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4. Government-Wide Financial StatementsASSETS Current assets: Cash and investments Taxes and assessments receivable, net Accounts receivable - net Due from other governments Contracts receivable Notes and loans receivable Prepaid expenses Inventories Total current assets Noncurrent assets Restricted cash and investments Deferred assessments recievable Deferred impact fees recievable Long term portion of loans receivable Capital assets - land Capital assets - construction in progress Capital assets - depreciable, net Total noncurrent assets Total assets LIABILITIES Current liabilities Accounts payable Retainage Accrued payroll Current portion of long-term liabilities Current portion of long-term capital liabilities Current portion of compensated absences payable Other current liabilities Total current liabilities Noncurrent liabilities Deferred revenue - loans recievable Noncurrent portion of long-term liabilities Noncurrent portion of long-term capital liabilities Noncurrent portion of compensated absences Other post employment benefits Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for capital projects Restricted for debt service Restricted for special projects Restricted for other purposes Unrestricted Total net assets Total liabilities and net assets See accompanying Notes to the Financial Statements City of Kalispell, Montana Statement of Net Assets June 30, 2011 Governmental Business -type Downtown Parking Activities Activities Total BID Commission $ 8,181,158 $ 5,784,070 $ 13,965,228 $ 124,884 $ 24,111 1,698,619 117,089 1,815,708 9,905 - 402,148 476,213 878,361 - 10,206 991,622 190,781 1,182,403 10,785 - 114,352 19,338 133,690 - 85,734 - 85,734 - 106,650 473 107,123 1,350 - 91,491 91,491 - $ 11,580,283 $ 6,679,455 $ 18,259,738 $ 145,574 $ 35,667 $ 886,586 $ 5,914,395 $ 6,800,981 $ - $ - 3,889,495 - 3,889,495 2,198 2,198 2,051,189 - 2,051,189 2,552,209 1,699,194 4,251,403 268,544 129,536 398,080 - 87,312,757 75,294,665 162,607,422 34,621 $ 96,962,978 $ 83,037,790 $ 180,000,768 $ - $ 34,621 $ 108,543,261 $ 89,717,245 $ 198,260,506 $ 145,574 $ 70,288 501,705 103,604 605,309 5,725 341 25,435 - 25,435 - - 405,698 78,547 484,245 1,966 25,117 - 25,117 - 1,040,231 1,077,000 2,117,231 2,855 33,479 39,250 72,729 - 820 820 13,766 $ 2,031,665 $ 1,299,221 $ 3,330,886 $ 5,725 $ 18,928 1,116,997 - 1,116,997 - - 672,016 - 672,016 - 10,797,396 17,333,000 28,130,396 10,435 958,038 235,777 1,193,815 4,371 620,022 620,022 $ 14,164,469 $ 17,568,777 $ 31,733,246 $ - $ 14,806 $ 16,196,134 $ 18,867,998 $ 35,064,132 $ 5,725 $ 33,734 $ 78,295,883 $ 58,713,395 $ 137,009,278 $ - $ 21,331 2,498 3,837,785 3,840,283 - 904,935 1,886,611 2,791,546 7,222,094 - 7,222,094 - 190,000 190,000 - - 5,921,717 6,221,456 12,143,173 139,849 15,223 $ 92,347,127 $ 70,849,247 $ 163,196,374 $ 139,849 $ 36,554 $ 108,543,261 $ 89,717,245 $ 198,260,506 $ 145,574 $ 70,288 28 L 1 �; General Fund — this is the City's primary operating fund and accounts for the financial operations of the City not accounted for in any other fund. Principal sources of revenue are property taxes, state and local shared revenue, charges for services, and fines and forfeitures. Principal expenditures are for public safety. Community Development Loan Revolving Fund — this fund accounts for the lending and repayment of monies loaned to businesses and individuals for approved community development projects. SID 344 Debt Service Fund — this fund accounts for the resources accumulated and payments made for principal and interest on the bonds sold to finance the development of the Old School Station Industrial and Technology Park. ASSETS Cash and investments Taxes and assessments receivable, net Accounts receivable - net Due from other funds Due from other governments Contracts receivable Notes and loans receivable Prepaid expenses Restricted assets: Cash and investments Total assets LIABILITIES AND FUND BALANCE Liabilities: Accounts