3. Management's Discussion and AnalysisMANAGEMENT'S DISCUSSION AND
ANALYSIS
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Kalispell, we offer readers of the City of Kalispell's financial statements
this narrative overview and analysis of the financial activities of the City of Kalispell for the fiscal year
ended June 30, 2014. We encourage readers to consider the information presented here in conjunction
with additional information that we have furnished in our letter of transmittal.
FINANCIAL HIGHLIGHTS
➢ The assets of the City of Kalispell exceeded its liabilities at the close of the recent fiscal year by
$161,870,822 (net position). Of this amount, $15,952,508 (unrestricted net position) may be used to
meet the government's ongoing obligations to citizens and creditors.
➢ Total net position increased by $2,875,607 over the prior fiscal year.
➢ As of June 30, the City's governmental funds reported combined ending fund balances of
$10,970,044, an increase of $1,040,842 over the prior year. Of this amount, $2,024,152 is available
for spending at the government's discretion (committed, assigned, and unassigned fund balances).
➢ The City's total debt, excluding compensated absences, decreased by $958,405 (4%) during fiscal
year 2014; the result of minimal new borrowing.
AN OVERVIEW OF THE FINANCIAL STATEMENTS
There are three main components to the City of Kalispell's financial statements: 1) government -wide
financial statements, 2) fund financial statements, and 3) notes to the financial statements. Other
supplementary material is included in this report in addition to the basic financial statements themselves.
The City of Kalispell intends for this discussion and analysis to be used in conjunction with the basic
financial statements, and other material, as an introduction and also as a means to help the user better
understand the information.
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad overview of the
City of Kalispell's finances. The way information is presented in these statements is comparable to how
the financial information of a private -sector business would be presented.
The statement of net position presents information on all of the City of Kalispell's assets and liabilities.
The difference between these two (assets minus liabilities) is reported as net position. Net position can be
a useful tool in evaluating the financial health of an entity. A substantial decrease in net position may be
a sign of deteriorating financial outlook.
The change in net position during the most recent fiscal period is presented by the statement of activities.
The statement of activities reports changes in net position at the time the event takes place without regard
to the corresponding cash transaction. This results in some revenues and expenses being reported in this
statement that will not result in cash flow until a future fiscal period. Some examples of this would be
uncollected but earned taxes and earned leave benefits.
The government -wide financial statements of the City of Kalispell are segregated to distinguish between
functions supported predominantly by taxes and intergovernmental revenues (governmental activities)
and those that are intended to recover the majority of their costs through user fees and charges for services
(business -type activities). The governmental activities of the City of Kalispell include general
government/administration, public safety, public works, parks and recreation, and community
13
development. The business -type activities of the City of Kalispell include water distribution, sewer
collection and treatment, solid waste collection, and an airport.
The government -wide financial statements include, in addition to the primary government described in
the above paragraph, a legally separate Business Improvement District and a legally separate Tourism
Business Improvement District. The financial information of these component units is reported separately
on the Government -wide financial statements.
Fund Financial Statements
The City of Kalispell, like most other governmental entities, uses fund accounting. Funds are set up to
account for specific activities or objectives of the government. Funds also aid in ensuring compliance
with legal requirements. The City of Kalispell categorizes its funds as either governmental, proprietary,
or fiduciary.
➢ Governmental funds correspond with the functions reported as governmental activities in the
government -wide financial statements. Governmental fund financial statements, by focusing on
near -term inflows and outflows of spendable resources, may be more useful in evaluating a
government's short-term fiscal health than the government -wide financial statements.
A reconciliation has been prepared to help users more easily compare the governmental fund
balance sheet to the government -wide statement of net position and the governmental fund
statement of revenues, expenditures, and changes in fund balance to the government -wide
statement of activities. These reconciliations can be useful in contrasting, comparing and
understanding the long-term impact (government -wide statements) of near -term decisions
(governmental fund statements).
