Fiscal Year 2015 CAFR Comprehensive Annual Financial ReportCITY OF
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR 2015 July 1, 2014 - June 30, 2015
CITY OF KALISPELL
ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letterof Transmittal............................................................................................................................................ 3-8
Government Finance Officers' Association Certificate of Achievement.......................................................... 9
OrganizationalChart........................................................................................................................................... 10
City Elected and Appointed Officials.................................................................................................................. 11
FINANCIAL SECTION
IndependentAuditor's Report.............................................................................................................................12-14
Management's Discussion and Analysis..............................................................................................................15-28
Basic Financial Statements:
Government -wide Financial Statements:
Statementof Net Position.....................................................................................................................
29
Statementof Activities.........................................................................................................................
30
Governmental Fund Financial Statements:
Balance Sheet — Governmental Funds................................................................................................
31
Reconciliation of the Balance Sheet — Governmental Funds to the Statement of Net Assets.........
32
Statement of Revenues, Expenditures, and Changes in Fund Balances — Governmental Funds...
33
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds to the Statement of Activities......................................................................
34
Proprietary Fund Financial Statements:
Statement of Net Position — Proprietary Funds.................................................................................
35
Statement of Revenues, Expenses, and Changes in Net Position — Proprietary Funds ..................
36
Statement of Cash Flows — Proprietary Funds..................................................................................
37
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position — Fiduciary Funds...................................................................
38
Notes to the Financial Statements............................................................................................................39-90
Required Supplementary Information other than Management Discussion and Analysis:
Schedule of Funding Progress and Employer Contributions — Other Post -Employment
HealthcareBenefits...................................................................................................................
91
Schedule of Proportionate Share of the Net Pension Liability.........................................................
92
Scheduleof Contributions....................................................................................................................
93
Budgetary Comparison Schedule — General and Major Special Revenue Funds...........................94-97
Supplemental Information:
Combining and Individual Governmental Fund Statements and Schedules:
Combining Balance Sheet — Nonmajor Governmental Funds.........................................................98-103
Combining Statement of Revenues, Expenditures and Changes in Fund Balances —
Nonmajor Governmental Funds....................................................................................................104-110
Budgetary Comparison Schedule —
MajorDebt Service Funds..............................................................................................................
III
Budgetary Comparison Schedule —
Nonmajor Governmental Funds....................................................................................................112-129
Combining and Individual Proprietary Fund Statements:
Combining Statement of Net Position — Nonmajor Proprietary Funds .........................................
130
Combining Statement of Revenues, Expenditures, and Changes in Fund Net Position — Nonmajor
ProprietaryFunds..........................................................................................................................
131
Combining Statement of Cash Flows — Nonmajor Proprietary Funds ..........................................
132
Combining and Individual Agency Fund Statements:
Combining Statement of Fiduciary Net Assets - Agency Funds .....................................................
133
Combining Statement of Changes in Assets and Liabilities - Agency Funds ...............................
134
CITY OF KALISPELL
ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
STATISTICAL SECTION
Financial Trends
Net Position by Component...................................................................................
Changes in Net Position.........................................................................................
Fund Balances of Governmental Funds...............................................................
Changes in Fund Balances, Governmental Funds ...............................................
Revenue Capacity
.............. 135
.............. 136
.............. 137
.............. 138
Market Value of Taxable Property........................................................................................................ 139
Direct and Overlapping Property Tax Rates......................................................................................... 140
Principal Property Tax Payers............................................................................................................... 141
Property Tax Levies and Collections...................................................................................................... 142
Water — Sewer - Sold by Type of Customer........................................................................................... 143
Waterand Sewer Rates........................................................................................................................... 144
Debt Capacity
Ratios of Outstanding Debt by Type...................................................................................................... 14.5
Ratios of General Bonded Debt Outstanding........................................................................................ 146
Legal Debt Margin Information............................................................................................................. 147
Pledged Revenue Coverage..................................................................................................................... 148
Demographics and Economics
Demographic and Economic Statistics................................................................................................... 149
PrincipalEmployers................................................................................................................................. 150
Operating Section
Full-time Equivalent City Government Employees by Function/Program......................................... 151
Capital Assets Statistics by Function/Program..................................................................................... 1.52
REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS
Independent Auditor's Report on Compliance and on Internal Control over Financial Reporting
based on an Audit of Financial Statements Performed in Accordance with Government
AuditingStandards................................................................................................................................. 1.53-1.54
2
INTRODUCTORY
SECTION
City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903-1997
Telephone (406) 758-7701 Fax - (406) 758-7758
December 29, 2015
To the Honorable Mayor, members of the City Council, and Citizens of the City of Kalispell,
Montana:
CAFR TRANSMITTAL
State law requires that all general-purpose local governments publish within six months of the
close of each fiscal year (by December 31) a complete set of financial statements presented in
conformity with generally accepted accounting principles (GAAP). State law also requires a
biannual audit of these statements in accordance with generally accepted auditing standards by a
firm of licensed certified public accountants to be completed within 9 months of the close of
every other fiscal year (by March 31). It is the belief of the City Council and the Executive staff
that an annual audit assures a higher level of financial management and fiscal responsibility.
Pursuant to this policy and these requirements, the audited annual financial report for the City of
Kalispell, Montana for the fiscal year ended June 30, 2015, is submitted for your review.
Management Representation
The Finance Office prepared this report. Responsibility for the accuracy and completeness of
the presented data, including all disclosures, rests with the City. We believe the data, as
presented, is accurate in all material aspects; that it is presented in a manner designed to fairly
set forth the financial position and results of operations of the City as measured by the financial
activity of its various funds; and that all disclosures necessary to enable the reader to gain an
understanding of the City's financial affairs have been included.
To provide a reasonable basis for making these representations, management of the City has
established and maintained an internal control system designed to ensure that the assets of the
City are protected from loss, theft or abuse, and to ensure that adequate accounting data are
compiled to allow for the preparation of financial statements in conformity with accounting
principles generally accepted in the United States (US GAAP) and to comply with laws and
regulations. The system of internal control is designed to provide reasonable, but not absolute,
assurance that these objectives are met. The concept of reasonable assurance recognizes that:
(1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation
of costs and benefits requires estimates and judgments by management.
Independent Auditor
Wipfli LLP, a firm of licensed certified public accountants has audited the financial statements
of the City. The goal of the independent audit was to provide reasonable assurance that the
financial statements of the City for the fiscal year ended June 30, 2015, are free of material
misstatement. The independent audit involved examining, on a test basis, evidence supporting
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the amounts and disclosures in the financial statements; assessing the accounting principles used
and significant estimates made by management; and evaluating the overall financial statement
presentation. The independent auditors concluded, based upon the audit, that there was a
reasonable basis for rendering an unmodified opinion that the City's financial statements for the
fiscal year ended June 30, 2015, are fairly presented in conformity with US GAAP. The
independent auditor's report is presented as a component of the financial section of this report.
Transmittal Letter
GAAP require that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management's Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement MD&A and should be read in
conjunction with it. The City of Kalispell's MD&A immediately precedes the City's basic
financial statements within this report.
Profile of the City of Kalispell
The City of Kalispell, incorporated in 1892, is the county seat of Flathead County located in the
western part of the State of Montana. This historically has been one of the top growth areas in
the state. The City of Kalispell is empowered to levy a property tax on both real and personal
properties located within its boundaries. It also is empowered by state statute to extend its
corporate limits by annexation, which occurs periodically when deemed appropriate by the
governing council.
The City of Kalispell is operated under the council-manager form of government. Policy -making
and legislative authority are vested in a governing council consisting of the mayor and eight
other members. The governing council is responsible for, among other things, passing
ordinances, adopting the budget, appointing boards, and hiring the City Manager. The City
Manager is responsible for carrying out the policies and ordinances of the governing council, and
for overseeing the day-to-day operations of the City. The council is elected on a non -partisan
basis. Council members are elected by district to serve four-year staggered terms, with four
council members elected every two years. The mayor is elected at large for a four-year term.
All significant operations of the City, as defined by the National Council of Governmental
Accounting, Statement 93, have been included in the accompanying financial statements. The
City provides a full range of municipal services including police, fire, building, planning and
zoning, city court, parks and recreation, streets, community development and general
administrative services. The City also operates as Enterprise funds: water, sewer, solid waste,
and an airport.
In addition, the City presents financial data for two component units on the combined statements.
The Downtown Business Improvement District and the Tourism Business Improvement District
are both discretely presented governmental type component units.
The annual budget serves as the foundation for the City of Kalispell's financial planning and
control. All departments of the City of Kalispell are required to submit requests for
appropriation to the City Manager. The City Manager uses these requests as the starting point
for developing a proposed budget. The City Manager then presents this proposed budget to the
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council for review. The council is required to hold public hearings on the proposed budget and
to adopt a final budget. The appropriated budget is prepared by fund, function, and department.
Budgetary control is decentralized to the point that individual department heads are responsible
for expending within individual fund budgetary limits.
Budget to Actual Comparisons
The State municipal budget law stipulates that money, other than payments from agency funds,
may not be drawn from the treasury of a municipality except pursuant to an appropriation.
Therefore, a legally adopted budget is required for all funds, with the exception of agency funds.
The City legally adopts a budget for the required funds. Consistent with past years, the City
established the legal spending level at the fund level for the fiscal year 2015 budget. The City
Manager and Finance Director may make transfers of appropriations within a fund. Transfers
between funds, however, require approval of the City Council. Budget -to -actual comparisons
are provided in this report for each individual governmental fund for which an appropriated
annual budget has been adopted. For the general fund, the street maintenance special revenue
fund, the community development miscellaneous fund, and the community development loan
revolving fund, the comparison is part of the required supplementary information.
Other Postemployment Benefits — Implied Rate Subsidy Liability
The City of Kalispell reported the "implied rate subsidy" liability, required under the
Governmental Accounting Standards Board (GASB) Statement No. 45, in this financial report
and the related financial statements. Although the City reported this liability, and related
expenditures, the City does not agree that this represents a legal liability and further believes that
the presentation of this activity in the financial statements will eventually be misleading to the
users of the statements. In this, the fifth year of implementation, the recorded "rate subsidy"
liability is $1,816,949.
The City plans to continue funding the employee health insurance plan on a "pay as you go"
basis, and does not plan to fund this liability. City management feels it would be fiscally
irresponsible to take an amount equal to the actuarially determined liability and place it in an
irrevocable trust fund that would never be used and would most likely increase as the City, and
the related number of employees serving it, continues to grow. Retirees can leave the plan at
anytime and the City would have unwisely used funds collected from its citizens. Insurance rates
have been historically set so each plan offered is fiscally sound. Rates can be changed and
benefits altered at anytime to ensure the plans remain properly funded.
Because the City will not be funding this liability, it will continue to increase, and within a few
years, the financial statements will reflect the impact of a very large "implied rate subsidy"
liability that does not have legal substance. Management does not feel it has legal substance as
nothing in state law or any contractual agreement requires the city to offer the same rates to
retirees, spouses and their dependents as other participants. The State of Montana has submitted
a request to have GASB reconsider the requirement to report the implied rate subsidy. The City
of Kalispell agrees with and supports this request.
Pension Liability — GASB Statement 68
The City implemented GASB Statement 68, Accounting and Financial Reporting for Pensions
for fiscal year 2015. This statement resulted in a net pension liability of $9,192,076. The City
5
participates in three State of Montana cost -sharing multi -employer pension plans. The State
legislature determines the rates all employers and employees pay to participate. Each plan has a
different level of unfunded liability. GASB Statement 68 requires the City to record its share of
the unfunded liabilities even though we have made all statutorily required contributions. See
Note F for a description of the plans the City participates in.
Factors Affectine Financial Condition
The City of Kalispell has not been immune to the effects of the nation-wide economic downturn.
Two of the Flathead Valley's core industries have been hit particularly hard. The logging
industry is virtually shut down, which trickles down to closures in related industries. Columbia
Falls Aluminum Company, which struggled to continue operations for years, is now closed. The
City has, however, started to see an uptick in new construction and home foreclosures have
slowed somewhat. Kalispell Regional Medical Center continues to grow and, although they are
considered not for profit, their expansion helps the City's economy in many other ways.
Montana experienced a population increase between the 2000 and 2010 census of 9.7 percent.
Kalispell, however, experienced an increase of 40.1 percent, while Flathead County experienced
growth equal to 22.1 percent. The July 1, 2014 estimated population of Kalispell is 21,518
according to the U.S. Census Bureau, an increase of 1,591 from the 2010 census population of
19,927.
The unadjusted unemployment rate for the 2014 calendar year for City of Kalispell was 7.8
percent. This compares to 8.9 percent for the 2013 calendar year. A positive adjustment of over
10%. The most current unadjusted unemployment rate available (October 2015) for the City of
Kalispell, and Flathead County, is 5.0 percent. In comparison, the State of Montana's current
unemployment rate for the same period is 3.7 percent and the U.S. rate is 4.8%. The State of
Montana's rate is lowered in a large part by the very low unemployment, under 2% in some
counties in far eastern Montana, due to the Bakken oil field boom. The City's unemployment
rate has continued to improve from 13.1 percent high in January of 2011.
According to the United States Census Bureau, the 2013 per capita money income, the most
current information available, for Kalispell was $22,557, in 2013 dollars. This is approximately
11% less than the State of Montana's estimated per capita income ($25,373) in 2013 dollars, and
20% less than the Nation's estimated per capita income of $28,155 in 2013 dollars.
Revenue Growth and Reform
City revenues can be considered statutorily limited, circumstantial or discretionary. The City has
very little control over the growth of restricted and circumstantial revenues. Although the City
`controls' the growth or discretionary revenue, it is still subject to typical community pressures
for conservative growth.
Since November 1986 and the passage of Initiative 105, which limited certain property taxes to
the 1986 levels, the ability of the City to raise revenue for basic services is increasingly difficult.
Then, the legislature, with S13184, lowered tax rates forcing the City to increase mill levies to
maintain the same level of revenue. The City's cash reserves in most funds vary between 10%
and 20% of appropriations. State law allows for reserves of 50%. Reserves provide for cash flow
between tax revenue receipts to keep the City from having to borrow funds for operations.
Cel
Additional revenues generated by increased taxable valuation come with the additional costs of
an increased service area. The City of Kalispell's Police and Fire Departments, Courts system,
Building Department, Public Works and Parks have felt the increased pressure from the influx of
people to Flathead County. These pressures impact the budgets of all departments.
