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City of Kalispell FS 2022 Audit FinalFISCAL YEAR 2022 July 1, 2021 - June 30, 2022 CITY OF KALISPELL, MONTANA ANNUAL COMPREHENSIVE FINANCIAL REPORT Prepared by the City of Kalispell Finance Department INTRODUCTORY SECTION CITY OF KALISPELL ANNUAL COMPREHENSIVE FINANCIAL REPORT TABLE OF CONTENTS 1 INTRODUCTORY SECTION Table of Contents .................................................................................................................................................. 1-2 ACFR Letter of Transmittal ................................................................................................................................ 3-7 Government Finance Officers’ Association Certificate of Achievement ......................................................... 8 Organizational Chart ........................................................................................................................................... 9 City Elected and Appointed Officials .................................................................................................................. 10 FINANCIAL SECTION Independent Auditor’s Report…………………………………………………………………………………. 12-14 Management’s Discussion and Analysis………………………………………………………………….....…. 15-27 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position ..................................................................................................................... 30 Statement of Activities ......................................................................................................................... 31 Governmental Fund Financial Statements: Balance Sheet – Governmental Funds ................................................................................................ 33-34 Reconciliation of the Balance Sheet – Governmental Funds to the Statement of Net Position ..... 35 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds .. 36 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds to the Statement of Activities ...................................................................... 37 Proprietary Fund Financial Statements: Statement of Net Position – Proprietary Funds ................................................................................. 39 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds .................. 40 Statement of Cash Flows – Proprietary Funds .................................................................................. 41 Fiduciary Fund Financial Statements: Statement of Fiduciary Net Position – Custodial Funds ................................................................... 42-44 Notes to the Financial Statements…………………………………………………………………… 45-98 Required Supplementary Information other than Management Discussion and Analysis: Schedule of City’s Total Liability and Related Ratios – Other Post-Employment Healthcare Benefits .............................................................................................................................. 100 Schedule of City Contributions – Other Post-Employment Healthcare Benefits............................ 100 Schedule of Proportionate Share of the Net Pension Liability/Schedule of Contributions Post Employment Benefits/Required Notes………………………………………………………101-108 Budgetary Comparison Schedule – General and Major Special Revenue/Required Notes…..... 109-113 Supplemental Information: Combining and Individual Governmental Fund Statements and Schedules: Combining Balance Sheet – Nonmajor Governmental Funds……………………………………115-125 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds………………………………………………………………....126-132 Budgetary Comparison Schedule – Nonmajor Governmental Funds…………………………………………………………………133-158 Combining and Individual Proprietary Fund Statements: Combining Statement of Net Position – Nonmajor Proprietary Funds ......................................... 160 Combining Statement of Revenues, Expenditures, and Changes in Fund Net Position – Nonmajor Proprietary Funds ....................................................................................................... 161 Combining Statement of Cash Flows – Nonmajor Proprietary Funds .......................................... 162 Combining and Individual Internal Service Fund Statements: Combining Statement of Net Position – Internal Service Funds………………………………...... 164 Combining Statement of Revenues, Expenditures, and Changes in Fund Net Position - Internal Service Funds……………………………………………………………………………. 165 Combining Statement of Cash Flows – Internal Service Funds ………………………………….. 166 CITY OF KALISPELL ANNUAL COMPREHENSIVE FINANCIAL REPORT TABLE OF CONTENTS 2 STATISTICAL SECTION Financial Trends Net Position by Component ..................................................................................................................... 168 Changes in Net Position ........................................................................................................................... 169 Fund Balances of Governmental Funds ................................................................................................. 170 Changes in Fund Balances, Governmental Funds ................................................................................ 171 Revenue Capacity Market Value of Taxable Property......................................................................................................... 172 Direct and Overlapping Property Tax Rates ......................................................................................... 173 Principal Property Tax Payers ............................................................................................................... 174 Property Tax Levies and Collections ...................................................................................................... 175 Debt Capacity Ratios of Outstanding Debt by Type ...................................................................................................... 176 Ratios of General Bonded Debt Outstanding ........................................................................................ 177 Legal Debt Margin Information ............................................................................................................. 178 Direct and Overlapping Governmental Activities Debt ........................................................................ 179 Pledged Revenue Coverage ..................................................................................................................... 180 Demographics and Economics Demographic and Economic Statistics ................................................................................................... 181 Principal Employers ................................................................................................................................ 182 Operating Statistics Full-time Equivalent City Government Employees by Function/Program ......................................... 183 Operating Indicators by Function .......................................................................................................... 184 Capital Assets Statistics by Function/Program ..................................................................................... 185 Additional Information Cash Reconciliation.................................................................................................................................. Schedule of Cash Received and Distributed .......................................................................................... The Water System .................................................................................................................................... 186 The Sewer System .................................................................................................................................... 187 Tax Increment District Information ....................................................................................................... 188-189 Special Improvement District Information ............................................................................................ 191 General Obligation Debt Ratios .............................................................................................................. 192 SINGLE AUDIT SECTION Schedule of Expenditures of Federal Awards and Notes ................................................................................ 194 Notes to the Schedule of Expenditures of Federal Awards ............................................................................. 195 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 ........................................................................................................... 196-197 Independent Auditor’s Report on Compliance for Each Major Program and Report on Internal Control Over Compliance Required by Uniform Guidance ............................................................................... 198-200 Schedule of Findings and Questioned Costs ..................................................................................................... 201-203 City of Kalispell Post Office Box 1997 - Kalispell, Montana 59903-1997 Telephone (406) 758-7701 Fax - (406) 758-7758 July 24, 2023 To the Honorable Mayor, members of the City Council, and Citizens of the City of Kalispell, Montana: State law requires that all general-purpose local governments publish within six months of the close of each fiscal year (by December 31) a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP). State law also requires a biannual audit of these statements in accordance with generally accepted auditing standards by a firm of licensed certified public accountants to be completed within 9 months of the close of every other fiscal year (by March 31). It is the belief of the City Council and the Executive staff that an annual audit assures a higher level of financial management and fiscal responsibility. Pursuant to this policy and these requirements, the audited annual financial report for the City of Kalispell, Montana for the fiscal year ended June 30, 2022, 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. The material is presented in a manner designed to state fairly the financial position and results of operations of the City as measured by the financial activity of its various funds. All disclosures necessary to enable the reader to gain an understanding of the City's financial affairs have been included. To provide a reasonable basis for making these representations, management of the City has established and maintains an internal control system designed to ensure that the assets of the City are protected from loss, theft or abuse. The internal control system has been designed to also ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with accounting principles generally accepted in the United States (US GAAP) and to comply with laws and regulations. The system of internal control is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of 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. 3 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, 2022, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City’s financial statements for the fiscal year ended June 30, 2022, 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). The letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City of Kalispell’s MD&A immediately precedes the City’s basic financial statements within this report. Profile of the City of Kalispell The City of Kalispell, incorporated in 1892, is the county seat of Flathead County located in the western part of the State of Montana. This historically has been one of the top growth areas in the state. The City of Kalispell is empowered to levy a property tax on both real and personal properties located within its boundaries. It also is empowered by state statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the governing council. The City of Kalispell operates under the council-manager form of government. Policy-making and legislative authority are vested in a governing council consisting of the mayor and eight other members. The governing council is responsible for, among other things, passing ordinances, adopting the budget, appointing boards, and hiring the City Manager. The City Manager is responsible for 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, and solid waste. In addition, the City presents financial data for two component units on the combined statements. The Downtown Business Improvement District and the Tourism Business Improvement District are both discretely presented governmental type component units. 4 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 departments are responsible for expending within fund budgetary limits. Budget to Actual Comparisons The State municipal budget law stipulates that money, other than payments from agency funds, may not be drawn from the treasury of a municipality except pursuant to an appropriation. Therefore, a legally adopted budget is required for all funds, with the exception of agency funds. The City legally adopts a budget for the required funds. Consistent with past years, the City established the legal spending level at the fund level for the fiscal year 2022 budget. The City Manager and Finance Director may make transfers of appropriations within a fund. Transfers between funds, however, require approval of the City Council. Budget-to-actual comparisons are provided in the report for each individual governmental fund for which an appropriated annual budget has been adopted. For the general fund, the comparison is part of the required supplementary information. Factors Affecting Financial Condition Growth in Northwest Montana continues with Kalispell receiving the title of “Montana’s fastest growing urban area”. Gaining around 2,869 new residents since the pandemic. Property prices remain high with the June median list price of a home in Kalispell was $585,000. This compares to $425,000 in June of 2021. 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 do not purchase services in Kalispell and the Flathead Valley. While Flathead County and the State of Montana experienced growth under 15 percent between the 2010 census and 2020 census, the City of Kalispell experienced a population increase of over 23 percent. As of the most current population census, the estimated population of Kalispell is 26,110. According to the United States Census Bureau, the per capita income for the City of Kalispell was $29,801 in 2021 inflation-adjusted dollars. This is about 16% less than Flathead County’s estimated per capita income ($34,897), and 15% less than Montana’s estimated per capital income ($34,423). Per capita income for the United States is estimated to be $37,638 in 2022 inflation-adjusted dollars. 5 Revenue Growth and Reform City revenues can be considered statutorily limited, circumstantial, or discretionary. The City has very little control over the growth of restricted and circumstantial revenues. Although the City ‘controls’ the growth or discretionary revenue, it is still subject to typical community pressures for conservative growth. Since November 1986 and the passage of Initiative 105, which limited certain property taxes to the 1986 levels, the ability of the City to raise revenue for basic services is increasingly difficult. Then, the legislature, with SB184, lowered tax rates forcing the City to increase mill levies to maintain the same level of revenue. The City’s cash reserves in most funds vary between 10% and 20% of appropriations. State law allows for reserves of 50%. Reserves provide for cash flow between tax revenue receipts to keep the City from having to borrow funds for operations. Additional revenues generated by increased taxable valuation come with the additional costs of an increased service area. The City of Kalispell’s Police and Fire Departments, 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. Major Initiatives On December 4, 2017, the Kalispell City Council adopted The Downtown Plan as an amendment to the City of Kalispell Growth Policy Plan by Resolution No. 5846. The Downtown Plan addresses a number of key topics that affect the future growth and development of Downtown Kalispell. A number of goals/guiding principles were identified within the implementation chapter of The Downtown Plan. Goal/guiding principle number three states “creation of a downtown Tax Increment Finance District to assist with implementation of this plan.” The tax increment funds could be used for appropriate public infrastructure projects in support of the redevelopment of blighted conditions. In June 2022, the City of Kalispell completed the Kalispell Core & Rail Redevelopment project, funded, in part, by a $10 million Transportation Income Generating Economic Recovery (TIGER) grant from the U.S. Department of Transportation. These funds allowed for the construction of Glacier Rail Park, relocation of two rail-served businesses, installation of railroad crossing signals and traffic signals and conversion of the former rail bridge into a pedestrian bridge increasing motor and pedestrian safety and connectivity. The project also included the removal of the rail through the center of the city which was replaced with a concrete path, landscaping, trees, lighting, stormwater and site furnishings and a much-needed north-south street connection. This project has provided essential connectivity as well as catalyzing redevelopment in the heart of the community. 6 The American Rescue Plan Act (ARPA) was signed into law March 11, 2021, to address the COVID-19 pandemic. The Act has provided state and local aid to make necessary investments in water, sewer and storm infrastructure. On October 8, 2021, the Governor awarded the City of Kalispell several Competitive and Minimum Allocation Grants for Water, Sewer, and Stormwater projects. Replacement of Original 1920s Era Water and Sewer Mains in Downtown Kalispell is Kalispell’s largest ARPA project receiving grant allocations and focused on replacement of Kalispell’s aging critical infrastructure set to begin in spring of 2023. 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 Kalispell for its comprehensive annual financial report for the fiscal year ended June 30, 2021. This was the twelfth 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, Aimee Cooke Interim Finance Director 7 8 CITY OF KALISPELL, MONTANA ORGANIZATIONAL CHART CITIZENS OF KALISPELL CITY COUNCIL MAYOR Mark JohnsonWARD I WARD II WARD III WARD IV KariGabriel Sam Nunnally Jessica Dahlman Jed FisherSandy Carlson Chad Graham Ryan Hunter Sid Daoud CITY CLERKAimeeBrunckhorst MUNICIPAL JUDGE Rich Hickel CITY MANAGERDoug Russell PUBLIC SAFETYPOLICE Doug Overman LEGALJohnna Preble FINANCE Aimee Cooke PLANNING, BUILDING & COMMUNITY DEVELOPMENTJarod Nygren PARKS & RECREATION Chad Fincher PUBLICSAFETYFIRE Daniel Pearce INFORMATIONTECHNOLOGY Erika Billiet PUBLIC WORKSSusieTurner HUMAN RESOURCESDenise Michel 9 CITY OF KALISPELL, MONTANA CITY ELECTED AND APPOINTED OFFICIALS TERM ELECTED OFFICIALS EXPIRES Mayor Mark Johnson 12/2026 Council members: Kari Gabriel Ward I 12/2023 Kyle Waterman Ward III 12/2025 Sandy Carlson Ward I 12/2026 Ryan Hunter Ward III 12/2023 Sam Nunnally Ward II 12/2023 Sid Daoud Ward IV 12/2023 Chad Graham Ward II 12/2026 Tim Kluesner Ward IV 12/2025 Municipal Court Judge: Rick Hickel APPOINTED CITY OFFICIALS City Manager City Attorney City Clerk Police Chief Fire Chief Finance Director Public Works Director Parks Director Planning, Building, Community Dev. Human Resource Director City Treasurer Doug Russell Johnna Preble Aimee Brunckhorst Doug Overman Dan Pearce Aimee Cooke Susie Turner Chad Fincher Jarod Nygren Denise Michel Julie Hawes 10 FINANCIAL SECTION 11 550 N 31st Street Ph: 406.248.1681 Suite 300 wipfli.com Billings, MT 59101 12 INDEPENDENT AUDITOR’S REPORT City Council Members City of Kalispell Kalispell, Montana Opinions 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, as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City of Kalispell ’s basic financial statements as listed in the table of contents. 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, 2022, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial statements section of our report. We are required to be independent of the City of Kalispell, and to meet our ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter Change in Accounting Principle As described in Note 1 to the financial statements, the City adopted new accounting guidance, GASB Statement No. 87 – Leases. Our opinion is not modified with respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP); 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events considered in the aggregate, that raise substantial doubt about the City of Kalispell’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly after. 13 Auditor’s Responsibilities for the Audit of the Financial statements Our objective are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from an error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgement made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risk of material misstatement of the financial statements, whether due fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosure in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Kalispell, State of Montana internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Kalispell’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information GAAP requires that the management’s discussion and analysis, schedule of total liability and related ratios – other post-employment benefits, schedule of contributions – other post-employment benefits, schedules of proportionate share of the net pension liability, schedules of contributions and budgetary comparison information be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Government Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires 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 and opinion or provide any assurance. 14 Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Kalispell’s basic financial statements. The accompanying combining and individual nonmajor fund financial statements, nonmajor budgetary comparisons, and schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, are presented for purposes of additional analysis and are not required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financials statements or to the basic financials statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America , In our opinion, combining and individual nonmajor fund financial statements, nonmajor budgetary comparisons, and schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated July 24, 2023, on our consideration of the City of Kalispell’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of Kalispell’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Kalispell’s internal control over financial reporting and compliance. Wipfli LLP Billings, Montana July 24, 2022 MANAGEMENT’S DISCUSSION AND ANALYSIS 15 16 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, 2022. 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 $215,120,281 (net position). Of this amount, $18,703,815 (unrestricted net position) may be used to meet the government’songoing obligations to citizens and creditors. Total City net position increased by $21,201,304 over the prior fiscal year. Developerscontributed $10,300,000 of streets, and over $2,000,000 of water and sewer infrastructure were contributed to the City. As of June 30, the City’s governmental funds reported combined ending fund balances of$23,387,154, a decrease of $1,703,473 over the prior year. Of this amount, $1,669,273 isavailable for spending at the government’s discretion (unassigned fund balance). At fiscal year-end, the total of the unassigned components of fund balance for the general fund was $4,113,846 or 30% of fiscal year 2022 total general fund expenditures. The City’s total debt decreased by $1,953,806 (6.2%) during fiscal year 2022. Debt ofgovernmental activities decreased (11.5%) due to the payoff of a General Obligation bond infy21, and no new debt was incurred in fy22. Business-type activities debt decreased by$1,065,499 (4.5%) due to no new borrowings for fy22. 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 the City of Kalispell’s assets and deferred outflows of resources, and liabilities and deferred inflows of resources. The difference between these two (assets and deferred outflows of resources minus liabilities and deferred inflows of resources) is reported as net position. Net position can be a useful tool in evaluating 17 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 most of their costs through user fees and charges for services (business-type activities). The governmental activities of the City of Kalispell include general government/administration, public safety, public works, parks and recreation, and community development. The business-type activities of the City of Kalispell include water distribution, sewer collection and treatment, and solid waste collection. The government-wide financial statements include, in addition to the primary government described in the above paragraph, a legally separate Business Improvement District and a legally separate Tourism Business Improvement District. The financial information of these component units is reported separately on the Government-wide financial statements. Fund Financial Statements The City of Kalispell, like most other governmental entities, uses fund accounting. Funds are set up to account for specific activities or objectives of the government. Funds also 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 inthe government-wide financial statements. Governmental fund financial statements, byfocusing 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 governmentalfund balance sheet to the government-wide statement of net position and thegovernmental 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-widestatements) of near-term decisions (governmental fund statements). The City of Kalispell maintains numerous individual governmental funds. Thegovernmental fund balance sheet and statement of revenues, expenditures, and changes in fund balance present information separately only for funds which are considered major. Major funds are determined by a formula which considers the percentage of totalgovernmental assets, liabilities, revenues, and expenditures contained in each individualfund. The City of Kalispell has four major governmental funds; the General Fund(always a major fund), the Street Maintenance (special revenue) Fund, the Westside TIF 18 fund, and the American Rescue Plan Act fund. All non-major funds are presented as a group. The City of Kalispell adopts an annual appropriated budget for its funds. A budgetary comparison statement has been provided for the general fund and the other majorgovernmental funds to demonstrate compliance with this budget. The City of Kalispell maintains two different types of proprietary funds. Enterprisefunds and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Water, sewer, and solid waste make up the City of Kalispell’s enterprise funds. The City of Kalispell uses two internal service funds to accumulate and allocate itsinformation technology transactions and central garage transactions internally among itsvarious 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 processand categorized as either a governmental or business-type activity. Because the City ofKalispell’s internal service funds benefit governmental more so than business-typefunctions, 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 thatprovided 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 asmajor funds. Individual data is not required for the solid waste fund, because it is not classified as a major fund. The City of Kalispell maintains one fund to account for resources held by thegovernment for the benefit of outside parties. This fiduciary fund is not reflected in thegovernment-wide financial statements because the resources are not available to supportthe City of Kalispell’s own programs. The City of Kalispell must ensure that the assets reported in this fund are used for their intended purpose. The accounting method used for fiduciary funds is like that used for proprietary funds. Notes to the Financial Statements The information contained in the government-wide and fund financial statements is meant to be used in concurrence with the notes to the financial statements. The notes present further 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 Pensions schedules, and the general and major special revenue funds budgetary comparison schedules is included in the section for required supplementary information on pages 84 - 95. 19 ANALYZING THE CITY AS A WHOLE As mentioned prior, net position can be an important indicator of an entity’s financial well-being. For the period ending June 30, 2022, the City of Kalispell’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $215,120,281. The largest portion of the City’s net position ($165,369,599 or 77%) reflects its net investment in capital assets (e.g., land, buildings, machinery and equipment, infrastructure). The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. A summary of net position is shown in the following table. Governmental Business-type Activities Activities Change Change FY22 FY21 Inc (Dec)FY22 FY21 Inc (Dec) Current and Other Assets 37,489,494$ 34,557,240$ 2,932,254$ 43,890,797$ 36,251,236$ 7,639,561$ Capital Assets 89,098,814 77,455,505 11,643,309$ 105,516,167 101,666,450 3,849,717 Total Assets 126,588,308 112,012,745 14,575,563 149,406,964 137,917,686 11,489,278 Deferred Outflows of Resources 3,997,285 4,666,135 (668,850) 575,038 725,843 (150,805) Long-term Liabilities Outstanding 17,405,533$ 24,652,207$ (7,246,674)$ 23,513,475$ 27,297,783$ (3,784,308)$ Other Liabilities 12,680,559 6,367,712 6,312,847 2,854,653 465,680 2,388,973 Total Liabilities 30,086,092 31,019,919 (933,827) 26,368,128 27,763,463 (1,395,335) Deferred Inflow of Resources 5,724,384 2,249,424 3,474,960 3,268,712 3,268,712 - Net Position: Net Investment in Capital Assets 82,820,953 70,317,095 12,097,679 82,548,606 77,743,623 4,804,983 Restricted 18,926,543 9,476,546 9,449,997 12,120,363 7,885,626 4,234,737 Unrestricted (6,972,378) 3,615,896 (9,906,229) 25,676,193 24,880,297 795,896 Total net position 94,775,119$ 83,409,537$ 11,641,447$ 120,345,162$ 110,509,546$ 9,835,616$ An additional portion of the City’s net position ($32,397,199 or 15%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($18,015,417) may be used to meet the City’s ongoing obligations to citizens and creditors. Net position of the City increased almost 11% for fiscal year 2022 in comparison to fiscal year 2021 ($215 million compared to $194 million). 20 Changes in Net Position Governmental Business-type Activities Activities Change Change FY22 FY21 Inc (Dec)FY22 FY21 Inc (Dec) Revenues Program revenues (by major source): Charges for services 9,467,107 8,323,806 1,143,301 18,383,444 16,032,399 2,351,045 Operating grants and contributions 2,155,425 6,357,875 (4,202,450) 153,555 222,879 (69,324) Capital grants and contributions 13,319,980 1,045,006 12,274,974 2,360,036 799,492 1,560,544 General revenues (by major source): Property taxes for general purposes 10,489,024 10,109,452 379,572 - Video poker approptionment 58,525 69,175 (10,650) - Miscellaneous 575,644 514,139 61,505 - Interest/investment earnings 210,249 387,748 (177,499) 276,681 209,468 67,213 State entitlement 3,069,588 3,251,245 (181,657) - Gas Tax 919,184$ 870,890$ 48,294 - Total Revenues 40,264,726$ 30,929,336$ 9,335,390$ 21,173,716$ 17,264,238$ 3,909,478$ Program expenses General government 3,734,145$ 6,505,134$ (2,770,989)$ Public Safety 12,563,009 15,081,467 (2,518,458) Public Works 6,247,092 4,191,268 2,055,824 Parks and recreation 2,653,248 2,787,605 (134,357) Community development 3,075,663 3,093,846 (18,183) Debt service - interest 262,187 283,585 (21,398) Miscellaneous 363,801 - 363,801 Water 3,660,118$ 3,423,908 236,210$ Sewer 6,886,496 6,253,823 632,673 Solid Waste 1,191,379 1,008,739 182,640 Total expenses 28,899,145$ 31,942,905$ (3,043,760)$ 11,737,993$ 10,686,470$ 1,051,523$ Excess (deficiency) before special items and transfers 11,365,581$ (1,013,569)$ 12,379,150$ 9,835,723$ 6,577,768$ 3,257,955$ Gain (loss) on sale of capital assets -$ Extraordinary item - Contribution to other Gov't -$ -$ -$ Increase (decrease) in net position 11,365,581.00$ (1,013,569)$ 12,379,150$ 9,835,723$ 6,577,768$ 3,257,955$ Net Position - beginning 83,409,538 84,611,558 (1,202,020)$ 110,509,545 103,931,778 6,577,767$ Restatement (188,451) 188,451$ -106 0 (106)$ Net Position - ending 94,775,119$ 83,409,538$ 11,365,581$ 120,345,162$ 110,509,546$ 9,835,616$ Governmental Activities. Governmental activities in fiscal year 2022 increased the City’s net position by $11,365,581, an increase of $12,655,015 when compared to the prior fiscal year. Overall, revenues of the governmental funds increased 30% ($9,335,390). Expenses decreased about 10% or ($3,369,633). The key elements of the overall net position change were: Total program revenues increased substantially ($9,215,825 or 60%), while generalrevenues increased ($119,565 or 1%). Capital Grants and Contributions (program revenues) were $12,274,974 more than fiscal year 2021. $2,758,903 is Tiger Grant (Parkline Trail) revenue, $33,951 is Stonegardengrant, $199,384 is ARPA, and the remaining can be attributed to public works. Citystreets contributed by developers is $10,327,741. Public works program expenses increased about 28% ($2,066,626). This increase can be attributed to the construction of the American Rescue Plan Grant as well as an increase inmaintenance and operations. 21 The table and charts on this page help illustrate the information presented above. The table and bar chart present the cost and net cost (total cost less revenues generated by the activity) of each of the City’s largest governmental programs; General Government (administration), Public Safety (police and fire), Public Works (streets, light maintenance and signs and signals), Culture and Recreation (parks, urban forestry, pool, etc.), and Community Development. Net cost shows the financial burden placed on City taxpayers by each of these functions. The pie chart illustrates the different revenue sources for the City’s governmental activities and how much each source contributes. 22 -type activities. Business-type activities increased the City of Kalispell’s net position by$9,815,466, about 49% ($3,237,698) more than in fiscal year 2021. The factors leading to this 49% increase were: Overall, revenues of the City’s business-type activities increased $3,909,478. An increasein charges for services revenue (water and sewer rate increases) of $2,350,445, as well asa $1,560,544 in capital grants and contributions in water and sewer. Most of this increase is developers’ contributions of infrastructure in water and sewer infrastructure. Program expenses increased just 10% from the prior fiscal year. Expenses of the sewerdepartment, which includes the treatment plant and storm sewer, were up $641,467.Much of this increase is due to an increase in depreciation and other personal servicesexpense. The following charts help illustrate the information presented above related to business-type activities net position. 23 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 2022, the City of Kalispell’s governmental funds reported combined ending fund balances of $23,387,154, a decrease of $1,703,473 in comparison with the prior fiscal year. Approximately 7% of this amount ($1,669,273) constitutes unassigned fund balance, which is available for spending at the City’s discretion. The remainder of the fund balance is either nonspendable, restricted, or assigned to indicate that it is 1) not in spendable form ($1,377,178), 2) restricted for particular purposes ($18,926,543), or 3) assigned for particular purposes ($1,414,160). MAJOR GOVERNMENTAL FUNDS The general fund is the chief operating fund of the City of Kalispell. At the end of fiscal year 2022 unassigned fund balance of the general fund was $2,699,686, while total fund balance was $5,430,092. The fund balance decreased $1,162,139 during fiscal year 2022. As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total general fund expenditures. Unassigned fund balance represents approximately 22.0 percent of total general fund expenditures, while total fund balance represents approximately 44.0 percent of that same amount. The Westside TIF fund is a special revenue fund established with the intent to eliminate blight and encourage redevelopment in the West Side Urban Renewal-Core area TIF district. Tax revenue is the main source of revenue for this fund. At June 30, 2022, the fund balance of this fund was $705,556, a $752,189 increase from the prior fiscal year. The Street Maintenance fund is a special revenue fund established to account for the maintenance, construction, equipment and other costs incurred in the maintenance of the City’s streets. Assessments on properties within the City of Kalispell boundaries are the main source of this funds revenue. At June 30, 2022, the fund balance of this fund was $3,602,226, a $225,321 increase from the prior fiscal year. The American Rescue Plan Act (ARPA) fund is a capital project fund established to account for the federal and state funding attributable to ARPA. This funding is to go towards infrastructure projects approved through a process by the State of Montana. 24 Fund balance breakdown for the (4) major governmental funds: FUND BALANCE - TOTAL 5,430,092$ 705,556$ 3,602,226$ -$ NONSPENDABLELong-term recievables 1,300,000$ -$ -$ -$ Prepaids 16,246$ -$ 18,728$ -$ TOTAL NONSPENDABLE 1,316,246$ -$ 18,728$ -$ RESTRICTEDHousing & Community Development 705,556$ Public Works -$ -$ 3,583,498$ -$ TOTAL RESTRICTED -$ 705,556$ 3,583,498$ -$ ASSIGNMENTS Capital Equipment 550,000$ -$ -$ -$ Downtown Parking 23,542$ -$ -$ -$ Misc.840,618$ -$ -$ -$ TOTAL ASSIGNMENTS 1,414,160$ -$ -$ -$ UNASSIGNED 2,699,686$ -$ -$ -$ GENERAL FUND STREET MAINT.PLAN ACT AMERICAN RESCUE Westside TIF Proprietary Funds The City of Kalispell’s proprietary funds financial statements provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net position and the total growth in net position of the proprietary funds by fund are: Proprietary Fund Net Position % of Unrestricted Unrestricted Change in % Change in Net Position Net Position Net Position Net Position Water - major fund 11,398,239$ 44% 2,618,393$ 27% Sewer - major fund 13,179,037$ 51% 7,261,879$ 74% Other - solid waste 1,098,917$ 4% (44,549)$ 0% Total 25,676,193$ 100% 9,835,723$ 100% 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 2022 was $13,247,017. Actual expenditures for the year were $12,371,354, a favorable variance of $875,663, mostly attributable to salary vacancy savings. Actual revenues of the general fund were $11,415,359, $117,623, or about 1% more than the budgeted amount of $11,297,736 25 CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets At the end of 2022, the City of Kalispell has $179,121,955, net of depreciation, invested in a broad range of capital assets, including police and fire equipment, streets, buildings, land, park facilities, garbage collection equipment, and water and sewer lines. Governmental Business-type Total activities activities 2022 2021 2022 2021 2022 2021 Land 3,743,166$ 3,743,166$ 354,021$ 354,021$ 4,097,187$ 4,097,187$ Buildings 5,532,838 6,147,618 28,683 31,025 5,561,521 6,178,643 Improvements (not buildings)13,967,061 6,158,367 13,967,061 6,158,367 Machinery and equipment 3,970,984 3,815,990 757,400 810,142 4,728,384 4,626,132 Information Technology 131,444 138,288 131,444 138,288 Central Garage 102,695 106,296 102,695 106,296 Infrastructure 61,418,804 53,555,463 61,418,804 53,555,463 Construction in Progress 231,824 3,790,317 5,558,484 2,472,283 5,790,308 6,262,600 Source of Supply 4,638,284 4,819,523 4,638,284 4,819,523 Pumping Plant 1,786,958 1,867,787 1,786,958 1,867,787 Treatment Plant 16,654,695 17,488,161 16,654,695 17,488,161 Transmission and Distribution 62,043,752 61,675,445 62,043,752 61,675,445 General Plant 735,322 455,333 735,322 455,333 Storm Sewer system 12,848,335 11,692,730 12,848,335 11,692,730 Total 89,098,816$ 77,455,505$ 105,405,934$ 101,666,450$ 194,504,750$ 179,121,955$ *assets of the City's internal service funds included in governmental activities CITY OF KALISPELL'S CAPITAL ASSETS (NET OF DEPRECIATION)* Major Governmental funds capital asset events during the fiscal year 2022 included the following: Vehicles and other equipment with a cost basis of $513,548 were added. This included two (2) new police vehicles, a street de-icer truck, a street dump truck with plow, a parks toolcat and riding paint striper. Information Technology added equipment valued at $41,967. Paved/patched 5 alleys at a total cost of $43,659. Replaced 2,754’, or about 9.18 blocks ofsidewalks valued at $163,793. Disposed assets with a cost basis of $295,326. This included three a police vehicle with a cost basis of almost $34,185, a street department truck, street sweeper, and de-icer and (5)parks vehicles with a cost basis of $70,331. Finished construction of the Parkline Core Trail project. Major Business-type funds capital asset events during the fiscal year 2022 included the following: Water Meter System Upgrade at a cost of $419,594. Wastewater treatment equipment upgrade at a cost of $109,484. 1,204 linear feet of new stormwater main was installed valued at $637,064.   6,822 linear feet of new stormwater main valued at $666,239 was installed and contributed to the City by developers. Disposed fully depreciated assets of the sewer department with a cost basis of $175,660. 26 Purchased new sewer Vactor truck at a cost of $72,843. Purchased a new sewer pickup truck with plow at a cost of $31,284. Purchased new freightliner for sewer at a cost of $180,603. 9,486 linear feet of new water main valued at $667,407 was installed and contributed to theCity by developers. 7,669 linear feet of new sewer main valued at $890,670 was installed and contributed to theCity by developers. Additional information on capital assets can be found in the notes of the basic financial statements (Note D. Capital Assets pages 47 -49). Debt At the end of fiscal year 2022, the City of Kalispell had total long-term debt outstanding of $29,541,645. Of this amount, $4,200,000 represents bonds secured solely by specific revenue sources (i.e., revenue bonds). The remainder consists of $23,347,648 outstanding on State Revolving Fund loans for water and sewer infrastructure. There is also $1,069,154 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 $924,844 of loans for the purchase of other property and equipment ($518,387) and for gap lending ($406,457). Governmental Business-type Total activities activities 2022 2021 2022 2021 2022 2021 General obligation bonds -$ 230,000$ -$ -$ -$ 230,000 Revenue/Urban Renewal bonds 4,200,000 4,405,000 -$ -$ 4,200,000$ 4,405,000 SRF loans 490,320 516,893 22,857,328 23,922,827 23,347,648 24,439,720 Assessments 1,069,154 1,315,450 1,069,154 1,315,450 Contract debt/loans 924,844 1,105,282 - - 924,844 1,105,282 Total 6,684,318$ 7,572,625$ 22,857,328$ 23,922,827$ 29,541,645$ 31,495,452$ CITY OF KALISPELL'S OUTSTANDING DEBT Other obligations of the City of Kalispell include accrued vacation pay and sick leave (compensated absences, $2,098,548, OPEB liability ($4,517,656), and pension liability ($9,989,173). 