➢ The City of Kalispell maintains numerous individual governmental funds. The governmental
fund balance sheet and statement of revenues, expenditures, and changes in fund balance present
information separately only for funds which are considered major. Major funds are determined
by a formula which considers the percentage of total governmental assets, liabilities, revenues,
and expenditures contained in each individual fund. The City of Kalispell has four major
governmental funds; the General Fund (always a major fund), the Street Maintenance (special
revenue) Fund, the Community Development Loan Revolving (special revenue) Fund, and the
Special Improvement District 344 (debt service) Fund. All non -major funds are presented as a
group.
The City of Kalispell adopts an annual appropriated budget for its funds. A budgetary
comparison statement has been provided for the general fund and the major special revenue
funds to demonstrate compliance with this budget.
➢ The City of Kalispell maintains two different types of proprietary funds. Enterprise funds and
internal service funds. Enterprise funds are used to report the same functions presented as
business -type activities in the government -wide financial statements. Water, sewer, solid waste,
and the airport make up the City of Kalispell's enterprise funds. The City of Kalispell uses two
internal service funds to accumulate and allocate its information technology transactions and
central garage transactions internally among its various functions. Under the old reporting model
internal service funds were reported as proprietary funds because they recovered most of their
cost through user fees from other funds. Under the new model these funds are eliminated
through an allocation process and categorized as either a governmental or business -type activity.
14
Because the City of Kalispell's internal service funds benefit governmental more so than
business -type functions, it has been included within the governmental activities in the
government -wide financial statements.
➢ Information in the proprietary fund financial statements is of the same type as that provided in
the government -wide financial statements, however, it is more detailed. Individual fund data is
provided for the water fund, and the sewer fund, classified as major funds. Individual data is not
required for the airport fund or the solid waste fund, because they are not classified as major
funds.
➢ The City of Kalispell maintains three funds to account for resources held by the government for
the benefit of outside parties. These fiduciary funds are not reflected in the government -wide
financial statements because the resources are not available to support the City of Kalispell's
own programs. The City of Kalispell must ensure that the assets reported in these funds are used
for their intended purpose. The accounting method used for fiduciary funds is similar to that
used for proprietary funds.
Notes to the Financial Statements
The information contained in the government -wide and fund financial statements is meant to be used in
concurrence with the notes to the financial statements. The notes present further detail of the data
provided by these statements.
Other Information
All required supplementary information other than GASB Statement 45 — Other Postemployment Benefits
(OPEB) schedules and the general and major special revenue funds budgetary comparison schedules is
included in the basic financial statements or the accompanying notes. Therefore, the only information
presented in the section for required supplementary information is the OPEB information and required
budgetary comparison schedules on pages 74 - 77.
The combining statements for non -major governmental and non -major proprietary funds are presented
immediately following the required supplementary information section. Combining and individual fund
statements and schedules can be found beginning on page 78 of this report.
ANALYZING THE CITY AS A WHOLE
As mentioned prior, net position can be an important indicator of an entities financial well-being. For the
period ending June 30, 2014, the City of Kalispell's assets exceeded liabilities by $161,870,822.
The largest portion of the City's net position ($129,750,383 or 81%) reflects its investment in capital
assets (e.g., land, buildings, machinery and equipment, infrastructure); less any related debt used to
acquire those assets that is still outstanding. The City uses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending. Although the City's investment
in capital assets is reported net of related debt, it should be noted that the resources needed to repay this
debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate
these liabilities.
15
A summary of net position is shown in the following table.