The Montana constitution and state law require periodic reappraisal of property in the interest of
equal taxation (15-7-111, MCA). The State of Montana, through the Department of Revenue
(DOR), is responsible for valuing all taxable real and personal property. Every other year, the
DOR is required by state law to conduct a reappraisal of residential, commercial, industrial,
agricultural and forestland property in the state.
The most recent reappraisal cycle began on January 1, 2009 and was completed on July 1, 2014.
New reappraisal values were used for property tax purposes in tax year 2015 (fiscal year 2016).
Statewide, commercial and residential property values rose 43% and 54% respectively. In
Flathead County, reappraisals resulted in property value increases of 41% for commercial
property, and 66% for residential property.
Maior Initiatives
On April 21, 2014, the City Council voted unanimously to annex 40.69 acres located on the east
side of Whitefish Stage Road, north of East Oregon Street, and west of East Oregon Lane
(formerly McElroy -Wilkins gravel pit). The owner of this property, Flathead County Economic
Development Authority, intends to develop a rail -served industrial park that will be the new
home of several of the rail -served industrial business that are currently located within the City of
Kalispell's Core Area, as well as provide additional rail -served industrial land for other business
ventures. The proposed rail -served industrial park and relocation of industrial uses out of the
Core Area will facilitate removal of the railroad tracks from the Core Area and encourage
commercial investment in the recently expanded Westside Urban Renewal Tax -Increment
Finance (TIF) District.
In October, 2016, the City of Kalispell was awarded a $10 million Transportation Income
Generating Economic Recovery (TIGER) grant from U.S. Department of Transportation to help
fund the Glacier Rail Park and Kalispell Core Area Development projects. The emphasis of this
grant will be to remove the railroad tracks from the City of Kalispell to assist further
development without the tracks being an impediment, and to construct a Rail Park outside of the
core area, to accommodate establishments that need or prefer rail service for their business.
Awards and Acknowledgments
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of
Kalispell for its comprehensive annual financial report for the fiscal years ended June 30, 2014.
This was the 5' consecutive year that the City of Kalispell had submitted and achieved this
prestigious award. In order to be awarded a Certificate of Achievement, a government must
publish an easily readable and efficiently organized comprehensive annual financial report. This
report must satisfy both generally accepted accounting principles and applicable legal
requirements. A Certificate of Achievement is valid for a period of one year only. We believe
that our current comprehensive annual financial report continues to meet the Certificate of
7
Achievement Program's requirements and we are submitting it to the GFOA to determine its
eligibility for another certificate.
The completion of the Annual Financial Report on a timely basis was made possible by the entire
staff of the Finance Department and the cooperation of all City departments. I would also like to
give recognition to the mayor, governing council, and the city manager for their consistent
support for maintaining the highest standards in the management of the City of Kalispell's
finances.
Respectfully submitted,
Rick Wills
Finance Director
�J
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Kalispell
Montana
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2014
Executive Director/CEO
10
MUNICIPAL JUDGE
Lori Adams
CITY CLERK
Aimee Brunckhorst
CITY OF KALISPELL, MONTANA
ORGANIZATIONAL CHART
CITIZENS OF KALISPELL
CITY COUNCIL
MAYOR
Mark Johnson
WARD I WARD II WARD III
Kan Gabriel Wayne Saverud Jim Atkinson
Sandy Carlson Chad Graham Rod Kuntz
CITY MANAGER
Doug Russell
FINANCE
Rick Wills
HUMAN PUBLIC WORKS INFORMATION
RESOURCES Susie Turner TECHNOLOGY
Terry Mitton j I � Enka Billiet
10
WARD IV
Tim Kluesner
Phil Gui/(rida
PLANNING, PARKS &
BUILDING & RECREATION
COMMUNITY Chad Fincher
DEVELOPMENT
Tom Jentz
PUBLIC SAFETY PUBLIC SAFETY LEGAL
FIRE POLICE Charlie Harball
Dave Dedman Roger Nasset
0 j
CITY OF KALISPELL, MONTANA
CITY ELECTED AND APPOINTED OFFICIALS
TERM
ELECTED OFFICIALS EXPIRES
Mayor Mark Johnson 12/2017
Council members:
Kari Gabriel
Ward I
12/2015
Jim Atkinson
Ward HI
12/2017
Sandy Carlson
Ward I
12/2017
Rod Kuntz
Ward HI
12/2015
Wayne Saverud
Ward H
12/2015
Phil Guiffrida
Ward IV
12/2015
Chad Graham
Ward H
12/2017
Tim Kluesner
Ward IV
12/2017
Municipal Court Judge:
Lori Adams
12/2017
APPOINTED CITY OFFICIALS
City Manager
Doug Russell
Attorney
Charles Harball
City Clerk
Aimee Brunckhorst
Police Chief
Roger Nasset
Fire Chief
Dave Dedman
Finance Director
Rick Wills
Public Works Director
Susie Turner
Parks Director
Chad Fincher
Planning Director
Tom Jentz
Community Development Manager
Katharine Thompson
Human Resource Director
Terry Mitton
City Treasurer
Deb Diest
11
Wipfli LLP
910 North Last Chance Gulch
Helena, MT 59601
406.442.5520
fax 406.443.1017
www.wipfli.com
INDEPENDENT AUDITOR'S REPORT
City Council Members
City of Kalispell, Montana
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -type activities, the
aggregate discretely presented component units, each major fund, the aggregate remaining fund information, and
budgetary comparisons of each major fund of the City of Kalispell, as of and for the year ended June 30, 2015, and the
related notes to the financial statements, which collectively comprise the City of Kalispell's basic financial statements as
listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America; this includes the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these 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 Government 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 involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial
position of the governmental activities, the business -type activities, the aggregate discretely presented component units,
each major fund, the aggregate remaining fund information, and budgetary comparisons of each major fund of the City of
Kalispell, as of June 30, 2015, and the respective changes in financial position and, where applicable, cash flows thereof
for the year then ended in conformity with accounting principles generally accepted in the United States of America.
12
Emphasis of Matter
As discussed in Note J to the financial statements, the 2014 financial statements have been restated to correct a
misstatement. Our opinions are not modified with respect to this matter.
Change in Accounting Principle
As discussed in Note 1 to the financial statements, in 2015 the City adopted new accounting guidance. GASB Statement
68, Accounting and Financial Reporting for Pensions — an amendment to GASB Statement No. 27 and GASB Statement
71, Pension Transition for Contributions Made Subsequent to the Measurement Date — an amendment of GASB
Statement No. 68. Our opinions are not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and
analysis, Schedule of City's Proportionate Share of Net Pension Liability and Contributions on Pages 92 — 93, schedule
of funding progress — other post -employment healthcare benefits on page 91, and budgetary comparison information on
pages 94 through 97 and 111 be presented to supplement the basic financial statements. Such information, although not a
part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to
be an essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required supplementary information in
accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our
audit of the basic financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the
City of Kalispell's financial statements. The introductory section, combining and individual nonmajor fund financial
statements, budgetary comparisons (other than major funds), and the statistical section are presented for purposes of
additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and budgetary comparisons (other than major funds)
are the responsibility of management and were derived from and relate directly to the underlying accounting and other
records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and certain other procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial statements or to
the basic financial statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund
financial statements and budgetary comparisons (other than major funds) are fairly stated in all material respects in
relation to the financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the
basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.
13
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 29, 2015 on our
consideration of the City of Kalispell's internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards in considering the City of Kalispell's
internal control over financial reporting and compliance.
L,... L.
Wipfli LLP
Helena, Montana
December 29, 2015
14
FINANCIAL
SECTION
MANAGEMENT'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, 2015. 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 $154,934,238 (net position). Of this amount, $7,884,310 (unrestricted net position) may
be used to meet the government's ongoing obligations to citizens and creditors.
➢ Total net position increased by $3,514,813 over the prior fiscal year net position.
➢ As of June 30 the City's governmental funds reported combined ending fund balances of
$17,051,948, an increase of $3,726,523 over the prior year. Of this amount, $3,069,305 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 $2,458,542 (10%)
during fiscal year 2015. 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
15
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 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 aide in ensuring
compliance with legal requirements. The City of Kalispell categorizes its funds as either
governmental, proprietary, or fiduciary.
➢ Governmental funds correspond with the functions reported as governmental activities 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 assets 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 five major governmental funds; the General Fund
(always a major fund), the Street Maintenance (special revenue) Fund, the Community
Development Loan Revolving (special revenue) Fund, the Community Development —
Miscellaneous (special revenue) Fund, and the Special Improvement District 344 (debt
service) Fund. All non -major funds are presented as a group.
16
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. Because the
City of Kalispell's internal service funds benefit governmental more so than business -
type functions, they have been included within the governmental activities in the
government -wide financial statements.
Information in the proprietary fund financial statements is of the same type as 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, GASB Statement 68 — Accounting and Financial Reporting for
Pensions schedules, and the general and major special revenue funds budgetary comparison
schedules is included in the basic financial statements or the accompanying notes. Therefore, the
only information presented in the section for required supplementary information is the OPEB
17
information, pension information, and required budgetary comparison schedules on pages 91
97.
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 98 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, 2015, the City of Kalispell's assets exceeded liabilities by
$154,934,238.
The largest portion of the City's net position ($131,407,596 or 85%) 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. A summary of net position
is shown in the following table.
Governmental
Business
-type
Activities
Activities
RESTATED
Change
RESTATED
Change
FY15
FY14
Inc(Dec)FY15
FY14
Inc Mec
Current and other assets
$ 22,579,029
$ 20,059,734 $
2,519295 $
17,457,975
$ 16,800,092
$ 657,883
Capital assets
80,019,468
81,349,530
(1,330,062)
74,385,165
73,856,422
528,743
Total assets and deferred outflow of resources
102,598,497
101,409264
1,189233
91,843,140
90,656,514
1,186,626
Long-term debt outstanding
$ 17,106,004
$ 15,459,782 $
1,646222 $
15,498,880
$ 18,001,002
$ (2,502,122)
Otherliabilities
4,683,537
2,048,179
2,635,358
2218,978
504,828
1,714,150
Total liabilities and deferred inflow of resources
21,789,541
17,507,961
4281,580
17,717,858
18,505,830
(787,972)
Invested in capital assets, net of debt
71,610,586
71,734,631
(124,045)
59,797,010
58,015,752
1,781258
Restricted
8,581,135
6260,916
2,320219
7,061,197
7,590,734
(529,537)
Unrestricted (deficit)
617235
1273,194
(655,959)
7267,075
6,544,198
722,877
Total net position
$ 80,808,956
$ 79268,741 $
1,540215 $
74,125282
$ 72,150,684
$ 1,974,598
An additional portion of the City's net position ($15,642,332 or 10%) represents resources that
are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net assets ($7,884,310 or 5%) 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 about 3% for fiscal year 2015 in comparison to fiscal year
2014 restated ($154.9 million compared to $151.4 million).
18
Table 2 - Changes in Net Assets
Revenues
Program revenues (by mayor source):
Charges for services
Opemting grants and contributions
Capital grants and contributions
General revenues (by mayor source):
Property taxes for general purposes
Video poker apportionment
Miscellaneous
Interestinvestment 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
Gain (loss) on sale of capital assets
Transfers - net
Increase (decrease) in net assets
Governmental Business -type
Activities Activities
Change Change
FY15 FY14 Inc(Dec)FY15 FY14 Inc(Dec)
$ 6,003,479 $ 5,870,315 $ 133,164 $ 9,212,044 $ 8,983,515 $ 228,529
1,838,425 2,636,321 (797,896) 27,721 8,372 19,349
3,232,618 1,519,825 1,712,793 1,098,222 2,137,977 (1,039,755)
7,584,776 8,739,80 (1,155,031) - - -
57,350 60,450 (3,100) - - -
132,571 124,331 8,240 2,101 - 2,101
72,531 48,193 24,338 113,963 83,224 30,739
3,134,703 2,835,264 299,439 - -
364,622 364,563 59 1 - L - -
$ 22,421,075 $ 22,199,069 $ 222,006 $ 10,454,051 $ 11,213,088 $ (759,037)
$ 5,401,242 $ 5,688,135 $ (286,893)
$ 9,575,487 $ 9,269,827 305,660
$ 2,773,097 $ 2,573,627 199,470
$ 2,062,669 $ 2,123,237 (60,568)
$ 683,164 $ 1,601,170 (918,006)
$ 331,811 $ 357,857 (26,046)
154,715 $ 177,751 $ (23,036)
$ 2,542,119 $ 2,625,046 (82,927)
$ 5,077,643 $ 5,114,591 (36,948)
$ 816,686 $ 812,6�LOj 4,036
$ 20,827,470 $ 21,613,853 $ (786,383) $ 8,591,163 $ 8,730,038 $ (138,875)
1,593,605 585,216 1,008,389 1,862,888 2,483,050 (620,162)
11,610 11,610 46,710 --Iqq 46,710
(65,000) (218,728) 153,728 65,000 218,728 (153,728)
$ 1,540,215 $ 366,488 $ 1,173,727 $ 1,974,598 $ 2,701,778 $ (727,180)
Governmental Activities. Governmental activities in fiscal year 2015 increased the City's net
position by $1,540,215. Specifically, revenues increased about 1%, and expenses decreased 4%.
The key elements of the overall net position change were:
➢ Total program revenues increased substantially ($1,048,061 or 11%), while general
revenues also decreased ($826,055 or 7%). The major revenue changes from fiscal year
2014 are streets contributed by developers (capital grants and contributions) of almost
$2,000,000, a reduction in operating grants and contributions of the community
development department of close to $1,000,000, and an over $2,000,000 GASB 34
deferred revenue adjustment reducing property taxes for general purposes by over $1.1
million.
➢ Governmental activities program expenses decreased $786,383. This can be attributed to
the community development program and the decrease in operating grants and
contributions noted above for the decrease in revenues.
The table and charts 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
19
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
FY15
FY14
FY15
FY14
Public Safety
9.6
9.3
6.1
5.8
Public Works
2.8
2.6
(1.1)
-
Parks and Recreation
2.1
2.1
1.3
1.2
Community Development
0.7
1.6
0.3
-
General Government
5.4
5.7
2.8
4.2
Debt Service
0.3
0.4
0.3
0.4
Totals
$ 20.9
$ 21.7
$ 9.7
$ 11.6
12000000
10000000
8000000
c
Z5
0 6000000
Q
�4000000
2000000
Expenses and Program Revenues - Governmental Activities for fiscal year 2015
Oexpenses
■prog rev
gen gov't pub safety pub works parks/rec comm dev
Activity
20
Revenue by Source - Governmental Activities fiscal year 2015
Other
3%
Charges for
27%
Property taxes Operating
34 /o grants/contributions
8%
-- Capital
grants/contributions
14%
Business -type activities. Business -type activities increased the City of Kalispell's net position
by $1,974,598. The factors leading to this result were:
➢ Revenues of the City's business -type activities decreased $759,037. Capital grants and
contributions revenue of business -type activities decreased almost 50% from $2,137,977
to $1,098,222, attributable to a reduction in the amount of capital contributed (both
impact fees and developers infrastructure contributions).