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 50-54). ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES The City’s elected and appointed officials considered many factors when adopting the fiscal year 2022 budget, before imposing tax rates and fees of the business-type activities. Some of these factors include: capital improvements identified in the City’s Capital Improvement Program, inflation rates, the City’s collective bargaining units, the local economy, national and world events (pandemic), and the citizen’s ability to pay. Inflation rates, as well as interest rates have a significant impact on the cost of City projects. For the year, inflation rates continued to increase. The Bureau of Labor Statistics of the U.S. Department of Labor reported the Consumer Price Index-Unadjusted for all items at a decline of 0.2 percent in June of 2022. The index for all items 27 less food and energy decreased .1 percent for the 12 months ending June of 2022. The food indexed increased .3 percent, and the energy index retreated 5 percent. 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. BASIC FINANCIAL STATEMENTS 28 GOVERNMENT – WIDE FINANCIAL STATEMENTS 29 City of Kalispell, Montana Statement of Net Position June 30, 2022 Governmental Activities Business-type Activities Total Downtown BID Tourism BID ASSETS Current assets: Cash and investments $28,896,847 $27,699,639 $56,596,486 $71,116 $363,773 Taxes and assessments receivable, net 2,035,412 78,471 2,113,883 4,828 Accounts receivable 403,815 696,870 1,100,685 1,000 Notes, loans, and contracts receivable 2,348,588 688,701 3,037,289 Due from other governments 801,397 207,072 1,008,469 8,245 Prepaid expenses 87,589 70,500 158,089 Inventories -71,011 71,011 Due from other 4,840 - 4,840 Lease Receivable -36,132 36,132 Contracts Receivable 80,146 - 80,146 Total current assets 34,658,634 29,548,396 64,207,030 84,189 364,773 Noncurrent assets: Restricted cash and investments 2,812,396 12,120,363 14,932,759 Capital assets - land 3,743,166 354,021 4,097,187 Capital assets - construction in progress 231,824 5,558,484 5,790,308 Capital assets - net of depreciation 85,123,824 99,493,429 184,617,253 95,279 Lease Receivable -2,222,038 2,222,038 Right of use asset, net 18,464 110,233 128,697 Total noncurrent assets 91,929,674 119,858,568 211,788,242 - 95,279 Total Assets 126,588,308 149,406,964 275,995,272 84,189 460,052 DEFERRED OUTFLOWS OF RESOURCES Pensions 3,191,005 488,427 3,679,432 OPEB 806,280 86,611 892,891 Total deferred outflows of resources 3,997,285 575,038 4,572,323 - - LIABILITIES Current liabilities: Accounts payable 1,263,875 663,602 1,927,477 2,989 31,087 Accrued payroll 613,888 151,665 765,553 Revenues collected in advance 6,094,354 - 6,094,354 Operating debt 28,034 - 28,034 Capital debt 606,316 1,799,734 2,406,050 Compensated absences payable 1,237,093 200,136 1,437,229 Due to Contractor - Retainage 49,301 35,727 85,028 Due to P/R Benefit Providers 344,189 - 344,189 Deposits Payable 2,435,824 - 2,435,824 Lease Purchase 7,685 3,789 11,474 Total current liabilities 12,680,559 2,854,653 15,535,212 2,989 31,087 Noncurrent liabilities: Deposits payable 400 34,676 35,076 Operating debt 378,423 - 378,423 Capital debt 5,671,545 21,057,594 26,729,139 Compensated absences payable 466,766 194,552 661,318 Total OPEB liability 2,716,579 292,077 3,008,656 Net pension liability 8,161,041 1,828,132 9,989,173 Lease Purchase 10,779 106,444 117,223 Total noncurrent liabilities 17,405,533 23,513,475 40,919,008 - - Total Liabilities 30,086,092 26,368,128 56,454,220 2,989 31,087 DEFERRED INFLOWS OF RESOURCES Pensions 3,496,686 771,243 4,267,929 OPEB 2,227,698 239,299 2,466,997 Leases -2,258,170 2,258,170 Total deferred inflows of resources 5,724,384 3,268,712 8,993,096 - - NET POSITION Net investment in capital assets 82,820,953 82,548,606 165,369,559 Restricted for:- General government 55,822 55,822 Public safety 4,989,143 4,989,143 Public works 6,136,951 6,136,951 Culture & recreation 2,640,886 2,640,886 Housing & community development 3,975,435 3,975,435 Debt service 1,128,306 1,111,385 2,239,691 Replacement and depreciation -525,804 525,804 Capital projects -10,083,174 10,083,174 Other Purposes -400,000 400,000 Unrestricted (6,972,378)25,676,193 18,703,815 81,200 428,965 Total net position $94,775,119 $120,345,162 $215,120,281 $81,200 $428,965 The notes to the financial statements are an integral part of this statement. Primary Government Component Units 30 City of Kalispell, MontanaStatement of ActivitiesFor the Fiscal Year EndedJune 30, 2022 Component Units Expenses Indirect Expense Allocation Charges for Services Operating Grants and Contributions Capital Grants and Contributions Governmental Activities Business-Type Activities Total Downtown BID Tourism BIDFunctions/Programs Primary government: Governmental activities: General government $3,482,225 $251,920 $1,376,830 $582,678 $2,758,903 $984,266 $984,266 Public safety 12,424,090 138,919 3,764,023 1,356,671 33,951 (7,408,364) (7,408,364) Public works 5,867,360 379,732 2,898,061 82,324 10,527,126 7,260,419 7,260,419 Culture and recreation 2,568,013 85,235 1,375,248 64,168 - (1,213,832) (1,213,832) Housing and community development 3,071,823 3,840 52,945 69,584 - (2,953,134) (2,953,134) Debt service - interest and other charges 262,187 - - - (262,187) (262,187) Miscellaneous 363,801 - - - (363,801) (363,801) Total governmental activities 28,039,499 859,646 9,467,107 2,155,425 13,319,980 (3,956,633) (3,956,633) Business-type activities: Water 3,306,882 353,236 5,263,888 64,365 803,128 $2,471,263 2,471,263 Sewer 6,332,280 554,216 12,001,567 67,016 1,556,908 6,738,995 6,738,995 Solid Waste 985,887 205,492 1,117,989 22,174 - (51,216) (51,216) Total business-type activities 10,625,049 1,112,944 18,383,444 153,555 2,360,036 9,159,042 9,159,042 Total primary government $38,664,548 $1,972,590 $27,850,551 $2,308,980 $15,680,016 (3,956,633) 9,159,042 5,202,409 Component units: Downtown BID $116,728 $3,859 $119,278 $7,500 $6,191 Tourism BID 645,216 5,000 631,500 (18,716) Total component units $761,944 $8,859 $750,778 $7,500 $- $6,191 $(18,716) General revenues: Property taxes for general purposes 10,489,024 - 10,489,024 Unrestricted federal/state shared revenues 3,069,588 - 3,069,588 Unrestricted investment earnings 210,249 276,681 486,930 351 1,526 Miscellaneous 299,566 - 299,566 Gas Tax 919,184 - 919,184 Video Poker Apportionment 58,525 - 58,525 276,078 - 276,078 Transfers - net - - - Special items - net - 400,000 400,000 Total general revenues, transfers, and special items 15,322,214 676,681 15,998,895 351 1,526 Change in net position 11,365,581 9,835,723 21,201,304 6,542 (17,190) Net position - beginning 83,409,538 110,509,545 193,919,083 74,658 414,458 Restatements - (106) (106) 31,697 Net position - beginning restated 83,409,538 110,509,439 193,918,977 74,658 446,155 Net position - ending $94,775,119 $120,345,162 $215,120,281 $81,200 $428,965 The notes to the financial statements are an integral part of this statement Primary Government Net (Expense) Revenue and Changes in Net Position Program Revenues 31 GOVERNMENTAL FUND FINANCIAL STATEMENTS MAJOR GOVERNMENTAL FUNDS General Fund – The City’s primary operating fund and accounts for the financial operations of the City not accounted for in any other fund. Principal sources of revenue are property taxes, state and local shared revenue, charges for services, and fines and forfeitures. Principal expenditures are for public safety. Westside TIF - Accounts for monies received and expended for approved projects in this TIF district. Street Maintenance – Accounts for special assessment revenues levied, received, and expended to keep streets clean, safe, and drive-able. American Recovery Act – Accounts for funds received by the City through this Act for approved City infrastructure projects. 32 City of Kalispell, Montana Balance Sheet Governmental Funds June 30, 2022 2188 2500 4393 General Fund Westside TIF Street Maintenance American Recovery Act Grant Total Nonmajor Governmental Funds Total Governmental Funds ASSETS Current assets $7,263,438 $678,630 $ 3,583,069 $6,142,606 $10,367,516 $ 28,035,259 204,145 1,369 121,052 - 1,708,846 2,035,412 - - - - 403,815 403,815 - 456,553 - - 1,892,035 2,348,588 59,410 - - - - 59,410 285,273 9,375 131,685 - 375,064 801,397 16,246 - 18,728 - 42,204 77,178 4,060 - - - 780 4,840 Cash and investments Taxes and assessments receivable, net Accounts receivable Notes and loans receivable Due from other funds Due from other governments Prepaid expenses Due from other Contracts Receivable 31,656 - - - - 31,656 Total current assets 7,864,228 1,145,927 3,854,534 6,142,606 14,790,260 33,797,555 Noncurrent assets Restricted cash and investments - - - - 2,812,396 2,812,396 Advances to other funds 1,300,000 - - - - 1,300,000 Total noncurrent assets 1,300,000 - - - 2,812,396 4,112,396 Total assets 9,164,228 1,145,927 3,854,534 6,142,606 17,602,656 37,909,951 LIABILITIES Current liabilities Accounts payable 374,102 436,167 83,024 48,252 278,064 1,219,609 Accrued payroll 375,876 2,835 47,832 - 160,314 586,857 Due to other funds - - - - 59,410 59,410 Revenues collected in advance - - - 6,094,354 - 6,094,354 Advances from other funds - - - - 1,300,000 1,300,000 Due to Contractor - Retainage - - - - 49,301 49,301 Due to P/R Benefit Providers 344,189 - - - - 344,189 Deposits Payable 2,435,824 - - - - 2,435,824 Total current liabilities 3,529,991 439,002 130,856 6,142,606 1,847,089 12,089,544 Noncurrent liabilities Deposits payable - - 400 - - 400 Total noncurrent liabilities - - 400 - - 400 Total liabilities 3,529,991 439,002 131,256 6,142,606 1,847,089 12,089,944 204,145 1,369 121,052 - 1,708,847 2,035,413 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - deferred taxes and assessments Unavailable revenue - deferred accounts receivable - - - - 397,440 397,440 Total deferred inflows of resources 204,145 1,369 121,052 - 2,106,287 2,432,853 Major Governmental Funds 33 City of Kalispell, Montana Balance SheetGovernmental Funds June 30, 2022 2188 2500 4393 General Fund Westside TIF Street Maintenance American Recovery Act Grant Total Nonmajor Governmental Funds Total Governmental Funds Major Governmental Funds FUND BALANCES Nonspendable Non current portion of notes, loans, contracts receivable 1,300,000 - - - - 1,300,000 Prepaid expenses 16,246 - 18,728 - 42,204 77,178 Restricted for: General government - - - - 55,822 55,822 Public safety - - - - 4,989,143 4,989,143 Public works - - 3,583,498 - 2,553,453 6,136,951 Culture & recreation - - - - 2,640,886 2,640,886 Housing & community development - 705,556 - - 3,269,879 3,975,435 Debt service - - - - 1,128,306 1,128,306 Assigned to: General government 53,073 - - - - 53,073 Public safety 23,542 - - - - 23,542 Capital projects 550,000 - - - - 550,000 Miscellaneous 787,545 - - - - 787,545 Unassigned 2,699,686 - - - (1,030,413) 1,669,273 Total fund balances $5,430,092 $705,556 $3,602,226 $- $13,649,280 $23,387,154 Total liabilities, deferred inflows of resources and fund balance $9,164,228 $1,145,927 $3,854,534 $6,142,606 $17,602,656 $37,909,951 The notes to the financial statements are an integral part of this statement. 34 City of Kalispell, Montana Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2022 Total fund balances - governmental funds 23,387,154 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Land 3,743,166 Construction in progress 231,824 Depreciable capital assets (net)84,889,685 88,864,675 Taxes and Assessments receivable that will be collected but are not available soon enough to pay for current-period expenditures are deferred inflows of resources in the funds.2,035,413 Internal service funds are used by management to to account for any activity that provide goods or services to other funds, departments, or agencies of the primary government and its component units, or to other governments, on a cost-reimbursement basis. The percentage of assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the internal service funds attributable to governmental activities are reported on the Statement of Net Position.1,045,018 Long-term liabilities (current and non-current portions) are not due and payable in the current period and therefore are not reported as liabilities in the funds. Operating debt (406,457) Capital debt (6,277,861) Compensated absences payable (1,665,546) OPEB liability (2,716,579) Pension liability (8,161,041) (19,227,483) Employer contributions to a plan during the reporting period not recognized as of the plan's measurement date and the proportionate share of collective plan expense that is applicable to future periods are reported as deferred outflows of resouces on the Statement of Net Position. Pensions 3,191,006 OPEB 806,280 The proportionate share of reductions to collective plan expense that are applicable to future periods is reported as deferred inflows of resouces on the Statement of Net Position. Pensions (3,496,686) OPEB (2,227,698) Ambulance receivables that will be collected but are not available soon enough to pay for current-period expenditures are deferred inflows of resources in the funds.397,440 Total net position - governmental activities $ 94,775,119 The notes to the financial statements are an integral part of this statement. 35 City of Kalispell, Montana Statement of Revenues, Expenditures, and Changes in Fund BalancesGovernmental Funds For Fiscal Year Ended June 30, 2022 2188 2500 4393 General Fund Westside TIF Street Maintenance American Recovery Act Grant Total Nonmajor Governmental Funds Total Governmental Funds REVENUES Taxes and assessments $6,448,846 $- $2,830,453 $- $6,089,318 $15,368,617 Licenses and permits 225,000 - 2,713 - - 227,713 Intergovernmental 3,094,803 - - 199,385 3,391,157 6,685,345 Charges for services 1,117,235 - 5,498 - 3,602,829 4,725,562 Fines and forfeitures 417,159 - - - - 417,159 Miscellaneous 44,863 20,607 23,429 - 121,116 210,015 Investment earnings 67,453 18,855 17,359 - 77,470 181,137 Total revenues 11,415,359 39,462 2,879,452 199,385 13,281,890 27,815,548 EXPENDITURES Current: General government 2,710,445 - - - - 2,710,445 Public safety 8,534,848 - - - 2,362,277 10,897,125 Public works 71,504 - 2,218,582 - 1,084,825 3,374,911 Culture and recreation 21,600 - -- 2,205,128 2,226,728 Housing and community development 108,550 71,866 - - 2,860,994 3,041,410 Miscellaneous 363,801 - - - - 363,801 Debt service - principal 45,636 - 26,573 - 820,263 892,472 Debt service - interest and other charges 5,531 - 12,758 - 242,560 260,849 Capital outlay 509,439 4,448,724 370,376 199,385 227,521 5,755,445 Total expenditures 12,371,354 4,520,590 2,628,289 199,385 9,803,568 29,523,186 0 Excess (deficiency) of revenues over (under) expenditures (955,995) (4,481,128) 251,163 - 3,478,322 (1,707,638) OTHER FINANCING SOURCES (USES) Transfers in 1,113,856 3,521,532 - - 614,842 5,250,230 Transfers (out)(1,320,000) - (25,842) - (3,904,388) (5,250,230) Proceeds from general long term debt - - - - 4,165 4,165 Total other financing sources (uses)(206,144) 3,521,532 (25,842) - (3,285,381) 4,165 Net change in fund balance (1,162,139) (959,596) 225,321 - 192,941 (1,703,473) Fund balances - beginning 6,592,231 1,665,152 3,376,905 - 13,456,339 25,090,627 Fund balances - ending $5,430,092 $705,556 $3,602,226 $- $13,649,280 $23,387,154 The notes to the financial statements are an integral part of this statement. Major Governmental Funds 36 City of KalispellReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Fundsto the Statement of Activities For the Fiscal Year EndedJune 30, 2022 Net change in fund balances - total governmental funds (1,703,473) Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital assets purchased - capital outlay 5,755,445 Depreciation expense (4,479,148) 1,276,297 In the Statement of Activities, the acquisition value of capital asset donations is recognized as revenue. Governmental funds do not recognize these revenues: Acquisition value of donated capital assets 10,327,740 Revenues reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in governmental funds: Tax and assessment revenue (233,462) The change in compensated absences payable is reported as an increase or decrease to expense on the Statement of Activities, but is not recognized as an increase or decrease to expenditures on the Statement of Revenues, Expenditures and Changes in Fund Balance: Change in compensated absence liability (20,512) Repayment of debt principal during the reporting period consumes current financial resources and are recognized as expenditures in the governmental funds, but the repayment of long-term debt principle balances reduces the liability in the Statement of Net Position: Long-term debt principal payments 892,472 Long term debt incurred during the reporting period provide current financial resources to governmental funds and are recognized as an inflow, an other financing source, in the Statement of Reveneus, Expenditures, and Changes in Fund Balances. Long term debt incurred is recognized as an increase in liabilities in the Statement of Net Position. Proceeds from general long-term debt (4,165) Internal service funds are used by management to to account for any activity that provides goods or services to other funds, departments, or agencies of the primary government and its component units, or to other governments, on a cost-reimbursement basis.. The percentage of net revenue of the internal service funds attributable to governmental activities is reported on the Government-Wide Statement of Activities. Revenues and expenditures attributable to governmental funds are not reported on the Statement of Revenues, Expenditures and Changes in Fund Balance.334,013 The change in other post employment benefits is reported as an expense on the Statement of Activities, but is not reported as an expenditure on the Statement of Revenues, Expenditures and Changes in Fund Balance:(161,992) Employer contributions made to pension plans during the reporting period consume current financial resources, thus are reported as expenditures in the Statement of Revenues, Expenditures, and Changes in Fund Balances. However, only the amount of pension expense recognized by the plan during the measurement period is reported as expenses in the Statement of Activities.(1,061,936) The difference between on-behalf contributions to fund pension liabilities recognized as revenue during the reporting period in the Statement of Revenues, Expenditures, and Changes in Fund Balances and on-behalf contributions recognized during the measurement period increases (decreases) operating grants and contributions reported on the Statement of Activities.1,600,185 Revenues from ambulance services reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in governmental funds:70,696 Capital contributions of infrastructure assets from homeowners are not current financial resources and therefore are not reported in governmental funs 49,718 Change in net position - Statement of Activities 11,365,581 The notes to the financial statements are an integral part of this statement. 37 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. 38 City of Kalispell, Montana Statement of Net Position Proprietary FundsJune 30, 2022 Governmental Activities 5210 5310 Water Sewer Total Nonmajor Enterprise Funds Total Enterprise Funds Internal Service Funds ASSETS Current assets Cash and investments $12,677,602 $13,603,786 $1,418,251 $27,699,639 $861,588 Taxes and assessments receivable, net - 53,212 25,259 78,471 - Accounts receivable 266,715 430,155 - 696,870 - Notes, loans, and contracts receivable 109,964 578,737 - 688,701 - Due from other governments 19,014 126,920 61,138 207,072 - Prepaid expenses 27,061 36,054 7,385 70,500 10,411 Inventories 71,011 - - 71,011 - Lease Receivable 36,132 - - 36,132 - Total current assets 13,207,499 14,828,864 1,512,033 29,548,396 920,489 Noncurrent assets Restricted cash and investments 1,656,241 10,464,122 - 12,120,363 - Capital assets - land 105,958 248,063 - 354,021 - Capital assets - construction in progress 1,803,164 3,755,320 - 5,558,484 - Capital assets - net of depreciation 34,665,317 64,254,776 573,336 99,493,429 234,139 Lease Receivable 2,222,038 - - 2,222,038 - Right of use asset, net - 110,233 - 110,233 18,464 Total noncurrent assets 40,452,718 78,832,514 573,336 119,858,568 252,603 Total assets 53,660,217 93,661,378 2,085,369 149,406,964 1,173,092 DEFERRED OUTFLOWS OF RESOURCES Pensions 204,732 213,165 70,530 488,427 - OPEB 37,502 49,109 - 86,611 - Total deferred outflows of resources 242,234 262,274 70,530 575,038 - LIABILITIES Current liabilities Accounts payable 454,280 193,553 15,769 663,602 44,266 Accrued payroll 47,100 81,712 22,853 151,665 27,031 Capital debt 345,320 1,824,323 - 2,169,643 - Compensated absences payable 63,957 97,223 38,956 200,136 30,319 Due to Contractor - Retainage 25,727 10,000 - 35,727 - Total current liabilities 936,384 2,206,811 77,578 3,220,773 101,616 Noncurrent liabilities Deposits payable 13,634 21,042 - 34,676 - Capital debt 3,820,685 16,867,000 - 20,687,685 - Compensated absences payable 64,043 99,795 30,714 194,552 7,994 Total OPEB liability 126,162 165,915 - 292,077 - Net pension liability 766,293 797,854 263,985 1,828,132 - Lease Purchase - 110,233 - 110,233 18,464 Total noncurrent liabilities 4,790,817 18,061,839 294,699 23,147,355 26,458 Total liabilities 5,727,201 20,268,650 372,277 26,368,128 128,074 DEFERRED INFLOWS OF RESOURCES Pensions 323,279 336,595 111,369 771,243 - OPEB 103,614 135,685 - 239,299 - Leases 2,258,170 - - 2,258,170 - Total deferred inflows of resources 2,685,063 472,280 111,369 3,268,712 - NET POSITION Net investment in capital assets 32,408,434 49,566,836 573,336 82,548,606 234,139 Debt service 227,273 884,112 - 1,111,385 - Replacement and depreciation - 525,804 - 525,804 - Capital projects 1,456,241 8,626,933 - 10,083,174 - Other Purposes - 400,000 - 400,000 - Unrestricted 11,398,239 13,179,037 1,098,917 25,676,193 810,879 Total net position $45,490,187 $73,182,722 $1,672,253 $120,345,162 $1,045,018 The notes to the financial statements are an integral part of this statement. Major Enterprise Funds Business-Type Activities 39 City of Kalispell, Montana Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds For Fiscal Year Ended June 30, 2022 Governmental Activities 5210 5310 Water Sewer Other Enterprise Funds Totals Internal Service Funds OPERATING REVENUES Charges for services $4,116,282 $7,031,831 $1,115,479 $12,263,592 $1,374,185 Miscellaneous revenues 271,252 87,812 2,510 361,574 3,371 Special assessments - 1,903,649 - 1,903,649 - On-behalf - pensions 64,365 67,016 22,174 153,555 - Lease Revenue 36,132 - - 36,132 - Total operating revenues 4,488,031 9,090,308 1,140,163 14,718,502 1,377,556 OPERATING EXPENSES Personal services 1,212,118 1,911,093 595,661 3,718,872 722,932 Supplies 109,983 274,719 132,549 517,251 393,527 Purchased services 455,824 1,198,219 68,524 1,722,567 449,311 Building materials 249,120 75,328 - 324,448 - Fixed charges 387,555 638,881 236,136 1,262,572 34,301 Loss/bad debt expense - - - - 13,420 Depreciation 1,136,294 2,306,374 158,509 3,601,177 59,643 Total operating expenses 3,550,894 6,404,614 1,191,379 11,146,887 1,673,134 Operating income (loss)937,137 2,685,694 (51,216) 3,571,615 (295,578) NON-OPERATING REVENUES (EXPENSES) Licenses/permits revenue - - - - 196,874 Intergovernmental revenue - - - - 430,000 Interest revenue 147,130 122,884 6,667 276,681 4,055 Debt service interest expense (109,224) (481,882) - (591,106) (1,338) Impact Fees 840,222 2,978,275 - 3,818,497 - Total non-operating revenues (expenses)878,128 2,619,277 6,667 3,504,072 629,591 Income (loss) before contributions, transfers, special & extraordinary items 1,815,265 5,304,971 (44,549) 7,075,687 334,013 Capital contributions 803,128 1,556,908 - 2,360,036 - Special items (revenue)- 400,000 - 400,000 - Change in net position 2,618,393 7,261,879 (44,549) 9,835,723 334,013 Net position - beginning 42,871,900 65,920,843 1,716,802 110,509,545 711,005 Restatements (106) - - (106) - Net position - beginning restated 42,871,794 65,920,843 1,716,802 110,509,439 711,005 Net position - ending $45,490,187 $73,182,722 $1,672,253 $120,345,162 $1,045,018 The notes to the financial statements are an integral part of this statement. Major Enterprise Funds Business-Type Activities 40 City of Kalispell, MontanaStatement of Cash FlowsProprietary Fund For Fiscal Year EndedJune 30, 2022 Governmental Activities 5210 5310 Water Sewer Total Nonmajor Enterprise Funds Total Enterprise Funds Internal Service Funds Cash Flows from Operating Activities: Cash received from customers $4,074,084 $ 8,777,852 $ 1,118,323 $ 13,970,259 $ 1,360,766 Cash received from miscellaneous sources 271,252 87,812 2,510 361,574 3,371 Cash paid to suppliers of goods and services (791,015) (2,180,669) (433,701) (3,405,385) (853,269) Cash paid to employees (1,115,450) (1,881,145) (590,919) (3,587,514) (720,005) Cash received (paid) from deposits (1,126) 21,042 - 19,916 - Net cash provided (used) by operating activities 2,437,745 4,824,892 96,213 7,358,850 (209,137) Cash Flows from Non-Capital and Related Financing Activities: Intergovernmental revenue received - - - - 430,000 Cash received from Charter Franchise Fees - - - - 196,873 Net cash provided (used) by non-capital and related financing activities - - - - 626,873 Cash Flows from Capital and Related Financing Activities: Principal paid on capital debt (345,320) (1,420,844) - (1,766,164) - Proceeds from capital debt - 1,100,666 - 1,100,666 - Interest paid on capital debt (109,224) (481,882) - (591,106) (1,338) Acquisition and construction of capital assets (2,677,213) (4,663,448) - (7,340,661) (49,198) Capital Contributions received 803,642 2,489,981 (4,293) 3,289,330 - Cash received from contractors - retainage 3,045 (60,482) - (57,437) - Cash received from impact fees 840,222 2,978,275 - 3,818,497 - Net cash provided (used) by non-capital and related financing activities (1,484,848) (57,734) (4,293) (1,546,875) (50,536) Cash Flows from Investing Activities: Interest on investments 147,130 122,884 6,667 276,681 4,055 Change in Current and Noncurrent portions of notes, loans, and contracts receivable 18,920 23,189 - 42,109 (419) Net cash provided (used) by investing activities 166,050 146,073 6,667 318,790 3,636 Net increase (decrease) in cash and cash equivalents 1,118,947 4,913,231 98,587 6,130,765 370,836 Cash and cash equivalents as of: June 30, 2021 13,214,896 19,154,677 1,319,664 33,689,237 490,752 June 30, 2022 $14,333,843 $ 24,067,908 $ 1,418,251 $ 39,820,002 $ 861,588 Displayed on Statement of Net Position-Proprietary Funds as: Cash and investments $12,677,602 $ 13,603,786 $ 1,418,251 $ 27,699,639 $ 861,588 Restricted cash and investments 1,656,241 10,464,122 - 12,120,363 - Total at end of year $14,333,843 $ 24,067,908 $ 1,418,251 $ 39,820,002 $ 861,588 Reconciliation of operating income to net cash provided by operating activity: Operating income (loss)$928,691 $ 2,676,900 $ (54,126) $ 3,551,465 $ (295,578) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense 1,136,294 2,306,374 158,509 3,601,177 59,643 Change in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: - (2,604) 2,675 71 - (78,330) (155,024) 169 (233,185) - - - 1 1 175 11,085 - - 11,085 - (1,126) 21,042 - 19,916 - 400,382 6,478 3,507 410,367 23,695 8,995 20,454 2,826 32,275 1,478 20,284 24,084 (11,303) 33,065 1,450 (35,283) (45,502) - (80,785) - (287,191) (402,605) (107,783) (797,579) - 54,129 80,980 20,750 155,859 - 237,188 238,493 80,988 556,669 - 6,536 8,560 - 15,096 - 36,091 47,262 - 83,353 - $2,437,745 $ 4,824,892 $ 96,213 $ 7,358,850 $ (209,137) (Increase) decrease in assessments receivable (Increase) decrease in accounts receivable (Increase) decrease in prepaid items (Increase) decrease in inventories Increase (decrease) in customer deposits Increase (decrease) in accounts payable Increase (decrease) in accrued payables Increase (decrease) in compensated absences payable Increase (decrease) in OPEB liability Increase (decrease) in net pension liability (Increase) decrease in deferred outflows-pension Increase (decrease) in deferred inflows-pension (Increase) decrease in deferred outflows-OPEB Increase (decrease) in deferred inflows-OPEB Net cash provided (used) by operating activities The notes to the financial statements are an integral part of this statement. Major Enterprise Funds Business-type Activities 41 FIDUCIARY FUND FINANCIAL STATEMENTS CUSTODIAL FUNDS Custodial Funds – used to account for assets held by the City as an agent for individuals, private organizations, other governments, and/or other funds. 42 City of Kalispell, Montana Statement of Changes in Fiduciary Net Position Fiduciary Funds June 30, 2022 Custodial Funds ASSETS Cash and cash equivalents $12,535 Total assets 12,535 NET POSITION Restricted for: Individuals, organizations, and other governments 12,535 Total net position $12,535 The notes to the financial statements are an integral part of this statement. 43 City of Kalispell, Montana Statement of Changes in Fiduciary Net Position Fiduciary Funds June 30, 2022 Custodial Funds Change in net position - Net position - beginning - Restatements 12,535 Net position - beginning restated 12,535 Net position - ending $12,535 The notes to the financial statements are an integral part of this statement. 44 NOTES TO THE FINANCIAL STATEMENTS 45 City of Kalispell, Montana Notes to Financial Statements June 30, 2022 46 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, 2022, 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, 2022, the City implemented GASB Statement 87, Leases. This Statement defines a lease and establishes a single model for lease accounting based on the foundation principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use the lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about a governments’ leasing activities. Financial Reporting Entity In determining the financial reporting entity, the City complies with the provisions for GASB statement No. 14, The Financial Reporting Entity, and includes all component units of which the City appointed a voting majority of the units’ board; the City is either able to impose its will on the unit or a financial benefit or burden relationship exists. Primary Government The City of Kalispell is a political subdivision of the State of Montana governed by an elected Mayor and Council duly elected by the registered voters of the City. The City utilizes the City Manager form of government. The City is considered a primary government because it is a general-purpose local government. Further, it meets the following criteria: (a) It has a separately elected governing body (b) It is legally separate and (c) It is fiscally independent from the State and other local governments. The accompanying financial statements present the primary government and entities for which the government is considered financially accountable (component units). These financial statements include all funds, agencies, boards, commissions, and authorities, which meet the criteria for inclusion in the City’s financial report. These criteria include financial accountability, appointment of a majority of the secondary government and the financial benefit or burden derived by the primary government from a secondary government. City of Kalispell, Montana Notes to Financial Statements June 30, 2022 47 Discretely Presented Component Units Discretely presented component units are separate legal entities that meet the component unit criteria described above but do not meet the criteria for blending. The City’s discretely presented component units, the Downtown Business Improvement District and the Tourism Business Improvement District are legally separate organizations of the City, but the City is financially accountable. Neither the Business Improvement District nor the Tourism Business Improvement District issue financial statements separate from the City of Kalispell. The City reports the two component units in separate columns to emphasize that they are legally separate from the City and from each other. Downtown Business Improvement District On April 3, 2017, by resolution 5801, the City created the Downtown Business Improvement District (BID). The Mayor and City Council appoint the Board of Directors. The City is able to impose its will on the BID as it is authorized to levy assessments to support the activities of the BID, and approves their annual budget. The purpose of said Business Improvement District is to promote the health, safety, prosperity, security and general welfare of the inhabitants of the City of Kalispell and the proposed district and appears to be of special benefit to the property within the District. The District boundaries are roughly 3rd Avenue East to 3rd Avenue West between Center Street and 5th Street South. Publicly owned property and owner-occupied single-family dwellings are exempt from the assessments related to the District. Tourism Business Improvement District On May 3, 2010, by resolution 5425, the City created the Tourism Business Improvement District (TBID). The Mayor with the approval of the City Council appointed seven owners of property within the district to act as the Board of Trustees of the District. The City is able to impose its will on the TBID as it is authorized to levy assessments to support the activities of the TBID, and approves their annual budget. The purpose of said Tourism Business Improvement District is to promote the health, safety, prosperity, security and general welfare of the inhabitants of the City of Kalispell and the proposed district and appears to be of special benefit to the property within the District. The District is made up of those properties within the corporate limits of the City of Kalispell with five or more rooms providing overnight stays for transient patrons at its business. Basis of Presentation, Measurement Focus, and Basis of Accounting Government-wide Financial Statements The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these government-wide financial statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported 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 City of Kalispell, Montana Notes to Financial Statements June 30, 2022 48 segment. The general government function of the City includes expenses that are, in essence, indirect expenses of other functions. These indirect 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 as general revenues. Indirect expenses reported in the statement of activities are allocated to the different functions of the City. These indirect expenses include administration, data processing, and central garage. The administrative cost allocation is based on each functions’ percentage of total City expenses. Information Technology is allocated based approximately on that function’s 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 regarding inter-fund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal service fund financial statements have been eliminated; however, interfund services provided and used are not eliminated in the process of consolidation. Interfund services provided and used are not eliminated in the process of consolidation. Measurement Focus and Basis of Accounting On the government-wide Statement of Net Position and the Statement of Activities, both governmental and business-type activities are presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred, regardless of the timing of the cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. The City generally applies restricted resources to expenses incurred before using unrestricted resources when both restricted and unrestricted net assets are available. The City has chosen not to accrue the interest payable of general long-term debt at year-end. This practice results in interest expense reported for governmental activities on the statement of activities to equal the interest expenditure on the statement of revenues, expenditures, and changes in fund balance. Although, this is contrary to full accrual accounting, the City feels that it is immaterial in the presentation of its financial statements. City of Kalispell, Montana Notes to Financial Statements June 30, 2022 49 Fund Financial Statements Basis of Presentation The financial records of the City are organized into funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. Funds are organized into three categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. Each major fund is displayed in a separate column in the governmental or proprietary funds statements. All the remaining funds are aggregated and reported in a single column as non-major funds. A fund is considered major if it is the primary operating fund of the City (General fund) or meets the following criteria: a.Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type; and b.Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental orenterprise funds are at least 5 percent of the corresponding total for all governmental and enterprise funds combined. Measurement focus and Basis of Accounting Governmental funds are used to account for the City’s general government activities. Governmental fund types use the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual, (i.e., when they are “measurable and available”). “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The City considers all revenues available if they are collected within 60 days after year-end. Expenditures are recorded when the related fund liability is incurred except for un-matured interest on general long-term debt which is recognized when due, and certain compensated absences and claims and 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. City of Kalispell, Montana Notes to Financial Statements June 30, 2022 50 Major Governmental Funds The City reports the following major governmental funds: The General Fund is always a major fund. This is the City’s primary operating fund, and it accounts for all financial resources of the City except those required to be accounted for in other funds. The Westside TIF (special revenue) fund was created with the intent to eliminate blight and encourage redevelopment in the West Side Urban Renewal – Core Area TIF district. Tax revenue is the main source of revenue for this fund. The Street Maintenance Fund (special revenue) fund was established to account for the repairs and other costs incurred in the maintenance of the City’s streets. An assessment on the City of Kalispell’s taxpayers is the main source of revenue for this fund. The American Recovery Act Infrastructure (capital project) fund was established to account for Federal and State dollars received as part of the American Recovery Act. These grant funds will be used with local water and sewer fund dollars for the construction cost associated with allowed infrastructure projects. Proprietary funds are accounted for using the accrual basis of accounting. These funds account for operations that are primarily financed by user charges. The flow of economic resources 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 fund’s principal ongoing operations. The principal operating revenues for enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. Major Proprietary Funds The City reports the following major proprietary funds: The Water Fund accounts for the activities of the City’s water distribution operations. The Sewer Fund accounts for the activities of the City’s sewer collection and treatment operations and includes the storm sewer system. City of Kalispell, Montana Notes to Financial Statements June 30, 2022 51 Additionally, the City reports the following fund types: Internal Service. These funds account for the financing of goods and services provided by one department to other departments on a cost reimbursement basis. These funds account for the City’s fleet repair and maintenance (Central Garage) and provide technology systems and a means to distribute public information (Information Technology) to City Staff for their respective provisions of services to the City of Kalispell. Eliminations have been made to minimize the double accounting of internal activities. The City’s policy for internal service elimination is to eliminate amounts related to overhead and indirect expenditures and not services provided. Assets of the internal service funds are allocated to the governmental-type funds and the business-type funds based on which fund type benefits the most from its services. Accordingly, the Information Technology and Central Garage funds’ assets are included with the governmental activities. All Fiduciary funds reported account for assets held by the City of Kalispell in a trustee capacity (custodial fund). The custodial fund does not present results of operations or have a measurement focus. Agency funds are accounted for using the accrual basis of accounting. The Kalispell Police Department (KPD) Evidence custodial fund accounts for assets that the City holds as evidence but will be returned to the owner when it is no longer required as evidence. 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 on City deposits is distributed to the appropriate funds utilizing a formula based on the average balance of cash and investments of each fund. Montana State statutes authorize the City to invest in interest-bearing savings accounts, certificates of deposits, and time deposits insured up to $250,000 by the Federal Deposit Insurance Corporation or fully collateralized, U.S. government and U.S. agency obligations and repurchase agreements where there is a master repurchase agreement and collateral held by a third party. 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. City of Kalispell, Montana Notes to Financial Statements June 30, 2022 52 2.Receivables Between Funds Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either interfund receivables/payables (i.e., the current portion of interfund loans) or advances to/from other funds (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as due to/from other funds. Advances between funds are offset by a fund balance reserve account in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources. Taxes Property tax levies are set within forty-five days of the State providing shared revenue figures, in connection with the budget process. Real property (and certain attached personal property) taxes are billed within ten days after the third Monday in October and are due in equal installments on November 30 and the following May 31. After those dates, they become delinquent, and a lien is filed upon the property. After three years, the City may exercise the lien and take title to the property. Special assessments are billed in two equal installments due November 30 and the following May 31. Personal property taxes (other than those billed with real estate) are generally billed no later than the second Monday in July (normally in May or June), based on the prior November’s levies. Personal property taxes, other than mobile homes, are due thirty days after billing. Mobile home taxes are billed in two halves, the first due thirty days after billing: the second due September 30. The tax billings are considered past due after the respective due dates 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. 