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4. Government-Wide Financial StatementsGOVERNMENT - WIDE FINANCIAL STATEMENTS ASSETS Current assets: Cash and investments Taxes and assessments receivable, net Internal balances Accounts receivable - net Notes and loans receivable Contracts receivable Due from other governments Prepaids Inventories Other debits Total current assets Noncurrent assets Restricted cash and investments Deferred assessments recievable Long term portion of loans receivable Capital assets - land Capital assets - construction in progress Capital assets - depreciable, net Other debits 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 credits Total current liabilities Noncurrent liabilities Noncurrent portion of long-term liabilities Noncurrent portion of long-term capital liabilities Noncurrent portion of compensated absences Other credits Other post employment benefits Total noncurrent liabilities Total liabilities NET POSITION Net investment in capital assets Restricted for capital projects Restricted for debt service Restricted for special projects Unrestricted Total net position See accompanying Notes to the Financial Statements City of Kalispell, Montana Statement of Net Position June 30, 2014 Component Component Units Units Governmental Business -type Downtown Tourism Activities Activities Total BID BID $ 9,622,853 $ 8,197,605 $ 17,820,458 $ 73,276 $ 184,537 2,254,856 55,258 2,310,114 2,405 264,795 320,444 585,239 112,125 - 112,125 84,877 54,072 138,949 1,188,269 189,189 1,377,458 10,404 200,977 36,238 237,215 - 164,939 164,939 14,258 14,258 13,743,010 9,017,745 22,760,755 86,085 184,537 828,138 7,782,347 8,610,485 3,284,431 - 3,284,431 2,204,155 - 2,204,155 2,395,299 1,701,888 4,097,187 10,905 77,811 88,716 78,943,326 72,076,723 151,020,049 12,817 87,666,254 81,638,769 169,305,023 - 12,817 101,409,264 90,656,514 192,065,778 86,085 197,354 418,681 191,760 610,441 5,863 28,707 12,832 5,045 17,877 319,421 57,745 377,166 25,878 - 25,878 1,291,318 1,269,833 2,561,151 947,523 185,815 1,133,338 7,345 7,345 3,015,653 1,717,543 4,733,196 5,863 28,707 595,101 - 595,101 8,323,581 14,570,837 22,894,418 348,935 83,128 432,063 21,851 - 21,851 1,275,394 242,933 1,518,327 10,564,862 14,896,898 25,461,760 - - 13,580,515 16,614,441 30,194,956 5,863 28,707 71,734,631 58,015,752 129,750,383 - 6,070,163 6,070,163 362,952 1,520,571 1,883,523 8,214,245 - 8,214,245 7,516,921 8,435,587 15,952,508 80,222 168,647 $ 87,828,749 $ 74,042,073 $ 161,870,822 $ 80,222 $ 168,647 27 N co City of Kalispell, Montana Statement of Activities For the Fiscal Year Ended June 30, 2014 Net (Expenses) Revenues and Changes in Net Position Program Revenues Primary Government Component Unit Component Vol Indirect Operating Capital Business - Expense Charges for Grants and Grants and Governmental type Downtown Tourism Functions/Programs Expenses Allocation Services Contributions Contributions Activities Activities Total BID BID Primary government: Governmental activities: General government $ 5,686,941 $ 1,194 $ 628,729 $ 4,608 $ 904,631 $ (4,150,167) $ - $ (4,150,167) Public safety 9,083,478 186,349 2,033,870 1,332,674 105,820 (5,797,463) - (5,797,463) Public works 2,293,356 280,271 2,172,122 - 356,996 (44,509) - (44,509) Parks and recreation 2,063,722 59,515 752,460 21,750 152,378 (1,196,649) - (1,196,649) Community development 1,590,526 10,644 283,134 1,277,289 - (40,747) - (40,747) Debt service -interest 357,857 (357,857) (357,857) Total governmental activities 21,075,880 537,973 5,870,315 2,636,321 1,519,825 (11,587,392) (11,587,392) Business -type activities: Airport 169,775 7,976 78,657 - - - (99,094) (99,094) Water 2,454,941 170,105 2,985,959 - 1,137,384 - 1,498,297 1,498,297 Sewer 4,793,675 320,916 4,967,223 8,372 1,000,593 - 861,597 861,597 Solid Waste 728,438 84,212 951,676 139,026 139,026 Total business -type activities 8,146,829 583,209 8,983,515 8,372 2,137,977 2,399,826 2,399,826 Total primary government $ 29,222,709 S 1,121,182 $ 14,853,830 $ 2,644,693 $ 3,657,802 $ (11,597,392) $ 2,399,926 S (9,187,566) Component units: Downtown BID $ 140,682 $ 3,416 $ 87,485 $ - $ - $ (56,613) Tourism BID 493,304 5,000 517,482 - - $ 