➢ Expenses decreased slightly, about 2%, from the prior fiscal year.
The following charts help illustrate the information presented above related to business -type
activities net assets.
21
7000000
6000000
5000000
4000000
0
Q3000000
2000000
W1111111111111idt
Expenses and Program Revenues - Business -type Activities for fiscal year 2015
airport water sewer solid waste
Activity
Revenues by Source - Business -type Activities for fiscal year 2015
Investmentlother
Earnings
Capital 2%
grants/contribution s
Operating 11%
s/contributions
0%
Charges for services
87%
22
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 2015, the City of Kalispell's governmental funds reported combined
ending fund balances of $17,051,948, an increase of $3,726,523 in comparison with the prior
fiscal year restated. Of the ending fund balance, $13,749,087 (81%) 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 ($3,204,445); assets are limited by specific voter
approved bonds ($612,474); assets are limited by specific special assessments ($1,837,648);
assets are limited by state law ($8,000,966); assets are limited by contribution restrictions
($93,554). $3,069,305 or 18% 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
2015 unassigned fund balance of the general fund was $2,946,897, while total fund balance was
$3,266,749. The fund balance increased $854,361 during fiscal year 2015. Revenues and other
financing sources increased almost $900,000 from fiscal year 2014. This increase in revenues
included almost $500,000 in taxes and assessments, primarily because of the collections of some
protested taxes being settled, and a nearly $300,000 increase in State entitlement share payment
(intergovernmental revenues). Expenditures and other financing uses changed very little; less
than 3%. At the end of fiscal year 2015, unassigned fund balance represents 27% of total general
fund expenditures, a 6% improvement from fiscal year 2014. The general fund balance of
$319,852 is non -spendable and assigned as follows:
GENERAL FUND BALANCE - TOTAL
NONSPENDABLE
Long-term recievables
Prepaids
TOTAL NONSPENDABLE
ASSIGNMENTS
Capital Equipment
Downtown Parking
TOTAL ASSIGNMENTS
UNASSIGNED
$ 3,266,749
$ 12,900
$181,504
$ 194,404
$101,906
$ 23,542
$ 125,448
$ 2,946,897
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, 2015, the fund balance of this fund was $1,528,640, a $241,522
increase from the prior fiscal year.
23
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, 2015, the fund balance of this fund was $2,002,565, a small increase
from fiscal year 2014 restated. For fiscal year 2015, the Community Development Loan
Revolving fund made two new loans.
The Community Development — Miscellaneous fund is a special revenue fund used to account
for various activities of the department. There is a loan housed in the fund and various grants
have also been accounted for in this fund. This funds primary income sources are loan
repayment money and grant revenue. In fiscal year 2015, this fund was used to account for the
transactions resulting in and from the City's purchase of six properties in the Old School Station
Technical/Industrial Park. These transactions resulted in a 104% increase in the fund balance.
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 technical/industrial development known as Old School Station.
Fund balance at June 30, 2015, for SID 344 was $469,558, an increase of $678,265 from fiscal
year 2014. This extraordinary increase in fund balance is the result of the City taking ownership
of six properties within the district by bringing the taxes current.
Proprietary Funds
The City of Kalispell's proprietary funds financial statements provide the same type of
information found in the government -wide financial statements, but in more detail. Unrestricted
net position and the total growth in net position of the proprietary funds by fund are:
Proprietary Fund Net Position
of
Unrestricted
Funds total
Change in
% Change in
Net Position
Net Position
Net Position
Net Position
Water
$ 3,827,110
13%
$ 940,104
3%
Sewer
2,639,216
6%
918,125
2%
Other
800,749
22%
116,369
3%
Total
$ 7,267,075
10%
$ 1,974,598
3%
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 2015 was $11,319,465.
Actual expenditures for the year were $10,995,903, a favorable variance of $323,562. Actual
public safety expenditures were $165,562 less than budgeted, due to personal services savings.
Actual general government expenditures were $136,508 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 $11,850,264, $514,320 more than the budgeted amount
of $11,335,944. Taxes and assessments revenue in excess of the budgeted amount by $557,754,
24
mainly due to the collection of some protested taxes, was offset by deficiencies in other revenue
categories.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of 2015, the City of Kalispell has $154,260,382, 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 Business -type Total
activities activities
2015 2014 2015 2014 2015 2014
Land $ 2,395,299 $ 2,395,299 $ 1,762,512 $ 1,701,888 $ 4,157,811 $ 4,097,187
Construction in Progress
$ 22,155 1,651,143
$ 77,811
$ 1,651,143
99,966
Source of Supply
3,773,176
3,856,681
$ 3,773,176
3,856,681
Pumping Plant
1,848,986
1,961,419
$ 1,848,986
1,961,419
Treatment Plant
19,445,460
20,059,920
$ 19,445,460
20,059,920
Transmission and Distribution
33,512,687
33,903,460
$ 33,512,687
33,903,460
General Plant
1,402,569
1,569,245
$ 1,402,569
1,569,245
Storm Sewer system
10,283,837
9,998,606
$ 10,283,837
9,998,606
Total
$79,875,217 $81,266,722 $74,385,165
$73,856,422
$ 154,260,382
$ 155,123,144
Major Governmental funds capital asset events during the fiscal year 2015 included the
following:
➢ The police department purchased (3) vehicles, (2) motorcycles, and wireless in car cameras
at a cost of $131,245.
➢ The fire department purchased a pickup for $32,504.
➢ Completed purchase and setup of Cityworks software program for the building department at
a total cost of $51,274.
➢ The street department purchased a John Deere loader and an asphalt zipper. The cost of
these two pieces of equipment was $253,907.
➢ Heart monitors costing $24,887 were purchased for the ambulance department using funding
from the American Heart Association.
➢ Paved 5 alleys at a total cost of $24,112. Replaced 1,723', 5.7 blocks, of sidewalks valued at
$68,581.
➢ Streets valued at $1,811,225 were donated to the City.
➢ Disposed assets with a cost basis of $248,357.
Major Business -type funds capital asset events during the fiscal year 2015 included the
following:
➢ Developer's contributed (6) fire hydrants valued at $24,448.
➢ Replaced (3) and installed (5) new fire hydrants at a total cost of $32,504.
➢ 1,687 linear feet of new water main valued at $131,715 was installed and contributed to the
City by developers.
25
➢ The water department installed 233 new meters, including 88 new domestic meters of various
sizes.
➢ Completed project replacing water line on 4th Ave EN, total project cost was $637,147.
➢ Water and sewer mains were relocated and upsized to accommodate the Highway 93 Bypass
construction. City's fiscal year 2015 cost was $12,169. Montana Department of
Transportation contributed the fiscal year 2015 balance of $28,825.
➢ Installed back-up generator for sanitary sewer lift station 911 (Nicklaus Drive).
➢ Developer's contributed 691 linear feet of new sanitary sewer main valued at $26,762.
➢ Installed roof liners on two buildings in the waste water treatment plant complex at a total
cost of $44,000.
➢ Replaced digester gas room piping and odor control filter bed bark at the wastewater
treatment plant at a total cost of over $140,000.
➢ Installed a storm water main on 9' Street East (Hedges School) at a cost of $294,672.
➢ Completed phase III of the South Meadows storm drain project.
➢ Developer's contributed 294 linear feet of new storm sewer main valued at $22,445.
➢ Storm drain improvements on 4' Avenue EN and Parkway Drive were completed for
$79,972.
➢ Refurbished a sidearm solid waste truck for $80,598.
➢ The sewer department has over $1.5 million in construction projects in progress as of June
30, 2015.
➢ Replaced or abandoned water and sewer transmission and distribution assets with a cost basis
of approximately $56,000.
Additional information on capital assets can be found in the notes of the basic financial
statements (Note D. Capital Assets pages 54-56).
Debt
At the end of fiscal year 2015, the City of Kalispell had total long-term debt outstanding of
$23,618,018. Of this amount, $2,805,000 comprises debt backed by the full faith and credit of
the government and $1,932,000 represents bonds secured solely by specific revenue sources (i.e.,
revenue bonds). The remainder consists of $13,759,000 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 $3,074,242 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 $2,047,776 of loans for the purchase of other property and equipment.
CITY OF KALISPELL'S OUTSTANDING DEBT
Governmental Business -type Total
activities activities
2015 2014 2015 2014 2015 2014
General obligation bonds $ 2,805,000 $ 3,255,000 $ 2,805,000 $ 3,255,000
Revenue/Urban Renewal bonds $ 1,257,000 1,410,000 675,000 735,000 $ 1,932,000 $ 2,145,000
SRF loans 13.759.000 14.932.682 $ 13.759.000 $14.932.682
Total $ 9,029,863 $10,235,890 $14,588,155 $15,840,670 $ 23,618,018 $ 26,076,560
26
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 57-62).
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The City's elected and appointed officials considered many factors when setting the fiscal year
2016 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.
aource: u.a. lieparunenL of i aoor anu muustry.
➢ The City of Kalispell's unemployment rate (preliminary/unadjusted) stood at 5.0% as of
October of 2015, which is a slight improvement from the October 2014 rate of 5.1 percent.
27
This is worse than the State's unemployment rate of 3.7%, and about the same as the
Nation's rate of 4.8 percent for the same month and year.
➢ Applications for building permits and other internal indicators of growth, such as impact fee
revenues, remained strong in fiscal year 2015. Short-term future forecast are optimistic.
➢ 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.
During fiscal year 2015, fund balance in the General Fund increased to $3,266,749. The City of
Kalispell has not appropriated any of this amount for spending in the 2016 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 2016:
➢ 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 $200,000.
o Both categories of light maintenance assessments were increased. These changes
will increase revenue for the light maintenance fund an estimated $134,000.
➢ Business -type:
o No changes.
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.
28
GOVERNMENT - WIDE FINANCIAL
STATEMENTS
ASSETS
Cash and investments
Taxes and assessments receivable, net
Accounts receivable - net
Notes and loans receivable
Contracts receivable
Due from other governments
Prepaids
Inventories
Properties held for sale
Other debits
Restricted assets:
Cash and investments
Capital assets (net of accumulated depreciation):
Land
Construction in Progress
Depreciable
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Contractually required contributions related to pensions
Total deferred outflows of resources
Total assets and deferred outflows of resources
LIABILITIES
Accounts payable
Retainage
Accrued payroll
Other credits
Current portion of long-term liabilities
Bonds and notes - not capital
Bonds and notes - capital
Compensated absences payable
Long-term liabilities, due in more than one year
Bonds and notes - not capital
Bonds and notes - capital
Compensated absences
Other post employment benefits - health
Net pension liability
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Diff. between est. and actual earnings on pension plan inv.
Total deferred inflows of resources
NET POSITION
Net investment in capital assets
Restricted for capital projects
Restricted for debt service
Restricted for special projects
Restricted for other purposes
Unrestricted
Total net position
See accompanying Notes to the Financial Statements
City of Kalispell, Montana
Statement of Net Position
June 30, 2015
Component Units
Governmental
Business -type
Downtown
Tourism
Activities
Activities
Total
BID
BID
$ 11,760,656 $
9,413,199 $
21,173,855
$ 52,518 $
160,442
3,538,180
28,409
3,566,589
1,683
-
232,572
366,327
598,899
-
2,283,862
-
2,283,862
89,117
53,473
142,590
-
1,3 86,954
176,465
1,5 63,419
10,327
225,030
38,692
263,722
-
-
134,667
134,667
1,258,465
-
1,258,465
25,490
-
25,490
935,129
7,061,198
7,996,327
2,395,299
1,762,512
4,157,811
-
1,651,143
1,651,143
-
77,624,169
70,971,510
148,595,679
-
7,375
101,754,923
91,657,595
193,412,518
64,528
167,817
843,574
185,545
1,029,119
-
-
843,5 74
185,545
1,029,119
359,636
451,176
810,812
9,665
17,614
27,279
376,618
65,588
442,206
869
-
869
26,148
-
26,148
1,315,038
1,130,963
2,446,001
978,801
192,288
1,171,089
594,831
-
594,831
7,093,844
13,457,192
20,551,036
356,306
93,686
449,992
1,526,237
290,712
1,816,949
7,534,786
1,657,290
9,192,076
5,588 25,315
5,588 25,315
1,616,762
355,609
1,972,371
1,616,762
355,609
1,972,371
71,610,586
59,797,010
131,407,596
-
4,181,876
4,181,876
627,503
1,467,713
2,095,216
7,953,632
1,221,608
9,175,240
-
190,000
190,000
7,375
135,127
29
W
O
City of Kalispell, Montana
Statement of Activities
For
the Fiscal Year
Ended June 30, 2015
Net (Expenses)
Revenues
and
Changes in Net Assets
Program Revenues
Primary Government
Component Units
Indirect
Operating
Capital
Business -
Expense
Charges for Grants and
Grants and
Governmental
type
Downtown Tourism
Functions/Proszrams
Expenses
Allocation
Services Contributions Contributions
Activities
Activities
Total
BID BID
Primary government:
Governmental activities:
General government
$
5,399,935
$ 1,307
$ 684,550 $ 126,037 $
1,828,580
$ (2,762,075) $
$ (2,762,075)
$ $
Public safety
9,373,151
202,336
1,973,898 1,487,677
-
(6,113,912)
(6,113,912)
Public works
2,477,757
295,340
2,463,435 -
1,400,791
1,091,129
1,091,129
Parks and recreation
1,997,793
64,876
728,165 23,850
3,247
(1,307,407)
(1,307,407)
Community development
666,540
16,624
153,431 200,861
-
(328,872)
(328,872)
Debt service -interest
331,811
(331,811)
(331,811)
Total governmental activities
20,246,987
580,483
6,003,479 1,838,425
3,232,618
(9,752,948)
(9,752,948)
Business -type activities:
Airport
147,817
6,898
79,091 -
-
(75,624)
(75,624)
Water
2,370,071
172,048
3,018,276 8,365
421,623
906,145
906,145
Sewer
4,768,660
308,983
5,141,284 14,237
676,599
754,477
754,477
Solid Waste
714,842
101,844
973,393 5,119
161,826
161,826
Total business -type activities
8,001,390
589,773
9,212,044 27,721
1,098,222
1,746,824
1,746,824
Total primary government
$
28,248,377
$ 1,170,256
$ 15,215,523 $ 1,866,146 $
4,330,840
$ (9,752,948) $
1,746,824
$ (8,006,124)
Component units:
Downtown BID
$
101,808
$ 4,797
$ 80,554 $ - $
-
$ (26,051)
Tourism BID
558,861
5,000
547,724 -
-
$ (16,137)
Total component units
$
660,669
$ 9,797
$ 628,278 $ - $
$ (26,051) $ (16,137)
General Revenues:
Property taxes for general purposes
$ 7,584,775 $
-
$ 7,584,775
$ - $ -
Video poker apportionment
57,350
-
57,350
- -
Miscellaneous
132,571
2,101
134,672
4,397 -
Interest/investment earnings
72,531
113,963
186,494
372 92
State entitlement
3,134,703
-
3,134,703
- -
Gas Tax
364,622
-
364,622
- -
Gain (loss) on sale of capital assets
11,610
46,710
58,320
- -
Transfers - net
(65,000)
65,000
-
- -
Total general revenues, special items
and transfers
11,293,162
227,774
11,520,936
4,769 92
Change in net position
1,540,214
1,974,598
3,514,812
(21,282) (16,045)
See accompanying Notes to the Financial Statements
Net position - beginning
87,828,749
74,042,073
161,870,822 80,222
168,647
Restatements
39,101
39,101 -
(10,100)
Prior period adjustment - GASB 68
(8,599,108)
(1,891,389)
(10,490,497)
Net position -beginning -restated
79,268,742
72,150,684
151,419,426 80,222
158,547
Net position - end
$ 80,808,956 $
74,125,282 $
154,934,238 $ 58,940 $
142,502
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 drive -able.
