
-
-
-
-
-
Properties held for sale
Other debits
Restricted assets:
Restricted cash and investments
-
-
-
-
-
-
Total assets
892,411
13,554
15,547
82,503
931
7,248
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
-
7,475
-
-
21
7,248
Retainage
-
-
-
-
Accrued payroll
-
2,150
2,370
127
Due to other funds
6,079
-
642
Advances from other funds
-
-
Other credits
-
-
-
-
-
Totalliabilities
13,554
2,150
2,370
790
7,248
Deferred inflows of resources
Unavailable revenue - deferred accounts receivabl
-
-
-
-
-
Unavailable revenue - deferred taxes and assessmt
Total deferred inflows of resources
Fund Balance:
Nonspendable - not in spendable fonn:
Prepaid
-
Restricled
General Government
-
-
-
-
Public Safety
-
13,397
80,133
141
Public Works
-
-
-
-
Culture and Recreation
-
Community Development
892,411
Debt Service
-
-
-
-
Totalfundbalance
892,411
-
13,397
80,133
141
-
Total liabilities and fund balance
892,411
13,554
15,547
82,503
931
7,248
See independent auditor's report.
110
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2018
Brownfields
HAZMAT
Total Special
City Hall Debt
Loan Revolving
Fire Grants
Grant
Revenue Funds
G.O. Bonds
Service
ASSETS
Cash and investments
100,500
4,778
52,567
12,486,998
-
12,435
Taxes and assessments receivable, net
-
-
-
300,338
23,528
-
Accounts receivable - net
317,976
-
Notes and loans receivable
1,805,563
Due from other funds
-
-
Due from other governments
1,011
455,797
35,252
Prepaids
-
67,072
-
Properties held for sale
1,258,465
Other debits
435
Restricted assets:
Restricted cash and investments
1,039,026
-
-
Total assets
100,500
4,778
53,578
17,731,670
58,780
12,435
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
-
-
550
453,841
-
-
Retainage
-
-
Accrued payroll
129,206
-
Due to other funds
6,721
5,111
Advances from other funds
1,300,000
-
Other credits
435
-
Totalliabilities
550
1,890,203
5,111
Deferred inflows of resources
Unavailable revenue - deferred accounts receivabl
-
314,188
-
Unavailable revenue - deferred taxes and assessmr
300,338
23,528
Total deferred inflows of resources
614,526
23,528
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
67,072
-
Restricted
-
General Government
-
-
90,721
Public Safety
4,778
53,028
3,058,625
Public Works
-
-
3,429,026
Culture and Recreation
-
1,482,789
Community Development
100,500
7,098,708
-
-
Debt Service
-
-
30,141
12,435
Total fund balance
100,500
4,778
53,028
15,226,941
30,141
12,435
Total liabilities and fund balance
100,500
4,778
53,578
17,731,670
58,780
12,435
See independent auditor's report.
111
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30.2018
Airport TIF Westside TIF
Debt Service Debt Service SID Revolving S & C's SID 343 SID 345
ASSETS
Cash and investments
180,288
10,000
44,765
14
-
5,192
Taxes and assessments receivable, net
43,288
-
-
36,498
11,616
170,640
Accounts receivable - net
-
-
-
-
Notes and loans receivable
-
Due from other funds
-
9,188
-
-
-
Due from other governments
35,518
-
802
7,925
266
Prepaids
-
-
-
-
Properties held for sale
Other debits
-
-
-
-
-
Restricted assets:
Restricted cash and investments
144,500
480,011
238,100
-
750
11,172
Total assets
403,594
490,011
292,053
37,314
20,291
187,270
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
-
-
-
-
-
-
Retainage
Accrued payroll
-
Due to other funds
4,077
Advances from other funds
-
Other credits
-
Total liabilities
4,077
Deferred inflows of resources
Unavailable revenue - deferred accounts receivabl
-
-
-
-
Unavailable revenue - deferred taxes and assessmt
43,288
36,498
11,616
170,640
Total deferred inflows of resources
43,288
36,498
11,616
170,640
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
-
-
Restricted
General Government
-
Public Safety
-
Public Works
-
Culture and Recreation
-
Community Development
-
-
-
-
-
Debt Service
360,306
490,011
292,053
816
4,598
16,630
Total fund balance
360,306
490,011
292,053
816
4,598
16,630
Total liabilities and fund balance
403,594
490,011
292,053
37,314
20,291
187,270
See independent auditor's report.
112
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2018
ASSETS
Cash and investments
Taxes and assessments receivable, net
Accounts receivable - net
Notes and loans receivable
Due from other funds
Due from other governments
Prepaids
Properties held for sale
Other debits
Restricted assets:
Restricted cash and investments
Total assets
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
Retainage
Accrued payroll
Due to other funds
Advances from other funds
Other credits
Total liabilities
Total Nonmajor
Total Debt Westside TIF Total Capital Governmental
Service Funds Fire Pumper Capital Project Project Funds Funds
252,694
3,528,539 3,528,539 S 16,268,231
285,570
- - 585,908
-
317,976
-
1,805,563
9,188
- 9,188
79,763
207,853 207,853 743,413
-
- - 67,072
1,258,465
435
874,533 - - - 1,913,559
1,501,748 207,853 3,528,539 3,736,392 S 22,969,810
207,853 150,489 358,342 812,183
- 25,418 25,418 25,418
- - - 129,206
9,188 15,909
1,300,000
- - - - 435
9,188 207,853 175,907 383,760 S 2,283,151
Deferred inflows of resources
Unavailable revenue - deferred accounts receivabl - 314,188
Unavailable revenue - deferred taxes and assessmr 285,570 585,908
Total deferred inflows of resources 285,570 900,096
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
Restricted
General Government
Public Safety
Public Works
Culture and Recreation
Community Development
Debt Service
Total fund balance
Total liabilities and fund balance
See independent auditor's report.
67,072
90,721
3,058,625
3,429,026
- - 1,482,789
- 3,352,632 3,352,632 10,451,340
1,206,990 - - 1,206,990
1,206,990 3,352,632 3,352,632 S 19,786,563
1,501,748 207,853 3,528,539 3,736,392 S 22,969,810
113
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2018
Old School Tech
REVENUES
Airport TIF
Westside TIF
Parks - in - Lieu
Parks
Ambulance
TIF
Taxes and assessments
350,000
241,110
1,120,873
71,315
Licenses and permits
_
_
_
_
_
Intergovernmental
42,671
243,128
-
-
352,000
3,057
Charges for services
-
-
16,792
547,442
718,625
-
Miscellaneous
-
-
-
48,682
-
-
Investment earnings
20,778
45,791
183
6,672
-
213
Total revenues
413,449
530,029
16,975
1,723,669
1,070,625
74,585
EXPENDITURES
Public safety
-
-
-
-
1,072,584
-
Public works
_
Parks and recreation
-
-
1,519,286
-
Community Development
126,087
656,077
-
20,393
Debt service - principal
-
-
30,928
-
Debt service - interest
2,647
Capital outlay
-
-
134,677
-
-
Total expenditures
126,087
656,077
-
1,687,538
1,072,584
20,393
Excess (deficiency) of revenues over expenditures
287,362
(126,048)
16,975
36,131
(1,959)
54,192
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
61,527
-
Proceeds from the sale of general capital asset disposition
2,876
Transfers in
_
Transfers (out)
(2,240,000)
-
(60,000)
Total other financing sources and uses
-
(2,240,000)
-
64,403
(60,000)
Net change in fund balance
287,362
(2,366,048)
16,975
100,534
(1,959)
(5,808)
Fund balances - beginning
1,786,485
4,004,198
1,417
790,846
16,884
16,696
Restatements
_
_
_
_
Fund balances - beginning restated
1,786,485
4,004,198
1,417
790,846
16,884
16,696
Fund balances - ending
2,073,847
1,638,150
18,392
891,380
14,925
10,888
See independent auditor's report.
114
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2018
Old School
Building
Public Safety
Light
REVENUES
Industrial TIF
Rail Park TEDD
Health Levy
Department
Impact Fees
Maintenance
Taxes and assessments
7,381
518
905,148
-
389,735
Licenses and permits
-
-
-
915,468
-
Intergovernmcntal
22,831
-
-
Charges for services
-
306,342
202,304
-
Miscellaneous
-
-
-
-
22,619
Investment earnings
61
2
-
19,475
9,352
2,673
total revenues
7,442
520
927,979
1,241,285
211,656
415,027
EXPENDITURES
Public safety
-
-
-
827,496
15,000
-
Public works
-
-
328,227
Parks and recreation
-
Community Development
-
-
Debt service - principal
67,575
22,055
Debt service - interest
-
1,941
413
Capital outlay
33,419
-
35,549
Total expenditures
-
-
-
860,915
84,516
386,244
Excess (deficiency) of revenues over expenditures
7,442
520
927,979
380,370
127,140
28,783
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disposition
Transfers in
Transfers (out) (10,000) (901,000)
Total other financing sources and uses (10,000) - (901,000) - - -
Net change in fund balance (2,558) 520 26,979 380,370 127,140 28,783
Fund balances - beginning
Restatements
Fund balances- beginning restated
Fund balances - ending
See independent auditor's report.
7,414 63,742 1,594,560 818,266 291,552
7,414 - 63,742 1,594,560 818,266 291,552
4,856 520 90,721 1,974,930 945,406 320,335
115
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2018
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
EXPENDITURES
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disposition
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
Community
Gas Tax -
Street
Development
BARSAA
Maintenance
Urban Forestry MACI
Loan Revolving
CD Misc.
7,089
2,667,198
775,062
522,832
-
15,250
-
40,000
58,999
11,704
47,444
1,088
-
7,461
4,497
-
-
7,1 16
18,045
3,759
6,045
3,647
577,037
2,751,703
810,272
53,489
4,735
318,196
2,171,670
-
-
-
467,036 - -
-
- 838 171,520
98,254
10,904 - -
-
13,773
1,011
72,659
1,019,788
48,180 - -
390,855
3,303,485
527,131 838 171,520
186,182
(551,782)
283,141 52,651 (166,785)
615,098 40,000
18,108 - -
- 70,000
-
633,206
40,000
-
70,000
186,182
81,424
323,141
- 52,651
(96,785)
590,278
2,255,776
261,567
21,006 2,081,618
325,095
-
-
-
- -
16,250
590,278
2,255,776
261,567
21,006 2,081,618
341,345
776,460
2,337,200
584,708
21,006 2,134,269
244,560
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2018
RD Revolving
Stonegarden
Drug Enforcement
Law Enforcement Fairgrounds ADA
REVENUES
Loan (2)
Grant
Grant
COPS Grant
Grants
Grant
Taxes and assessments
Licenses and permits
-
-
-
-
-
Intergovernmental
-
36,042
95,381
116,334
27,733
150,469
Charges for services
7,132
-
-
-
13,451
-
Miscellaneous
-
2,842
Investment earnings
1,678
-
-
-
-
-
Total revenues
8,810
36,042
95,381
116,334
44,026
150,469
EXPENDITURES
Public safety
-
36,042
85,458
76,185
43,885
-
Public works
-
-
-
-
Parks and recreation
-
-
Community Development
887
150,469
Debt service - principal
26,674
-
Debt service - interest
5,425
Capital outlay
-
-
-
-
-
Total expenditures
32,986
36,042
85,458
76,185
43,885
150,469
Excess (deficiency) of revenues over expenditures
(24,176)
-
9,923
40,149
141
-
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
Proceeds from the sale of general capital asset disposition
Transfers in
Transfers (out)
Total other financing sources and uses
-
-
-
Net change in fund balance
(24,176)
9,923
40,149
141
Fund balances - beginning
916,587
3,474
39,984
-
Restatements
-
-
Fund balances - beginning restated
916,587
3,474
39,984
-
Fund balances - ending
892,411
13,397
80,133
141
See independent auditors report
117
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2018
EPA Brownfields Brownfields Loan
Total Special
REVENUES
Grant Revolving
Fire Grants
HAZNIAT Grant
Revenue Funds
G.O. Bonds
Taxes and assessments
6,535,429
517,099
Licenses and permits
-
-
915,468
-
intergovernmental
9,178
1,509
1,638,415
Charges for services
-
-
-
1,971,323
Miscellaneous
4,894
1,945
92,940
-
Investment earnings
-
-
614
146,104
2,003
Total revenues
9,178
4,894
4,068
11,299,679
519,102
EXPENDITURES
Public safety
-
4,873
11,826
2,173,349
-
Public works
-
-
2,818,093
Parks and recreation
-
1,986,322
Community Development
9,178
1,135,449
-
Debt service - principal
-
256,390
470,000
Debt service - interest
25,210
34,513
Capital outlay
-
-
-
1,344,272
-
Total expenditures
9,178
4,873
11,826
9,739,085
504,513
Excess (deficiency) ofrevenues over expenditures
-
21
(7,758)
1,560,594
14,589
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
716,625
Proceeds from the sale of general capital asset disposition
20,984
Transfers in
70,000
Transfers (out)
(3,211,000)
Total other financing sources and uses
(2,403,391)
-
Netchangein fund balance
- 21
(7,758)
(842,797)
14,589
Fund balances - beginning
100,500 4,757
60,786
16,053,488
15,552
Restatements
- -
-
16,250
-
Fund balances - beginning restated
100,500 4,757
60,786
16,069,738
15,552
Fund balances - ending
100,500 4,778
53,028
15,226,941
30,141
See independent auditor's report
118
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2018
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
EXPENDITURES
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
Excess Ideficiency) of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disposition
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances- beginning restated
Fund balances - ending
See independent auditor's report.