19,178 Total component units $ 633,996 $ 8,416 $ 604,967 $ - $ - i $ (56,613) $ 19,178 General Revenues: Property taxes for general purposes $ 8,739,807 $ - $ 8,739,807 $ - $ - Video poker apportionment 60,450 - 60,450 - - mseellaneous 124,331 - 124,331 16,210 - InteresUinvestment earnings 48,193 83,224 131,417 449 158 State entitlement 2,835,264 - 2,835,264 - - Gas Tax 364,563 - 364,563 - - Transfers - net (218,728) 218,728 Total general revenues, special items and transfers 11,953,880 301,952 12,255,832 16,659 158 Change in net position 366,488 2,701,778 3,068,266 (39,954) 19,336 Net position - beginning 87,470,487 71,524,728 158,995,215 120,176 164,796 Restatements (8,226) (184,433) (192,659) (15,485) Net position - beginning - restated 87,462,261 71,340,295 158,802,556 120,176 149,311 See accompanying Notes to the Financial Statements Net position - end $ 87,828,749 $ 74,042,073 S 161,870,922 $ 80,222 $ 168,647 GOVERNMENTAL FUND FINANCIAL STATEMENTS MAJOR GOVERNMENTAL FUNDS General Fund - this is the City's primary operating fund and accounts for the financial operations of the City not accounted for in any other fund. Principal sources of revenue are property taxes, state and local shared revenue, charges for services, and fines and forfeitures. Principal expenditures are for public safety. Street Maintenance - Accounts for special assessment revenues levied, received, and expended to keep streets clean, safe, and driveable. 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. City of Kalispell, Montana Balance Sheet Governmental Funds June30,2014 CD Other Total STREET REVOLVING Governmental Governmental General Fund MAINTENANCE LOAN SID 344 Funds Foods ASSETS Cash and investments $ 1,940,132 $ 1,213,980 $ 434,414 $ - $ 5,776,171 $ 9,364,697 Taxes and assessments receivable, net 743,100 88,497 - 3,542,271 1,165,419 5,539,287 Accounts receivable - net - - - - 264,795 264,795 Notes and loans receivable - - 1,718,991 - 597,289 2,316,280 Contracts receivable 41,290 - - - - 41,290 Due from other funds 45,000 - - - 208,707 253,707 Due from other governments 486,358 212,427 - - 489,484 1,188,269 Prepaids 163,547 11,556 - - 21,369 196,472 Other debits 13,003 - - - 1,255 14,258 Restricted assets: Restricted cash and investments 828,138 828,138 Total assets $ 3,432,430 $ 1,526,460 $ 2,153,405 $ 3,542,271 $ 9,352,627 $ 20,007,193 LIABILITIES Accounts payable $ 64,311 $ 122,435 $ - $ - $ 140,405 $ 327,151 Retainage - 9,665 - - 3,167 12,832 Accrued payroll 194,045 18,745 - - 100,168 312,958 Due to other funds - - - 208,707 45,000 253,707 Other credits 21,565 286 21,851 Total liabilities 279,921 150,845 208,707 289,026 928,499 Deferred inflows of resources Unavailable revenue - deferred accounts receivable - - - - 253,083 253,083 Unavailable revenue - deferred loans - - 1,718,991 - 597,289 2,316,280 Unavailable revenue - deferred taxes and assessments 743,100 88,497 3,542,271 1,165,419 5,539,287 Total deferred inflows ofresources 743,100 88,497 1,718,991 3,542,271 2,015,791 8,108,650 FUND BALANCES Nonspendable - not in spendable form: Long-term recievables 13,003 - - - - 13,003 Prepaids 163,547 11,556 - - 21,369 196,472 Restricted: General Government - - - - 41,054 41,054 Public Safety - - - - 930,531 930,531 Public Works - 1,275,562 - - 604,793 1,880,355 Culture and Recreation - - - - 634,672 634,672 Community Development - - 434,414 - 4,243,732 4,678,146 Debt Service - - - - 571,659 571,659 Unrestricted Fund Balances: Assigned: Capital Equipment 101,906 - - - - 101,906 Parking 23,542 - - - - 23,542 Unassigned fund balance 2,107,411 (208,707) 1,898,704 Total fund balance 2,409,409 1,287,118 434,414 (208,707) 7,047,810 10,970,044 Total liabilities and fund balance $ 3,432,430 $ 1,526,460 $ 2,153,405 $ 3,542,271 $ 9,352,627 $ 20,007,193 See accompanying Notes to the Financial Statements 29 City of Kalispell, Montana Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Positon June 30, 2014 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 position 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 Taxes, assessments and accounts receivable will be collected this year, but are not available soon enough to pay for the current