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.
Community Development Loan Miscellaneous Fund — this fund was originally
established to account for Urban Development Assistance Grants (UDAG). In fiscal year
2015, this fund, with dollars borrowed from the General fund, purchased six undeveloped
properties from Flathead County at the Old School Station Industrial/Technical Park, a
City special improvement district.
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.
CityaKa0spol, Mmtana
Balance Sheet
Gmesnmental Fnnds
June 30,2015
O her
Tdal
Street
CD Lvan
Governmental
Gmernmental
General Fmd
Maintenance
Revdving
CD M
SD) 394
Fends
Fends
ASSETS
Cash and investments
$
1,476,433 $
1,341,676 $
314,519 $
626,242 $
40,558 $
7,358,939 $
11,587,367
Taxes and assessments receivable, net
220,187
39,869
-
-
2,415,436
862,688
3,538,180
Aceounts receivable - net
1,915
-
-
-
-
230,657
232,572
Notes and loans receivable
-
-
1,688,M6
36,956
-
558,860
2,283,862
Conhacts receivable
4 ,551
-
-
-
-
-
46,551
Due from other funds
6,988
-
-
-
-
-
6,988
Due from other governments
517,234
220,747
-
-
-
648,973
1,386,954
Prepaids
181,504
13,328
-
-
-
25,824
220,656
Advances to other funds
1,3W,000
-
-
-
-
-
1,300,000
Otha&bita
12,%0
215
-
-
-
12,375
25,490
Rqp iea hddfaale
-
-
-
1,258,465
-
-
1,258,465
Reahi&M assets:
Cash and ivveatmwta
$
$
$
$
$
$
935,129 $
935,129
Total assets
$
3,]63,]12 $
1,615,835 $
2,002,565 $
1,921,663 $
2,884,994 $
10,633,445 $
22,822,214
LI ffinIES
Aceounta payable
$
48,869 $
1],11] $
- $
6 $
- $
253,817 $
319,809
Retainage
-
9,665
-
-
-
-
9,665
Accmed payroll
227,907
20,544
-
-
-
118,992
367,443
Due to other funds
-
-
-
-
-
6,988
6,988
Advances from other funds
-
-
-
1,300,000
-
-
1,300,000
Olh-&ta
869
869
Total liabilities
$
2763]]6 $
47,326 $
$
133003006 $
$
3803666 $
2,004,]]4
Defected ivflowa ofremu-
Uvavailablerevenue-& Maceouvta receivable
$
- $
- $
- $
- $
- $
22],312 $
22],312
Unavailable revenue-& Mfaxes and ascessvamts
220,187
39,869
2,415,436
862,688
3,538, 180
Total def Minflows of rem-
$
220,187 $
39,869 $
$
$
2,415,436 $
1,090,000 $
3,765,492
FUNDBALANCES
Nonaprvdable-votiv aprvdable fen
Long-turn-i-blea
$
12,900 $
- $
- $
- $
- $
- $
12,900
Prepaids
181,504
13,328
-
-
-
25,824
220,656
Reahi&M
Gwad Govemmwt
-
-
-
-
-
104,057
104,057
Public Safety
-
-
-
-
-
1,049,062
1,049,062
Public Works
-
1,515,312
-
-
-
496,343
2,011,655
Culture and Recreation
-
-
-
-
-
]82,505
782,505
Covmwnity Development
-
-
2,002,565
621,657
-
6'080,525
8,704,747
Debt Service
-
-
-
-
469,558
627,503
1,097,061
Umeahi&M Fund Balances:
Assign d:
Capital Equipmwt
101,906
-
-
-
-
-
101:906
Pinking
23,542
-
-
-
-
-
23542
Unassigned fund bdance
239463897
(3,040)
2,943,857
Total fund balances
$
3,266,749 $
1,528,640 $
2,002,565 $
621,657 $
469,558 $
9,162,]]9 $
17,051,948
Total liabilities,& M inflows of resources, and fund balances
$
3,]63,]12 $
1,615,835 $
2,002,565 $
1,921,663 $
2,884,994 $
10,633,445 $
22,822,214
Sce accevgranyivg Notes to the Fi.6.1 Statemwta
31
City of Kalispell, Montana
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position
June 30, 2015
Total fund balances - governmental funds $ 17,051,948
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in
the funds. 79,875,217
Deferred outflow of resources - related to pensions result from contributions made subsequent to the
measurement date that are recognized on the statement of net position. 843,574
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 287,888
Long-term liabilities are not due and payable in the current period and therefore are not reported as
liabilities in the funds.
- Bonds and notes (9,029,861)
- Compensated absences (1,307,517)
- Other post employment benefits (1,526,237)
- Net pension liability (7,534,786)
- Deferred inflow of resources - related to pensions (1,616,762)
Taxes, assessments and accounts receivable will be collected this year, but are not available soon enough to
pay for the current periods expenditures and, therefore, are reported as unavailable revenue in the funds.
- deferred taxes and assessments 3,538,180
- ambulance 227,312
Total net position - governmental activities $ 80,808,956
See accompanying Notes to the Financial Statements
32
City of Kalispell, Montana
Statement of Revenua, EapendiW-, and Changes iv Fund Balances
GwernmentalFunds
For the Fiscal Year Ended Sane 30, 2015
Other
Total
Street
CD Loan
Governmental
Goner®®tal
G® WFund
Maintenance
Revolving
CD Misc
SID 344
Funds
Funtls
REVENUES
Taxes and assessments
$
5,716,754 $
- $
- $
- $
1,261,667 $
4,297:211 $
11,271,616
Licenses and permits
82,297
-
-
-
-
2%748
381,045
Ivtergov--tal
4,02],0]8
-
-
29,b14
-
1,350,011
5406:13
Charges for services
]68,614
2,174,473
18,262
2,059
-
1,667,167
4:630575
FivesavdforF'tures
538,234
-
-
-
-
-
538,234
Miscellm-
27,898
3,399
-
-
-
157,318
188,615
Iv�estmevt earvivgs
12,779
6,880
4,274
2,071
46,524
72,528
Total revenues
$
11,173,654 $
2,184,752 $
22,536 $
33,744 $
1,261,667 $
7,816,983 $
22,493,336
EXPENDITURES
General govemmevt
$
2,623,226
- $
2623226
Publicsafety
7,451,258
-
-
-
-
1,664,694
9:115:952
Publicworks
267,736
1,705,055
-
-
-
699,361
2,672,152
Z" and .-im
-
-
-
-
-
1,608,497
1,608,49]
Community development
55,379
-
2,471
45,281
-
581,887
685,018
Deb[I'm .-pivdpal
70,775
97,165
-
-
225,000
937,117
1,330,057
Debt service -interest
5,280
3,298
-
-
132,658
190,575
331,811
Capital outlay
152,]]3
253,907
154:070
560,750
Total expenditures
$
10,626,427 $
2,059,425 $
2,471 $
45,281 $
357,658 $
5,836,201 $
18,927,463
E.-(&fi i-cy)ofresevues wer(..der) expenditu
$
547,227 $
125,327 $
20,065 $
(11,537) $
904,009 $
1,980,782 $
3,565,873
OTDER FINANCING SOURCES (USES)
Issuance of&bt
$
- $
116,195 $
- $
- $
- $
7,845 $
124,040
Proceedsf the sale ofg-I capital asset disposition
11,610
-
-
-
-
-
11,610
Tr f W
665,000
-
-
327,649
8,000
1,200,627
2,201,276
Tr fmout
(369,476)
(233,744)
(1,573,056)
(2,176,276)
Total other 8vavdvg sources (u )
$
307,134 $
116,195 $
- $
327,649 $
(225,744) $
(364,584) $
160,650
Net Cbavge iv Fuvd Balances
$
854,361 $
2413522 $
203065 $
3163112 $
6783265 $
136163198 $
3,726,523
Fuvd balances- begivnivg
$
2,409,409 $
1,287,118 $
434,414 $
260,828 $
(208,707) $
6,786982 $
]0,970,044
R-temevta
2,979
1,548,086
44,717
759:599
2,355,381
Fuvd balances- begivnivg, restated
$
2,412,388 $
1,287,118 $
1,982,500 $
305,545 $
(208,707) $
7,546,581 $
13,325,425
Fuvd balances-evdivg $ 3,266,749 $ 1,528,640 $ 2,002,565 $ 621,657 $ 469,558 $ 9,162,779 $ 17,051,948
See a-pavyivg Notes to the Finavdal Stet-m
33
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, 2015
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances - total governmental funds $ 3,726,523
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 560,750
- Depreciation expense (3,780,836)
Revenues in the Statement of Activities that do not provide current financial resources are not reported as
revenues in the funds:
- Donated capital assets 1,828,580
- Deferred assessments recievable (beginning of year) (5,792,370)
- Deferred assessments recievable (end of year) 3,765,492
The change in compensated absences is shown as an expense in the Statement of Activities (34,361)
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 1,330,057
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 (124,040)
Changes to net pension liability are shown as revenues/expenses on the Statement of Activities 291,134
The increase in other post employment benefits is shown as an expense in the Statement of Activities (250,843)
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 20,128
Change in net position - Statement of Activities $ 1,540,214
See accompanying Notes to the Financial Statements
PROPRIETARY FUND FINANCIAL
STATEMENTS
MAJOR ENTERPRISE FUNDS
Water Fund — Accounts for the City's water utility operations, including water impact
fees.
Sewer Fund — Accounts for the City's sewer and storm water utility operations, including
sewer and storm impact fees.
INTERNAL SERVICE FUNDS
Information Technology Fund — used to account for the goods and services provided by
the information technology department to other departments of the City on a cost -
reimbursement basis.
Central Garage Fund — used to account for the goods and services provided by the central
garage to other departments of the City on a cost -reimbursement basis.
City of Kalispell, Montana
Statement of Net Position
Proprietary Foods
June 30, 2015
Governmental
BusinessTypeActivities-Enterprise Funds
Activities
Non -major
Internal Service
Water
Sewer
Enterprise
Totals
Funds
ASSETS
Cash and investments
$ 4,605,947
$ 3,686,963
$ 1,120,289 $
9,413,199 $
173,289
Taxes and assessments receivable, net
-
12,529
15,880
28,409
-
Accountsreceivable -net
144,721
220,934
672
366,327
-
Contracts receivable
2,497
35,476
15,500
53,473
42,566
Due from otter governments
2,013
86,214
88,238
176,465
-
Prepaids
11,660
19,567
7,465
38,692
4,374
Inverdories
134,667
-
-
134,667
-
Restricted assets:
Cash and investments
1,269,107
5,792,091
-
7,061,198
-
Capital assets (net of accumulated depreciation):
Lard
91,587
311,380
1,359,545
1,762,512
-
ConstmctioninProgress
208,357
1,442,786
-
1,651,143
-
Depreciable
25,311,313
43,970,459
1,689,738
70,971,510
144,251
Total assets
31,781,869
55,578,399
4,297,327
91,657,595
364,480
DEFERRED OUTFLOWS OF RESOURCES
Contractually required contributions related to pensioru
55,990
95,292
34,263
185,545
Total deferred outflows of resources
55,990
95292
34,263
185,545
LIABILITIES
Accounts payable
233,330
197,934
19,912
451,176
39,827
Retamage
9,497
8,117
-
17,614
-
Accmedpayroll
21,328
33,018
11,242
65,588
9,175
Otter credits
5,740
-
-
5,740
-
Current portion of long-term liabilities
Bonds and notes - capital
193,000
900,000
37,963
1,130,963
-
Compensated absences payable
49,785
96,107
46,396
192,288
20,345
Long-term liabilities, due in more than one year
Bonds and notes - capital
1,857,000
11,484,000
116,192
13,457,192
-
Compensated absences payable
21,601
39,786
32,299
93,686
7,245
Otter post employment benefits - health
181,695
109,017
-
290,712
-
Net pension liability
500,102
851,147
306,041
1,657,290
Total liabilities
3,073,078
13,719,126
570,045
17,362,249
76,592
DEFERRED INFLOWS OF RESOURCES
Diff. between est. and actual earnings on pension plan inv.