City Nall Debt
Airport TIF Debt
Westside TIF
Service
Service
Debt Service SID Revolving
S & C's
SID 343
262,855
9,566
88,116
"'000
-
3,829
3,126
-
-
90,000
266,684
3,126
9,566
88,116
81,995
160,000
433,500
7,841
140,000
6,763
22,107
21,159
1,549
7,500
88,758 182,107 454,659
-
9,390 147,500
1,242 84,577 (454,659)
3,126
176 (59,384)
944,670
120
-
-
-
(120)
- 944,670
120
(120)
1,242 84,577 490,011
3,246
56 (59,384)
11,193 275,729 288,807 760 63,982
11,193 275,729 - 288,807 760 63,982
12,435 360,306 490,011 292,053 816 4,598
119
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2018
Total Debt Service
Westside TIF
REVENUES
SID 345
Funds
Fire Pumper
Capital Project
Taxes and assessments
22,175
899,811
Licenses and permits
-
-
Intergovernmental
90,000
Charges for services
-
Miscellaneous
-
13,291
Investment earnings
-
8,958
-
Total revenues
22,175
998,769
13,291
EXPENDITURES
Public safety
-
-
-
Public works
Parks and recreation
-
Community Development
-
-
57,141
Debt service - principal
13,000
1,306,336
-
Debt service - interest
5,505
99,096
-
-
Capital outlay
-
-
467,684
658,848
Total expenditures
18,505
1,405,432
467,684
715,989
Excess (deficiency) of revenues over expenditures
3,670
(406,663)
(467,684)
(702,698)
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
467,684
4,960,000
Proceeds from the sale of general capital asset disposition
-
-
_
Transfers in
944,790
Transfers (out)
(120)
-
(904,670)
Total other financing sources and uses
-
944,670
467,684
4,055,330
Net change in fund balance
3,670
538,007
-
3,352,632
Fund balances - beginning
12,960
668,983
-
Restatements
-
_
Fund balances - beginning restated
12,960
668,983
Fund balances - ending
16,630
1,206,990
3,352,632
See independent auditor's report.
120
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2018
Total Nonmajor
S & C
Total Capital
Governmental
REVENUES
Construction Kidsports Grant
Project Funds
Funds
Taxes and assessments
7,435,240
Licenses and permits
-
-
915,468
Intergovernmental
- 561,995
561,995
2,290,410
Charges for services
-
-
1,971,323
Miscellaneous
13,291
106,231
Investment earnings
-
-
155,062
Total revenues
561,995
575,286
12,873,734
EXPENDITURES
Public safety
-
-
2,173,349
Public works
2,818,093
Parks and recreation
-
1,986,322
Community Development
57,141
1,192,590
Debt service - principal
-
1,562,726
Debt service - interest
- -
-
124,306
Capital outlay
4,288 561,995
1,692,815
3,037,087
Total expenditures
4,288 561,995
1,749,956
12,894,473
Excess (deficiency) of revenues over expenditures
(4,288) -
(1,174,670)
(20,739)
OTHER FINANCING SOURCES (USES)
Issuance of debt
4,288
5,431,972
6,148,597
Proceeds from the sale of general capital asset disposition
-
-
20,984
Transfers in
1,014,790
Transfers (out)
-
(904,670)
(4,115,790)
Total other financing sources and uses
4,288
4,527,302
3,068,581
Net change in fund balance
-
3,352,632
3,047,842
Fund balances - beginning
-
16,722,471
Restatements
16,250
Fund balances -beginning restated
-
16,738,721
Fund balances -ending
3,352,632
19,786,563
See independent auditors report.
121
BUDGETARY COMPARISON SCUIEDULE - OTHER MAJOR
FUNDS
RESOURCES (INFLOWS):
Taxes and assessments $
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Miscellaneous
Investment earnings
Amounts available for appropriation $
CHARGES TO APPROPRIATIONS (OUTFLOWS);
General government $
Public safety
Public works
Community development
Debt service - principal
Debt service - interest
Capital outlay
Total charges to appropriations $
OTHER FINANCING SOURCES (USES)
Transfers in
Total other financing sources (uses) $
Net change in fund balance
Fund balance - beginning of the year
Fund balance - end of the year
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2018
SID 344
ACTUAL
AMOUNTS
VARIANCE
BUDGETED
AMOUNTS (BUDGETARY
WITH FINAL
ORIGINAL
FINAL BASIS) See Note A
BUDGET
318,631
$ 318,631 $ 255,578
$ (63,053)
$ 318,631 $ 255,578
$ (63,053)
318,631
225,000
225,000 225,000
-
102,283
102,283 102,282
1
327,283
$ 327,283 $ 327,282
$ 1
$ (71,704)
$ 331,315
$ 259,611
See independent auditor's report
122
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2018
Tiger Grant
ACTUAL
AMOUNTS
VARIANCE
BUDGETED
AMOUNTS
(BUDGETARY
WITH FINAL
ORIGINAL
FINAL
BASIS) See Note A
BUDGET
RESOURCES (INFLOWS):
Taxes and assessments
$
-
$ -
$
-
$ -
Licenses and permits
-
-
-
-
Intergovernmental
10,000,000
10,000,000
6,196,091
(3,803,909)
Charges for services
-
-
-
-
Fines and forfeitures
-
-
-
-
Miscellaneous
-
-
-
-
Investment earnings
-
-
-
-
Amounts available for appropriation
$
10,000,000
$ 10,000,000
$
6,196,091
$ (3,803,909)
CHARGES TO APPROPRIATIONS (OUTFLOWS);
General government
$
-
$ -
$
-
$ -
Public safety
-
-
-
Public works
-
-
-
-
Community development
-
-
-
-
Debt service - principal
-
-
-
-
Debt service - interest
-
-
-
-
Capital outlay
18,107,000
18,107,000
8,396,091
9,710,909
Total charges to appropriations
$
18,107,000
$ 18,107,000
$
8,396,091
$ 9,710,909
OTHER FINANCING SOURCES (USES)
Transfers in
8,107,000
8,107,000
2,200,000
(5,907,000)
Total other financing sources (uses)
$
8,107,000
$ 8,107,000
$
2,200,000
$ (5,907,000)
Net change in fund balance
$
-
Fund balance - beginning of the year
$
-
Fund balance - end of the year
$
-
See independent auditor's report
123
BUDGETARY COMPARISON SCHEDULE - NONMAJOR
FUNDS
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Airport TIF
Westside TIF
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
350,000
350,000
300,200
241,110
(59,090)
Licenses and permits
-
-
-
_
_
_
Intergovernmental
42,671
42,671
243,128
243,128
-
Charges for services
-
-
_
_
_
Miscellaneous
-
-
-
8,500
-
(8,500)
Investment earnings
15,000
20,778
5,718
15,000
45,791
30,791
Total revenues
57,671
413,449
355,778
566,828
530,029
(36,799)
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation - - - _ _ _
Community Development 2,036,142 126,087 1,910,055 1,014,362 656,077 358,285
Debt service - principal - - - _ _ _
Debt service - interest
Capital outlay - - - _ _ _
Total expenditures 2,036,142 126,087 1,910,055 1,014,362 656,077 358,285
Excess (deficiency) of revenues over expenditun (1,978,471) 287,362 2,265,833 (447,534) (126,048) 321,486
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
5,000,000 - (5,000,000)
350,000 - (350,000) -
- - - (3,155,725) (2,240,000) 915,725
350,000 - (350,000) 1,844,275 (2,240,000) (4,084,275)
(1,628,471) 287,362 1,915,833 1,396,741 (2,366,048) (3,762,789)
1,786,485
1,786,485
2,073,847
4,004,198
4,004,198
1,638,150
124
City of Kalispeli, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Parks in Lieu
Parks
Positive /
Positive /
(Negative)
(Negative)
Budget Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
-
1,041,000
1,120,873
79,873
Licenses and permits
-
-
-
-
Intergovemmental
-
-
-
-
Charges for services
- 16,792
16,792
502,429
547,442
45,013
Miscellaneous
- -
-
31,500
48,682
17,182
Investment earnings
16 183
167
3,000
6,672
3,672
Total revenues
16 16,975
16,959
1,577,929
1,723,669
145,740
EXPENDITURES
Current:
Public safety
- -
-
Public works
- -
-
-
-
-
Parks and recreation
- -
-
1,766,923
1,519,286
247,637
Community Development
- -
-
-
-
-
Debt service - principal
- -
-
41,602
30,928
10,674
Debt service - interest
- -
-
4,280
2,647
1,633
Capital outlay
1,432 -
1,432
168,000
134,677
33,323
Total expenditures
1,432 -
1,432
1,980,805
1,687,538
293,267
Excess (deficiency) of revenues over expenditure
(1,416) 16,975
18,391
(402,876)
36,131
439,007
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
64,000
61,527
(2,473)
Proceeds from the sale of general capital asset disp
-
2,876
2,876
Transfers in
-
101,467
-
(101,467)
Transfers (out)
-
-
-
Total other financing sources and uses
- -
-
165,467
64,403
(101,064)
Net change in fund balance
(1,416) 16,975
18,391
(237,409)
100,534
337,943
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
1,417
1,417
18,392
790,846
790,846
891,380
125
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Ambulance
Old School Tech TIF
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
-
-
65,000
71,315
6,315
Licenses and permits
-
-
-
_
_
_
Intergovernmental
110,000
352,000
242,000
3,056
3,057
1
Charges for services
750,000
718,625
(31,375)
-
-
-
Miscellaneous
-
-
_
_
_
Investment earnings
-
-
-
100
213
113
Total revenues
860,000
1,070,625
210,625
68,156
74,585
6,429
EXPENDITURES
Current:
Public safety 1,188,096 1,072,584 115,512 - - -
Public works - - -
Parks and recreation - - - _ _ _
Community Development - - - 21,500 20,393 1,107
Debt service - principal - - - _ _ _
Debt service - interest - - -
Capital outlay - - _ _ _ _
Total expenditures 1,188,096 1,072,584 115,512 21,500 20,393 1,107
Excess (deficiency) of revenues over expenditure (328,096) (1,959) 326,137 46,656 54,192 7,536
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
350,000 - (350,000) - -
- - - (60,000) (60,000)
350,000 - (350,000) (60,000) (60,000) -
21,904 (1,959) (23,863) (13,344) (5,808) 7,536
16,884
16,884
14,925
16,696
16,696
10,888
126
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Old School Industrial TIF
Rail Park TEDD
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget Actual
Variance
REVENUES
Taxes and assessments
10,100
7,381
(2,719)
- 518
518
Licenses and permits
-
-
- -
-
Intergovernmental
-
-
- -
-
Charges for services
-
-
- -
-
Miscellaneous
-
-
-
- -
-
Investment earnings
-
61
61
2
2
Total revenues
10,100
7,442
(2,658)
520
520
EXPENDITURES
Current:
Public safety
-
-
-
- -
-
Public works
-
-
-
Parks and recreation
-
-
-
Community Development
-
-
- -
Debt service - principal
-
-
-
Debt service - interest
-
-
- -
-
Capital outlay
-
-
- -
-
Total expenditures
-
-
-
- -
-
Excess (deficiency) of revenues over expenditure
10,100
7,442
(2,658)
520
520
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
(10,000)
(10,000)
-
Total other financing sources and uses
(10,000)
(10,000)
- -
-
Net change in fund balance
100
(2,558)
(2,658)
- 520
520
Fund balances - beginning
7,414
-
Restatements
-
-
Fund balances - beginning restated
7,414
-
Fund balances - ending
4,856
520
See independent auditor's report.