period's expenditures, and therefore are deferred in the funds. - current portion - noncurrent portion - ambulance Loans recievable that will be collected at some future date that are recognized as revenues on the statement of activities. - current portion - noncurrent portion Total net position - governmental activities See accompanying Notes to the Financial Statements $ 10,970,044 81,266,723 267,760 (11,509,034) (1,275,394) 2,254,856 3,284,431 253,083 112,125 2,204,155 $ 87,828,749 City of Kalispell, Montana Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2014 CD Other Total STREET REVOLVING Governmental Governmental General Fund MAINTENANCE LOAN SID344 Funds Funds REVENUES Taxes and assessments $ 5,246,868 $ - $ - $ 83,160 $ 3,405,118 $ 8,735,146 Licenses and permits 70,698 - - - 352,656 423,354 Intergovernmental 3,694,688 - - - 2,710,567 6,405,255 Charges for services 682,400 1,930,224 89,888 - 1,683,800 4,386,312 Fines and forfeitures 571,741 - - - 325 572,066 Miscellaneous 25,186 59,010 - - 100,076 194,272 Investment earnings 7,220 4,539 3,273 33,161 48,193 Total revenues 10,298,801 1,993,773 93,161 83,160 8,285,703 20,754,598 EXPENDITURES General government 2,883,679 - - - 9,653 2,893,332 Public safety 7,116,246 - - - 1,638,836 8,755,082 Public works 35,838 1,777,188 - - 563,041 2,376,067 Parks and recreation - - - - 1,664,595 1,664,595 Community development 75,200 - 33,831 - 1,492,139 1,601,170 Debt service - principal 77,270 55,343 - 225,000 906,614 1,264,227 Debt service - interest 6,985 2,669 - 142,283 205,920 357,857 Capital outlay 117,726 190,012 894,260 1,201,998 Total expenditures 10,312,944 2,025,212 33,831 367283 7,375,058 20,114,328 Excess (deficiency) of revenues over expenditures (14,143) (31,439) 59,330 (284,123) 910,645 640,270 OTHER FINANCING SOURCES (USES) Issuance of debt - 46,500 - - 357,123 403,623 Transfers in 660,000 - - 30,797 948,924 1,639,721 Transfers out (386,731) (1,252,990) (1,639,721) Total other financing sources (uses) 273,269 46,500 30,797 53,057 403,623 Net Change in Fund Balance 259,126 15,061 59,330 (253,326) 963,702 1,043,893 Fund balances - beginning 2,150,283 1,272,057 375,084 44,619 6,087,159 9,929,202 Restatements (3,051) (3,051) Fund balances - beginning, restated 2,150,283 1,272,057 375,084 44,619 6,084,108 9,926,151 Fund balance - ending $ 2,409,409 $ 1,287,118 $ 434,414 $ (208,707) $ 7,047,810 $ 10,970,044 See accompanying Notes to the Financial Statements 31 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, 2014 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds $ 1,043,893 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 1,201,998 - Depreciation expense (3,719,124) - Capital assets transferred to enterprise funds (218,728) 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 (loss) on the sale/disposal of capital assets (187,873) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds: - Donated capital assets 912,834 - Deferred assessments recievable (beginning of year) (5,284,395) - Deferred assessments recievable (end of year) 5,792,370 - Deferred loans recievable (beginning of year) (2,294,618) - Deferred loans recievable (end of year) 2,316,280 - Increase in deferred loans recievable recognized as revenue in Statement of Activities The change in compensated absences is shown as an expense in the Statement of Activities 9,603 Repayment of debt principal is an expenditures in the governmental funds, but the repayment reduces long- term debt in the Statement of Net Position: - Long-term debt principal payments 1,264,227 Long term debt proceeds provide current financial resources to the governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position: - Proceeds from the sale of long-term debt (403,623) The increase in other post employment benefits is shown as an expense in the Statement of Activities (212,518) 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. 