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13. Audit-Fiscal Year Ended 6/30/01CITY OF KALISPELL FLATHEAD COUNTY, MONTANA Fiscal Year Ended June 30, 2001 Denning, Downey & Associates, F.C. CERTIFIED PUBLIC ACCOUNTANTS CITY OF KALISPELL FLATHEAD COUNTY, MONTANA Fiscal Year Ended lune 30, 2001 TABLE OF CONTENTS Organization I Independent Auditor's Report 2-3 General. Purpose Financial Statements Combined Balance Sheet — All Fund Types and Account Groups Combined Statement of Revenues, Expenditures, and Changes in Fund Balances — All GovenuEental Fund Types 5 Combined Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual — General, Special Revenue, Debt Service and Capital Projects Fund Types 6-7 Combined Statement of Revenues, and Changes in Retained Earnings — All Proprietary Fund Types and Discretely Presented Component Unit 8 Combined. Statement of Cash Flows — All Proprietary Fund Types and Discretely Presented Component Unit 9 Notes to Financial Statements 10-43 Single Audit Section Schedule of Expenditures of Federal Awards 44 Notes to Schedule of Expenditures of Federal Awards 45 CITY OF KALISPELL FLATHEAD COUNTY, MONTANA TABLE OF CONTENTS (Continued) Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 46-47 Report on Compliance with Requirements Applicable to Each Major program and Internal Control Over Compliance in Accordance with OMB Circular A-133 48-49 Schedule of Findings and Questioned Costs 50-54 Report on Other Compliance, Financial, and Internal Accounting Control Matters 55 Report on Prior Audit Recommendations 56 William E, Boharski CITY OF KALISPELL FLATHEAD COUNTY, MONTANA ORGANIZATION Fiscal Year Ended June 30, 2001 CITY COUNCIL Mayor Ron Van Natta Ward I Dora Counsell Dale Haarr Ward 11 Fred Leistko Jim Atkinson. Ward I'll Randy Kenyon Doug Scarff Ward IV Duane Larson CITY OFFICIALS Claris Kukulski City Manager Array Robertson Finance Director Glen Neier City Attorney James Hann Public Works Director Frank Garner Police Chief Michael Baker Parks Director "Ted Waggoner Fire Chief Susan Moyer Cormininity Development Heidi Ulbricht Municipal Court Judge Director Denning, Downey & Associates, P, Ca CERTIFIED PUBLIC ACCOUNTANTS 1740 US. NY 93 South - Suite 101 Kalispell, MT 59901 INDEPENDENT AUDITOR'S REPORT Mayor and City Council City of Kalispell Flathead County Kalispell, Montana We have audited the general-purpose financial statements of City of Kalispell, Flathead County, Montana, as of and for the year ended June 30, 2001, as listed in the Table of Contents. These general-purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Governinent Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the City as of June 30, 2001, and the results of its operations and the cash flows of its proprietary fund types for the year then ended in conformity with accounting principles generally accepted in the United States of America, In accordance with Gov minent Auditing Standards, we have also issued our report dated March 4, 2002, on our consideration of the City of Kalispell's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit perfortned in accordance with Gaverninent Auditing, Standards and should be read in conjunction with this report in considering the results of our audit. -2- Robert k Denning, CPA, Kin? Al. Downey, C'I'A Our audit was performed for the puTOse of forming an opinion on the general-purpose financial. statements of the City of Kalispell, taken as a whole. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by the U.S. Office of Management and Budget Circular A-1.33, Audits off'States, Local Governments, and Non -Profit Organizations, and is not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole. March 4, 2002 CITY OF KALISPELL, FLATMAD COUNTY, MONTANA rnnrnrnl« a4MANCuecrurr.ArLcLrnn"VES AND ACCOUNT ROLrnc lune 30, 2001 See accompanying Notes ruNancial Statements -4- PROPRIETARY FIDUCIARY PRIMARY COMPONENT REPORTING GOVERNMENTAL FUND TYPES PROPRIETARY MD TYPES FUND TYPES ACCOUNT GROUPS GOVERNMENT UNIT ENTITY General Gercral TOTALS TOTALS Special Debt Capital Intemal Trust And Fixed Loug•Term (MiMORA.NDUM PARKING XMORANDUM GeneralReevenue Se view Projects Ente prise LtNice Ageig Assets Debt ONLY) _ COMMSSION ONLY) ASSET'S Cuhurves0nems S 1,169,861 $ 4,898,396 S 188,533 S 1,351,720 S 8,201,919 S 603,176 S 104,017 $ $ $ 16,513,674 $ 47,962 $ 16,961,586 Taxeslassassmentsreueivable 211,772 303,195 232,770 55,592 803,139 803,239 Other receivables 2,333,957 476,464 2,810,421 10,880 2,821,301 Due from other funds 1,279 12,041 13,320 13,320 Advance toOlherFun& 7$,000 75,600 75,000 Due from 066 governments 181,751 710,968 5,618 60,576 1,031,914 1,031,914 Prepaid cxpensas 55,378 55,378 55,378 inventories 96,367 %,367 96,367 Amoumavaile6leindebtsenricefunds 247,151 247,151 247,151 Am©untto he provided forr6mment of generalloggtemadebt 5,484,249 5,484,249 5,484,249 Fixed assets 88 18,485,381 45164,845 17,209 45,182,054 TOTAL ASSETS S•„_�,,,,,,,1,,560,G64„ $ 76806 $ �. 8,3� 49 962 S� _ 19 .. 13517 $ ... 20 ..,.,�. 35490094 ,n � $„ _ .103 4•.� S G4 .._w.....�.d:-7 104 01. r $ 18,485,381 $ �...- 5731400 S � 72 „ . 295 508 $ ._._�,...�-.w 16 051 8 72,371 SS9 -,_- L1AL3IlIITES AN�F1lND�31DTY Liahilides: Sh*lempayables S 118,217 $ 141,436 S S 101,186 $ 167,979 S 129,150 S 104,017 $ S S 761,980 $ 1,903 S 763,883 Due toolherfunds 12,041 1,279 13,320 13,320 Advance from other funds 75,000 75,000 75,000 Deferred revenue 211,771 2,635,716 232,771 3,080,258 3,080,298 Long -ten liabiiities__- 6,909,746 5,731,400_ 12,641,146 4,593 12,645,739 ToW Liabilities $� 329983 $mm 2,852IIS2 $ 244,812 S 102,465 $ 7,077,725 S 129150 $ 104,017 S S 5,731400 $ _ 16,571,704 S 6,496 S 1b,S78,200 Fund Equity: Contributedcapital S S $ $ S 12,800,890 S S S $ T 12,800,890 S S 12,900,890 Investmen3 inganeralfixed assets 18,485,381 18,465,181 38,485,381 Retained earrings Reserved 6,706,700 28,339 6,735,039 6,735,039 Unreserved 8,904,779 545,975 9,450,754 69,515 9,520,309 Fund Balance ResesvedlnvesonentlnTmst 316,380 247,150 563,530 563,530 I)nreserved1,230x681„ S,208,274µ m mm 1149255 mmm 7,688,210 7,686210 Total FundFquity Smµ,_ i�230681 $ 5,524,654 $ 247,150 $ 1,14s 1 92S5 $ 28,412,369 S 574,314 $ $ „ .. 18485,381 $ , $ 55,723,804 S 69,55 $ 5 _ _ 3 �.__..55,79359.�. TOTAL LiAL1ll.TI'CCSAND Fi)NDEQf)ffY ..•_ 1S60.bG4 S_..µ,83,16806 SG919�62, S 1351720 S ,.35.490094,. 5_µ__•70_3_4s4 104,017 $ 18,485.381 $� 5,731,400 � 72,295508 $ 7605.1„_ $ 7371,559 --- See accompanying Notes ruNancial Statements -4- CITY OF KALISPELL, FLATHAD COUNTY, MONTANA COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES- ALI, GOVERNMENTAL FUND TWES U S Taxeslspecial assessments Licenses and permits Intergovernmental revenue Charges for services Fines and forfeitures Miscellaneous revenues Investment and royalty earrings Total Rcvcnues XPM. Current: General government Public safety Public works Culture and recreation Housing and community development Miscellaneous Capital outlay Debt service Total Expenditures Excess (Defecicncy of Revenues Over Expenditures Otlrcr Financing Sources (Uses); Proceeds of general long-term debt Proceeds of general fixed asset disposition Operating transfers in Operatingtransfers(out) TotalOtherFinancing Sources (Uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses Fund Balances - July 1, 2000 - as previously reported Restatements Fund Balances • July 1, 2000 - as restated Residualequitytransfers Fund Balances . June 30, 2001 See accompanying Notes to Financial Statements For Fiscal Year Ended June 30, 2001 GOVERNMENTAL FUND TYPES TOTALS µ mSpecial Debt Capital (MEMORANDUM General Revenue Service Projects_ 0) $ 1,704,359 $ 2,508,408 $ 217,176 $ $ 4,429,943 177,476 345,349 92 522,917 1,571,158 1,994,602 166,681 3,732,441 879,585 108,921 1,345 989,851 386,341 5,324 1,249,255 $ 391,665 87,301 70,249 157,550 224,987 428,112 60,260 713,359 $ 5,031,207 $ 5,460,965 $ 444L09 $ 1,345 $ 10,937,726 $ 901,080 $ 109,610 $ $ $ 1,010,690 2,409,829 1,012,981 3,422,810 541,889 1,157,349 109,238 654,807 208,147 862,954 $ (27440 $ , } 1,481,696 1,481,696 565 242,097 242,662 154,730 674,826 135,382 964,938 30,769 284,652 403,541 718,962 4,693,669 $ 5,1.71,358 $ 403,541 $ 135,382 $ 10,403,950 $ 337,538 $ 289,607 $ 40,668 $ (134,037) $ 533376 $ 31,250 $ 57,700 $ $ 1,583,815 $ 1,672,765 55,100 89,387 144,487 40,000 153,790 158,150 351,940 (153,790 198,150 (351,940) $ (27440 $ , } 300877 $µww158,150„ , $ 1,385,665 $ 1,817,252 $ 310,098 $ 590,484 $ 198,818 $ 1,251,628 $_ _ 2,351,028„ $ 907,446 $ 4,935,320 $ 61,469 $ (2,373) $ 5,901,862 X1,150 $ 907,446 $ 4,934,170 $ 61,469 $ (2,373) $ 5,900,712 13,137 X13,137 _ $ 1,230681 $.5,524,654 $ 247,150 S 1,249,255 $ 8,251,740 .5.. CITY OF KALISPELL, FLATHEAD COUNTY. MONTANA COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES . BUDGET AND ACTUAL GENERAL, SPECIAL REVENUE, DEBT SERVICE AND CAPITAL PROJECTS FUND TYPES For Fiscal Year Ended June 30, 2001 E ;P Current: General government $ 930,385 $ GENERAL FUND S 29,305 $ SPECIAL REVENUE FUNDS 109,610 $ _____...m_._.__........__...___.. Public safety Variance 2,409,829 (940) Variance 1,012,981 38,740 Publicworks Favorable 541,889 31,239 Favorable 1,157,349 Bud ct ActualUnfavorable 653,105 Budget Actual (Unfavorable 0 -MES 45,168 Housing and community development 1S3 9 53'790 �(91) 2,144,215 Taxes/special assessments $ 1,738,939 $ 1,704,359 $ (34,580) $ 2,367,710 S 2,508,408 $ 140,698 Licenses and permits 131,176 177,476 46,300 246,907 345,349 98,442 Intergovemmental revenue 1,422,347 1,571,158 148,811 2,758,625 1,994,602 (764,023) Charges far services 902,409 879,585 (22,824) 130,379 108,921 (21,458) Fines and forfeitures 420,000 386,341 (33,659) 5,000 5,324 324 Miscellancousrevenues 89,291 87,301 (1,990) 61,669 70,249 8,580 Investment and royalty earnings 75,000 224,987 149,987 402,544 mm5,972,834 428,112 25,568 Total Revenues S 4,779,162 $ 5,031,207 $252,045 $ S 5,460,965„ $ m (511,869 E ;P Current: General government $ 930,385 $ 901,080 S 29,305 $ 116,028 $ 109,610 $ 6,418 Public safety 2,408,889 2,409,829 (940) 1,051,721 1,012,981 38,740 Publicworks 573,128 541,889 31,239 1,576,172 1,157,349 418,823 Culture and recreation 653,105 654,807 (1,702) 253,315 208,147 45,168 Housing and community development 1S3 9 53'790 �(91) 2,144,215 1,481,696 662,519 Miscellaneous 1,500 565 935 315,876 242,097 73,779 Capital outlay 154,730 154,730 - 1,499,671 674,826 824,845 Debt service 30,626 30 769(143-} $ 310,098 $ 307,723 284,652 23,071 Total Expenditures S 4,752,363 $ _4,693, 669 $__58,694 $ 7,264 ,721 S 5171,358 $ ,_ ._._ 2,093,363 Excess (Defciency)of Revenues Over Expenditures $ 26,799 $ 337,538 $ 310,739 $ (1291,887 $ 289,607 $ 1,581M494 Other Financing Sources (Uses)' Proceeds of general long-term debt $ 34,500 $ 31,250 $ (3,250) $ 60,000 S .57,700 $ (2,300) Proceeds ofgeneralfixed asset disposition 90,000 55,100 (34,900) 1,831,111 89,387 (1,741,724) Operating transfers in 40,000 40,000 153,699 153,790 91 Operatingtransfers(out) 1S3 9 53'790 �(91) ' Total Other Financing Sources(Uses) $ 29199 S _. 