127
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Health Levy
Building Department
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
995,000
905,148
(89,852)
-
-
-
Licenses and permits
-
-
-
945,000
915,468
(29,532)
Intergovernmental
22,025
22,831
806
-
-
-
Charges for services
-
-
-
400,000
306,342
(93,658)
Miscellaneous
-
_
_
Investment earnings
-
-
-
5,000
19,475
14,475
Total revenues
1,017,025
927,979
(89,046)
1,350,000
1,241,285
(108,715)
EXPENDITURES
Current:
Public safety - -
820,788
827,496
(6,708)
Public works - _
_
_
_
Parks and recreation - - _
_
_
Community Development - _ _
_
Debt service - principal _ _ _
_
Debt service - interest - _ _
_
_
Capital outlay - - -
105,000
33,419
71,581
Total expenditures - - -
925,788
860,915
64,873
Excess (deficiency) of revenues over expenditun 1,017,025 927,979 (89,046)
424,212
380,370
(43,842)
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
(992,000) (901,000) 91,000
- -
(992,000) (901,000) 91,000
- - -
25,025 26,979 1,954
424,212 380,370 (43,842)
63,742
1,594,560
63,742
1,594,560
90,721
1,974,930
128
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Impact Fees
Light Maintenance
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
-
-
-
386,600
389,735
3,135
Licenses and permits
-
-
-
-
-
Intergovemmental
-
-
-
-
-
-
Charges for services
182,000
202,304
20,304
-
-
-
Miscellaneous
-
-
-
5,000
22,619
17,619
Investment earnings
7,000
9,352
2,352
1,200
2,673
1,473
Total revenues
189,000
211,656
22,656
392,800
415,027
22,227
EXPENDITURES
Current:
Public safety
15,000
15,000
-
-
-
-
Public works
-
-
-
414,619
328,227
86,392
Parks and recreation
-
-
-
-
Community Development
-
-
-
-
-
-
Debt service - principal
67,675
67,575
100
22,055
22,055
-
Debt service - interest
2,034
1,941
93
551
413
138
Capital outlay
850,000
-
850,000
36,000
35,549
451
Total expenditures
934,709
84,516
850,193
473,225
386,244
86,981
Excess (deficiency) of revenues over expenditure
(745,709)
127,140
872,849
(80,425)
28,783
109,208
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
(745,709) 127,140 872,849 (80,425)
818,266
945,406
28,783 109,208
291,552
129
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Gas Tax - BARSAA
Street Maintenance
Positive /
Positive /
(Negative)
(Negative)
Budget Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
- 7,089
7,089
2,577,976
2,667,198
89,222
Licenses and permits
- -
-
_
_
-
Intergovernmental
371,304 522,832
151,528
-
-
-
Charges for services
- 40,000
40,000
7,500
58,999
51,499
Miscellaneous
- -
-
3,500
7,461
3,961
Investment earnings
4,500 7,116
2,616
15,000
18,045
3,045
Total revenues
375,804 577,037
201,233
2,603,976
2,751,703
147,727
EXPENDITURES
Current:
Public safety
_
_
_
-
-
-
Public works
630,949
318,196
312,753
2,689,595
2,171,670
517,925
Parks and recreation
-
_
-
-
-
_
Community Development
_
-
-
Debt service - principal
122,878
98,254
24,624
Debt service - interest
-
-
-
35,820
13,773
22,047
Capital outlay
134,557
72,659
61,898
1,132,882
1,019,788
113,094
Total expenditures
765,506
390,855
374,651
3,981,175
3,303,485
677,690
Excess (deficiency) of revenues over expenditun
(389,702)
186,182
575,884
(1,377,199)
(551,782)
825,417
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
670,000 615,098 (54,902)
- - - - 18,108 18,108
40,000 (40,000) - - -
40,000 - (40,000) 670,000 633,206 (36,794)
(349,702) 186,182 535,884 (707,199) 81,424 788,623
590,278
590,278
776,460
2,255,776
2,255,776
2,337,200
130
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Urban Forestry
MACI
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance Budget Actual
Variance
REVENUES
Taxes and assessments
750,250
775,062
24,812 -
-
Licenses and permits
-
-
- -
-
Intergovernmental
20,250
15,250
(5,000) 375,067 -
(375,067)
Charges for services
-
11,704
11,704 - -
-
Miscellaneous
2,200
4,497
2,297 -
-
Investment earnings
1,500
3,759
2,259 - -
-
Total revenues
774,200
810,272
36,072 375,067 -
(375,067)
EXPENDITURES
Current:
Public safety
-
- - -
Public works
-
-
- - -
Parks and recreation
769,944
467,036
302,908 - - -
Community Development
-
-
- - -
Debt service - principal
14,905
10,904
4,001 - -
Debt service - interest
1,295
1,011
284 - - -
Capital outlay
55,000
48,180
6,820 433,202 - 433,202
Total expenditures
841,144
527,131
314,013 433,202 - 433,202
Excess (deficiency) of revenues over expenditun
(66,944)
283,141
350,085 (58,135) - 58,135
OTHER FINANCING SOURCES (USES)
Issuance of debt
40,000 40,000 - -
Proceeds from the sale of general capital asset disp
- - - - -
Transfers in
- - - 43,000 - (43,000)
Transfers (out)
- - - - -
Total other financing sources and uses
40,000 40,000 - 43,000 - (43,000)
Net change in fund balance
(26,944) 323,141 350,085 (15,135) - 15,135
Fund balances - beginning
261,567 21,006
Restatements
- -
Fund balances - beginning restated
261,567 21,006
Fund balances - ending
584,708 21,006
See independent auditor's report
131
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Community Development Loan Revolving
CD Misc.
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
-
_
_
_
_
_
Charges for services
55,637
47,444
(8,193)
9,820
1,088
(8,732)
Miscellaneous
-
_
_
_
Investment earnings
3,500
6,045
2,545
3,000
3,647
647
Total revenues
59,137
53,489
(5,648)
12,820
4,735
(8,085)
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation - _ _ _
Community Development 252,000 838 251,162 233,869 171,520 62,349
Debt service - principal - _ _ _ _ _
Debt service - interest - _ _ _
Capital outlay - - _ - -
Total expenditures 252,000 838 251,162 233,869 171,5 00 62,349
Excess (deficiency) of revenues over expenditun - (192,863) 52,651 245,514 (221,049) (166,785) 54,264
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
220,000 70,000 (150,000)
- - 220,000 70,000 (150,000)
(192,863) 52,651 245,514 (1,049) (96,785) (95,736)
2,081,618
2,081,618
2,134,269
325,095
16,250
341,345
244,560
132
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
RD Revolving Loan (2)
Stonegarden Grant
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget Actual Variance
REVENUES
Taxes and assessments
-
- -
Licenses and permits
-
- - -
Intergovernmental
-
-
61,473 36,042 (25,431)
Charges for services
58,258
7,132
(51,126)
- - -
Miscellaneous
-
-
-
- - -
Investment earnings
700
1,678
978
- - -
Total revenues
58,958
8,810
(50,148)
61,473 36,042 (25,431)
EXPENDITURES
Current:
Public safety
-
61,473 36,042 25,431
Public works
-
- - - -
Parks and recreation
-
-
- - -
Community Development
350,000
887
349,113 - -
Debt service - principal
26,673
26,674
(1) - -
Debt service - interest
5,426
5,425
1 - -
Capital outlay
-
-
- - -
Total expenditures
382,099
32,986
349,113 61,473 36,042 25,431
Excess (deficiency) of revenues over expenditun
(323,141)
(24,176)
298,965 - - -
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
(323,141) (24,176) 298,965 -
916,587
916,587
892,411
133
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Drug Enforcement Grant
COPS Grant
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
Licenses and permits
-
-
-
-
-
Intergovernmental
95,000
95,381
381
100,000
116,334
16,334
Charges for services
-
-
-
-
-
-
Miscellaneous
Investment earnings
-
-
-
-
-
-
Total revenues
95,000
95,381
381
100,000
116,334
16,334
EXPENDITURES
Current:
Public safety
93,046
85,458
7,588
76,185
76,185
-
Public works
-
-
-
-
-
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
-
-
-
-
-
Total expenditures
93,046
85,458
7,588
76,185
76,185
-
Excess (deficiency) of revenues over expenditures
1,954
9,923
7,969
23,815
40,149
16,334
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
-
-
-
Proceeds from the sale of general capital asset dispc
Transfers in
Transfers (out)
Total other financing sources and uses
-
-
-
-
-
-
Net change in fund balance
1,954
9,923
7,969
23,815
40,149
16,334
Fund balances - beginning
3,474
39,984
Restatements
-
-
Fund balances - beginning restated
3,474
39,984
Fund balances - ending
13,397
80,133
See independent audits report.
134
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Law Enforcement Grants
Fairgrounds ADA Grant
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual Variance
REVENUES
Taxes and assessments
-
-
-
-
Licenses and permits
-
-
-
-
-
Intergovernmental
68,000
27,733
(40,267)
150,469
150,469 -
Charges for services
20,000
13,451
(6,549)
-
-
Miscellaneous
-
2,842
2,842
-
-
Investment earnings
-
-
-
-
-
Total revenues
88,000
44,026
(43,974)
150,469
150,469 -
EXPENDITURES
Current:
Public safety
91,500
43,885
47,615
-
- -
Public works
-
-
-
-
-
Parks and recreation
-
-
-
- -
Community Development
-
-
-
150,469
150,469
Debt service - principal
-
-
-
-
-
Debt service - interest
-
-
-
-
-
Capital outlay
-
-
-
-
-
Total expenditures
91,500
43,885
47,615
150,469
150,469
Excess (deficiency) of revenues over expendilurt
(3,500)
141
3,641
-
-
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
-
Proceeds from the sale of general capital asset disp
-
-
Transfers in
3,500
-
(3,500)
-
Transfers (out)
-
-
-
-
Total other financing sources and uses
3,500
-
(3,500)
Net change in fund balance
-
141
141
Fund balances - beginning
-
Restatements
Fund balances - beginning restated
-
-
Fund balances - ending
141
See independent auditor's report.