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 $490,415 at June 30, 2022. Ambulance accounts receivable $891,664 Times allowance percentage 55% @ June 30, 2022 $490,415 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, 2022: Water $ 20,460 Sewer $ 35,204 City of Kalispell, Montana Notes to Financial Statements June 30, 2022 53 Lease Receivables The following are lease receivables to the City of Kalispell on June 30, 2022. For Fiscal Year Ended Receivable Beginning Balance Principal Interest Total Receivable Ending Balance 2022 2,294,302$ 36,132$ 68,342$ 104,474$ 2,258,170$ 2023 2,258,170$ 40,409$ 67,200$ 107,609$ 2,217,761$ 2024 2,217,761$ 44,908$ 65,926$ 110,834$ 2,172,853$ 2025 2,172,853$ 49,643$ 64,514$ 114,157$ 2,123,210$ 2026 2,123,210$ 54,629$ 62,957$ 117,586$ 2,068,581$ 2027 2,068,581$ 56,054$ 65,060$ 121,114$ 2,012,527$ 2028 2,012,527$ 65,370$ 59,376$ 124,746$ 1,947,157$ 2029-2045 1,947,157$ 1,947,157$ 538,164$ 2,481,506$ -$ Total 2,294,302$ 991,539$ 3,282,026$ Contracts The following are contracts payable to the City of Kalispell on June 30, 2022. FUND Source Amount General - Major Governmental Municipal Court 31,656$ Information Technology - Internal Service Franchise Fees-Charter (formerly Bresnan)48,490$ Total Governmental Activities 80,146$ Water - Major Proprietary Impact Fees 109,964$ Sewer - Major Proprietary Impact Fees 578,737$ Total Proprietary Funds 688,701$ Total City contracts receivable 768,847$ 3.Inventories and Prepaid Items Inventories for materials and supplies for governmental fund types are expended at the time of purchase. The amounts on hand in governmental funds are considered immaterial. Enterprise Fund inventory of materials and supplies are valued at cost and 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. On June 30, 2022, the City reported inventories and prepaid items in the following funds. FUND Purpose Amount FUND Purpose Amount General - Major Governmental Personnell 16,246 Water - Major Proprietary Health Insurance 27,061 Parks Health Insurance 21,091 Water - Major Proprietary Inventory 71,011 Ambulance Health Insurance 11,310 Sewer - Major Proprietary Health Insurance 36,054 Building Department Health Insurance 9,803 Solid Waste Health Insurance 7,385 Street Maintenance Health Insurance 18,728 Total Proprietary Funds 141,511 Total Governmental Funds 77,178 Total City inventory and prepaid items 229,100$ Information Technology - Internal Service Health Insurance 7,224 Central Garage - Internal Service Health Insurance 3,187 Total Internal Service 10,411 Total Governmental Activities 87,589 City of Kalispell, Montana Notes to Financial Statements June 30, 2022 54 4.Restricted Assets Certain proceeds of the City’s enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. When an expense is incurred for which both restricted and unrestricted net assets are available, it is the City’s policy to first apply the restricted resources. 5.Capital Assets Capital assets, which include property, plant, and equipment, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. The City defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of five years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value. More detailed information on the City’s streets and all capital assets can be found in Note 3, D. Capital Assets. Police vehicles are an exception despite a useful life less than 5 years. The City has determined that it is important to capitalize and depreciate these because the total cost, as a group, is substantial. The costs of normal maintenance and repairs that do not add to the value of the assets or extend asset lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related assets. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of fixed assets is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Depreciation has been provided for the property, plant and equipment of the City of Kalispell using the straight-line method. The useful lives of these assets have been estimated as follows: Buildings 20-50 years Improvements Other than buildings 10-50 yearsStreets 40 yearsMachinery, vehicles and equipment 3-20 years Water and Sewer lines, pump stations 10-50 yearsIntangible assets 5-50 years 6.Compensated Absences It is the City’s policy and state law to permit employees to accumulate a limited amount of earned but unused vacation benefits, which will be paid to employees upon separation from City service. Employees are allowed to accumulate and carry over a maximum of two times their annual accumulation of vacation. Any vacation leave time accumulated over this maximum carryover must be used within 90 days of the new calendar year. There is no restriction on the amount of sick leave that may be accumulated. Upon separation, employees are paid 100 percent of accumulated vacation and 25 percent of accumulated sick leave. In fiscal year 2012, the City of Kalispell began offering a voluntary employees beneficiary association (VEBA) City of Kalispell, Montana Notes to Financial Statements June 30, 2022 55 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 30 in the succeeding fiscal year (current). The City also assumes sick leave accumulated as of June 30 will remain accumulated in the succeeding fiscal year (long-term). 7. Long-Term Debt and Lease Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, or proprietary fund type statement of net position. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed when incurred. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether withheld from the actual debt proceeds received, are reported as debt service expenditures. The City of Kalispell, the lessee, has entered into lease agreements for the contractual right to use (RTU) another entity’s nonfinancial asset for a period of time (referred to as the lease term) in an exchange or exchange-like transaction. Under the provisions of GASB Statement No. 87-Leases, a lessee with lease contract(s) having a determined term or more than 12 months are required to report the present value of future lease principal payments for the right to use the nonfinancial assets as a lease asset, an intangible asset, which is amortized on a straight line basis over the lease term and as a lease payable in the government-wide and/or in the proprietary and fiduciary statement of net position. The City of Kalispell on September 7th, 2018 entered into a lease agreement with BNSF Railway Company to construct and maintain one pipeline across or along the rail corridor. The term of the lease purchase is 25 years with an interest rate of 3.00%. City of Kalispell, Montana Notes to Financial Statements June 30, 2022 56 Governmental Activities Fiscal Year Ended Principal Interest Total 2023 7,685$ 841$ 8,526$ 2024 3,745$ 516$ 4,261$ 2025 3,884$ 279$ 4,163$ 2026 3,150$ 73$ 3,223$ 2027 -$ -$ -$ 2028-2038 -$ -$ -$ Total 18,464$ 1,709$ 20,173$ At June 30, 2022, the principal and interest requirements to maturity are as follows; Business-Type Activities Fiscal Year Ended Principal Interest Total20233,789$ 3,307$ 7,096$ 2024 4,116$ 3,193$ 7,309$ 2025 4,458$ 3,070$ 7,528$ 2026 4,818$ 2,936$ 7,754$ 2027 5,195$ 2,792$ 7,987$ 2028-2038 87,857$ 17,508$ 105,365$ Totals:110,233$ 32,806$ 143,039$ At June 30, 2022, the principal and interest requirements to maturity are as follows; The total amount of lease assets and related accumulated amortization for the fiscal year end June 30, 2022, are as follows: Intangible right-to-use (RTU) lease assets being amortized: Lease asset-Intangible 29,431 113,712 Total lease assets being amortized 29,431$ 113,712$ Less accumulated amortization for: Lease asset-Intangible (10,967) (3,479) Total accumulated amortization (10,967)$ (3,479)$ Total lease asset value 18,464$ 110,233$ Governmental Activities Business- Type The City of Kalispell, the lessor, owns nonfinancial assets and has entered into lease agreement(s) giving another entity the contractual right to use (RTU) the City of Kalispell nonfinancial asset for a period of time (referred to as the lease term) in an exchange or exchange-like transaction. Under the provisions of GASB Statement No. 87-Leases, a lessor with lease contract(s) having a determined term of more than 12 months are required to report the present value of future principal lease payments as a lease receivable and a deferred inflow of resources-lease revenue in the fund level balance sheet and/or the statement of net position. Lease revenue is recognized as an inflow on a straight-line basis over the lease term. The City of Kalispell entered into a contract to lease a portion of its water tower space for a period of 25 years to the following: Lease Origination Date Interest Rate Lease Term Maturity Date Annual Payment Bullitt 7/1/2021 1.03%25 years 6/1/2045 30,236$ Sprint 7/1/2021 1.03%25 years 6/1/2045 29,572$ Verizon 7/1/2021 1.03%25 years 12/1/2041 44,666$ City of Kalispell, Montana Notes to Financial Statements June 30, 2022 8.Operating Leases The City leases certain office equipment from others under operating leases expiring in future years. The following are the terms of the outstanding leases: Lease Origination Date Interest Rate Lease Term Maturity Date Annual Payment Sharp MX5071 6/7/2022 4.20%4 years 6/7/2026 -$ Xerox C8155H2 7/1/2021 4.20%5 years 5/1/2026 1,758$ Xerox 7535 7/1/2021 4.20%5 years 7/1/2022 1,351$ Xerox C8070H 7/1/2021 4.20%5 years 6/15/2023 3,121$ Xerox C8170H 7/1/2021 4.20%5 years 4/12/2026 2,110$ B405 7/1/2021 1.5%4 years 4/1/2025 393$ C368 7/1/2021 0.25%5 years 2/23/2022 1,350$ MX4070 7/1/2021 4.20%4 years 11/1/2022 1,620$ MXC303 7/1/2021 4.20%4 years 5/9/2023 602$ 9.Net Position/Fund Balance Net position in the government wide and proprietary fund financial statements show the amount of the capital assets less any outstanding debt issued to fund them as “net investment in capital assets.” Restricted net position are those that have constraints placed on them by external parties or imposed by law or enabling legislation. The City implemented GASB Statement 54 for fiscal year 2011. As a result, the classifications for fund balance now used for governmental funds are reported in two general classifications, non-spendable and spendable: Non-spendable represents the portion of fund balance that is not in spendable form such as inventories and prepaids, and, in the general fund, long-term notes and loans receivable. Spendable fund balance is further categorized as restricted, committed, assigned, and unassigned. Restricted fund balance contains balances that can be spent only for the specific purposes stipulated by external parties or through enabling legislation. External parties include grantors, debt covenants, votes, and laws and regulations of other governments. Committed fund balance includes amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority, the City Council. The City Council formally adopts a Resolution to establish, modify, or rescind a fund balance commitment. Assigned fund balances are intended to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or committed. Fund balances are assigned by the governing body. The City Council has the authority to express assignments in the General fund. In governmental funds other than the general fund, assigned fund balance represents the remaining amount that is not restricted or committed. Also included in the assigned fund balance for the general fund are assignments for the portion of the current 57 City of Kalispell, Montana Notes to Financial Statements June 30, 2022 58 general fund balance projected to be used to fund expenditures and other cash outflows more than the expected revenues and other cash inflows in the next fiscal year. Unassigned fund balance is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications. In other funds, the unassigned classification is 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 NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Budgetary Data Policies The State of Montana’s budget law stipulates that money, other than payments from Agency funds, may not be drawn from the treasury of a municipality except pursuant to an appropriation. The City legally adopts a budget for the required funds. Process An annual appropriated operating budget is adopted each fiscal year for the general fund, special revenue funds, debt service funds and capital projects funds on the modified accrual basis. In addition, a budget is adopted for the enterprise and internal service funds on a full accrual basis. The appropriated budget is prepared by fund, function, and for the general fund and certain other funds, by department. The final budget is legally enacted by the City Council, after holding public hearings as required by State statutes, and within forty-five days of the State providing final shared revenue figures. The City Manager and Finance Director may make budget appropriation transfers within a fund between general classifications of salaries and wages, maintenance and operation and capital outlay. Reported budget amounts represent the originally adopted budget as amended by resolution of the City Council. It is management’s responsibility to see that the budget is followed to the budgetary line item. The City Council may amend a final budget when shortfalls in budgeted revenues require reductions in approved appropriations to avert deficit spending; when savings result from unanticipated adjustments in projected expenditures; when unanticipated state or federal monies are received; or when a public emergency occurs which could not have been foreseen at the time of adoption. City of Kalispell, Montana Notes to Financial Statements June 30, 2022 59 The City Manager is granted budget amendment authority for the expenditure of funds from debt service funds, enterprise funds, internal service funds, trust funds, federal and state grants accepted and approved by the City Council, special assessments, and donations. The procedure to amend the budget in total can be made only after the City prepares a resolution, notice is published of a public hearing, and a public hearing is held in accordance with state law. The City had no violations of budget law for fiscal year 2022, as all expenditures/expenses in total by fund are less than the related appropriations or are transfers of closed funds as allowed by State law. All budget amendments and closeout transfers during FY 2022 are described below: The CD Programs special revenue fund (2886) budget was increased $252,316. This change was to fund the approved change order request for the Kalispell Parkline. The Hazmat Grant fund expenditure budget increased $14,809. This change was due to a grant accepted in fiscal year 2020 ($40,000) and the related fiscal year 2022 carryover ($14,809). The 2945 Samaritan House Grant increased $30,000. This change was due to the acceptance of a Community Development Block Planning Grant on behalf of Samaritan House. The 2958 Hazmat Team Sustainment Grant increased $40,000. This change was due to the acceptance of the Montana State Homeland Security Program Grant. The 2919 Law Enforcement Grant fund increased $5,000. This change was due to the acceptance of the Walmart Community Grant for Tactical Medical Kits. The 2188 Westside TIF fund was increased $252,316. This change was to fund the approved change order request for the Kalispell Parkline. The 5210 Water Enterprise fund was increased $600,000. This change was due to the North Main Well project bid amounts exceeding the budgeted amount. The 5310 Sewer Enterprise fund was increased $122,505. This change was due to the 1st & 2nd Ave EN Sanitary Sewer Replacement Project bid amounts exceeding the budgeted amount. NOTE 3. DETAILED NOTES ON ALL FUNDS A. Cash and Investments At June 30, 2022, the carrying amount of the City’s deposits in local banks and investments is $71,612,896. 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. City of Kalispell, Montana Notes to Financial Statements June 30, 2022 60 The City’s reports cash and investments as follows: Unrestricted Restricted Total Governmental activities $28,896,847 $2,812,396 $31,709,243 Business-type activities 27,699,639 12,120,363 39,820,002 Fiduciary funds 12,535 12,535 Component unit 71,116 71,116 $56,680,137 $14,932,759 $71,612,896 Reconciliation of carrying amount to deposit balances: Governmental & Business Investment Activities Agency BID Total Certificates of Deposit $248,000$ 248,000$ U.S. Treasury Securities 750,000 750,000 U.S. Government Bonds 25,595,000 25,595,000 State of Montana - Short Term Investment Pool Account 40,066,690 40,066,690 S & C Bonds - internal 33,154 33,154 Demand deposits 4,833,621 12,535$ 71,116$ 4,917,272 Petty Cash 2,780 2,780 71,529,244$ 12,535$ 71,116$ 71,612,896$ Under the City’s investment policy and as authorized by Montana law, the City is restricted to investing funds in specific types of investment instruments. These investments are low risk, locked into a guaranteed rate of return, and are, therefore, not impacted significantly by changes in short term interest rates. Along with limitations placed on investments by state law, the City minimizes custodial credit risk by restrictions set forth in City policy. Custodial credit risk for investments is the risk that in the event of a financial institution failure, the City’s investments may not be returned, or the City will not be able to recover the collateral securities in the possession of the outside party. The City voluntarily participates in the STIP (Short Term Investment Pool) administered by the Montana Board of Investments (MBOI). Shares, the prices of which are fixed at $1.00 per share, represent a local government’s STIP ownership and participants may buy or sell shares with one-business days’ notice. STIP administrative expenses are charged daily against the STIP income, which is distributed on the first calendar day of each month. Shareholders have the option to automatically reinvest their distribution income in additional shares. STIP is not registered with the Securities and Exchange Commission. STIP is not FDIC insured or otherwise insured or guaranteed by the federal government, the State of Montana, the MBOI or any other entity against investment losses and there is no guaranteed rate of return on funds invested in STIP shares. The MBOI maintains a reserve fund to offset possible losses and limit fluctuations in STIP’s valuation. The STIP investment portfolio consists of securities with maximum maturity of 2 years. Information on investments held in the STIP can be found in the Annual Report on the MBOI website at Annual Reports - Montana Board of Investments (investmentmt.com). City of Kalispell, Montana Notes to Financial Statements June 30, 2022 61 Investments in the pool are reported at a Net Asset Value (NAV). The fair value of pooled investments is determined annually and is based on year-end market prices. The unit value of the pool is fixed at $1 for both participant redemptions and purchases. Investments in STIP are carried and reported at cost. STIP income is automatically reinvested in additional units. The STIP is not rated by a national rating agency. B. Interfund Receivables and Payables (Due to/from Other Funds) The composition of interfund balances and due to/from as of June 30, 2022, was as follows: Receivable Fund Payable Fund Amount Purpose General Fund - Major Governmental Rail Park TEDD - Special Revenue 59,410 S/T Loan Total - Due To Other Funds (Governmental Funds)59,410$ C.Transfers The following is an analysis of transfers between funds during Fiscal Year 2022: From To Amount Purpose Health - Special Revenue Fund General - Major Governmental 1,100,000 Operations Health - Special Revenue Fund Parks - Special Revenue Funnd 111,000 Operations General Fund - Major Governmental Ambulance - Special Revenue 350,000 Operations General Fund - Major Governmental Westside TIF - Special Revenue Fund 900,000 Operations General Fund - Major Governmental Drug Grant - Special Revenue Fund 64,000 Operations General Fund - Major Governmental Block Grant - Special Revenue Fund 6,000 Operations Old School Tech TIF - Special Revenue FundSID - 344 - Special Revenue Fund 50,000 Operations Old School Ind TIF - Special Revenue Fund SID - 344 - Special Revenue Fund 8,000 Operations Rail Park - TEDD - Special Revenue Fund Westside TIF - Special Revenue Fund 140,000 Operations Special Street - Special Revenue Fund BaRSAA - Special Revenue Fund 25,842 Operations CD Loan Revolving - Special Revenue Fund Westside TIF - Special Revenue Fund 525,000 Operations CD Projects - Special Revenue Fund Westside TIF - Special Revenue Fund 1,056,532 Operations Westside TIF Debt Service Westside TIF - Special Revenue Fund 900,000 Operations G.O. Bonds - Special Revenue Fund SID Revolving - Debt Service Fund 13,856 Close Out TOTAL 5,250,230$ D. Capital Assets Capital asset activities for the year ended June 30, 2022 were as follows: Assets Contributed In fiscal year 2022, Governmental Activities report contributed assets with a value of $49,718. These contributed assets were sidewalks replaced or repaired and paid for by homeowner’s directly (not assessed). In fiscal year 2022, Business-type Activities report contributed assets with a value of $2,360,036. City of Kalispell, Montana Notes to Financial Statements June 30, 2022 62 Developers contributed nine thousand four hundred eighty-six linear feet (9,486’) of water mains, including 22 new fire hydrants valued at $803,128 to the water fund. These 9,486 linear feet of mains were distributed among seven different projects (developments). The Sewer fund received sewer and storm mains. Developers contributed seven thousand six hundred sixty-nine linear feet (7,669’) of sewer mains ($890,670), and six thousand eight hundred twenty-two linear feet (6,822’) of storm sewer main ($666,239). These 14,491 linear feet of mains were distributed among six different projects (developments). Construction in Progress Additions to construction in progress of governmental activities include an additional $199,384 for the American Rescue Plan (ARPA) water/sewer main replacement project, and $10,000 for Fire Station 61 dorm remodel project. Reductions to construction in progress of governmental activities included $1,256,838 related to the Core Trail and $1,099,042 related to the Parkline Trail, both of which are related to the completion of the Tiger Grant; and an additional $1,411,997 for the Kidsport improvement grant project. Additions to construction in progress of business-type activities was $3,723,265. This included projects replacing water mains ($135,777); continuing the development of a new well and associated storage ($622,070); lower pressure zone reservoir roof replacement ($155,964); N. main well replacement ($483,332); making improvements to lift station #9 (29,945); improvements to lift station #3 ($38,832); design and construction of fermenter for the wastewater treatment plan ($56,311); construction phase of a new EQ Basin for the wastewater treatment plant ($103,526); continuing design and construction of a regional stormwater facilities ($2,060,989); and design and construction of a stormwater quality treatment facility ($76,519). Reductions to construction in progress of business-type activities included, in the sewer (storm) fund, the W Center from 7th Ave W to Meridian main project ($637,064). City of Kalispell, Montana Notes to Financial Statements June 30, 2022 63 Balance Balance Governmental Activities:July 1, 2021 Additions Contributions Transfers Deductions June 30, 2022 Capital assets not being depreciated: Land (Asset type: 010)3,743,166$ -$ -$ -$ -$ 3,743,166$ Construction in Progress 3,790,317 209,384 (3,767,877) - 231,824 Total capital assets not being depreciated 7,533,483 209,384 - (3,767,877) - 3,974,990 Capital assets being depreciated: Buildings (Asset type: 020)16,869,454 - - - 16,869,454 Improvements other than buildings (Asset type: 030)18,507,960 4,626,770 49,718 3,767,877 26,952,325 Machinery and equipment General (Asset type: 040)10,495,679 919,291 - (295,326) 11,119,644 Ambulance (Asset type: 100)583,330 - - - - 583,330 Parking (Asset type: 230)46,071 - - - 46,071 Infrastructure (Asset type: 031)93,205,419 10,327,741 - - - 103,533,160 Total capital assets being depreciated 139,707,913 15,873,802 49,718 3,767,877 (295,326) 159,103,984 Less accumulated depreciation for: Buildings (Asset type: 020)(10,721,836) (614,780) - - (11,336,616) Improvements other than buildings (Asset type: 030)(12,349,593) (635,671) - - (12,985,264) Machinery and equipment General (Asset type: 040)(6,895,262) (710,416) - - 295,326 (7,310,352) Ambulance (Asset type: 100)(367,757) (53,881) - - (421,638) Parking (Asset type: 230)(46,071) - - - (46,071) Infrastructure (Asset type: 031)(39,649,956) (2,464,400) - - - (42,114,356) Total accumulated depreciation (70,030,475) (4,479,148) - - 295,326 (74,214,297) Total capital assets being depreciated, net 69,677,438 11,394,654 49,718 3,767,877 - 84,889,687 Governmental activities capital assets, net 77,210,921$ 11,604,038$ 49,718$ -$ -$ 88,864,677$ Balance Balance Internal service funds:July 1, 2021 Additions Contributions Transfers Deductions June 30, 2022 Information Technology (Asset type: 200)525,108$ 41,832$ -$ -$ 566,940$ Less accumulated depreciation - Information Technology (386,820) (48,676) - - (435,496) Capital Asset being amortorized: Right to use asset 60,843 60,843$ Equipment (42,379) (42,379)$ Less accumulated amoritzation Central Garage (Asset type: 220)338,373 9,818 348,191 Less accumulated depreciation - Central Garage (232,077) (13,419) (245,496) Internal service funds assets, net 244,584$ 8,019$ -$ -$ -$ 252,603$ Governmental activities depreciation was charged to functions/programs of the primary government as follows: Governmental Activities: General Government 2,893,471$ Public Safety 524,109 Public Works 635,163 Parks and Recreation 426,405 Total Governmental Activities 4,479,148$ City of Kalispell, Montana Notes to Financial Statements June 30, 2022 64 Balance Transfers/ Construction BalanceBusiness-type activities:July 1, 2021 Additions Contributions in Progress Deductions June 30, 2022 Capital assets not being depreciated:Land Water (Asset type: 070)105,958 - - - - 105,958 Sewer (Asset type: 120)221,513 - - - - 221,513 Sewer (Storm) (Asset type: 150)26,550 - - - - 26,550 Construction in progress Water 446,021 1,357,143 - - - 1,803,164 Sewer 60,942 228,614 - - - 289,556 Storm 1,965,320 2,137,508 - (637,064) 3,465,764 Solid Waste - - - - - Total capital assets not being depreciated 2,826,304 3,723,265 - (637,064) - 5,912,505 Capital assets being depreciated:Water General Plant (Asset type: 060)1,138,168 103,605 1,241,773 Source of Supply (Asset type: 070)6,437,073 - - - 6,437,073 Transmision and Distribution (Asset type: 080)39,238,695 419,594 803,128 40,461,417 Pumping Plant (Asset type: 090)3,981,044 - - 3,981,044 Sewer General Plant (Asset type: 130)1,076,110 240,296 (162,328) 1,154,078 Transmision and Distribution (Asset type: 140)47,657,275 - 890,670 - 48,547,945 Storm Sewer System (Asset type: 150)18,148,428 258,776 666,238 637,064 (13,333) 19,697,173 Treatment Plant Equipment (Asset type: 180)521,381 118,486 639,867 Treatment Plant (Asset type: 190)42,249,544 106,867 42,356,411 Solid Waste Buildings (Asset type: 111)345,442 - 345,442 Machinery and equipment (Asset type: 110)2,091,976 6,257 - - 2,098,233 Total capital assets being depreciated 162,885,136 1,253,881 2,360,036 637,064 (175,661) 166,960,456 Capital assets being amortorized:Right to use asset Intangible - Lease Asset 113,712 113,712 Total capital assets being amortorized - 113,712 - - - 113,712 Less accumulated depreciation for:Water General Plant (Asset type: 060)(932,827) (32,702) - (965,529) Source of Supply (Asset type: 070)(1,617,550) (181,239) - - (1,798,789) Transmision and Distribution (Asset type: 080)(11,656,061) (841,523) - (12,497,584) Pumping Plant (Asset type: 090)(2,113,257) (80,829) - (2,194,086) Sewer General Plant (Asset type: 130)(826,118) (31,210) - 162,328 (695,000) Transmision and Distribution (Asset type: 140)(13,564,464) (903,562) - - (14,468,026) Storm Sewer System (Asset type: 150)(6,455,698) (406,473) - - 13,333 (6,848,838) Treatment Plant Equipment (Asset type: 180)(405,801) (21,318) - - (427,119) Treatment Plant (Asset type: 190)(24,761,383) (940,333) - - (25,701,716) Solid Waste Buildings (Asset type: 111)(314,417) (2,342) - - (316,759) Machinery and equipment (Asset type: 110)(1,397,414) (156,167) - - (1,553,581) Total accumulated depreciation (64,044,990) (3,597,698) - - 175,661 (67,467,027) Less accumulated amortization for:Right to use assets Intangible - Lease Asset (3,479) (3,479) Total accumulated amortizaton - (3,479) - - - (3,479) Total capital assets being depreciated, net 98,840,146 (2,343,817) 2,360,036 637,064 - 99,493,429 Total capital assets being amortorized, net - 110,233 - - - 110,233 Business-type activities capital assets, net 101,666,450$ 1,489,681$ 2,360,036$ -$ -$ 105,516,167$ Business-type activities depreciation was charged to functions/programs of the primary government as follows: Business-Type Activities Depreciaton Amortization Total Water 1,136,294$ 1,136,294$ Sewer -$ Sanitary 934,771 3,479 938,250$ Treatment 961,651 961,651$ Storm 406,473 406,473$ Solid Waste 158,509 158,509$ Total Buisiness-type Activites 3,597,698$ 3,479$ 3,601,177$ City of Kalispell, Montana Notes to Financial Statements June 30, 2022 65 E.Long-Term Debt During the year ended June 30, 2022, the following changes occurred in long-term liabilities: Balance Balance Due within July 1, 2021 Additions Reductions June 30, 2022 1 year Governmental Activities: G.O. Bonds 230,000$ -$ (230,000)$ -$ -$ Revenue Bonds 4,405,000 - (205,000) 4,200,000 210,000 SRF 516,893 - (26,573) 490,320 27,266 Assessments 1,315,450 4,165 (250,460) 1,069,155 251,797 Contract Debt/Loans 671,068 (152,682) 518,386 117,253 Intermediary Program 434,214 - (27,757) 406,457 28,034 Compensated Absences*1,645,034 1,665,546 (1,645,034) 1,665,546 1,206,774 Other postemployment benefits*3,471,079 (754,500) 2,716,579 - Pensions*11,926,607 (3,765,566) 8,161,041 - Governmental Activities Sub Total 24,615,345$ 1,669,711$ (7,057,572)$ 19,227,484$ 1,841,124$ Internal Service Funds: Lease Purchase - 18,464 18,464 7,685 Compensated Absences 36,863$ 38,313$ (36,863)$ 38,313$ 30,319$ Internal Service Funds Sub Total 36,863$ 38,313$ (36,863)$ 38,313$ 38,004$ Government-wide Governmental Activities 24,652,208$ 1,708,024$ (7,094,435)$ 19,265,797$ 1,879,128$ *The governmental funds that are expected to liquidate the compensated absences, pension, and otherpostemployment benefits liabilities are the General, Parks, Ambulance, Building, Light Maintenance, Street Maintenance, and Urban Forestry. Balance Balance Due within July 1, 2021 Additions Reductions June 30, 2022 1 year Business-type Activities: SRF 23,922,827$ (1,766,164)$ 22,156,663$ 1,799,734$ Lease Purchase - 110,233 110,233 3,789 Compensated Absences 361,623 233,202 (200,136) 394,689 200,136 Other postemployment benefits 372,862 (80,785) 292,077 Pensions 2,625,711 (797,579) 1,828,132 Business-type Activities Sub Total 27,283,023$ 343,435$ (2,844,664)$ 24,781,794$ 2,003,659$ Total City 51,935,231$ 2,051,459$ (9,939,099)$ 44,047,591$ 3,882,787$ 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, 2022, were as follows: Origination Interest Due Principal Annual Balance Purpose Date Rate Term Date Amount Payment June 30, 2022 Pool/Fire Hall Refunding 6/13/2012 variable 10 years 2022 4,145,000$ varies -$ Total G.O. Bonds 4,145,000$ -$ City of Kalispell, Montana Notes to Financial Statements June 30, 2022 66 Legal Debt Margin At June 30 the general obligation debt issued by the City did not exceed its legal debt margin as demonstrated by the following computation: Total assessed value of taxable property (market value-2022)3,676,016,903$ General limitation percentage 2.50% General limitation of indebtedness 91,900,423 Outstanding general obligation bonds at June 30 0 Outstanding loans subject to limitation* Park Improvements 50,862 Parks Equipment 13,520 Public Safety Equipment 454,005 SID Bonds 1,036,000 Total debt subject to limit 1,554,387 Excess limit over outstanding debt margin $90,346,036 *A State of Montana, Board of Investment’s attorney gave an opinion that loans issued under 7-5-4306, MCA aresubject to the limit of indebtedness. These loans are displayed on page 58 (Loans/Contracted Debt). Special Assessment Debt – Special assessment bonds are secured by a lien on the assessed properties. The primary source of repayment is the assessments levied against the benefiting properties. However, the City is liable, to an extent, for repayment of these special assessment bonds. State law authorizes the City to establish a revolving fund to ensure the payment of debt service on the bonds if assessed property owner’s default. Origination Interest Due Principal Annual BalancePurposeDate Rate Term Date Amount Payment June 30, 2022 SID344 6/15/2006 3.7%-5.28%20 years 2026 4,520,000$ varies 920,000$ SID345 5/15/2014 3.00%15 years 2029 242,000 varies 116,000 2014 S&C 1/6/2012 3.25%8 years 2023 7,845 981$ 981 2015 S&C 4/12/2013 3.50%8 years 2024 9,272 1,159$ 2,318 2016 S&C 1/2/2014 3.75%8 years 2025 9,792 1,224$ 3,672 2017 S&C 1/2/2015 4.50%8 years 2026 4,288 536$ 2,144 2018 S&C 1/4/2016 5.50%8 years 2027 7,145 893$ 4,465 2019 S&C 6/30/2016 4.75%8 years 2028 15,824 1,978$ 11,868 2020 S&C 1/4/2021 3.25%8 years 2029 4,046 506$ 3,540 2021 S&C 1/6/2021 3.25%8 years 2030 4,165 521$ 4,165 Total Special Assessment Bonds 4,824,377$ 1,069,155$ *In the event that all future and delinquent assessments are paid and that there are no future adjustments to assessments by the City of Kalispell, there is a projected surplus of principalassessments in SID's 344 and 345 of $16,248 and $24,676, respectively. Revenue Bonds – Revenue bonds are directly related to and paid from the fund. The 2018 West Side Tax Increment bonds are accounted for in the Government-wide financial statements and are paid directly from tax increment in the district. Issue Interest Final Bonds Balance Purpose Date Rate Term Maturity Issued June 30, 2022 Governmental Activities: 2018 - West Side TIF 5/1/18 variable 19 years 2037 4,960,000 4,200,000 Governmental Activities Sub Total 4,960,000$ 4,200,000$ City of Kalispell, Montana Notes to Financial Statements June 30, 2022 67 Significant Provisions of the Series 2018 West Side Tax Increment Urban Renewal Revenue Bonds The 2018 Bonds mature on January 1, 2037. The 2018 Bonds with stated maturities from 2019 through 2028 shall not be subject to redemption prior to their stated maturities. The 2018 Bonds with stated maturities on or after July 1, 2029, will be subject to redemption on July 1, 2028, and any day thereafter, at the option of the City, in whole or in part, at a redemption price equal to the principal amount thereof to be redeemed plus interest accrued to the redemption date, without premium. Interest on the Bonds varies from 3.00% for the Bonds with stated maturities from July 1, 2019, through July 1, 2025, to 5.00% for the $500,000 Term Bond with the stated maturity of January 1, 2033. Reserve Account – The City shall maintain a debt service reserve account with a balance equal to the lesser of: (i) ten percent (10%) of the original principal amounts of the Bonds; (ii) the maximum amount of principal and interest payable on the Bonds in the current or any future fiscal year; or (iii) 125% of the average debt service on the Bonds payable in any fiscal year. 125% of the average debt service ($6,043,125/16 years) $472,119 City’s Reserve $480,011 State Revolving Fund – the City has nine (9) loan agreements with the State Revolving Fund (SRF). These obligations are to be repaid from the operating income of the fund. SRF LOANS Interest Amount Outstanding Purpose Origination Rate Term Borrowed June 30, 2022Governmental Activities:2017 Streets - 4th Ave E FY18 2.50%20 years 615,098$ 490,320$ Governmental Activities Sub Total 615,098$ 490,320$ Business-type Activities:2013 Sewer - WWTP Digester Lid FY13 3.00%20 years 1,102,748$ 679,000$ 2012 Sewer - Hwy 93 S FY13 2.25%12 years 1,009,000 186,000 2012 Sewer - WWTP System Improvements FY13 2.25%15 years 12,827,000 4,762,000 2018 Sewer - Westside Interceptor FY18 2.50%30 years 12,194,841 10,945,000 2012 Water - Sheepherders Well/Storage FY13 2.25%15 years 1,500,000 497,000 2017 Water - 4th Ave E FY18 2.50%20 years 1,974,988 1,574,357 2020 Water - Refunding 2004 Bond FY20 2.50%4 years 365,648 167,648 2020 Water - 4 Mi. Dr. Transmission FY20 2.50%20 years 2,147,108 1,927,000 2021 Storm - Regional Facilities FY21 2.50%20 years 2,152,737 2,062,000 2017 Storm Sewer - 4th Ave E FY18 2.50%20 years 71,914 57,323 Business-type Activities Sub Total 35,345,984$ 22,857,328$ Total SRF Loans 35,961,082$ 23,347,648$ Water Debt Required Information Debt Service Account - Monthly an amount equal to not less than 1/6 of the interest due within the next six months and 1/12 of the principal to become due within the next twelve months shall be credited to the debt service account. The debt service account was zero as of June 30, 2022, as all debt service payments were made as of the end of the fiscal year, leaving no accrued interest or principal balance. City of Kalispell, Montana Notes to Financial Statements June 30, 2022 68 Reserve Account - The City shall keep in the reserve account an amount equal to or greater than 50% of the maximum amount of principal and interest required in the current or any subsequent fiscal year ($454,545 * 0.50 = $227,273). As of June 30, 2022, the debt service reserve account contains $227,273. Maximum P & I $ 454,545 Total Reserve Requirement $ 227,273 Reserve balance 6/30/21 $ 227,273 Property Insurance - The City will cause all buildings, properties, fixtures, and equipment to be kept insured in amounts that are ordinarily carried. Liability Insurance - The City will carry insurance against liability of the City and its employees. Rates and Charges – Rates and charges will be made and kept sufficient to provide gross income and revenues adequate to pay promptly the reasonable and current expenses of operating and maintaining the system and to produce in each fiscal year net revenues more than such current expenses, equal to 110% of the maximum amount of principal and interest payable from the Revenue Bond Account in any subsequent fiscal year. Water Fund Cash Flow Debt Coverage Water Service Charges 4,116,282$ Misc. Revenue 271,252 Total Operating Revenue 4,387,534 Less: Operating Expense (excludes depreciation)2,423,046 Available for Debt Service 1,964,488$ **Maximum Debt Service 454,545$ Estimated Coverage FY22 432% **includes all water fund borrowings Sewer Debt Required Information Operating Reserve – The city shall keep in the operating reserve account an amount equal to one month’s operating expenses. As of June 30, 2022, the operating reserve account contains $400,000. Debt Service Account - Monthly an amount equal to not less than 1/6 of the interest due within the next six months and 1/12 of the principal to become due within the next twelve months shall be credited to the debt service account. The debt service account was zero as of June 30, 2022, as all debt service payments were made as of the end of the fiscal year, leaving no accrued interest or principal balance. Reserve Account - The City shall keep in the reserve account an amount equal to or greater than 50% of the maximum amount of principal and interest required in the current or any subsequent fiscal year ($1,923,092 * 0.50 = $961,546). As of June 30, 2022, the debt service reserve account contains $961,546. Bond reserve dollars are held in both the storm fund ($83,739), and sewer fund ($877,807). City of Kalispell, Montana Notes to Financial Statements June 30, 2022 69 Rates and Charges – Rates and charges will be made and kept sufficient to provide gross income and revenues adequate to pay promptly the reasonable and current expenses of operating and maintaining the system and to produce in each fiscal year net revenues more than such current expenses, equal to 110% of the maximum amount of principal and interest payable from the Revenue Bond Account in any subsequent fiscal year. Sewer Fund Cash Flow Debt Coverage *Operating Revenue 9,023,292$ Total 9,023,292 Less: Operating Expense (excludes depreciation)4,107,034 Available for Debt Service 4,916,258$ **Maximum Debt Service 1,923,092$ Estimated Coverage FY22 256% *includes storm sewer assessments **includes all sewer/storm fund borrowings Loans/Contracted Debt Origination Interest Due Principal Balance Purpose Date Rate Term Date Amount June 30, 2022 Governmental Activities BOI:Chip Truck (Forestry)11/3/2017 varies 5 years 2/15/2022 40,000 - BOI: Woodland Playground (parks)8/23/2019 varies 5 years 2/15/2025 97,772 50,862 BOI:Flatbed Chevy (Parks)11/23/2016 varies 5 years 2/15/2022 31,066 - BOI:Mower (Parks)3/31/2017 varies 5 years 2/15/2022 59,707 - BOI:Woodland Bathroom (Parks)6/30/2017 varies 5 years 2/15/2022 39,214 - BOI:Mower (Parks)2/16/2018 varies 5 years 2/15/2023 35,191 7,388 BOI:Spray Gator (Parks)6/30/2018 varies 5 years 2/15/2023 26,336 6,132 BOI:Fire Pumper 3/16/2018 varies 10 years 2/15/2028 467,684 301,004 BOI:Ambulance 1/19/2021 varies 5 years 2/15/2026 189,438 153,001 Sub total BOI loans 946,408$ 518,386$ USDA:Intermediary Relending Program 10/12/2004 1.00%30 years 10/12/2034 520,000$ 267,771$ Relending Program 11/27/2006 1.00%30 years 11/27/2036 257,500 138,686 Sub total USDA Intermediary 777,500 406,456 Total loans/contracted debt - Governmental Activities 1,723,908$ 924,843$ BOI - Board of Investments Intercap Loan Program City of Kalispell, Montana Notes to Financial Statements June 30, 2022 70 Requirements to amortize debt The annual requirements to amortize all long-term debt outstanding; excluding compensated absences payable, other post-employment benefits, and net pension liability, as of June 30, 2022, were as follows: Governmental Activities: SPECIAL G.O.ASSESSMENT CONTRACTED INTERMEDIARY SRF REVENUE FY BONDS BONDS LOANS/DEBT LOAN PROGRAM LOANS BONDS ENDED PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL INTEREST TOTAL 2023 251,797 51,770 117,253 8,035 28,034 4,064 27,266 12,088 210,000 157,225 867,532 2024 250,816 39,233 106,659 6,218 28,314 3,784 27,729 11,406 215,000 150,925 840,084 2025 253,658 26,766 98,884 4,564 28,598 3,501 28,191 10,707 220,000 144,475 819,344 2026 252,434 14,249 90,345 2,992 28,884 3,215 28,884 10,000 230,000 137,875 798,878 2027 19,897 1,794 52,434 1,631 29,173 2,926 29,808 9,272 235,000 130,688 512,623 2028-2031 40,553 1,588 52,811 819 119,637 8,759 127,782 29,355 1,025,000 573,025 1,979,329 2032-2036 - 134,249 4,095 181,158 17,668 1,525,000 300,425 2,162,595 2037-2041 9,568 96 39,502 544 540,000 10,800 600,510 TOTAL -$ -$ 1,069,155$ 135,400$ 518,386$ 24,259$ 406,457$ 30,440$ 490,320$ 101,040$ 4,200,000$ 1,605,438$ 8,580,895$ Business-type Activities: SRF FY LOANS(1)(2) ENDED PRINCIPAL INTEREST TOTAL 2023 1,799,734 550,655 2,350,389 (1) The 2021 sewer (storm) fund SRF loan 2024 1,842,920 507,890 2,350,810 is included on this schedule. The City has 2025 1,703,809 465,152 2,168,961 drawn $2,152,737 of the $2,460,000 funds available. 2026 1,744,116 424,660 2,168,776 All funds have been drawn. A final amortization 2027 1,788,192 383,210 2,171,402 schedule has been used to update this schedule 2028-2031 2,930,218 1,279,710 4,209,928 2032-2036 3,887,841 1,163,622 5,051,463 (2) The 2018 Westside Interceptor loan included 2037-2041 3,488,498 686,785 4,175,283 an amount ($400,000) to be forgiven by the debtor. 