107,308
182,633
65,668
355,609
Total deferred inflows ofresources
107,308
182,633
65,668
355,609
NET POSITION
Net investment in capital assets
23,561,257
33,340,625
2,895,128
59,797,010
144,251
Restricted for capital projects
910,706
3,271,170
-
4,181,876
-
Restricted for debt service
358,400
1,109,313
-
1,467,713
-
Restricted for special projects
-
1,221,608
-
1,221,608
-
Restricted for other purposes
-
190,000
-
190,000
-
Unrestricted
3,827,110
2,639,216
800,749
7,267,075
143,637
Total net position
$ 28,657,473
$ 41,771,932
$ 3,695,877 $
74,125,282 $
287,888
See accompanying Notes to the Financial Statements
35
OPERATING REVENUES
Charges for serviees
Misce➢aneous revenues
Special assessments
Total operating revenues
OPERATING EXPENSES
Personal services
Supplies
Pmcbased services
Building materials
Fixed charges
Depreciation
Total operating expenses
Operating income (loss)
NONOPERATINGREVENUES (EXPENSES)
Intergovernmental revenue
Interest revenue
Crain (loss) on sale of capital assets
D&t service interest expense
Total non -operating revenues (expenses)
Income (loss) before contributions and transfers
Transfers out
Capital Grants - Developer/Other Gov't
Capital Grants - Impact Fees
Capital Contributions - GoVtal Fmds
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
City of Kalispell, Montana
Statement of Reveoars, Expenses, and Changes in Net Position
Proprietary Funds
For the Fiscal Year Ended June 30, 2015
Governmental
Business -Type Activities
- Enterprise Funds
Activities
Non major
Internal Service
Water Sewer
Enterprise
Totals
Funds
$ 2,845,146 $ 4267,108 $
1,052,392 $
8,164,646 $
884,148
173,130 38,960
2,193
214,283
98
835,216
835,216
3,018276 5,141,284
1,054,585
9214,145
884,246
922,095 1,426276
489,632
2,838,003
379,093
85,632 119,077
85,122
289,831
250,433
293,962 718,548
65,450
1,077,960
179,611
60,580 42,119
-
102,699
-
212,320 489,687
132,916
834,923
28,444
898,931 1,980,782
197,111
3,076,824
27,640
2,473,520 4,776,489
970,231
8 220 240
865,221
544,756 364,795
84,354
993,905
19,025
8,365 14237
5,119
27,721
-
39,049 68,448
6,466
113,963
1,103
(5,090) 5200
46,600
46,710
-
(68,599) (301,154)
(1,170)
(370,923)
(26,275) (213,269)
57,015
(182,529)
1,103
518,481 151,526
141,369
811,376
20,128
- -
(25,000)
(25,000)
-
175,504 58,691
-
234,195
-
246,119 617,908
-
864,027
-
90,000
90,000
940,104 918,125
116,369
1,974,598
20,128
28288,112 41,825,182
3,928,779
74,042,073
267,760
(570,743) (971,375)
(349,271)
(1,891,389)
27,717,369 40,853,807
3,579,508
72,150,684
267,760
$ 28,657,473 $ 41,771,932 $
3,695,877 $
74,125282 $
287,888
36
City of Kalispell, Montana
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2015
Governmental
Business - Type Activities
Activities
Non -major
Internal Service
Water
Sewer
Enterprise
Totals
Fund
Cash flows from operating activities:
Cash received from customers $
2,818,352 $
4,243,915 $
1,073235 $
8,135,502 $
885,267
Cash received from assessments
-
858,306
-
858,306
-
Cash received from miscellaneous sources
173,130
38,960
92
212,182
Cash payments for claims
(657,588)
(1,388,639)
(279,823)
(2,326,050)
(510,192)
Cash payments to employees
(903,029)
(1,416,752)
(484,336)
(2,804,117)
(371,928)
Net cash provided (used) by operating activities
1,430,865
2,335,790
309,168
4,075,823
3,147
Cash flows from capital and related financing activities:
Principal paid on bonds, loans and advances
(364,000)
(884,748)
(18,833)
(1,267,581)
-
Interest paid on bonds, loans and advances
(68,599)
(301,154)
(1,170)
(370,923)
Acquisition and construction of capital assets
(716,888)
(2,166,086)
(80,598)
(2,963,572)
(89,083)
Proceeds from bonds, loans and advances
-
15,066
15,066
Impact fees
259,304
621,062
-
880,366
Sale of capital asset
-
5,200
31,100
36,300
Net cash provided (used) by capital and related financing activitii
(890,183)
(2,710,660)
(69,501)
(3,670,344)
(89,083)
Cash flows from non -capital financing activities:
Transfers between funds
(25,000)
(25,000)
Net cash provided (used) from non -capital financing activities
-
-
(25,000)
(25,000)
-
Cash flows from investing activities:
Interest on investments
39,049
68,448
6,466
113,963
1,104
Net cash provided (used) by investing activities
39,049
68,448
6,466
113,963
1,104
Net increase(decrease)in cash and cash equivalents
579,731
(306,422)
221,133
494,442
(84,832)
Cash and cash equivalents at beginning
Restatements
Cash and cash equivalents at end
5,295,322 9,785,475 899,156 15,979,953 258,156
$ 5,875,053 $ 9,479,053 $ 1,120289 $ 16,474,395 $ 173,324
Reconciliation of operating income (loss) to net cash provided
(used) by operating activities:
Operating income (loss) $
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation
Pension Adj.
Other Post Employment Benefits Expense
Changes in assets and liabilities:
544,756 $ 364,795 $ 84,354 $ 993,905 $
898,931 1,980,782 197,111 3,076,824
(10,958) (18,650) (6,706) (36,314)
28,648 19,131 47,779
19,025
27,640
Accounts receivable- net
(26,794)
(23,193)
76
(49,911)
$1,021
Taxes and assessments receivable, net
-
17,113
9,736
26,849
-
Prepaid expenses
720
(2203)
(970)
(2,453)
165
Increase Comp Abs
(1,519)
7,410
11,139
17,030
4,289
Decrease in due from County
5,977
8,930
14,907
-
Accounts payable
(5,094)
(19208)
3,665
(20,637)
(51,704)
Accrued payroll
2,175
3,836
1,833
7,844
2,711
Net cash provided (used) by operating activities
$ 1,430,865 $
2,335,790 $
309,168 $
4,075,823 $
3,147
The City received non cash contributions
of land and infrastructure as follows:
$ 175,504 $
58,691
$
234,195
See accompanying notes to the financial statements
37
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, 2015
Agency
Funds
ASSETS
Cash and short-term investments $ 524,624
LIABILITIES
Due to others $ 524,624
See accompanying Notes to the Financial Statements
38
NOTES TO THE FINANCIAL
STATEMENTS
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Kalispell's accompanying financial statements have been prepared in conformity with generally accepted
accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB), the accepted
standard -setting body for establishing governmental accounting and financial reporting principles.
The accompanying financial statements present the financial position of the City and the various funds and fund types, the
results of operations of the City and the various funds and fund types, and the cash flows of the proprietary funds. The
financial statements are presented as of June 30, 2015, and for the year then ended.
The more significant accounting policies of the City are described below
Recently Implemented Accounting Pronouncements
In June 2004, the Governmental Accounting Standards Board (GASB) issued Statement No. 45, Accounting and Financial
Reporting by Employers for Postretirement Benefits Other Than Pensions. The City implemented this new statement during
the year ended June 30, 2011. Certain significant changes in the Statement include the following:
1. Recognition of cost of postemployment benefits on the government -wide financial statements on the accrual basis of
accounting instead of the cash basis.
2. Provide information on current values of future benefits, associated liabilities, and summarize major plan provisions
and demographics.
For the fiscal year ended June 30, 2014, the City implemented GASB Statement 65, Items Previously Reported as Assets and
Liabilities. This Statement establishes accounting and financial reporting standards that reclassify, as deferred outflows of
resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes,
as outflows of resources or inflows of resources, certain items that were previously reported as assets and liabilities.
For the fiscal year ended June 30, 2015, the City implemented GASB Statement 68, Accounting and Financial Reporting for
Pensions, and GASB Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. This
statements purpose is to improve accounting and financial reporting by state and local governments for pensions, and improve
information provided by state and local government employers about financial support for pensions provided by other entities.
Financial Reporting Entity
In determining the financial reporting entity, the City complies with the provisions for GASB statement No. 14, The Financial
Reporting Entity, and includes all component units of which the City appointed a voting majority of the units' board; the City
is either able to impose its will on the unit or a financial benefit or burden relationship exists.
Primary Government
The City of Kalispell is a political subdivision of the State of Montana governed by an elected Mayor and Council duly
elected by the registered voters of the City. The City utilizes the City Manager form of government. The City is considered a
primary government because it is a general purpose local government. Further, it meets the following criteria: (a) It has a
separately elected governing body (b) It is legally separate and (c) It is fiscally independent from the State and other local
governments.
39
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
The accompanying financial statements present the primary government and its component units, entities for which the
government is considered to be financially accountable. These financial statements include all funds, agencies, boards,
commissions and authorities which meet the criteria for inclusion in the City's financial report. These criteria include
financial accountability, appointment of a majority of the secondary government and the financial benefit or burden derived
by the primary government from a secondary government.
Discretely Presented Component Units
Discretely presented component units are separate legal entities that meet the component unit criteria described above but do
not meet the criteria for blending. The Cities' discretely presented component units, the Downtown Business Improvement
District and the Tourism Business Improvement District are legally separate organizations of the City, but the City is
financially accountable. The two component units are reported in a separate columns to emphasize that they are legally
separate from the City.
Downtown Business Improvement District
On September 2, 2003, by resolution 4828, the City created the Downtown Business Improvement District (BID). The Mayor
and City Council appointed the Board of Directors. The City is able to impose its will on the BID as it is authorized to levy
assessments to support the activities of the BID. The annual budget of the BID is subject to approval by the City Council.
The purpose of said Business Improvement District is to promote the health, safety, prosperity, security and general welfare of
the inhabitants of the City of Kalispell and the proposed district, and appears to be of special benefit to the property within the
District. The District boundaries are roughly 2nd Avenue East to 2nd Avenue West between Center Street and 4' Street South.
Publicly owned property and owner occupied single family dwellings are exempt from the assessments related to the District.
Tourism Business Improvement District
On May 3, 2010, by resolution 5425, the City created the Tourism Business Improvement District (TBID). The Mayor with
the approval of the City Council appointed seven owners of property within the district to act as the Board of Trustees of the
District. The City is able to impose its will on the TBID as it is authorized to levy assessments to support the activities of the
TBID. The annual budget of the TBID is subject to approval by the City Council. The purpose of said Tourism Business
Improvement District is to promote the health, safety, prosperity, security and general welfare of the inhabitants of the City of
Kalispell and the proposed district, and appears to be of special benefit to the property within the District. The District is
made up of those properties within the corporate limits of the City of Kalispell with five or more rooms providing overnight
stays for transient patrons at its business.
Basis of Presentation, Measurement Focus, and Basis of Accounting
Government -wide Financial Statements
The government -wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report
information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the
effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported
by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant
extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate
component units for which the primary government is financially accountable.
Eliminations have been made to minimize the double -counting of business -type activities.
40
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by
program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The general
government function of the City includes expenses which are, in essence, indirect expenses of other functions. These
expenses are allocated to each related function. Program revenues include 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants
and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment.
Taxes and other items not properly included among program revenues are reported instead as general revenues.
Indirect expenses reported in the statement of activities must be allocated to the different functions of the City. These
expenses include administration, data processing, and central garage. The administrative cost allocation is based on each
functions percentage of total City expenses. Data processing is allocated based approximately on that functions usage of the
City's computer servers. Central garage expenses are allocated to the other functions of the City based on actual invoicing.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the
latter are excluded from the government -wide financial statements. Major individual governmental funds and major
individual enterprise funds are reported as separate columns in the fund financial statements.
Certain eliminations have been made as prescribed by GASB 34 in regards to inter -fund activities, payables and receivables.
All internal balances in the Statement of Net Position have been eliminated except those representing balances between the
governmental activities and business -type activities, which are presented as internal balances and eliminated in the total
primary government column. In the Statement of Activities, internal service fund transactions have been eliminated; however,
those transactions between governmental and business -type activities have not been eliminated.
Measurement Focus and Basis of Accounting
On the government -wide Statement of Net Position and the Statement of Activities, both governmental and business -type
activities are presented using the economic resources measurement focus and the accrual basis of accounting. Under the
accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred,
regardless of the timing of the cash flows. Property taxes are recognized as revenues in the year for which they are levied.
Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been
met. The City generally applies restricted resources to expenses incurred before using unrestricted resources when both
restricted and unrestricted net assets are available.
The City has chosen not to accrue the interest payable of general long-term debt at year end. This practice results in interest
expense reported for governmental activities on the statement of activities to equal the interest expenditure on the statement of
revenues, expenditures, and changes in fund balance. Although, this is contrary to full accrual accounting, the City feels that
it is immaterial in the presentation of its financial statements.
Fund Financial Statements
Basis of Presentation
Fund financial statements of the City are organized into funds. A fund is an independent fiscal and accounting entity with a
self -balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid
management in demonstrating compliance with finance -related legal and contractual provisions. The minimum number of
funds is maintained consistent with legal and managerial requirements. Funds are organized into three categories:
governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary
categories. Each major fund is displayed in a separate column in the governmental funds statements. All of the remaining
41
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
funds are aggregated and reported in a single column as non -major funds. A fund is considered major if it is the primary
operating fund of the City or meets the following criteria:
a. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or enterprise fund
are at least 10 percent of the corresponding total for all funds of that category or type; and
b. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or enterprise funds
are at least 5 percent of the corresponding total for all governmental and enterprise funds combined.
Measurement focus and Basis of Accounting
Governmcntal funds are used to account for the City's general government activities. Governmental fund types use the flow
of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual
basis of accounting, revenues are recognized when susceptible to accrual. (i.e., when they are "measurable and available")
"Measurable" means the amount of the transaction can be determined and "available" means collectible within the current
period or soon enough thereafter to pay liabilities of the current period. The City considers all revenues available if they are
collected within 60 days after year-end. Expenditures are recorded when the related fund liability is incurred except for un-
matured interest on general long-term debt which is recognized when due, and certain compensated absences and claims and
judgments which are recognized when the obligations are expected to be liquidated with expendable available financial
resources.
Real and personal property taxes, special assessments, charges for current services, and interest earnings are susceptible to
accrual. Other receipts and taxes become measurable and available when cash is received by the City and are recognized as
revenue at that time. The City recorded real and personal property taxes and assessments levied for the current year as
revenue. Taxes and assessments receivable remaining unpaid at year-end and not expected to be collected soon enough
thereafter to be available to pay obligations of the current year were recorded as deferred revenue, with a corresponding
reduction in revenues, as required by generally accepted accounting principles. In addition, prior period delinquent taxes and
assessments collected in the current period were recorded as revenue in the current period as required by generally accepted
accounting principles. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to
accrual criteria are met. Expenditure driven grants are recognized as revenue when the qualifying expenditures have been
incurred and all other grant requirements have been met.