27,440 $�. _ 1,759 $ _ 2,044,810 $_ 300,877 $__q,743,933 Excess(Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses $ 2� $ 310,098 $ 312,498 $ 752,923.. $ 590,484 662,43 $ 9) ,... Fund Balances - July 1, 2000 - as previously reported $ 907,446 $ 4,935,320 Restatements 11 50) Fund Balances - July 1, 2000 • as restated $ 907,446 $ 4,934,170 Residual equity transfers 13,137 Fund Balances June 30, 2001$ 12_, 30,681 $__5j2_4 54, See accompanying Notes to Financial Statements CITY OF KALISPELL, FLATHEAD COUNTY. MONTANA COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND VALANCES - BUDGET AND ACTUAL GENERAL, SPECIAL REVENUE, DEBT SERVICE AND CAPITAL PROJECTS FUND TYPES RfYENUES Taxes/special assessments Licenses and permits Intergovernmental revenue Charges for services Fines and forfeitures Miscellaneous revenues Investment and royalty earnings Total Revenues MOMS Current: General government Public safety Public works Culture and recreation Housing and community development Miscellaneous Capital outlay Debt service Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses): Proceeds of general long-term debt Proceeds of fixed asset dispositions Operating transfers in Operating transfers(out) Total Other Financing Sources (Uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses Fund Balances - July 1, 2000 - as previously reported Restatements Fund Balances • July 1, 2000 - as restated Residual equity transfers Fund Balances - June 30, 2001 See accompanying Notes to Financial Statements For Fiscal Year Ended June 30, 2001 DEBT SERVICE FUNDS CAPITAL PROJECTS FUNDS variance Variance Favorable Favorable HudSet Actual Unfavorable Vud-get Actual UnfavorabEe) 374,189 $ 217,176 $ (157,013) $ $ $ 92 92 40,818 166,681 125,863 1,345 1,345 .8,176 60,260 127,916) - $ 603,183 $ 1 444,209 $ 158,914 $ $ 1,345 $ _ 1,34S 1,445,350 135,382 1,309,968 405,566 403,541 2,025 - 405,566 $ 403,541 $ 2,025 $_1 445 350 $ 135 382 $ 1,309 968 191,611 $ 40 668 $m 156 94� $ 14( 45,350) $ I( 34,031) $ 1,3I 1,313 $ $ $ $ 1,606,500 S 1,583,815 $ (22,685) 158,150 158,150 E8, . 198,150 .. ,385,665 $ 22685) 158150 1,408,350 $ 1�� $ 197,617 $ 198,818 $ 1,201 $ (37,000) $_1,251,628 $� 1,288.628 $ 61.,469 $ (2,373) $ 61,469 $ (2,373) $ 1,249,255 CITY OF KALISPELL, FLATHEAD COUNTY, MONTANA COMBINED STATEMENT OItREVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS ALL PROPRIETARY Ill) TYPES AND DISCRETELY IRESENTED COMPONENT UNIT Operating Revenues: Charges for services Miscellaneous revenues Special assessments Fines and forfeitures revenues Internal services Total Operating Revenues Operating Expenses: Personal services Supplies Purchased services Fixed charges Losseslbad debt expenses Depreciation Total Operating Expenses Operating Income(Loss) Non -Operating Revenues(Expenses): Contributions from developers Interest Debt service interest expense Total Non•Operatirng Revenues(Expeases) Net Income(Loss) Add depreciation on fixed assets acgnired with capital grants Increase(Decrease) in Retained Earnings Retained Earnings/Fund Balance- July 1, 2000 - As Previously Reported Restatements Retained Earning/Fund Balance- July 1, 2000 • As Restated Retained Earnings/ Fund Balance - June 30, 2001 See accompanying Notes to Financial Statcerents For Fiscal Year Ended June 30, 2001 $ 1,317,180 $180,031) $ 789,118 $ {10,59 $ 778,609 $ 14,301,303 $ 754,345 $ 15,055,648 $ 80,064 $ 15,135,712 $ 14;294,299 $ 754;345 $ 15,048,644 $ 80,064 $ 15,128,708 611,479 $__ 574,314 15,837,7b2 $_w __ 69,SS5 $`. 15,907 317: PRIMARY COMPONENT REPORTING PROPRIETARY FUND TYPES GOVERNMENT UNIT ENTITY TOTALS TOTALS Internal (MEMORANDUM Parking (MEMORANDUM . _ EnterErise_ _Service ONLY)_._. ._.Commisstan ONLY). $ 4,799,882 $ $ 4,799,882 $ 62,317 $ 4,862,199 4,430 32 4,462 4,462 265,192 265,192 265,192 43,421 43,421. 960,266 _ 960,266 960,266 $.w... 5,069,504 $ 960,298 $_ $ __._.105,738 $ 6,135,540 ________6,029,802 $ 1,781,692 $ $ 1,781,692 $ 73,460 $ 1,855,152 149,870 7,243 157,1.13 3,997 1.61,110 802,257 1,100,625 1,902,882 29,057 1,931939 433,034 24,508 457,542 4,352 461,894 144,400 144,400 144,400 1,538,732 51,370 _ 1,590,102 6,706 1,596,808.. $ 4,949,985 $ .__ 5 1183 746 $ ,, 6,0 33,731 $J_ 117,572 $� � 6,151,303 $ 219,519 $223,4498$ (3,929 $ $ 348,031 $ $ $ $ 434,049 42,874 476,914 1,325 478,239 (343,203) 0 _ (343,203} _^ _3,203 $ 438 866 $ 42 874 $ 133,711 $ 1325 $ 135 036,. $ 658,387 $(180,574) $ 129 782 $ (10 59 $ 119,273 $ 658193 $ 543 $„ 659,336 $ µ $ nm 659,336 $ 1,317,180 $180,031) $ 789,118 $ {10,59 $ 778,609 $ 14,301,303 $ 754,345 $ 15,055,648 $ 80,064 $ 15,135,712 $ 14;294,299 $ 754;345 $ 15,048,644 $ 80,064 $ 15,128,708 611,479 $__ 574,314 15,837,7b2 $_w __ 69,SS5 $`. 15,907 317: CITY OF KALISPELL FLAT14EAD COUNTY, MONTANA COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUNK TYPES AND DISCRETELY PRESENTED COMPONENT UNIT Fiscal Year Ended June 30, 2001 Cash Flows from Operating Activities: Cash Received from Customers Cash Receivcd from Assessments Cash Payments to Supplies for Gods and Services Cash Payments to Employees for Services Cash from Other Operating Revenues Net Cash Provided by Operating Activities Cash Flaws from Capital and Related Financing Activities: Board of investment loans principal paid in debt Interest paid on debt Acquisition mrd Construction of capital assets Net Cash Used for Capital and Related Financing Activities Cash Flows from Investing Activities: Purchase of sidewalk and curb warrants Redemption of sidewalk and curb warrants Interest on investments Net Cash Provided from Investing Activities Net decrease in cash and cash equivalents Cash and cash equivalents at Inly 1, 2004 Cash and cash equivaleau at June 30, 2001 Reconciliation of Operating lucerne to Net Cash provided by Operating Activities: Operating Income Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities: Depreciation Bad Debt Expense Changes in Assets and Liabilities: Docrease(Increase) in Accnants Receivable Decrease(Increasc) in Assessments Receivable Decrees (Increase) in prepaid expenses Deacrease (lnorease) in Inventory Increase{Decrease) in Accounts payable ]ncroase(Decrease) in Compensated Absences Net Cash Provided by Opera6ug Activities Note: Contributions from developers totaled $348,03tintheEnlorprisefunds. See accompanying Notes to Financial Statements PROPRIETARY FUND TYPES TOTALS TOTALS (MEMORANDUM COMPONENT (MEMORANDUM ONLY) UNIT ONLY) Enterprise Internal Primary proprietary Reporting Funds Service Government Entity $ 4,017,526 S 960,298 8 4,977,824 $ 105,738 $ 5,083,562 746,901 746,501 746,501 (1,337,001) (1,060,125) (2,397,126) (40,140) (2,437,266) (1,758,058) (1,758,058) (72,842) (1,830,900) 50,459 50,459 50,459 $ 1,719,427 $ (99,827) S 1,619,600 s (7,244) $ 1,612,356 812,698 812,698 812,698 (618,768) (618,768) (618,768) (347,749) (347,749) (347,749) 2,074,682) (86,078)2,160,760) µ (11,764) (2,172,524 $ (2,228,501) $ (86,078) $ (2,314,579 $ (11,764) $ (2,326,343) $ (2,315) $ $ (2,315) $ $ (2,315) 12,474 12,474 12,474 434,038 42,874 476,912 1,325 478,237 $ 444,197 s 42,874 S 487,071 $ 1,325 $ 488,396 $ (64,877) $ (143,031) S (207,908) $ (17,683) $ (225,591) 8,235,019 746,207 8,981,226 65,645 9,046,871 $ 8,170,142 $ 603,176 S 8,713,318 $ 47,962 S 8,821,280 $ 219,519 (223,448) (3,929) (11,834) (15,763) 1,543,277 51,370 1,594,647 6,706 1,601,353 196,289 196,289 196,289 (301,934) (301,934) (301,934) (9,517) (9,517) (9,517) 831 831 831 5,180 5,160 5,180 42,980 71,420 114,400 (2,734) 111,666 23,633 23,633 618 24,251 $ 1,719,427 99827) 1,619,600 (7,244 1,612,356 0 CITY OF KALISPELL T'�T { IVF A T'1. COUNTY, 'V 11T b� brut r b. N I1 ♦ Tm ANA '� J"LHl1� AD COUN1 Y, NIV1N1.ANA NOTES TO FINANCIAL STATEMENTS June 30, 2001 1. Summary of Si nificant Accountin Policies The following is a summary of the City of Kalispell's significant accounting policies: Reporting Entity The City is governed by an elected Mayor and City Council. 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 general-purpose financial statements include all funds, account groups, agencies, boards, commissions and authorities which meet the criteria for inclusion inn 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. As required by generally accepted accounting principles, these financial statements present the City of Kalispell and its component unit. The component unit is included in the city's reporting entity because of the significance of its operational or financial relationship with the City, as described above. The discretely presented component unit, the Kalispell Parking Commission, is a legally separate organization of the City, but the City is financially accountable. The City appoints the governing body of the Parking Commission. The Parking Commission runs a variety of metered and leased parking areas downtown which are owned by the City, They also issue tickets for parking violations in the parking district downtown. The component unit is reported in a separate column to emphasize it is legally separate from the City. Measurement Focus, Basis of Accounting Fund Aceountin� The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for within a separate set of self -balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as appropriate, The following types of funds and account groups are maintained by the City. E1 CITY OF KALISPELL FLATnLtW CuuiiT1, ivMiv I&N J NOTES TO FINANCIAL STATEMENTS June 30, 2001 1, Summary of Significant Accounting Policies -coni. 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, (Le., 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 unmatured 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 (excluding motor vehicle 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, General Fund is the City's primary operating fund. It accounts for all financial resources except those required to be accounted for in other funds. S ecial Revenue Funds used to account for the revenue sources that are legally restricted to expenditures for specific purposes. Capital Pro'ect Funds used to account for financial resources for the acquisition or construction of capital facilities (other than those financed by proprietary funds), Debt Service Funds used to account for the accumulation of resources for, and payment of, general long tern debt principal, interest and. related costs. CITY OF KALISPELL FLAT HEEhu COUNTY ,1V10 TANA NOTES TO FINANCIAL STATEMENTS June 30, 2001 1. Summar of Si nificant Accountin Policies - con't. PROPRIETARY FUNDS are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method., revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The City has elected not to apply FASB pronouncements issued after November 30, 1989, Enterprise Funds used to account for operations (a) that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that costs of providing goods or services to the general public on a continuing basis be Financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. Internal Service Funds account for the financing of goods or services provided by one department to other City departments on a cost reimbursement basis. FIDUCIARY FUNDS account for assets held by the government as an agent on behalf of others. Trust and Agency Funds used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments and/or other funds. These may include (a) expendable trust funds, (b) non expendable trust funds, (c) pension trust funds and (d) agency funds. FIXED ASSETS AND LONG-TERM LIABILITIES General Fixed Assets Account Grou used to account for tlne fixed assets of the City which are not accounted for in proprietary funds or in trust funds. General Lon -Term Debt Account Group used to account for all long term debt of the City except that accounted for in the proprietary or trust funds. -12- CITY OF ULISPELL FLA 1 r1 C" l.,aU N 1 yr, MUIN 1 AIN A NOTES TO FINANCIAL STATEMENTS June 30, 2001. 