135
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
EPA Brownfields Grant
Brownfields Loan Revolving
Positive /
Positive /
(Negative)
(Negative)
Budget Actual Variance
Budget Actual Variance
REVENUES
Taxes and assessments
Licenses and permits
- _
_ _
Intergovernmental
378,058 9,178 (368,880)
486,924 - (486,924)
Charges for services
- _ _
_ _
Miscellaneous
Investment earnings
- _ _
_
Total revenues
378,058 9,178 (368,880)
486,924 - (486,924)
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation - _ _ _ _
Community Development 378,058 9,178 368,880 587,424 587,424
Debt service - principal - _ _ _ _
Debt service - interest
Capital outlay - _ _ _ _
Total expenditures 378,058 9,178 368,880 587,424 587,424
Excess (deficiency) of revenues over expenditun - - - (100,500) 100,500
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
136
(100,500) - 100,500
100,500
100,500
100,500
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Fire Grants
HAZMAT Grant
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget Actual
Variance
REVENUES
Taxes and assessments
-
-
-
Licenses and permits
-
-
-
- -
Intergovernmental
210,408
-
(210,408)
22,000 1,509
(20,491)
Charges for services
-
-
-
- -
-
Miscellaneous
5,000
4,894
(106)
- 1,945
1,945
Investment earnings
-
-
-
100 614
514
Total revenues
215,408
4,894
(210,5 44)
22,100 4,068
(18,032)
EXPENDITURES
Current:
Public safety
5,000
4,873
127
23,500
11,826
11,674
Public works
-
-
-
-
-
-
Parks and recreation
-
-
-
Community Development
-
Debt service - principal
-
-
-
Debt service - interest
-
-
-
Capital outlay
231,448
-
231,448
-
-
-
Total expenditures
236,448
4,873
231,575
23,500
11,826
11,674
Excess (deficiency) of revenues over expenditun
(21,040)
21
21,061
(1,400)
(7,758)
(6,358)
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
-
Proceeds from the sale of general capital asset disp
-
-
-
-
Transfers in
21,040
-
(21,040)
-
Transfers (out)
-
-
-
Total other financing sources and uses
21,040
-
(21,040)
Net change in fund balance
-
21
21
(1,400)
(7,758)
(6,358)
Fund balances - beginning
4,757
60,786
Restatements
-
-
Fund balances - beginning restated
4,757
60,786
Fund balances - ending
4,778
53,028
See independent auditor's report
137
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
EXPENDITURES
Current:
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Total Special Revenue Funds
Positive /
(Nezative)
Budget Actual Variance
6,126,126
6,535,429
409,303
945,000
915,468
(29,532)
2,759,833
1,638,415
(1,121,418)
1,985,644
1,971,323
(14,321)
55,700
92,940
37,240
74,616
146,104
71,488
11,946,919
11,299,679
(647,240)
Public safety
2,373,833
2,173,349
200,484
Public works
3,735,163
2,818,093
917,070
Parks and recreation
2,536,867
1,986,322
550,545
Community Development
5,023,824
1,135,449
3,888,375
Debt service - principal
295,788
256,390
39,398
Debt service - interest
49,406
25,210
24,196
Capital outlay
3,147,521
1,344,272
1,803,249
Total expenditures
17,162,402
9,739,085
7,423,317
Excess (deficiency) of revenues over expenditun
(5,215,483)
1,560,594
6,776,077
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
138
5,774,000 716,625 (5,057,375)
- 20,984 20,984
1,129,007 70,000 (1,059,007)
(4,217,725) (3,211,000) 1,006,725
2,685,282 (2,403,391) (5,088,673)
(2,530,201) (842,797) 1,687,404
16,053,488
16,250
16,069,738
15,226,941
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditure
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
G.O. Bonds
City Hall Debt Service
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
497,000
517,099
20,099
-
-
9,500
(9,500)
90,000
90,000
-
1,000
2,003
1,003
-
-
507,500
519,102
11,602
90,000
90,000
470,000
470,000
81,996
81,995
1
34,513
34,513
7,278
6,763
515
89,274
88,758
516
504,513
504,513
2,987
14,589
11,602
726
1,242
516
11,602
726
1,242
516
2,987
14,589
15,552
11,193
15,552
11,193
30,141
12,435
139
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Airport TIF Debt Service Westside TIF Debt
Positive / Positive /
(Negative) (Negative)
Budget
Actual
Variance Budget Actual Variance
REVENUES
Taxes and assessments
174,000
262,855
88,855 - -
Licenses and permits
-
_
_ _
Intergovernmental
_
_
_ _ _
Charges for services
-
_
_ _
Miscellaneous
_
_
_ _ _
Investment earnings
1,500
3,829
2,329 - -
Total revenues
175,500
266,684
91,184 - _
EXPENDITURES
Current:
Public safety
-
-
_
_
Public works
_
_
_
Parks and recreation
_
_
_
_
Community Development
-
_
_ _
_
Debt service - principal
160,000
160,000
- 342,984
433,500 (90,516)
Debt service - interest
22,108
22,107
1 111,675
21,159 90,516
Capital outlay
_
_
_ _
_ _
Total expenditures
182,108
182,107
1 454,659
454,659 -
Excess(deficiency)ofrevenues over expenditun
(6,608)
84,577
91,185 (454,659)
(454,659) -
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
- 944,670 944,670 -
- - 944,670 944,670 -
(6,608) 84,577 91,185 490,011 490,011 -
275,729
275,729
360,306
140
490,011
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
SID Revolving
S & C's
Positive /
Positive /
(Negative)
(Negative)
Budget Actual
Variance
Budget Actual
Variance
REVENUES
Taxes and assessments
-
-
9,980 9,566
(414)
Licenses and permits
- -
-
- -
-
Intergovernmental
- -
-
-
Charges for services
- -
-
- -
-
Miscellaneous
- -
-
- -
-
Investment earnings
2,500 3,126
626
- -
-
Total revenues
2,500 3,126
626
9,980 9,566
(414)
EXPENDITURES
Current:
Public safety -
-
Public works -
-
Parks and recreation - -
-
-
Community Development - -
- -
- -
Debt service - principal - -
- 7,983
7,841 142
Debt service - interest - -
- 1,549
1,549 -
Capital outlay - -
- -
-
Total expenditures - -
- 9,532
9,390 142
Excess (deficiency) of revenues over expenditure 2,500 3,126
626 448
176 (272)
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
120 120 - - -
- - (120) (120) -
- 120 120 (120) (120) -
2,500 3,246 746 328 56 (272)
288,807
288,807
292,053
141
760
760
816
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
SID 343
Positive /
(Negative)
Budget
Actual
Variance
REVENUES
Taxes and assessments
92,100
88,116
(3,984)
Licenses and permits
-
-
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
-
-
Total revenues
92,100
88,116
(3,984)
EXPENDITURES
Current:
Public safety
-
-
Public works
Parks and recreation
Community Development
-
-
Debt service - principal
140,000
140,000
-
Debt service - interest
8,875
7,500
1,375
Capital outlay
-
-
-
Total expenditures
148,875
147,500
1,375
Excess (deficiency) of revenues over expenditures
(56,775)
(59,384)
(2,609)
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset dispc
Transfers in
Transfers (out)
SID 345
Budget
22,571
Actual
22,175
Positive /
(Negative)
Variance
(396)
22,571
22,175
(396)
14,000
5,865
13,000
5,505
1,000
360
19,865
18,505
1,360
2,706
3,670
964
Total other financing sources and uses - - -
Net change in fund balance (56,775) (59,384) (2,609) 2,706 3,670 964
Fund balances - beginning 63,982 12,960
Restatements -
Fund balances - beginning restated 63,982
Fund balances - ending 4,598
See independent auditor's report.
16,630
142
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Total Debt Service Funds
Positive /
(Negative)
Budget
Actual
Variance
REVENUES
Taxes and assessments
795,651
899,811
104,160
Licenses and permits
-
-
-
Intergovernmental
99,500
90,000
(9,500)
Charges for services
-
-
-
Miscellaneous
-
-
-
Investment earnings
5,000
8,958
3,958
Total revenues
900,151
998,769
98,618
EXPENDITURES
Current:
Public safety
-
Public works
-
Parks and recreation
-
-
Community Development
-
-
Debt service - principal
1,156,963
1,306,336
(149,373)
Debt service - interest
191,863
99,096
92,767
Capital outlay
-
-
-
Total expenditures
1,348,826
1,405,432
(56,606)
Excess (deficiency) of revenues overexpenditure
(448,675)
(406,663)
42,012
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
143
944,670
944,790 120
(120)
(120) -
944,550
944,670 120
495,875
538,007 42,132
668,983
668,983
1,206,990
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Fire Pumper Westside TIF Capital Project
Positive / Positive /
(Negative) (Negative)
Budget Actual Variance Budget Actual Variance
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
- _ _ _
Charges for services
- _ _ _ _ _
Miscellaneous
- - - 13,291 13,291 -
Investment earnings
- - - _ _
Total revenues
- - - 13,291 13,291 -
EXPENDITURES
Current:
Public safety
Public works - _
_
Parks and recreation - -
- _
_ _
Community Development - -
- 57,141
57,141 -
Debt service - principal - -
- _
_ _
Debt service - interest - _
_ _
_ _
Capital outlay 500,000 467,684
32,316 4,011,480
658,848 3,352,632
Total expenditures 500,000 467,684
32,316 4,068,621
715,989 3,352,632-
Excess (deficiency) of revenues overexpenditun (500,000) (467,684)
32,316 (4,055,330)
(702,698) 3,352,632
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
500,000 467,684 (32,316) 4,960,000 4,960,000 -
- - - (904,670) (904,670) -
500,000 467,684 (32,316) 4,055,330 4,055,330 -
- - - - 3,352,632 3,352,632
144
3,352,632
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
S & C Construction
Kidsports Grant
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
-
-
Licenses and permits
-
-
-
-
Inlergovernmental
-
-
561,998
561,995
(3)
Charges for services
-
-
-
-
Miscellaneous
-
-
740,726
-
(740,726)
Investment earnings
-
-
-
-
-
Total revenues
-
-
1,302,724
561,995
(740,729)
EXPENDITURES
Current:
Public safety
-
-
-
-
-
-
Public works
-
-
-
Parks and recreation
-
-
-
-
-
-
Community Development
-
-
-
-
-
Debt service - principal
-
-
-
-
-
Debt service - interest
-
-
-
-
-
-
Capital outlay
25,000
4,288
20,712
1,302,724
561,995
740,729
Total expenditures
25,000
4,288
20,712
1,302,724
561,995
740,729
Excess (deficiency) of revenues over expenditure
(25,000)
(4,288)
20,712
-
-
-
OTHER FINANCING SOURCES (USES)
Issuance of debt
25,000
4,288
(20,712)
-
Proceeds from the sale of general capital asset disp
-
-
-
-
-
Transfers in
-
-
Transfers (out)
-
-
-
Total other financing sources and uses
25,000
4,288
(20,712)
Net change in fund balance
-
-
-
Fund balances - beginning
-
Restatements
-
-
Fund balances - beginning restated
-
-
Fund balances - ending
-
See independent auditor's report.
145
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2018
Total Capital Project Funds
Positive /
(Negative)
Budge
Actual
Variance
REVENUES
Taxes and assessments
Licenses and permits
_
_
_
Intergovernmental
561,998
561,995
(3)
Charges for services
_
_
_
Miscellaneous
754,017
13,291
(740,726)
Investment earnings
-
-
_
Total revenues
1,316,015
575,286
(740,729)
EXPENDITURES
Current:
Public safety -
Public works
Parks and recreation - _ _
Community Development 57,141 57,141 -
Debt service - principal - _ _
Debt service - interest _ _ _
Capital outlay 5,839,204 1,692,815 4,146,389
Total expenditures 5,896,345 1,749,956 4,146,389
Excess (deficiency) of revenues over expenditure (4,580,330) (1,174,670) 3,405,660
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
146
5,485,000 5,431,972 (53,028)
(904,670) (904,670)
4,580,330 4,527,302 (53,028)
- 3,352,632 3,352,632
3,352,632
COMBINING AND INDIVIDUAL
FUND STATEMENTS
NONMAJOR PROPRIETARY FUNDS
AIRPORT ENTERPRISE — Accounts for all monies received and expensed in the
operation of the City airport.
SOLID WASTE Accounts for assessments received and expenses incurred in the
operation of the City solid waste department.
City of Kalispell, Montana
Combining Statement of Net Positon
Nonmajor Proprietary Funds
June 30, 2018
ASSETS
Current assets:
Cash and investments
Taxes and assessments receivable, net
Due from other governments
Prepaids
Total current assets
Noncurrent assets:
Capital assets (net of accumulated depreciation):
Land
Depreciable
Total noncurrent assets
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Pension plan subsequent contributions/changes
Total deferred outflows of resources
LIABILITIES
Current liabilities:
Accounts payable
Accrued payroll
Bonds and notes - capital
Other current liabilities
Total current liabilities
Noncurrent liabilities:
Compensated absences payable
Net pension liability
Total noncurrent liabilities
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Pension-diff. between projected and actual earnings
Total deferred inflows of resources
NET POSITION
Net investment in capital assets
Unrestricted
Total net position
See independent auditor's report.
Airport Enterprise
Solid Waste
Totals
$ 19,238
$
1,222,511
$
1,241,749
-
26,185
26,185
-
61,870
61,870
-
20,228
20,228
$ 19,238
$
1,330,794
$
1,350,032
1,359,545
-
1,359,545
716,268
590,710
1,306,978
$ 2,075,813
$
590,710
$
2,666,523
$ 2,095,051
$
1,921,504
$
4,016,555
-
98,281
98,281
$ -
$
98,281
$
98,281
$ 19,238
$
6,833
$
26,071
-
16,734
16,734
-
39,121
39,121
-
54,714
54,714
19,238
117,402
136,640
-
39,905
39,905
-
392,706
392,706
-
432,611
432,611
$ 19,238
$
550,013
$
569,251
$ -
$
3,206
$
3,206
$ -
$
3,206
$
3,206
$ 2,075,813
$
551,589
$
2,627,402
-
914,977
914,977
$ 2,075,813
$
1,466,566
$
3,542,379
147
City of Kalispell, Montana
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position
Nonmajor Proprietary Funds
For the Fiscal Year Ended June 30, 2018
Airport
Enterprise
OPERATING REVENUES
Charges for services
$
69,656 $
Total operating revenues
$
69,656 $
OPERATING EXPENSES
Personal services
$
- $
Supplies
-
Purchased services
227,946
Fixed charges
10,152
Depreciation
95,474
Total operating expenses
$
333,572 $
Operating income (loss)
$
(263,916) $
NONOPERATING REVENUES (EXPENSES)
Intergovernmental revenue
$
- $
Interest revenue
1,824
Debt service interest expense
-
Total non -operating revenues (expenses)
$
1,824 $
Income (loss) before contributions and transfers
$
(262,092) $
Change in net position
$
(262,092) $
Net Position - beginning of the year
$
2,337,905 $
Net Position - end of the year
$
2,075,813 $
See independent auditor's report.