payable Retainage Accrued payroll Due to other funds Deferred revenue - accounts recievable Deferred revenue - assessments recievable Deferred revenue - loans recievable Deferred revenue - impact fees recievable Total liabilities Fund Balance: Nonspendable - not in spendable form: Prepaid Long-term receivables Restricted: Municipal Court Technology Public Safety Public Works Culture and Recreation Community Development Debt Service Other Capital Projects Other Purposes Unrestricted fund balance: Assigned Capital Equipment Parking Band Shell Unassigned Total fund balance Total liabilities and fund balance See accompanying Notes to the Financial Statements City of Kalispell, Montana Balance Sheet Governmental Funds June 30, 2011 Community Other Total Development Governmental Governmental General Fund Loan Revolving SID 344 Funds Funds $ 1,186,937 $ 332,081 $ 36 $ 6,532,001 $ 8,051,055 597,187 - 3,584,051 1,406,876 5,588,114 - - - 402,148 402,148 - 16,000 - 933 16,933 38,111 - 65,277 888,234 991,622 114,352 - - 2,198 116,550 25,168 1,626,880 484,875 2,136,923 104,177 - - 973 105,150 $ - $ - $ 226,000 $ 660,586 $ 886,586 $ 2,065,932 $ 1,974,961 $ 3,875,364 $ 10,378,824 $ 18,295,081 58,473 - - 418,971 477,444 - 25,435 25,435 268,009 135,908 403,917 - 16,933 16,933 - - 397,495 397,495 597,187 - 3,584,051 1,406,876 5,588,114 - 1,626,880 - 484,875 2,111,755 - - - 2,198 2,198 $ 923,669 $ 1,626,880 $ 3,584,051 $ 2,888,691 $ 9,023,291 $ 104,177 $ - $ $ 973 $ 105,150 25,168 - 25,168 45,652 - 45,652 - 519,932 519,932 1,583,588 1,583,588 - 436,481 436,481 348,081 4,364,570 4,712,651 - 291,313 613,622 904,935 - 2,498 2,498 - 15,234 15,234 20,000 - 20,000 23,542 23,542 12,526 12,526 911,198 - - (46,765) 864,433 $ 1,142,263 $ 348,081 $ 291,313 $ 7,490,133 $ 9,271,790 $ 2,065,932 $ 1,974,961 $ 3,875,364 $ 10,378,824 $ 18,295,081 30 City of Kalispell, Montana Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets June 30, 2011 Total fund balances - governmental funds Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. An internal service fund is used by management to charge the costs of providing services within the government. The assets and liabilities of the internal service funds are included in governmental activities in the government -wide statement of net assets Long-term liabilities are not due and payable in the current period and therefore are not reported as liabilities in the funds. - Other post employment benefits Assessments and accounts receivable will be collected this year, but are not available soon enough to pay for the current period's expenditures, and therefore are deferred in the funds. - current portion - noncurrent portion - ambulance - impact fees Loans recievable that will be collected at some future date that are recognized as revenues on the statement of activities. current portion - noncurrent portion - portion that will be recognized as revenue on the statement of activities in future years Total net assets - governmental activities See accompanying Notes to the Financial Statements $ 9,271,790 90,090,495 144,482 (13,522,183) (620,022) 1,243,127 4,344,987 397,495 2,198 79,740 2,032,015 (1,116,997) 92,347,127 31 City of Kalispell, Montana Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended ,tune 30, 2011 Community Other Total Development Governmental Governmental General Fund Loan Revolving SID344 Funds Funds REVENUES Taxes and assessments $ 4,723,511 $ - $ 364,469 $ 3,213,387 $ 8,301,367 Licenses and permits 51,169 - - 272,102 323,271 Intergovernmental 3,458,310 - - 4,407,359 7,865,669 Charges for services 973,745 55,450 - 3,711,448 4,740,643 Fines and forfeitures 549,267 - - - 549,267 Miscellaneous 74,093 - - 177,365 251,458 Investment earnings 34,410 5,835 39,239 79,484 Total revenues $ 9,864,505 $ 61,285 $ 364,469 $ 11,820,900 $ 22,111,159 EXPENDITURES General government $ 2,393,244 $ - $ - $ 139,133 $ 2,532,377 Public safety 6,794,180 - - 1,538,589 8,332,769 Public works 552,602 - - 