City of Kalispell -Net Position
Governmental
Business -type
Activities
Activities
Change
Change
FYI
FY13
Inc(Dec)FYI
FY13
Inc(Dec)
Current and other assets
$
20,059,734
$ 18,227,470
$ 1,832,264 $
16,800,092
$ 14,907,429
$ 1,892,663
Capital assets
81,349,530
83,322,670
(1,973,140)
73,856,422
73,437,357
419,065
Total assets
$
101,409,264
$ 101,550,140
$ (140,876) $
90,656,514
$ 88,344,786
$ 2,311,728
Long-term debt outstanding
$
11,532,336
$ 12,391,631
$ (859,295) $
16,109,613
$ 16,201,715
$ (92,102)
Other liabilities
2,048,179
1,688,022
360,157
504,828
618,343
(113,515)
Total liabilities
$
13,580,515
$ 14,079,653
$ (499,138) $
16,614,441
$ 16,820,058
$ (205,617)
Net position:
Net investment in capital assets $ 71,734,631 $ 72,872,788 $ (1,138,157) $ 58,015,752 $ 56,139,329 $ 1,876,423
Restricted 8,577,197 7,745,994 831,203 7,590,734 6,735,034 855,700
Unrestricted (deficit) 7,516,921 6,851,705 665,216 8,435,587 8,650,365 (214,778)
Total net position $ 87,828,749 $ 87,470,487 $ 358,262 $ 74,042,073 $ 71,524,728 $ 2,517,345
An additional portion of the City's net position ($16,167,931 or 10%) represents resources that are subject
to external restrictions on how they may be used. The remaining balance of unrestricted net position
($15,952,508 or 9%) may be used to meet the City's ongoing obligations to citizens and creditors.
At June 30, the City is able to report positive balances in all three categories of net position, both for the
City as a whole, as well as for its separate governmental and business -type activities.
Net position of the City increased by just about 2% for fiscal year 2014 in comparison to fiscal year 2013
($161.9 million compared to $161.2 million).
City of Kalispell - Changes in Net Position
Revenues
Program revenues (by major source):
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues (by major source):
Property Taxes for general purposes
Video poker apportionment
Miscellaneous
Interestlinvestment earnings
State entitlement
Gas Tax
Total revenues
Program expenses
General government
Public safety
Public works
Parks and recreation
Community development
Debt service - interest
Airport
Water
Sewer
Solid Waste
Total expenses
Excess (deficiency) before
special items and transfers
Transfers - net
Increase (decrease) in net position
Governmental Business -type
Activities Activities
Change Change
FYI FY13 Inc(Dec FYI FY13 Inc(Dec)
5,870,315 $ 5,681,989 $ 188,326 $ 8,983,515 $ 8,694,254 $ 289,261
2,636,321 2,688,746 (52,425) 8,372 8,354 18
1,519,825 1,378,649 141,176 2,137,977 1,012,027 1,125,950
8,739,807 8,092,684 647,123
60,450 59,801 649
124,331 91,261 33,070 - -
48,193 71,573 (23,380) 83,224 102,311 (19,087)
2,835,264 2,657,356 177,908 - -
364,563 360,650 3,913 - - -
$ 22,199,069 $ 21,082,709 $ 1,116,360 $ 11,213,088 $ 9,816,946 $ 1,396,142
5,688,135 $ 6,709,524 $ (1,021,389)
9,269,827 9,293,138 (23,311)
2,573,627 3,074,630 (501,003)
2,123,237 1,991,585 131,652
1,601,170 3,616,337 (2,015,167)
357,857 390,770 (32,913)
177,751 225,974 (48,223)
2,625,046 2,660,877 (35,831)
5,114,591 5,255,654 (141,063)
$ 21,613,853 $ 25,075,984 $ (3,462,131) $ 8,730,038 $ 8,926,472 $ (196,434)
585,216 (3,993,275) 4,578,491 2,483,050 890,474 1,592,576
(218,728) (358,169) 139,441 218,728 358,169 (139,441)
$ 366,488 $ (4,351,444) $ 4,717,932 $ 2,701,778 $ 1,248,643 $ 1,453,135
16
Governmental Activities. Governmental activities in fiscal year 2014 increased the City's net position
by $366,488. Specifically, revenues increased about 5%, and expenses decreased 14%. The key elements
of the overall net position change were:
➢ Total revenue increased slightly ($1,116,360 or 5.3%). Seventy-four percent ($825,031) of this
increase is property tax revenue ($647,123) and entitlement share payment ($177,908).