1. Summary of Si nificant Accounting Policies — can't, Bud ets and BudUtary Accountin An operating budget is adopted each fiscal year for the General Fund, Special Revenue Funds, Debt Service Funds, Capital Projects Funds, Enterprise Funds and Internal. Service Funds on the cash basis, which is a basis of accounting not in accordance with generally accepted. accounting principles The final budget is legally enacted by the City Council, on the second Monday in August after holding public hearings as required by State statutes. Budget appropriation transfers may be made between the general classifications of salaries and wages, maintenance and operation and capital outlay. Reported budget amounts represent the originally adopted budget as amended by resolution of the City Council. It is management's responsibility to see that the budget is followed to the budgetary line item The City Council may amend a final budget when shortfalls in budgeted revenues require reductions in approved appropriations to avert deficit spending; when savings result from unanticipated adjustments in projected expenditures; when unanticipated state or federal monies are received; or when a public emergency occurs which could not have been foreseen at the time of adoption. The 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. Encumbrances All appropriations lapse at the end of fiscal year. The City has chosen not to use encumbrance accounting, Receivables and Payables 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 fields are reported as due tolf-ons other funds. CITY OF KALISPELL Y7T 1 TT TT 1 r\ n^T n Tmtr 9 r/1v Tm yri PLAirihnu C0UNi Y,1 ONV ANA NOTES TO FINANCIAL STATEMENTS June 30, 2001 1. Su,mmari of Si niticant Accounting Policies - con't. Fixed Assets All purchased fixed assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Donated fixed assets are valued, at their estimated fair market value on the date received. 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, in the proprietary funds, depreciated over the remaining useful lives of the related assets. The City records contributions to enterprise from City, federal and state sources for property acquisitions as contributed capital. General fixed assets are not capitalized in the funds used to acquire or construct them. Instead, capital. acquisition and construction are reflected as expenditures in governmental funds, and the related assets are reported in the general fixed assets account group. Assets in the general fixed assets account group are not depreciated. Public domain or infrastructure fixed assets are excluded from the general fixed assets account group. Public domain or infrastructure assets include roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems and similar assets that are immovable and of value only to the goverrnnent. Fixed assets purchased or acquired by proprietary fund types are recorded in the individual fund making the purchase. Any fixed assets donated specifically for an enterprise fund are also recorded in that individual fund. Depreciation has been provided for the property, plant and equipment of the proprietary funds using the straight line method. The useful lives of these assets have been estimated as follows: Buildings 20-50 years Improvements Other than buildings 10-50 years Machinery, vehicles and equipment 5-20 years Water and Sewer lines, pump stations 10-50 years Taxes and assessments An allowance for uncollectible accounts was not maintained for real and personal property taxes and special assessments. The direct write-off method is used for these accounts. -14. CITY OF KALISPELL l7�I1i1 lLa11M xrl 111r fv07rVV rMT7 +Mv1n1I�`]rm yi��.' Tp. NOTES T4 FINANCIAL STATEMENTS June 30, 2001 1. Summary of Significant Accountin Policies - con't. Enterprise Accounts Receivable A reserve for estimated uncollectible accounts receivable is maintained for the reserve balances are as follows for June 30, 2001: Water $ 4,345 Sewer $ 11,546 Ambulance $104,923 Water Fund, Sewer Fund and the Ambulance Fund, The Inventories and Pre aid Items Enterprise Fund Inventory of materials and supplies are valued at cost, using the First In -First Out valuation method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items, Vacation and Sick Leave 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, but no more than 90 days into 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. The liability associated with govermnental fund -type employees is reported in the general long-term debt account group, while the liability associated with proprietary fund -type employees is recorded in the respective Band. Referred Revenues Deferred revenue results when asset recognition criteria have been met and when revenue recognition criteria have not been met. These pertain to the net uncollected property tax and other receivables and are classified as Deferred Revenues on the combined balance sheet. Lon - Term Debi; Unmatured general long-term debt of the City, including special assessment debt for which the government is obligated in some manner, is recorded in a separate, self balancing set of accounts, the General. Long -Term Debt Account. Long -tenor debt of the proprietary funds, including enterprise related special assessment debt, is reported as a liability in the specific fund making the debt service payments, For more infornnnation on the long-term debt of the City, see Note 7. CITY OF KALISPELL rLATriEAD COM, iViViV TxIV NOTES TO FINANCIAL STATEMENTS .lune 30, 2001 I. Summary of Si nifrcant Accountin Policies - con't. Fungi Reservations of fund balance represent amounts that are not appropriable or are legally segregated for a specific purpose. Reservations of retained earnings are limited to outside third -party restrictions. Designations of fund balance represent tentative management plans that are subject to change. The proprietary funds contributed capital represents equity acquired through capital grants and capital contributions from developers, customers or other funds or governments. Contributed Capital Enterprise Fund contributions from grants, customers, special improvement districts and other outside sources restricted for capital acquisition or construction are reported as contributed capital. Depreciation on assets acquired from contributions is reflected in the statement of revenue, expenses and changes in retained earnings. The amount of depreciation applicable to assets acquired through contribution from grants, entitlement, and shared revenues is transferred to the related contribution account instead of retained earnings. Enterprise Fund resources received from grants, entitlement or shared revenues which may be used for operations are reported as non- operating revenues. Interfund Transactions Interfund transactions consisting of identified services performed for other funds or costs billed to other funds are treated as expenditures in the fund receiving the services and as revenue in the fund performing the services. Transactions which constitute reimbursements of a fund. for expenditures or expenses initially made from it which are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of the expenditures in the fund that is reimbursed. Advances between funds are accounted for in the appropriate interfund receivable and payable accounts. Cash and Cash Equivalent The City considers for the purposes of the statement of cash plows, all investments of the proprietary fund types, except for investments in sidewalk and curb warrants to be cash equivalents, Investments are carried at cost, which approximates fair value. -16- CITY OF KALISPELL 1rLATTHEAD COUNTY, IMU"N1AN1A NOTES TO FINANCIAL STATEMENTS June 30, 2001. to Summar of Si nitnicant Accounting Policies - con't. Total Columns on Combined Statements Total columns on the Combined Statements are captioned "Memorandum Only„ to indicate that they are presented only to facilitate financial analysis. Data in. these columns do not present financial position., results of operations or changes in. financial position in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in. the aggregation of this data. 2. ProPro er�Taxes The City's real estate property tax is levied on the assessed value listed as of January 1 for all real property located in the City. Assessed values are established by the State Department of Revenue based on market value. A revaluation of all property is required to be completed on a periodic basis. Taxable value is defined by State statute as a fixed percentage of market value. The City is permitted by State statutes to levy taxes up to certain fixed limits for various purposes. The taxes levied by the City for the year ended June 30 2001 were within legal limits. The tax levies were based upon a taxable value of $21,153,794. Taxes are due in two equal installments on November 30 and May 31 of each fiscal year. The tax billings considered past due after the due dates are subject to penalty and interest charges. 3, Deficit Fund Balances The following Funds had deficit fund balances at June 30 2001; Debt Service Funds; 1992 Sidewalk & Curb $ 964 1994 Sidewalk & Curb $ 316 1996 Sidewalk & Curb $ 13 1997 Sidewalk & Curb $ 219 SID 337 $ 87925 Capital Pjo'ect� Funds: 1999 Sidewalk & Curb Construction $ 1,279 The deficits in the Debt Service funds were caused by a shortfall in anticipated revenue and will be eliminated as delinquent assessments are collected. Sidewalk construction will be reimbursed by homeowner or sale of warrants, -1.7- CITY OF KALISPELL 'TIT A TTTTID n nT 7T TM\ I 'A wUX TT A NA T I rrxnnc,Au IVUIVI Y, iviVINIHNA NOTES TO FINANCIAL STATEMENTS June 30, 2001 4. Budget Variances A significant unfavorable budget to actual variance existed in the special revenue funds intergovernmental revenues due to anticipated grant revenue that was not realized in the fiscal year. Favorable variances in public works, housing and community development, and capital outlay expenditures in special revenue funds are due to conservative budgeting. Unfavorable revenue variances in taxes/special assessment and investment and royalty revenues in debt service funds are due to slower than anticipated growth for the Westside TIF district. A favorable variance was noted in intergovernmental revenues in the debt service funds due to revenue recognition of a payment in lieu of taxes from a developer. The SID 343 project received proceeds from the sale of bonds in fiscal year 2001. Bond proceeds were unexpended and carried over causing a positive variance, classified as capital outlay in the capital projects funds. 