Solid Waste
Totals
1,021,797
$
1,091,453
1,021,797
$
1,091,453
546,944
78,203
93,958
146,037
146,155
$
546,944
78,203
321,904
156,189
241,629
1,011,297
$
1,344,869
10,500
$
(253,416)
5,897
11,153
(1,703)
$
5,897
12,977
(1,703)
15,347
$
17,171
25,847
$
(236,245)
25,847
$
(236,245)
1,440,719
$
3,778,624
1,466,566
$
3,542,379
MV
City of Kalispell, Montana
Combining Statement of Cash Flows
Nonmajor Proprietary Funds
Year Ended June 30, 2018
Cash flows from operating activities:
Cash received from customers
Cash payments for claims
Cash payments to employees
Net cash provided (used) by operating activities
Cash flows from capital and related financing activities:
Principal paid on bonds, loans and advances
Interest paid on bonds, loans and advances
Net cash provided (used) by capital and related financing activities
Cash flows from investing activities:
Interest on investments
Net cash provided (used) by investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning
Cash and cash equivalents at end
Reconciliation of operating income (loss) to net cash provided
(used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation
Changes in assets and liabilities:
Accounts receivable - net
Taxes and assessments receivable, net
Due from county
Comp absences
Accounts payable
Prepaid Expenses
Accrued payroll
Pension expens adjustment
Net cash provided (used) by operating activities
See Independent Auditor's Report
t U PUI L
Solid Waste
Enterprise Totals
$ 71,777
$ 1,036,183
$ 1,107,960
(219,050)
(316,221)
(535,271)
-
(516,266)
(516,266)
$ (147,273)
$ 203,696
$ 56,423
$ -
$ (38,728)
$ (38,728)
-
(1,703)
(1,703)
$ -
$ (40,431)
$ (40,431)
$ 1,824
$ 11,153
$ 12,977
$ 1,824
$ 11,153
$ 12,977
$ (145,449)
$ 174,418
$ 28,969
164,687
1,048,093
1,212,780
$ 19,238
$ 1,222,511
$ 1,241,749
$ (263,916)
$ 10,500
$ (253,416)
95,474
146,155
241,629
2,121
-
2,121
-
(2,885)
(2,885)
-
17,271
17,271
-
(1,756)
(1,756)
19,048
(4,445)
14,603
-
6,422
6,422
-
8,738
8,738
-
23,696
23,696
$ (147,273)
$ 203,696
$ 56,423
149
COMBINING AND INDIVIDUAL
FUND STATEMENTS
AGENCY FUNDS
KPD EVIDENCE — Accounts for monies and property confiscated and/or retained as
evidence.
TBID CLEARING - Accounts for monies received for and due to the Tourism Business
Improvement District.
PAYROLL CLEARING — Accounts for payroll deductions and expenses payable to
other agencies and vendors.
PERFORMANCE BONDS — Accounts for monies held by the City as a guarantee of
performance by developers or vendors.
ASSETS
Current assets:
Cash and investments
Total assets
LIABILITIES
Current liabilities:
Due to others
Total liabilities
City of Kalispell, Montana
Combining Statement of Fiduciary Net Position
Agency Funds
June 30, 2018
KPD EVIDENCE
TBID Clearing Payroll Clearing
Performance
Bonds
Totals
$ 10,207 $ 2,710 $ 133,144 $ 54,145 $ 200,206
$ 10,207 $ 2,710 $ 133,144 $ 54,145 $ 200,206
$ 10,207 $ 2,710 $ 133,144 $ 54,145 $ 200,206
$ 10,207 $ 2,710 $ 133,144 $ 54,145 $ 200,206
See independent auditor's report.
IFIll
City of Kalispell, Montana
Combined Statement of Changes in Assets and Liabilities
Agency Funds
For the Fiscal Year Ended June 30, 2018
KPD Evidence
Balance 7/1/17
Additions
Deletions
Balance 6/30/18
ASSETS
Current assets:
Cash and investments
$
10,207
-
-
$
10,207
Total assets
10,207
-
-
10,207
LIABILITIES
Current liabilities:
Due to others
$
10,207
-
-
$
10,207
Total liabilities
$
10,207
-
-
$
10,207
Payroll Clearing
Balance 7/1/17
Additions
Deletions
Balance 6/30/18
ASSETS
Current assets:
Cash and investments
$
82,134
9,028,431
(8,977,421)
$
133,144
Total assets
82,134
9,028,431
(8,977,421)
133,144
LIABILITIES
Current liabilities:
Due to others
$
82,134
9,698,320
(9,647,310)
$
133,144
Total liabilities
$
82,134
9,698,320
(9,647,310)
$
133,144
Performance Bonds
Balance 7/1/17
Additions
Deletions
Balance 6/30/18
ASSETS
Current assets:
Cash and investments
$
16,603
177,642
(140,100)
$
54,145
Total assets
$
16,603
177,642
(140,100)
$
54,145
LIABILITIES
Current liabilities:
Due to others
$
16,603
326,099
(288,557)
$
54,145
Total liabilities
$
16,603
326,099
(288,557)
$
54,145
Tourism Business Improvement District
Balance 7/l/17
Additions
Deletions
Balance 6/30/18
ASSETS
Current assets:
Cash and investments
$
2,600
603,336
(603,226)
$
2,710
Total assets
$
2,600
603,336
(603,226)
$
2,710
LIABILITIES
Current liabilities:
Due to others
$
2,600
1,201,562
(1,201,452)
$
2,710
Total liabilities
$
2,600
1,201,562
(1,201,452)
$
2,710
See independent auditor's report.
151
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.
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.
FINANCIAL TRENDS
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Unaudited statistical section
152
CITY OF KALISPELL, MONTANA
CHANGES IN NET POSITION
Past Ten Fiscal Years
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Expenses
Governments] activities:
General government
6.778.754
5,149,809
3,310,274
6,995,454
6,709,323
3,688,135
5.401,242
5,823,767
3,941.775
6,231,409
Public Safety
8,962,262
9,015,732
8,729,290
8,536,332
9,293,138
9,269,827
9,373,487
9,113,674
10.968.010
11,333.862
Public Works
2,327,255
3,201.811
3,306.165
2,844,001
3,074,630
2,573,627
2,773,097
2.581,002
2,660.513
3,341,768
Parks and recreation
2,009,169
1,860,308
1,845,939
1,913.920
1,991,585
2,123,237
2,062,669
2,037,468
2,184,222
2,554,634
Community Development
1,012,555
1,629,636
2,033,880
1,426,377
3.616,337
1,601,170
683,164
928,661
853,455
1,275,659
Interest
672,386
627,678
590,361
390,770
357,857
331,811
286,401
242,110
226,388
Total governmental activities expenses
S 21,762,380
S 21,484,994
S 21,803,909 S 21,716,084 S 23,075,984
S 21,613,853
$ 20,827,470 S 20,790,973
S 22.750.085
S 24.983,920
Business -type activities:
Airport
204,842
176,702
214,636
217.616
225,974
177,751
154,715
154,091
155,876
333,572
Water
2,597,419
2,638,011
2,689,293
2,592,628
2,660,877
2,625,046
2,542,119
2,657,816
2,734,979
3,079,040
Sewer
5,354,062
5,976,393
5,882.868
3,564,219
5,255,654
5,114,591
5.077,643
5.204.622
4,955,923
5,482,339
Solid Waste
772,132
801,909
718,139
749,491
783,967
812,650
816,686
880,679
872,161
1013000
Total business -type activities expenses
8.928,453
9,593,015
9,504,936
9,123,944
8,926,472
8,730,039
9,591.163
8,997,208
8,718,941
9907951
Total primary government expenses
$ 30,690,835
S 31,078,009 S 31,310,845
$ 30,840,028
$ 34,002,456 $ 30,343,891
S 29,418,633
S 29,688,181
$ 31,469,026
$ 34,891,871
Program Revenues
Governmental activities:
Charges for services:
General government
929,925
951,940
1,039,553
865.223
669,964
628.729
684350
892,578
789,167
909.258
Public Safety
1,867,539
1,622,104
1,678,825
1,733,969
1,929.011
2,033,870
1.973,898
2,219,795
3.155.476
2,816,599
Public Works
2.604.731
2,098,848
2,312,530
2,226,027
2.201.616
2,172.122
2,463,435
2,672,473
2,885A92
3,155,932
Parks and recreation
547,874
624,158
592,868
619,634
711.969
752.460
728,165
730.928
716.491
1,334,208
Community Development
228,989
136,598
28,161
243,088
170.429
283,134
153,431
88,252
66.393
55,664
Operating grants and contributions
2.074,401
3,768,083
3,588,307
2,554,322
2,689,746
2,636.321
1,838,425
1-354,890
1,470,485
1.708,661
Capital grants and contributions
6,551,018
2,284,267
3,351,562
1,385,939
1,378,649
1,519.825
3,232,619
942,125
1,544.330
7 512439
Total governmental activities program revenues
$ 14,704,477
S 11,495,998
S 12,591,806 $
9.648,202
S 9,749,384
S 10,026,461
S 11,074,522
S 8,901,041
S 10,627,834
S 17,492,750
Business -type activities:
Charges for services:
Airport
72,373
70,694
70,900
76,572
75,813
78.657
79,091
72,623
74.228
69,656
Water
2,562,569
2,624.521
2,296.394
2,430,380
2.740,512
2,985,939
3,019,276
3.535,072
3,891.449
4,346,570
Sewer
4,163,757
4,129,271
4,124,020
4,554,153
4,977,286
4,967,223
5.141,284
5,543,740
7,485,750
7,774,762
Solid Waste
758,236
767,404
805.613
851,563
900,643
931,676
973.393
988,145
1.005.796
1,021,797
Operating grants and contributions
2,416
8.354
8,372
27,721
137,048
32,653
31,078
Capital grants and contributions
1,237.291
1,280,807
888,609
679,690
1,012,027
2,137,977
1,098,222
3,338,669
131,626
579.992
Total business -type activities program revenues
8,814,226
8,872,697
8,185,736
8,594,776
9,714,635
11,129,864
10,337.987
13 615,297
12 621,492
13 823 845
Total primary government program revenues
$ 23.518,703
$ 20,358,695
S 20 777,542
S 18,242,978
$ 19,464,019 $ 21,136,325
S 21,412.509 S22,516338
$ 23,249,346
S 31,316,595
Not (Expense) I Revenue
Governmental activities
(7,057,903)
(9,998,996)
(9,214,103)
(12,067,881)
(15,326,600)
(11,597,392)
(9,752,949)
(11,889932)
(12,122,231)
(7,491,170)
Business -type activities
(114,229)
(720,318)
(1,319,200)
(529,168)
788,163
2,399,826
1,746,824
4,718089
3,902.551
3915894
Total primary government net expense
S (7,172,132) S (10,719,314) S (10,533,303) S(12,597,049) S(14,538,437) $ (9,187,566) S (9,0016,124) S (7,171,843) S (8,219,680) $ (3,575,27G1
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes
Property taxes
6,252,363
6,370,333
7.563,944
7.469,972
8.092,684
8,739,807
7,394.775
8,357,904
8,848.481
8,912,089
Misc.