2,486,858 3,039,460 Culture and recreation - - - 1,385,997 1,385,997 Housing and community development - - - 2,034,606 2,034,606 Debt service - principal 69,139 - 225,000 765,366 1,059,505 Debt service - interest 13,774 - 169,957 396,630 580,361 Capital outlay 107,141 1,837,494 1,944,635 Total expenditures $ 9,930,080 $ $ 394,957 $ 10,584,673 $ 20,909,710 Excess (deficiency) of revenues over expenditures $ (65,575) $ 61,285 $ (30,488) $ 1,236,227 $ 1,201,449 OTHER FINANCING SOURCES (USES) Proceeds of general tong term debt $ - $ - $ - $ 100,462 $ 100,462 Transfers in 514,326 - 48,565 666,412 1,229,303 Transfers out (73,500) (1,155,803) (1,229,303) Total other financing sources (uses) $ 440,826 $ $ 48,565 $ (388,929) $ 100,462 Net Change in Fund Balance $ 375,251 $ 61,285 $ 18,077 $ 847,298 $ 1,301,911 Fundbalances- beginning $ 767,012 $ 286,796 $ 273,236 $ 6,642,835 $ 7,969,879 Fund balance - ending $ 1,142,263 $ 348,081 $ 291,313 $ 7,490,133 $ 9,271,790 See accompanying Notes to the Financial Statements 32 City of Kalispell, Montana Reconciliation of the Statement of Revenues, Expenditures. and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2011 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds $ 1,301,911 Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets: Capital assets purchased 1,944,635 - Depreciation expense (3,721,977) In the Statement of Activities, the loss or gain on the sale or disposal of capital assets is recognized. The fund financial statements recognize only the proceeds from the sale of these assets: - Gain on the sale of capital assets (87,337) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds: Donated capital assets 753,898 - Deferred impact fees recievable (beginning of year) - Deferred impact fees recievable (end of year) 2,198 - Deferred assessments recievable (beginning of year) (5,758,896) - Deferred assessments recievable (end of year) 5,985,610 Deferred loans recievable (beginning of year) (2,130,326) - Deferred loans recievable (end of year) 2,111,755 Increase in deferred loans recievable not recognized as revenue in Statement of Activities (56,254) The decrease in compensated absences is shown as a expense reduction in the Statement of Activities 63,626 Repayment of debt principal is an expenditures in the governmental funds, but the repayment reduces long- term debt in the Statement of Net Assets: - Long-term debt principal payments 1,059,505 Long term debt proceeds provide current financial resources to the governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Assets: - Proceeds from the sale of long-term debt (100,462) The increase in other post employment benefits is shown as an expense in the Statement of Activities (143,752) Internal service funds are used by management to chare the costs of certain activities, to individual funds. The net revenue of the internal service funds is reported with the governmental activities of the Government - Wide Statement of Activities net of the amounts allocated to business -type activities and depreciation expense. (10,899) In the Statement of Activities, the transfer of capital assets to a enterprise fund is recognized as an expense. The fund financial statements don't recognize the transfer because there is no flow of current financial resources: (112,574) Change in net assets - Statement of Activities $ 1,100,661 See accompanying Notes to the Financial Statements 33 IUVYJAIIOI OA RIN I a IM Water Fund — Accounts for the City's water utility operations, including water impact fees. Sewer Fund — Accounts for the City's sewer and storm water utility operations, including sewer and storm impact fees. I WI III 10IMMMMIJAWOM Data Processing Fund — used to account for the goods and services provided by the data processing department to other departments of the City on a cost -reimbursement basis. City of Kalispell, Montana Balance Sheet Proprietary Funds ,tune 30, 2011 Governmental Business -Type Activities - Enterprise