➢ Governmental activities expenses decreased ($3,462,131). Ninety-nine percent ($3,412,163) of
this total decrease is due to a couple of major one-time expenditures in last fiscal year, the
acquisition of the permanent easement on the Kidsports property for ($2,266,336) and a loss from
the transfer of the Gateway West Mall (Teletech) property of ($1,145,827).
➢ In fiscal year 2014 the City's central garage was reclassified as an internal service fund. This
resulted in governmental -activities public works expenses decreasing ($501,003), offsetting some
increases in other programs.
➢ Debt service interest is now reported, on the statement of activities, as a separate line item rather
than being allocated to individual functions.
The table and charts below and on the following page help illustrate the information presented above.
The table and bar chart present the cost and net cost (total cost less revenues generated by the
activity) of each of the City's largest programs; General Government (administration), Public Safety
(police and fire), Public Works (streets, light maintenance and signs and signals), Culture and
Recreation (parks, urban forestry, pool, etc.), and Community Development.
Net cost shows the financial burden placed on City taxpayers by each of these functions. The pie
chart illustrates the different revenue sources for the City's governmental activities and how much
each source contributes.
Governmental Activities
by function (in Millions)
Total Cost Net Cost
of Services of Services
FY14 FY13 FY14 FY13
Public Safety $ 9.3 $ 9.3 $ 5.8 $ 5.1
Public Works 2.6 3.1 - 0.3
Parks and Recreation 2.1 2.0 1.2 1.2
Conmmity Development 1.6 3.6 - 2.4
General Government 5.7 6.7 4.2 5.9
Debt Service 0.4 0.4 0.4 0.4
Totals $ 21.7 $ 25.1 $ 11.6 $ 15.3
17
Expenses and Program Revenues - Governmental Activities for fiscal year 2014
10000000
9000000
8000000
7000000
6000000
O
Q
5000000
EA
4000000
3000000
2000000
1000000
gen gov't pub safety pub works parks/rec comm dev
18
Activity
Governmental activities percentage of revenue by source:
■ Other
2%
■ State entitlement
13%
■ Property to
40%
wgesfor services
26%
Operating
grants/contribu
12%
■ Capital
grants/contributions
7%
Business -type Activities. Business -type activities increased the City of Kalispell's net position by
$2,701,778. The factors leading to this result were:
➢ Revenues of the City's business -type activities increased $1,396,142. Capital grants and
contributions revenue of business -type activities increased over 100% from $1,012,027 to
$2,137,977, attributable to the construction industry picking up and related contributed capital
(impact fees and infrastructure contributions).
➢ Expenses decreased ($196,434) or about 3% from the prior fiscal year.
The following charts help illustrate the information presented above related to business -type activities net
position.
7000000
6000000
5000000
-r=4000000
D
0
Q3000000
va
2000000
1000000
0
Expenses and Program Revenues- Business -type Activities forfiscal year 2014
airport water sewer so lid waste
Activity
19
Business -type activities percentage of revenue by source:
■ Investment/other
Earnings
3%
s for servi ces
78%
ANALYZING THE CITY'S INDIVIDUAL FUNDS
Governmental Funds
The focus of the City of Kalispell's governmental funds is to provide information on near -term inflows,
outflows, and balances of spendable resources (fund balance). Spendable fund balance (restricted,
committed, assigned, and unassigned) is a useful tool when assessing the net resources a government has
available to spend at the end of a fiscal period.
At the end of fiscal year 2014, the City of Kalispell's governmental funds reported combined ending fund
balances of $10,970,044, an increase of $1,043,893 in comparison with the prior fiscal year. Of the
ending fund balance, $8,736,417 (80%) is restricted, indicating that constraints placed on the use of
resources are externally imposed, or imposed by law because: assets are limited by specific grant
agreements ($995,966); assets are limited by specific voter approved bonds ($571,659); assets are limited
by specific special assessments ($1,564,776); assets are limited by state law ($5,594,627); assets are
limited by contribution restrictions ($9,388). $2,024,152 or 19% is available for spending at the City's
discretion. Following is a short analysis of each major governmental fund.