2042-2046 2,561,000 316,213 2,877,213 The City has received a compliance certificate 2047-2051 1,111,000 34,925 1,145,925 therefore the $400,000 is not included in the schedule TOTAL 22,857,328$ 5,812,822$ 28,670,150$ City of Kalispell, Montana Notes to Financial Statements June 30, 2022 F. Employee Benefit Pension Plans Substantially all City of Kalispell full-time employees participate in one of three statewide, cost sharing, multiple-employer retirement benefit plans administered by the Public Employees Retirement Board (PERB). The authority to establish or amend contribution requirements for all plans and provide cost of living adjustments for defined benefits plans is assigned to the State legislature. PERB issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information for these plans. It is available from the Montana Public Employees Retirement Administration (MPERA) at 100 North Park Avenue, Suite 200, P.O. Box 200131, Helena, Montana, 59620-0131 or at their website, http://mpera.mt.gov. The Montana Public Employees Retirement Administration (MPERA) prepares its financial statements using the accrual basis of accounting. For the purposes of measuring the net pension liability, deferred inflows of resources and deferred outflows of resources related to pensions, pension expense, 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 the period incurred. Investments are reported at fair value. MPERA adheres to all applicable Governmental Accounting Standards Board (GASB) statements. Total City of Kalispell pension expense from all three (3) plans (PERS, MPORS, FURS) the City participates in were $3,626,565. Contributions to pension plans are as required by state statute. Information about each plan follows: 71 PUBLIC EMPLOYEES' RETIREMENT SYSTEM - DEFINED BENEFIT GASB 68 NOTES TO THE FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2022 (REPORTING DATE), JUNE 30, 2021 (MEASUREMENT DATE) In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non-employer contributing entity are required to recognize and report certain amounts associated with participation in the Public Employees’ Retirement System Defined Benefit Retirement Plan (the Plan). This includes the proportionate share of the collective Net Pension Liability; Pension Expense; and Deferred Outflows and Deferred Inflows of Resources associated with pensions. Employers are provided guidance in GASB Statement 68, paragraph 74, where pension amounts must be combined as a total or aggregate for reporting, whether provided through cost-sharing, single-employer, or agent plans. This report provides information for employers who are using a June 30, 2021, measurement date for the 2022 reporting. If an employer’s fiscal year end is after June 30th, the employer will not use the measurements shown in this report but will need to wait for the measurement date as of June 30, 2022. Summary of Significant Accounting Policies MPERA prepared financial statements using the accrual basis of accounting. The same accrual basis was used by MPERA for the purposes of determining the Net Pension Liability (NPL); Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions; Pension Expense; the Fiduciary Net Position; and Additions to or Deductions from Fiduciary Net Position. Member contributions are recognized in the period in which contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the accounting period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting period in which they are due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred. Investments are reported at fair value. MPERA adhered to all accounting principles generally accepted by the United States of America. MPERA applied all applicable pronouncements of the Governmental Accounting Standards Board (GASB). General Information about the Pension Plan Plan Description: The PERS-Defined Benefit Retirement Plan (DBRP), administered by the Montana Public Employee Retirement Administration (MPERA), is a multiple-employer, cost-sharing plan established July 1, 1945, and governed by Title 19, chapters 2 & 3, Montana Code Annotated (MCA). This plan provides retirement benefits to covered employees of the State, and local governments, and certain employees of the Montana University System, and school districts. Benefits are established by state law and can only be amended by the Legislature. All new members are initially members of the PERS-DBRP and have a 12-month window during which they choose to remain in the PERS-DBRP or join the PERS-DCRP by filing an irrevocable election. Members may not be participants of both the defined benefit and defined contribution retirement plans. All new members from the universities also have a third option to join the university system’s Montana University System Retirement Program (MUS-RP). Benefits provided: The PERS-DBRP provides retirement, disability, and death benefits to plan members and their beneficiaries. Benefits are based on eligibility, years of service, and highest average compensation (HAC). Member rights are vested after five years of service. Service retirement: Hired prior to July 1, 2011: o Age 60, 5 years of membership service o Age 65, regardless of membership service o Any age, 30 years of membership service Hired on or after July 1, 2011: o Age 65, 5 years of membership service o Age 70, regardless of membership service 72 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 Early Retirement: Hired prior to July 1, 2011: o Age 50, 5 years of membership service o Any age, 25 years of membership service Hired on or after July 1, 2011: o Age 55, 5 years of membership service Second Retirement: (requires returning to PERS-covered employer or PERS service) Retired before January 1, 2016 and accumulate less than 2 years additional service credit or retired on or after January 1, 2016 and accumulate less than 5 years additional service credit: o A refund of member’s contributions plus return interest (currently 2.02% effective July 1, 2018). o No service credit for second employment. o Start the same benefit amount the month following termination; and o Guaranteed Annual Benefit Adjustment (GABA) starts again in the January immediately following thesecond retirement. Retired before January 1, 2016 and accumulate at least 2 years of additional service credit: o A recalculated retirement benefit based on provisions in effect after the initial retirement; and o GABA starts on the recalculated benefit in the January after receiving the new benefit for 12 months. Retired on or after January 1, 2016 and accumulate 5 or more years of service credit: o The same retirement as prior to the return to service. o A second retirement benefit as prior to the second period of service based on laws in effect upon the rehiredate; and o GABA starts on both benefits in the January after receiving the original and the new benefit for 12 months. Member’s highest average compensation (HAC) Hired prior to July 1, 2011 highest average compensation during any consecutive 36 months. Hired on or after July 1, 2011 – highest average compensation during any consecutive 60 months. Compensation Cap Hired on or after July 1, 2013 – 110% annual cap on compensation considered as a part of a member’s highestaverage compensation. Monthly benefit formula Members hired prior to July 1, 2011 o Less than 25 years of membership service: 1.785% of HAC per year of service credit; o 25 years of membership service or more: 2% of HAC per year of service credit. Members hired on or after July 1, 2011 o Less than 10 years of membership service: 1.5% of HAC per year of service credit; o 10 years or more, but less than 30 years of membership service: 1.785% of HAC per year of service credit; o 30 years or more of membership service: 2% of HAC per year of service credit. Guaranteed Annual Benefit Adjustment (GABA) After the member has completed 12 full months of retirement, the member’s benefit increases by the applicable percentage (provided below) each January, inclusive of all other adjustments to the member’s benefit. 3.0% for members hired prior to July 1, 2007 1.5% for members hired between July 1, 2007 and June 30, 2013 Members hired on or after July 1, 2013:(a)1.5% for each year PERS is funded at or above 90%;(b)1.5% reduced by 0.1% for each 2.0% PERS is funded below 90%; and(c)0% whenever the amortization period for PERS is 40 years or more. Contributions: The State Legislature has the authority to establish and amend contribution rates. Member and employer contribution rates are specified by Montana Statute and are a percentage of the member’s compensation. Contributions are deducted from each member’s salary and remitted by participating employers. Special Funding: The state of Montana, as the non-employer contributing entity, paid to the Plan, additional contributions that qualify as special funding. Those employers who received special funding are all participating employers. Not Special Funding: Per Montana law, state agencies and universities paid their own additional contributions. The employer paid contributions are not accounted for as special funding for state agencies and universities but are reported as employer contributions. 73 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 Member and employer contribution rates are shown in the table below. Fiscal Member State & Universities Local Government School Districts Year Hired < 07/01/11 Hired > 07/01/11 Employer Employer State Employer State 2022 7.900% 7.900% 8.970% 8.870% 0.100% 8.600% 0.370% 2021 7.900% 7.900% 8.870% 8.770% 0.100% 8.500% 0.370% 2020 7.900% 7.900% 8.770% 8.670% 0.100% 8.400% 0.370% 2019 7.900% 7.900% 8.670% 8.570% 0.100% 8.300% 0.370% 2018 7.900% 7.900% 8.570% 8.470% 0.100% 8.200% 0.370% 2017 7.900% 7.900% 8.470% 8.370% 0.100%8.100% 0.370% 2016 7.900% 7.900% 8.370% 8.270% 0.100%8.000% 0.370%2015 7.900% 7.900% 8.270% 8.170% 0.100%7.900% 0.370%2014 7.900% 7.900% 8.170% 8.070% 0.100%7.800% 0.370%2012 – 2013 6.900% 7.900% 7.170% 7.070% 0.100%6.800% 0.370% 2010 – 2011 6.900%7.170% 7.070% 0.100%6.800% 0.370% 2008 – 2009 6.900%7.035% 6.935% 0.100%6.800% 0.235% 2000 - 2007 6.900%6.900% 6.800% 0.100%6.800% 0.100% 1.Member contributions to the system of 7.9% are temporary and will be decreased to 6.9% on January 1 followingactuary valuation results that show the amortization period has dropped below 25 years and would remain below 25years 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 anadditional 0.1% a year and will continue over 10 years through 2024. The additional employer contributionsincluding the 0.27% added in 2007 and 2009, will terminate on January 1 following actuary valuation results thatshow the amortization period has dropped below 25 years and would remain below the 25 years following thereduction of both the additional employer and additional member contributions rates.b.Effective July 1, 2013, employers are required to make contributions on working retirees’ compensation.Member contributions for working retirees are not required.c.The portion of employer contributions allocated to the Plan Choice Rate (PCR) are included in the employersreporting. The PCR was paid off effective March 2016 and the contributions previously directed to the PCR arenow directed to member accounts. 3.Non-Employer Contributions:a.Special Fundingi.The state contributed 0.1% of members’ compensation on behalf of local government entities.ii.The state contributed 0.37% of members’ compensation on behalf of school district entities.iii.The state contributed a Statutory Appropriation from the General Fund of $34,290,660. 74 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 Pension Liability, Pension Expense, and Deferred Outflows and Deferred Inflows of Resources Related to Pensions GASB Statement 68 allows a measurement date of up to 12 months before the employer’s fiscal year-end can be utilized to determine the Plan’s TPL. The basis for the TPL as of June 30, 2021, was determined by taking the results of the June 30, 2020, 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 roll forward procedure will include the effects of any assumption changes and legislative changes. The update procedures are in conformity with Actuarial Standards of Practice issued by the Actuarial Standards Board. The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). The proportionate shares of the employer’s and the State of Montana’s NPL for June 30, 2021, and 2020, are displayed below. The employer’s proportionate share equals the ratio of the employer’s contributions to the sum of all employer and non-employer contributions during the measurement period. The state’s proportionate share for a particular employer equals the ratio of the contributions for the particular employer to the total state contributions paid. The employer recorded a liability of $6,193,855 and the employer’s proportionate share was 0.341594 percent. As of measurement date Net Pension Liability as of 6/30/2021 Net Pension Liability as of 6/30/2020 Percent of Collective NPL as of 6/30/2021 Percent of Collective NPL as of 6/30/2020 Change in Percent of Collective NPL CITY OF KALISPELL Proportionate Share $ 6,193,855 $ 9,067,196 0.341594% 0.343687% (0.002093)% State of Montana Proportionate Share associated with Employer $ 1,825,504 $ 2,856,744 0.100677% 0.108283% (0.007606)% Total $ 8,019,359 $ 11,923,940 0.442271% 0.451970% (0.009699)% Changes in actuarial assumptions and methods: The following changes in assumptions or other inputs were made that affected the measurement of the TPL. 1.The discount rate was lowered from 7.34% to 7.06%2.The investment rate of return was lowered from 7.34% to 7.06% Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date. Changes in proportionate share: There were no changes to the Plan between the measurement date of the collective NPL and the employer’s reporting date that are expected to have a significant effect on the employer’s proportionate share of the collective NPL. Pension Expense: At June 30, 2021, the employer recognized a Pension Expense of $109,267 for its proportionate share of the Plan’s pension expense. The employer also recognized grant revenue of $520,254 for the support provided by the State of Montana for its proportionate share of the pension expense associated with the employer. As of measurement date Pension Expense as of 6/30/2021 Pension Expense as of 6/30/2020 CITY OF KALISPELL’s Proportionate Share $109,267 $1,114,433 State of Montana Proportionate Share associated with the Employer 520,254 467,198 Total $629,521 $1,581,631 75 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 Recognition of Deferred Inflows and Outflows: At June 30, 2021, 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 Resources Deferred Inflows of Resources Expected vs. Actual Experience $66,100 $44,837 Projected Investment Earnings vs. Actual Investment Earnings 0 2,509,195 Changes in Assumptions 917,425 0 Changes in Proportion and Differences Between Employer Contributions and Proportionate Share of Contributions 0 58,992 Employer Contributions Subsequent to the Measurement Date 671,364 Total $1,654,889 $2,613,023 Other amounts reported as deferred outflows and inflows of resources related to pensions are recognized in the employer’s pension expense as follows: For the Measurement Year ended June 30: Recognition of Deferred Outflows and Deferred Inflows in future years as an increase or (decrease) to Pension Expense 2022 $1,328,592 2023 $(208,340) 2024 $(606,035) 2025 $(800,997) Thereafter $ 0 76 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 Actuarial Assumptions: The total pension liability as of June 30, 2021, was determined on the results of an actuarial valuation date of June 30, 2020, using the following actuarial assumptions, applied to all periods included in the measurement. Among those assumptions were the following: Investment Return (net of admin expense) 7.06% Admin Expense as % of Payroll 0.28% General Wage Growth * *includes Inflation at 3.50% 2.40% Merit Increases 0% to 4.80% Postretirement Benefit Increases 1.Guaranteed Annual Benefit Adjustment (GABA) each JanuaryAfter the member has completed 12 full months of retirement, themember’s benefit increases by the applicable percentage (providedbelow) each January, inclusive of all other adjustments to themember’s benefit. Members hired prior to July 1, 2007 Members hired between July 1, 2007 & June 30, 2013 Members hired on or after July 1, 2013 For each year PERS is funded at or above 90% The 1.5% is reduced by 0.1% for each 2.0%PERS is funded below 90% 0% whenever the amortization period for PERS is 40years or more 3.0% 1.5% 1.5% 0% Mortality: Contributing members, service retired members & beneficiaries Disabled Members RP-2000 Combined Employee and Annuitant Mortality Tables projected to 2020 with scale BB, set back one year for males RP-2000 Combined Mortality Tables, with no projections Discount Rate: The discount rate used to measure the TPL was 7.06%. The projection of cash flows used to determine the discount rate assumed that contributions from participating plan members, employers, and non-employer contributing entities would be made based on the Board’s funding policy, which established the contractually required rates under the Montana Code Annotated. The state contributed 0.10% of the salaries paid by local governments and 0.37% paid by school districts. In addition, the state contributed a statutory appropriation from the general fund. Based on those assumptions, the Plan’s fiduciary net position was projected to be adequate to make all the projected future benefit payments of current plan members through the year 2126. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL. A municipal bond rate was not incorporated in the discount rate. Target Allocations: The long-term rate of return as of June 30, 2021, was calculated using the average long-term capital market assumptions published in the Survey of Capital Market Assumptions 2021 Edition by Horizon Actuarial Service, LLC, yielding a median real return of 4.66%. The assumed inflation is based on the intermediate inflation assumption of 2.40% in the 2021 OASDI Trustees Report used by the Chief Actuary for Social Security to produce 75-year cost projections. Combining these two results yields a nominal return of 7.06%. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation as of June 30, 2021, are summarized in the table on the top of the next page. 77 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 Asset Class Target Asset Allocation Long-Term Expected Real Rate of Return Arithmetic Basis Cash 3.0% (0.33%) Domestic Equity 30.0%5.90% International Equity 17.0% 7.14% Private Investments 15.0%9.13% Real Assets 5.0% 4.03% Real Estate 9.0% 5.41% Core Fixed Income 15.0% 1.14% Non-Core Fixed Income 6.00%3.02% Total 100.0% Sensitivity of the proportionate share of the net pension liability to changes in the discount rate: The following presents the employer’s sensitivity of the NPL to the discount rate in the table below. A small change in the discount rate can create a significant change in the liability. The NPL was calculated using the discount rate of 7.06%, as well as what the NPL would be if it were calculated using a discount rate 1.00% lower or 1.00% higher than the current rate. As of measurement date 1.0% Decrease (6.06%) Current Discount Rate 1.0% Increase (8.06%) CITY OF KALISPELL’s Net Pension Liability $9,831,779 $6,193,855 $3,142,481 PERS Disclosure for the defined contribution plan CITY OF KALISPELL contributed to the state of Montana Public Employee Retirement System Defined Contribution Retirement Plan (PERS-DCRP) for employees that have elected the DCRP. The PERS-DCRP is administered by the PERB and is reported as a multiple-employer plan established July 1, 2002, and governed by Title 19, chapters 2 & 3, MCA. All new PERS members are initially members of the PERS-DBRP and have a 12-month window during which they may choose to remain in the PERS-DBRP or join the PERS-DCRP by filing an irrevocable election. Members may not be participants of both the defined benefit and defined contribution retirement plans. Member and employer contribution rates are specified by state law and are a percentage of the member’s compensation. Contributions are deducted from each member’s salary and remitted by participating employers. The state Legislature has the authority to establish and amend contribution rates. Benefits are dependent upon eligibility and individual account balances. Participants are vested immediately in their own contributions and attributable income. Participants are vested after 5 years of membership service for the employer’s contributions to individual accounts and the attributable income. Non-vested contributions are forfeited upon termination of employment per 19-3-2117(5), MCA. Such forfeitures are used to cover the administrative expenses of the PERS-DCRP. At the plan level for the measurement period ended June 30, 2021, 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 340 employers that have participants in the PERS-DCRP totaled $1,103,889. Pension plan fiduciary net position: The stand-alone financial statements (76d) of the Montana Public Employees Retirement Board (PERB) Annual Comprehensive Financial Report (ACFR) and the GASB 68 Report disclose the Plan’s fiduciary net position. These reports, as well as the actuarial valuations and experience study, are available from the PERB at PO Box 200131, Helena MT 59620- 0131, (406) 444-3154 or are available on the MPERA website at https://mpera.mt.gov/about/annualreports1/annualreports. 78 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 MUNICIPAL POLICE OFFICERS’ RETIREMENT SYSTEM GASB 68 NOTES TO THE FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2022 (REPORTING DATE), JUNE 30, 2021 (MEASUREMENT DATE) In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non-employer contributing entity are required to recognize and report certain amounts associated with participation in the Municipal Police Officers’ Retirement System (the Plan). This includes the proportionate share of the collective Net Pension Liability; Pension Expense; and Deferred Outflows and Deferred Inflows of Resources associated with pensions. Employers are provided guidance in GASB Statement 68, paragraph 74, where pension amounts must be combined as a total or aggregate for reporting, whether provided through cost-sharing, single-employer, or agent plans. This report provides information for employers who are using a June 30, 2021 measurement date for the 2022 reporting. Summary of Significant Accounting Policies MPERA prepared financial statements using the accrual basis of accounting. The same accrual basis was used by MPERA for the purposes of determining the Net Pension Liability (NPL); Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions; Pension Expense; the Fiduciary Net Position; and Additions to or Deductions from Fiduciary Net Position. Member contributions are recognized in the period in which contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the accounting period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting period in which they are due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred. Investments are reported at fair value. MPERA adhered to all accounting principles generally accepted by the United States of America. MPERA applied all applicable pronouncements of the Governmental Accounting Standards Board (GASB). General Information about the Pension Plan Plan Description: The Municipal Police Officers’ Retirement System (MPORS), administered by the Montana Public Employee Retirement Administration (MPERA), is a multiple-employer, cost-sharing defined benefit plan established in 1974 and governed by Title 19, chapters 2 & 9, Montana Code Annotated (MCA). This plan provides retirement benefits to all municipal police officers employed by first- and second-class cities and other cities that adopt the plan. Benefits are established by state law and can only be amended by the Legislature. Deferred Retirement Option Plan (DROP): Beginning July 2002, eligible members of MPORS can participate in the DROP by filing a one-time irrevocable election with the Board. The DROP is governed by Title 19, Chapter 9, Part 12, MCA. A member must have completed at least twenty years of membership service to be eligible. They may elect to participate in the DROP for a minimum of one month and a maximum of 60 months and may only participate in the DROP once. A participant remains a member of the MPORS but will not receive membership service or service credit in the system for the duration of the member’s DROP period. During participation in the DROP, all mandatory contributions continue to the retirement system. A monthly benefit is calculated based on salary and years of service to date as of the beginning of the DROP period. The monthly benefit is paid into the member’s DROP account until the end of the DROP period. At the end of the DROP period, the participant may receive the balance of the DROP account in a lump-sum payment or in a direct rollover to another eligible plan, as allowed by the IRS. If the participant continues employment after the DROP period ends, they will again accrue membership service and service credit. The DROP account cannot be distributed until employment is formally terminated. Benefits provided: MPORS provides retirement, disability, and death benefits to plan members and their beneficiaries. Benefits are based on eligibility, years of service, and compensation. Member rights are vested after five years of service. Service retirement and monthly benefit formula: 20 years of membership service, regardless of age. Age 50 with 5 years of membership service (Early Retirement). 2.5% of FAC x years of service credit. 79 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 Second retirement: Re-calculated using specific criteria for members who return to covered MPORS employment prior to July 1, 2017: Less than 20 years of membership service, upon re-employment, repay benefits and subsequent retirement is basedon total MPORS service. More than 20 years of membership service, upon re-employment, receives initial benefit and a new retirementbenefit based on additional service credit and FAC after re-employment.Applies to retirement system members re-employed in a MPORS position on or after July 1, 2017: If the member works more than 480 hours in a calendar year and accumulates less than 5 years of service creditbefore terminating again, the member: o is not awarded service credit for the period of reemployment; o is refunded the accumulated contributions associated with the period of reemployment; o starting the first month following termination of service, receives the same retirement benefit previouslypaid to the member; and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives aGuaranteed Annual Benefit Adjustment (GABA) in January immediately following second retirement. If the member works more than 480 hours in a calendar year and accumulates at least 5 years of service creditbefore terminating again, the member: o is awarded service credit for the period of reemployment; o starting the first month following termination of service, receives: *the same retirement benefit previously paid to the member, and *a second retirement benefit for the period of reemployment calculated based on the laws in effect asof the members rehire date; and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives aGABA: *on the initial retirement benefit in January immediately following second retirement, and *on the second retirement benefit starting in January after receiving that benefit for at least 12 months. A member who returns to covered service is not eligible for a disability benefit. Member’s final average compensation (FAC) Hired prior to July 1, 1977 - average monthly compensation of final year of service; Hired on or after July 1, 1977 - final average compensation (FAC) for last consecutive 36 months. Compensation Cap Hired on or after July 1, 2013: 110% annual cap on compensation considered as a part of a member’s FAC. Guaranteed Annual Benefit Adjustment (GABA) Hired on or after July 1, 1997, or those electing GABA, and has been retired for at least 12 months, a GABA will bemade each year in January equal to 3%. Minimum benefit adjustment (non-GABA) The minimum benefit provided may not be less than 50% of the compensation paid to a newly confirmed policeofficer of the employer that last employed the member as a police officer in the current fiscal year. Contributions: The State Legislature has the authority to establish and amend contribution rates to the plan. Member and employer contribution rates are specified by Montana Statute and are a percentage of the member’s compensation. Contributions are deducted from each member’s salary and remitted by participating employers. Special Funding: MCA 19-9-702 requires the State of Montana to contribute a percentage of total compensation directly to the Plan annually after the end of each fiscal year. Member, Employer and State contribution rates are shown in the table below. Member Fiscal Year Hired < 7/1/75 Hired > 6/30/75 Hired > 6/30/79 Hired > 6/30/97GABA Employer State 2000 - 2022 5.800% 7.000% 8.500% 9.000% 14.410% 29.370% 1998 - 1999 7.800% 9.000% 10.500% 11.000% 14.410% 29.370% 1997 7.800% 9.000% 10.500%14.360% 29.370% 80 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 Pension Liabilities, Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions GASB Statement 68 allows a measurement date of up to 12 months before the employer’s fiscal year-end can be utilized to determine the Plan’s TPL. The basis for the TPL as of June 30, 2021, was determined by taking the results of the June 30, 2020, 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 roll forward procedure will include the effects of any assumption changes and legislative changes. The update procedures are in conformity with Actuarial Standards of Practice issued by the Actuarial Standards Board. The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). The proportionate shares of the employer’s and the State of Montana’s NPL for June 30, 2021, and 2020, are displayed below. The employer’s proportionate share equals the ratio of the employer’s contributions to the sum of all employer and non-employer contributions during the measurement period. Due to the existence of the special funding situation, the state is required to report a proportionate share of a local government’s collective NPL that is associated with the non-state employer. The state’s proportionate share for a particular employer equals the ratio of the contributions for the particular employer to the total state contributions paid. The employer recorded a liability of $2,761,059 and the employer’s proportionate share was 1.5188 percent. As of measurement date Net Pension Liability as of 6/30/2021 Net Pension Liability as of 6/30/2020 Percent of Collective NPL as of 6/30/2021 Percent of Collective NPL as of 6/30/2020 Change in Percent of Collective NPL CITY OF KALISPELL Proportionate Share $ 2,761,059 $ 3,663,004 1.5188% 1.4976% 0.0212% State of Montana Proportionate Share associated with Employer 5,612,007 7,387,909 3.0871% 3.0206% 0.0665% Total $ 8,373,066 $ 11,050,913 4.6059% 4.5182% 0.0877% Changes in actuarial assumptions and methods: The following changes in assumptions or other inputs were made that affected the measurement of the TPL. 1.The discount rate was lowered from 7.34% to 7.06%2.The investment rate of return was lowered from 7.34% to 7.06% Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date. Changes in proportionate share: There were no changes to the Plan between the measurement date of the collective NPL and the employer’s reporting date that are expected to have a significant effect on the employer’s proportionate share of the collective NPL. Pension Expense: At June 30, 2021 measurement date, the employer recognized its proportionate share of the Plan’s pension expense of $407,915. The employer also recognized grant revenue of $826,360 for the support provided by the State of Montana for its proportionate share of the pension expense associated with the employer. As of measurement date Pension Expense as of 6/30/2021 Pension Expense as of 6/30/2020 CITY OF KALISPELL’s Proportionate Share $407,915 $627,023 State of Montana Proportionate Share associated with the Employer 826,360 1,286,060 Total $1,234,275 $1,913,083 81 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 Recognition of Deferred Inflows and Outflows: At June 30, 2021, the employer reported its proportionate share of the Plan’s deferred outflows of resources and deferred inflows of resources from the following sources: As of measurement date Deferred Outflows of Resources Deferred Inflows of Resources Expected vs. Actual Experience $87,816 $30,150 Projected Investment Earnings vs. Actual Investment Earnings 0 831,822 Changes in Assumptions 527,536 0 Changes in Proportion and Differences Between Employer Contributions and Proportionate Share of Contributions 0 14,015 Employer Contributions Subsequent to the Measurement Date 403,522 Total $1,018,874 $875,987 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: For the Measurement Year ended June 30: Recognition of Deferred Outflows and Deferred Inflows in future years as an increase or (decrease) to Pension Expense 2022 $881,793 2023 $27,274 2024 $(93,383) 2025 $(269,275) Thereafter $0 Actuarial Assumptions: The total pension liability as of June 30, 2021, was determined by an actuarial valuation date of June 30, 2020, using the following actuarial assumptions, applied to all periods included in the measurement. Among those assumptions were the following: Investment Return (net of admin expense) 7.06% Admin Expense as % of Payroll 0.18% General Wage Growth * *includes Inflation at 3.50% 2.40% Merit Increases 0% to 6.60% Postretirement Benefit Increases 1.Guaranteed Annual Benefit Adjustment (GABA) each JanuaryMembers hired on or after July 1, 1997 or those electing GABA Requires 12 full months of retirement before GABA will be made 2.Minimum Benefit Adjustment (non-GABA)Benefit for a retired member or member’s survivor and member didnot elect GABA 3.0% The minimum benefit provided should not be less than 50% of the monthly compensation paid to a newly confirmed police officer of the employer that last employed the member as a police officer Mortality: Contributing members, Service Retired Members & beneficiaries Disabled Retirees RP-2000 Combined Employee and Annuitant Mortality Tables projected to 2020 with scale BB, set back one year for males RP-2000 Combined Mortality Tables with no projects 82 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 Discount Rate: The discount rate used to measure the TPL was 7.06%. The projection of cash flows used to determine the discount rate assumed that contributions from participating plan members, employers, and non-employer contributing entities would be made based on the Board’s funding policy, which established the contractually required rates under the Montana Code Annotated. The state contributed 29.37% of the salaries paid by employers. Based on those assumptions, the Plan’s fiduciary net position was projected to be adequate to make all the projected future benefit payments of current plan members through the year 2134. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL. A municipal bond rate was not incorporated in the discount rate. Target Allocations: The long-term rate of return as of June 30, 2021, was calculated using the average long-term capital market assumptions published in the Survey of Capital Market Assumptions 2021 Edition by Horizon Actuarial Service, LLC, yielding a median real return of 4.66%. The assumed inflation is based on the intermediate inflation assumption of 2.40% in the 2021 OASDI Trustees Report used by the Chief Actuary for Social Security to produce 75-year cost projections. Combining these two results yields a nominal return of 7.06%. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation as of June 30, 2021, are summarized in the below table. Asset Class Target Asset Allocation Long-Term Expected Real Rate of Return Arithmetic Basis Cash 3.0% (0.33%) Domestic Equity 30.0%5.90% International Equity 17.0% 7.14% Private Investments 15.0%9.13% Real Assets 5.0% 4.03% Real Estate 9.0%5.41% Core Fixed Income 15.0% 1.14% Non-Core Fixed Income 6.0%3.02% Total 100.0% Sensitivity of the proportionate share of the net pension liability to changes in the discount rate – 78g: The following presents the employer’s sensitivity of the NPL to the discount rate in the table below. A small change in the discount rate can create a significant change in the liability. The NPL was calculated using the discount rate of 7.06%, as well as what the NPL would be if it were calculated using a discount rate 1.00% lower or 1.00% higher than the current rate. As of measurement date 1.0% Decrease (6.06%) Current Discount Rate 1.0% Increase (8.06%) CITY OF KALISPELL’s Net Pension Liability $4,517,430 $2,761,059 $1,364,875 Pension plan fiduciary net position: The stand-alone financial statements (76d) of the Montana Public Employees Retirement Board (PERB) Annual Comprehensive Financial Report (ACFR) and the GASB 68 Report disclose the Plan’s fiduciary net position. These reports, as well as the actuarial valuations and experience study, are available from the PERB at PO Box 200131, Helena MT 59620-0131, (406) 444-3154 or are available on the MPERA website at https://mpera.mt.gov/about/annualreports1/annualreports. 83 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 FIREFIGHTERS’ UNIFIED RETIREMENT SYSTEM GASB 68 NOTES TO THE FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2022 (REPORTING DATE), JUNE 30, 2021 (MEASUREMENT DATE) In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non-employer contributing entity are required to recognize and report certain amounts associated with participation in the Firefighters’ Unified Retirement System (the Plan). This includes the proportionate share of the collective Net Pension Liability; Pension Expense; and Deferred Outflows and Deferred Inflows of Resources associated with pensions. Employers are provided guidance in GASB Statement 68, paragraph 74, where pension amounts must be combined as a total or aggregate for reporting, whether provided through cost-sharing, single-employer, or agent pension plans. This report provides information for employers who are using a June 30, 2021 measurement date for the 2022 reporting. Summary of Significant Accounting Policies MPERA prepared financial statements using the accrual basis of accounting. The same accrual basis was used by MPERA for the purposes of determining the Net Pension Liability (NPL); Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions; Pension Expense; the Fiduciary Net Position; and Additions to or Deductions from Fiduciary Net Position. Member contributions are recognized in the period in which contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the accounting period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting period in which they are due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred. Investments are reported at fair value. MPERA adhered to all accounting principles generally accepted by the United States of America. MPERA applied all applicable pronouncements of the Governmental Accounting Standards Board (GASB). General Information about the Pension Plan Plan Description: The Firefighters’ Unified Retirement System (FURS), administered by the Montana Public Employee Retirement Administration (MPERA), is a multiple-employer, cost-sharing defined benefit plan established in 1981, and governed by Title 19, chapters 2 & 13, Montana Code Annotated (MCA). This plan provides retirement benefits to firefighters employed by first- and second-class cities, other cities and rural fire district departments that adopt the plan, and to firefighters hired by the Montana Air National Guard on or after October 1, 2001. Benefits are established by state law and can only be amended by the Legislature. Benefits provided: The FURS provides retirement, disability, and death benefits to plan members and their beneficiaries. Benefits are based on eligibility, years of service, and highest average compensation (HAC). Member rights are vested after five years of service. Service retirement and monthly benefit formula: Hired on or after July 1, 1981, or member has elected to be covered by GABA: o 20 years of membership service, regardless of age o 2.5% of HAC x years of service credit Hired prior to July 1, 1981, and who had not elected to be covered by GABA, the greater of above, or: o If membership service is less than 20 years: 2% of the highest monthly compensation (HMC) for each year ofservice credit, or o If membership service is greater or equal to 20 years: 50% of HMC plus 2% of HMC for each year of servicecredit in excess of 20 Early retirement: Age 50 with 5 years of membership service - Normal retirement benefit calculated using HAC andservice credit Second retirement: Applies to retirement system members re-employed in a FURS position on or after July 1, 2017: If the member works more than 480 hours in a calendar year and accumulates less than 5 years of service credit beforeterminating again, the member: o is not awarded service credit for the period of reemployment; o is refunded the accumulated contributions associated with the period of reemployment; 84 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 o starting the first month following termination of service, receives the same retirement benefit previously paid tothe member; and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives a GuaranteedAnnual Benefit Adjustment (GABA) in January immediately following second retirement. If the member works more than 480 hours in a calendar year and accumulates at least 5 years of service credit beforeterminating again, the member: o is awarded service credit for the period of reemployment; o starting the first month following termination of service, receives: *the same retirement benefit previously paid to the member; and *a second retirement benefit for the period of reemployment calculated based on the laws in effect as ofthe members’ rehire date, and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives a GABA: *on the initial retirement benefit in January immediately following second retirement, and *on the second retirement benefit starting in January after receiving that benefit for at least 12 months. A member who returns to covered service is not eligible for a disability benefit. Member’s compensation period used in benefit calculation Hired prior to July 1, 1981 and not electing GABA: highest monthly compensation (HMC); Hired after June 30, 1981 and those electing GABA: highest average compensation (HAC) during any consecutive 36months (or shorter period of total service). Part-time firefighter: 15% of regular compensation of a newly confirmed full-time firefighter. Compensation Cap Hired on or after July 1, 2013: 110% annual cap on compensation considered as a part of a member’s HAC. Guaranteed Annual Benefit Adjustment (GABA) Hired on or after July 1, 1997, or those electing GABA, and has been retired for at least 12 months – the member’s benefit increases by 3.0% each January. Minimum Benefit Adjustment (non-GABA) A member with 10 or more years of membership service who has not elected to be covered under GABA - the minimum benefit provided may not be less than 50% of the monthly compensation paid to a newly confirmed active firefighter of the employer that last employed the member as a firefighter in the current fiscal year. Contributions: The State Legislature has the authority to establish and amend contribution rates to the plan. Member and employer contribution rates are specified by Montana Statute and are a percentage of the member’s compensation. Contributions are deducted from each member’s salary and remitted by participating employers. Special Funding: MCA 19-13-604 requires the State of Montana to contribute a percentage of total compensation directly to the Plan annually after the end of each fiscal year. Member, Employer and State contribution rates are shown in the table below. Member Fiscal Year Non-GABA GABA Employer State 1998 – 2022 9.500% 10.700% 14.360% 32.610% 1997 7.800% 14.360% 32.610% Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions GASB Statement 68 allows a measurement date of up to 12 months before the employer’s fiscal year-end can be utilized to determine the Plan’s TPL. The basis for the TPL as of June 30, 2021, was determined by taking the results of the June 30, 2020, 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 roll forward procedure will include the effects of any assumption changes and legislative changes. The update procedures are in conformity with Actuarial Standards of Practice issued by the Actuarial Standards Board. 