Funds Activities Non -major Internal Service Water Sewer Enterprise Totals Funds ASSETS Current assets: Cash and investments $ 2,990,451 $ 2,034,783 $ 758,836 $ 5,784,070 $ 130,103 Taxes and assessments receivable, net - 52,724 64,365 117,089 - Accounts receivable - net 165,878 309,845 490 476,213 Contracts receivable 6,197 13,141 - 19,338 - Due from other governments - 105,079 85,702 190,781 - Prepaid expenses 473 - - 473 1,500 Inventories 91,491 91,491 Total current assets $ 3,254,490 $ 2,515,572 $ 909,393 $ 6,679,455 $ 131,603 Noncurrent assets: Restricted cash and investments $ 963,803 $ 4,950,592 $ - $ 5,914,395 $ - Capitalassets - land 103,263 248,063 1,347,868 1,699,194 - Capital assets - construction in progress 37,728 - 91,808 129,536 - Capital assets - depreciable, net 25,292,954 48,257,855 1,743,856 75,294,665 43,015 Total noncurrent assets $ 26,397,748 $ 53,456,510 $ 3,183,532 $ 83,037,790 $ 43,015 Total assets $ 29,652,238 $ 55,972,082 $ 4,092,925 $ 89,717,245 $ 174,618 LIABILITIES Current liabilities: Accounts payable 35,115 61,351 7,138 103,604 24,261 Accrued payroll 27,256 38,921 12,370 78,547 1,781 Current portion of long-term capital liabilities 280,000 797,000 - 1,077,000 - Current portion of compensated absences payable 13,193 20,841 5,216 39,250 - Other current liabilities 820 820 Total current liabilities $ 356,384 $ 918113 $ 24,724 $ 1,299,221 $ 26,042 Noncurrent liabilities: Noncurrent portion of long-term capital liabilities 3,158,000 14,175,000 - 17,333,000 - Noncurrent portion of compensated absences 76,265 101,377 58,135 235,777 4,094 Total noncurrent liabilities $ 3,234,265 $ 14,276,377 $ 58,135 $ 17,568,777 $ 4,094 Total liabilities $ 3,590,649 $ 15,194,490 $ 82,859 $ 18,867,998 $ 30,136 NET ASSETS Invested in capital assets, net of related debt $ 21,995,945 $ 33,533,918 $ 3,183,532 $ 58,713,395 $ 43,015 Restricted for capital projects 448,355 3,389,430 - 3,837,785 - Restrictedfordebtservice 515,449 1,371,162 - 1,886,611 - Restricted for other purposes - 190,000 - 190,000 - Unrestricted 3,101,840 2,293,082 826,534 6,221,456 101,467 Total net assets $ 26,061,589 $ 40,777,592 $ 4,010,066 $ 70,849,247 $ 144,482 Total liabilities and net assets $ 29,652,238 $ 55,972,082 $ 4,092,925 $ 89,717,245 $ 174,618 See accompanying Notes to the Financial Statements 34 City of Kalispell, Montana Statement of Revenues, Expenses, and Changes in Net Assets Proprietary Funds For the Fiscal Year Ended June 30, 2011 Governmental Business -Type Activities - Enterprise Funds Activities Non -major Internal Service Water Sewer Enterprise Totals Funds OPERATING REVENUES Charges for services $ 2,168,153 $ 3,274,532 $ 70,900 $ 5,513,585 $ 145,624 Miscellaneous revenues 128,441 21,981 - 150,422 163 Special assessments 827,507 805,613 1,633,120 Total operating revenues $ 2,296,594 $ 4,124,020 $ 876,513 $ 7,297127 $ 145,787 OPERATING EXPENSES Personal services $ 984,114 $ 1,442,273 $ 438,872 $ 2,865,259 $ 84,465 Supplies 84,716 100,208 61,191 246,115 34,737 Purchased services 323,267 741,277 88,702 1,153,246 172,576 Building materials 80,935 35,201 - 116,136 - Fixed charges 226,657 459,758 94,169 780,584 31,669 Depreciation 839,662 2,516,227 249,841 3,605,730 9,941 Total operating expenses $ 2,539,351 $ 5,294,944 $ 932,775 $ 8,767,070 $ 333,388 Operating income (loss) $ (242,757) $ (1,170,924) $ (56,262) $ (1,469943) $ (187,601) NON -OPERATING REVENUES (EXPENSES) Licenses/permits revenue 262,817 441,341 - 704,158 - Intergovernmental revenue 7,430 28,899 - 36,329 174,937 Interest revenue 55,354 84,474 24,079 163,907 1,765 Debt service interest expense (149,942) (587,924) (737,866) Total non -operating revenues (expenses) $ 175,659 $ (33,210) $ 24,079 $ 166,528 $ 176,702 Income (loss) before contributions and transfers $ (67,098) $ (1,204,134) $ (32,183) $ (1,303,415) $ (10,899) Capital contributions 134,322 126,374 - 260,696 - SPECIAL AND EXTRAORDINARY ITEMS Special item - (312,736) (312,736) Change in net