The general fund is the chief operating fund of the City of Kalispell. At the end of fiscal year 2014
unassigned fund balance of the general fund was $2,107,411, while total fund balance was $2,409,409.
The fund balance increased $259,126 during fiscal year 2014.
20
Revenues and other financing sources and expenditures and other financing uses changed very little; less
than 1%. At the end of fiscal year 2014, unassigned fund balance represents 21% of total general fund
expenditures, a 4% improvement from fiscal year 2013. The general fund balance of $2,409,409 is non -
spendable and assigned as follows:
GENERAL FUND BALANCE -TOTAL $ 2,409,409
NONSPENDABLE
Long-term recievables $ 13,003
Prepaids 163,547
TOTAL NONSPENDABLE $ 176,550
ASSIGNMENTS
Capital Equipment $ 101,906
Downtown Parking 23,542
TOTAL ASSIGNMENTS $ 125,448
UNASSIGNED $ 2,107,411
The Street Maintenance fund is a special revenue fund established to account for the maintenance,
construction, equipment and other costs incurred in the maintenance of the City's streets. Assessments on
properties within the City of Kalispell boundaries are the main source of this funds revenue. At June 30,
2014, the fund balance of this fund was $1,287,118, a $15,061 increase from the prior fiscal year.
The Community Development Loan Revolving fund is a special revenue fund used to make low interest
housing and commercial loans within the City of Kalispell. Principal and interest from these loans or the
purchase and subsequent resale of a fixed asset are the only sources of revenue in this fund. At June 30,
2014, the fund balance of this fund was $434,414, a 16% increase from fiscal year 2013. For fiscal year
2014, the Community Development Loan Revolving fund made no new loans.
Special Improvement District 344 (debt service) fund was established by the City of Kalispell in fiscal
year 2006 for the purpose of servicing the debt attributable to the construction of the infrastructure needed
in the industrial/commercial development known as Old School Station.
Fund balance at June 30, 2014, for SID 344 was-$208,707, a decrease of 568% from fiscal year 2013.
This extraordinary reduction in fund balance is the result of the owner of many properties within the
district being in excess of 5 years delinquent on the taxes for the properties.
Proprietary Funds
The City of Kalispell's proprietary funds financial statements provide the same type of information found
in the government -wide financial statements, but in more detail. Unrestricted net position and the total
growth in net position of the proprietary funds by fund are:
Proprietary Fund Net Position
j
% of
Unrestricted
Funds total
Change in
% Change in
Net Position
Net Position Net Position
Net Position
Water
$ 4,016,081
14% $
1,525,966
6%
Sewer
3,483,534
8%
1,130,756
3%
Other
935,972
24%
45,056
1%
Total
$ 8,435,587
46% $
2,701,778
10%
21
For the discussion regarding major changes in net position of the proprietary funds see the explanation
above in the business -type activities of the statement of activities.
GENERAL FUND BUDGETARY HIGHLIGHTS
The City of Kalispell's general fund expenditures budget for fiscal year 2014 was $10,600,539. Actual
expenditures for the year were $10,312,944, a favorable variance of $287,595. Actual public safety
expenditures were $190,504 less than budgeted, due to personal services savings. Actual general
government expenditures were $91,173 less than budgeted, the result of most general government
departments making efforts to hold down expenditures where possible.
Actual revenues of the general fund were $10,298,801, $4,281 less than the budgeted amount of
$10,303,082. Taxes and assessments revenue in excess of the budgeted amount by $118,468 was more
than offset by small decreases in most other categories.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of 2014, the City of Kalispell has $155,123,144, net of depreciation, invested in a broad range
of capital assets, including police and fire equipment, streets, buildings, land, park facilities, garbage
collection equipment, and water and sewer lines.