146,162 Change in net position - Statement of Activities $ 366,488 See accompanying Notes to the Financial Statements 32 PROPRIETARY FUND FINANCIAL STATEMENTS MAJOR ENTERPRISE FUNDS Water Fund - Accounts for the City's water utility operations, including water impact fees. Sewer Fund - Accounts for the City's sewer and storm water utility operations, including sewer and storm impact fees. INTERNAL SERVICE FUND Information Technology Fund - Used to account for the goods and services provided by the information technology department to other departments of the City on a cost -reimbursement basis. Central Garage Fund - Used to account for the goods and services provided by the central garage to other departments of the City on a cost -reimbursement basis. City of Kalispell, Montana Statement of Net Position Proprietary Funds June 30, 2014 Governmental Business -Type Activities - Enterprise Funds Activities Internal Non -major Service Water Sewer Enterprise Totals Funds ASSETS Current assets: Cash and investments $ 3,994,982 $ 3,303,467 $ 899,156 $ 8,197,605 $ 258,156 Taxes and assessments receivable, net - 29,642 25,616 55,258 - Accounts receivable - net 121,955 197,741 748 320,444 - Contracts receivable 15,271 38,801 - 54,072 43,587 Due from other governments - 92,021 97,168 189,189 - Prepaids 12,380 17,363 6,495 36,238 4,505 Inventories 164,939 - - 164,939 Total current assets 4,309,527 3,679,035 1,029,183 9,017,745 306,248 Noncurrent assets: Restricted cash and investments 1,300,340 6,482,007 - 7,782,347 - Capital assets - land 91,587 250,756 1,359,545 1,701,888 Capital assets - construction in progress 5,679 72,132 - 77,811 - Capital assets - depreciable, net 25,290,037 44,980,436 1,806,250 72,076,723 82,807 Total noncurrent assets 26,687,643 51,785,331 3,165,795 81,638,769 82,807 Total assets 30,997,170 55,464,366 4,194,978 90,656,514 389,055 LIABILITIES Current liabilities: Accounts payable 41,958 133,556 16,246 191,760 91,530 Retainage 650 4,395 - 5,045 - Accrued payroll 19,154 29,182 9,409 57,745 6,463 Current portion of long -terns capital liabilities 364,000 887,000 18,833 1,269,833 - Current portion of compensated absences payable 53,618 92,305 39,892 185,815 17,486 Other credits 7,345 - - 7,345 Total current liabilities 486,725 1,146,438 84,380 1,717,543 115,479 Noncurrent liabilities: Noncurrent portion of long-term capital liabilities 2,050,000 12,366,682 154,155 14,570,837 - Noncurrent portion of compensated absences 19,286 36,178 27,664 83,128 5,816 Other post employment benefits 153,047 89,886 - 242,933 - Total noncurrent liabilities 2,222,333 12,492,746 181,819 14,896,898 5,816 Total liabilities 2,709,058 13,639,184 266,199 16,614,441 121,295 NET POSITION Net investment in capital assets 22,973,303 32,049,642 2,992,807 58,015,752 82,807 Restricted for capital projects 887,470 5,182,693 - 6,070,163 - Restricted for debt service 411,258 1,109,313 - 1,520,571 - Unrestricted 4,016,081 3,483,534 935,972 8,435,587 184,953 Total net position $ 28,288,112 $ 41,825,182 $ 3,928,779 $ 74,042,073 $ 267,760 See accompanying Notes to the Financial Statements 33 City of Kalispell, Montana Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds For the Fiscal Year Ended June 30, 2014 OPERATING REVENUES Charges for services Miscellaneous revenues Special assessments Total operating revenues OPERATING EXPENSES Personal services Supplies Purchased services Building materials Fixed charges Loss/bad debt expense Depreciation Total operating expenses Operating income NON -OPERATING REVENUES (EXPENSES) Capital Grants - Developer's/Other Gov't Capital Grants - Impact Fees Operating Grant - Intergovernmental revenue Interest revenue Gain (loss) on sale of capital assets Debt service interest expense Total non -operating revenues (expenses) Income (loss) before contributions and transfers Capital contributions - Governmental funds Change in net position Net Position - Beginning of the year Restatements Net Position - Beginning of the year - Restated Net Position - End of the year See accompanying Notes to the Financial Statements Governmental Business -Type Activities - Enterprise Funds Activities Water $ 2,821,327 164,632 2,985,959 1,001,638 81,885 289,207 53,073 231,023 6,452 861,050 2,524,328 461,631 677,154 460,230 27,669 (24,773) (75,945) 1,064,335 1,525,966 26,767,646 (5,500) 26,762,146 Non -major Sewer Enterprise $ 4,115,777 $ 1,028,460 21,440 1,873 830,006 - 4,967,223 1,030,333 1,420,233 517,116 