Major Funds
The City reports the following major governmental funds:
The Gcncral Fund is always a major fund. This is the City's primary operating fund and it accounts for all financial
resources of the City except those required to be accounted for in other funds.
The Street Maintenance Fund (special revenue fund) was established to account for the repairs and other costs incurred in
the maintenance of the City's streets. An assessment on the City of Kalispell's tax payers is the main source of revenue for
this fund.
The Community Development Loan Rcvolving Fund (special revenue fund) was originally established to account for a
federal Community Development Block Grant. These federal dollars were loaned to businesses and individuals for projects
approved by the City's Community Development department. The main revenue source for this fund is borrower's interest
payments.
42
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
The Community Development Miscellaneous Fund (special revenue fund) was originally established to account for Urban
Development Assistance Grants (UDAG). These federal dollars were loaned to businesses and individuals for projects located
in economic development zones and approved by the City Community Development department. The main revenue source for
this fund is borrower's interest payments. In fiscal year 2015, this fund, with dollars borrowed from the General fund,
purchased six undeveloped properties from Flathead County at the Old School Station Industrial/Technical Park, a City
special improvement district. Taxes on these properties were five to seven years delinquent, thereby putting the City's SID
debt service fund at risk of not making the annual payment. The City intends to resell these properties for development.
SID 344 is a debt service fund established to account for the resources accumulated and payments made for principal and interest
of the 20 year bonds sold to finance the construction of the Old School Station Industrial and Technology Park.
Proprietary funds are accounted for using the accrual basis of accounting. These funds account for operations that are primarily
financed by user charges. The flow of economic resources focus concerns determining costs as a means of maintaining the capital
investment and management control. Revenues are recognized when earned and expenses are recognized when incurred.
Allocations of costs, such as depreciation, are recorded in proprietary funds.
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connections with a proprietary fund's
principal ongoing operations. The principal operating revenues for enterprise funds are charges to customers for sales and
services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non -operating revenues
and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted
resources first, then unrestricted resources as they are needed.
The City reports the following major proprietary funds:
The Water Fund accounts for the activities of the City's water distribution operations.
The Sewer Fund accounts for the activities of the City's sewer collection and treatment operations and includes the storm
sewer system.
Fiduciary funds account for assets held by the government in a trustee capacity or as an agent on behalf of others.
The agency fund is custodial in nature and does not present results of operations or have a measurement focus. Agency funds
are accounted for using the modified accrual basis of accounting. This fund is used to account for assets that the City holds
for others in an agency capacity.
As a general rule the effect of inter -fund activity has been eliminated from the government -wide financial statements, and the
internal service funds have been absorbed pro -ratably into governmental -type and business -type activities on the government -
wide financial statements. Exceptions to this general rule are charges for services between various functions of the
government. Elimination of these charges would distort the direct costs and program revenues reported for the various
functions concerned.
43
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
Budget Process
An annual appropriated operating budget is adopted each fiscal year for the general fund, special revenue funds, debt service
funds and capital projects funds on the modified accrual basis. In addition, a budget is adopted for the enterprise and internal
service funds on a full accrual basis. The appropriated budget is prepared by fund, function, and for the general fund and
certain other funds, by department.
The final budget is legally enacted by the City Council, after holding public hearings as required by State statutes, and within
forty-five days of the State providing final shared revenue figures. The City Manager and Finance Director may make budget
appropriation transfers within a fund between general classifications of salaries and wages, maintenance and operation and
capital outlay. Reported budget amounts represent the originally adopted budget as amended by resolution of the City
Council. It is management's responsibility to see that the budget is followed to the budgetary line item.
The City Council may amend a final budget when shortfalls in budgeted revenues require reductions in approved
appropriations to avert deficit spending; when savings result from unanticipated adjustments in projected expenditures; when
unanticipated state or federal monies are received; or when a public emergency occurs which could not have been foreseen at
the time of adoption.
The City Manager is granted budget amendment authority for the expenditure of funds from debt service funds, enterprise
funds, internal service funds, trust funds, federal and state grants accepted and approved by the City Council, special
assessments, and donations.
The procedure to amend the budget in total can be made only after the City prepares a resolution, notice is published of a
public hearing, and a public hearing is held in accordance with state law.
All material budget amendments and transfers during FY 2015 are described below
Governmental Funds
The City Council in January accepted two DNRC grants (fund 2600), for a total of $19,000, to fund hazardous tree removals,
a tree replacement program, and development of an Emerald Ash Borer response plan.
Passed Resolution No. 5699 to move $10,976 of forfeiture monies from the Drug Enforcement Grant fund (2916) to the Law
Enforcement Grant fund (2919), and increase the Law Enforcement Grant fund by that amount for the purchase of "In Car"
camera systems.
Accepted a Homeland Security - Stonegarden Grant (fund 2915), for $125,266, and amended the budget that amount to
accommodate the purchase of tactical safety improvements and to strengthen the City's network against cyber-attacks.
The City Council accepted a Mission Lifeline Grant from the American Heart Association in the amount of $20,000, and the
City Manager amended the Fire Grants fund (2956) by this amount to allow for the purchase of a heart monitor.
The City Council passed Resolution No. 5725 which amended the Community Development — Misc. fund (2886) $1,300,000,
Old School Station Technology TIF fund (2310) $250,765, and Old School Station Industrial TIF fund (2311) $57,360.
Also, the City Manager amended the SID 344 debt service fund (3644) by $234,094. These amendments allowed for the
purchase of properties in the Old School Station Industrial/Technology Park, the repayment of funds transferred to help pay
prior year debt service, and the transfer of funds to a property owner to offset SID debt.
44
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
The City Council accepted a grant from the National Recreation and Park Association in partnership with the Walmart
Foundation in the amount of $26,200. To accommodate the expenditure of these funds the City Manager amended the Parks
fund (2215) $6,200. The balance of this grant will be expended in fiscal year 2016.
The City Manager amended the 2005 S & C debt service fund (3605) by $1,250. Fiscal year 2015 was the final year of this S
& C debt service fund and the amendment accommodated the transfer of remaining funds to the debt service revolving fund.
The Airport TIF debt service fund required a $50 City Manager budget amendment to account for the actual cost of fiscal
agent fees.
Assets, Liabilities, and Net Assets or Equity
1. Cash, Cash Equivalents, and Investments
The City's cash and cash equivalents are considered to be cash on hand, demand and time deposits, government backed
securities, bonds and warrants, and investments with the State of Montana's short-term investment pool (STIP). The cash
resources of the individual funds are combined to form a pool of cash and investments which is managed by the City
Treasurer.
Investments are carried at cost, which does approximate fair value as described in Note III, A, except for investments in STIP
and particular bonds, which are reported at fair value.
For purposes of the statement of cash flows, the enterprise and internal services funds consider all funds (including restricted
assets) held in the City's cash management pool to be cash equivalents.
2. Receivables
Between Funds
Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year
are referred to as either interfund receivables/payables (i.e., the current portion of interfund loans) or advances to/from other
funds (i.e., the non -current portion of interfund loans). All other outstanding balances between funds are reported as due
to/from other funds.
Advances between funds are offset by a fund balance reserve account in applicable governmental funds to indicate they are
not available for appropriation and are not expendable available financial resources.
Tares
Property tax levies are set within forty-five days of the State providing shared revenue figures, in connection with the budget
process. Real property (and certain attached personal property) taxes are billed within ten days after the third Monday in
October and are due in equal installments on November 30 and the following May 31. After those dates, they become
delinquent, and a lien is filed upon the property. After three years, the City may exercise the lien and take title to the
property. Special assessments are billed in two equal installments due November 30 and the following May 31. Personal
property taxes (other than those billed with real estate) are generally billed no later than the second Monday in July (normally
in May or June), based on the prior November's levies. Personal property taxes, other than mobile homes, are due thirty days
after billing. Mobile home taxes are billed in two halves, the first due thirty days after billing; the second due September 30.
The tax billings are considered past due after the respective due dates and are subject to penalty and interest charges.
45
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
An allowance for uncollectible accounts was not maintained for real and personal property taxes and special assessments
receivable. The direct write-off method is used for these accounts.
Ambulance
An allowance, based on history, for estimated uncollectible accounts receivable of 46% is maintained for the Ambulance
fund. This allowance account has been adjusted to $196,486 at June 30, 2015.
Ambulance accounts receivable $427,143
Times allowance percentage 46%
@ June 30, 2015 $196,486
Water/Sewer
A reserve for estimated uncollectible accounts receivable of 0.5% of metered sales is maintained for the Water Fund and
Sewer Fund. The reserve balances are as follows for June 30, 2015:
Water
Sewer
$ 14,246
$ 21,360
Contracts
The following are contracts payable to the City of Kalispell on June 30, 2015.
FUND
Source
Amount
General- Major Governmental
Municipal Court
$ 46,551
Information Technology - Internal Service Charter (formerly Bresnan)
42,566
Water- Major Proprietary
Impact Fees
2,497
Sewer- Major Proprietary
Impact Fees
35,476
Solid Waste - Nonmajor Proprietary
Asset sale
15,500
Total Proprietary
53,473
Total City contracts receivable
$ 142,590
3. Inventorics and Prepaid Items
Inventories for materials and supplies for governmental fund types are expended at the time of purchase. Enterprise Fund
inventory of materials and supplies are valued at cost and the First -In First -Out (FIFO) method is utilized. Certain payments
to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items.
46
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
The City pays in advance for Health Insurance and Workers' Compensation. This results in a City asset at June 30. On June
30, 2015, the City reported assets for prepaying expenses in the following funds.
FUND
Purpose
Amount
General- Major Governmental
Workers Compensation
$ 94,695
General- Major Governmental
Health Insurance
86,809
Parks
Health Insurance
11,549
Ambulance
Health Insurance
10,647
Building Department
Health Insurance
3,628
Street Maintenance- Major Governmental Health Insurance
13,328
Total Governmental
220,656
Information Technology -Internal Service Health Insurance 4,374
Water- Major Proprietary Health Insurance 11,660
Sewer- Major Proprietary Health Insurance 19,567
Solid Waste Health Insurance 7,465
Total Proprietary 38,692
Total City prepaids $ 263,722
4. Restricted Assets
Certain proceeds of the City's enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are
classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. When an
expense is incurred for which both restricted and unrestricted net assets are available, it is the City's policy to first apply the
restricted resources.
5. Capital Assets
Capital assets, which include property, plant, and equipment, are reported in the applicable governmental or business -type
activities columns in the government -wide financial statements. Capital assets are defined by the government as assets with
an initial, individual cost of more than $5,000 and an estimated useful life in excess of five years. Such assets are recorded at
historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair
market value at the date of donation. As required by GAS13, the City of Kalispell has retroactively reported its streets as part
of capital assets in the financial reports for fiscal year 2009. More detailed information on the City's streets and all capital
assets can be found in Note D. Capital Assets.
Police vehicles are an exception despite a useful life less than 5 years. The City has determined that it is important to
capitalize and depreciate these because the total cost, as a group, is substantial.
The costs of normal maintenance and repairs that do not add to the value of the assets or extend asset lives are not capitalized.
Improvements are capitalized and depreciated over the remaining useful lives of the related assets. Major outlays for capital
assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of fixed
assets is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the
same period.
47
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Depreciation has been provided for the property, plant and equipment of the City of Kalispell using the straight line method.
The useful lives of these assets have been estimated as follows:
Buildings
20-50 years
Improvements Other than buildings
10-50 years
Streets
40 years
Machinery, vehicles and equipment
3-20 years
Water and Sewer lines, pump stations
10-50 years
6. Compensated Absences
It is the City's policy and state law to permit employees to accumulate a limited amount of earned but unused vacation
benefits, which will be paid to employees upon separation from City service. Employees are allowed to accumulate and carry
over a maximum of two times their annual accumulation of vacation. Any vacation leave time accumulated over this
maximum carryover must be used within 90 days of the new calendar year. There is no restriction on the amount of sick leave
that may be accumulated. Upon separation, employees are paid 100 percent of accumulated vacation and 25 percent of
accumulated sick leave.
In fiscal year 2012, the City of Kalispell began offering a voluntary employees beneficiary association (VEBA) plan. A tax-
free post -retirement medical expense account used by retirees and their eligible dependents to pay for any eligible medical
expenses. The plan is funded by 50% of the employee's unused sick leave at the time of retirement, which is contributed by
the City into the plan. The benefit to the retiree of this plan is that they receive two times the amount of unused sick leave at
retirement, none of which is subject to tax.
The liability associated with governmental fund -type employees is reported in Governmental Activities column of the
Statement of Net Position, while the liability associated with proprietary fund -type employees is recorded in the respective
fund and the Business -type Activities column of the Statement of Net Position. For the purpose of reporting these
compensated absences payable as current or noncurrent, the City assumes all employees will use their vacation accumulated
as of June 30' in the succeeding fiscal year (current). The City also assumes sick leave accumulated as of June 30' will
remain accumulated in the succeeding fiscal year (long-term).
7. Long - Term Obligations
In the government -wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and
other long-term obligations are reported as liabilities in the applicable governmental activities, or proprietary fund type
statement of net position. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs
are expensed when incurred.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance
costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums
received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other
financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service
expenditures.
48
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
8. Net Position/Fund Balance
Net position in the government wide and proprietary fund financial statements show the amount of the capital assets less any
outstanding debt issued to fund them as "net investment in capital assets." Restricted net position are those that have
constraints placed on them either by external parties or imposed by law or enabling legislation.
The City implemented GASB Statement 54 for fiscal year 2011. As a result, the classifications for fund balance now used for
governmental funds are reported in two general classifications, non -spendable and spendable:
Non -spendable represents the portion of fund balance that is not in spendable form such as inventories and prepaids, and, in
the general fund, long term notes and loans receivable.
Spendable fund balance is further categorized as restricted, committed, assigned, and unassigned.
Restricted fund balance contains balances that can be spent only for the specific purposes stipulated by external parties or
through enabling legislation. External parties include grantors, debt covenants, votes, and laws and regulations of other
governments.
Committed fund balance includes amounts that can be used only for the specific purposes determined by a formal action of
the government's highest level of decision -making authority, the City Council. The City Council needs to formally adopt
a Resolution in order to establish, modify, or rescind a fund balance commitment.