CITY OF KALISPELL'S CAPITAL ASSETS
(NET OF DEPRECIATION)
Governmental Bus ines s-type Total
Activities Activities
2014 2013 2014 2013 2014 2013
Land
$ 2,395,299
$ 2,395,299
$ 1,701,888 $
1,701,888 $
4,097,187 $
4,097,187
Buildings
9,869,926
10,461,053
53,428
62,784
9,923,354
10,523,837
hnprovements (not buildings)
8,563,405
9,029,782
8,563,405
9,029,782
Machinery and equipment
3,801,713
3,678,116
673,964
306,285
4,475,677
3,984,401
Infrastructure
56,614,224
57,720,089
56,614,224
57,720,089
Construction in progress
22,155
38,331
77,811
772,554
99,966
810,885
Source ofsupply
3,856,681
3,849,983
3,856,681
3,849,983
Pumping plant
1,961,419
2,073,864
1,961,419
2,073,864
Treatment plant
20,059,920
19,692,830
20,059,920
19,692,830
Transmission and distnbution
33,903,460
33,747,465
33,903,460
33,747,465
General plant
1,569,245
1,694,840
1,569,245
1,694,840
Storm sewer system
9,998,606
9,534,864
9,998,606
9,534,864
Total
$ 81,266,722
$ 83,322,670
$ 73,856,422 $
73,437,357 $
155,123,144 $
156,760,027
Major Governmental funds capital asset events during the fiscal year 2014 included the following:
➢ Continued work on the Woodland Connector Trails. Fiscal year 2014 construction cost was $164,050
which is 87% paid by a federal grant.
➢ Purchased (4) police department vehicles at a cost of $119,726.
➢ Used Montana Board of Investment funding to purchase (2) dump trucks for the street department,
and an aerial lift truck for the light maintenance department.
➢ Received a Montana Air and Congestion Initiative (MACI) matching grant for a flush truck valued at
$174,533. The City's shared cost was less than 13%.
➢ Completed the purchase of a hazardous materials trailer tow vehicle through the use of a U.S.
Department of Homeland Security grant (Assistance for Firefighters Grant). Fiscal year 2014 cost,
100% federal grant paid, equaled $109,178.
22
➢ Paved 7 alleys. Replaced 1,510 linear feet (5 blocks) of sidewalks.
➢ A developer donated a street valued at $904,631.
➢ Disposed equipment with a cost basis of $255,228.
Major Business -type funds capital asset events during the fiscal year 2014 included the following:
➢ Made lower zone water reservoir improvements costing $68,303.
➢ Made Improvements to the South Woodland Drive water system valued at $282,447.
➢ A water distribution service truck was purchased for $26,511.
➢ Developer's contributed 31 fire hydrants valued at $111,211.
➢ 9,530 linear feet of new water main valued at $451,399 was installed and contributed to the City by
developers.
➢ The water department installed 497 new meters, including 113 new domestic meters of various sizes.
➢ Completed project replacing water line on 2nd Ave WN, total project cost was $164,277.
➢ Water and sewer mains were relocated and upsized to accommodate the Highway 93 Bypass
construction. City's cost was $67,743. Montana Department of Transportation contributed the
balance of $160,546.
➢ Developer's contributed 3,055 linear feet of new sanitary sewer main valued at $67,519 and a lift
station with a value of $46,952.
➢ Installed roof liners on two buildings in the waste water treatment plant complex at a total cost of
$112,760.
➢ Completed the primary digester lid project. Fiscal year 2014 cost for construction was $770,160.
Total project cost was $1,166,304.
➢ Completed the "Willows" storm water project. Total cost of project equaled $315,680. Partially
funded by a SID. Business -type (sewer fund) capital contributed from governmental (capital project)
fund was $218,728.
➢ Developer's contributed 294 linear feet of new storm sewer main valued at $89,460.
➢ Purchased a Vactor vacuum truck for the storm sewer fund at a cost of $327,064.
➢ Purchased 2 new solid waste trucks for $451,757. Used Montana Board of Investment financing
$172,988 for the rear -loader truck and purchased the side -arm truck with replacement funds.
➢ Replaced or abandoned water and sewer transmission and distribution assets with a cost basis of
approximately $110,000.