98,469
106,783
151,062
184,781
189,921
111,048
200,013
201,577
Investment earnings
159,208
106,799
81,041
130.836
71,573
48,193
72,531
105,557
159,362
210.835
Grants and entitlements not restricted
2,223,398
2,608,937
2,316,980
2,603,949
2,657,356
2,835,264
3,134,703
3,132,339
3,194,831
3,177,113
Gas Tax
354,678
361,349
366,904
361,157
360,650
364,563
364,622
369,749
371,303
522,832
Gain (loss) sale of capital assets
(392)
(212,127)
11,610
78,497
22,183
(196,262)
Transfers
(194,558)
(112,574)
27,188
(358,169)
(218,728)
(65,000)
35,000
35,000
Total governmental activities
$ 8,989,647
S 9,232,468
S 10,314.764
S 10,487,758
S 10,975,156 $ 11,953,880
S 11,293,162
S 12,190,314
S 12,821.175
S 12,828,184
Business -type activities:
Investment earnings
467,038
228,143
163,907
142,299
102.311
83,224
113,%3
132,339
227,052
288,162
Gain (loss) sale of capital assets
(41.786)
-
46,710
(3,091)
-
Other
(312,736)
-
2,101
140.616
19,631
-
Transfers
194,559
112,574
-
358,169
218,728
65,000
(33,000)
(35,000)
Total business -type activities
S 467,038
S 422,701
$ (36,255) S 100,513
S 460,480
S 301,952
S 227,774
S 234,864 S 211,683
S 288,162
Total primary government
S 9,436,685
S 9,673,169 S 10,279,509
110,598,271
S 11,435,636
S 12,253,832
S 11,520,936 S 12,425,178
$ 13,032,858
S 13,116,346
Change in Net Position
Governmental activities
1,931.744
(746,528)
1,100,661
(1,580,123)
(4,351,444)
366488
1,540,214
300.382
698.944
5,337,014
Business -type activities
352,809
(297,617)
(1,353,455)
(428,655)
1,248,643
2,701,778
1114.598
4,952,953
4,114,234
4,204,056
Total primary government
S 2,284,553
$ (1,044,145) S (254,794) S (2,006,778) S (3,102,801) $ 3,069,266 $ 3,514,812
S 3,233,335
S 4,813,178
S 9541070
Unaudited statistical section
153
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Unaudited statistical section
154
Revenues
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Miscellaneous
Investment earnings
Total revenues
Expenditures
General government
Public safety
Public works
Parks and recreation
Community development
Capital outlay
Debt service:
Principal
Interest
Total expenditures
Excess of revenues
over (under) expenditures
Other Financing Sources (Uses)
CITY OF KALISPELL, MONTANA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
Past Ten Fiscal Years
(modified accrual basis of accounting)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
7,367,487 8,085,877 8,301,367 8,857,628 8,915,749 8,735,146 11,275,636 9,324,431 12,456,526 13,518,677
328,040 325,787 323,271 395,211 330,807 423,354 381,045 664,391 1,229,925 1,115,019
5,184,134 7,366,576 7,865,669 6,142,095 6,882,344 6,405,255 5,406,703 5,743,188 6,314,835 12,269,442
4,778,786 4,817,847 4,740,643 4,511,738 4,339,260 4,386,312 4,630,575 4,935,344 3,006,507 3,022,950
489,108 497,126 549,267 539,579 585,906 572,066 538,234 495,347 454,547 443,919
201,852 252,339 251,458 147,907 129,351 184,272 188,615 288,652 138,075 116,693
159,208 106,800 79,484 78,076 71,572 48,193 72,528 105,557 159,363 188,004
18,508,615 21,452,352 22,111,159 20,672,234 21,254,989 20,754,598 22,493,336 21,556,910 23,759,778 30,674,704
2,437,743 2,565,522 2,532,377 3,409,323 2,512,714 2,893,332 2,623,226 2,991,835 2,495,710 3,127,703
8,569,405 8,851,001 8,332,769 8,044,589 8,820,726 8,755,082 9,115,952 9,540,699 10,873,610 10,644,186
2,210,238 2,761,933 3,039,460 2,673,729 2,904.562 2,376,067 2,672,152 2,191,012 2,327,678 2,857,261
1,590,360 1,453,215 1,385,997 1,439,646 1,519,173 1,664,595 1,608,497 1,550,843 1,714,235 1,986,322
1,018,756 1,622,982 2,034,606 1,355,200 3,616,337 1,601,170 685,018 923,170 853,455 1,275,659
1,804,037 949,400 1,944,635 1,075,598 1,701,728 1,201,998 560,750 930,636 1,792,584 11,577,677
1,088,314 1,125,928 1,059,505 5,243,827 1,259,716 1,264,227 1,330,057 1,880,720 1,294,872 1,787,726
672,386 627,678 580,361 639,724 390,770 357,857 331,811 286,401 242,110 226,588
19,391,239 19,957,659 20,909,710 23,881,636 22,725,726 20,114,328 18,927,463 20,295,316 21,594,254 33,483,122
(882,624) 1,494,693 1,201,449 (3,209,402) (1,470,737) 640,270 3,565,873 1,261,594 2,165,524 (2,808,418)
Transfers in
1,290,617
1,740,512
1,229,303
1,414,504
1,512,214
1,639,721
2,201,276
2,022,611
1,020,234
4,115,790
Transfers out
(1,290,617)
(1,740,512)
(1,229,303)
(1,414,504)
(1,512,214)
(1,639,721)
(2,176,276)
(1,987,611)
(985,234)
(4,115,790)
Issuance of debt
8,980
7,629
100,462
4,821,585
243,680
403,623
124,040
461,833
134,287
6,148,597
Sales of capital assets
6,029
233,637
11,610
93,272
26,513
20,984
Bond premium
52,763
Total other financing sources (uses)
15,009
7,629
100,462
5,107,985
243,680
403,623
160,650
590,105
195,800
6,169,581
Net change in fund balances
Debt service as a percentage of
noncapital expenditures
(867,615) 1,502,322 1,301,911 1,898,583 (1,227,057) 1,043,893 3,726,523 1,851.699 2,361,324 3,361,163
10.0100 923oo 865oo 2580% 78500 858°0 90500 11190o 7760o 9.200o
Unaudked statistical section
155
REVENUE CAPACITY
CITY OF KALISPELL, MONTANA
MARKET VALUE OF TAXABLE PROPERTY
Past Ten Fiscal Years
(in thousands of dollars)
Fiscal
Year
Real
Less
Total
Total
Ended
Taxable
Tax
Taxable
Direct
June 30,
Value
Increment
Valuation
Tax Rate
2009
$37,850
$
1,341
$
36,509
170.23
2010
$39,522
$
1,540
$
37,982
169.81
2011
$41,074
$
1,626
$
39,448
170.34
2012
$41,785
$
1,716
$
40,069
175.93
2013
$40,531
$
1,515
$
39,016
185.60
2014
$40,798
$
1,464
$
39,334
185.10
2015
$41,761
$
2,240
$
39,521
187.80
2016
$38,953
$
1,000
$
37,953
205.60
2017
$39,229
$
1,211
$
38,018
212.70
2018
$42, 373
$
1,142
$
41,231
206.12
Taxable
Estimated
Value as a
Market
Percentage
Value
of Market Value
$1,190, 541
3.07%
$1,269,511
2.99%
$1,360,162
2.90%
$1,413,041
2.84%
$1,450,786
2.69%
$1,506,125
2.61%
$1,587,574
2.49%
$2,294,128
1.65%
$2,307,546
1.65%
$2, 561,622
1.61 %
Source: Flathead County and Montana Department of Revenue
Note: Assessed by Montana Department of Revenue every other year
Unaudited statistical section
156
CITY OF KALISPELL, MONTANA
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Past Ten Fiscal Years
(rate per $1000 ofassessed 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.
2009
138.76
16.22
15.25
170.23
334.05
15.43
104.51
46.00
2010
140.11
15.20
14.50
169.81
333.79
15.69
113.12
46.00
2011
141.50
14.64
14.20
170.34
333.52
15.96
122.77
46.00
2012
145.88
16.55
13.50
175.93
333.48
16.00
125.69
46.00
2013
154.60
18.50
12.50
185.60
333.96
15.52
125.96
46.00
2014
154.10
18.50
12.50
185.10
333.68
15.80
124.94
46.00
2015
156.80
18.50
12.50
187.80
332.58
16.90
128.88
46.00
2016
170.10
23.00
12.50
205.60
363.75
18.99
145.03
46.00
2017
174.20
26.00
12.50
212.70
348.07
21.45
148.18
46.00
2018
169.62
24.00
12.50
206.12
432.82
20.16
138.11
46.00
Source: Flathead County
Unaudited statistical section
157
CITY OF KALISPELL, MONTANA
PRINCIPAL PROPERTY TAX PAYERS
Current Year, and Seven Years Ago
2018
2011
Percentage
Percentage
of Total City
of Total City
Taxable
Taxable
Taxable
Taxable
l axpayer
Value
Rank
Value
Value
Rank
Value
CENTURYLINK INC
1,429,233
2
3.37%
1,116,553
2
2.67%
FLATHEAD ELECTRIC COOPERATIVE INC
1,710,818
1
4.04%
2,699,165
1
6.46%
NORTHWESTERN CORP TRANSMISSION & DISTRIBUTION
1,058,017
3
2.50%
481,270
4
1.15%
FLATHEAD HOSPITAL DEVELOPMENT COMPANY LLC
613,976
4
1.45%
571,673
3
1.37%
TKG MOUNTAIN VIEW PLAZA LLC
407,525
6
0.96%
CHARTER COMMUNICATIONS INC
257,567
8
0.61%
WAL-MART ESTATE BUSINESS TRUST
314,795
7
0.74%
333,699
6
0.80%
CROWN ENTERPRISES INC (SPORTSMANS)
250,941
9
0.59%
NORTHWEST HORIZONS INC 59.9%
225,380
10
0.53%
STATE OF MONTANA DNRC
412,082
5
0.97%
TARGET CORPORATION
216,632
8
0.52%
HD DEVELOPMENT OF MARYLAND INC (HOME DEPOT)
187,013
10
0.45%
RED LION HOTELS LIMITED PARTNERSHIP
400,451
5
0.96%
KALISPELL HOTEL LLC
227,030
7
0.54%
VERIZON WIRELESS
187,883
9
0.45%
Total
6,680,334
15.77%
6,421,369
15.37%
Total City Taxable Assessed Value
Source: Flathead County
$42,373,220
$41,785,560
Unaudited statistical section
158
CITY OF KALISPELL, MONTANA
PROPERTY TAX LEVIES AND COLLECTIONS
Past Ten Fiscal Years
Fiscal
Collected within the
Year
Taxes Levied
Fiscal Year
of the Levy
Collections
Total Collections to Date
Ended
for the
Percentage
in Subsequent
Percentage
June 30,
Fiscal Year
Amount
of Levy
Years
Amount
of Levy
2009
6,214,927
5,883,671
94.67%
274,773
6,158,444
99.09%
2010
6,449,723
6,036,354
93.59%
411,906
6,448,260
99.98%
2011
6,719,572
6,182,842
92.01 %
535,190
6,718,032
99.98%
2012
7,049,515
6,847,410
97.13%
201,156
7,048,566
99.99%
2013
7,241,555
6,817,096
94.14%
439,087
7,256,183
100.20%
2014
7,280,909
6,986,904
95.96%
277,536
7,264,440
99.77%
2015
7,422,232
7,179,788
96.73%
231,586
7,411,374
99.85%
2016
7,803,137
7,453,486
95.52%
315,814
7,769,300
99.57%
2017
9,020,188
8,612,172
95.48%
356,986
8,969,158
99.43%
2018
9,537,133
9,102,917
95.45%
n/a
9,102,917
95.45%
Source: Flathead County
Unaudited statistical section
159
CITY OF KALISPELL, MONTANA
WATER SOLD BY TYPE OF CUSTOMER
Past Ten Fiscal Years
(in thousands of gallons)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Type of Customer
Residential 565,060 506,020 509,575 545,349 475,419 587,018 625,397 759,788 648,231 725,939
Commercial 527,405 540,942 515,959 495,461 544,564 494,608 516,693 644,066 538,038 650,721
Total 1,092,465 1,046,962 1,025,534 1,040,810 1,019,983 1,081,626 1,142,090 1,403,854 1,186,269 1,376,660
Total direct rate $ 229 $ 230 $ 2.06 $ 2.14 $ 249 $ 2.55 $ 2.43 $ 230 $ 243 $ 232
per 1000 gallons
SEWER SOLD BY TYPE OF CUSTOMER
Past Ten Fiscal Years
(in thousands of gallons)
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Type of Customer
Residential
354,477
357,747
332,977
331,165
367,916
365,731
364,397
424,171
409,063
372,713
Commercial
519,402
521,204
449,167
527,307
538,810
482,325
497,854
527,792
507,824
537,721
Total
873,879
878,951
782,144
858,472
906,726
848,056
862,251
951,963
916,887
910,434
Total direct rate
$ 4.22
$ 3.79
$ 4.20
$ 4.37
$ 4.61 $
4.87 $
4.95 $
4.87 $
4.85 $
499
per 1000 gallons
Source: City of Kalispell Finance Department
Unaudited statistical section
160
Fiscal
Year
Ended
June 30,
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
CITY OF KALISPELL, MONTANA
WATER AND SEWER RATES
Water
Monthly
Rate per
Base
1000
Rate
Gallons
in city out of city
in city out of city
$
1.88
2.35
$ 2.43
3.04
$
1.88
2.35
$ 2.43
3.04
$
1.88
2.35
$ 2.43
3.04
$
1.88
2.35
$ 2.43
3.04
$
4.69
5.86
$ 2.43
3.04
$
7.50
9.38
$ 2.43
3.04
$
7.50
9.38
$ 2.43
3.04
$
7.50
9.38
$ 2.43
3.04
$
7.50
9.38
$ 2.43
3.04
$
7.50
9.38
$ 2.43
3.04
Irrigation (sprinkling)
Monthly
Rate per
Base
1000
Rate
Gallons
in city out of city
in city out of city
$ 1.88
2.35
$
1.55
1.94
$ 1.88
2.35
$
1.55
1.94
$ 1.88
2.35
$
1.55
1.94
$ 1.88
2.35
$
1.55
1.94
$ 4.69
5.86
$
1.55
1.94
$ 7.50
9.38
$
1.55
1.94
$ 7.50
9.38
$
1.55
1.94
$ 7.50
9.38
$
1.55
1.94
$ 7.50
9.38
$
1.55
1.94
$ 7.50
9.38
$
1.55
1.94
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.
Sources: City of Kalispell, Resolutions 4798/4799/5491
Unaudited statistical section
161
Sewer
Monthly
Rate per
Base
1000
Rate
Gallons
in city out of city
in city out of city
$
1.88
2.35
$
4.19
5.24
$
1.88
2.35
$
4.19
5.24
$
4.69
5.86
$
4.19
5.24
$
7.50
9.38
$
4.19
5.24
$
7.50
9.38
$
4.78
5.98
$
7.50
9.38
$
4.78
5.98
$
8.44
10.55
$
4.78
5.98
$
8.44
10.55
$
4.78
5.98
$
8.44
10.55
$
4.78
5.98
$
8.44
10.55
$
4.78
5.98
Flathead County Water & Sewer District # 1
- Evergreen
Monthly
Rate per
Base
1000
Rate
Gallons
Evergreen"
Evergreen"
1.63
1.85
1.76
1.48
1.67
1.74
1.78
11,243.28
2.69
12,024.00
2.76
11,012.28
2.08
"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. The district is counted as
1 sewer connection.