Assigned fund balances are intended to be used by the government for specific purposes but do not meet the criteria to be
classified as restricted or committed. Assignments of fund balance are created by the governing body. The City Council
has the authority to express assignments in the General fund. In governmental funds other than the general fund, assigned
fund balance represents the remaining amount that is not restricted or committed. Also included in the assigned fund
balance for the general fund are assignments for the portion of the current general fund balance that is projected to be used
to fund expenditures and other cash outflows in excess of the expected revenues and other cash inflows in the next fiscal
year.
Unassigned fund balance is the residual classification for the government's general fund and includes all spendable
amounts not contained in the other classifications. In other funds, the unassigned classification should be used only to
report a deficit balance resulting from overspending for specific purposes for which amounts have been restricted,
committed, or assigned.
When both restricted and unrestricted resources are available, spending will occur in the following order, for the identified
fund types:
General Fund: restricted, committed, assigned, unassigned
Special Revenue Funds: restricted, committed, assigned
Debt Service Funds: assigned, committed, restricted
Capital Project Funds: restricted, committed, assigned
49
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Excess of expenditures over appropriations
For the year ended June 30, 2015, all City funds expenditures were less than or equal to budgeted appropriations.
B. Deficit Fund Balances
The City reports one (1) Fund with a deficit fund balance at June 30, 2015.
The Sidewalk and Curb capital project fund shows a negative fund balance of $3,040 at June 30'. This is due to the timing of
construction season and the end of the fiscal year.
NOTE 3. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS
A. Cash and Cash Equivalents
Investment Income
Income from pooled investments is allocated to the individual funds based on the fund's month end cash balance in relation to
total pooled investments.
Cash Composition
Cash and investments may include cash and cash items; demand, time, savings, and fiscal agent deposits; investments in the
State Short -Term Investment Pool (STIP); repurchase agreements; U.S. government treasury bills, notes, bonds, and other
treasury obligations such as state and local government series; general obligations of certain agencies of the United States
such as Federal Home Loan Bank; and U.S. government security money market funds if the fund meets certain conditions.
Total City's (primary governmental and component units) composition of cash, deposits and investments at fair value as of
June 30, 2015, are as follows:
Cash on hand
$ 2,930
Cash in banks:
Demand Deposits
15,907,983
Bonds/Warrants
37,242
STIP
1,520
Government Backed Securities
13,797,649
Total
$29.747. 224
50
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Credit Risk
Section 7-6-202, MCA, limits investments of public money of a local government in the following eligible securities:
(a) United States government treasury bills, notes and bonds and in the United States treasury obligations, such as state
and local government series (SLGLS), separate trading of registered interest and principal of securities (STRIPS), or
similar United States treasury obligations;
(b) United States treasury receipts in a form evidencing the holder's ownership of future interest or principal payments
on specific United States treasury obligations that, in the absence of payment default by the United States, are held in
a special custody account by an independent trust company in a certificate or book entry form with the federal
reserve bank of New York; or
(c) Obligations of the following agencies of the United States, subject to the limitations in subsection 2 (not included):
(i) federal home loan bank;
(ii) federal national mortgage association;
(iii) federal home mortgage corporation; and
(iv) federal farm credit bank.
With the exception of the assets of a local government group self-insurance program, investments may not have a maturity date
exceeding 5 years except when the investment is used in an escrow account to refund an outstanding bond issue in advance.
Section 7-6-205 and Section 7-6-206, MCA, state that demand deposits may be placed only in banks and Public money not
necessary for immediate use by a county, city, or town that is not invested as authorize in Section 7-6-202 may be placed in time
or savings deposits with a bank, savings and loan association, or credit union in the state or placed in repurchase agreements as
authorized in Section 7-6-213.
The City of Kalispell has no investment policy that would further limit its investment choices.
The City of Kalispell has the following investments and their related credit risk as reported by Standard and Poor's or Moody's
investment service:
Short Term Investment Pool (STIP) Quality Ratings and Weighted Average Maturity as of June 30, 2015:
Credit WAM
Amortized Cost Quality in
Security Investment Type (in thousands) Rating Days
Asset Backed Commercial Paper $ 779,579 A-1 25
Corporate Commercial Paper 101,299 A-1 102
Corporate Variable Rate 571,672 A-1+ 42
Certificates of Deposit Fixed Rate 150,000 A-1 259
Certificates of Deposit Variable Rate 450,000 A-1+ 47
Other Asset Backed 27,821 NR NA
U.S. Government Agency Fixed 54,498 A-1+ 236
U.S. Government Agency Variable 239,008 A-1+ 42
Money Market Funds (Unrated) 161,592 NR 1
Money Market Funds (Rated) 3,000 A-1+ 1
Total Investments $ 2,538,469 A-1 52
Securities Lending Collateral Investment Pool $ 5,806 NR 30`
`As of June 30, 2015, the Securities Lending Quality Trust liquidity pool had an average duration of
30 days and an average weighted final maturity of 115 days for U.S. dollar collateral. In March
2015, all holdings in the Securities Lending Duration Pool were sold.
Audited financial statements for the State of Montana's Board of Investments are available at 2401 Colonial Drive, 3' floor,
Helena, MT 59620.
51
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Custodial Credit Risk
Custodial Credit risk is the risk that, in the event of a bank failure, the government's deposits may not be returned to it. The City
of Kalispell does not have a deposit policy for custodial credit risk. All deposits are carried at cost plus accrued interest. As of
June 30, 2015, the City of Kalispell's bank balance was exposed to custodial credit risk as follows:
Depository Account Balance
Insured $ 250,000
Collateralized
-Collateral held by the pledging bank's trust
department, but not in the City's name 15,821,580
Total Deposits $16A71.580
Deposit Security
Section 7-6-207, MCA, states (1) The local governing body may require security only for that portion of the deposits which is not
guaranteed or insured according to law and, as to such unguaranteed or uninsured portion, to the extent of:
(a) 50% of such deposits if the institution in which the deposit is made has a net worth of total assets ratio of 6% or
more; or
(b) 100% if the institution in which the deposit is made has a net worth of total assets ratio of less than 6%.
The amount of collateral held for the City of Kalispell deposits at June 30, 2015, exceeded the amount required by State statues.
Concentration of Credit Risk
The City of Kalispell places no limit on the amount the entity may invest in any one issuer. The City of Kalispell's concentration
of credit risk percentages follow for each investment issued that is not issued or explicitly guaranteed by the U.S. government,
invested in mutual funds, external investment pools or other pooled investments:
% of credit risk
Bonds/Warrants <1%
52
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
Interest Rate Risk
The City of Kalispell does not have a formal investment policy that limits investment maturities as a means of managing its
exposure to fair value losses arising from increasing interest rates. The following is a list of individual investments as of June 30,
2015 along with their related interest rates and maturity dates.
Investment
STIP
Federal Farm Banks
Federal Farm Banks
Federal National Mtg Assn
Federal Home Loan Bank
Federal Home Loan Mortgage Corp.
Federal Home Loan Bank
Federal Home Loan Mortgage Corp.
Federal Home Loan Mortgage Corp.
Federal National Mtg Assn
Federal National Mtg Assn
Federal Farm Banks
Federal National Mtg Assn
Wells Fargo Bank
S&C Bonds - internal
Total
Interest Rate Maturity Date
Amount
0.13%(varies)
varies
$ 1,520
0.900%
12/26/17
2,000,000
1.100%
10/23/17
1,000,000
0.900%
10/25/17
1,894,649
1.500%
5/28/20
1,000,000
1.100%
11/17/17
250,000
1.550%
1123/20
1,000,000
1.625%
9/12119
500,000
1.875%
11/12/19
750,000
1.450%
1/30119
1,000,000
0.900%
1117/17
1,405,000
1.030%
3/12/18
1,000,000
1.000%
3127/18
1,750,000
0.950%
2/28/18
248,000
3.00%-6.00%
varies
37,242
$13,836,411
B. Interfund Receivables and Payables (Due to/from Other Funds)
The composition of interfund balances and due to/from as of June 30, 2015, was as follows:
Receivable Fund Payable Fund Amount Purpose
General Fund - Major Governmental Stonegarden Grant - Special Revenue Fund $ 1,065 S/T Loan
General Fund - Major Governmental Law Enforcement Grants - Special Revenue Fund 3,837 S/T Loan
General Fund - Major Governmental CDBG-ED (FVCC) Grant - Special Revenue Fund 2,086 S/T Loan
Total - Due To Other Funds (Governmental Funds $ 6,988
C. Transfers
The following is an analysis of transfers between funds during Fiscal Year 2015:
From
Health
Health
Parks - in - Lieu
Old School Tech TIF
Old School Tech TIF
Old School TIF - Debt Service
Old School Industrial TIF
Old School Industrial TIF
Old School TIF - Debt Service
West Side TIF - Special Revenue
Airport TIF - Debt Service
Solid Waste - Nonmajor Proprietary
General - Major Governmental
S & C's
General - Major Governmental
Drug Grant
General - Major Governmental
To
General - Major Governmental
Parks
Trails
CD Misc
Old School TIF - Debt Service
Old School Tech TIF
CD Misc
Old School TIF - Debt Service
Old School Industrial TIF
West Side TIF - Debt Service
Airport TIF - Special Revenue
Gas Tax
Ambulance - Special Revenue
SID Revolving
Drug Grant
Law Enforcement Block Grant
Law Enforcement Block Grant
TOTAL
Amount Purpose
$ 665,000 Operations
70,000 Operations
8,181 Match
268,789 Operations
7,500 Operations
180,366 Operations
58,860 Operations
500 Operations
53,378 Operations
32,000 Operations
450,000 Operations
25,000 Operations
310,000 Operations
1,250 Close out
55,976 Match/Operations
10,976 Operations
3,500 Match
$ 2,201,276
53
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
D. Capital Assets
Capital asset activity for the year ended June 30, 2015 was as follows
Asset Transfers between fund types
Capital assets transferred from governmental funds to business -type funds are not reported in the Statement of Revenues,
Expenditures, and Changes in Fund Balances, because there has been no flow of current financial resources. It is reported as
a transfer for both sides in the Statement of Activities. It is reported as a capital contribution on the Proprietary Funds
Statement of Revenues, Expenses, and Changes in Fund Net Position. For fiscal year 2015 governmental funds contributed
capital valued at $90,000 to the Sewer (Storm) Fund.
Assets Contributed
In fiscal year 2015, Governmental Activities report contributed assets from private sources with a value of $1,839,465.
Streets valued at $1,811,225 were contributed by developers. The balance ($28,240) are sidewalk improvements paid for by
homeowner's directly or by Sidewalk & Curb assessments.
In fiscal year 2015, Business -type Activities report contributed assets from private sources with a value of $205,370. The
Water fund received contributions from developers in the amount of $156,163. Contributed to the Water fund were six (6)
new fire hydrants ($24,448), and sixteen hundred eighty seven linear feet (1687') of water mains ($131,715). The Sewer fund
received contributions from developers in the amount of $49,207. Contributed to the Sewer fund were six hundred and ninety
one linear feet (691') of sanitary mains ($26,762), and two hundred ninety four linear feet (294') of storm sewer mains
($22,445).
In fiscal year 2015, Business -type Activities report contributed assets from other governments with a value of $28,825. The
Montana Department of Transportation contributed to the City's cost to relocate a water and sewer main. The MDOT's share
of these projects were $19,341 and $9,484, respectively.
Gain (Loss) on Sale/Disposal of Capital Assets
In fiscal year 2015, Business -type Activities report gain on disposal of assets of $46,710. Residential and commercial meters
were replaced with a depreciated value of $5,090, resulting in a loss on disposal of capital assets in the Water fund. The
Sewer fund's sale of a fully depreciated 1980 injector truck resulted in a gain of $5200. The Solid Waste fund sold two fully
depreciated trucks, a sidearm and a rear -loader, for a gain of $46,600.