5. Cash in TreasurylInvestments Cash in Treasury may include cash and cash items; demand, time, savings and fiscal agent deposits; investments in the State Short-term Investment fool. (S.T.I.P); direct obligations of the United States Government; and repurchase agreements. The composition of Cash in Treasury on June 30 2001, was as follows: PrimGov't. Q0t 8je ntit Cash on haled $ 1,326 $ 150 $ 1.,476 Cash in Banks: Demand Deposits 3521615 26,115 378,730 Savings Deposits 50,783 - 50,783 Time Deposits - 2107 2107 Bidders bonds 1,656 - 1,656 Bonds/Warrants 31,775 - 31,775 STIP $16469 - $16,075469 Total $.lSl 47 962. $j(561µ86 Deposits - at year end, the carrying amount of the City's deposits was $403,398 and the bank balance was $293,121. These deposits include demand and time deposits, Of the bank balances, all were covered by Federal Depository Insurance or by securities held by the pledging financial institutions trust department or agent in the City's name. The $47,812 belonging to the Parking Commission, a component unit of the City, was completely covered by Federal Depository Insurance. CITY OF KALISPELL FLA i HEAa� CU i Y, MONTANA NOTES TO FINANCIAL STATEMENTS June 30, 2001 5, Cash in Treasur /investments- can't. Montana statutes require that the City obtain securities for the uninsured portion of the deposits as follows: 1. Securities equal to 50% of such deposits if the institution in which the deposits are made has a net worth to total assets ratio of 6% or more, or 2. Securities equal 100% of the uninsured deposits if the institution in which the deposits are made has a net worth to total assets ratio of less than 6%. State statutes do not specify in whose custody or name the collateral is to be held. The amount of collateral held for the City deposits at June 30, 2001,exceeded the amount required by State statutes, The City held no investments subject to risk categorization as of June 30, 2001. Governmental Accounting Standards Board (GASB) Technical Bulletin No. 94-1 requires governmental entities participating in an investment pool to disclose certain types of securities held in the pool. As noted above the City invests in Short -Term Investment Pool managed by the State of Montana. This pool contains two types of investments required to be disclosed, which are Asset-backed Securities and Variable Rate (Floating Rate) securities. Amounts (unaudited) invested by STIP in each type as of June 30 2001, were as follows: Amounts invested by the City in. STIP may be redeemed at any date at the carrying value on that date, According to GASB Statement No. 31, Accounting and Financial. Reporting for Certain Investments and External Investment Pools, STIP is considered and External investment pool. STIP is also classified as a "20 -like" pool. A 2a7 -life pool is an external investment pool that is not registered with the Securities and Exchange Commission (SEC) as an investment company, but has a policy that it will, and does, operate in a manmer consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. If certain conditions are met, 20 -like pools are allowed to use anmrlized cost rather than fair value to report net assets to compute unit values. The Board of Investments has adopted a policy to treat STIP as a 2a7 -like pool. Audited financial statements for the State of Montana's Board of Investments are available at 555 Fuller Avenue, Helena, Montana. CatCategn 11 % Asset-backed $ 662,179,819 39.86 Variable Rate 299,009,275 18.00 Other Securities 700,173,452 42.14 Total $ 1661,362 546 100.00 Amounts invested by the City in. STIP may be redeemed at any date at the carrying value on that date, According to GASB Statement No. 31, Accounting and Financial. Reporting for Certain Investments and External Investment Pools, STIP is considered and External investment pool. STIP is also classified as a "20 -like" pool. A 2a7 -life pool is an external investment pool that is not registered with the Securities and Exchange Commission (SEC) as an investment company, but has a policy that it will, and does, operate in a manmer consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. If certain conditions are met, 20 -like pools are allowed to use anmrlized cost rather than fair value to report net assets to compute unit values. The Board of Investments has adopted a policy to treat STIP as a 2a7 -like pool. Audited financial statements for the State of Montana's Board of Investments are available at 555 Fuller Avenue, Helena, Montana. CITY OF ULISPELL -rr � rrr rn i n r r i% Tmv r% M ^N, � r v 4 rLHlrEADC UNIY,1VION1R1�1A NOTES TO FINANCIAL STATEMENTS June 30, 2001 6. Property, Plant and E ul ment A summary of changes in the general fixed assets is as follows: Lull 20_00 Land $ 1,773,433 Buildings 9,292,832 Improvements other than buildings 3,477,130 Machinery & equipment 3,351,651 TOTAL $.17895 046 Additions Deletions Other June 30 2001 $207,174 $ - $ - $ 1,980,607 88,346 - - 9,381,178 58,244 2,090 3,537,464 274,86538 294 L2.,090) 3,586,132 $622 $ 294 $_ - $j=&4=8 81 Financial Accounting Standards Board (FA.SB) Statement No. 34 - Capitalization of interest - requires that interest expenditures incurred during construction of assets be capitalized. During fiscal 2001, no interest costs were capitalized. A summary of proprietary fund type property, plant, and equipment at June 30, 2001 follows: Enterprise Internal Component unit Funds Service Peking Comm, Land $ 248,063 $ - $ - Machinery & equipment 2,009,403 296,722 50,116 Construction in progress 390,444 - - Source of supply 767,838 Pumping plant 1437,906 Treatment plant 14,5911174 Transmission & distribution 18,234462 General plantlbuildings 1,684,674 Storm sewer system 41, 44176 Total $ 437508,140 $ 296,722 $ 50,116 Less Accunl. Depreciation 16 928 964)1( 96,434) _ 32 907) Net $..2G.S79,176 $ 100 288 $_..17 z09 .20. CITY OF KALISPELL FLATHEAD COUNTY, MONTANA NOTES TO FINANCIAL STATEMENTS June 30, 2001 7, Long-term Debt The following is a summary of long term debt transactions of the City for the fiscal year ended June 30, 2001. Balance Balance Bonded debt: Bonded Debt at June 30, 2001 are comprised of the following individual issues: Revenue Bonds: Revenue bonds are directly related to and expected to be paid from the Proprietary funds, June 30, 2000 Additions Reductions June 30, 2001 (1)(2) Revenue Bonds $ 6,160,000 $ 812,698 $ (616,958) $ 6,355,740 (2) SRI Loan-WWTP 2,783,000 - (176,000) 2,607,000 (1) Special Assessments 262,904 17583,815 (48,444) 1,798,275 (1) Urban. Renewal Bonds 45500 - (215,000) 240,000 (1) Contract Debt/loans 5$2,308 4950 (58,122) 613,136 (1)(3)(4) Compensated Absences 968,739 62,849 - 10,31,588 Totals $112 1 $ 2,548,312 $11(, 14,5241 $12 645.739 (1) Reported in general long-term debt account group (2) Reported in enterprise fund (3) Reported in internal service fund (4) Reported in Proprietary Component Unit 5.08% 9yrs 2006 925,000 Bonded debt: Bonded Debt at June 30, 2001 are comprised of the following individual issues: Revenue Bonds: Revenue bonds are directly related to and expected to be paid from the Proprietary funds, -21- Issue Interest Term of final Amount Outstanding Annual PPose Date Rate Bonds Maturity Issued June 30,2001 PPEment 2001 Water Bonds 6/01 4.00% 20yrs 2021 $ 653,433 $ 653,433 varies 1996 Water Bonds 6/96 5.50% 15yrs 2011 1,060,000 79500 varies 1991 WWTP-refunding 4/91 7.18% 20yrs 2011 2,815,000 1,850,000 varies 1997 Sewer -refunding 5/97 5.08% 9yrs 2006 925,000 585,000 varies 2000 Westside Tax Inc. 3/00 6.21% 10yrs 2010 2,500,000 21313,042 $339,350 Intercap Loan -Garbage Truck3/01 4.75% 5yrs 2006 _159,265 159,265 varies Total Revenue Bonds $$11698 $ 6 355,740 -21- CITY OF KALISPELL nT A IrH" A T, r FST' T11-1 w ? t!S"A TT I ^� T a rLAI LAV WUIN I Y, lV UNIHiVA NOTES TO FINANCIAL STATEMENTS June 30, 2001 7. Long-term Debt-con't 2000 Westside Tax Increment The Board of Investments loan for the Stream Project has interest rates dependent on the creation of jobs. Stream International, Inc. is a computer Support center anticipating creating over 500 new jobs for the Kalispell area. The Loan of $2,500,000 to the City is for the purchase of 60,000 sq, ft of the old Gateway West Mall. The area is being rehabilitated as part of a Westside Urban Renewal District (TIF) project. The Stream organization is leasing the property back. Extensive enhancements were provided to entice this company to come to Kalispell. The County fort Authority has also committed $125,000 per year toward the debt service. This loan has a first lien on the Tax Increment of the District. The Port will be managing the physical property. Tax Increment Urban Renewal Bonds; In December, 1985, the City issued $2,100,000 in Tax Increment Urban Renewal Bonds pursuant to Title 7, Chapter 15, Parts 42 and 43, MCA and pursuant to the Bond Resolution adopted by the Kalispell City Council. These Series 1985 Bonds are considered to be special obligations of the City payable solely from tax increment generated by the area. The City has irrevocably pledged and appropriated the tax increment to the payment of the Series 1985 Bonds which have a first lien on all tax increment revenue generated by the area. The series 1985 Bonds do not constitute a general obligation of the City or pledge the ad valorem taxing power of the City. Although the long-term liability created by the issuance of the bonds is considered a fund -specific liability, it is reported as a liability in the general long-term debt group as required by generally accepted accounting principles. At June 30, 2001 there was $2,092,314 available in the Tax Increment Special Revenue Fund to service these bonds. Issue Interest Tenn of Final Bonds Outstanding Annual Pur Date Rate Bonds Maturity Issued June 30 2001 Payments Tax Increment 12185 6.25.9.5% 16 yrs 7101102 $2,100,000 $240,000 varies State Revolyi�un In November 1991, the City entered into an agreement with the State Revolving Fund (SRF) to borrow funds to partially finance the construction of a wastewater treatment plant facility. This obligation is to be repaid from the operating income of the Sewer Fund. Interest Amount Outstanding Rate Term Borrowed June 30 2001 SRF Loan 4% 20 yrs. $ 3,913,425 $ 2,67 0�.0 -22- CITY OF KALISPELL rLAIHEAD 1") Al I Y, MUIN IAINA NOTES TO FINANCIAL STATEMENTS June 30, 2001 7. Long-term Debt-con't Suecial Assessment Bonds; Special assessment bonds are secured by a lien on the assessed properties. The primary source of repayment is the assessments levied against the benefiting properties, However, the City is liable, to an extent, for repayment of these special assessment bonds. The City is authorized by State law to establish and has established a revolving fund to ensure the payment of debt service on the bonds in the event that assessed property owners default. -23- Issue Interest Term of Final. Bonds Outstanding Annual LUT se Date Date Bonds Maturit Issued June 30 2001 P 'ut SID 337 -sewer 1.2101186 7.74 % 15 yrs 2002 $ 110,000 $ 10,000 varies SID 341 -sewer 09101.195 6.06% 15 yrs 2011 100,000 55,000 varies SID 342 —sewer 11/01195 6.34 % 15 yrs 2011 20900 120,000 varies SID 343 — Suimyview Lane 01101102 3.6%-5.5% 20 yrs 2021 1,581,500 1,581,500 