DEBT CAPACITY
CITY OF KALISPELL, MONTANA
RATIOS OF OUTSTANDING DEBT BY TYPE
Past Ten Fiscal Years
Governmental Activities
Fiscal
Year
General
Special
Ended
Obligation
Notes
Revenue
Assessment
June 30,
Bonds
Payable
Bonds
Bonds
2009
5,145,000
3,062,562
78,876
4,760,665
2010
4,805,000
2,833,340
1,445,000
4,410,462
2011
4,450,000
2,682,566
1,325,000
4,077,194
2012
4,145,000
2,422,191
1,700,000
3,845,329
2013
3,700,000
2,380,835
1,558,000
3,457,647
2014
3,255,000
2,177,968
1,410,000
3,392,922
2015
2,805,000
1,893,621
1,257,000
3,074,242
2016
2,350,000
1,401,475
1,098,000
2,761,499
2017
1,885,000
1,204,829
933,500
2,427,060
2018
1,415,000
1,458,992
5,891,760
2,015,507
Source:
City Manager's Recommended Budget
City of Kalispell Finance Department
Business -Type Activities
Total
Percentage
Revenue
Notes
Primary
of Personal
Per
Bonds
Payable
Government
Income
Capita
22,193,000
35,240,103
4.68%
$ 1,660.62
19,541,000
33,034,802
4.61%
$ 1,526.56
18,410,000
30,944,760
4.43%
$ 1,552.91
17,333,000
29,445,520
4.03%
$ 1,453.67
15,938,483
27,034,965
3.43%
$ 1.319.62
15,667,682
172,988
26,076,560
3.25%
$ 1,243.40
14,434,000
154,155
23,618,018
2.82%
$ 1,097.59
13,341,000
116,192
21,068,166
2.45%
$ 955.39
12,287,096
77,849
18,815,334
1.95%
$ 826.65
13,443,771
39,121
24,264,151
2.43%
$ 1,045.33
Unaudited statistical section
162
CITY OF KALISPELL, MONTANA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
Past Ten Fiscal Years
General Bonded Debt Outstanding
Percentage
Fiscal
of Actual
Year
General
Special
Externally
Net
Taxable
Ended
Obligation
Assessment
Restricted
Bonded
Value of
Per
June 30,
Bonds
Bonds
for Repayment
Debt
Property
Capita
2009
5,145,000
4,760,665
371,873
9,533,792
26.1%
$
440.56
2010
4,805,000
4,410,462
541,525
8,673,937
22.8%
$
435.29
2011
4,450,000
4,077,194
531,075
7,996,119
20.3%
$
394.75
2012
4,145,000
3,845,329
414,292
7,576,037
18.9%
$
369.80
2013
3,700,000
3,457,647
349,694
6,807,953
17.4%
$
332.31
2014
3,255,000
3,392,922
172,267
6,475,655
16.5%
$
308.78
2015
2,805,000
3,074,242
531,588
5,347,654
13.5%
$
248.52
2016
2,350,000
2,761,499
765,985
4,345,514
11.4%
$
197.06
2017
1,885,000
2,427,060
637,055
3,675,005
9.7%
$
161.46
2018
1,415,000
2,015,507
603,849
2,826,658
6.9%
$
121.78
Source:
City Manager's Recommended Budget
Montana Department of Revenue
Montana Department of Labor and
Industry,
Quarterly Census of Employment and Wages (QCEW) Program
Unaudited statistical section
163
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Unaudited statistical section
164
CITY OF KALISPELL, MONTANA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
June 30, 2018
Governmental Unit
Overlapping General Obligation Debt:
Estimated
Debt Percentage
Outstanding Applicable (1)
Estimated
Share of
Overlapping
Debt
Flathead County
4,815,000
16.83%
810,201
Flathead Valley Community College
7,555,000
16.83%
1,271,250
Kalispell High School
34,380,000
33.27%
11,438,443
Kalispell Elementary
29,440,000
100.00%
29,440,000
West Valley Elementary
5,960,000
39.02%
2,325,446
Subtotal Overlapping Debt
45,285,339
City direct debt
10,295,412
100.00%
$ 10,295,412
Grand total direct and overlapping debt
55,580,751
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
165
CITY OF KALISPELL, MONTANA
PLEDGED REVENUE COVERAGE
Past Ten Fiscal Years
Water'Sewer Revenue Bonds
Fiscal
Year
Utility
Less.
Ended
Service
Operating
Debt Service
June 30,
Charges'
Expenses"
Principal
Interest
2009
7,572,970
(4,676,950)
(579,197)
(182,006)
2010
7,213,024
(4,513,881)
(1,087,000)
(779,083)
2011
6,810,442
(4,478,406)
(1,131,000)
(737,866)
2012
7,359,224
(4,143,706)
(1,007,000)
(647,296)
2013
8,063,596
(4,410,574)
(1,387,000)
(446,979)
2014
8,289,654
(4,516,282)
(1,226,000)
(388,108)
2015
8,587,057
(4,370,296)
(1,242,000)
(369,564)
2016
9,523,918
(4,769,754)
(1,093,000)
(342,382)
2017
9,133,285
(4,647,567)
(1,117,000)
(316,036)
2018
10,154,805
(5,628,376)
1,223,662
(327,688)
"includes other revenues pledged for debt
service
" excludes depreciation
Source:
City of Kalispell Finance Department
Coverage
2,134,817
833,060
463,170
1,561,222
1,819,043
2,159,264
2,605,197
3,318,782
3,052,682
5,422,403
Stx:cial Assessment Bonds
Special
Special
Assessment
Assessment
Debt Service
Billing
Collections
Principal
Interest
Coverage
298,968
(327,423)
(241,088)
(269,543)
711,971
(357,831)
(228,611)
125,529
505,777
(334,210)
(212,843)
(41,276)
332,474
(396,662)
(185,444)
(249,632)
471,321
399,180
(391,662)
(186,121)
(178,603)
456,236
197,682
(324,198)
(171,133)
(297,649)
465,275
1,400,791
(326,526)
(163,360)
910,905
448,878
404,275
(319,000)
(145,808)
(60,533)
433,302
389,479
(338,739)
(132,230)
(81,490)
427,331
375,435
(385,841)
(116,836)
(127,242)
Unaudited statistical section
166
DEMOGRAPI4ICS AND ECONOMICS
CITY OF KALISPELL, MONTANA
DEMOGRAPHIC AND ECONOMIC STATISTICS
Past Ten Fiscal Years
Per
Capita K-12 Annual
Calendar Personal Personal School Unemployment
Year Population Income (in thousands) Income Enrollment' Rate"
2009
21,221
757,271
35,685
5,425
2010
21,640
705,875
32,619
5,450
2011
19,927
687,222
34,487
5,590
2012
20,256
726,684
35,875
5,729
2013
20,487
783,054
38,222
5,762
2014
20,972
814,385
38,832
5,812
2015
21,518
838,815
38,982
5,828
2016
22,052
932,844
42,302
5,859
2017
22,761
977,653
42,953
5,873
2018
23,212
not available
not available
5,920
'School District 5
"unadjusted annual (calendar) - October unadjusted (2017)
Sources: Kalispell Public Schools Audit Report
U.S. Census Bureau
U.S. Department of Commerce - Bureau of Economic Analysis
Montana Department of Labor & Industry
Unaudited statistical section
167
6.00%
10.90%
10.90%
9.00%
7.70%
6.50%
5.70%
5.60%
4.50%
3.80%
CITY OF KALISPELL, MONTANA
PRINCIPAL PUBLIC AND PRIVATE INDUSTRY EMPLOYERS
Most current information and 2010
Private Employer
Kalispell Regional Healthcare
Teletech
Applied Materials (Semitool Inc.)
Immanuel Lutheran Home
Summit Medical Fitness Center
AON Service Corporation - NFS
A Plus Healthcare
Brendan House
Glacier Bank
L C Staffing Service
McDonalds
Smith's Food & Drug
Superl Foods
Costco
Walmart
Healthcenter Northwest
2018
2010
Estimated
Estimated
# of
# of
Employees
Employees
Industry
1000+
1000+
Healthcare
250-499
500-999
Professional & Tech.
250-499
500-999
Manufacturing
250-499
100-249
Healthcare
100-249
not available
Healthcare
250-499
250-499
Insurance
100-249
not available
Healthcare
100-249
not available
Healthcare
250-499
250-499
Banking
100-249
100-249
Temp. Services
100-249
not available
Food
100-249
not available
Grocery
250-499
250-499
Grocery
100-249
not available
Retail
250-499
250-499
Retail
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 Nine year prior information is not available. This
information will be updated as available
Unaudited statistical section
168
OPERATING STATISTICS
CITY OF KALISPELL, MONTANA
Full -Time Equivalent City Government Employees by Function/Program
Past Ten Fiscal Years
FY 09
FY10
FYI
FY12
FY13
FY14
FY15
FY16
FY17
FY18
General Government
Manager
2.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
100
1.00
Human Resources
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1 50
1.50
City Clerk
1.34
1.34
1.34
1.34
124
1.23
1.58
1.33
1.33
1.33
Media Specialist
0.50
0.55
0.55
0.55
Finance
3.70
3.20
3.20
3.20
320
3.20
3.20
3.20
320
3.20
Attorney
4.66
4.66
4.66
4.66
4.66
4.67
4.67
4.67
4.67
4.67
Court
4.00
4.00
4.00
4.00
4,00
4.00
4.00
4.00
4.00
4.00
City Hall
1.00
1.00
1.40
1.40
I AO
1.40
1.45
1.45
1.45
1.45
Planning & Zoning
6.50
4.75
4.75
4.25
4.25
4.25
4.25
4.25
4,05
3.95
Building
7.50
5.25
3.45
3.95
3.95
3.95
5.20
5.20
6.75
8.65
Information Technology
1.00
1.00
1.00
1.50
2.25
2.25
2.15
2.55
2.55
2.55
Total General Government
33.70
28.25
26.85
27.35
27.45
27.45
29.00
29.15
30,50
32.30
Public Safety
Police
48.50
47.50
41.00
42.00
44.00
44.00
44.00
46.00
49.75
50.75
Fire
29.90
24.90
27.30
26.30
27.30
23.30
23.30
23.30
23.30
22.90
Ambulance
9.10
9.10
7.50
7.50
6.50
9.50
9.50
9.50
9.50
9.50
Total Public Safety
87.50
81.50
75.80
75.80
77.80
76.80
76.80
78.80
82.55
83.15
Public Works
DPW
0.15
0.15
0.25
0.25
0.25
0.25
0.25
0.25
0.25
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
12.05
12.30
12.65
12.35
12.25
12.25
12.25
12.25
13.25
13.25
Sign/signal
2.50
2.50
2.50
2.50
2.50
2.00
2.00
2.00
2.00
2.00
Light District
0.60
0.60
0.80
0.75
0.75
1.25
1.25
1.25
1.25
1.25
Water
15.75
15.95
15.60
15.25
14.90
14.80
14.80
15.30
15.30
15.30
Sewer
8.70
8.40
8.45
7.55
7.00
7.05
7.05
7.55
7.55
7.55
WWTP
9.40
8.40
8.05
7.90
7.55
7.55
7.55
8.55
8.55
8.55
Storm
6.00
6.20
6.40
6.45
6.20
6.20
6.20
6.20
6.20
7.20
Solid Waste
7.55
7.60
7.35
7.25
7.35
7.40
7.40
7.40
7.40
7.40
Total Public Works
65.70
65.10
65.05
63.25
61 75
61.75
61.75
63.75
64.75
65.75
Parks and Recreation
Parks and Recreation
11.10
9.20
8.90
8.90
945
9.80
9.80
9.80
10.60
10.60
Forestry
2.80
2.80
3.00
3.00
320
2.85
1.80
1.80
2.00
3.00
Total Parks and Recreation
13.90
12.00
11.90
11.90
12 65
12.65
11.60
11.60
12.60
13.60
Community Development
UDAG/Comm. Dev.