85 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). The proportionate shares of the employer’s and the State of Montana’s NPL for June 30, 2021, and 2020, are displayed below. The employer’s proportionate share equals the ratio of the employer’s contributions to the sum of all employer and non-employer contributions during the measurement period. Due to the existence of the special funding situation, the state is required to report a proportionate share of a local government’s collective NPL that is associated with the non-state employer. The state’s proportionate share for a particular employer equals the ratio of the contributions for the particular employer to the total state contributions paid. The employer recorded a liability of $1,034,261 and the employer’s proportionate share was 1.2086 percent. As of measurement date Net Pension Liability as of 6/30/2021 Net Pension Liability as of 6/30/2020 Percent of Collective NPL as of 6/30/2021 Percent of Collective NPL as of 6/30/2020 Change in Percent of Collective NPL CITY OF KALISPELL Proportionate Share $ 1,034,259 $ 1,822,118 1.2086% 1.1645% 0.0441% State of Montana Proportionate Share associated with Employer 2,347,443 4,107,673 2.7431%2.6251%0.1180% Total $ 3,381,702 $ 5,929,791 3.9517% 3.7896% 0.1621% Changes in actuarial assumptions and methods: The following changes in assumptions or other inputs were made that affected the measurement of the TPL. 1.The discount rate was lowered from 7.34% to 7.06%2.The investment rate of return was lowered from 7.34% to 7.06% Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date. Changes in proportionate share: There were no changes to the Plan between the measurement date of the collective NPL and the employer’s reporting date that are expected to have a significant effect on the employer’s proportionate share of the collective NPL. Pension Expense: At June 30, 2021 measurement date, the employer recognized its proportionate share of the Plan’s pension expense of $172,779. The employer also recognized grant revenue of $407,125 for the support provided by the State of Montana for its proportionate share of the pension expense that is associated with the employer. As of measurement date Pension Expense as of 6/30/2021 Pension Expense as of 6/30/2020 CITY OF KALISPELL’s Proportionate Share $172,779 $320,281 State of Montana Proportionate Share associated with the Employer 407,125 725,905 Total $579,904 $1,046,186 86 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 Recognition of Deferred Inflows and Outflows: At June 30, 2021, the employer reported its proportionate share of the Plan’s deferred outflows of resources and deferred inflows of resources from the following sources: As of measurement date Deferred Outflows of Resources Deferred Inflows of Resources Expected vs. Actual Experience $135,419 $5,627 Projected Investment Earnings vs. Actual Investment Earnings 0 707,555 Changes in Assumptions 529,462 0 Changes in Proportion and Differences Between Employer Contributions and Proportionate Share of Contributions 0 65,737 Employer Contributions Subsequent to the Measurement Date 340,851 Total $1,005,732 $778,919 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: For the Measurement Year ended June 30: Recognition of Deferred Outflows and Deferred Inflows in future years as an increase or (decrease) to Pension Expense 2022 $585,344 2023 $(59,597) 2024 $(83,524) 2025 $(118,381) Thereafter $168,825 Actuarial Assumptions: The total pension liability as of June 30, 2021, was determined by an actuarial valuation date of June 30, 2020, using the following actuarial assumptions, applied to all periods included in the measurement. Among those assumptions were the following: Investment Return (net of admin expense) 7.06% Admin Expense as % of Payroll 0.17% General Wage Growth * *includes Inflation at 3.50% 2.40% Merit Increases 0% to 6.30% Postretirement Benefit Increases 1.Guaranteed Annual Benefit Adjustment (GABA) each January Members hired on or after July 1, 1997 or those electing GABA Requires 12 full months of retirement before GABA will be made2.Minimum Benefit Adjustment (non-GABA) Members with 10 or more years of membership service and memberdid not elect GABA 3.0% The minimum benefit provided should be less than 50% of the current base compensation of a newly confirmed active firefighter of the employer that last employed the member as a fire fighter Mortality: Contributing members, Service Retired Members & beneficiaries Disabled members RP-2000 Combined Employee and Annuitant Mortality Tables projected to 2020 with scale BB, set back one year for males RP-2000 Combined Mortality Tables with no projections 87 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 Discount Rate: The discount rate used to measure the TPL was 7.06%. The projection of cash flows used to determine the discount rate assumed that contributions from participating plan members, employers, and non-employer contributing entities would be made based on the Board’s funding policy, which established the contractually required rates under the Montana Code Annotated. The state contributed 32.61% of the salaries paid by employers. Based on those assumptions, the Plan’s fiduciary net position was projected to be adequate to make all the projected future benefit payments of current plan members through the year 2133. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL. A municipal bond rate was not incorporated in the discount rate. Target Allocations: The long-term rate of return as of June 30, 2021, was calculated using the average long-term capital market assumptions published in the Survey of Capital Market Assumptions 2021 Edition by Horizon Actuarial Service, LLC, yielding a median real return of 4.66%. The assumed inflation is based on the intermediate inflation assumption of 2.40% in the 2021 OASDI Trustees Report used by the Chief Actuary for Social Security to produce 75-year cost projections. Combining these two results yields a nominal return of 7.06%. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation as of June 30, 2021, are summarized in the below table. Asset Class Target Asset Allocation Long-Term Expected Real Rate of Return Arithmetic Basis Cash 3.0% (0.33%) Domestic Equity 30.0%5.90% International Equity 17.0% 7.14% Private Investments 15.0%9.13% Real Assets 5.0% 4.03% Real Estate 9.0%5.41% Core Fixed Income 15.0% 1.14% Non-Core Fixed Income 6.0%3.02% Total 100.0% Sensitivity of the proportionate share of the net pension liability to changes in the discount rate: The following presents the employer’s sensitivity of the NPL to the discount rate in the table below. A small change in the discount rate can create a significant change in the liability. The NPL was calculated using the discount rate of 7.06%, as well as what the NPL would be if it were calculated using a discount rate 1.00% lower or 1.00% higher than the current rate. As of measurement date 1.0% Decrease (6.06%) Current Discount Rate 1.0% Increase (8.06%) CITY OF KALISPELL’s Net Pension Liability $2,346,613 $1,034,259 $(16,952) Pension plan fiduciary net position: The stand-alone financial statements (76d) of the Montana Public Employees Retirement Board (PERB) Annual Comprehensive Financial Report (ACFR) and the GASB 68 Report disclose the Plan’s fiduciary net position. The reports, as well as the actuarial valuations and experience study, are available from the PERB at PO Box 200131, Helena MT 59620-0131, (406) 444-3154 or are available on the MPERA website at https://mpera.mt.gov/about/annualreports1/annualreports. 88 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2022 City of Kalispell, Montana Notes to Financial Statements June 30, 2022 89 G.Postemployment Health Insurance Benefits (OPEB) Plan Description. In fiscal year 2022, the City of Kalispell provided employee medical insurance through a single-employer plan run by the Montana Municipal Interlocal Authority (MMIA). The City also provided dental through single-employer defined benefit plan. As required by state law (2-18-704, MCA), terminated employees may remain on the City’s health insurance plan for up to 18 months if they pay the monthly premiums. This benefit is required under federal C.O.B.R.A. law. In accordance with Montana State law (see below), retirees may remain on the City’s health plan if they wish. The City’s contract with Allegiance Benefits details the plan eligibility. MMIA is the administrator of the benefit plan, which covers both active and retired members. The City’s retirees may continue coverage for themselves and their covered eligible dependents if they are eligible for public employees’ retirement by virtue of their employment with the City of Kalispell. To continue coverage, retirees are required to pay the full cost of the benefit. The City’s current labor contracts do not include any obligations for payments to retirees. Montana Codes Annotated (MCA) Section 2-18-704 states (1) an insurance contract or plan issued under this part must contain provisions that permit: (a)The member of a group who retires from active service under the appropriate retirement provisions of adefined 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 thefederal Health Insurance for the Aged Act, 42 U.S. C. 1395, as amended, unless the member is aparticipant 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 formedicare under the federal Health Insurance for the Aged Act or unless the spouse has or is eligible for equivalent insurance coverage as provided in subsection (1)(a); (c)The surviving children of a member to remain members of the group if they are eligible for retirementbenefits accrued by the deceased member as provide by law unless they have equivalent coverage insubsection (1)(a) or are eligible for insurance coverage by virtue of the employment of a survivingparent 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 Outflows of Resources Related to OPEB. The City’s total other post-employment benefit (OPEB) liability of $3,008,655 as of June 30, 2022, was determined by an actuarial valuation as of that date. City of Kalispell, Montana Notes to Financial Statements June 30, 2022 90 Actuarial assumptions and other inputs. The total OPEB liability in the June 30, 2022 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Inflation 3.00 percent Salary increases 3.50 percent Discount rate 4.09 percent Premium trend rate 3.20 percent Retirees share of benefit-related costs 100 percent of projected premiums for retirees The discount rate was based on the S&P Municipal Bond 20 Year High Grade Rate Index as of June 30, 2022. Mortality rates were based on the RP-2000 Combined Mortality Table Projection BB projected to 2020, males set back one year; consistent with PERS, FURS, and MPORS Pension Actuarial Valuation 6/30/21. The actuarial assumptions used in the June 30, 2022 valuation represent a reasonable long-term expectation of future OPEB outcomes. The assumptions are tested with each valuation for ongoing reasonableness and are updated when appropriate. Changes in the Total OPEB Liability. Total OPEB Liability OPEB Liability at June 30,2021 3,843,941$ Changes for the year: Service cost 208,761$ Interest 157,217$ Difference between expected and actual experience (48,744)$ Changes in assumptions (1,152,520)$ OPEB Liability at June 30,2022 $3,008,655 Sensitivity of the Total OPEB Liability to Changes in the Discount Rate. The following table presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or higher than the current discount rate. 1% Decrease Discount Rate 1% Increase (3.09%) (4.09%) (5.09%) Total OPEB Liability 3,549,968$ 3,008,655$ 2,572,764$ 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 (2.2%) (3.2%) (4.2%) Total OPEB Liability 2,484,605$ 3,008,655$ 3,684,752$ City of Kalispell, Montana Notes to Financial Statements June 30, 2022 91 For the year ended June 30, 2022, the City reported deferred inflows and deferred outflows of resources related to OPEB from the following sources: Deferred Inflows Deferred Outflows of Resources of Resources Differences between expected and actual experience (1,157,515)$ 9,466$ Current year amortization of experience differences 341,143$ (3,756)$ Changes in assumptions or other inputs (2,075,906)$ 1,316,511$ Current year amortization of assumption changes 425,281$ (429,332)$ Total (2,466,997)$ 892,889$ Amounts reported as deferred outflows/deferred outflows of resources related to OPEB as of June 30, 2022 will be recognized in OPEB expense as follows: Actual to Expected Changes in Fiscal Year Ending Experience Assumptions June 30:Inflow Outflow 2022 (4,798)$ (113,437)$ (118,235)$ 2023 (4,798)$ (113,437)$ (118,235)$ 2024 (4,798)$ (113,437)$ (118,235)$ 2025 (4,798)$ (113,437)$ (118,235)$ 2026 (4,798)$ (113,437)$ (118,235)$ Thereafter (24,754)$ (585,335)$ (610,089)$ (48,744)$ (1,152,520)$ (1,201,264)$ H.Amounts Due From Other Governments On June 30, 2022, the amounts due from other governments consisted of the following: General Fund Amount Debt Service Funds Amount Due from:Due from: Flathead County-Taxes 284,998$ Flathead County-Taxes 49,511$ State of Montana-Video Gaming Fees 275$ Sub Total 285,273$ Special Revenue Funds Amount Due from:Total Governmental Funds 801,397$ Flathead County-Taxes 406,655$ Flathead Economic Development Authority 9,375$ Enterprise Funds Amount Flathead County-Stonegarden 704$ Due from: Montana Board of Crime Control 16,884$ Flathead County-Impact Fees 55,136$ U.S. DOJ 16,565$ Flathead County-Taxes 151,936$ MDOT 3,881$ Total Business-type Funds 207,072$ EPA 12,549$ Sub Total 466,613$ Total City of Kalispell 1,008,469$ City of Kalispell, Montana Notes to Financial Statements June 30, 2022 92 I.Restricted Cash/Investments The following restricted cash/investments were held as of June 30, 2022. These amounts are reported within the cash/investment accounts on the Balance Sheet – Governmental Funds, and as restricted cash and investments on the Statement of Net Position – Proprietary Funds. RESTRICTED CASH: Business-type Activities July 1, 2021 Additions Subtractions June 30, 2022 Water Bond Reserve 227,273$ -$ -$ 227,273 Plant Investment/Impact Fees (1)1,523,107 830,493 (897,359) 1,456,241 Sewer Operating Reserve (2)400,000 - 400,000 Bond Reserve 922,617 922,617 Plant Investment/Impact Fees (sanitary) (1)2,742,365 1,631,550 (526,136) 3,847,779 Plant Investment/Impact Fees (treatment plant) (1)2,613,677 987,152 (604,480) 2,996,349 Plant Investment/Impact Fees (storm) (1)2,107,869 302,526 (666,094) 1,744,301 Treatment Plant Replacement (3)425,662 453,089 (352,947) 525,804 Total business-type activities restricted cash/investments 10,962,570 4,204,810 (3,047,016) 12,120,364 Governmental Activities Impact Fees Public Safety Growth related Capital (1)1,586,879 438,529 (4,309) 2,021,099 Urban Forestry Developers (4)142,147 17,045 (7,178) 152,014 Debt Service Westside TIF Bond Reserve 480,011 - - 480,011 Debt Service SID 345 Bond Reserve 11,172 - - 11,172 Debt Service Revolving Fund - SID 344 Bond Reserve 146,000 - (10,000) 136,000 Debt Service Revolving Fund - SID 345 Bond Reserve 12,100 - -12,100 Total governmental activities restricted cash/investments 2,378,309 455,574 (21,487) 2,812,396 Total restricted cash/investments 13,340,879$ 4,660,384$ (3,068,503)$ 14,932,760$ (1)Plant investment/impact fee cash. Montana State legislation regulating impact fees to fund capitalimprovements, 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 Councilauthorized and established the procedure and imposition of impact fees to fund capital improvements relatedto additional capacity (growth). MCA 7-6-1603 states, “the collection and expenditure of impact fees must be reasonably related to thebenefits 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 2022 fiscal year, the following adjustments relating to prior years’ transactions were made to fund balance or net position accounts. Fund Amount Reason Fiduciary Fund 12,535$ Correct for proper GASB 84 reportingCustodial Fund Total Fiduciary funds 12,535$ Water Fund - Major Proprietary 106$ Prior period retainage audit and adjustment correction Total Proprietary funds/Business-type activities 106$ City of Kalispell, Montana Notes to Financial Statements June 30, 2022 93 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. 1.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 sharedproportionally by all members. Under the supervision of the Board, the Director shall hire and direct staff to carryout 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 statewide health insurance pool administered by MMIA. Given the lack of coverage available, the City has no City of Kalispell, Montana Notes to Financial Statements June 30, 2022 94 coverage for potential losses from environmental damages. Effective July 1, 1987 The City of Kalispell joined with other Montana cities to form the Montana Municipal Insurance Authority, a self-insurance pool offering Worker's Compensation and Liability Coverage. Both public entity risk pools currently operate as common risk management and insurance programs for the member governments. The liability limits for damages in tort action are $750,000 per claim and $1.5 million per occurrence with an $11,250 deductible per occurrence. State tort law limits the City’s liability to $1.5 million. The city pays an annual premium for its employee injury insurance coverage, which is allocated to the employer funds based on total salaries and wages. The agreements for formation of the pools provide that they will be self-sustaining through member premiums. The tort liability plan and workers’ compensation program issued bonds in the amount of $4.41 million and $7.610 million, respectively, to immediately finance the necessary insurance reserves. All members signed a contingent note for a pro rata share of this liability in case operating revenue was insufficient to cover the debt service. The City’s share is $201,445 for liability and $281,715 for Workers’ Compensation to finance the necessary insurance reserves. Based on the plan’s current financial position, the City does not expect to make any payment on these notes. Separate financial statements are available from the Montana Municipal Insurance Authority. On October 1, 2004, Kalispell signed a 5 year agreement, since then extended, and through the Montana Municipal Insurance Authority, to create a statewide health insurance pool. The City pays the total monthly premium for employees who only choose to cover themselves. For employees who choose to cover additional dependents, the City pays a percentage of the extra costs. N. Contingencies The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. The effect on the financial statements cannot be determined at this time due to litigation. Accordingly, no provision has been made in the financial statements for these contingent liabilities. O.Receivables Taxes/Assessments Receivable The following funds had taxes and/or assessments receivable at June 30, 2022. FUND Source AmountGeneral - Major Governmental Taxes 204,145$ Downtown TIF Taxes 7,394 Westside TIF Taxes 1,369 Parks Taxes 37,050 Old School "Tech" TIF Taxes 48,508 Old School "Ind" TIF Taxes 51,848 Health Levy Taxes 33,136 Light Maintenance District Assessments 22,765 Street Maintenance - Major GovernmentalAssessments 121,052 Urban Forestry Assessments 27,853 Westside TIF debt service Taxes 36,021 SID 344 - Major Governmental Assessments 1,302,960 SID 345 Assessments 107,535 S & C's Assessments 33,776 Total Governmental Funds 2,035,412$ Sewer - Major Business-type Assessments 53,212 Solid waste Assessments 25,259 Total Business-type Funds 78,471 Total City 2,113,883$ City of Kalispell, Montana Notes to Financial Statements June 30, 2022 Accounts Receivable At June 30, 2022, the Ambulance fund had accounts receivable deferred net of $401,249. Total net accounts receivable of the Ambulance fund is $397,440. The difference is the result of $3,809 being receivable, and therefore recognized as revenue, prior to the Ambulance fund conversion from a proprietary fund to a special revenue fund. Loans Receivable Community Development Loan Revolving Second Avenue West Partners In August of 2002, the City of Kalispell entered two (2) notes receivable agreements with 2nd Avenue West Partners, L.P. (Hampstead Partners) for property on 2nd Avenue West in Kalispell. The property consists of a 40-unit low-income apartment complex known as 2nd Avenue West Independent Living Center. As stipulated in the agreement, this property is restricted as low-income housing, and shall remain as such for a period of thirty-five years. One of these notes is for $480,000, and bears interest at 1% per annum. The second of these notes is for $400,000, and bears interest at 4.81% per annum. These loans mature on February 28, 2032. Payments of interest on the note are due on or before the last day of the taxable year, to the extent 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, 2022, is $95,655, and $545,625, respectively. Community Development Block Grant Economic Development Program In fiscal year 2007, the City entered a community development program with funding from a community development block grant economic development program. Eligibility for these low interest loans is tied to the creation of jobs within Kalispell with a percentage of the jobs created to be filled by low and moderate-income persons. Rural Development Loan Revolving On May 5, 2003, the City Council passed Resolution No. 4780 establishing an Economic Development Revolving Loan Fund (ED RLF) for small business retention and expansion. The resolution also created an Economic Development Loan Review Committee to process all applications for assistance. Additionally, on August 16, 2004 and again on November 6, 2006, the City Council, by Resolution No. 4929 and 5158, respectively, authorized the City Manager to enter into loan agreements with the United States Department of Agriculture, Rural Development office, in the amount of $520,000 and $750,000. These monies will be used to assist in the retention and expansion of small business, which may stimulate economic development activity by assisting the private sector where a funding gap exists and alternative sources of public and private financing are not adequate. 95 City of Kalispell, Montana Notes to Financial Statements June 30, 2022 96 SUMMARY COMMUNITY DEVELOPMENT LOANS RECEIVABLE From orig.%To Orig. Amt.Balance Purpose CD Loan Revolving 2006 5.00 Distinctive Countertops 288,619 40,653 Jobs 2017 3.00 Norm's News 33,765 9,294 Jobs 2016 6.00 SMP LLC 50,000 - Jobs 2018 3.00 Wheatons 46,991 16,722 Jobs 2002 1.00 Hampstead Partners*480,000 480,000 Low Income Housing 2002 4.81 Hampstead Partners*400,000 400,000 Low Income Housing 2002 1.00 Hampstead Partners - Interest Portion*- 94,271 Low Income Housing 2002 4.81 Hampstead Partners - Interest Portion*- 597,524 Low Income Housing RD Loan Revolving 2006 6.50 Distinctive Countertops 175,000 25,293 Small Business 2012 5.25 Glacier Valley Endodontics, Inc 35,000 - Small Business 2020 3.00 PKM, LLC (NW DRYWALL)250,000 228,277 Small Business Westside TIF 2020 3.00 PKM, LLC (NW DRYWALL)500,000 456,554 Redevelopment Total Governmental Funds 2,259,375$ 2,348,588$ *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 statement of net position/balance sheet of the Governmental-Type/General Fund. These receivables, at June 30, 2022, amounted to $2,670,457. City of Kalispell, Montana Notes to Financial Statements June 30, 2022 97 R.Fund Balance Classification by Major Purposes The table presented below displays the City’s fund balances by major purpose as displayed on page 27, the 3,875,102 governmental funds balance sheet. American Other Total General Westside Street Rescue Governmental Governmental Fund TIF Maint.Plan Act Funds Funds Nonspendable - not in spendable form Long-term recievables 1,300,000 - - - - 1,300,000 Prepaids 16,246 - 18,728 - 42,204 77,178 Total nonspendable 1,316,246 - 18,728 - 42,204 1,377,178 Restricted General Government-Health Insurance - - - - 55,822 55,822 Public Safety-admin.- - - - 14,270 14,270 Public Safety-EMS - - - - 30,940 30,940 Public Safety-Building Inspection - - - - 2,803,550 2,803,550 Public Safety-Fire capital improvements - - - - 1,830,077 1,830,077 Public Safety-Police capital improvements - - - - 191,022 191,022 Public Safety-Police equip.- - - - 33,716 33,716 Public Safety-Police personnel - - - - 35,324 35,324 Public Safety-Fire equip.- - - - 6,369 6,369 Public Safety-Fire personnel - - - - 43,875 43,875 Public Works-Street cleanning and Maint.- - 3,583,498 - 21,006 3,604,504 Public Works-Street Lights - - - - 874,583 874,583 Public Works-roads and streets - - - - 1,115,179 1,115,179 Public Works-transportation infrastructure - - - - 542,685 542,685 Culture and Recreation-Park improvements - - - - 151,516 151,516 Culture and Recreation-Equipment - - - - 52,467 52,467 Culture and Recreation-Programs - - - - 1,370,197 1,370,197 Culture and Recreation-trees and maintenance - - - - 1,066,706 1,066,706 Community Development-- - - - 128,096 128,096 Community Development-Downtown TIF - - - - 252,197 252,197 Community Development-Old School Station - - - - 29,622 29,622 Community Development-South Kalispell TIF - - - - 214,340 214,340 Community Development-Westside TIF - 705,556 - - 27,090 732,646 Community Development-Revolving loan funds - -- - 2,618,534 2,618,534 Debt Service-SID - -- - 224,033 224,033 Debt Service-Old School improvements - -- - 45,107 45,107 Debt Service-The Willows improvements - -- - 24,232 24,232 Debt Service-S & C warrants - -- - 825 825 Debt Service-Core area improvements - -- - 834,109 834,109 Total restricted - 705,556 3,583,498 14,637,489 18,926,543 Assigned Capital Equipment 550,000 - - - 550,000 Parking 23,542 - - - 23,542 Miscellaneous 840,618 - - - 840,618 Total assigned 1,414,160 - - - - 1,414,160 Unassigned 2,699,686 - - (1,030,413) 1,669,273 Total fund balances 5,430,092 705,556 3,602,226 - 13,649,280 23,387,154 City of Kalispell, Montana Notes to Financial Statements June 30, 2022 98 S. Subsequent Events American Rescue Plan Act (ARPA) Grant ARPA was signed into law March 11, 2021, to address the COVID-19 pandemic. ARPA provides state and local aid to make necessary investments in water, sewer and storm infrastructure. On July 18, 2022 the Kalispell City Council accepted 4 grant awards totaling $3,041,957, for the Kalispell wastewater treatment plan fermenter rehabilitation; Kalispell wastewater treatment plant influent pipe and diversion structure reconstruction; Kalispell sewer replacement on 1st and 2nd Ave EN to Nevada St.; and Kalispell Noffsinger Spring Water Source Replacement. The Kalispell Core & Rail Redevelopment This US DOT Transportation Investment Generating Economic Recovery grant project has provided infrastructure for a rail-served industrial park known as Glacier Rail Park to serve existing and new business and relocated rail services for existing rail users from the Kalispell Core Area allowing for the abandonment and removal of the tracks, the creation of a complete street connection and the development of a trail in a linear park connecting the community. The Kalispell Parkline trail and linear park has connected economically disadvantaged and elderly people to business districts, grocery stores, schools, child and elder care, healthcare, workforce training and employment assistance while catalyzing redevelopment in the heart of the community. The project was completed in June 2022 and a community celebration and grand opening was held to celebrate the project July 21, 2022 which included plein air artists, a historical lecture, children’s parade and ribbon cutting ceremony. Samaritan House The City of Kalispell has partnered with the Samaritan House for a $30,000 Community Development Block Grant planning grant to prepare a preliminary architectural report for the proposed expansion of the facility to include 27 sleeping spaces as part of a homeless shelter, along with a dining area and shared community space. In addition, there would be 16 multi-family housing units for long term housing. The expansion would include remodeling of existing space as well as new construction. REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT DISCUSSION AND ANALYSIS 99 2017 2018 2019 2020 2021 2022 Total OPEB Liability Service cost 332,296$ 298,579$ 227,903$ 253,580$ 326,193$ 208,761$ Interest 79,695$ 137,494$ 135,435$ 76,055$ 72,682$ 157,217$ Difference between expected and actual experience 13,222$ (137,426)$ (736,800)$ (98,937)$ (235,464)$ (48,744)$ Changes in assumptions 1,013,936$ (253,167)$ (798,142)$ 244,123$ 346,504$ (1,152,520)$ Changes in benefit terms -$ -$ -$ -$ -$ -$ Contributions by employer -$ -$ -$ -$ -$ -$ Net change in total OPEB liability 1,439,149$ 45,480$ (1,171,604)$ 474,821$ 509,915$ (835,286)$ Total OPEB liability-beginning (restated) 2,546,180$ 3,985,329$ 4,030,809$ 2,859,205$ 3,334,026$ 3,843,941$ Total OPEB liability-ending 3,985,329$ 4,030,809$ 2,859,205$ 3,334,026$ 3,843,941$ $ 3,008,656 Covered-employee payroll 10,456,215$ 10,748,989$ 11,430,605$ 11,794,098$ 12,822,159$ 13,270,935$ Total OPEB liability as a percentage of covered- employee payroll 38.1% 37.5% 25.0% 28.3% 30.0% 22.7% Notes to Schedule: Changes of assumptions and other inputs Discount trend 3.13% 3.45% 3.36% 2.66% 2.18% 4.09% Medical trend 4.50% 4.50% 3.50% 3.50% 3.20% 3.20% Governmental Accounting Standards Board, Statement 75 requires this information to be provided for 10 years. Because fiscal year 2018 was the first year of implementation, 10 years is not available. SCHEDULE OF TOTAL LIABILITY AND RELATED RATIOS OTHER POSTEMPLOYMENT BENEFITS June 30, 2022 2017 2018 2019 2020 2021 2022 Contractually required contribution -$ -$ -$ -$ -$ -$ Contributions in relation to the contractually required contribution -$ -$ -$ -$ -$ -$ Contribution deficiency (excess)-$ -$ -$ -$ -$ -$ City's covered-employee payroll 10,456,215$ 10,748,989$ 11,430,605$ 11,794,098$ 12,822,159$ 13,270,935$ Contributions as a percentage of covered- employee payroll 0%0%0%0%0%0% Governmental Accounting Standards Board, Statement 75 requires this information to be provided for 10 years. Because fiscal year 2018 was the first year of implementation, 10 years is not available. City of Kalispell SCHEDULE OF CONTRIBUTIONS OTHER POSTEMPLOYMENT BENEFITS June 30, 2021 CITY OF KALISPELL REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2022 100 2021 2020 2019 2018 2017 2016 2015 2014 0.34159%0.34687%0.34786%0.342578%0.453698%0.431402%0.426464%0.436421% $6,193,855 $9,067,196 $7,271,356 $7,150,099 $8,836,349 $7,348,266 $5,961,419 $5,437,857 1,825,504 2,856,744 2,365,647 2,393,378 117,668 89,787 73,226 66,405 8,019,359$ 11,923,940$ 9,637,003$ 9,543,477$ 8,954,017$ 7,438,053$ 6,034,645$ 5,504,262$ $6,033,845 $5,766,515 $5,739,639 $5,633,887 $5,628,154 $5,167,438 $4,976,919 $4,978,271 102.65%157.24%126.69%126.91%157.00%142.20%119.78%111.22% 79.91%68.90%73.85%73.47%73.75%74.71%78.40%79.87% 2022 2021 2020 2019 2018 2017 2016 2015 $671,364 $595,854 $505,222 $493,648 $477,191 $471,085 $444,391 $430,109 $0 $0 $0 $0 $0 $0 $0 $0 $671,364 $595,854 $505,222 $493,648 $477,191 $471,085 $444,391 $430,109 $0 $0 $0 $0 $0 $0 $0 $0 $7,569,233 $6,814,068 $5,766,515 $5,739,639 $5,633,887 $5,628,154 $5,167,438 $4,976,919 8.87% 8.74% 8.76% 8.60% 8.47% 8.37% 8.60% 8.64% As of Measurement Date: Employer's proportion of the Net Pension Liability Employer's Net Pension Liability (amount) State of Montana's Net Pension Liability (amount) As of reporting date Total Employer's Covered Payroll (1) Employer's proportionate share as a percent of Covered Plan Fiduciary Net Position as a percent of the Total Pension Liability Contractually Required DB Contributions Plan Choice Rate Required Contributions Contributions in Relation to the Contractually Required Contribution Deficiency (Excess) Employer's Covered Payroll Contributions as a percentage of Covered Payroll Schedule is inteded to show information for 10 years. Additional years will be dispolayed as they become available. Public Employees Retirement Plan (PERS) Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability For the Last Ten Fiscal Years* Required Supplementary Information Schedule of Contributions For the Last Ten Fiscal Years* (1) All employer adjustments made in fiscal year 2020 but are adjusting a payroll with a pay date in a prior fiscal year, *The amounts presented for each fiscal year were determined as of June 30, the measurement date are considered prior year adjustments and are removed form the covered payroll report beforethe actuary calculates the employers proportionate share. CITY OF KALISPELL REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2022 101 Changes of Benefit Terms The following changes to the plan provisions were made as identified: 2017: Working Retiree Limitations – for PERS Effective July 1, 2017, if a PERS retiree returns as an independent contractor to what would otherwise be PERS-covered employment, general contractor overhead costs are excluded from PERS working retiree limitations. . Refunds 1)Terminating members eligible to retire may, in lieu of receiving a monthly retirement benefit, refund their accumulated contributions in a lump sum.2)Terminating members with accumulated contributions between $200 and $1,000 who wish to rollover their refund must do so within 90 days of termination of service.3)Trusts, estates, and charitable organizations listed as beneficiaries are entitled to receive only a lump-sum payment. Interest credited to member accounts – Effective July 1, 2017, the interest rate credited to member accounts increased from 0.25% to 0.77%. Lump-sum payouts Effective July 1, 2017, lump-sum payouts in all systems are limited to the member’s accumulated contributions rate than the present value of the member’s benefit. Disabled PERS Defined Contribution (DC) Members PERS members hired after July 1, 2011, have a normal retirement age of 65. PERS DC members hired after July 1, 2011 who became disabled were previously only eligible for a disability benefit until age 65. Effective July 1, 2017, these individuals will be eligible for a disability benefit until they reach 70, thus ensuring the same 5-year time period available to PERS DC disabled members hired prior to July 1, 2011, who have a normal retirement age of 60 and are eligible for a disability benefit until age 65. Changes in Actuarial Assumptions and Methods Method and assumptions used in calculations of actuarially determined contributions The following Actuarial Assumptions were adopted from the June 30, 2020 actuarial valuation: General Wage Growth* 3.50% Investment Rate of Return* 7.65% *Includes inflation at 2.75% Merit salary increase 0% to 8.47% Asset valuation method Four-year smoothed market Actuarial cost method Entry age Normal Amortization method Level percentage of payroll, open Remaining amortization period 30 years Mortality (Healthy members) For Males and Females: RP 2000 Combined Employee and Annuitant Mortality Table projected to 2020 using Scale BB, males set back 1 year Mortality (Disabled members) For Males and Females: RP 2000 Combined Mortality Table, with no projections Admin Expense as % of Payroll 0.28% Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the System. This amount varies from year to year based on the prior year’s actual administrative expenses. The actuarial assumptions and methods utilized in the June 30, 2020 valuation, were developed in the six year experience study for the period ending 2016. CITY OF KALISPELL REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2022 102 2021 2020 2019 2018 2017 2016 2015 2014 1.5188% 1.4976% 1.5182% 1.5868% 1.6383% 1.5682% 1.5255% 1.5019% $2,761,059 $3,663,004 $3,021,804 $2,717,519 $2,914,803 $2,822,947 $2,523,431 $2,359,962 5,612,007 7,387,909 6,153,443 5,555,145 5,940,859 5,603,673 5,112,711 4,767,405 8,373,066$ 11,050,913$ 9,175,247$ 8,272,664$ 8,855,662$ 8,426,620$ 7,636,142$ 7,127,367$ $2,748,824 $2,565,473 $2,502,092 $2,504,658 $2,449,995 $2,213,762 $2,111,268 $2,015,102 100.45% 142.78% 120.77% 108.50% 118.97% 127.52% 119.52% 117.11% 75.76% 64.84% 68.84% 70.95% 68.34% 65.62% 66.90% 67.01% 2022 2021 2020 2019 2018 2017 2016 2015 $403,522 $396,106 $369,685 $361,987 $374,615 $353,045 $324,287 $306,050 $403,522 $396,106 $369,685 $361,987 $374,615 $353,045 $324,287 $306,050 $0 $0 $0 $0 $0 $0 $0 $0 $2,800,297 $2,748,824 $2,565,473 $2,502,092 $2,504,658 $2,449,995 $2,213,762 $2,111,268 14.41% 14.41% 14.41% 14.47% 14.96% 14.41% 14.65% 14.50% Municipal Police Officers' Retirement Plan (MPORS) Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability For the Last Ten Fiscal Years* Total City of Kalispell Covered Payroll City of Kalispell proportionate share as a percent of Covered Payroll Plan Fiduciary Net Position as a percent of the Total Pension As of Measurement Date: City of Kalispell proportion of the Net Pension Liability (percentage) City of Kalispell Net Pension Liability (amount) State of Montana's Net Pension Liability associated with the proportionate share. Schedule is intended to show information for 10 years. Additional years will be displayed as they become available. As of reporting date Contractually Required Contributions Contributions in Relation to the Contractually Required Contribution Deficiency (Excess) Employer's Covered Payroll Contributions as a percentage of Covered Payroll considered prior year adjustments and are removed from the covered payroll report before the actuary calculates the employers *The amounts presented for each fiscal year were determined as of June 30, the measurement date (1) All employer adjustments made in the current fiscal year 2020 but are adjusting a payroll with a pay date in a prior fiscal year, are Schedule of Contributions For the Last Ten Fiscal Years* Required Supplementary Information CITY OF KALISPELL REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2022 103 Changes of Benefit Terms The following changes to the plan provision were made as identified: 2017: Working Retiree Limitations – for MPORS Applies to retirement system members who return on or after July 1, 2017 to covered employment in the system from which they retired. Members who return for less than 480 hours in a calendar year: o may not become an active member in the system; and o are subject to a $1 reduction in their retirement benefit for each $3 earned in excess of $5,000 in the calendar year. Members who return for 480 or more hours in a calendar year: o must become an active member of the system; o will stop receiving a retirement benefit from the system; and o will be eligible for a second retirement benefit if they earn 5 or more years of service credit through their secondemployment. Employee, employer and state contributions, if any, apply as follows: o employer contributions and state contributions (if any) must be paid on all working retirees; o employee contributions must be paid on working retirees who return to covered employment for 480 or more hoursin a calendar year. Second Retirement Benefit – for MPORS Applies to retirement system members who return on or after July 1, 2017 to active service covered by the system from which they retired. If the member works more than 480 hours in a calendar year and accumulates less than 5 years of service credit beforeterminating again, the member: o is not awarded service credit for the period of reemployment; o is refunded the accumulated contributions associated with the period of reemployment; o starting the first month following termination of service, receives the same retirement benefit previously paid to themember; and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives a GuaranteedAnnual Benefit Adjustment (GABA) in January immediately following second retirement. If the member works more than 480 hours in a calendar year and accumulates at least 5 years of service credit before terminating again, the member: o is awarded service credit for the period of reemployment; o starting the first month following termination of service, receives: *the same retirement benefit previously paid to the member, and *a second retirement benefit for the period of reemployment calculated based on the laws in effect as of themember’s rehire date; and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives a GABA: *on the initial retirement benefit in January immediately following second retirement, and *on the second retirement benefit starting in January after receiving that benefit for at least 12 months. A member who returns to covered service is not eligible for a disability benefit. Refunds Terminating members eligible to retire may, in lieu of receiving a monthly retirement benefit, refund their accumulatedcontributions in a lump sum. Terminating members with accumulated contributions between $200 and $1,000 who wish to rollover their refund must do sowithin 90 days of termination of service. Trusts, estates, and charitable organizations listed as beneficiaries are entitled to receive only a lump-sum payment. CITY OF KALISPELL REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2022 104 Interest credited to member accounts Effective July 1, 2017, the interest rate credited to member accounts increased from 0.25% to 0.77%. Lump-sum payouts Effective July 1, 2017, lump-sum payouts in all systems are limited to the member’s accumulated contributions rate than thepresent value of the member’s benefit. Changes in Actuarial Assumptions and Methods Method and assumptions used in calculations of actuarially determined contributions The following Actuarial Assumptions were adopted from the June 30, 2020 actuarial valuation: General Wage Growth* 3.50% Investment Rate of Return* 7.65% *Includes inflation at 2.75% Merit salary increases 0% to 6.60% Asset valuation