varies 1993 Walk & Curb 01104194 6.0% 8 yrs 2002 5,112 730 varies 1994 Walk & Curb 12131186 8.5% 8 yrs 2003 28,513 7,000 varies 1995 Walk & Curb 01/02196 8.5 % 8 yrs 2004 22,823 8,556 varies 1996 Walk & Curb 01/02197 8.5% 8 yrs 2005 12,148 6,074 varies 1997 Walk & Curb 10101198 8.0% 8 yrs 2006 8,572 4,287 varies 1998 Walk & Curb 01101199 7.75% 8 yrs 2007 1,687 1,265 varies 1999 Walk & Curb 01/01100 8.50% 8 yrs 2008 1,769 1,548 varies 2000 Walk & Curb 01/01101 9.50% 8 yrs 2009 _ 2,315 _J,315 varies Total Special Assessment Bonds $2 083,439 $17 8275 Special assessment bonds are secured by a lien on the assessed properties. The primary source of repayment is the assessments levied against the benefiting properties, However, the City is liable, to an extent, for repayment of these special assessment bonds. The City is authorized by State law to establish and has established a revolving fund to ensure the payment of debt service on the bonds in the event that assessed property owners default. -23- CITY OF KALISPELL rl )k, VLH1HU1VlZ,1V1U1V1AINA NOTES TO FINANCIAL STATEMENTS lune 30, 2001 7. Long-term Debt -cont. LoanslContracted Debt: General Lonv Term Debt Group of Accounts: Boom Truck/Leaf Loader 0110112001 4.75% 5 yrs 02/01/2005 88,950 88,950 Fnte risr�ds: Loader 0311012000 4.75% 7 yrs 02/1512007]03,000 __90,232 Total Loans $ 69.,217 $=—I 3�I6 *The Board of Housing loan is paid from the proceeds of the rents on the Courtyard Apartments per the agreement with NW Montana Human Resources. -24- Origination Interest Due Principal Outstanding P, urpose Date Rate Term Date Amount June 30 2001 *Board of Housing 0310111995 6% 30yrs 0210112025 $ 271,000 $ 246,132 Snowblower 0311911999 5.6% 3 yrs 0211512002 26,282 9,463 Road Grader 0212512000 5.6% 7 yrs 0211512007 122,382 106,915 Fire Truck 02115/2000 5.6% 5 yrs 0211512005 87,603 71,444 Boom Truck/Leaf Loader 0110112001 4.75% 5 yrs 02/01/2005 88,950 88,950 Fnte risr�ds: Loader 0311012000 4.75% 7 yrs 02/1512007]03,000 __90,232 Total Loans $ 69.,217 $=—I 3�I6 *The Board of Housing loan is paid from the proceeds of the rents on the Courtyard Apartments per the agreement with NW Montana Human Resources. -24- CITY OF KALISP LL rl' OnT TVT1r 1 MVT A NT A rLHi17.� V.VUI�[i1,1V1ViViHIlH NOTES TO FINANCIAL STATEMENTS June A 2001 7. Lon -terms m Debt -can't. Revenue Bond Requirements Si !ggnt provisions of the 1996 and 2001 Water System Revenue Bonds are as follows, Debt Service Account Monthly an amount equal to not less than 1l6 of the interest due within the next six months and 1112 of the principal to become due within the next twelve months shall be credited to the debt service account. Reserve Account The City shall keep in the reserve account an amount equal to the lesser of 10% of the original principal or the maximum amount of principal. and interest requirements. Pro�er%I:�.surance 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. Claar es Net revenues will be at least equal to 125% of the maximum principal and interest requirements for all future fiscal years. The City complied with the above revenue bond requirements. 161 CITY OF KALISPELL FLtl.irir t�LJ l COUNTY,1V1V1VTlhl�h NOTES TO FINANCIAL STATEMENTS June 30, 2001 7, Longi -term Debt -cont. Si uificant provisions Sewer Revenue Bonds Ordinances and Re aired Information. I. The City will establish a separate revenue bond account into which will be paid each month an amount equal to but not less than the surra of ane -sixth of the interest due within the next six mouths and one -twelfth of the principal due within the next twelve months with respect to all Bonds secured by the ordinance and payable from that account, and into which shall be paid each month additional net revenue equal to one -sixtieth of the maximum amount of principal and interest to fall due within any subsequent fiscal year on all such bonds until a reserve equal to such maximum amount of principal and interest is established, which reserve shall thereafter be maintained. The City complied with this provision. 2. Rates and charges will be made and kept sufficient to provide gross income and revenues adequate to pay promptly the reasonable and current expenses of operating and maintaining the system and to produce in each fiscal year net revenues in excess of such current expenses, equal to 125% of the maximum amount of principal and interest payable from the Revenue Bond Account in any subsequent fiscal year. The City complied with this provision. 3. The City shall maintain an Operating Reserve equal to one month's operating expenses. The terra operating expenses shall raaeaa current expenses, paid or accrued, or operation, maintenance and current repair of the system and its facilities, and shall include administrative expenses of the City relating solely to the system, premiums for insurance on the properties, labor and the cost of materials and supplies used for current operation and for maintenance, and charges for the accumulation of appropriate reserve for current expenses which are not recurrent monthly but may reasonably be expected to be incurred in accordance with sound accounting practices. Such expenses shall not include any allowance for depreciation or renewals or replacements of capital assets of the system and shall not include any portion of the salaries and wages paid to any officer or employee of the City, except such portion as shall represent reasonable compensation for the performance of duties necessary to the operation of the system. The City complied with this provision. 6►X CITY OF KALISPELL TrrTTr A T% pfw T1, 7m T 1--A TA rMAD VJUINIH�rIN NOTES TO FINANCIAL STATEMENTS June 30) 2001 7, Lon -term debt -cont. Significant provisions Sewer Revenue Bonds Ordinances and Required Information — con't. 4. The City shall, within 120 days after the close of each Fiscal year, cause to be prepared and supply to the original purchaser or purchasers of Bonds issued hereunder and the bank or banks designated as agent for the payment of principal of and interest thereon a financial report with respect to the system of such fiscal year as prepared by an independent certified public accountant. The City did not comply with this provision. 5. The audit report shall include the following: a. a statement in detail of the income and expenditures of the system for the fiscal year, identifying capital expenditures and separating them from operating expenditures; b, a balance sheet as of the end of the fiscal year; c. the number of premises connected to the system at the end of the fiscal year; d. the amount on hand in account of the Sewer System Fund at the end of the fiscal year; e, a list of the insurance policies and fidelity bonds in force at the end of the fiscal year, setting out as to each the amount thereof, the risks covered thereby, the name of the insurer or surety and the expiration of the date of the policy or bonds; and f: a determination that the report shows full compliance by the City with the provisions of this ordinance during the fiscal year covered thereby, including proper segregation of the capital expenditure from operating expenses, maintenance of the required balance in the Revenue Bond account, and the receipt of net revenue during the fiscal year at least equal to 125% of the maximum amount of principal and interest payable from the Revenue Bond account in any subsequent fiscal year; or if the report should reveal that the revenues have been insufficient for compliance with this ordinance, or that the methods used in accounting for such revenues were contrary to any provision of this authorizing ordinance, the report of audit shall include full explanation thereof, together with the recommendations for such change in rates or accounting practices or in the operation of the system as may be required. The following are the required disclosures which are not contained elsewhere in the audited financial statements. Number of premises connected to the system at the end of the fiscal year: 6,1.17 FIA CITY OF KALISP LL inIATIHEAD COUNTY, IVION-1AINA NOTES TO FINANCIAL STATEMENTS June 30, 2001 7, Long-term Debt -cont. Significant provisions Sewer Revenue Bonds Ordinances and Required Information — con't, Amount of cash on band in each account of the Sewer System at the end of the fiscal year; Unrestricted Cash $ 890,755 Sewer Operating Reserve 114,000 Replacement 1,197,087 Sewer Capital Improvement 1,130,941 Replacement and Depreciation 31,875 Replacement and Depreciation — Evergreen 1,849,862 Storm Maintenance 744,754 Sewer Sinking and Interest 922 Bond Reserve b�85 5000 Total $6,645.696 Schedule of Insurance Policies June 30, 2001 Montana Municipal Insurance Authority 1. Fidelity bond coverage has a $5,000,000 limit for employee and computer fraud. The fidelity bond also covers messengers with a $1,000,000 limit. The bond coverage includes a $5,000 deductible. Expires July 1, 2001. 2. Property Insurance. Blanket building policy with $25,000,000 limit and a $2,500 deductible per event. Boiler and machinery policy with $50,000,000 and a $2,000 deductible. Expires July 1, 2001. 3, liability Insurance; $750,000 per occurrence which arises or derives from injury to or death of a single person or damage to property of a single person regardless of number of persons or entities claiming damages. $1,500,000 per occurrence not covered as stated above. A $2,500 deductible applies. Expires July 1, 2001 *28- CITY Of KALISPELL »i AT7iT!An! Til TT r o/1�TTA1TA !LxIll Hllt JUIvl1,1V1VIN1x1Vx NOTES TO FINANCIAL STATEMENTS June 30, 2001. 7, Lori -term Debt -cont, Si nificant provisions of Series 2000 Westside Urban Renewal Tax Increment Bond Reserve Account The City shall keep in the reserve account an amount equal to the maximum amount of principal and interest due on all outstanding bonds of the Westside Tax Increment District in the then current or any future fiscal year. QIS Bond Max Principal and Debt Due in any future fiscal year $339,350 City's Reserve $ - The City is not in compliance with the above requirement. Pled ed Revenues The City shall generate revenues from: 1) interest repayment of a loan to Stream International, 2) user fee equal to Stream's Montana corporation license tax, 3) revenues generated from the Westside Tax Increment District, and 4) $125,000 from flathead County Economic Development Authority levy that will be sufficient to pay the principal thereof and interest thereon when due. During fiscal year 2001, the total bond payments due equaled $339,250, The Port Authority contributed $125,000. Westside Tax Increment District generated $401,669. The City is in compliance with the above requirement, -29- CITY OF KALISPELL riA TTTr A r\ (V) r1.7rr x WT A 1.7 A rLt1 l Y7YaAD LVUlV 1 Y, 1VY N AINA NOTES TO FINANCIAL STATEMENTS June 30, 2001 7. Lona -term Debt- cont. Significant provisions of the 2001 Solid Waste System Revenue Bonds are as follows. Debt Service Account Monthly an amount equal to not less than 116 of the interest due within the next sax months and, 1/12 of the principal to become due within the next twelve months shall be credited to the debt service account. Total. Required $ 2,71.3 City's Reserve $11,670 The City is in compliance with the above provision. Reserve Account The City shall keep in the reserve account an amount equal to the lesser of 10% of the original principal or the maximum amount of principal and interest requirements. Total Required Reserve $15,239 City's Reserve $15,239 The City is in compliance with the above provision. Rates and Chjncs Net revenues will be at least equal to 125% of the maximum principal and interest requirements for all future fiscal years. 