2.00
2.00
2.00
2.00
2 00
2.00
1.75
1.75
2.00
2.00
Airport
Airport
1.00
1.00
0.50
0.50
0 50
0.50
0.00
0.00
0.00
0.00
Total all funds
203.80
189.85
182.10
I80.80
882 15
881.15
880.90
885.05
992.40
196.80
Source: City Manager's Recommended Budget
Unaudited statistical section
169
CITY OF KALISPELL, MONTANA
OPERATING INDICATORS BY FUNCTION
Past Ten Fiscal Years
FY 09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
General Government
Resolutions passed
89
60
71
66
59
51
41
44
57
58
Ordinances passed
13
21
25
12
12
12
14
17
15
17
Payroll claims processed
6537
6170
6038
5985
6035
6063
5956
6169
6473
6351
Accounts payable claims processed
6624
6490
6178
6248
6461
6425
6704
6504
6716
6784
Receipts processed
22983
10440
10693
10749
10930
10984
10346
11775
13073
12687
Conditional use permits granted
3
7
5
7
5
4
4
6
5
12
Public Safety
Calls for law enforcement service
25976
25498
26550
27600
28650
29706
31419
34626
33186
34467
Citations
6713
6500
6300
6100
5877
5261
5233
5037
4680
4948
Arrests
1853
1865
1800
1700
1643
1316
1549
1734
1405
1659
Calls for fire service
725
652
538
627
708
831
697
798
882
796
Calls for rescue service
2571
2504
2037
2071
2197
2281
2560
2501
2673
2712
Building permits issued:
Residential
208
227
188
175
258
270
195
195
222
181
Commercial
211
228
196
178
254
262
163
137
137
176
Public Works
Streets and alleys maintained (Miles)
139
139
139
139
139
139
140
140
144
155
Sidewalk replaced (linear feet)
1060
1159
776
1704
1476
1510
1723
1589
794
1853
Alleys paved
11
13
12
10
14
7
5
6
6
7
Parks
Park users (reservations)
139727
129602
143190
157288
132291
144937
123633
103438
102533
101493
Acres of parks
429.74
429.74
429.49
429.49
429.49
429.49
429.49
429.49
429.49
42949
Recreation participants (rec, sports, youth, swir
48755
31931
27525
32109
36415
43490
41830
35697
35370
35370
Miles of trails
4.00
4.00
4.70
6.35
6.85
7.98
8.10
8.10
8.85
885
Community Development
TIF / TEDD Districts
4
4
4
4
4
4
4
4
4
5
New loans
1
0
0
3
3
3
1
0
1
2
Loans being serviced
16
16
13
16
19
21
22
19
20
10
Airport
Monthly tie down fees (average)
16
13
12
9
7
3
0
0
0
0
Monthly commercial fees (average)
4
5
4
5
6
7
7
6
6
4
Water
Average daily consumption (millions of gallons)
2.99
2.87
2.81
2.85
2.79
2.96
3.13
3.85
3.13
233
Number of customers
7258
7362
7468
7530
7625
7641
7675
7785
7907
8083
Sewer
Average daily wastewater treated (millions of ge
2.7
2.7
3.1
2.7
2.6
2.7
2.7
25
2.7
2.8
Solid Waste
Refuse collected (tons per day)
20.0
207
21 1
21.3
23.0
24.1
25.0
260
269
271
Source: City of Kalispell
Unaudited statistical section
170
CITY OF KALISPELL, MONTANA
Capital Asset Statistics by Function/Program
Past Ten Fiscal Years
FY 09
FY10
FY11
FY12 FY13
FY14
FY15
FY16
FY17
FY18
Police
Stations
1.00
1.00
1.00
1.00 1.00
1.00
1.00
1.00
100
1.00
Patrol Units (Cars)
11.00
11.00
11.00
11.00 11.00
11.00
11.00
11.00
11.00
11.00
Patrol Units (Motorcycles)
2.00
2.00
2.00
2.00 2.00
2.00
2.00
2.00
200
2.00
Fire
Stations
200
2.00
2.00
2.00 2.00
2.00
2.00
2.00
2.00
2.00
Fire Trucks
400
4.00
400
400 4.00
400
4.00
4.00
4.00
4.00
Ambulances
400
4.00
400
400 400
400
400
4.00
4.00
4.00
Water
Mains (Miles)
12500
125.50
126.00
126.00 126.00
128.00
128.00
129.50
129.75
130.05
Wastewater
Sanitary Mains (Miles)
130.00
130.50
130.50
130.50 130.50
131.00
131.00
13100
131.00
131.60
Storm Mains (Miles)
5200.
5200
52.00
52.00 5300
53.00
53.50
53.50
53.50
5375
Lift Stations
39.00
40.00
40.00
40.00 40.00
4100
4100
41.00
41 00
4100
Solid Waste
Cpllection Vehicles
8.00
8.00
8.00
8.00 8.00
800
800
800
8.00
8.00
Other Vehicles
2.00
2.00
2.00
200 2.00
200
200
2.00
2.00
2.00
Source: City of Kalispell
Unaudited statistical section
171
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Unaudited statistical section
172
Tax Increment Urban Renewal Bonds (Airport TIF)
Tax Increment Values
South Kalispell/Airport
(Kalispell B)
(expires July 1, 2020)
Incremental
Assessed/Market Taxable Value of
Taxable
Fiscal
Value of Property in Property in the
Value of
Year
the Airport TIF Airport TIF
Airport TIF
2017/18
$ 72,185,333 $ 1,191,058
$ 737,446
2016/17
$ 68,131,560 $ 1,149,211
$ 695,599
2015/16
$ 64.810,206 $ 1,337,249
$ 883,637
2014/15
$ 58,500,554 $ 1,339,930
$ 886,318
2013/14
$ 57,758,572 $ 1,390,221
$ 936,609
City of Kalispell
Fiscal
Year
Assessed/Market
Value
Taxable Value Tax Increment Districts (4)
excludes Incremental value Incremental Taxable Value
2017/18
$
2,561,621,909
$
41,231,226
$
1,141,994
2016/17
$
2,307,546,427
$
38,018,010
$
1,211.165
2015/16
$
2,294,127,519
$
37,952,794
$
1,000,265
2014/15
$
1,587,574,165
$
39,521,550
$
2,239,816
2013/14
$
1,506,125,081
$
39,334,849
$
1,463,599
Westside Tax Increment District
South Kalispell/Airport
(Kalispell C)
(Kalispell B)
(expires January 1, 2037)
(expires January 1, 2020)
Fiscal
Base Incremental
Total
Base
Incremental
Total
Year
Value Value
Value
Value
Value
Value
2617/18
$
7,932,918 $ 278,291
$
8,211,209
$
453,612
$
737,446 $
1,191,058
2016/17
$
7,932,918 $ 399,951
$
8,332,869
$
453,612
$
695,599 $
1,149,211
2015/16
$
7,932,918 $ -
$
6,663,338
$
453,612
$
883,637 $
1,337,249
2014/15
$
7,932,918 $ 1,219,018
$
9,151,936
$
453,612
$
886,318 $
1,339,930
2013/14
$
7,932,918 $ 394,482
$
8,327,400
$
453,612
$
936,609 $
1,390,221
Old School Station, Technology
Old School Station, Industrial
(Kalispell G)
(Kalispell H)
(expires January 1, 2020)
(expires
January 1, 2020)
Fiscal
Base Incremental
Total
Base
Incremental
Total
Year
Value Value
Value
Value
Value
Value
2017/18
$
390 $ 106,887
$
107,277
$
126
$
18,751 $
18,877
2016/17
$
390 $ 94,851
$
95,241
$
126
$
20,764 $
20,890
2015/16
$
390 $ 95,864
$
96,254
$
126
$
20,764 $
20,890
2014/15
$
390 $ 111,723
$
112,113
$
126
$
22,757 $
22,883
2013/14
$
390 $ 111,226
$
111,616
$
126
$
21,282 $
21,408
Unaudited statistical section
173
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174
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General Obligation Debt Ratios for the years 2015. 2016, 2017, and 2018
Direct Debt Per Capita
Direct and Estimated Overlapping Debt Per Capita
Direct Debt to the City's Assessed/Market Valuation
Direct and Estimated Overlapping Debt to the City's
Assessed/Market Valuation
Direct Debt to the City's Taxable Valuation
(excluding incremental values)
Direct and Estimated Overlapping Debt to the City's
Taxable Valuation (excluding incremental
values)
City's Assessed/Market Valuation Per Capita
City's Taxable Valuation Per Capita (excluding
incremental values)
2014/15
2015/16
2016/17
2017/18
446.83
319.34
259.57
443.54
1,536.74
1,311.15
1,281.12
2,394.49
0.61 %
0.31 %
0.26%
0.40%
2.08%
1.26%
1.26%
2.17%
24.33%
18.55%
15.54%
24.97%
83.67%
76.18%
76.70%
134.80%
73,779
104,033
101,382
110,358
1,837
1,721
1,670
1,776
unaudited statistical section
176
SINGLE AUDIT SECTION
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177
CITY OF KALISPELL
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Fiscal Year Ended June 30, 2018
Basis of Accounting
The accompanying Schedule of Expenditures of Federal Awards includes the federal award activity of the
City of Kalispell, Flathead County, Montana, under programs of the federal government for the year ended
June 30, 2018. The information in this schedule is presented in accordance with the requirements of OMB
Code of Federal Regulations, Uniform Administrative Requirements, Cost Principles and Audit
Requirements for Federal Awards, 2 CFR 200 (Uniform Guidance). Federal awards received directly from
federal agencies and passed through other government agencies is included in the schedule.
Summary of Significant Accounting Policies
Expenditures reported in the schedule are reported on the modified accrual basis of accounting, which is a
comprehensive basis of accounting other than US GAAP and is a different basis of accounting than the
basic financial statements (full accrual). Therefore, some amounts presented in this schedule may differ
from amounts presented in, or used in the preparation of, the basic financial statements.
Indirect Costs
The City did not elect to use the 10% de minimis indirect cost rate from Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Guidance Administrative Requirements, Subpart E Cost Principles.
Sub Recipients
The City of Kalispell's schedule of expenditures of federal awards does not include any sub recipients or
sub recipient expenditures in fiscal year 2018.
178
WIPFL1
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
City Council Members
City of Kalispell
We have audited, in accordance with auditing standards generally accepted in the United States and the
standards applicable to financial audits contained in Go vernment Auditing Standards issued by the Comptroller
General of the United States, 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, 2018, 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 15, 2019.
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) to determine the audit procedures that are appropriate in the circumstances
for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing
an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the
effectiveness of the City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees in the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial
statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a
deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness,
yet important enough to merit attention by those charged with governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over financial
reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our
audit we did not identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements, noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed
no instances of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
179
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 City'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 City's internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
LLP
Wpfli LLP
Helena, Montana
January 15, 2019
180
I -A][
WIP *
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE
REQUIRED BY THE UNIFORM GUIDANCE
City Council Members
City of Kalispell
Report on Compliance for Each Major Federal Program
We have audited the City of Kalispell's (the City) compliance with the types of compliance requirements
described in the U.S. Office of Management and Budget (OMB) Compliance Supplement that could have a
direct and material effect on each of the City of Kalispell's major federal programs for the year ended June 30,
2018. 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.
Management's Responsibility for Compliance
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of
its federal awards applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the City's major federal programs
based on our audit of the types of compliance requirements referred to above. We conducted our audit of
compliance in accordance with auditing standards generally accepted in the United States; the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States; 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). Those standards and the Uniform Guidance require that we plan and perform the audit
to obtain reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major federal program occurred. An audit
includes examining, on a test basis, evidence about the City's compliance with those requirements and
performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal
program. However, our audit does not provide a legal determination on the City's compliance.
Opinion on Each Major Federal Program
In our opinion, the City complied, in all material respects, with the types of 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, 2018.
181
Report on Internal Control over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing our audit
of compliance, we considered the City's internal control over compliance with the types of requirements that
could have a direct and material effect on a major federal program to determine the auditing procedures that
are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major
federal program 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 internal control over
compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over
compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent or detect and correct noncompliance with a type of compliance requirement of a federal
program on a timely basis. A material weakness in internal control over compliance is a deficiency, or
combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that
material noncompliance with a type of compliance requirement of a federal program will not be prevented or
detected and corrected on a timely basis. A significant deficiency in internal control over compliance is a
deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a federal program that is less severe than a material weakness in internal control over
compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over compliance
that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal
control over compliance that we consider to be material weaknesses. However, material weaknesses may
exist that have not been identified.
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.
LAP
Wipfli LLP
Helena, Montana
January 15, 2019
182
City of Kalispell, Montana
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended June 30, 2018
Section I: Summary of Auditor's Results
Financial Statements
Type of auditor's report issued: Unmodified
Internal control over financial reporting:
Are any material weaknesses identified? Yes X No
Are any significant deficiencies identified not considered to be
material weaknesses? Yes X None Reported
Is any noncompliance material to financial statements noted? Yes X No
Federal Awards
Type of auditor's report issued on compliance for major programs: Unmodified
Internal control over major program compliance:
Are any material weaknesses identified? Yes X No
Are any significant deficiencies identified not considered to be
material weaknesses? Yes X None Reported
Are any audit findings disclosed that are required to be
reported in accordance with the Uniform Guidance [2 CFR
200.516(a)] Yes X No
Identification of major programs:
CFDA Number and Name of Federal Program or Cluster
20.933 National Infrastructure Investments, TIGER Discretionary Grants
Enter the dollar threshold used to distinguish between
Type A and Type B programs: $ 750,000
Is the auditee qualified as a low -risk auditee? _Yes X No
183
Section II: Financial Statement Findings
There were no findings related to the financial statements that are required to be reported in accordance
with Government Auditing Standards.
Section III: Federal Award Findings
There were no findings related to federal awards that are required to be reported in accordance with
Government Auditing Standards.
Section IV: Current Status of Prior Year Findings
There were no prior year findings required to be reported in accordance with Government Auditing
Standards.
184