Additional information on capital assets can be found in the notes of the basic financial statements (Note
D. Capital Assets pages 50-53).
Debt
At the end of fiscal year 2014, the City of Kalispell had total long-term debt outstanding of $26,076,560.
Of this amount, $3,255,000 comprises debt backed by the full faith and credit of the government and
$2,145,000 represents bonds secured solely by specific revenue sources (i.e., revenue bonds). The
remainder consists of $14,932,682 outstanding on State Revolving Fund loans for construction/expansion
of the wastewater treatment plant, the extension of sewer lines south on Highway 93, and the construction
of a water storage facility and the related distribution/supply system. There is also $3,392,922 of special
assessment debt for which the City of Kalispell is liable in the event of default by the property owners
subject to the assessment, and $2,350,956 of loans for the purchase of other property and equipment.
23
CITY OF KALISPELL'S OUTSTANDING DEBT
Governmental Business -type Total
Activities Activities
2014 2013 2014 2013 2014 2013
General obligation bonds $ 3,255,000 $ 3,700,000 $ 3,255,000 $ 3,700,000
Revenue/Urban Renewal bonds 1,410,000 1,558,000 735,000 795,000 2,145,000 2,353,000
SRF loans 14,932,682 15,143,483 14,932,682 15,143,483
Assessments 3,392,922 3,457,647 3,392,922 3,457,647
Contract debt/loans 2,177,968 2,380,835 172,988 2,350,956 2,380,835
Total $ 10,235,890 $ 11,096,482 $ 15,840,670 $ 15,938,483 $ 26,076,560 $ 27,034,965
Other obligations of the City of Kalispell include accrued vacation pay and sick leave (compensated
absences). More detailed information about the City's long-term liabilities is presented in the notes to
the financial statements (Note E. Long -Term Debt pages 54-60).
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The City's elected and appointed officials considered many factors when setting the fiscal year 2015
budget, including but not limited to, tax rates and fees that will be charged by the business -type activities.
Some other considerations include: Capital needs; inflation; status of the City's agreements with the
bargaining units; local economics, including the citizen's ability to pay. In some instances, City data is
unavailable and Flathead County data was used.
Unemployment Data
24
Per Capita Personal Income
$50,000
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
Flathead County State of Montana United States
■ 2011
■ 2012
■ 2013
Source: U.S. Department of Labor and Industry.
➢ The City of Kalispell's unemployment rate (preliminary/unadjusted) stood at 5.1% as of October of
2014, which is an improvement of 33% over the December 2013 rate of 7.6%. This is worse than the
State's unemployment rate of 3.8%, but better than the Nation's rate of 5.9% for the same month and
year.
➢ Applications for building permits and other internal indicators of growth, such as impact fee
revenues, improved in fiscal year 2014. Short-term future forecast are more optimistic than in the
recent past.
➢ The rapid population growth which Flathead County and Northwest Montana experienced for many
years remains low, but has improved and is considered healthy growth.
➢ Energy costs continue to be volatile.
➢ Cost of labor, health, liability, and property insurance continue to rise.
During fiscal year 2014, fund balance in the General Fund increased to $2,409,409. The City of Kalispell
has not appropriated any of this amount for spending in the 2015 fiscal year budget. The City has
determined that preserving this available fund balance/reserve is necessary.
The City Council approved the following rate increases for fiscal year 2015:
➢ Governmental:
o All 4 categories of street maintenance assessments were increased. Category 1 & 2
maximums were not increased. These changes will result in an estimated revenue
increase for the street maintenance fund of $173,500.
➢ Business -type:
o Sewer bi-monthly administrative (base) charge increased from $15.00 to $16.88.
25
Request for Information
This financial report is designed to provide a general overview of the City of Kalispell's finances for all
those with an interest in the government's finances. Questions concerning any of the information
provided in this report or requests for additional financial information should be addressed to the City of
Kalispell, Finance Director, P.O. Box 1997, Kalispell, MT 59903-1997.