125% of Maximum Debt $41,849 Net Revenues $76,584 The City is in compliance with the above provision. -30- CITY OF KALISPELL MCGTNFLAHII vvY,v ANA NOTES TO FINANCIAL STATEMENTS June 30, 2001 7, Long-term Debt -can't, Compensated Absences Payable Compensated absences payable, which represent vacation, sick leave and compensatory time earned by employees which is payable upon termination, were as follows: Enterprise Funds $, 169,816 General Long Term Debt Group of Accounts 857,179 Parking Commission 4,593 Total U08 Requirements to amortize debt The annual requirements to amortize all long-term debt outstanding, except compensated absences payable, as of June 30, 2001, including interest payments are as follows: Revenue Special Contracted Fiscal Bonds/ Assessment Debt/Loans/ Year SRF Loan Bonds Urban Renewal Bonds Totals 2002 $ 1,212,547 $ 212,719 $ 390,522 $ 1,815,788 2003 1,2101736 188,707 98,378 1,4971821 2004 1,210,135 185,576 98,322 1,494,033 2005 1,214,679 1775863 98,231 1,490,773 2006 1,206,477 181,545 781175 1,466,197 20072011 4,942,312 729,756 135,595 5,807,663 2012-2016 688,265 5711600 971485 11357,350 2017.2021 130,916 465,920 97,485 6947321 2022.2026 - - 77,988 77,988 Total $1116,067 $_2,713,6 6 $1,172181 $15,701.934 Total Principal 8,962,740 1,798,275 853,136 11,614,151 Total Interest 2,853,327 915,411 319,045 4.087 783 Total$118 6 067 $ 2 713,686 $ 1,172,181 $ 701.934 CITY OF KALISPELL FLATHEAD CODMT Y, MUGNTAivA NOTES TO FINANCIAL STATEMENTS June 30, 2001 8. State -Wide Retirement Plans Substantially all full-time City employees are eligible for one of three retirement plans: Montana Public Employees' Retirement System(PERS); Municipal Police Officer's Retirement Systein(MPORS): and the Firefighters' Unified Retirement System(FURS). The plans are established by State law and administered by the State of Montana. The plans are cost-sharing multiple -employer defined benefit plans that provide retirement, disability and death benefits to plan members and beneficiaries. Contribution rates for the plans are required and determined by State law payroll for the fiscal year ended lune 30 2001, were: .PERS MPORS Employee 6.9% 9.0% Employer 6.8% 1.4.41% State ,10% The contribution rates, expressed as a percentage of covered FURS 9.5%-10.7% 1.4.36/0 The State contribution qualifies as an on -behalf payment. These amounts have not been recorded in the City's financial statements and were considered immaterial. The Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for all three plans. That report may be obtained by writing to Public Employees Retirement Division, P. 0, Box 200131, Helena, Mt,58620- 0131 or by calling 1-406-444-3154. The City's contributions for the years ending lune 30,1999, 2000, and 2001, as listed below, were equal to the required contributions for each year. PERS MPORS FURS Component unit PERS 1999 $164,757 $ 141,716 $113,580 $ 2,514 2000 $183,961 $ 153,004 $ 87,523 $ 3,066 2001 $1.97,731 $ 167,01.9 $128,807 $ 3,052 -32- CITY OF KALISPELL FLAT ri1EAD C001TIvT aY, M NTANA NOTES TO FINANCIAL STATEMENTS June 30, 2001 9. Post Employment Health Insurance Benefits 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. Retirees may remain on the City's health plan as long as they wish, provided they pay the monthly premiums. State law requires the City to provide this benefit. No cost can be estimated for the above benefits, although there is the probability that there are higher medical costs for retirees which would result in additional costs to the insurance program, There are no other post -employment benefits provided by the City. 10. Amounts due to and from other Funds/Advances Amounts due to and from other funds consist of the following: Advance from UDAG $75.0001 Advance to Westside TIF Due from: Sidewalk Construction (Capital Projects) 1992 S&C Fund (Debt Service) 1994 S&C Fund (Debt Service) 1996 S&C Fund (Debt Service) 1997 S&C Fund (Debt Service) SID 337 (Debt Service) SID & S&C Total Due to: General Fund SID Revolving Fund (Debt Service) SID Revolving Fund (Debt Service) SID Revolving Fund (Debt Service) SID Revolving Fund (Debt Service) SID Revolving Fund (Debt Service) -33. Origination Date $ 720 0..0.0.. 412000 Amount $ 1,279 1,153 422 263 324 9,879 13,320 Interest Rate Term 6.0% Open Ended CITY OF KALISPELL Tli A "n pT7 A T1 rIOT T1 TTTY 1 /nA TTA %i A rLhIHEAV t.liU1V t Y � iV101V 1�11VH NOTES TO FINANCIAL STATEMENTS June 30, 2001 11. Amounts due from other Governments The amounts due from other governments consisted of the following: Due from County General bund $ 181,752 Special Revenue Funds 190 Tax Increment $ 488,618 Airport Increment 11,769 Comp. Insurance 28,278 Retirement 24,960 Health 35,954 Light Maintenance 7,377 Decorative light Maintenance 558 Special Street Maintenance 49,1.20 Urban Forestry 61041 UDAG 4,707 Drug Enforcement Grant 409 Due from State Special Revenue Funds Police Resource Office 1049 Universal Police Grant 12,500 ISTFA 25,128 Total Special Revenue Funds $ 71 X68 Debt Service Funds Westside TIF $ 54,133 1992 Sidewalk & Curb 190 1993 Sidewalk & Curb 138 1994 Sidewalk & Curb 105 1995 Sidewalk & Curb 25 1996 Sidewalk & Curb 21.5 1997 Sidewalk & Curb 105 SID 337 953 SID 341 321 SID 342 2 433 Total Debt Service Funds $ S -34- Enterprise Funds Sewer $ 31,042 Garbage _4 915 Total Enterprise Funds $m 80 576 CITY OF KALISPELL rT A1rTTrAnnrliATry Tmxrr+AvA NOTES TO FINANCIAL STATEMENTS June 30, 2001. 12, Restricted Cash/Investments The following Restricted Cash/Investments were held as of lune 30, 2001: Erste rise Funds Water - Sinking & Interest $ 1,649 - Bond Reserve 106,000 - Replacement 454,301 - SRF Loan Reserve 481083 Sewer - Bond Reserve 6853500 - Operating Reserve 114,000 - Replacement 1,197,087 - Replacement Evergreen 1,849,862 - Sinking & Interest 922 - Invest R & D 31,875 - Capital Improvement 1,130,941 - Storm Maintenance 744,754 Ambulance - Replacement 64,764 Garbage - Replacement 85,761 - Sinking & Interest 10,909 Brand Reserve1�0 Enterprise Total $=§,S42 08 -35- CITY OF KALISPELL �rH.1w (a� rEniy-.rW� /] t�^,� n n)r1 knl�rl �-1nyr .I r ��3rm /� �,Ir !�` 1IL 1tA E D' CUVA1A i., MI 1V11"lJ.�'IL'A. NOTES TO FINANCIAL, STATEMENTS June 30, 2001 13. Fund Equity Reserves and/or Designations of the City at lune 30, 2001 consisted of, Special Revenue Funds: Tax Increment — Reserve for Bond Contingency Courtyard Maintenance — Courtyard. Community Development — Interest Subsidy UDAG -- advances Special. Revenue Funds Total Debt Service: Reserve for Bond. Contingency Internal Service, Designated for Replacement $ 123,046 25,414 92,920 75,000 $ 247,150 $ 28339 -36- Enterprise Fund: Water - Reserve for Revenue Bond 106,000 - Reserve for Sinking & Interest 1,650 - Reserve for Replacement 454,301 - Reserve for Inventory Supplies 961367 • Reserve for SRF Loan 48,083 Sewer - Reserve for Operations 114,000 - Reserve for Replacement -Sanitary 1,197,087 - Reserve for Revenue Bond 685,500 - Reserve for Sinking & Interest 922 - Reserve for Capital Improv/WWTP 1,162,816 Reserve for Replacement/WWTP 1,849,862 - Reserve for Storm Sewer 812,678 Ambulance - Designated for Replacement 64,764 - Reserve for Sinking & Interest 10,909 Garbage - Designated for Replacement 85,761 Reserve for Revenue Bond 16000 Enterprise Funds Total $ 5,706 Q CITY OF KALISPELL Y r ATT E A r1 r+nr TA 7°m r N A'n" TrP A 'A t o rLN1 "HE l )lJiV 11, I IUIN 1AIVA NOTES TO FINANCIAL STATEMENTS June 30, 2001 14. Chan es in Contributed Capital A schedule of changes in contributed capital is presented below: 15, Restatements During the current fiscal year, adjustments relating to prior year transactions were made to the following funds: Fund Amount Reason for Adjustment Tax Increment (Special Revenue bund) $ 3,850 Correct retainage Westside Increment (Special Revenue Fund) (5,000) Close reserve account Sewer (Enterprise Fund) gLO4 J Storm Sewer tax voids and abates Total $8154 1.6. Residual Equity Transfers Residual Equity transfers are made to transfer the remaining equity balance of a discontinued fund to another fund. Fund malcin Transfer Fund receiving Transfer Amount GO Bond—Debt Service General fund $131 -37- WATER SEWER DATA PROCESSING TOTAL Contributed Capital 711100 3,294,002 $10,165,681 $ 544 $13,460,227 Less: Depreciation on assets acquired by grants/contributions (60,086) L598,707) ,(544) (659,337) Contributed Capital 6/30/2001 L-3.213 $ 9 S66 974 $ - $ml2 800 90 15, Restatements During the current fiscal year, adjustments relating to prior year transactions were made to the following funds: Fund Amount Reason for Adjustment Tax Increment (Special Revenue bund) $ 3,850 Correct retainage Westside Increment (Special Revenue Fund) (5,000) Close reserve account Sewer (Enterprise Fund) gLO4 J Storm Sewer tax voids and abates Total $8154 1.6. Residual Equity Transfers Residual Equity transfers are made to transfer the remaining equity balance of a discontinued fund to another fund. Fund malcin Transfer Fund receiving Transfer Amount GO Bond—Debt Service General fund $131 -37- CITY OF KALISPELL 1"rT A r7ry tr A n /,Y^,r h, TrrX Y T ,f TT A I T A r Lh I nLHI XI r r, IvIOly I AIvn NOTES TO FINANCIAL STATEMENTS June 30, 2001 17, Se meat Information for Enterprise Funds The City maintains four Enterprise Funds which provide water, sewer, garbage and ambulance services. Segment information for June 30, 2001, was as follows: Operating Revenue Depreciation expense Operating Income (loss) Net Income (loss) Plant, Property & Equip. Additions Deletions Net Working Capital Total Assets Long-term Liabilities: Payable from Operating Revenues Total Equity WATER SEWER. AMBULANCE GARBAGE TOTAL $ 1,150,018 $ 2,720,673 $ 704,378 $ 494,435 $ 5,069,504 $ 251,575 $ 11167,045 $ 37,922 $ 82,190 $ 1,538,732 $ 42,752 $ 193,996 $ (11,623) $ (5,606) $ 219,519 $ 279,915 $ 380,652 $ (5,492) $ 3,312 $ 658,387 $ 13492,598 $ 474,847 $ 78,663 $ 311,309 $ 2,357,417 $ 72,476 $ - - - 72,476 $ 665,497 $ 946,346 $ 217,001 $ 223,395 $ 2,052,239 $10,075,471 $ 23,935,394 $ 436,234 $1,042,995 $ 35,490,093 $ 1,518,577 $ 5,156,799 $ 42,945 $ 191,425 $ 6,909,746 $ 01400 $18,663,078 $ 384,877 $ 849,524 $ 28,412,369 18. 