method Four-year smoothed market Actuarial cost method Entry Age Normal Amortization method Level percentage of pay, open Mortality (Healthy members) For Males and Females: RP 2000 Combined Employee and Annuitant Mortality Table projected to 2020 using Scale BB, males set back 1 year Mortality (Disabled members) For Males and Females: RP 2000 Combined Mortality Table Admin Expense as % of Payroll 0.18% Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the System. This amount varies from year to year based on the prior year’s actual administrative expenses. The actuarial assumptions and methods utilized in the June 30, 2020 valuation, were developed in the six-year experience study for the period ending 2016. CITY OF KALISPELL REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2022 105 2021 2020 2019 2018 2017 2016 2015 2014 1.2086%1.1645%1.1622%1.2872%1.4637%1.3965%1.4196%1.4283% $1,034,259 $1,822,118 $1,333,236 $1,482,534 $1,654,528 $1,594,992 $1,451,892 $1,394,256 2,347,443 4,107,673 3,224,436 3,389,894 3,757,250 3,613,749 3,233,749 3,145,374 $3,381,702 $5,929,791 4,557,671$ 4,872,428$ 5,411,778$ 5,208,741$ 4,685,641$ 4,539,630$ $2,224,092 $2,032,772 $2,015,410 $2,027,325 $2,188,185 $1,966,524 $1,907,689 $1,855,316 46.50%89.64%66.15%73.13%75.61%81.11%76.11%75.15% 87.72%75.34%80.08%79.03%77.77%75.48%76.90%76.71% 2022 2021 2020 2019 2018 2017 2016 2015 $340,851 $338,706 $299,206 $277,747 $298,390 $314,224 $281,160 $279,275 $340,851 $338,706 $299,206 $277,747 $298,390 $314,224 $281,160 $279,275 $0 $0 $0 $0 $0 $0 $0 $0 $2,373,613 $2,357,672 $2,032,772 $2,015,410 $2,027,325 $2,188,185 $1,966,524 $1,907,689 14.36% 14.37% 14.72% 13.78% 14.72% 14.36% 14.30% 14.64% As of Measurement Date: Employer's proportion of the Net Pension Liability (as a percentage) Employer's Net Pension Liability (amount) State of Montana's Net Pension Liability (amount) Total Employer's Covered Payroll Employer's proportionate share as a percent of Covered Payroll Plan Fiduciary Net Position as a percent of the Total Pension Schedule is intended to show information for 10 years. Additional years will be displayed as they become available. As of most recent FYE - (reporting date) Contractually Required Contributions Contributions in Relation to the Contractually Required Contribution Deficiency (Excess) Employer's Covered Payroll Contributions as a percentage of Covered Payroll considered prior year adjustments and are removed from the covered payroll report before the actuary calculates the employers proportionate share. For the Last Ten Fiscal Years* *The amounts presented for each fiscal year were determined as of June 30, the measurement date (1) All employer adjustments made in the current fiscal year 2020 but are adjusting a payroll with a pay date in a prior fiscal year, are Required Supplementary Information Schedule of Contributions CITY OF KALISPELL, MONTANA Firefighters Unified Retirement System (FURS) Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability For the Last Ten Fiscal Years* CITY OF KALISPELL REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2022 106 Changes of Benefit Terms The following changes to the plan provision were made as identified: 2017: Working Retiree Limitations – for FURS Applies to retirement system members who return on or after July 1, 2017 to covered employment in the system from which they retired. Members who return for less than 480 hours in a calendar year: o may not become an active member in the system; and o are subject to a $1 reduction in their retirement benefit for each $3 earned in excess of $5,000 in the calendar year. Members who return for 480 or more hours in a calendar year: o must become an active member of the system; o will stop receiving a retirement benefit from the system; and o will be eligible for a second retirement benefit if they earn 5 or more years of service credit through their secondemployment. Employee, employer and state contributions, if any, apply as follows: o employer contributions and state contributions (if any) must be paid on all working retirees; o employee contributions must be paid in working retirees who return to covered employment for 480 or more hoursin a calendar year. Second Retirement Benefit – for FURS Applies to retirement system members who return on or after July 1, 2017 to active service covered by the system from which they retired. If the member works more than 480 hours in a calendar year and accumulates less than 5 years of service credit beforeterminating again, the member: o is not awarded service credit for the period of reemployment; o is refunded the accumulated contributions associated with the period of reemployment; o starting the first month following termination of service, receives the same retirement benefit previously paid to themember; and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives a GuaranteedAnnual Benefit Adjustment (GABA) in January immediately following second retirement. If the member works more than 480 hours in a calendar year and accumulates at least 5 years of service credit beforeterminating again, the member: o is awarded service credit for the period of reemployment; o starting the first month following termination of service, receives: *the same retirement benefit previously paid to the member, and *a second retirement benefit for the period of reemployment calculated based on the laws in effect as of themember’s rehire date; and o does not accrue post-retirement benefit adjustments during the term of reemployment but receives a GABA: *on the initial retirement benefit in January immediately following second retirement, and *on the second retirement benefit starting in January after receiving that benefit for at least 12 months. A member who returns to covered service is not eligible for a disability benefit. Refunds Terminating members eligible to retire may, in lieu of receiving a monthly retirement benefit, refund their accumulatedcontributions in a lump sum. Terminating members with accumulated contributions between $200 and $1,000 who wish to rollover their refund must do sowithin 90 days of termination of service. Trusts, estates, and charitable organizations listed as beneficiaries are entitled to receive only a lump-sum payment. CITY OF KALISPELL REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2022 107 Interest credited to member accounts Effective July 1, 2017, the interest rate credited to member accounts increased from 0.25% to 0.77%. Lump-sum payouts Effective July 1, 2017, lump-sum payouts in all systems are limited to the member’s accumulated contributions rate than thepresent value of the member’s benefit. Changes in Actuarial Assumptions and Methods Method and assumptions used in calculations of actuarially determined contributions The following Actuarial Assumptions were adopted from the June 30, 2020 actuarial valuation: General Wage Growth* 3.50% Investment Rate of Return* 7.65% *Includes inflation at 2.75%Merit salary increases 0% to 6.30% Asset valuation method Four-year smoothed market Actuarial cost method Entry Age Normal Amortization method Level percentage of payroll, open Mortality (Healthy members) For Males and Females: RP 2000 Combined Employee and Annuitant Mortality Table projected to 2020 using Scale BB, males set back 1 year. Mortality (Disabled members) For Males and Females: RP 2000 Combined Mortality Table Admin Expense as % of Payroll 0.17% Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the System. This amount varies from year to year based on the prior year’s actual administrative expenses. The actuarial assumptions and methods utilized in the June 30, 2020 valuation, were developed in the six-year experience study for the period ending 2016. CITY OF KALISPELL REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2022 108 City of Kalispell, Montana Budgetary Comparison Schedule For the Fiscal Year Ended June 30, 2022 ACTUAL AMOUNTS VARIANCE (BUDGETARY WITH FINAL ORIGINAL FINAL BASIS) See Note A BUDGET RESOURCES (INFLOWS): Taxes and assessments $6,342,750 $6,342,750 $6,448,846 $106,096 Licenses and permits 160,000 160,000 225,000 65,000 Intergovernmental 3,082,750 3,082,750 3,094,803 12,053 Charges for services 1,097,236 1,097,236 1,117,235 19,999 Fines and forfeitures 525,000 525,000 417,159 (107,841) Miscellaneous 60,000 60,000 44,863 (15,137) Investment earnings 30,000 30,000 67,453 37,453 Amounts available for appropriation $11,297,736 $11,297,736 $11,415,359 $117,623 CHARGES TO APPROPRIATIONS (OUTFLOWS); General government $3,084,689 $3,084,689 $2,710,445 $374,244 Public safety 8,903,618 8,903,618 8,534,848 368,770 Public works 75,966 75,966 71,504 4,462 Culture and Recreation 21,600 21,600 21,600 - Community development 722,374 722,374 472,351 250,023 Debt service - principal 45,636 45,636 45,636 - Debt service - interest 5,720 5,720 5,531 189 Capital outlay 546,058 546,058 509,439 36,619 Total charges to appropriations $13,405,661 $13,405,661 $12,371,354 $1,034,307 OTHER FINANCING SOURCES (USES) Proceeds from the sale capital asset - - Transfers in 1,100,000 1,100,000 1,113,856 13,856 Transfers out (1,325,300) (1,325,300) (1,320,000) 5,300 Total other financing sources (uses)$(225,300) $(225,300) $(206,144) $19,156 Net change in fund balance (2,333,225) (2,333,225) $(1,162,139) 1,171,086 Fund balance - beginning of the year $6,592,231 Fund balance - end of the year $5,430,092 BUDGETED AMOUNTS General Fund 109 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 Conservation of natural resources Debt service - principal Debt service - interest Internal services Miscellaneous Capital outlay Total charges to appropriations OTHER FINANCING SOURCES (USES) Transfers in Transfers out 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 ACTUAL AMOUNTS VARIANCE (BUDGETARY WITH FINAL ORIGINAL FINAL BASIS) See Note A BUDGET $2,829,500 $2,829,500 $2,830,453 $953 - - 2,713 2,713 - - - - 5,000 5,000 5,498 498 - - - - 5,000 5,000 23,429 18,429 11,000 11,000 17,359 6,359 $2,850,500 $2,850,500 $2,879,452 $28,952 $- $- $- $- - - - - 2,668,867 2,668,867 2,218,582 450,285 - - - - - - - - 26,573 26,573 26,573 - 12,758 12,758 12,758 - - - - - - - - - 637,700 637,700 370,376 267,324 $3,345,898 $3,345,898 $2,628,289 $717,609 - - - - (23,750) (23,750) (25,842) (2,092) $(23,750) $(23,750) $(25,842) $(2,092) $225,321 $3,376,905 - $3,376,905 $3,602,226 Street Maintenance BUDGETED AMOUNTS City of Kalispell, Montana Budgetary Comparison Schedule For the Fiscal Year Ended June 30, 2022 110 RESOURCES (INFLOWS): Taxes and assessments Licenses and permits Intergovernmental Charges for servicesFines and forfeitures Miscellaneous Investment earnings Amounts available for appropriation CHARGES TO APPROPRIATIONS (OUTFLOWS); General government Public safetyPublic works Culture and Recreation Community development Debt service - principal Debt service - interest Capital outlayTotal charges to appropriations OTHER FINANCING SOURCES (USES) Proceeds from the sale capital asset Transfers in Transfers out 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, 2022 ACTUAL AMOUNTS VARIANCE (BUDGETARY WITH FINAL ORIGINAL FINAL BASIS) See Note A BUDGET - $- $- $- - - - - - - - - - - - - - - - - - - 20,607 20,607 35,576 35,576 18,855 (16,721) 35,576 $35,576 $39,462 $3,886 - $- $- $- - - - - - - - - 74,368 74,368 71,866 2,502 - - - - 4,443,135 4,695,451 4,448,724 246,727 4,517,503 $4,769,819 $4,520,590 $249,229 - - - - 3,293,135 2,393,135 3,521,532 1,128,397 - 3,293,135 $2,393,135 $3,521,532 $1,128,397 $(959,596) $1,665,152 $705,556 Westside TIF BUDGETED AMOUNTS 111 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 Conservation of natural resources Debt service - principal Debt service - interest Internal services Miscellaneous Capital outlay Total charges to appropriations OTHER FINANCING SOURCES (USES) Transfers in Transfers out 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 ACTUAL AMOUNTS VARIANCE (BUDGETARY WITH FINAL ORIGINAL FINAL BASIS) See Note A BUDGET $- $- $- $- - - - - 5,947,638 5,947,638 199,385 (5,748,253) - - - - - - - - - - - - - - - - $5,947,638 $5,947,638 $199,385 $(5,748,253) $- $- $- $- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5,947,638 5,947,638 199,385 5,748,253 $5,947,638 $5,947,638 $199,385 $5,748,253 - - - - - - - - $- $- $- $- $- $- - $- $- American Rescue Plan BUDGETED AMOUNTS City of Kalispell, Montana Budgetry Comparison Schedule For the Fiscal Year Ended June 30, 2022 112 A.Budgetary Comparison Schedules BUDGETED FUNDS The City adopts an annual budget for all of its funds in accordance with Title 7, Chapter 6, Part 40 of the Montana Code Annotated. Statute requires the adoption of a preliminary budget, public hearings on the preliminary budget and the final adoption of the budget by the first Thursday after the first Tuesday in September or within 30 calendar days of the receipt of the certified taxable valuations from the Department of Revenue. The City must also submit a copy of the final budget to the Department of Administration by the later of October 1 or 60 days after the receipt of taxable values from the Department of Revenue. State statute limits the making of expenditures or incurring of obligations to the amount of the final budget as adopted or as amended. Budget transfers and amendments are authorized by law, and in some instances, may require further public hearings. Any budget amendments providing for additional appropriations must identify the fund reserves, unanticipated revenue, or previously unbudgeted revenue that will fund the appropriations. Appropriations are created by fund, function, and activity and may further be detailed by department. Expenditure limitations imposed by law extend to the department level which is identified as the legal level of budgetary control. BUDGETARY BASIS The City’s budgets are prepared on the budgetary basis (modified accrual) of accounting, which results in accounting for certain funds, proprietary and internal service, on a basis other than generally accepted accounting principles (full accrual). The City’s accounting records are maintained on the basis of cash receipts and disbursements during the year. At year-end, certain adjustments are made to the City’s accounting records to reflect the basis of accounting described above. Reported budget amounts represent the originally adopted budget and the final budget, which includes amendments. Total fund expenditures may not legally exceed the budgeted expenditures. The budget lapses at the end of each year. Results of operations, on the budget basis of accounting, are presented for the general fund and major special revenue funds with legally adopted annual budgets, to provide a meaningful comparison of actual results with the budget. 113 CITY OF KALISPELL REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2022 SUPPLEMENTAL INFORMATION 114 COMBINING AND INDIVIDUAL FUND STATEMENTS NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Downtown TIF – Accounts for monies received and expended for approved projects in this TIF district. Airport TIF – Accounts for monies received and expended for approved projects in this TIF district. Parks in Lieu – Accounts for monies received by developer’s for the purpose of making improvements in specific City parks. Parks – Accounts for the monies received and expended in the operations of the City’s Parks Department. Ambulance – Accounts for the monies received and expended in the operations of the City’s Ambulance Department. Old School TIF’s – Accounts for monies received and expended for approved projects in these TIF districts. Rail Park TEDD – Accounts for the monies received and expended for approved projects in and related to the TEDD. Health Levy – Accounts for revenue from the permissive mill levy which provides funding for the fiscal year 2003 health insurance premium rate increase. Building Department – Accounts for all activity of enforcing the building regulations adopted by the City. Impact Fees – Accounts for public safety impact fees received and allowed and approved expenditures of each. Light Maintenance – Accounts for special assessment revenues levied, received, and expended for street lighting. Gas Tax and BARSAA – Accounts for revenues from State gasoline taxes apportioned from the State of Montana Department of Highways. 115 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) – Accounts for multiple grants received by the Police Department and all related revenues and expenditures. EPA Brownfields Grant – Accounts for Brownfields revitalization projects monies to be used for phase I and phase II environmental assessments. EPA Brownfields Loan Revolving Grant - Accounts for grant monies received for and expenditures related to environmental assessments. Fire Grants - Accounts for multiple grants received by the Fire Department and all related revenues and expenditures. Hazmat Grant – Accounts for the grant monies received for and expenditures related to respond and remedy hazmat calls of the City Fire Department. 116 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 344 - Accounts for the debt service payments associated with the Special Improvement District #344 bonds. SID 345 - Accounts for the debt service payments associated with the Special Improvement District #345 bonds. CAPITAL PROJECT FUNDS S & C Construction –Accounts for the monies received for and expenditures related to sidewalk and curb construction. Tiger Grant – 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. 117 City of Kalispell, Montana Combining Balance SheetNonmajor Special Revenue FundsJune 30, 2022 Downtown TIF Airport TIF Parks-in-Lieu Parks ASSETS Current assets Cash and investments $236,835 $263,641 $126,516 $1,499,243 Taxes and assessments receivable, net 7,394 - - 37,050 Accounts receivable - - - 2,565 Notes, loans, and contracts receivable - - - - Due from other governments 15,362 - - 50,931 Prepaid expenses - - - 21,091 Due from other - - - 780 Total current assets 259,591 263,641 126,516 1,611,660 Noncurrent assets Restricted cash and investments - - - - Total noncurrent assets - - - - Total assets 259,591 263,641 126,516 1,611,660 LIABILITIES Current liabilities Accounts payable - - - 34,464 Accrued payroll - - - 71,391 Due to other funds - - - - Advances from other funds - - - - Due to Contractor - Retainage - 49,301 - - Total current liabilities - 49,301 - 105,855 Total liabilities - 49,301 - 105,855 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue 7,394 - - 37,050 Ambulance Revenue - - - - Total deferred inflows of resources 7,394 - - 37,050 FUND BALANCES Nonspendable Prepaid expenses - - - 21,091 Restricted for:- - - - General government - - - - Public safety - - - - Public works - - - - Culture & recreation - - 126,516 1,447,664 Housing & community development 252,197 214,340 - - Unassigned - - - - Total Fund Balance $252,197 $214,340 $126,516 $1,468,755 Total Liabilities, Deferred Inflow of Resources and Fund Balance $259,591 $263,641 $126,516 $1,611,660 The notes to the financial statements are an integral part of this statement. 118 City of Kalispell, MontanaCombining Balance SheetNonmajor Special Revenue FundsJune 30, 2022 Ambulance Old School Tech TIF Old School Industrial TIF Rail Park TEDD Health Levy ASSETS Current assets Cash and investments 61,206 $8,728 $4,028 $- $1,678 Taxes and assessments receivable, net - 48,508 51,848 - 33,136 Accounts receivable 401,250 - - - - Notes, loans, and contracts receivable - - - - - Due from other governments - 15,712 1,154 87,939 54,144 Prepaid expenses 11,310 - - - - Due from other - - - - - Total current assets 473,766 72,948 57,030 87,939 88,958 Noncurrent assets Restricted cash and investments - - - - - Total noncurrent assets - - - - - Total assets 473,766 72,948 57,030 87,939 88,958 LIABILITIES Current liabilities Accounts payable 6,013 - - - - Accrued payroll 28,063 - - 1,439 - Due to other funds - - - 59,410 - Advances from other funds - - - - - Due to Contractor - Retainage - - - - - Total current liabilities 34,076 - - 60,849 - Total liabilities 34,076 - - 60,849 - DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - 48,508 51,848 - 33,136 Ambulance Revenue 397,440 - - - - Total deferred inflows of resources 397,440 48,508 51,848 - 33,136 FUND BALANCES Nonspendable Prepaid expenses 11,310 - - - - Restricted for:- - - - - General government - - - - 55,822 Public safety 30,940 - - - - Public works - - - - - Culture & recreation - - - - - Housing & community development - 24,440 5,182 27,090 - Unassigned - - - - - Total Fund Balance 42,250 $24,440 $5,182 $27,090 $55,822 Total Liabilities, Deferred Inflow of Resources and Fund Balance 473,766 $72,948 $57,030 $87,939 $88,958 The notes to the financial statements are an integral part of this statement. 119 City of Kalispell, MontanaCombining Balance SheetNonmajor Special Revenue FundsJune 30, 2022 Building Dept Public Safety Impact Fees Light Maintenance Gas Tax - BARSAA Urban Forestry ASSETS Current assets Cash and investments $2,837,466 $14,270 $869,673 $1,664,288 $913,525 Taxes and assessments receivable, net - - 22,765 - 27,853 Accounts receivable - - - - - Notes, loans, and contracts receivable - - - - - Due from other governments - - 21,432 - 28,296 Prepaid expenses 9,803 - - - - Due from other - - - - - Total current assets 2,847,269 14,270 913,870 1,664,288 969,674 Noncurrent assets Restricted cash and investments - 2,021,099 - - 152,014 Total noncurrent assets - 2,021,099 - - 152,014 Total assets 2,847,269 2,035,369 913,870 1,664,288 1,121,688 LIABILITIES Current liabilities Accounts payable 4,073 - 12,683 6,424 13,836 Accrued payroll 29,843 - 3,839 - 13,292 Due to other funds - - - - - Advances from other funds - - - - - Due to Contractor - Retainage - - - - - Total current liabilities 33,916 - 16,522 6,424 27,128 Total liabilities 33,916 - 16,522 6,424 27,128 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - - 22,765 - 27,854 Ambulance Revenue - - - - - Total deferred inflows of resources - - 22,765 - 27,854 FUND BALANCES Nonspendable Prepaid expenses 9,803 - - - - Restricted for:- - - - - General government - - - - - Public safety 2,803,550 2,035,369 - - - Public works - - 874,583 1,657,864 - Culture & recreation - - - - 1,066,706 Housing & community development - - - - - Unassigned - - - - - Total Fund Balance $2,813,353 $2,035,369 $874,583 $1,657,864 $1,066,706 Total Liabilities, Deferred Inflow of Resources and Fund Balance $2,847,269 $2,035,369 $913,870 $1,664,288 $1,121,688 The notes to the financial statements are an integral part of this statement. 120 City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2022 (2) MACI CommunityDevelopment CD Misc.RD Revolving Loan Stonegarden Grant ASSETS Current assets Cash and investments $21,006 $188,515 $269,587 $537,984 $449 Taxes and assessments receivable, net - - - - - Accounts receivable - - - - - Notes, loans, and contracts receivable - 1,638,465 - 253,570 - Due from other governments - - - - 704 Prepaid expenses - - - - - Due from other - - - - - Total current assets 21,006 1,826,980 269,587 791,554 1,153 Noncurrent assets Restricted cash and investments - - - - - Total noncurrent assets - - - - - Total assets 21,006 1,826,980 269,587 791,554 1,153 LIABILITIES Current liabilities Accounts payable - - - - - Accrued payroll - - - - - Due to other funds - - - - - Advances from other funds - - 1,300,000 - - Due to Contractor - Retainage - - - - - Total current liabilities - - 1,300,000 - - Total liabilities - - 1,300,000 - - DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - - - - - Ambulance Revenue - - - - - Total deferred inflows of resources - - - - - FUND BALANCES Nonspendable Prepaid expenses - - - - - Restricted for:- - - - - General government - - - - - Public safety - - - - 1,153 Public works 21,006 - - - - Culture & recreation - - - - - Housing & community development - 1,826,980 - 791,554 - Unassigned - - (1,030,413) - - Total Fund Balance $21,006 $1,826,980 $(1,030,413) $791,554 $1,153 Total Liabilities, Deferred Inflow of Resources and Fund Balance $21,006 $1,826,980 $269,587 $791,554 $1,153 The notes to the financial statements are an integral part of this statement. 121 City of Kalispell, Montana Combining Balance SheetNonmajor Special Revenue Funds June 30, 2022 Drug Enforcement Grant Law Enforcement Grant EPA Brownsfield Grant Brownfields Loan Revolving ASSETS Current assets Cash and investments $29,083 $13,921 $26,847 $100,500 Taxes and assessments receivable, net - - - - Accounts receivable - - - - Notes, loans, and contracts receivable - - - - Due from other governments 16,884 20,446 12,549 - Prepaid expenses - - - - Due from other - - - - Total current assets 45,967 34,367 39,396 100,500 Noncurrent assets Restricted cash and investments - - - - Total noncurrent assets - - - - Total assets 45,967 34,367 39,396 100,500 LIABILITIES Current liabilities Accounts payable - - 11,800 - Accrued payroll 11,796 651 - - Due to other funds - - - - Advances from other funds - - - - Due to Contractor - Retainage - - - - Total current liabilities 11,796 651 11,800 - Total liabilities 11,796 651 11,800 - DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - - - - Ambulance Revenue - - - - Total deferred inflows of resources - - - - FUND BALANCES Nonspendable Prepaid expenses - - - - Restricted for:- - - - General government - - - - Public safety 34,171 33,716 - - Public works - - - - Culture & recreation - - - - Housing & community development - - 27,596 100,500 Unassigned - - - - Total Fund Balance $34,171 $33,716 $27,596 $100,500 Total Liabilities, Deferred Inflow of Resources and Fund Balance $45,967 $34,367 $39,396 $100,500 The notes to the financial statements are an integral part of this statement. 122 City of Kalispell, Montana Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2022 Fire Grants Hazmat Grant Airport MDOT Grant Safer Grant CHRP Grant Total Nonmajor Governmental Funds ASSETS Current assets Cash and investments $6,369 $43,875 $- $- $- $9,739,233 Taxes and assessments receivable, net - - - - - 228,554 Accounts receivable - - - - - 403,815 Notes, loans, and contracts receivalbe - - - - - 1,638,465 Due from other governments - - - - - 325,553 Prepaid Expenses - - - - - 42,204 Due from other governments - - - - - 780 Total current assets 6,369 43,875 11,840,620 Noncurrent assets - - - - - Restricted cash and investments - - - - - 2,173,113 Total noncurrent assets - - 2,173,113 Total assets 6,369 43,875 14,013,733 LIABILITIES Current liabilities Accounts payable - - - - - 89,293 Accrued payroll - - - - - 160,314 Due to other funds - - - - - 59,410 Advances from other funds - - - - - 1,300,000 Due to Contractor - Retainage - - - - - 49,301 Total current liabilities - - - - - 1,658,318 Total liabilities - - - - - 1,658,318 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - - - - - 228,555 Amublance Revenue - - - - - 397,440 Total deferred inflows of resources - - - - - 625,995 FUND BALANCES Nonspendable Prepaid expenses - - - - - 42,204 Restricted for:- - - - General government - - - - - 55,822 Public Safety 6,369 43,875 - - - 4,989,143 Public Works - - - - - 2,553,453 Culture & Recreation - - - - - 2,640,886 Housing & Community Development - - - - - 3,269,879 Debt Service - - - - - Unassigned - - - - - (1,030,413) Total Fund Balance 6,369 43,875 - - - $ 12,520,974 Total Liabilities, Deferred Inflow of Resources and Fund Balance 6,369 43,875 $14,013,733 The notes to the financial statements are an intergral part of this statement 123 City of Kalispell, Montana Combining Balance Sheet Nonmajor Debt Service FundsJune 30, 2022 3188 3500 3600 3644 3645 Westside TIF Debt Service SID Revolving S & C's SID 344 SID 345 Total Nonmajor Debt Service Funds ASSETS Current assets Cash and investments $309,703 $75,933 $430 $40,623 $12,823 439,512 Taxes and assessments receivable, net 36,021 - 33,776 1,302,960 107,535 1,480,292 Due from other governments 44,396 - 395 4,484 236 49,511 Total current assets 390,120 75,933 34,601 1,348,067 120,594 1,969,315 Noncurrent assets Restricted cash and investments 480,011 148,100 - - 11,172 639,283 Total noncurrent assets 480,011 148,100 - - 11,172 639,283 Total assets 870,131 224,033 34,601 1,348,067 131,766 2,608,598 DEFERRED INFLOWS OF RESOURCES - - - - - - Property tax/special assessment revenue 36,022 - 33,776 1,302,960 107,534 1,480,292 Total deferred inflows of resources 36,022 - 33,776 1,302,960 107,534 1,480,292 0 FUND BALANCES Restricted for:- - - - - - Debt service 834,109 224,033 825 45,107 24,232 1,128,306 Total fund balances $834,109 $224,033 $825 $45,107 $24,232 1,128,306 Total Liabilities, Deferred Inflows of Resources and Fund Balance $870,131 $ 224,033 $ 34,601 $ 1,348,067 $ 131,766 2,608,598 The notes to the financial statements are an integral part of this statement. 124 City of Kalispell, Montana Combining Balance Sheet Nonmajor Capital Project Funds June 30, 2022 S & C Construction Tiger Grant Total Capital Project Funds Total Nonmajor Governmental Funds ASSETS Current assets Cash and investments $- $188,771 $188,771 $10,367,516 Taxes and assessments receivable, net - - - 1,708,846 Accounts receivable - - - 403,815 Notes, loans, and contracts receivalbe - - - 1,892,035 Due from other governments - - - 375,064 Prepaid Expenses - - - 42,204 Due from other governments - - - 780 Total current assets - 188,771 188,771 14,790,260 Noncurrent assets Restricted cash and investments - - - 2,812,396 Total noncurrent assets - - - 2,812,396 Total assets - 188,771 188,771 17,602,656 LIABILITIES Current liabilities Accounts payable - 188,771 188,771 278,064 Accrued payroll - - - 160,314 Due to other funds - - - 59,410 Advances from other funds - - - 1,300,000 Due to Contractor - Retainage - - - 49,301 Total current liabilities - 188,771 188,771 1,847,089 Total liabilities - 188,771 188,771 1,847,089 DEFERRED INFLOWS OF RESOURCES Property tax/special assessment revenue - - - 1,708,847 Amublance Revenue - - - 397,440 Total deferred inflows of resources - - - 2,106,287 FUND BALANCES Nonspendable Prepaid expenses - - - 42,204 Restricted for:- General government - - - 55,822 Public Safety - - - 4,989,143 Public Works - - - 2,553,453 Culture & Recreation - - - 2,640,886 Housing & Community Development - - - 3,269,879 Debt Service - - 1,128,306 Unassigned - - - (1,030,413) Total Fund Balance $- $- $- $13,649,280 Total Liabilities, Deferred Inflow of Resources and Fund Balance $- $188,771 $188,771 $17,602,656 The notes to the financial statements are an intergral part of this statement 125 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds June 30, 2022 Downtown TIF Airport TIF Parks - in- Lieu Parks Ambulance REVENUES Taxes and assessments 222,590 - - 1,220,708 - Intergovernmental 6,379 - - - 161,734 Charges for Services - - 71,908 662,970 503,976 Miscellaneous - - 7,423 50,119 6,487 Investment earnings 678 - 552 5,956 - Total revenues 229,647 79,883 1,939,753 672,197 EXPENDITURES Public Safety - - - - 1,104,023 Public Works - - - - - Parks and Recreation - - - 1,673,235 - Community Development 3,750 26,119 - - - Debt Service - principle - - - 60,234 36,437 Debt Service - interest - - - 1,806 3,376 Capital Outlay - - - 87,892 - Total expenditures 3,750 26,119 - - - Excess (deficiency) of revenues over expenditures 225,897 (26,119) 79,883 1,823,167 1,143,836 OTHER FINANCING SOURCES (USES) Issuance of debt - - - - - Transfers in - - - 111,000 350,000 Transfers out - - - - - Total other financing sources and uses - - - 111,000 350,000 Net change in fund balance 225,897 (26,119) 79,883 227,586 (121,639) Fund balances - beginning 26,300 240,459 46,633 1,241,169 163,889 Restatements Fund balances - beginning restated Fund balances - ending 252,197 214,340 126,516 1,468,755 42,250 The notes to the financial statements are an intergral part of this statement 26,300 240,459 46,633 1,241,169 163,889 126 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds June 30, 2022 Old SchoolTech TIF Old School Industrial TIF Rail Park TEDD Health Levy Building Department Public Safety Impact Fees REVENUES Taxes and assessments 71,126 5,612 177,618 1,080,993 - - Intergovernmental 3,482 - 15 27,642 - - Charges for Services - - - - 1,791,032 449,829 Miscellaneous - - - - 203 - Investment earnings 113 25 224 - 13,964 10,004 Total revenues 74,721 5,637 177,857 1,108,635 1,805,199 459,833 EXPENDITURES Public Safety - - - - 1,070,033 17,560 Public Works - - - - - - Parks and Recreation - - - - - - Community Development 17,475 - 95,074 - - - Debt Service - principal - - - - - - Debt Service - interest - - - - - - Capital Outlay - - - - - - Total expenditures 17,475 - 95,074 - 1,070,033 17,560 Excess (deficiency) of revenues over expenditures 57,246 5,637 82,783 1,108,635 735,166 442,273 OTHER FINANCING SOURCES (USES) Issuance of debt - - - - - - Transfers in - - - - - - Transfers out (50,000) (8,000) (140,000) (1,211,000) - - Total other financing sources and uses (50,000) (8,000) (140,000) (1,211,000) - - Net change in fund balance 7,246 (2,363) (57,217) (102,365) 735,166 442,273 Fund balances - beginning 17,194 7,545 84,307 158,187 2,078,187 1,593,096 Restatements Fund balances - beginning restated Fund balances - ending 24,440 5,182 27,090 55,822 2,813,353 2,035,369 The notes to the financial statements are an intergral part of this statement 17,194 7,545 84,307 158,187 2,078,187 1,593,096 127 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue FundsJune 30, 2022 Light Maintenance Gas Tax - BARSAA Urban Forestry MACI Community Development Loan Revolving CD Misc. REVENUES Taxes and assessments 423,545 919,184 622,605 - - - Intergovernmental - - 2,656 - - - Charges for Services - 40,000 17,765 - 52,945 - Miscellaneous 25,490 - 4,949 - - - Investment earnings 4,138 6,881 5,206 - 2,860 16,695 Total revenues 453,173 966,065 653,181 - 55,805 16,695 EXPENDITURES Public Safety - - - - - - Public Works - - - - Parks and Recreation 739,279 531,893.00 - - - Community Development -- - - 2,403 23,919 Debt Service - principal - - 10,374.00 - - - Debt Service - interest - - 128.00 - - - Capital Outlay 4,549 101,918 - - - - Total expenditures 323,976 841,197 542,395 - 2,403 23,919 Excess (deficiency) of revenues over expenditures 129,197 124,868 110,786 - 53,402 (7,224) OTHER FINANCING SOURCES (USES) Issuance of debt - - - - - - Transfers in - - - - Transfers out - 25,842 -- - (525,000) Total other financing sources and uses - 25,842 - - (525,000) Net change in fund balance 129,197 150,710 110,786 - (471,598) (1,063,756) Fund balances - beginning 745,386 1,507,154 955,920 21,006 2,298,578 33,343 Restatements Fund balances - beginning restated 745,386 1,507,154 955,920 21,006 2,298,578 33,343 Fund balances - ending 874,583 1,657,864 1,066,706 21,006 1,826,980 (1,030,413) The notes to the financial statements are an intergral part of this statement 319,427 (1,056,532)(1,056,532) 128 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue FundsJune 30, 2022 RD Revolving Loan (2)Stonegarden Drug Enforcement Grant Law Enforcement Grants EPA Brownsfield Grant Brownfields Loan Revolving REVENUES Taxes and assessments - -- Intergovernmental - 34,887 28,020 40,487 - Charges for Services - - - 12,404 - - Miscellaneous - - - 25,445 - - Investment earnings 8,115 - - - - - Total revenues 8,115 33,951 34,887 65,869 40,487 - EXPENDITURES Public Safety - 3,801 94,235 53,309 - - Public Works - - - - - - Parks and Recreation - - - - - - Community Development 615 - - - 12,891 - Debt Service - principal 27,758 - - - - - Debt Service - interest 4,342 - - - - - Capital Outlay - 28,997 - - - - Total expenditures 32,715 32,798 94,235 53,309 12,891 - Excess (deficiency) of revenues over expenditures (24,600) 1,153 (59,348) 12,560 27,596 - OTHER FINANCING SOURCES (USES) Issuance of debt - - 64,000 6,000 - - Transfers in - - - - - - Transfers out - - - - - - Total other financing sources and uses - - 64,000 6,000 - - Net change in fund balance (24,600) 1,153 4,652 18,560 27,596 - Fund balances - beginning 816,154 - 29,519 15,156 - 100,500 Restatements Fund balances - beginning restated 816,154 - 29,519 15,156 - 100,500 Fund balances - ending 791,554 1,153 34,171 33,716 27,596 100,500 The notes to the financial statements are an intergral part of this statement 33,951 129 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds June 30, 2022 Fire Grants HAZMAT Grant Total Special Revenue Funds G.O. Bonds Westside TIF DebtService SID Revovling REVENUES Taxes and assessments - - 4,743,981 195,677 863,580 Intergovernmental - 16,923 356,176 276,078 Charges for Services - - 3,602,829 Miscellaneous 1,000 - 121,116 Investment earnings - 227 75,638 625 1,207 Total revenues 1,000 17,150 8,899,740 196,302 1,139,658 1,207 EXPENDITURES Public Safety 1,701 17,615 2,362,277 - - - Public Works - - 1,084,825 - - - Parks and Recreation - - 2,205,128 - - - Community Development - - 156,127 - - Debt Service - principal - - 134,803 230,000 205,000 - Debt Service - interest - - 9,652 4,950 163,775 - Capital Outlay - - 223,356 - - - Total expenditures 1,701 17,615 6,176,168 234,950 368,775 - Excess (deficiency) of revenues over expenditures (701) (465) 2,723,572 (38,648) 770,883 1,207 OTHER FINANCING SOURCES (USES) Issuance of debt - - - - - Transfers in - - 556,842 - - - Transfers out - - (2,990,532) (13,856) (900,000) - Total other financing sources and uses - - (2,433,690)(13,856) (900,000) - Net change in fund balance (701) (465) 299,882 (52,504) (129,117) 1,207 Fund balances - beginning 7,070 44,340 12,231,092 52,504 963,226 222,826 Restatements Fund balances - beginning restated 7,070 44,340 12,231,092 52,504 963,226 222,826 Fund balances - ending 6,369 43,875 12,520,974 - 834,109 224,033 The notes to the financial statements are an intergral part of this statement 130 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds June 30, 2022 S&C's SID 344 SID 345 Total Debt Service Funds REVENUES Taxes and assessments 12,191 254,492 19,397 1,345,337 Intergovernmental - - - 276,078 Charges for Services - - - - Miscellaneous - - - - Investment earnings - - - 1,832 Total revenues 12,191 254,492 19,397 1,623,247 EXPENDITURES Public Safety - - - - Public Works - - - - Parks and Recreation - - - - Community Development - - - Debt Service - principal 9,460 225,000 1,600 685,460 Debt Service - interest 1,710 58,633 3,840 232,908 Capital Outlay - - - - Total expenditures 11,170 283,633 19,840 918,368 Excess (deficiency) of revenues over expenditures 1,021 (29,141) (433) 704,879 OTHER FINANCING SOURCES (USES) Issuance of debt - - - Transfers in - 58,000 - 58,000 Transfers out - - - (913,856) Total other financing sources and uses - 58,000 - (855,856) Net change in fund balance 1,021 28,859 (443) (150,977) Fund balances - beginning (196) 16,248 24,675 1,279,283 Restatements Fund balances - beginning restated (196) 16,248 24,675 1,279,283 Fund balances - ending 825 45,107 24,322 1,128,306 The notes to the financial statements are an intergral part of this statement 131 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds June 30, 2022 S & C Construction Tiger Grant Total Capital Project Funds Total Nonmajor Governmental Funds REVENUES Taxes and assessments - 6,089,318 Intergovernmental - -2,758,903 3,391,157 Charges for Services - -- 3,602,829 Miscellaneous - -- 121,116 Investment earnings - -- 77,470 Total revenues - 2,758,903 2,758,903 13,281,890 EXPENDITURES Public Safety - - - 2,362,277 Public Works - - - 1,084,825 Parks and Recreation - - - 2,205,128 Community Development - 2,704,867 2,704,867 2,860,994 Debt Service - principal - -- 820,263 Debt Service - interest - -- 242,560 Capital Outlay 4,165 - 4,165 227,521 Total expenditures 4,165 2,704,867 2,721,527 9,803,568 Excess (deficiency) of revenues over expenditures (4,165) 54,036 49,871 3,478,322 OTHER FINANCING SOURCES (USES) Proceeds from general long term debt 4,165 - 4,165 4,165 Transfers in - - - 614,842 Transfers out - - - (3,904,388) Total other financing sources and uses 4,165 - 4,165 (3,285,381) Net change in fund balance - 54,036 54,036 202,941 Fund balances - beginning - (54,036) (54,036) 13,456,339 Restatements Fund balances - beginning restated - (54,036) (54,036) 13,456,339 Fund balances - ending - - - 13,649,280 The notes to the financial statements are an intergral part of this statement 2,758,903 132 BUDGETARY COMPARISON SCHEDULE – NONMAJOR FUNDS 133 VARIANCE WITH VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET ACTUAL POSITIVE ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 30,000$ 30,000$ 222,590$ 192,590$ -$ -$ -$ -$ Intergovernmental -$ -$ 6,379$ 6,379$ -$ -$ -$ -$ Investment and Royalty Earnings 50$ 50$ 678$ 628$ -$ -$ -$ -$ Total revenues 30,050$ 30,050$ 229,647$ 199,597$ -$ -$ -$ -$ EXPENDTIURES Current: Public Works -$ -$ -$ -$ 240,459$ 240,459$ 26,119$ 214,340$ Operations and maintenance -$ -$ -$ -$ 240,459$ 240,459$ 26,119$ 214,340$ Housing and Community Development 30,000$ 30,000$ 3,750$ 26,250$ -$ -$ -$ -$ Operations and maintenance 30,000$ 30,000$ 3,750$ 26,250$ -$ -$ -$ -$ Total expenditures 30,000$ 30,000$ 3,750$ 26,250$ 240,459$ 240,459$ 26,119$ 214,340$ Excess (deficiency) of revenues over (under) expenditures 50$ 50$ 225,897$ 225,847$ (240,459)$ (240,459)$ (26,119)$ 214,340$ Net change in fund balance 50$ 50$ 225,897$ 225,847$ (240,459)$ (240,459)$ (26,119)$ 214,340$ Fund balances - beginning 26,300$ 240,459$ Fund balances - ending 252,197$ 214,340$ 2185 Airport TIF 134 City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2022 2180 Downtown TIF City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2022 0 0 0 VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Charges for Services - - 71,908 71,908 Miscellaneous - - 7,423 7,423 Investment and Royalty Earnings - - 552 552 Total revenues - - 79,883 79,883 0 EXPENDTIURES Current: Capital outlay 46,000 46,000 - 46,000 Total expenditures 46,000 46,000 - 46,000 0 Excess (deficiency) of revenues over (under) expenditures (46,000) (46,000) 79,883 125,883 0 Net change in fund balance (46,000) (46,000) 79,883 125,883 Fund balances - beginning 46,633 Fund balances - ending 126,516 2210 Parks-in-Lieu 135 City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year EndedJune 30, 2022 00 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE)REVENUES Taxes and Assessments 1,173,175$ 1,173,175$ 1,220,708$ 47,533$ -$ -$ -$ -$ Intergovernmental -$ -$ -$ -$ 140,000$ 140,000$ 161,734$ 21,734$ Charges for Services 737,736$ 737,736$ 662,970$ (74,766)$ 700,000$ 700,000$ 503,976$ (196,024)$ Miscellaneous 20,000$ 20,000$ 50,119$ 30,119$ -$ -$ 6,487$ 6,487$ Investment and Royalty Earnings 5,000$ 5,000$ 5,956$ 956$ -$ -$ -$ -$ Total revenues 1,935,911$ 1,935,911$ 1,939,753$ 3,842$ 840,000$ 840,000$ 672,197$ (167,803)$ 0 EXPENDTIURES Current: Public Safety -$ -$ -$ -$ 1,195,347$ 1,195,347$ 1,143,836$ 51,511$ Personal services -$ -$ -$ -$ 918,735$ 918,735$ 858,980$ 59,755$ Operations and maintenance -$ -$ -$ -$ 237,049$ 237,049$ 245,043$ (7,994)$ Culture and Recreation 2,388,473$ 2,388,473$ 1,823,167$ 565,306$ -$ -$ -$ -$ Personal services 1,486,600$ 1,486,600$ -$ 1,486,600$ -$ -$ -$ -$ Operations and maintenance 572,583$ 572,583$ 1,673,235$ (1,100,652)$ -$ -$ -$ -$ Debt Service 62,290$ 62,290$ 62,040$ 250$ 39,563$ 39,563$ 39,813$ (250)$ Debt service - principal 60,234$ 60,234$ 60,234$ -$ 36,437$ 36,437$ 36,437$ -$ Debt service - interest and other charges 2,056$ 2,056$ 1,806$ 250$ 3,126$ 3,126$ 3,376$ (250)$ Capital outlay 267,000$ 267,000$ 87,892$ 179,108$ -$ -$ -$ -$ Total expenditures 2,388,473$ 2,388,473$ 1,823,167$ 565,306$ 1,195,347$ 1,195,347$ 1,143,836$ 