118,135 96,115 770,519 60,186 45,241 - 475,293 127,871 5,464 - 1,967,543 189,113 4,802,428 990,401 164,795 39,932 249,933 750,660 8,372 - 50,431 5,124 (312,163) - 747,233 5,124 912,028 45,056 218,728 - 1,130,756 45,056 40,688,926 4,068,156 5,500 (184,433) 40,694,426 3,883,723 $ 28,288,112 $ 41,825,182 $ 3,928,779 34 Internal Totals Service Funds $ 7,965,564 $ 992,312 187,945 23 830,006 - 8,983,515 992,335 2,938,987 363,715 296,135 251,718 1,119,912 198,332 98,314 - 834,187 28,922 11,916 - 3,017,706 15,821 8,317,157 858,508 666,358 133,827 927,087 1,210,890 8,372 - 83,224 1,085 (24,773) - (388,108) - 1,816,692 1,085 2,483,050 134,912 218,728 11,250 2,701,778 146,162 71,524,728 121,598 (184,433) - 71,340,295 121,598 $ 74,042,073 $ 267,760 City of Kalispell, Montana Statement of Cash Flows Proprietary Funds Year Ended June 30, 2014 Governmental Business - Type Activities Activities Non -major Internal Service Water Sewer Enterprise Totals Funds Cash flows from operating activities: Cash received from customers $ 2,830,213 $ 4,212,162 $ 1,015,895 $ 8,058,270 $ 992,728 Cash received from assessments - 816,175 - 816,175 - Cash received from miscellaneous sources 164,633 21,440 1,874 187,947 Cash payments for claims (687,552) (1,394,087) (318,382) (2,400,021) (395,101) Cash payments to employees (979,141) (1,386,787) (517,739) (2,883,667) (348,415) Net cash provided (used) by operating activities 1,328,153 2,268,903 181,648 3,778,704 249,212 Cash flows from capital and related financing activities: Principal paid on bonds, loans and advances (358,000) (868,000) (1,226,000) Interest paid on bonds, loans and advances (75,945) (312,163) (388,108) Acquisition and construction of capital assets (672,190) (1,533,956) (453,599) (2,659,745) (47,499) Proceeds from bonds, loans and advances - 955,199 172,988 1,128,187 Impact fees 461,889 759,783 - 1,221,672 Net cash provided (used) by capital and related financing activitie (644,246) (999,137) (280,611) (1,923,994) (47,499) Cash flows from non -capital financing activities: Advances between funds 33,009 33,009 Hydrant Meter Deposits 3,370 - 3,370 Intergovernmental revenue - 8,372 8,372 Net cash provided (used) from non -capital financing activities 3,370 41,381 44,751 - Cash flows from investing activities: Interest on investments 27,669 50,431 5,124 83,224 1,085 Net cash provided (used) by investing activities 27,669 50,431 5,124 83,224 1,085 Net increase (decrease) in cash and cash equivalents 714,946 1,361,578 (93,839) 1,982,685 202,798 Cash and cash equivalents at beginning 4,585,876 8,418,397 992,995 13,997,268 55,358 Restatements (5,500) 5,500 - - - Cash and cash equivalents at end $ 5,295,322 $ 9,785,475 S 899,156 $ 15,979,953 S 258,156 Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $ 461,631 $ 164,795 $ 39,932 $ 666,358 $ 133,827 Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation 861,050 1,967,544 189,113 3,017,707 15,821 Other Post Employment Benefits Expense 25,502 14,978 40,480 Changes in assets and liabilities: Accounts receivable - net 15,338 101,848 (298) 116,888 393 Inventory (45,169) - - (45,169) - Taxes and assessments receivable, net 1,244 3,670 4,914 Prepaid expenses - 608 608 (2,261) Compensated Absences (5,467) 12,903 (1,726) 5,710 10,912 Due from County - (15,075) (15,936) (31,011) - Accounts payable 12,805 15,100 (34,210) (6,305) 86,132 Accrued payroll 2,463 5,566 495 8,524 4,388 Net cash provided (used) by operating activities $ 1,328,153 $ 2,268,903 $ 181,648 $ 3,778,704 $ 249,212 The City received non cash contributions of land and infrastructure as follows: $ 677,154 $ 468,661 $ $ 1,145,815 $ 11,251 See accompanying notes to the financial statements 35 FIDUCIARY FUND FINANCIAL STATEMENTS AGENCY FUNDS Agency Funds - Used to account for assets held by the City as an agent for individuals, private organizations, other governments, and/or other funds. City of Kalispell, Montana Statement of Fiduciary Net Position Fiduciary Funds June 30, 2014 ASSETS Cash and short-term investments Total assets LIABILITIES Due to others Total liabilities NET POSITION Agency Funds $ 499,452 $ 499,452 $ 499,452 $ 4995452 See accompanying Notes to the Financial Statements Gel