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. CITY OF KALISPELL ri ATTTT hD!"ATT%T1rV rA'n'ATTANTA FLAME ill ka n11IAlUiN1ttNA NOTES TO FINANCIAL STATEMENTS June 30, 2001 19. ,mint Ventures Joint ventures are independently constituted entities generally created by two or more governments for a specific purpose, 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 County taxed the property owners directly for the City's contribution for the fiscal year ended June 30, 2001 at an equivalent rate of mills. County -wide Administrative Board The City of Kalispell along with flathead County, the City of Columbia falls, and the City of Whitefish, participate in a County -wide Administrative Board (CAB) that was established by an interlocal agreement in December, 1979, The CAB was formed for the purpose of coordinating all land use planning, subdivision reviews andapproval, and zoning application and enforcement in flathead County, as well as to assist in annexation by the cities, The Board consists of four members, the Mayor of each of the three cities and the Chairman of the Flathead County Board of County Commissioners, The CAB is financed by a tax levied by each of the parties of the interlocal agreement in the proportion to the expected benefits that each party shall receive during the ensuing fiscal year. The financial activities of the CAB are accounted for by flathead County. The City's contribution for CAB for fiscal year 2001 was $77,307. Courtyard Apartments/Northwest Montana Human. Resources The City entered into an agreement with Northwest Montana Human Resources (NWMHR) for a joint venture construction project of the Courtyard Apartments. The City owns 16 units of the apartment complex built with Home Grant and CDGB funds. NWMHR has built 16 units also. The agreement provides for the management of the housing complex for low income housing. All operations and maintenance of the housing complex are managed by Northwest Montana Human Resources. NWMHR maintains a trust fund in the City's name to record the revenues and expenses of the housing complex. As of June 30, 2001 the equity in the fund was $49,186. The debt payments on the mortgage are paid from the proceeds of the rents by NWMHR. The principal balance is recorded on the City's books in the Long- tern Debt Group of Accounts. The original amount of the loan was $271,000. The balance as of Tune 30, 2001 is $246,132. -39- CITY OF KALISPELL rl AT1.) , hTl f nl'11iTV hA'nNYTAV A I'LAIH AIDI.VLIlNI1,IV1.VlV1. INA NOTES TO FINANCIAL STATEMENTS June 30, 2001 20. Risk. Manampent 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 privately administered, self-insured plan. Given the lack of coverage available, the City has no coverage for potential losses from environmental damages. Effective July 1, 1987 The City of Kalispell joined with other Montana cities to form the Montana Municipal Insurance Authority, a self- insurance elfinsurance pool offering Worker's Compensation and Liability Coverage. Both public entity risk pools currently operate as comrnon 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 a $7,500 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 $7.61.0 million, respectively, to immediately finance the necessary insurance reserves. All members signed a contingent note for a pro rata share of this liability in case operating revenue was insufficient to cover the debt service. The City's share is $201,445 for liability and $281,715 for Workers' Compensation to finance the necessary insurance reserves. Based on the plan's current financial position, the City doesn't expect to make any payment on these notes. Separate financial statements are available from the Montana Municipal Insurance Authority. -40- CITY OF KALISPELL F LAINEG COUN1 it iVIUAIt NA NOTES TO FINANCIAL STATEMEN"T"S June 30, 2001 21. Health Insurance In October 1.993, The City established an. internal service fund for the City's self-insured health insurance plan. The plan is administered by Blue Cross/Blue Shield of Montana, The City pays premiums recommended by Blue Cross into the City Health Fund. The claims are submitted weekly by Blue Cross and paid out of this fund. The City pays the total monthly premium for all full-time employees and their dependents. Vision is optional and paid by the employee. The plan pays 80% of the medical claims after the $100 per individual, $200 per family deductible has been satisfied, up to a total of $100 maximum individual deductible or $200 maximum family deductible. Generic prescription drugs are 100% covered. Dental claims are paid 100% if the dentist is a participating Blue Cross dentist, otherwise 80% of the claims are paid. A "stop -loss" policy has been purchased to cover any claims that exceed $75,000 per individual or aggregate claims of 115% of claims projected by Blue Cross. No individual reached the stop loss amount nor did the City total reach the projected amount. A reconciliation of claims payable follows: Claims payable, June 30, 2000 $ 53,437 Claims incurred 1,138,895 Claims paid 1068,113 Claims payable, June 30, 2001 124,219 22. rending Litigation The following is a list of litigation pending against the City and the amount of damages claimed by the Plaintiff. The City Attorney has made no evaluation as to the outcome of each case. The City has liability insurance that may cover all or part of the damages, Accordingly, no provision has been made in the financial statements for these contingent liabilities, -41- Damn es requested Potential of boss Status Grey v. City of Kalispell $ 50,000 Unknown 9t1' Circuit Appeal Broad v. City of Kalispell Not Stated Remote Not stated Nupac V. City of Kalispell $ 70,000 Remote Not stated KPA v. Cite of Kalispell $ 4000 Possible Not stated Stork v. Cite of Kalispell $1,000,000 Remote Not stated. Olson v, fiffity of Kalispell $ 1,000 Possible Justice Court -41- CITY OF KALISPELL T'T 1t TTS A T1/')nT T1 Trrx 7 1!n'1 T�'1�I1,71 rr,hr rAl)kvurvrr,1vrUINJAINA NOTES TO FINANCIAL STATEMENTS June 30, 2001. 23, Loans Receivable March 1, 1999 the City entered into a loan with the Center Street Plaza, $70,529. The term of the loan is 15 years at a rate of 3%. Original Loan amount $ 705529 June 30, 2001 balance $ 61,847 The City entered into a community development program, which includes funding from a community development block grant, to make available to eligible applicants (low -to -moderate income residents), a loan for at least one-half of the required rehabilitation cost. These funds from the City, together with loans from the first Federal Savings Bank (now Glacier Bank) of Montana, the lender, must provide the total funds required for the purchase and rehabilitation of the housing unit, At the time the bank loans are closed with the borrower, the proceeds of the City's loan will be deposited into the borrower's construction account at First Federal, The City's loan is secured by the property, and filed in a third lien position. Repayment of the City loan will not begin until 30 days after the Lender's loan (second lien) for construction of the unit has been paid off. The City's loan is interest free until such time as repayment begins. The maximum amount of a private lender loan cannot exceed $20,000 per property with a ten-year pay back. In addition, when an owner -occupant is unable to afford a private lender loan at the pre -determined interest rate agreed to by the City and lender, he or she may qualify for City financing, The City may provide a direct loan of up to $25,000 with a varying interest rate (as low as zero percent) or with a longer amortization period (maximum of fifteen years) or a deferred loan to be repaid simultaneously, at a later date, with a balloon payment, or to be released at the end of ten years. The City has $1,046,822 recorded as loans receivable as of June 30 2001 in the Community Development Loan Revolving Fund. Housing loans leveraged with Tax Increment Funds are recorded in the Tax Increment Fund in the amount of $ 36,900. The above mentioned loans are offset with deferred revenue accounts. Uncollected taxes receivables in governmental funds are offset with deferred revenue accounts as explained in the "basis of accounting". The City entered into a 20 year redevelopment loan at 5% with Big Sky Manor using UDAG funds in August 1999, Original Loan amount 5124,000 June 30, 2001 balance $117,384 -42- CITY OF KALISPELL r TT ATa /Yl1T r1 rmrr rdna im Aa7A r LCl tMEAU l..UOTN . S, lVlVN I AlNth NOTES TO FINANCIAL STATEMENTS June 30, 2001. 23. Loans Receivable-con't. The City entered into a 20 year redevelopment loan @ h% with United Way in January 2000, Original Loan amount $133,500 June 30, 2001 balance $128,387 On March 8, 2000, the City entered into a 10 loan with Stream, Inc. at 11% as part of the package to bring Stream. Jobs to Kalispell. The interest earnings are to be split with 5.6% committed to the debt service fund to pay off the Stream Bonds, The remaining 59% interest and the principal will be returned to the UDAG fund, Original Loan amount $1,000,000 June 30 2001 balance $ 9421547 25, Component unit -Kalil ell Parking Commission The Kalispell City Council passed Resolution 4103, a Resolution of intention to create Special Parking District #2 on June 21, 1993, Also passed was Resolution 41.04, a resolution of intention to provide for funding the cost of maintaining, operating, repairing, and improving Special. Parking Maintenance District #2 and Resolution 4105, a Resolution declaring the need for a Parking Commission to function in the City of Kalispell and declaring a jurisdictional area wherein said Parking Commission is authorized to function. The Mayor and City Council appointed the Board of Directors composed of City residents who operate businesses within the district. It is the intention of the City of Kalispell that the downtown business community manages the parking for the downtown district. The Parking Con-flnission opened their doors on. February 1st 1994, The City transferred $53,000 in Fiscal 1994 to the district as start up money, no further City funds have been given to the district, It is intended that the Parking Commission be operated as a Proprietary type fund and has been classified as such in the City's financial statements, -43- SINGLE AUDIT SECTION CITY OF KALISPELL FLATHEAD COUNTY, MONTANA SCHEDULE OF EXPENDFI URES OF FEDERAL AWARDS For Fiscal Year Ended June 30, 2001 U,S, Department of Justice Passed Through Flathead County: Drug Control and Systems Grant - Formula Grant Federal Pass -Through Program or Beginning Ending Federal Grantor/Pass-Through CFDA Grantor's Award Balance Federal Balance Grautor(r�ru ram Title Number Number Amount July 1, 2000 Revenue Other Expenditures June 30, 2001 U.S. Department of Housing and Urban Development 1,512 Local Law Enforcemcnt Block Grant 16.592 2000 -LB -BX -3024 $ 9,890 Passed through the State Departinew of Commerce: 9,890 11099 10,989 Community Oriented Policing Services - Hiring Award 1010 1999UMWX2840 Community Development Block Grant (CDBG) -Economic Development 14,228 MT-CDBG-ED00-03 $400,000 $ $ 400,000 $ $ 400,000 $ Home Investment Partnerships Program (HOME) 14.239 M94-SG300117 5400,000 200 200 Total U.S. Department of housing and Urban Development Total U.S. Department of Justice 23,054 $ $ 400,200 $ $ 400,200 $ U,S, Department of Justice Passed Through Flathead County: Drug Control and Systems Grant - Formula Grant 16.579 NIA N!A $ 6,356 $ 34,473 $ 10,000 $ 50,243 $ 586 Direct: U.S. Department of Transportation Local law Enforcement Block Grant 16.592 2000 -LB -VX -0343 $ 9,073 1,512 1,512 Local Law Enforcemcnt Block Grant 16.592 2000 -LB -BX -3024 $ 9,890 9,890 11099 10,989 