51,511$ 0Excess (deficiency) of revenues over (under) expenditures (452,562)$ (452,562)$ 116,586$ 569,148$ (355,347)$ (355,347)$ (471,639)$ (116,292)$ 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ -$ -$ -$ Transfers in 111,000$ 111,000$ 111,000$ -$ 250,000$ 250,000$ 350,000$ 100,000$ Total other financing sources (uses)111,000$ 111,000$ 111,000$ -$ 250,000$ 250,000$ 350,000$ 100,000$ 0 -$ -$ -$ -$ -$ -$ Net change in fund balance (341,562)$ (341,562)$ 227,586$ 569,148$ (105,347)$ (105,347)$ (121,639)$ (16,292)$ Fund balances - beginning 1,241,169$ 163,889$ Fund balances - ending 1,468,755$ 42,250$ 2215 2230 Parks Ambulance 136 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 65,000$ 65,000$ 71,126$ 6,126$ 4,350$ 4,350$ 5,612$ 1,262$ Intergovernmental 3,056$ 3,056$ 3,482$ 426$ -$ -$ -$ -$ Investment and Royalty Earnings 150$ 150$ 113$ (37)$ 30$ 30$ 25$ (5)$ Total revenues 68,206$ 68,206$ 74,721$ 6,515$ 4,380$ 4,380$ 5,637$ 1,257$ 0EXPENDTIURES Current: Housing and Community Development 68,162$ 68,162$ 17,475$ 50,687$ 8,000$ 8,000$ -$ 8,000$ Operations and maintenance 68,162$ 68,162$ 17,475$ 50,687$ 8,000$ 8,000$ -$ 8,000$ Total expenditures 68,162$ 68,162$ 17,475$ 50,687$ 8,000$ 8,000$ -$ 8,000$ 0Excess (deficiency) of revenues over (under) expenditures 44$ 44$ 57,246$ 57,202$ (3,620)$ (3,620)$ 5,637$ 9,257$ 0OTHER FINANCING SOURCES (USES)-$ -$ -$ -$ -$ -$ Transfers (out)-$ -$ (50,000)$ (50,000)$ -$ -$ (8,000)$ (8,000)$ Total other financing sources (uses)-$ -$ (50,000)$ (50,000)$ -$ -$ (8,000)$ (8,000)$ 0 -$ -$ -$ -$ -$ -$ Net change in fund balance 44$ 44$ 7,246$ 7,202$ (3,620)$ (3,620)$ (2,363)$ 1,257$ Fund balances - beginning 17,194$ 7,545$ Fund balances - ending 24,440$ 5,182$ 2311 City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue FundsFor Fiscal Year Ended June 30, 2022 2310 Old School Tech TIF Old School Industrial TIF 137 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 200,000$ 200,000$ 177,618$ (22,382)$ 1,077,500$ 1,077,500$ 1,080,993$ 3,493$ Intergovernmental -$ -$ 15$ 15$ 24,486$ 24,486$ 27,642$ 3,156$ Investment and Royalty Earnings 100$ 100$ 224$ 124$ -$ -$ -$ -$ Total revenues 200,100$ 200,100$ 177,857$ (22,243)$ 1,101,986$ 1,101,986$ 1,108,635$ 6,649$ 0EXPENDTIURES Current: Housing and Community Development 238,460$ 238,460$ 95,074$ 143,386$ -$ -$ -$ -$ Personal services 34,992$ 34,992$ 33,478$ 1,514$ -$ -$ -$ -$ Operations and maintenance 203,468$ 203,468$ 61,596$ 141,872$ -$ -$ -$ -$ Total expenditures 238,460$ 238,460$ 95,074$ 143,386$ -$ -$ -$ -$ 0 Excess (deficiency) of revenues over (under) expenditures (38,360)$ (38,360)$ 82,783$ 121,143$ 1,101,986$ 1,101,986$ 1,108,635$ 6,649$ 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ -$ -$ -$ Transfers (out)-$ -$ (140,000)$ (140,000)$ (1,211,000)$ (1,211,000)$ (1,211,000)$ -$ Total other financing sources (uses)-$ -$ (140,000)$ (140,000)$ (1,211,000)$ (1,211,000)$ (1,211,000)$ -$ 0 -$ -$ -$ -$ -$ -$ Net change in fund balance (38,360)$ (38,360)$ (57,217)$ (18,857)$ (109,014)$ (109,014)$ (102,365)$ 6,649$ Fund balances - beginning 84,307$ 158,187$ Fund balances - ending 27,090$ 55,822$ 2372 City of KalispellBudgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2022 2312 Rail Park TEDD Health Levy 138 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Licenses and permits 1,060,000 1,060,000 - (1,060,000) - - - - Charges for Services - - 1,791,032 1,791,032 270,000 270,000 449,829 179,829 Miscellaneous - - 203 203 - - - - Investment and Royalty Earnings 13,000 13,000 13,964 964 10,000 10,000 10,004 4 Total revenues 1,073,000 1,073,000 1,805,199 732,199 280,000 280,000 459,833 179,833 0 EXPENDTIURES Current: Public Safety 1,159,693 1,159,693 1,070,033 89,660 1,607,560 1,607,560 17,560 1,590,000 Personal services 773,372 773,372 716,620 56,752 - - - - Operations and maintenance 348,821 348,821 353,413 (4,592) 15,000 15,000 17,560 (2,560) Debt Service - - - - 15,000 15,000 - 15,000 Debt service - principal - - - - 12,000 12,000 - 12,000 Debt service - interest and other charges - - - - 3,000 3,000 - 3,000 Capital outlay 37,500 37,500 - 37,500 1,577,560 1,577,560 - 1,577,560 Total expenditures 1,159,693 1,159,693 1,070,033 89,660 1,607,560 1,607,560 17,560 1,590,000 0 Excess (deficiency) of revenues over (under) expenditures (86,693) (86,693) 735,166 821,859 (1,327,560) (1,327,560) 442,273 1,769,833 0 Net change in fund balance (86,693) (86,693) 735,166 821,859 (1,327,560) (1,327,560) 442,273 1,769,833 Fund balances - beginning 2,078,187 1,593,096 Fund balances - ending 2,813,353 2,035,369 Public Safety Impact Fees City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue FundsFor Fiscal Year Ended June 30, 2022 2394 Building Dept 2399 139 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 420,700$ 420,700$ 423,545$ 2,845$ -$ -$ 919,184$ 919,184$ Intergovernmental -$ -$ -$ -$ 394,873$ 394,873$ -$ (394,873)$ Charges for Services -$ -$ -$ -$ -$ -$ 40,000$ 40,000$ Miscellaneous 5,000$ 5,000$ 25,490$ 20,490$ -$ -$ -$ -$ Investment and Royalty Earnings 4,000$ 4,000$ 4,138$ 138$ 7,000$ 7,000$ 6,881$ (119)$ Total revenues 429,700$ 429,700$ 453,173$ 23,473$ 401,873$ 401,873$ 966,065$ 564,192$ 0EXPENDTIURES Current: Public Works 472,881$ 472,881$ 323,976$ 148,905$ 965,824$ 965,824$ 841,197$ 124,627$ Personal services 103,172$ 103,172$ 96,347$ 6,825$ -$ -$ -$ -$ Operations and maintenance 294,709$ 294,709$ 223,080$ 71,629$ 811,942$ 811,942$ 739,279$ 72,663$ Capital outlay 75,000$ 75,000$ 4,549$ 70,451$ 153,882$ 153,882$ 101,918$ 51,964$ Total expenditures 472,881$ 472,881$ 323,976$ 148,905$ 965,824$ 965,824$ 841,197$ 124,627$ 0 Excess (deficiency) of revenues over (under) expenditures (43,181)$ (43,181)$ 129,197$ 172,378$ (563,951)$ (563,951)$ 124,868$ 688,819$ 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ -$ -$ -$ Transfers in -$ -$ -$ -$ 40,000$ 40,000$ 25,842$ (14,158)$ Total other financing sources (uses)-$ -$ -$ -$ 40,000$ 40,000$ 25,842$ (14,158)$ 0 -$ -$ -$ -$ -$ -$ Net change in fund balance (43,181)$ (43,181)$ 129,197$ 172,378$ (523,951)$ (523,951)$ 150,710$ 674,661$ Fund balances - beginning 745,386$ 1,507,154$ Fund balances - ending 874,583$ 1,657,864$ 2420 City of KalispellBudgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2022 2400 Light Maintenance Gas Tax - BARSAA 140 City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2022 0 0 0 VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 606,200$ 606,200$ 622,605$ 16,405$ Intergovernmental 4,888$ 4,888$ 2,656$ (2,232)$ Charges for Services -$ -$ 17,765$ 17,765$ Miscellaneous 3,200$ 3,200$ 4,949$ 1,749$ Investment and Royalty Earnings 5,000$ 5,000$ 5,206$ 206$ Total revenues 619,288$ 619,288$ 653,181$ 33,893$ 0 EXPENDTIURES Current: Culture and Recreation 755,460$ 755,460$ 542,395$ 213,065$ Personal services 332,288$ 332,288$ 277,678$ 54,610$ Operations and maintenance 412,627$ 412,627$ 254,215$ 158,412$ Debt Service 10,545$ 10,545$ 10,502$ 43$ Debt service - principal 10,374$ 10,374$ 10,374$ -$ Debt service - interest and other charges 171$ 171$ 128$ 43$ Total expenditures 755,460$ 755,460$ 542,395$ 213,065$ 0 Excess (deficiency) of revenues over (under) expenditures (136,172)$ (136,172)$ 110,786$ 246,958$ 0 Net change in fund balance (136,172)$ (136,172)$ 110,786$ 246,958$ Fund balances - beginning 955,920$ Fund balances - ending 1,066,706$ 2600 Urban Forestry 141 City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2022 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental 210,228 210,228 - (210,228) - - - - Charges for Services - - - - - - 52,945 52,945 Investment and Royalty Earnings - - - - 56,166 56,166 2,860 (53,306) Total revenues 210,228 210,228 - (210,228) 56,166 56,166 55,805 (361) 0EXPENDTIURES Current: Housing and Community Development - - - - 527,406 527,406 2,403 525,003 Operations and maintenance - - - - 527,406 527,406 2,403 525,003 Capital outlay 242,814 242,814 - 242,814 - - - - Total expenditures 242,814 242,814 - 242,814 527,406 527,406 2,403 525,003 0 Excess (deficiency) of revenues over (under) expenditures (32,586) (32,586) - 32,586 (471,240) (471,240) 53,402 524,642 0 OTHER FINANCING SOURCES (USES)- - - - - - Transfers in 15,000 15,000 - (15,000) - - - - Transfers (out)- - - - - - (525,000) (525,000) Total other financing sources (uses)15,000 15,000 - (15,000) - - (525,000) (525,000) 0 - - - - - - Net change in fund balance (17,586) (17,586) - 17,586 (471,240) (471,240) (471,598) (358) Fund balances - beginning 21,006 2,298,578 Fund balances - ending 21,006 1,826,980 MACI Community Development Loan Revolving 2825 2880 142 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Investment and Royalty Earnings 202,000 202,000 16,695 (185,305)42,725 42,725 8,115 (972)Total revenues 202,000 202,000 16,695 (185,305)42,725 42,725 8,115 (972) 0EXPENDTIURES Current: Housing and Community Development 1,080,451 1,080,451 23,919 1,056,532 172,074 172,074 32,715 139,359 Operations and maintenance 828,135 1,080,451 23,919 1,056,532 450,000 450,000 615 449,385 Debt Service - - - - 22,074 22,074 32,100 (10,026) Debt service - principal - - - - 27,757 27,757 27,758 (1) Debt service - interest and other charges - - - - 4,342 4,342 4,342 Total expenditures 828,135 1,080,451 23,919 1,056,532 439,374 439,374 32,715 406,6590 Excess (deficiency) of revenues over (under) expenditures (626,135)(878,451)(7,224) 436,227 (396,649)(396,649) (24,600) 45,6870 OTHER FINANCING SOURCES (USES)- - - - - - Transfers (out)- - (1,056,532) (1,056,532) - - - - Total other financing sources (uses)- - (1,056,532) (1,056,532) - - - - 0 - - - - - - Net change in fund balance (626,135)(626,135)(1,063,756) (396,649)(396,649*)(24,600) 45,687 Fund balances - beginning 33,343 816,154 Fund balances - ending (1,030,413) 791,554 2887 & City of KalispellBudgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2022 2886 CD Projects RD Revolving Loan (620,305) 143 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments -$ -$ -$ -$ 38,301.00$ 38,301.00$ -$ (38,301.00)$ Intergovernmental 40,000 40,000 33,951 (6,049) - - 34,887 34,887 Total revenues 40,000 40,000 33,951 (6,049) 38,301 38,301 34,887 (3,414) 0 EXPENDTIURES Current: Public Safety 40,000 40,000 32,798 7,202 105,742 105,842 94,235 11,607 Personal services - - - - 105,742 105,742 - 105,742 Operations and maintenance 40,000 40,000 3,801 36,199 - - 94,235 (94,235) Capital outlay - - 28,997 (28,997) - - - - Total expenditures 40,000 40,000 32,798 7,202 105,742 105,742 94,235 11,5070 Excess (deficiency) of revenues over (under) expenditures - - 1,153 1,153 (67,441) (67,441)(59,348) 8,0930 OTHER FINANCING SOURCES (USES)- - - - - - Transfers in - - - - 64,000 64,000 64,000 - Total other financing sources (uses)- - - - 64,000 64,000 64,000 - 0 - - - - - - Net change in fund balance - - 1,153 1,153 (3,441) (3,441)4,652 8,093 Fund balances - beginning - 29,519 Fund balances - ending 1,153 34,171 0 2916 City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue FundsFor Fiscal Year Ended June 30, 2022 2915 Stonegarden Grant Drug Enforcement Grant 144 ctual (Budgetary Basis) City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year EndedJune 30, 2022 0 0 0 VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental 134,399 134,399 - (134,399) Miscellaneous - - - - 134,399 134,399 - (134,399) - - - - 179,199 179,199 - 179,199 586,495.00 586,495.00 - 586,495.00 - - - - - 179,199 179,199 - 179,199 (44,800)(44,800)- (44,800) Total revenues0 EXPENDTIURES Current: Public Safety Personal Services Housing and Community Development Operations and maintenance Capital outlay Total expenditures 0 Excess (deficiency) of revenues over (under) expenditures 0 OTHER FINANCING SOURCES (USES)- - - Transfers in 100,000 100,000 - 100,000 Total other financing sources (uses)- - - - 0 - Net change in fund balance -- - $ Fund balances - beginning -Fund balances - ending $ - 2918 CCHRP GRANTHRP 145 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental 51,000 51,000 28,020 (22,980) 15,484 15,484 40,487 25,003 Charges for Services 17,000 17,000 12,404 (4,596) - - - - Miscellaneous 4,000 9,000 25,445 16,445 - - - - Total revenues 72,000 77,000 65,869 (11,131) 15,484 15,484 40,487 25,003 0EXPENDTIURES Current: Public Safety - - 53,309 (53,5,000309)- - - - Personal services 55,000 55,000 24,884 (30,116)- - - - Operations and maintenance 23,000 28,000 28,425 (425)- - - - Housing and Community Development - - - - 15,484 15,484 12,891 2,593 Operations and maintenance - - - - 15,484 15,484 12,891 2,593 Total expenditures - 83,000 53,309 18,560 15,484 15,484 12,891 2,593 0 Excess (deficiency) of revenues over (under) expenditures 18,560 (64,440) - - 27,596 27,596 0 OTHER FINANCING SOURCES (USES)- - - - - - Transfers in 6,000 6,000 6,000 - - - - - Total other financing sources (uses)6,000 6,000 6,000 - - - - - 0 - - - - - - Net change in fund balance 83,000 89,000 18,560 (64,440) - - 27,596 27,596 Fund balances - beginning 15,156 - Fund balances - ending 33,716 27,596 EPA Brownsfield Grant City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue FundsFor Fiscal Year Ended June 30, 2022 2919 Law Enforcement Grant 2953 78,000 146 0 0 0 VARIANCE WITH VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental 485,995 485,995 - (485,995) 53,000 53,000 - (53,000) Miscellaneous - - - - - - 1,000 1,000 Total revenues 485,995 485,995 - (485,995) 53,000 53,000 1,000 (52,000) 0 EXPENDTIURES Current: Public Safety - - - - 63,300 63,300 1,701 61,599 Operations and maintenance - - - - 5,000 5,000 1,701 3,299 Housing and Community Development 586,495 586,495 - 586,495 - - - - Operations and maintenance 586,495 586,495 - 586,495 - - - - Capital outlay - - - - 58,300 58,300 - 58,300 Total expenditures 586,495 586,495 - 586,495 63,300 63,300 1,701 61,599 0Excess (deficiency) of revenues over (under) expenditures (100,500) (100,500) - 100,500 (10,300) (10,300) (701) 9,599 0 OTHER FINANCING SOURCES (USES)- - - - - - Transfers in - - - - 5,300 5,300 - (5,300) Total other financing sources (uses)- - - - 5,300 5,300 - (5,300) 0 - - - - - - Net change in fund balance (100,500) (100,500) - 100,500 (5,000) (5,000) (701) 4,299 Fund balances - beginning 100,500 7,070 Fund balances - ending 100,500 6,369 2956 City of KalispellBudgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2022 2955 Brownfields Loan Revolving Fire Grants 147 ctual (Budgetary Basis) 0 0 0 VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental 54,314 16,923 (37,391) Investment and Royalty Earnings 200 200 227 27 Total revenues 200 54,514 17,150 (37,364) 0 EXPENDTIURES Current: General Government 32,809 32,809 - 32,809 Personal services - Operations and maintenance - Public Safety - - 17,615 (17,615) Operations and maintenance 18,000 72,809 17,615 55,194 Housing and Community Development - - - - Operations and maintenance - - - - Total expenditures 18,000 72,809 17,615 15,194 0 Excess (deficiency) of revenues over (under) expenditures (17,800)(18,295) (465) 22,170 0 Net change in fund balance (17,800)(18,295) (465) 22,170 Fund balances - beginning 44,340 Fund balances - ending 43,875 City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year EndedJune 30, 2022 2957 Hazmat Grant 148 City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue Funds For Fiscal Year Ended June 30, 2022 VARIANCE WITH VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET ACTUAL POSITIVE ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments -$ -$ -$ -$ -$ -$ -$ -$ Intergovernmental - 30,000.00 - (30,000.00) 236,712.00 236,712.00 - (236,712.00) Investment and Royalty Earnings - -- - - - - - Total revenues - 30,000.00 - (30,000.00) 236,712.00 236,712.00 - (236,712.00) EXPENDTIURES Current: Public Works - - - - 236,712.00 236,712.00 - 236,712.00 Operations and maintenance - - - - - - - - Housing and Community Development - 30,000.00 - 30,000.00 - - - - Operations and maintenance - 30,000.00 - 30,000.00 - - - - Total expenditures - 30,000.00 - 30,000.00 236,712.00 236,712.00 - 236,712.00 Excess (deficiency) of revenues over (under) expenditures - - - - - - - - Net change in fund balance -$ -$ - -$ -$ -$ - -$ Fund balances - beginning - - Fund balances - ending -$ -$ 2945 2974 Samaritan House Airport Grant 149 Actual (Budgetary Basis)City of Kalispell Budgetary Comparison Schedule Nonmajor Special Revenue FundsFor Fiscal Year Ended June 30, 2022 00 0 VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Charges for Services - - - - Miscellaneous - - - - Investment and Royalty Earnings - - - - Total revenues 159,392 159,392.00 - (159,392.00) 0 EXPENDTIURES Current: Capital outlay - - - - Total expenditures 212,522.00 212,522.00 - 212,522.00 0 Excess (deficiency) of revenues over (under) expenditures (53,130.00) (53,130.00) - 53,130.00 0 Net change in fund balance 46,870.00$ 46,870.00$ - (46,870.00)$ Fund balances - beginning - Fund balances - ending -$ 2995 Safer 150 City of Kalispell, Montana Budgetary Comparison Schedule For the Fiscal Year Ended June 30, 2022 ACTUAL AMOUNTS VARIANCE (BUDGETARY WITH FINAL ORIGINAL FINAL BASIS) See Note A BUDGET RESOURCES: Taxes and assessments $3,615,226 3,615,226 4,743,981 1,128,755 Licenses and permits - - Intergovernmental 2,542,827 2,612,827 356,176 (2,256,651) Charges for services 2,784,736 2,784,736 3,602,829 818,093 Fines and forfeitures - Miscellaneous 38,200 38,200 121,116 82,916 Investment earnings 345,521 345,521 75,638 (269,883) Amounts available for appropriation $9,326,510 $9,396,510 $8,899,740 $(496,770) EXPENDITURES General government $ Public safety 2,931,440 2,991,349 2,362,277 2,362,277 Public works 1926298 1,926,298 1,084,825 841,473 Parks and recreation 2804098 2,804,098 2,205,128 598,970 Community development 1,924,007 1,954,007 156,127 1,797,880 Debt service - principal 146,802 146,802 134,803 11,999 Debt service - interest 12,695 12,695 9,652 3,043 Capital outlay 2,694,768 2,694,768 223,356 2,471,412 Total expenditures $12,440,108 $12,530,017 $6,176,168 $8,087,054 OTHER FINANCING SOURCES (USES) Issuance of debt - - - - Transfers in 615,050 615,050 556,842 (58,208) Transfers out (2,039,135) (2,291,451) (2,990,532) (699,081) Total other financing sources (uses)$(1,424,085) $(1,676,401) $(2,433,690) $(757,289) Net change in fund balance $289,882 Fund balance - beginning of the year $12,231,092 Restatements Fund balance - beginning of the year - restated $12,231,092 Fund balance - end of the year $12,520,974 BUDGETED AMOUNTS Total Non-Major Special Revenue Funds 151 City of Kalispell, MontanaBudgetary Comparison Schedule Nonmajor Debt Service Funds For Fiscal Year Ended June 30, 2022 FALSE FALSE VARIANCE WITH VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET ACTUAL POSITIVE ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments $ 182,446 182,446 195,677$ 195,677$ 910,350$ 910,350$ 863,580$ (46,770)$ Intergovernmental - - -$ -$ 243,128$ 243,128$ 276,078$ 32,950$ Charges for Services - - -$ -$ 9,000$ 9,000$ -$ (9,000)$ Investment and Royalty Earnings - - 625$ 625$ 1,000$ 1,000$ -$ (1,000)$ Total revenues 182,446 - 182,446 196,302$ 196,302$ 1,163,478$ 1,163,478$ 1,139,658$ (23,820)$ EXPENDITURES Debt Service - - 234,950$ (234,950)$ 368,775$ 368,775$ 368,775$ -$ Debt service - principal -230,000 -230,000 230,000$ (230,000)$ 205,000$ 205,000$ 205,000$ -$ Debt service - interest and other charges 4,950 4,950 4,950$ (4,950)$ 163,775$ 163,775$ 163,775$ -$ Total expenditures 234,950 234,950 234,950$ (234,950)$ 368,775$ 368,775$ 368,775$ -$ Excess (deficiency) of revenues over (under) expenditures (52,504) ( 52,504)(38,648)$ (38,648)$ 794,703$ 794,703$ 770,883$ (23,820)$ OTHER FINANCING SOURCES (USES)- - -$ -$ -$ -$ Transfers (out)- - (13,856)$ (13,856)$ (900,000)$ (900,000)$ (900,000)$ -$ Total other financing sources (uses)- - (13,856)$ (13,856)$ (900,000)$ (900,000)$ (900,000)$ -$ Net change in fund balance $ --(52,504) $ (52,504)$ (52,504)$ (105,297)$ (105,297)$ (129,117)$ (23,820)$ Fund balances - beginning 52,504$ 963,226$ Fund balances - ending -$ 834,109$ 3012 G.O. Bonds 3188 Westside TIF Debt Service 152 0 00 VARIANCE WITH VARIANCE WITH0BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET0ACTUALPOSITIVEACTUALPOSITIVE0ORIGINALFINALAMOUNTS(NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE)REVENUES Taxes and Assessments -$ -$ -$ -$ 11,362$ 11,362$ 12,191$ 829$ Investment and Royalty Earnings 500$ 500$ 1,207$ 707$ -$ -$ -$ -$ Total revenues 500$ 500$ 1,207$ 707$ 11,362$ 11,362$ 12,191$ 829$ 0EXPENDITURES Current: Debt Service -$ -$ -$ -$ 11,422$ 11,422$ 11,170$ 252$ Debt service - principal -$ -$ -$ -$ 9,461$ 9,461$ 9,460$ 1$ Debt service - interest and other charges -$ -$ -$ -$ 1,961$ 1,961$ 1,710$ 251$ Total expenditures -$ -$ -$ -$ 11,422$ 11,422$ 11,170$ 252$ 0 Excess (deficiency) of revenues over (under) expenditures 500$ 500$ 1,207$ 707$ (60)$ (60)$ 1,021$ 1,081$ 0 Net change in fund balance 500$ 500$ 1,207$ 707$ (60)$ (60)$ 1,021$ 1,081$ Fund balances - beginning 222,826$ (196)$ Fund balances - ending 224,033$ 825$ 3600 SID Revolving S & C's City of Kalispell, Montana Budgetary Comparison ScheduleNonmajor Debt Service FundsFor the Year Ended June 30, 2022 3500 153 0 00 VARIANCE WITH VARIANCE WITH0BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET0ACTUALPOSITIVEACTUALPOSITIVE0ORIGINALFINALAMOUNTS(NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 288,000$ 288,000$ 254,492$ (33,508)$ 20,000$ 20,000$ 19,397$ (603)$ Total revenues 288,000$ 288,000$ 254,492$ (33,508)$ 20,000$ 20,000$ 19,397$ (603)$ 0 EXPENDITURES Current: Housing and Community Development 50,000$ 50,000$ -$ 50,000$ -$ -$ 19,840$ (19,840)$ Operations and maintenance 50,000$ 50,000$ -$ 50,000$ -$ -$ -$ -$ Debt Service 283,633$ 283,633$ 283,633$ -$ 19,840$ 19,840$ 19,840$ -$ Debt service - principal 225,000$ 225,000$ 225,000$ -$ 16,000$ 16,000$ 16,000$ -$ Debt service - interest and other charges 58,633$ 58,633$ 58,633$ -$ 3,840$ 3,840$ 3,840$ -$ Total expenditures 333,633$ 333,633$ 283,633$ 50,000$ 19,840$ 19,840$ 19,840$ -$ 0 Excess (deficiency) of revenues over (under) expenditures (45,633)$ (45,633)$ (29,141)$ 16,492$ 160$ 160$ (443)$ (603)$ 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ -$ -$ -$ Transfers in -$ -$ 58,000$ 58,000$ -$ -$ -$ -$ Total other financing sources (uses)-$ -$ 58,000$ 58,000$ -$ -$ -$ -$ 0 -$ -$ -$ -$ -$ -$ Net change in fund balance (45,633)$ (45,633)$ 28,859$ 74,492$ 160$ 160$ (443)$ (603)$ Fund balances - beginning 16,248$ 24,675$ Fund balances - ending 45,107$ 24,232$ 3645 SID 344 SID 345 City of Kalispell, MontanaBudgetary Comparison ScheduleNonmajor Debt Service FundsFor the Year Ended June 30, 2022 3645 154 Actual (Budgetary Basis)City of KalispellBudgetary Comparison Schedule Nonmajor Debt Service FundsFor Fiscal Year EndedJune 30, 2022 0 Total Non-Major Debt Service Funds 0 0 VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 1,412,158$ 1,412,158$ 1,345,337$ (66,821)$ Property taxes -$ -$ 1,090,845$ 1,090,845$ Special assessments -$ -$ 253,926$ 253,926$ Bond principal and interest assessments -$ -$ 566$ 566$ Total Taxes and Assessments 1,412,158$ 1,412,158$ 1,345,337$ (66,821)$ Intergovernmental 243,128$ 243,128$ 276,078$ 32,950$ State shared revenues -$ -$ 276,078$ 276,078$ Total Intergovernmental 243,128$ 243,128$ 276,078$ 32,950$ Charges for Services 9,000$ 9,000$ -$ (9,000)$ Total Charges for Services 9,000$ 9,000$ -$ (9,000)$ Investment and Royalty Earnings 1,500$ 1,500$ 1,832$ 332$ Total revenues 1,665,786$ 1,665,786$ 1,623,247$ (42,539)$ 0 -$ -$ -$ EXPENDITURES -$ -$ -$ Current: Housing and Community Development 50,000$ 50,000$ 31,010$ 18,990$ Operations and maintenance 50,000$ 50,000$ -$ 50,000$ Debt Service 683,670$ 683,670$ 918,368$ (234,698)$ Debt service - principal 685,461$ 685,461$ 685,460$ 1$ Debt service - interest and other charges 233,159$ 233,159$ 232,908$ 251$ Total expenditures 968,620$ 968,620$ 918,368$ 50,252$ 0 Excess (deficiency) of revenues over (under) expenditures 697,166$ 697,166$ 704,879$ 7,713$ 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ Transfers in -$ -$ 58,000$ 58,000$ Transfers (out)(900,000)$ (900,000)$ (913,856)$ (13,856)$ Total other financing sources (uses)(900,000)$ (900,000)$ (855,856)$ 44,144$ 0 -$ -$ -$ Total other financing sources (uses), special and extraordinary items (900,000)$ (900,000)$ (855,856)$ 44,144$ 0 Net change in fund balance (202,834)$ (202,834)$ (150,977)$ 51,857$ Fund balances - beginning 1,279,283$ Fund balances - ending 1,128,306$ 155 City of Kalispell Budgetary Comparison Schedule Nonmajor Debt Service Funds For Fiscal Year Ended June 30, 2022 0 Total Non-Major Debt Service Funds 0 0 VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes and Assessments 1,171,712$ 1,171,712$ 1,345,337$ 173,625$ Intergovernmental 243,128$ 243,128$ 276,078$ 32,950$ Charges for Services 9,000$ 9,000$ -$ (9,000)$ Investment and Royalty Earnings 1,500$ 1,500$ 1,832$ 332$ Total revenues 1,425,340$ 1,425,340$ 1,623,247$ 197,907$ 0 EXPENDITURES -$ -$ -$ Current: Debt Service 683,670$ 683,670$ 918,368$ (234,698)$ Debt service - principal 455,461$ 455,461$ 685,460$ (229,999)$ Debt service - interest and other charges 228,209$ 228,209$ 232,908$ (4,699)$ Total expenditures 683,670$ 683,670$ 918,368$ (234,698)$ 0 Excess (deficiency) of revenues over (under) expenditures741,670$ 741,670$ 704,879$ (36,791)$ 0 OTHER FINANCING SOURCES (USES)-$ -$ -$ Transfers in -$ -$ 58,000$ 58,000$ Transfers (out)(842,000)$ (842,000)$ (913,856)$ (71,856)$ Total other financing sources (uses)(842,000)$ (842,000)$ (855,856)$ (13,856)$ -$ Total other financing sources (uses), special and extraordinary items (842,000)$ (842,000)$ (855,856)$ (13,856)$ 0 Net change in fund balance (100,330)$ (100,330)$ (150,977)$ (50,647)$ Fund balances - beginning 1,279,283$ Fund balances - ending 1,128,306$ 156 City of KalispellBudgetary Comparison Schedule Nonmajor Capital Projects Funds For Fiscal Year Ended June 30, 2022 FALSE FALSE VARIANCE WITH VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET BUDGETED AMOUNTS FINAL BUDGET ACTUAL POSITIVE ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE)ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental - - - - 2,705,046 2,705,046 2,758,903 53,857 Investment and Royalty Earnings 25,000 25,000 - (25,000) - - - - Total revenues 25,000 25,000 - (25,000) 2,705,046 2,705,046 2,758,903 53,857 EXPENDITURES Current: Housing and Community Development - - - - 2,705,046.00 2,705,046.00 2,704,867.00 179.00 Personal services - - - - - - - - Operations and maintenance - - - - 2,705,046 2,705,046 2,704,867 179 Capital outlay 25,000 25,000 4,165 20,835 - - - - Total expenditures 25,000 25,000 4,165 20,835 2,705,046 2,705,046 2,704,867 179 Excess (deficiency) of revenues over (under) expenditures - - (4,165) (4,165) - - 54,036 54,036 OTHER FINANCING SOURCES (USES)- - - - - - Proceeds from general long term debt - - 4,165 4,165 - - - - Total other financing sources (uses)- - 4,165 4,165 - - - - Net change in fund balance -$ -$ - - - - 54,036 54,036 Fund balances - beginning - (54,036) Fund balances - ending -$ -$ 4290 2991 S & C Construction Tiger Grant 157 City of KalispellBudgetary Comparison Schedule Nonmajor Capital Projects Funds For Fiscal Year Ended June 30, 2022 0 Total Non-Major Capital Project Funds 0 0 VARIANCE WITH 0 BUDGETED AMOUNTS FINAL BUDGET 0 ACTUAL POSITIVE 0 ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Intergovernmental 2,705,046 2,705,046 2,758,903 53,857 Investment and Royalty Earnings 25,000 25,000 - (25,000) Total revenues 2,730,046 2,730,046 2,758,903 28,857 0 - - - EXPENDITURES - - - Current: Housing and Community Development - - - - Personal services - - - - Operations and maintenance 2,705,046 2,705,046 2,704,867 179 Capital outlay 25,000 25,000 4,165 20,835 Total expenditures 2,805,046 2,805,046 2,721,527 83,519 0 Excess (deficiency) of revenues over (under) expenditures - - 49,871 49,871 0 OTHER FINANCING SOURCES (USES)- - - Proceeds from general long term debt - - 4,165 4,165 Total other financing sources (uses)- - 4,165 4,165 0 Net change in fund balance - - 54,036 54,036 Fund balances - beginning (54,036) Fund balances - ending -$ 158 COMBINING AND INDIVIDUAL FUND STATEMENTS NONMAJOR PROPRIETARY FUNDS SOLID WASTE – Accounts for assessments received and expenses incurred in the operation of the City solid waste department. 159 City of Kalispell, Montana Combining Statement of Net PositionNonmajor Enterprise Funds June 30, 2022 5510 Solid Waste ASSETS Current assets Cash and investments $1,418,251 Taxes and assessments receivable, net 25,259 Due from other governments 61,138 Prepaid expenses 7,385 Total current assets 1,512,033 Noncurrent assets Capital assets - net of depreciation 573,336 Total noncurrent assets 573,336 Total assets 2,085,369 0 DEFERRED OUTFLOWS OF RESOURCES Pensions 67,620 Total deferred outflows of resources 67,620 0 LIABILITIES Current liabilities Accounts payable 15,769 Accrued payroll 22,853 Compensated absences payable 38,956 Total current liabilities 77,578 Noncurrent liabilities Compensated absences payable 30,714 Net pension liability 263,985 Total noncurrent liabilities 294,699 Total liabilities 372,277 0 DEFERRED INFLOWS OF RESOURCES Pensions 111,369 Total deferred inflows of resources 111,369 0 NET POSITION Net investment in capital assets 573,336 Unrestricted 1,096,007 Total net position $ 1,669,343 The notes to the financial statements are an integral part of this statement. 160 City of Kalispell, Montana Combining Statement of Revenues, Expenditures, and Changes in Fund Net Position Nonmajor Enterprise Funds June 30, 2022 5510 Solid Waste OPERATING REVENUES Charges for services $1,115,479 Miscellaneous revenues 2,510 On-behalf - pensions 22,174 Total operating revenues 1,140,163 OPERATING EXPENSES Personal services 598,571 Supplies 132,549 Purchased services 68,524 Fixed charges 236,136 Depreciation 158,509 Total operating expenses 1,194,289 Operating income (loss)(54,126) NON-OPERATING REVENUES (EXPENSES) Interest revenue 6,667 Total Non-Operating Revenues (Expenses)6,667 Change in net position Net position - beginning (47,459) 1,716,802 Net position - ending $ 1,669,343 The notes to the financial statements are an integral part of this statement. 161 City of Kalispell, Montana Combining Statement of Cash Flows Nonmajor Enterprise Funds For Fiscal Year Ended June 30, 2022 5510 Solid Waste Cash Flows from Operating Activities: Cash received from customers $1,118,323 Cash received from miscellaneous sources 2,510 Cash paid to suppliers of goods and services (433,701) Cash paid to employees (590,919) Net cash provided (used) by operating activities 96,213 Cash Flows from Capital and Related Financing Activities: Capital Contributions received (4,293) Net cash provided (used) by capital financing activities (4,293) Cash Flows from Investing Activities: Interest on investments 6,667 Net cash provided (used) by investing activities 6,667 Net increase (decrease) in cash and cash equivalents 98,587 Cash and cash equivalents as of; June 30, 2021 1,319,664 June 30, 2022 $1,418,251 Displayed on Combining Statement of Net Position-Nonmajor Enterprise Funds as: Cash and investments $1,418,251 Reconciliation of operating income to net cash provided by operating activity: Operating income (loss)$(54,126) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense 158,509 Change in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in assessments receivable 2,675 (Increase) decrease in accounts receivable 169 (Increase) decrease in prepaid items 1 Increase (decrease) in accounts payable 3,507 Increase (decrease) in accrued payables 2,826 Increase (decrease) in compensated absences payable (11,303) Increase (decrease) in net pension liability (107,783) (Increase) decrease in deferred outflows-pension 20,750 Increase (decrease) in deferred inflows-pension 80,988 Net cash provided (used) by operating activities $96,213 The notes to the financial statements are an integral part of this statement. 162 COMBINING AND INDIVIDUAL FUND STATEMENTS INTERNAL SERVICE FUNDS 163 City of Kalispell, Montana Combining Statement of Net PositionInternal Service Funds June 30, 2022 1 2 6030 6010 Information Technology Central Garage Total Internal Service Funds ASSETS Current assets Cash and investments $646,060 $215,528 $861,588 Notes, loans, and contracts receivable 48,490 - 48,490 Prepaid expenses 7,224 3,187 10,411 Lease Receivable 18,464 - 18,464 Total current assets 720,238 218,715 938,953 Noncurrent assets Capital assets - net of depreciation 131,444 102,695 234,139 Total noncurrent assets 131,444 102,695 234,139 Total assets 851,682 321,410 1,173,092 LIABILITIES Current liabilities Accounts payable 37,543 6,723 44,266 Accrued payroll 17,628 9,403 27,031 Compensated absences payable 24,233 6,086 30,319 Total current liabilities 79,404 22,212 101,616 Noncurrent liabilities Compensated absences payable 4,231 3,763 7,994 Lease Purchase 18,464 - 18,464 Total noncurrent liabilities 22,695 3,763 26,458 Total liabilities 102,099 25,975 128,074 NET POSITION Net investment in capital assets 131,444 102,695 234,139 Unrestricted 618,139 192,740 810,879 Total net position $749,583 $295,435 $1,045,018 The notes to the financial statements are an integral part of this statement. 164 City of Kalispell, Montana Combining Statement of Revenues, Expenses, and Changes in Net PositionInternal Service FundsFor Fiscal Year EndedJune 30, 2022 6030 6010 Information Technology Central Garage OPERATING REVENUES Charges for services $753,914 $620,271 $1,374,185 Miscellaneous revenues - 3,371 3,371 Total operating revenues 753,914 623,642 1,377,556 OPERATING EXPENSES Personal services 499,212 223,720 722,932 Supplies 104,608 288,919 393,527 Purchased services 412,389 36,922 449,311 Fixed charges 6,720 27,581 34,301 Loss/bad debt expense - 13,420 13,420 Depreciation 59,643 - 59,643 Total operating expenses 1,082,572 590,562 1,673,134 Operating income (loss)(328,658) 33,080 (295,578) NON-OPERATING REVENUES (EXPENSES) Licenses/permits revenue 196,874 - 196,874 Intergovernmental revenue 430,000 - 430,000 Interest revenue 2,819 1,236 4,055 Debt service interest expense (1,338) - (1,338) Total Non-Operating Revenues (Expenses)628,355 1,236 629,591 Income (loss) before contributions, transfers, special & extraordinary items 299,697 34,316 334,013 Change in net position 299,697 34,316 334,013 Net position - beginning 449,886 261,119 711,005 Net position - ending $ 749,583 $ 295,435 $ 1,045,018 The notes to the financial statements are an integral part of this statement. Total Internal Service Funds 165 City of Kalispell, Montana Combining Statement of Cash FlowsInternal Service Funds For Fiscal Year EndedJune 30, 2022 6030 6010 Information Technology Central Garage Total Internal Service Funds Cash Flows from Operating Activities: Cash received from customers $753,915 $606,851 $1,360,766 Cash received from miscellaneous sources - 3,371 3,371 Cash paid to suppliers of goods and services (492,397) (360,872) (853,269) Cash paid to employees (500,112) (219,893) (720,005) Net cash provided (used) by operating activities (238,594) 29,457 (209,137) Cash Flows from Non-Capital and Related Financing Activities: Intergovernmental revenue received 430,000 - 430,000 Cash received from Charter Franchise Fees 196,873 - 196,873 Net cash provided (used) by non-capital and related financing activities 626,873 - 626,873 Cash Flows from Capital and Related Financing Activities: Interest paid on capital debt (1,338) - (1,338) Acquisition and construction of capital assets (52,799) 3,601 (49,198) Net cash provided (used) by capital financing activities (54,137) 3,601 (50,536) Cash Flows from Investing Activities: Interest on investments 2,819 1,236 4,055 Change in Current and Noncurrent portions of notes, loans, and contracts receivable (419) - (419) Net cash provided (used) by investing activities 2,400 1,236 3,636 Net increase (decrease) in cash and cash equivalents 336,542 34,294 370,836 Cash and cash equivalents as of; June 30, 2021 309,518 181,234 490,752 June 30, 2022 $646,060 $ 215,528 $ 861,558 Displayed on Combining Statement of Net Position-Internal Service Funds as: Cash and investments $646,060 $ 215,528 861,588 Reconciliation of operating income to net cash provided by operating activity: Operating income (loss)$(328,658) $ 33,080 $ (295,578) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense 59,643 - 59,643 Change in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in prepaid items 175 - 175 Increase (decrease) in accounts payable 31,146 (7,451) 23,695 Increase (decrease) in accrued payables (282) 1,760 1,478 Increase (decrease) in compensated absences payable (618) 2,068 1,450 Net cash provided (used) by operating activities $(238,594) $ 29,457 $ (209,137) Schedule of non-cash transactions Depreciation 59,643 - 59,643 The notes to the financial statements are an integral part of this statement. 166 STATISTICAL SECTION This part of the City of Kalispell’s financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosure and required supplementary information says about the government’s overall financial health. Contents Financial Trends These schedules contain trend information to help the reader understand how the government’s financial performance and well-being have changed over time Revenue Capacity These schedules contain information to help the reader assess the government’s most significant local revenue source, the property tax. Debt Capacity These schedules present information to help the reader assess the affordability of the government’s current level of outstanding debt and the government’s ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government’s financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government’s financial report relates to the services the government provides and the activities it performs. Additional Information This category is intended to present other information the City feels is necessary for its users. Sources: Unless otherwise noted, the information in these schedules is derived from the City of Kalispell annual financial report for the relevant year. Note: The City of Kalispell implemented GASB Statement 34 in fiscal year 2003, therefore the data for prior years are not shown; schedules presenting government-wide information include information beginning in that year. 167 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Governmental activities Net investment in capital assets 72,872,788 71,734,631 71,610,586 70,056,388 69,120,365 72,196,186 82,128,310 71,130,497 70,317,095 82,820,953 Restricted 7,745,994 8,577,197 8,581,135 9,406,621 9,350,293 12,103,683 9,265,932 9,349,779 9,476,546 18,926,543 Unrestricted 6,851,705 7,516,921 617,235 1,612,405 2,881,803 2,389,606 2,634,167 4,131,282 3,615,896 (6,972,378) Total governmental activities net position 87,470,487$ 87,828,749$ 80,808,956$ 81,075,414$ 81,352,461$ 86,689,475$ 94,028,409$ 84,611,558$ 83,409,537$ $ 94,775,119 Business-type activities Net investment in capital assets 56,139,329 58,015,752 59,797,010 60,294,686 60,491,421 61,913,049 70,085,780 75,179,096 77,743,623 82,548,606 Restricted 6,735,034 7,590,734 7,061,197 9,184,782 10,401,661 10,896,926 10,163,238 9,679,072 7,885,626 12,120,363 Unrestricted 8,650,365 8,435,587 7,267,075 9,516,020 12,169,294 14,456,457 15,586,293 19,073,610 24,880,297 25,676,193 Total business-type activities net position 71,524,728$ 74,042,073$ 74,125,282$ 78,995,488$ 83,062,376$ 87,266,432$ 95,835,311$ 103,931,778$ 110,509,546$ $ 120,345,162 Primary Government Net investment in capital assets 129,012,117 129,750,383 131,407,596 130,351,074 129,611,786 134,109,235 152,214,090 146,309,593 148,060,718 164,963,380 Restricted 14,481,028 16,167,931 15,642,332 18,591,403 19,751,954 23,000,609 19,429,170 19,028,851 17,362,172 31,046,906 Unrestricted 15,502,070 15,952,508 7,884,310 11,128,425 15,051,097 16,846,063 18,220,460 23,204,892 28,496,193 19,109,995 Total primary government net position $ 158,995,215 $ 161,870,822 $ 154,934,238 $ 160,070,902 $ 164,414,837 $ 173,955,907 $ 189,863,720 $ 188,543,336 $ 193,919,083 $ 215,120,281 Un a u d i t e d s t a t i s t i c a l s e c t i o n CITY OF KALISPELL, MONTANA NET POSITION BY COMPONENT Past Ten Fiscal Years 168 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022ExpensesGovernmental activities: General government 6,709,523 5,688,135 5,401,242 5,823,767 5,841,775 6,251,409 6,078,813 6,225,773 6,505,134 4,117,979 Public Safety 9,293,138 9,269,827 9,575,487 9,113,674 10,968,010 11,333,862 11,186,487 11,738,977 15,081,467 12,568,054 Public Works 3,074,630 2,573,627 2,773,097 2,581,002 2,660,513 3,341,768 5,778,281 4,432,162 4,191,268 6,257,894 Parks and recreation 1,991,585 2,123,237 2,062,669 2,057,468 2,184,222 2,554,634 2,530,660 2,371,145 2,787,605 2,661,668 Community Development 3,616,337 1,601,170 683,164 928,661 853,455 1,275,659 2,860,796 2,048,260 3,093,846 3,079,481 Interest 390,770 357,857 331,811 286,401 242,110 226,588 381,767 333,593 283,585 262,187 Total governmental activities expenses 25,075,983$ 21,613,854$ 20,827,471$ 20,790,973$ 22,750,085$ 24,983,920$ 28,816,804$ 27,149,910$ 31,942,905$ 28,947,263$ Business-type activities: Airport 225,974 177,751 154,715 154,091 155,876 333,572 - - - - Water 2,660,877 2,625,046 2,542,119 2,657,816 2,734,979 3,079,040 3,042,213 3,134,112 3,423,908 3,668,564 Sewer 5,255,654 5,114,591 5,077,643 5,204,622 4,955,925 5,482,339 5,812,173 6,341,537 6,253,823 6,895,290 Solid Waste 783,967 812,650 816,686 880,679 872,161 1,013,000 994,660 1,047,408 1,008,739 1,194,289 Total business-type activities expenses 8,926,472 8,730,038 8,591,163 8,897,208 8,718,941 9,907,951 9,849,046 10,523,057 10,686,470 11,758,143 Total primary government expenses 34,002,455$ 30,343,892$ 29,418,634$ 29,688,181$ 31,469,026$ 34,891,871$ 38,665,850$ 37,672,967$ 42,629,375$ 40,705,406$ Program RevenuesGovernmental activities: Charges for services: General government 669,964 628,729 684,550 892,578 789,167 909,258 810,930 797,202 1,082,008 1,376,830 Public Safety 1,928,011 2,033,870 1,973,898 2,219,795 3,155,476 2,816,588 2,570,838 3,006,814 2,986,568 3,764,023 Public Works 2,201,616 2,172,122 2,463,435 2,672,473 2,885,492 3,155,932 3,470,887 3,203,603 2,854,584 2,898,061 Parks and recreation 711,969 752,460 728,165 730,928 716,491 1,334,208 1,283,827 1,049,706 1,349,752 1,375,248 Community Development 170,429 283,134 153,431 88,252 66,393 55,664 50,979 64,685 50,894 52,945 Operating grants and contributions 2,688,746 2,636,321 1,838,425 1,354,890 1,470,485 1,708,661 1,841,137 3,473,490 6,357,875 2,155,425 Capital grants and contributions 1,378,649 1,519,825 3,232,618 942,125 1,544,350 7,512,439 12,331,081 - 1,045,006 13,319,980 Total governmental activities program revenues 9,749,384$ 10,026,461$ 11,074,522$ 8,901,041$ 10,627,854$ 17,492,750$ 22,359,679$ 11,595,500$ 15,726,687$ 24,942,512$ Business-type activities:Charges for services: Airport 75,813 78,657 79,091 72,623 74,228 69,656 - - - - Water 2,740,512 2,985,959 3,018,276 3,535,072 3,891,449 4,346,570 4,241,715 3,874,001 4,633,672 5,263,888 Sewer 4,977,286 4,967,223 5,141,284 5,543,740 7,485,750 7,774,762 8,007,450 7,994,232 10,302,333 12,000,967 Solid Waste 900,643 951,676 973,393 988,145 1,005,786 1,021,797 1,048,091 1,076,047 1,096,394 1,117,989 Operating grants and contributions 8,354 8,372 27,721 137,048 32,653 31,078 47,478 55,235 222,879 154,155 Capital grants and contributions 1,012,027 2,137,977 1,098,222 3,338,669 131,626 579,982 6,536,160 5,200,256 799,492 2,360,036 Total business-type activities program revenues 9,714,635 11,129,864 10,337,987 13,615,297 12,621,492 13,823,845 