assets $ (245,512) $ (1,077,760) $ (32,183) $ (1,355,455) $ (10,899) Net Assets - Beginning of the year $ 26,307,101 $ 41,855,352 $ 4,051,899 $ 72,214,352 $ 155,381 Restatements (9,650) (9,650) Net Asses - Beginning of the year - Restated $ 26,307,101 $ 41,855,352 $ 4,042,249 $ 72,204,702 $ 155,381 Net Assets - End of the year $ 26,061,589 $ 40,777,592 $ 4,010,066 $ 70,849,247 $ 144,482 See accompanying Notes to the Financial Statements 35 City of Kalispell, Montana Statement of Cash Flows Proprietary Funds Year Ended June 30, 2011 Governmental Business - Type Activities Activities Non -major Internal Service Water Sewer Enterprise Totals Fund Cash flows from operating activities: Cash received from customers $ 2,175,696 $ 3,222,987 $ 70,831 $ 5,469,514 $ 145,787 Cash received from assessments - 885,354 833,407 1,718,761 - Cash received from miscellaneous sources 127,621 21,981 - 149,602 - Cash payments for claims (717,678) (1,352,259) (243,838) (2,313,775) (222,876) Cash payments to employees (991,849) (1,472,869) (443,752) (2,908,470) (87,620) Net cash provided (used) by operating activities $ 593,790 $ 1,305,194 $ 216,648 $ 2,115,632 $ (164,709) Cash flows from capital and related financing activities: Principal paid on bonds, loans and advances $ (362.000) $ (769,000) $ - $ (1,131,000) $ - Interest paid on bonds, loans and advances (149,942) (587,924) - (737,866) - Acquisition and construction of capital assets (517,997) (52,811) - (570,808) (33,955) Proceeds from government grants 29,736 86,543 116,279 Net cash provided (used) by capital and related financing activities $ (1,000 203) $ (1,323,192) $ - $ (2,323,395) $ (33,955) Cash flows from non -capital financing activities: Intergovernmental revenue $ - $ 24,255 $ - $ 24,255 $ 174,937 Proceeds of licenses and permits- for non operating 251,620 428,200 - 679,820 - Acquisition of latecomers agreements rights (312,736) (312,736) Net cash provided (used) from non -capital financing activities $ (61,116) $ 452,455 $ - $ 391,339 $ 174,937 Cash flows from investing activities: Interest on investments $ 55,354 $ 84,474 $ 24,079 $ 163,907 $ 1,765 Net cash provided (used) by investing activities $ 55,354 $ 84,474 $ 24,079 $ 163.907 $ 1,765 Net increase (decrease) in cash and cash equivalents $ (412,175) $ 519,931 $ 240,727 $ 347,483 $ (21,962) Cash and cash equivalents at beginning 4,366.429 6,466,444 527,759 11,360,632 152,065 Restatements (9,650) (9,650) Cash and cash equivalents at end $ 3,954.254 $ 6,985,375 $ 758,836 $ 11,698,465 $ 130,103 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $ (242,757) $ (1,170,924) $ (56,262) $ (1,469,943) $ (187,601) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation 839,662 2,516,227 249,842 3,605,731 9,941 Bad Debt 1,640 - - 1,640 - Loss on Disposition of Asset 347 - _ 347 _ Changes in assets and liabilities: Accounts receivable- net 5,903 (51,545) (70) (45,712) - Increase in Hydrant Meter Deposits (820) - - (820) - Taxes and assessments receivable, net 17,793 (9,633) 3,160 - Prepaid expenses 354 827 - 1,191 0,5W) Increase Comp Abs (8,312) (32,897) (4,010) (45,219) (2,541) Decrease in due from County - 40,054 37,427 77,481 - Aecounts payable (2,804) (16,642) 224 (19,222) 17,606 Accrued payroll 577 2,301 (870) 2,008 (614) Net cash provided (used) by operating activities $ 593,790 $ 1,305,194 $ 216,648 $ 2,115,632 $ (164,709) The City received non cash contributions of land and infrastructure as follows: $134,322 $126374 $260,696 See accompanying notes to the financial statements 36 Agency Funds — used to account for assets held by the City as an agent for individuals, private organizations, other governments, and/or other funds. City of Kalispell, Montana Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2011 Cash and short-term investments Total assets LIABILITIES Due to others Total liabilities 101I H-II.XyDIIK` Agency Funds $ 143,026 $ 143,026 143,026 $ 143,026 See accompanying Notes to the Financial Statements 37