Community Oriented Policing Services - Hiring Award 1010 1999UMWX2840 $150,000 3,813 45,000 49,041 95,832 2,022 Community Oriented Policing Services - In School Award 16.710 1999S1IWX0664 $125,000 774 46,082 15,730 46,856 Total U.S. Department of Justice 23,054 S 12,455 $ 135,445 $ 60,140 $ 205,432 $ 2,608 U.S. Denartorent of Labor and Industry Paned through The State Departrneat of Commerce Workforce Investment Act 17.255 MT-CDBG-ED00.03 5 50,000 $ $ 50,000 $ $ 50,000 $ U.S. Department of Transportation Passed through the Montano Department of Transportalion: Community Transportation Enhancement Program (CTEP) Lawrence Park Trail I 20.203 STPE 6799(10) $ 45,056 $ 1,485 $ 4,290 $ 225 $ 6,000 $ Community Transportation Enhancement Program (CTEP) Lawrence Park Trail 11 20.205 STPE 6799(15) $167,140 10,490 15,730 3,166 23,054 Community Transportation Enhancement Program (CTEP) Meridian Road Walk 20.205 STPE 6701(4) $103,896 (2,035) 2,914 (879) Community Transportation Enhancement Program (CTEP) Meridian Connector 20.205 STPE 6799(23) $ 98,260 14,530 21,154 (6,624) Community Transportation Enhancement Program (CTEP) Woodland Park 111 20.205 STPE 6799(21) $ 77,623 (11,724) 11,724 Highway Traffic Safety - Troop Grant 20.600 99.0307.02 $ 8,600 3,468 3,468 Highway Traffic Safety - Kalispell Occupant Protection 20.600 01.03-0103 $ 20,000 9,763 $ 9,763 Total U.S, Department of Transportation $ 1,664 5 47,227 5 11,070 $ 43,551 $ 16,430 U.S. De nartnrent orPuhlic health and human Services Passed through Flathead County: Special Program for the Aging Title 111E 93.043 01.22A -A009 NIA S $ 4,000 $ $ 4,000 $ Total Federal Assistance $ 14,139 5 636,872 $ 71,210 $ 703,183 $ 19,038 -44- CITY OF KALISPELL FLATHEAD COUNTY, MONTANA NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Fiscal Year Ended dune 30, 2001 Basis oftresentation The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of City of Kalispell., Flathead. County, Montana, and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. `therefore, some amounts presented in this schedule may differ from amounts presented in, or used in preparation of, the general-purpose financial statements. -45- Denning, Downey & Associates, P. C, CERTIFIED PUBLIC ACCOUNTANTS 1740 VS, Hwy 93 South - Suite 101 Kalispell, MT 59901 REPORT" ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Mayor and City Council City of Kalispell Flathead County Kalispell, Montana We have audited the financial statements of City of Kalispell, Flathead County, Montana, as of and for the year ended June 30, 2001, and have issued our report thereon dated March d, 2002, We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the City of Kalispell's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and., accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City of Kalispell's control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the control over financial reporting that, in our judgment, could adversely affect the City of Kalispell's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements, Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items 01-1, 01-2, 01-3, and 01-4. -46- Robert K Denning, CPQ - hn M, Downe3� CPA A material weakness is a condition in which the design. or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the general-purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal. control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses, However, of the reportable conditions described above, we consider item. 01-4 to be a material weakness, This report is intended solely for the information and use of the Mayor and City Council, management, the Montana Department of Administration, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. March 4, 2002 .47_ Denning, Downey & Associates, P. C. CERTIFIED PUBLIC A CCO UNTANTS 1740 US, Hwy 93 South - Suite 101 Kalispell, MT 59901 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Mayor and City Council City of Kalispell Flathead County Kalispell, Montana Comm pliance We have audited the compliance of City of Kalispell, Flathead County, Montana, with the types of compliance requirements described in the U.S. Office a f Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2001. The City's major federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the City's management. Our responsibility is to express an opinion of the City's compliance based on our audit, We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by tllc Comptroller General of the United States; and OMB Circular A-133 require that we plan aid perforin the audit to obtain reasonable assurance about whether the noncompliance with the types of compliance requircrnents referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City's compliance with those requirements. -48- Robert K, Denning, CPA - Kiin M. Downey, CPA Internal Control Over Cam fiance The management of the City is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing an opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-1.33. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended for the information of Mayor and City Council, management, the Montana Department of Administration, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. March 4, 2002 191 CITY OF KALISPELL FLATHEAD COUNTY, MONTANA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Fiscal Year .Ended June A 2001 Section I — Summary of Auditor's Results Financial Statements Type of auditor's report issued. Unqualified Internal control over financial reporting: Material weakness(es) identified? Yes Reportable condition(s) identified not considered to be material weahesses Yes Noncompliance material to financial statements noted? No Federal Awards Internal control over major programs: Material weakness(os) identified? No Reportable condition(s) identified not considered to be material weaknesses None reported .50. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Type of auditor's report issued on compliance for major programs; Unqualified Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section .510(a)? No Identification of major programs: CFDA Number Name of Federal Pro ram or Cluster 14.228 Community Development Block Grant Economic Development Dollar threshold used to distinguish between Type A and Type B programs: $ 30� 000 Auditee qualified as low-risk auditee? No Section. II — Financial Statement Findings 01-1 Exceeding Budtet Authority Condition. The City exceeded its budget authority in the Cringe Victim Advocate Fund (Special Revenue Fund) and Employee Health Fund (Intergyral Service Fund) by $324 and $218,113, respectively. Criteria: Section 7-6-4005, MCA, states, "Expenditures limited to appropriations. (1) Local government officials may not make a disbursement or an expenditure or incur an obligation in excess of the total appropriations for a fund. (2) A local government official who violates subsection (1) is liable for the amount of the excess disbursement, expenditure, or obligation personally and upon the official's bond. (3) The subsequent claims approval process may not be considered as the making of a disbursement or an expenditure or as incurring an obligation and does not otherwise limit or mitigate the local governinent official's personal liability. -51- SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect: The City is not in compliance with Section 7-6-4005, MCA. Cause: The City received additional funds for the Crime Victim Advocate Program and expended, but did not amend the budget in error. The City was experiencing increased claim activity in the Employee Health Fund. Recommendation: The City should limit making of expenditures or incurring of expenditures to the amount appropriated, 01.2 City Court Receivables Condition: The City uses a manual card system for tracking court receivables. The system is not self -balancing, it does not provide aged receivable reports or summaries of those that have not made payments as agreed upon. Criteria: Internal control procedures should include, at a minimum, the preparation of aged receivable listing and a self -balancing system to ensure all receivables are collected. Effect: Weak internal control procedures. Cause: inadequate accounting system. Recommendation: The City should implement a computerized accounts receivable program for the City Court receivables. -52- SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 01-3 Parking Commission Receivables Condition: The Parking Commission accounting system for receivables did not provide for a retrievable list of the outstanding receivables and an aging of those receivables as of June 30, 2001, Criteria: Accounting system internal control procedures should include an obtainable list of outstanding receivables. Effect: We were unable to review for collectibility of the outstanding receivables as of June 30, 2001, Cause: Accounting system not fully developed for receivables. Recommendation: The Commission should change from a spreadsheet based accounting system to an accounts receivable package in order to provide more accurate financial records for outstanding receivables. 01-4 ShortTerm PlEable Condition: Estimated liability for claims was understated in the amount of $78,978 in the Health Insurance fund (Internal Service), and accounts payable was understated in the amount of $89,580 in the SID 343 Construction fund (Capital Projects). Criteria: Generally Accepted Accounting Principles (GAAP) requires the accurate reporting of financial statements. Effect: Short-term payables were understated in the amount of $168,558. This has been corrected for the audit report. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation: The City should implement procedures that ensure that all purchases received and/or services performed within a fiscal year are expensed in the same fiscal year. The City should estimate claims liability at fiscal year end for an amount that is based on the monthly claims average for the fiscal year multiplied by three. Section III — Federal Award Findings and Questioned Costs There were no Federal Award Findings and Questioned Costs reported. 5141 Denning, Downey & Associates, P. C. CERTIFIED PUBLIC A CCOUNTA NTS 1740 VS, 11w)) 93 South - Suite 101 Kalispell, MT 59901 REPORT ON OTHER COMPLIANCE, FINANCIAL, AND INTERNAL ACCOUNTING CONTROL MATTERS Mayor and. City Council City of Kalispell Flathead County Kalispell, Montana Where were no other compliance, financial, or internal accounting matters, March 4, 2002 _55_ Robert K. Denning, CPA - Kite R Downey, CPA Denning, Downey & Associates, P.C. CERT'YIED PUBLIC ACCOUNTANT'S 1790 U.S. Hwy 93 South - Suite 101 Kalispell, MT 59901 REPORT ON PRIOR AUDIT REPORT RECOMMENDATIONS Mayor and City Council City of Kalispell. Flathead County Kalispell, Montana The prior audit report contained four recommendations, The action taken on each recommendation is as follows: Action Taken Parking Conar�aission Partially Implemented City Court Receivables Not Implemented Revenue Bond Requirements implemented (disclosed in footnotes any exceptions) Exceeding Budget Authority Not Implemented March 4, 2002 ..56. Robert K. Deming, CPA - Kim M. Dovne)� CPA