19,880,894 18,199,771 17,054,770 20,897,035 Total primary government program revenues 19,464,019$ 21,156,325$ 21,412,509$ 22,516,338$ 23,249,346$ 31,316,595$ 42,240,573$ 29,795,271$ 32,781,457$ 45,839,547$ Net (Expense) / Revenue Governmental activities (15,326,600) (11,587,393) (9,752,948) (11,889,932) (12,122,231) (7,491,170) (6,457,125) (15,554,410) (16,216,218) (4,004,751) Business-type activities 788,163 2,399,826 1,746,824 4,718,089 3,902,551 3,915,894 10,031,848 7,676,714 6,368,300 9,138,892 Total primary government net expense (14,538,437)$ (9,187,567)$ (8,006,124)$ (7,171,843)$ (8,219,680)$ (3,575,276)$ 3,574,723$ (7,877,696)$ (9,847,918)$ 5,134,141$ General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes 8,092,684 8,739,807 7,584,775 8,357,904 8,848,481 8,912,089 9,647,621 10,393,815 10,109,452 10,489,024 Misc.151,062 184,781 189,921 111,048 200,015 201,577 99,876 128,414 583,314 634,169 Investment earnings 71,573 48,193 72,531 105,557 159,362 210,835 284,576 262,342 387,748 210,249 Grants and entitlements not restricted 2,657,356 2,835,264 3,134,703 3,132,559 3,184,831 3,177,113 3,074,926 3,425,997 3,251,245 3,069,588 Gas Tax 360,650 364,563 364,622 369,749 371,303 522,832 689,060 835,851 870,890 919,184 Gain (loss) sale of capital assets 11,610 78,497 22,183 (196,262) - 6,500 - - Transfers (358,169) (218,728) (65,000) 35,000 35,000 - - (8,960,047) - - Total governmental activities 10,975,156$ 11,953,880$ 11,293,162$ 12,190,314$ 12,821,175$ 12,828,184$ 13,796,059$ 6,092,872$ 15,202,649$ 15,322,214$ Business-type activities:Investment earnings 102,311 83,224 113,963 132,339 227,052 288,162 410,448 412,935 209,468 276,681 Gain (loss) sale of capital assets - 46,710 (3,091) - - (2,077,363) - - Other 2,101 140,616 19,631 - 209,531 - - 400,000 Transfers 358,169 218,728 65,000 (35,000) (35,000) - - - - Total business-type activities 460,480$ 301,952$ 227,774$ 234,864$ 211,683$ 288,162$ (1,457,384)$ 412,935$ 209,468$ 676,681$ Total primary government 11,435,636$ 12,255,832$ 11,520,936$ 12,425,178$ 13,032,858$ 13,116,346$ 12,338,675$ 6,505,807$ 15,412,117$ 15,998,895$ Change in Net Position Governmental activities (4,351,444) 366,487 1,540,214 300,382 698,944 5,337,014 7,338,934 (9,461,538) (1,013,569) 11,317,463 Business-type activities 1,248,643 2,701,778 1,974,598 4,952,953 4,114,234 4,204,056 8,574,464 8,089,649 6,577,768 9,815,573 Total primary government (3,102,801)$ 3,068,265$ 3,514,812$ 5,253,335$ 4,813,178$ 9,541,070$ 15,913,398$ (1,371,889)$ 5,564,199$ 21,133,036$ CITY OF KALISPELL, MONTANA CHANGES IN NET POSITIONPast Ten Fiscal Years Unaudited statistical section 169 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 General Fund Nonspendable 179,383 176,550 194,404 217,116 252,213 251,038 1,547,200 1,540,412 1,304,360 1,316,246 Restricted Assigned 138,840 125,448 125,448 225,072 509,620 379,968 830,886 1,746,043 2,059,369 1,414,160 Unassigned 1,832,060 2,107,411 2,946,897 3,242,167 3,381,494 3,881,096 2,810,356 2,507,348 3,228,502 2,699,686 Total general fund 2,150,283$ 2,409,409$ 3,266,749$ 3,684,355$ 4,143,327$ 4,512,102$ 5,188,442$ 5,793,803$ 6,592,231$ 5,430,092$ 678,630$ Assigned -$ -$ -$ -$ -$ -$ -$ -$ -$ 678,630$ 11,556$ 13,328$ 38,820$ 32,397$ 19,554$ 13,133$ 18,728$ 18,728$ 1,275,562$ 1,515,312$ 1,908,577$ 2,223,379$ 2,906,400$ 3,077,434$ 3,358,177$ 3,583,498$ -$ 1,287,118$ 1,528,640$ 1,947,397$ 2,255,776$ -$ 2,925,954$ 3,090,567$ 3,376,905$ 3,602,226$ 1,287,118$ 1,528,640$ 1,947,397$ 2,255,776$ -$ 2,925,954$ 3,090,567$ 3,376,905$ 3,602,226$ All Other Governmental Nonspendable 32,925$ 21,369$ 25,824$ 31,447$ 30,760$ 67,072$ 28,450$ 27,804$ 41,903$ 42,204$ Restricted 7,745,994$ 7,460,855$ 9,949,913$ 13,167,238$ 14,767,250$ 19,979,102$ 13,739,004$ 15,139,371$ 15,133,820$ 14,637,489$ Unassigned (208,707)$ (3,040)$ 39,286$ (175)$ (54,232)$ (1,030,413)$ Reserved Unreserved, reported in: Special revenue funds Total all other governmental funds 7,778,919$ 7,273,517$ 9,972,697$ 13,237,971$ 14,798,010$ 20,046,174$ 13,767,454$ 15,167,000$ 15,121,491$ 13,649,280$ Note: The City of Kalispell implemented the new standards for reporting fund balance, GASB Statement 54, in fiscal year 2011. Restricted Un a u d i t e d s t a t i s t i c a l s e c t i o n Nonspendable Restricted Street Maint. (Major) Nonspendable CITY OF KALISPELL, MONTANA FUND BALANCES OF GOVERNMENTAL FUNDS Past Ten Fiscal Years (modified accrual basis of accounting) Westside TIF (Major) 170 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Revenues Taxes and assessments 8,915,749 8,735,146 11,275,636 9,324,431 12,456,526 13,518,677 13,633,324 14,293,833 14,922,135 15,368,617 Licenses and permits 330,807 423,354 381,045 664,391 1,229,925 1,115,019 746,187 946,567 230,574 227,713 Intergovernmental 6,882,344 6,405,255 5,406,703 5,743,188 6,314,835 12,269,442 5,883,270 7,639,407 8,472,164 6,685,345 Charges for services 4,339,260 4,386,312 4,630,575 4,935,344 3,006,507 3,022,950 2,887,000 2,863,094 3,818,043 4,725,562 Fines and forfeitures 585,906 572,066 538,234 495,347 454,547 443,919 512,889 514,035 495,459 417,159 Miscellaneous 129,351 184,272 188,615 288,652 138,075 116,693 143,271 108,699 452,102 210,015 Investment earnings 71,572 48,193 72,528 105,557 159,363 188,004 261,385 238,482 387,748 181,137 Total revenues 21,254,989 20,754,598 22,493,336 21,556,910 23,759,778 30,674,704 24,067,326 26,604,117 28,778,225 27,815,548 Expenditures General government 2,512,714 2,893,332 2,623,226 2,991,835 2,495,710 3,127,703 3,233,558 3,392,162 3,206,238 3,074,246 Public safety 8,820,726 8,755,082 9,115,952 9,540,699 10,873,610 10,644,186 10,719,151 10,879,234 12,123,225 10,897,125 Public works 2,904,562 2,376,067 2,672,152 2,191,012 2,327,678 2,857,261 5,166,350 3,638,526 3,262,769 3,374,911 Parks and recreation 1,519,173 1,664,595 1,608,497 1,550,843 1,714,235 1,986,322 2,092,271 1,941,001 2,196,358 2,226,728 Community development 3,616,337 1,601,170 685,018 923,170 853,455 1,275,659 2,860,796 2,048,260 2,995,286 3,041,410 Capital outlay 1,701,728 1,201,998 560,750 930,636 1,792,584 11,577,677 1,107,299 926,860 2,790,528 5,755,445 Debt service: Principal 1,259,716 1,264,227 1,330,057 1,880,720 1,294,872 1,787,726 1,324,876 1,341,973 886,012 892,472 Interest 390,770 357,857 331,811 286,401 242,110 226,588 381,767 333,593 283,585 260,849 Total expenditures 22,725,726 20,114,328 18,927,463 20,295,316 21,594,254 33,483,122 26,886,068 24,501,609 27,744,001 29,523,186 Excess of revenues over (under) expenditures (1,470,737) 640,270 3,565,873 1,261,594 2,165,524 (2,808,418) (2,818,742) 2,102,508 1,034,224 (1,707,638) Other Financing Sources (Uses) Transfers in 1,512,214 1,639,721 2,201,276 2,022,611 1,020,234 4,115,790 992,570 1,005,000 1,115,170 5,250,230 Transfers out (1,512,214) (1,639,721) (2,176,276) (1,987,611) (985,234) (4,115,790) (992,570) (1,005,000) (1,115,170) (5,250,230) Issuance of debt 243,680 403,623 124,040 461,833 134,287 6,148,597 104,917 15,824 193,484 4,165 Sales of capital assets 11,610 93,272 26,513 20,984 37,399 6,500 - Bond premium - Total other financing sources (uses)243,680 403,623 160,650 590,105 195,800 6,169,581 142,316 22,324 193,484 4,165 Net change in fund balances (1,227,057) 1,043,893 3,726,523 1,851,699 2,361,324 3,361,163 (2,676,426) 2,124,832 1,227,708 (1,703,473) Debt service as a percentage of noncapital expenditures 7.24%7.72%8.79%11.19%7.76%9.20%6.62%7.11%4.69%4.85% CITY OF KALISPELL, MONTANACHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS Past Ten Fiscal Years(modified accrual basis of accounting) Unaudited statistical section 171 Fiscal Taxable Year Real Less Total Total Estimated Value as a Ended Taxable Tax Taxable Direct Market Percentage June 30,Value Increment Valuation Tax Rate Value of Market Value 2013 40,531$ 1,515$ 39,016$ 185.60 1,450,786$ 2.69% 2014 40,798$ 1,464$ 39,334$ 185.10 1,506,125$ 2.61% 2015 41,761$ 2,240$ 39,521$ 187.80 1,587,574$ 2.49% 2016 38,953$ 1,000$ 37,953$ 205.60 2,294,128$ 1.65% 2017 39,229$ 1,211$ 38,018$ 212.70 2,307,546$ 1.65% 2018 42,373$ 1,142$ 41,231$ 206.12 2,561,622$ 1.61% 2019 43,808$ 940$ 42,868$ 205.76 2,638,150$ 1.62% 2020 48,698$ 1,064$ 47,634$ 193.30 2,972,359$ 1.60% 2021 49,672$ 701$ 48,971$ 189.42 3,046,186$ 1.61% 2022 57,135$ 1,921$ 55,214$ 161.10 3,554,590$ 1.55% Source: Flathead County and Montana Department of Revenue Note: Reappraised by Montana Department of Revenue every other year CITY OF KALISPELL, MONTANA MARKET VALUE OF TAXABLE PROPERTY Past Ten Fiscal Years (in thousands of dollars) Unaudited statistical section 172 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. 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 2019 171.26 23.00 11.50 205.76 424.34 20.33 142.07 46.00 2020 161.00 21.30 11.00 193.30 403.70 21.46 137.73 46.00 2021 162.62 22.00 4.80 189.42 404.11 20.53 138.79 46.00 2022 138.10 19.50 3.50 161.10 296.95 18.34 143.67 46.00 Source: Flathead County CITY OF KALISPELL, MONTANA DIRECT AND OVERLAPPING PROPERTY TAX RATES Past Ten Fiscal Years (rate per $1000 of assessed value) City of Kalispell Overlapping Rates Unaudited statistical section 173 Percentage Percentage of Total City of Total CityTaxableTaxableTaxableTaxableTaxpayerValueRankValueValueRankValue FLATHEAD ELECTRIC COOPERATIVE INC 2,531,904 1 4.43%1,964,761 1 4.82% NORTHWESTERN CORP TRANSMISSION & DISTRIBUTION 2,502,277 2 4.38%836,224 3 2.05% QWEST/CENTURYLINK INC 1,292,091 3 2.26%1,053,168 2 2.58% FLATHEAD HOSPITAL DEVELOPMENT COMPANY LLC 821,466 4 1.44%624,315 4 1.53% TKG MOUNTAIN VIEW PLAZA LLC 440,458 5 0.77%359,974 8 0.88% PIG INVESTMENTS LLLP 347,136 6 0.61% WAL-MART ESTATE BUSINESS TRUST 304,722 7 0.53%402,695 5 0.99% VERIZON WIRELESS 288,210 8 0.50%187,883 0.46% CROWN ENTERPRISES LLC 203,881 9 0.36% NORTHWEST HORIZONS INC 184,505 10 0.32%161,503 7 FIRST INTERSTATE BANK 247,690 9 KING QTIP MARTIALTRUST, G JERRY 234,027 10 RED LION HOTELS LIMITED PARTNERSHIP 356,542 6 0.87% Total 8,916,650 15.61%6,428,782 14.18% Total City Taxable Assessed Value 57,135,017$ 40,798,448$ Source: Flathead County GASB, Statement 44 requires the demographic and economic information should indicate the principal property tax payers in the current year and nine years prior for comparison. CITY OF KALISPELL, MONTANA PRINCIPAL PROPERTY TAX PAYERS Current Year, and Nine Years Ago 20132022 Unaudited statistical section 174 Fiscal Year Taxes Levied Collections Ended for the Percentage in Subsequent Percentage June 30,Fiscal Year Amount of Levy Years Amount of Levy 2013 7,595,509 7,397,602 97.39%123,598 7,521,200 99.02% 2014 7,551,710 7,357,549 97.43%111,016 7,468,565 98.90% 2015 7,842,716 7,739,273 98.68%68,908 7,808,181 99.56% 2016 8,008,737 7,886,063 98.47%112,049 7,998,112 99.87% 2017 8,344,008 8,178,854 98.02%154,723 8,333,577 99.87% 2018 8,733,923 8,556,054 97.96%167,611 8,723,665 99.88% 2019 9,014,140 8,846,037 98.14%158,354 9,004,391 99.89% 2020 10,296,334 9,592,708 93.17%395,448 9,988,156 97.01% 2021 10,200,518 9,819,238 96.26%182,351 10,001,589 98.05% 2022 10,844,979 10,306,732 95.04%N/A 10,306,732 95.04% Source: Flathead County City Manager's Final Adopted Budget CITY OF KALISPELL, MONTANAPROPERTY TAX LEVIES AND COLLECTIONSPast Ten Fiscal Years Fiscal Year of the Levy Total Collections to Date Collected within the Unaudited statistical section 175 Fiscal Year General Special Total Percentage Ended Obligation Notes Revenue Assessment Revenue Notes Primary of Personal Per June 30,Bonds Payable Bonds Bonds Bonds Payable Government Income Capita 2013 3,700,000 2,380,835 1,558,000 3,457,647 15,938,483 27,034,965 3.48%1,319.62$ 2014 3,255,000 2,177,968 1,410,000 3,392,922 15,667,682 172,988 26,076,560 3.23%1,243.40$ 2015 2,805,000 1,893,621 1,257,000 3,074,242 14,434,000 154,155 23,618,018 2.72%1,097.59$ 2016 2,350,000 1,401,475 1,098,000 2,761,499 13,341,000 116,192 21,068,166 2.26%955.39$ 2017 1,885,000 1,204,829 933,500 2,427,060 12,287,096 77,849 18,815,334 1.81%826.65$ 2018 1,415,000 1,458,992 5,891,760 2,045,507 13,443,771 39,121 24,294,151 2.21%1,046.62$ 2019 940,000 1,325,573 5,532,498 1,793,229 22,977,473 0 32,568,773 2.73%1,360.55$ 2020 455,000 1,105,755 5,142,542 1,561,856 23,755,660 0 32,020,813 2.60%1,303.89$ 2021 230,000 1,105,282 4,916,893 1,315,450 23,922,827 0 31,490,452 2.85%1,501.55$ 2022 0 924,844 4,690,320 1,069,155 22,857,328 0 29,541,647 2.48%1,372.88$ Source: City Manager's Recommended Budget City of Kalispell Finance Department Montana Department of Labor and Industry Governmental Activities Business-Type Activities CITY OF KALISPELL, MONTANA RATIOS OF OUTSTANDING DEBT BY TYPE Past Ten Fiscal Years Unaudited statistical section 176 Percentage Fiscal of ActualYearGeneral Special Externally Net TaxableEndedObligationAssessment Restricted Bonded Value of PerJune 30,Bonds Bonds for Repayment Debt Property Capita 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 2,045,507 603,849 2,856,658 6.9%123.07$ 2019 940,000 1,793,229 457,246 2,275,983 5.3%95.08$ 2020 455,000 1,561,856 273,899 1,742,957 3.7%70.97$ 2021 230,000 1,315,450 52,504 1,492,946 3.0%59.60$ 2022 0 1,069,155 0 1,069,155 1.9%40.95$ Source:City Manager's Recommended Budget Montana Department of Revenue Montana Department of Labor and Industry, Quarterly Census of Employment and Wages (QCEW) Program CITY OF KALISPELL, MONTANA RATIOS OF GENERAL BONDED DEBT OUTSTANDINGPast Ten Fiscal Years General Bonded Debt Outstanding Unaudited statistical section 177 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Debt limit*36,269,655 37,653,127 39,689,354 57,353,188 57,688,661 64,040,548 65,953,748 76,154,661 88,864,757 91,900,423 Total net debt applicable to limit (3,663,390) (3,233,480) (2,744,859) (2,873,590) (3,045,293) (2,795,518) (2,265,573) (2,617,057) (2,366,055) (1,554,387) Legal debt margin 32,606,265$ 34,419,647$ 36,944,495$ 54,479,598$ 54,643,368$ 61,245,030$ 63,688,175$ 73,537,604$ 86,498,702$ 90,346,036$ Total net debt applicable to the limit as a percentage of debt limit 10.10%8.59%6.92%5.01%5.28%4.37%3.44%3.44%2.66%1.69% *2.5% of total market value of taxable property Source:City Manager's Recommended Budget Montana Department of Revenue CITY OF KALISPELL, MONTANA LEGAL DEBT MARGIN INFORMATION Past Ten Fiscal Years Un a u d i t e d s t a t i s t i c a l s e c t i o n 178 Estimated Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding Applicable (1)Debt Overlapping General Obligation Debt: Flathead County 6,026,729 16.83%1,014,094 Flathead Valley Community College 4,655,000 16.83%783,278 Kalispell High School 31,745,000 33.27%10,561,762 Kalispell Elementary 23,615,000 100.00%23,615,000 West Valley Elementary 4,715,000 39.02%1,839,677 Subtotal Overlapping Debt 37,813,811 City direct debt 6,684,040 100.00%6,684,040$ Grand total direct and overlapping debt 44,497,851 Sources: Assessed value data used to estimate applicable percentages was provided by the State of Montana, Department of Revenue. Debt outstanding data was provided by each governmental unit. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of Kalispell. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. (1) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the City's boundaries and dividing it by each unit's total taxable assessed value. CITY OF KALISPELL, MONTANA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT June 30, 2022 Unaudited statistical section 179 FiscalYear Utility Less:Special Special Ended Service Operating Assessment Assessment June 30,Charges*Expenses**Principal Interest Coverage Billing Collections Principal Interest Coverage 2013 8,063,596 (4,410,574)(1,387,000)(446,979)1,819,043 471,321 399,180 (391,662)(186,121)(178,603)2014 8,289,654 (4,516,282)(1,226,000)(388,108)2,159,264 456,236 197,682 (324,198)(171,133)(297,649)2015 8,587,057 (4,370,296)(1,242,000)(369,564)2,605,197 465,275 1,400,791 (326,526)(163,360)910,90520169,523,918 (4,769,754)(1,093,000)(342,382)3,318,782 448,878 404,275 (319,000)(145,808)(60,533)2017 9,133,285 (4,647,567)(1,117,000)(316,036)3,052,682 433,302 389,479 (338,739)(132,230)(81,490) 2018 10,154,805 (5,628,376)(1,223,662)(327,688)2,975,079 427,331 375,435 (385,841)(116,836)(127,242) 2019 10,864,941 (5,768,642)(1,569,738)(507,040)3,019,521 338,686 281,508 (259,423)(98,577)(76,492) 2020 10,873,469 (6,155,658)(2,207,044)(561,970)1,948,797 334,157 263,260 (247,198)(87,309)(71,247)2021 11,769,468 (6,021,058)(1,709,193)(574,747)3,464,470 326,566 274,178 (250,451)(76,466)(52,739)2022 13,410,826 (6,530,080)(1,799,734)(591,106)4,489,906 304,377 287,286 (250,460)(64,183)(27,357) *includes other revenues pledged for debt service ** excludes depreciation Source:City of Kalispell Finance Department Special Assessment Bonds CITY OF KALISPELL, MONTANA PLEDGED REVENUE COVERAGE Past Ten Fiscal Years Debt Service Water/Sewer Revenue Bonds Debt Service Unaudited statistical section 180 Per Capita K-12 Annual Calendar Total Wages Personal School UnemploymentYearPopulation (in thousands)Income Enrollment*Rate** 2012 20,256 760,451 37,542 5,729 9.00% 2013 20,487 775,863 37,871 5,762 7.70% 2014 20,972 808,345 38,544 5,812 6.50% 2015 21,518 869,478 40,407 5,828 5.70% 2016 22,052 932,844 42,302 5,859 5.60% 2017 22,761 1,041,543 45,760 5,873 5.10% 2018 23,212 1,098,647 47,331 5,920 4.70% 2019 23,938 1,190,844 49,747 5,921 4.70% 2020 24,558 1,231,166 50,133 5,970 4.90% 2021 25,049 1,321,084 52,740 6,211 2.20% 2022 est 26,110 1,446,781 55,411 6,193 3.00% *School District 5 **unadjusted annual (calendar) - October unadjusted (2020) Sources:Kalispell Public Schools Audit Report, enrollment U.S. Census Bureau, population Montana Department of Labor & Industry: Unemployment Rate, Personal Income, Total Wages (Flathead County, City of Kalispell unavailable) CITY OF KALISPELL, MONTANA DEMOGRAPHIC AND ECONOMIC STATISTICS Past Ten Fiscal Years Unaudited statistical section 181 Estimated Estimated # of # of Private Employer Employees Employees Logan Health (Kalispell Regional Hospital)1000+1000+Healthcare Teletech 250-499 500-999 Professional & Tech. Applied Materials (Semitool Inc.)250-499 250-499 Manufacturing Immanuel Lutheran Home 250-499 100-249 Healthcare AON Service Corporation - NFS 250-499 250-499 Insurance Glacier Bank 250-499 250-499 Banking L C Staffing Service 100-249 250-499 Temp. Services Super 1 Foods 250-499 250-499 Grocery Costco 250-499 100-249 Retail Walmart 250-499 250-499 Retail Healthcenter Northwest 250-499 not available Healthcare Sources: Montana Department of Labor & Industry The State of Montana, Department of Labor reports all employers in each county and does not rank them or provide the number of employees as they consider it confidential information. Industry CITY OF KALISPELL, MONTANA PRINCIPAL EMPLOYERS Most current information and Ten Year Prior (2012) 2022 2012 Unaudited statistical section 182 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 General Government Manager 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Human Resources 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 2.00 City Clerk 1.24 1.23 1.58 1.33 1.33 1.33 1.33 1.33 1.33 1.33 Media Specialist Finance 3.20 3.20 3.20 3.20 3.20 3.20 3.20 3.20 3.20 3.20 Attorney 4.66 4.67 4.67 4.67 4.67 4.67 4.67 5.67 5.67 5.67 Court 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 City Hall 1.40 1.40 1.45 1.45 1.45 1.45 1.45 1.45 1.45 1.45 Planning & Zoning 4.25 4.25 4.25 4.25 4.05 3.95 3.95 3.95 3.15 3.15 Building 3.95 3.95 5.20 5.20 6.75 8.65 8.65 8.65 8.45 8.45 Information Technology 2.25 2.25 2.15 2.55 2.55 2.55 2.55 2.55 5.55 5.55 Total General Government 27.45 27.45 29.00 29.15 30.50 32.30 32.30 33.30 35.30 35.80 Public Safety Police 42.00 44.00 44.00 44.00 46.00 49.75 50.75 50.75 50.75 53.75 Fire 26.30 27.30 23.30 23.30 23.30 23.30 22.90 22.90 21.90 25.90 Ambulance 7.50 6.50 9.50 9.50 9.50 9.50 9.50 9.50 9.50 9.50 Total Public Safety 75.80 77.80 76.80 76.80 78.80 82.55 83.15 83.15 82.15 89.15 Public Works DPW 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.20 Garage 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Street Maint 12.35 12.25 12.25 12.25 12.25 13.25 13.25 14.25 14.40 14.55 Sign/signal 2.50 2.50 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 Light District 0.75 0.75 1.25 1.25 1.25 1.25 1.25 1.25 1.40 1.25 Water 15.25 14.90 14.80 14.80 15.30 15.30 15.30 15.30 15.50 15.75 Sewer 7.55 7.00 7.05 7.05 7.55 7.55 7.55 8.05 8.25 8.50 WWTP 7.90 7.55 7.55 7.55 8.55 8.55 8.55 8.55 8.55 8.55 Storm 6.45 6.20 6.20 6.20 6.20 6.20 7.20 7.70 7.85 8.00 Solid Waste 7.25 7.35 7.40 7.40 7.40 7.40 7.40 7.40 7.55 7.45 Total Public Works 63.25 61.75 61.75 61.75 63.75 64.75 65.75 67.75 68.75 69.25 Parks and Recreation Parks and Recreation 8.90 9.45 9.80 9.80 9.80 10.60 10.60 10.80 10.80 11.80 Forestry 3.00 3.20 2.85 1.80 1.80 2.00 3.00 3.80 3.80 3.80 Total Parks and Recreation 11.90 12.65 12.65 11.60 11.60 12.60 13.60 14.60 14.60 15.60 Community Development UDAG/Comm. Dev.2.00 2.00 2.00 1.75 1.75 2.00 2.00 2.00 2.00 2.00 Airport Airport 0.50 0.50 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total all funds 180.90 182.15 182.70 181.05 186.40 194.20 196.80 200.80 202.80 211.80 Source: City Manager's Recommended Budget CITY OF KALISPELL, MONTANA Full-Time Equivalent City Government Employees by Function/Program Past Ten Fiscal Years Unaudited statistical section 183 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21General Government Resolutions passed 59 51 41 44 57 58 56 50 53 Ordinances passed 12 12 14 17 15 17 17 26 13Payroll claims processed 6035 6063 5956 6169 6473 6351 6008 6351 6619Accounts payable claims processed 6461 6425 6704 6504 6716 6784 6905 6745 6638Receipts processed 10930 10984 10346 11775 13073 12687 11686 10209 9432Conditional use permits granted 5 4 4 6 5 12 4 5 7 Public SafetyCalls for law enforcement service 28650 29706 31419 34626 33186 34467 36459 33578 32952Citations587752615233503746804948576047864390Arrests164313161549173414051659166016871511Calls for fire service 708 831 697 798 882 796 906 1157 1128Calls for rescue service 2197 2281 2560 2501 2673 2712 2792 2702 2806 Public WorksStreets and alleys maintained (Miles)139 139 140 140 144 155 160 160 166Sidewalk replaced (linear feet)1476 1510 1723 1589 794 1853 1468 1234 1024Alleys paved 14 7 5 6 6 7 10 13 5 Parks Park users (reservations)132291 144937 123633 103438 102533 101493 92161 92161 92161Acres of parks 429.49 429.49 429.49 429.49 429.49 429.49 429.49 429.49 429.49Recreation participants (rec, sports, youth, swim)36415 43490 41830 35697 35370 35370 42526 40303 40303Miles of trails 6.85 7.98 8.10 8.10 8.85 8.85 8.85 8.85 8.85 Development Services Building permits issued: Residential 258 270 195 195 222 181 183 216 324 Commercial 254 262 163 137 137 176 86 71 182Community Development TIF / TEDD Districts 4 4 4 4 4 5 5 5 5 New development loans 3 3 1 0 1 2 0 2 0 Loans being serviced 19 21 22 19 20 10 9 12 12 AirportMonthly tie down fees (average)7 3 0 0 0 0 0 0 0Monthly commercial fees (average)6 7 7 6 6 4 0 0 0 WaterAverage daily consumption (millions of gallons)2.85 2.79 2.96 3.13 2.96 2.33 2.33 3.23 3.57Number of customers 7625 7641 7675 7785 7907 8083 8263 8363 8579 Sewer Average daily wastewater treated (millions of gallons)2.6 2.7 2.7 2.5 2.7 2.8 2.7 2.4 2.6 Solid WasteRefuse collected (tons per day)23.0 24.1 25.0 26.0 26.9 27.1 27.7 28.5 30.1 Source: City of Kalispell - updated as available CITY OF KALISPELL, MONTANA OPERATING INDICATORS BY FUNCTIONPast Ten Fiscal Years Unaudited statistical section 184 CITY OF KALISPELL, MONTANACapital Asset Statistics by Function/ProgramPast Ten Fiscal Years FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Police Stations 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00Patrol Units (Cars)11.00 11.00 11.00 11.00 11.00 11.00 11.00 11.00 11.00Patrol Units (Motorcycles)2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 FireStations 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00Fire Trucks 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 Ambulances 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 WaterMains (Miles)126.00 128.00 128.00 129.50 129.75 130.05 137.50 143.00 144.00 WastewaterSanitary Mains (Miles)130.50 131.00 131.00 131.00 131.00 131.60 138.80 141.00 151.00Storm Mains (Miles)53.00 53.00 53.50 53.50 53.50 53.75 66.80 68.00 68.50 Lift Stations 40.00 41.00 41.00 41.00 41.00 41.00 41.00 43.00 43.00 Solid Waste Collection Vehicles 8.00 8.00 8.00 8.00 8.00 8.00 6.00 6.00 8.00Other Vehicles 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 Source: City of Kalispell Unaudited statistical section 185 CITY OF KALISPELL, MONTANATHE WATER SYSTEM Past Four Fiscal Years % of % of % of % of Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2018/19 Fiscal Year 2019/20 Fiscal Year 2020/21 Fiscal Year 2021/22 2018/19 Water 2019/20 Water 2020/21 Water 2021/22 Water Type of Water Revenues Water Revenues Water Revenues Water Revenues User Business Charges 3,061,790$ Charges 2,875,645$ Charges 3,410,757$ Charges 3,891,151$ Logan Health (KRMC)Hospital 63,115$ 2.06%56,850$ 1.98%87,244$ 2.56%81,793$ 2.10% Red Lion Hotel Hotel 16,274$ 0.53%15,426$ 0.54%12,993$ 0.38%12,594$ 0.32% John Peschel/Valley Linen Cleaner 18,597$ 0.61%11,645$ 0.40%11,849$ 0.35%14,603$ 0.38% Springhill Suites by Marriott Hotel -$ 11,751$ Hilton Hotel 11,416$ 0.37%9,345$ 0.32%9,909$ 0.29%10,679$ 0.27% Town Pump C Store 17,002$ The Summit Athletic Club 15,231$ 0.50%14,123$ 0.49%9,582$ 0.28%14,440$ 0.37% Heritage Place Nursing Home 19,481$ 0.64%22,841$ 0.79%23,023$ 0.68%22,674$ 0.58% Hampton Inn Hotel 10,868$ 0.35%9,990$ 0.35%11,307$ 0.33%12,194$ 0.31% Brendan House Nursing Home 10,042$ 0.33%9,791$ 0.34%8,747$ 0.26%10,119$ 0.26% Hutton Ranch Plaza Retail 11,554$ 0.38%13,187$ 0.46%17,436$ 0.51%24,434$ 0.63% Total 176,578$ 5.39%176,578$ 6.14%163,198$ 5.63%203,530$ 5.23% 2019 2020 2021 2022Type of Customer Residential 763,521 624,711 740,239 449,259 Commercial 610,958 556,796 563,375 595,963 Total 1,374,479 1,181,507 1,303,614 1,045,222 Total direct rate 2.27$ 2.57$ 2.67$ 3.09 per 1000 gallons Fiscal Year Ended June 30,in city out of city in city out of city in city out of city in city out of city 2019 7.50$ 9.38 2.43$ 3.04 7.50$ 9.38 1.55$ 1.94 2020 7.50$ 9.38 2.43$ 3.04 7.50$ 9.38 1.55$ 1.94 2021 8.25$ 10.31 2.33$ 2.91 8.25$ 10.31 2.33$ 2.91 2022 9.99$ 12.49 2.99$ 3.74 9.99$ 12.49 2.99$ 3.74 Sources: City of Kalispell Some custormers pay to install a separate irrigation City of Kalispell, Resolutions 4798/4799/5491 meter and are then billed actual meter readings for their irrigation use. The City also bills customers a "sprinkling" rate based off of an average usage in the "winter months" deduction. MonthlyBase Rate Rate per1000 Rate Gallons Monthly Major Water System Users Water Sold by Customer Type Water Rates Gallons Water Irrigation (sprinkling) Base Rate per1000 Unaudited statistical section 186 CITY OF KALISPELL, MONTANATHE SEWER SYSTEM Past Four Fiscal Years 2019 2020 2021 2022Type of Customer Residential 468,674 391,342 437,675 445,326 Commercial 519,977 494,274 496,260 1,515,646 Total 988,651 885,616 933,935 1,960,972 Total direct rate 4.57$ 5.05$ 6.44$ 3.57 per 1000 gallons Fiscal Year Ended June 30, in city out of city in city out of city Evergreen**Evergreen** 2019 8.44$ 10.55 4.78$ 5.98 12,334.26 2.50 2020 8.44$ 10.55 4.78$ 5.98 10,670.00 2.20 2021 11.19$ 13.99 6.34$ 7.93 15,079.00 2.96 2022 14.22$ 17.78 8.06$ 10.08 17,707.14 3.27 Sources: City of Kalispell City of Kalispell, Resolutions 4798/4799/5491 **Evergreen has its own collections system and only uses the City's sewage treatment plant, which results in a reduced charge. The City bills the district, which in turn bills the users within the district. Sewer Sold by Customer Type Sewer Rates Sewer - Evergreen Rate Gallons Rate Gallons Flathead County Water & Sewer District #1 Monthly Rate per Monthly Rate perBase1000Base1000 187 Fiscal Base Incremental Total Base Incremental Total Year Value Value Value Value Value Value 2021/22 7,932,918$ 1,220,447$ 9,153,365$ 1,665,094$ 312,587$ 1,977,681$ 2020/21 7,932,918$ 316,833$ 8,249,751$ 1,665,094$ 34,523$ 1,699,617$ 2019/20 7,932,918$ 610,039$ 8,542,957$ 2018/19 7,932,918$ 75,444$ 8,008,362$ 2017/18 7,932,918$ 278,291$ 8,211,209$ 2016/17 7,932,918$ 399,951$ 8,332,869$ 2015/16 7,932,918$ -$ 6,663,338$ Fiscal Base Incremental Total Base Incremental Total Year Value Value Value Value Value Value 2021/22 390$ 121,498$ 121,888$ 126$ 15,382$ 15,508$ 2020/21 390$ 92,647$ 93,037$ 126$ 14,840$ 14,966$ 2019/20 390$ 89,170$ 89,560$ 126$ 14,841$ 14,967$ 2018/19 390$ 88,448$ 88,838$ 126$ 15,782$ 15,908$ 2017/18 390$ 106,887$ 107,277$ 126$ 18,751$ 18,877$ 2016/17 390$ 94,851$ 95,241$ 126$ 20,764$ 20,890$ 2015/16 390$ 95,864$ 96,254$ 126$ 20,764$ 20,890$ Fiscal Base Incremental Total Year Value Value Value 2021/22 7,057$ 251,894$ 258,951$ 2020/21 7,057$ 242,333$ 249,390$ 2019/20 7,057$ -$ 5,409$ 2018/19 7,057$ 541$ 7,598$ 2017/18 7,057$ 619$ 7,676$ Source: Based on information provided by Flathead County and the Montana Department of Revenue Note: Property is assessed by the State Department of Revenue every two years. Glacier Rail Park TEDD (expires January 1, 2032) (Kalispell G)(Kalispell H) (expires January 1, 2020)(expires January 1, 2020) Downtown TIF (expires January 1, 2035) Old School Station, Technology Old School Station, Industrial (expires January 1, 2037) Westside Tax Increment District (Kalispell C) City of Kalispell, Montana Tax Increment District Taxable Valuation Detail Past Seven Fiscal Years Unaudited statistical section 188 Incremental District's Incremental Assessed/Market Taxable Value of Taxable Taxable Value as Fiscal Value of Property in Property in the Value of City Taxable Value Percentage of City's Year the Westside TIF Westside TIF Westside TIF (excludes Incremental Value)Taxable Value 2021/22 525,181,815$ 9,153,365$ 1,220,447$ 55,213,209$ 2.21% 2020/21 214,809,296$ 8,249,751$ 316,833$ 48,971,275$ 0.65% 2019/20 462,009,037$ 8,542,957$ 610,039$ 48,088,400$ 1.27% 2018/19 448,463,121$ 8,292,481$ 75,444$ 42,868,315$ 0.18% 2017/18 430,387,494$ 8,153,865$ 278,291$ 41,231,226$ 0.67% 2016/17 420,898,376$ 8,268,210$ 399,951$ 38,018,010$ 1.05% 2015/16 393,088,367$ 6,520,032$ -$ 37,952,794$ 0.00% 2014/15 340,553,479$ 9,129,813$ 1,219,018$ 39,521,550$ 3.08% 2013/14 315,211,210$ 8,324,668$ 394,482$ 39,334,849$ 1.00% Source: Based on information provided by Flathead County and the Montana Department of Revenue Note: Property is assessed by the State Department of Revenue every two years. City of Kalispell, Montana Westside Tax Increment District Comparison to City Taxable Value Past Seven Fiscal Years (expires January 1, 2038) Westside TIF (Kalispell C) Unaudited statistical section 189 % of % of % of TIF District TIF District TIF District 2018/19 Taxable 2019/20 Taxable 2020/21 Taxable 2021/22 Type of Taxable Value Taxable Value Taxable Value Taxable Taxpayer Business Value 8,008,362$ Value 8,542,957$ Value 8,249,751$ Value Centurylink Telecommunications 1,154,887$ 14.00%961,073$ 11.25%760,122$ 9.21%852,531$ Flathead Electric Coop Utility 484,915$ 5.88%515,795$ 6.04%517,557$ 6.27%482,733$ WSPGB Mall LLC Mall 221,014$ 2.68%216,116$ 2.53%157,025$ 1.90%159,167$ Stoneriver National Flood Services Insurance 131,795$ 1.60%157,324$ 1.84%156,762$ 1.90%171,563$ First Interstate Bank Financial Services 163,166$ 1.98%177,021$ 2.07%154,579$ 1.87%155,177$ Northwestern Energy Utility 149,254$ 1.81%151,661$ 1.78%153,357$ 1.86%148,097$ Spring Creek Development LLC Lodging 136,167$ 1.65%137,214$ 1.61%133,596$ 1.62%152,967$ Kalispell Ventures LLC Assisted Living 108,953$ 1.32%117,028$ 1.37%115,751$ 1.40%108,386$ Super 1 Food and Drug 107,083$ 1.30%87,359$ FCEDA/Teletech Call Center 106,610$ 1.29%108,591$ 1.27%106,379$ 1.29%103,052$ Three Rivers Bank Financial Services 110,548$ 1.34%117,316$ 1.37%57,908$ 0.70%42,550$ Total 2,767,309$ 33.54%2,659,139$ 31.13%2,420,119$ 29.34%2,463,582$ Debt Service Coverage for the Westside TIF 2018/19 2019/20 2020/21 2021/22 Westside Tax Increment Revenue available for debt service 357,028$ 705,082$ 507,082$ 1,139,658$ Average Annual Debt Service(1)375,700$ 375,700$ 377,695$ 377,695$ Debt Service Coverage 0.95 1.88 1.34 3.02 (1) Average annual debt service on the outstanding Westside TIF Bonds is equal to $6,043,125/16 per the debt schedule in the Official Statement. Trends in Tax Increment Fiscal Base Incremental Total Tax Increment Entitlement Total Tax Bonds Maximum Annual Year Value Value Taxable Value Revenue Share Revenue Increment Outstanding Debt Service Coverage 22 7,932,918$ 1,220,447$ 9,153,365$ 863,580$ 243,128$ 1,106,708$ 4,200,000$ 377,695$ 2.93 21 7,932,918$ 316,833$ 8,249,751$ 263,955$ 243,128$ 507,083$ 4,405,000$ 377,695$ 1.34 20 7,932,918$ 610,039$ 8,542,957$ 461,954$ 243,128$ 705,082$ 4,600,000$ 375,700$ 1.88 City of Kalispell, Montana Westside TIF Operating Data Last Three Fiscal Years Un a u d i t e d s t a t i s t i c a l s e c t i o n Trends in Value City of Kalispell, Montana Principal Property Tax Payers in Westside TIF Last Three Fiscal Years 190 CITY OF KALISPELL, MONTANA Special Improvement Districts Operating DataJune 30, 2022 Original Maturity Bonds Cash Assessments Delinquent Bond Issue Amount Date Outstanding Balance Outstanding Assessments 1 SID 344 4,520,000$ 6/30/2026 920,000$ 40,623$ 1,302,960$ 468,678$ 2 SID 345 242,000$ 6/30/2029 116,000$ 23,995$ 107,298$ -$ TOTAL 4,762,000$ 1,036,000$ 64,618$ 1,410,258$ 468,678$ Revolving Fund Principal Cash Amount Assessment Total Annual Fiscal Year Ended June 30,Balance of Debt Billing Collections 2013 268,008$ 3,457,647$ 471,321$ 364,982$ 2014 281,562$ 3,392,922$ 456,236$ 187,565$ 2015 283,466$ 3,074,240$ 465,275$ 616,527$ 2016 285,488$ 2,761,499$ 448,878$ 396,747$ 2017 288,807$ 2,427,060$ 433,302$ 379,258$ 2018 292,053$ 2,045,507$ 417,768$ 365,721$ 2019 296,996$ 1,793,229$ 329,721$ 272,959$ 2020 221,196$ 1,518,000$ 324,327$ 253,437$ 2021 222,826$ 1,409,000$ 294,763$ 248,302$ Last Ten Fiscal Years Outstanding SIDs Revolving Fund Balance and Bonds Secured Thereby - SIDs Billing and Collections unaudited statistical section 191 2017/18 2018/19 2019/20 2020/21 2021/22 Direct Debt Per Capita 443.54 355.03 44.74 302.31 - Direct and Estimated Overlapping Debt Per Capita 2,394.49 2,394.40 1,816.79 2,313.02 - Direct Debt to the City's Assessed/Market Valuation 0.40%0.32%0.04%0.25%0.00% Direct and Estimated Overlapping Debt to the City's Assessed/Market Valuation 2.17%2.17%1.50%1.90%0.00% Direct Debt to the City's Taxable Valuation (excluding incremental values)24.97%19.40%2.26%15.46%0.00% Direct and Estimated Overlapping Debt to the City's Taxable Valuation (excluding incremental values)134.80%130.83%91.64%118.31%0.00% City's Assessed/Market Valuation Per Capita 110,358 110,208 121,000 121,609 - City's Taxable Valuation Per Capita (excluding incremental values)1,776 1,830 1,783 1,955 - City of Kalispell, Montana General Obligation Debt Ratios Last Five Fiscal Years unaudited statistical section 192 SINGLE AUDIT SECTION REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS AND SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AS REQUIRED BY U.S. OFFICE OF MANAGEMENT AND BUDGET UNIFORM GUIDANCE, AUDITS OF STATE AND 9iIW.-1 IKeiIT1 a OW! 105 1 W!I [.y:11 11l[i]e,Iola] II I 193 EndingFederal Grantor/Pass-Through Federal Pass-Through Award Beginning Bal Federal Match/Other Federal Match/Other BalanceGrantor/Program Title AL #Grantor's #Amount July 1, 2021 Revenue Revenue Expenditures Expenditures June 30, 2022 U. S. Department of Transportation Passed thru the State Department of Transportation National Priority Safety Programs 20.616 107278 10,218$ -$ 10,218$ 10,218$ -$ Passed thru the Federal Railroad AdministrationNational Infrastructure Investments 20.933 n/a 10,000,000$ -$ 2,758,904$ 2,704,867$ 54,037$ Total U. S. Department of Transportation -$ 2,769,122$ -$ 2,715,085$ -$ 54,037$ U. S. Department of Justice Direct: Bulletproof Vest Partnership Program 16.607 n/a 2,150$ -$ 2,150$ 2,150$ 2,150$ 2,150$ -$ Edward Byrne Memorial Justice Assistance Grant Program 16.738 2019-DJ-BX-0310 12,099$ -$ 12,099$ 12,099$ -$ Passed through Flathead County:Edward Byrne Memorial Justice Assistance Grant Program 16.738 11-G01-91260 25,301$ -$ 25,301$ 25,301$ -$ Total U. S. Department of Justice -$ 39,550$ 2,150$ 39,550$ 2,150$ -$ U.S. Department of Homeland Security Passed thru: Department of Military Afairs Homeland Security Grant Program 97.067 14,304$ -$ 14,304$ 14,304$ -$ Passed thru: Flathead CountyHomeland Security Grant Program 97.067 32,798$ -$ 32,798$ 32,798$ -$ Total U. S. Department of Homeland Security -$ 47,102$ -$ 47,102$ -$ -$ Environmental Protection Agency Direct:Brownfields Multipurpose, Assessment, Revolving Loan Fund, and Cleanup Cooperative Agreements 66.818 BF-97863001 400,000$ - 40,487$ 12,891$ 27,596$ Total Environmental Protection Agency -$ 40,487$ -$ 12,891$ -$ 27,596$ Executive Office of the President Passed through State of Montana-Board of Crime Control: High Intensity Drug Trafficking Areas Program 95.001 G11RM0035A, G12R, G13R 13,474$ -$ 9,587$ 9,587$ 3,887$ Total Executive Office of the President -$ 9,587$ -$ 9,587$ -$ 3,887$ Department of the Treasury Passed through State of Montana:Coronavirus State and Local Fiscal Recovery Funds 21.027 2,071,010$ -$ 199,385$ 199,385$ 1,871,625$ Total Department of the Treasury -$ 199,385$ -$ 199,385$ -$ 1,871,625$ Total Federal Assistance -$ 3,105,233$ 2,150$ 3,023,600$ 2,150$ 1,957,145$ City of Kalispell, Flathead County, MontanaSCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFor Fiscal Year Ended June 30, 2022 194 CITY OF KALISPELL NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Fiscal Year Ended June 30, 2022 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, 2022. The information in this schedule is presented in accordance with the requirements of 0MB 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 2022. 195 550 N 31st Street Ph: 406.248.1681 Suite 300 wipfli.com Billings, MT 59101 196 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 Kalispell, Montana We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, 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 as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City of Kalispell’s basic financial statements, and have issued our report thereon dated July 24, 2023. Report on Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of Kalispell’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of Kalispell’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’ of Kalispell’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Kalispell’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the of financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 197 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 of Kalispell’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 of Kalispell’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Wipfli LLP Billings, Montana July 24, 2023 550 N 31st Street Ph: 406.248.1681 Suite 300 wipfli.com Billings, MT 59101 198 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 Kalispell, Montana Report on Compliance for Each Major Federal Program Opinion on Each Major Federal Program We have audited the the City of Kalispell’s 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, 2022. The City of Kalispell’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. In our opinion, the City of Kalispell complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal programs for the year ended June 30, 2022. Basis for Opinion on the Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor's Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the City of Kalispell and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City of Kalispell's compliance with the compliance requirements referred to above. 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, 2022. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City of Kalispell’s federal programs 199 Auditor’s Responsibility for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City of Kalispell’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City of Kalispell’s compliance with the requirements of each major federal programs as a whole. In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City of Kalispell’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an understanding of the City of Kalispell’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City of Kalispell’s internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Other Matters The results of our auditing procedures disclosed an instance of noncompliance which is required to be reported in accordance with Uniform Guidance and which is described in the accompanying schedule of findings and questioned costs as item 2022-001. Our opinion on each major program is not modified with respect to this matter. Government Auditing Standards requires the auditor to perform limited procedures on the City of Kalispell’s response to the noncompliance finding identified in our audit described in the accompanying schedule of findings and questioned costs. The City of Kalispell’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. 200 Report on Internal Control over Compliance A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over-compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Wipfli LLP Billings, Montana July 24, 2023 City of Kalispell, Montana SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2022 201 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)] X Yes No Identification of major programs: AL Number and Name of Federal Program or Cluster 21.027 Coronavirus State and Local Fiscal Recovery Fund 20.933 National Infrastructure Investments Discretionary Grant Program 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? X Yes No City of Kalispell, Montana SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2022 202 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 2022 – 001 Late Audit Submission Funding agency: U.S. Department of Treasury Title: Coronavirus State and Local Fiscal Recovery Fund and National Infrastructure Investments Discretionary Grant Program AL number: 21.027 and 20.933 Criteria or Specific Requirement: 2 CFR section 200.512(a) requires the reporting package and data collection form be submitted to the Federal Audit Clearinghouse the earlier of 30 calendar days after the reports are received from auditors or nine months after the end of the audit period. Condition: The fiscal year audit and reporting package is being submitted after the required due date. Context: We reviewed the audit submission date in comparison to the required due date. Questioned Costs: To be determined by grantor. Effect: There is a potential for suspension or cessation of federal and/or state funding. Cause: The ongoing COVID-19 pandemic caused delays that lead to the audit missing the required deadline. Repeat: No Auditor's Recommendation: The City and the audit firm should work together to take the necessary steps to ensure that the audited financial statements are submitted within the required timeframe. View of Responsible Officials: The City of Kalispell will work with Wipfli audit firm to ensure the audited financial statements are submitted to the Federal Audit Clearinghouse the earlier of 30 calendar days after the reports are received from the auditors or nine months after the end of the audit period. City of Kalispell, Montana SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2022 203 Section IV: Current Status of Prior Year Findings There were no prior year findings required to be reported in accordance with Government Auditing Standards.