54
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
Governmental Activities:
Capital assets not being depreciated:
Land
Construction in Progress
Total capital assets not being depreciated
Capital assets being depreciated:
Buildings
Improvements other than buildings
Machinery and equipment
General
Ambulance
Parking
Infrastructure
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Machinery and equipment
General
Ambulance
Parking
Infrastructure
Total accumulated depreciation
Total capital assets being depreciated, net
City capital assets, net
Internal service funds:
Information Technology
Less accumulated depreciation - Information Technology
Central Garage
Less accumulated depreciation - Central Garage
Internal service funds assets, net
DUNE 30, 2015
Balance
Balance
July 1, 2014
Additions
Contributions
Deductions
June 30, 2015
$ 2,395,299
$
$
$ -
$ 2,395,299
22,155
(22,155)
-
2,417,454
(22,155)
2,395,299
17,163,639
17,163,639
15,462,924
78,203
28,240
15,569,367
8,137,648
493,817
-
(248,357)
8,383,108
398,059
-
398,059
123,794
-
123,794
81,323,959
-
1,811,225
83,135,184
122,610,023
572,020
1,839,465
(248,357)
124,773,151
(7,293,713)
(588,508)
-
(7,882,221)
(6,899,519)
(595,569)
(7,495,088)
(4,377,237)
(546,503)
248,357
(4,675,383)
(369,755)
(12,394)
-
(382,149)
(110,796)
(4,763)
(115,559)
(24,709,735)
(2,033,098)
(26,742,833)
(43,760,755)
(3,780,835)
248,357
(47,293,233)
78,849,268
(3,208,815)
1,839,465
-
77,479,918
$81,266,722 $ (3,208,815) $ 1,839,465 $ (22,155) $79,875,217
Balance Balance
July 1, 2014 Additions Contributions Deductions June 30, 2015
$ 183,850 $ 46,720 $ $ $ 230,570
(155,031) (20,131) (175,162)
230,529 42,364 272,893
(176,541) (7,509) (184,050)
$ 82,807 $ 61,444 $ $ $ 144,251
Governmental activities depreciation was charged to functions/programs of the primary government as follows:
Governmental Activities:
General Government $ 2,492,714
Public Safety 556,238
Public Works 263,695
Parks and Recreation 468,188
Total Governmental Activities $ 3,780,835
55
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
Balance
Balance
Business -type activities:
July 1, 2014
Additions
Contributions
Deductions
June 30, 2015
Capital assets not being depreciated:
Land
Airport
$ 1,347,867
$ -
$ -
$ -
$ 1,347,867
Water
105,958
-
-
-
105,958
Sewer
221,513
60,624
-
-
282,137
Sewer (Storm)
26,550
-
-
-
26,550
Construction in progress
Airport
-
-
-
-
-
Water
5,679
208,208
-
(5,530)
208,357
Sewer
72,132
1,388,395
-
(17,741)
1,442,786
Sewer (Storm)
Total capital assets not being depreciated
1,779,699
1,657,227
-
2( 3,271)
3,413,655
Capital assets being depreciated:
Airport
1,962,813
-
-
-
1,962,813
Water
General Plant
1,376,904
-
-
-
1,376,904
Source of Supply
4,749,611
21,115
-
-
4,770,726
Transmision and Distribution
26,893,866
726,881
175,504
(54,509)
27,741,742
Pumping Plant
3,604,237
-
-
-
3,604,237
Sewer
General Plant
1,002,189
-
-
-
1,002,189
Transmision and Distribution
24,272,020
65,389
36,246
-
24,373,655
Storm Sewer System
14,022,718
610,738
22,445
-
14,655,901
Treatment Plant Equipment
465,667
-
-
(107,985)
357,682
Treatment Plant
39,141,910
235,988
-
-
39,377,898
Solid Waste
Buildings
316,731
-
-
-
316,731
Machinery and equipment
1,701,188
80,598
(307,228)
1,474,558
Total capital assets being depreciated
119,509,854
1,740,709
234,195
(469,722)
121,015,036
Less accumulated depreciation for:
Airport
(851,075)
(96,466)
-
-
(947,541)
Water
General Plant
(1,064,744)
(46,565)
-
-
(1,111,309)
Source of Supply
(892,930)
(104,620)
-
-
(997,550)
Transmision and Distribution
(7,748,457)
(633,524)
-
49,419
(8,332,562)
Pumping Plant
(1,642,818)
(112,433)
-
-
(1,755,251)
Sewer
General Plant
(856,841)
(23,646)
-
-
(880,487)
Transmision and Distribution
(9,513,969)
(756,179)
-
-
(10,270,148)
Storm Sewer System
(4,024,112)
(347,952)
-
-
(4,372,064)
Treatment Plant Equipment
(444,466)
(2,556)
-
107,985
(339,037)
Treatment Plant
(19,081,991)
(850,447)
-
-
(19,932,438)
Solid Waste
Buildings
(263,303)
(10,063)
-
-
(273,366)
Machinery and equipment
(1,048,425)
(90,576)
307,228
(831,773)
Total accumulated depreciation
(47,433,131)
(3,075,027)
464,632
(50,043,526)
Total capital assets being depreciated, net
72,076,723
(1,334,318)
234,195
(5,090)
70,971,510
Business -type activities capital assets, net
$ 73,856,422
$ 322,909
$ 234,195
$ (28,361)
$ 74,385,165
Business -type activities depreciation was charged to functions/programs of the primary government as follows:
Business -type Activities:
Airport $ 96,466
Water 897,142
Sewer 1,980,780
Solid Waste 100,639
Total Business -type Activities $ 3,075,027
56
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
E. Long -Term Debt
During the year ended June 30, 2015, the following changes occurred in liabilities reported in long-term debt:
Balance
July 1, 2014 Additions
Reductions
Balance Due within
June 30, 2015 1 year
Governmental Activities:
G.O. Bonds
$ 3,255,000
$ -
$ (450,000)
$ 2,805,000
$
455,000
Revenue Bonds
1,410,000
(153,000)
1,257,000
159,000
Assessments
3,392,922
7,844
(326,526)
3,074,240
327,506
Contract Debt/Loans
1,556,990
116,195
(374,642)
1,298,543
373,532
Intermediary Program
620,978
-
(25,900)
595,078
26,148
Compensated Absences
1,273,156
1,009,474
(947,523)
1,335,107
958,456
Governmental Activities Sub Total
$ 11,509,046
$ 1,133,513
$ (2,277,591)
$ 10,364,968
$
2,299,642
Internal Service Funds:
Compensated Absences
$ 23,302
$ 21,774
$ (17,486)
$ 27,590
$
20,345
Internal Service Funds Sub Total
$ 23,302
$ 21,774
$ (17,486)
$ 27,590
$
20,345
Business -type Activities:
Revenue Bonds
$ 735,000
$ -
$ (60,000)
$ 675,000
$
65,000
SRF
14,932,682
17,318
(1,191,000)
13,759,000
1,028,000
Contract Debt/Loans
172,988
-
(18,833)
154,155
37,963
Compensated Absences
268,942
(185,815)
202,847
285,974
192,288
Business -type Activities Sub Total
$ 16,109,612
$ (168,497)
$ (1,066,986)
$ 14,874,129
$
1,323,251
In prior years, the general fund was used to liquidate compensated absences and claims and judgments.
General Obligation Bonds - The City issues general obligation bonds to provide funds for the acquisition and construction
of major capital facilities. General obligation bonds are direct obligations and pledge the full faith and credit of the City.
General obligation bonds outstanding as of June 30, 2015 were as follows:
Purpose
Pool/Fire Hall Refunding
Origination Interest
Date Rate Term
6/13/2012 1%-2% 10years
Total G.O. Bonds
Due Principal Annual Balance
Date Amount Payment 30-Jun-15
2022 $4,145,000 varies $2,805,000
$4,145,000 $2,805,000
Special Assessment Debt - Special assessment bonds are secured by a lien on the assessed properties. The primary source of
repayment is the assessments levied against the benefiting properties. However, the City is liable, to an extent, for repayment
of these special assessment bonds. 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.
Origination
Interest
Due
Principal
Annual
Balance
Purpose
Date
Rate
Term
Date
Amount
Payment
30-Jun-15
SID343
6/12/2001
3.6 %-5.5 %
20 years
2021
1,581,500
varies
315,000
SID344
6/15/2006
3.7 %-5.1 %
20 years
2026
4,520,000
varies
2,495,000
SID345
5/15/2014
3.00 %
15 years
2029
242,000
varies
227,000
2007 S&C
1/3/2008
6.00 %
8 years
2016
15,407
varies
1,926
2008 S&C
1/3/2009
3.50 %
8 years
2017
8,981
varies
2,245
2009 S&C
1/4/2010
3.50 %
8 years
2018
7,629
varies
2,861
2010 S&C
1/6/2011
3.00 %
8 years
2019
942
varies
471
2011 S&C
1/6/2012
325 %
8 years
2020
5,792
varies
3,620
2012 S&C
4/12/2013
325 %
8 years
2021
3,981
varies
2,986
2013 S&C
1/2/2014
325 %
8 years
2022
17,472
varies
15,288
2014 S&C
1/2/2016
325 %
8 years
2023
7,845
varies
7,845
Total Special Assessment
Bonds
$ 6,411,549
$ 3,074,242
57
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
SID's 343 Assessments
In the event that all future and delinquent assessments are paid and that there are no future adjustments to assessments by the
City of Kalispell, there is a projected surplus of principal assessments in SID 343 of $138,182.
SID 344 Bonds
The City of Kalispell entered into a Continuing Disclosure Undertaking dated as of June 29, 2006 with respect to the SID 344
Bonds. As part of the Undertaking, the City covenanted and agreed to provide continuing disclosure of certain financial
information, operating data, and timely notices of the occurrence of certain events for the benefit of the Holders of the Bonds
in order to assist the Participating Underwriters in complying with Securities and Exchange Commission Rule 15c2-12(b) (5),
promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the
"Rule"). The Bonds were issued pursuant to Resolution No. 5123, adopted by the City Council of the City on June 19, 2006.
Pursuant to Resolution No. 5123, principal of and interest on the Bonds are secured by: (i) special assessments payable by
taxpayers in SID 344; (ii) certain tax increment revenues pledged to the Bonds; (iii) a bond reserve account ($226,000)
established in the SID 344 fund; (iv) the debt service revolving fund ($226,000). On the July 1, 2014 payment date for the
Bonds, the City used $367,283 of the $384,576 in the SID 344 bond reserve accounts to fully satisfy the regularly scheduled
debt service payment of $367,283. As of June 30, 2015, these reserves have been fully reestablished.
The use of the bond reserve monies was necessary because the largest property owner in SID 344 (currently the owner of 5 of
the 17 total parcels in SID 344) had not paid 2008/2009/2010/2011/2012/2013 Special Assessments when due, and the
available Special Assessments and Tax Increments were insufficient to fully satisfy the regularly scheduled payment. The City
has determined that the use of bond reserve monies constitutes a material event (as defined by the Rule and the Undertaking)
because it is an unscheduled draw on the reserves reflecting financial difficulties for the Bonds.
In April 2015, the City of Kalispell became owner of six of the eleven unsold properties in Special Improvement District 344
by bringing the taxes current on those six properties. The City used these tax payments to replenish the debt service revolving
fund to its required amount of $226,000. These funds also allowed the City to make the fiscal year 2015 and future debt
payments without the use of reserve money, and replenish the district bond reserve account.
Revenue Bonds — Revenue bonds are directly related to and expected to be paid from the proprietary fund. The 2005 Airport
Tax Increment bonds and the 2012 West Side Tax Increment bonds are accounted for in the Government -wide financial
statements and are paid directly from tax increment in the district.
Purpose
Governmental Activities:
2005A - Airport TIF
2012 - West Side TIF
Governmental Activities Sub Total
Business -type Activities:
2004 Water Refunding
Business -type Activities Sub Total
Issue Interest
Date Rate Term
Sep-05 3.8%-4.40% 10 years
Mar-12 variable 25 years
May-04 2.5%-4.85% 20 years
Total Revenue Bonds
58
Final Bonds
Maturity Issued
Balance
30-Jun-15
2020 $ 1,445,000 $ 795,000
2037 500,000 462,000
$ 1,945,000 $ 1,257,000
2024 $ 1,840,000 $ 675,000
1,840,000 675,000
$ 3,785,000 $ 1,932,000
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
Significant Provisions of the Series 2005 Airport Urban Renewal Tax Increment Bond
Reserve Account — The City shall maintain a debt service reserve account with a balance equal to the lesser of: (i) ten percent
of the sum of the original principal amounts of each series of Bonds of which any Bond is Outstanding or (ii) the maximum
amount of principal and interest due on the Outstanding Bonds (giving effect to any mandatory sinking fund redemption) in
the then current or any future calendar year.
10% of the sum of the original principal amount $144,500
City's Reserve $144,500
At June 30, 2015, the Airport TIF debt service fund had taxes due from Flathead County in the amount of $138,096. These
monies were received on July 17, 2015 and the district bond reserve was fully replenished.
Significant Provisions of the Series 2012 West Side Urban Renewal Tax Increment Note
The Note matures on January 1, 2037, and is subject to redemption, at the option of the City, in whole or in part, on July 1,
2014. Interest on the note is variable and adjusts at a rate equal to the Prime Rate as published in the Wall Street Journal plus
.75% on each interest payment date for the Note.
Reserve Account — The City is not required to maintain a debt service reserve account related to the Series 2012 West Side
Urban Renewal Tax Increment Note.
Water Debt Required Information
Debt Service Account - Monthly an amount equal to not less than 1/6 of the interest due within the next six months and 1/12
of the principal to become due within the next twelve months shall be credited to the debt service account. The debt service
account was zero as of June 30, 2015, as all debt service payments were made as of the end of the fiscal year, leaving no
accrued interest or principal balance.
Reserve Account - The City shall keep in the reserve account an amount equal to the lesser of 10% of the original principal or
the maximum amount of principal and interest required in the current or any subsequent fiscal year. For the Water fund the
City complies with the 10% of the original principle.
10% of Original Principal $ 358,400
Total Reserve Requirement $ 358,400
Reserve balance 6/30/15 358 400
Property Insurance - The City will cause all buildings, properties, fixtures, and equipment to be kept insured in amounts that
are ordinarily carried.
Liability Insurance - The City will carry insurance against liability of the City and its employees.
Rates and Charges — Rates and charges will be made and kept sufficient to provide gross income and revenues adequate to
pay promptly the reasonable and current expenses of operating and maintaining the system and to produce in each fiscal year
net revenues 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.
59
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
Cash Flow Coverage
Water Service Charges
$ 2,845,146
`Misc. Revenue
212,179
Total Operating Revenue
3,057,325
Less: Operating Expense (excludes depreciation)
1,574,589
Available for Debt Service
$ 1,482,736
—Maximum Debt Service
$ 354,800
Estimated Coverage FY15
418%
`includes interest revenue
"includes all water fund borrowings
State Revolving Fund — the City has six (5) loan agreements with the State Revolving Fund (SRF). These obligations are to
be repaid from the operating income of the fund.
Water and Sewer Debt Refinanced
On August 20, 2012, by Resolution No. 5576 and Resolution No. 5577, the City Council approved the refinancing of most of
the debt of the Water fund and all of the debt of the Sewer Funds.
Resolution No. 5576 related to first amended and restated water system revenue bonds (DNRC Drinking Water State
Revolving Loan Program); amending authorizing resolutions adopted March 5, 2001, June 4, 2007, and September 4, 2007,
and bonds. Refunded principal of the three bond issues was $404,000, $526,000 and $1,340,000, respectively. Total Water
fund debt service related to these issues, prior to refinancing was $2,857,582. After the refinancing was completed on August
30, 2012, total Water fund debt service related to these issues was 2,558,345. Net savings from refinancing the Water fund
debt will be $299,237.
Resolution No. 5577 related to first amended and restated sewer system revenue bonds (DNRC Water Pollution Control State
Revolving Loan Program); amending authorizing resolutions adopted July 6, 2004, and October 15, 2007, and bonds.
Refunded principal of the two bond issues was $1,009,000 and $13,026,000, respectively. Total Sewer fund debt service
related to these issues, prior to refinancing was $18,370,225. After the refinancing was completed on August 30, 2012, total
Sewer fund debt service related to these issues was 16,290,310. Net savings from refinancing the Sewer fund debt will be
$2,079,915.
SRF LOANS
2013 Sewer - WWiP Digester Lid
2012 Sewer Refunding
2012 Water Refunding
2012 Water Refunding
2012 Sewer Refunding
Sewer Debt Required Information
Interest
Amount
Outstanding
Origination
Rate
Term
Borrowed
30-Jun-15
FY13
3.00%
20years
$ 1,102,748
$ 1,009,000
FY13
225%
12years
1,009,000
781,000
FY13
225%
15years
1,340,000
1,106,000
FY13
2.00%
8years
404,000
269,000
FY13
225%
15years
12,827,000
10,594,000
Total SRF
Loans
$ 16,682,748
$13,759,000
Operating Reserve — The city shall keep in the operating reserve account an amount equal to one month's operating expenses.
As of June 30, 2014, the operating reserve account contains $190,000.
Debt Service Account - Monthly an amount equal to not less than 1/6 of the interest due within the next six months and 1/12
of the principal to become due within the next twelve months shall be credited to the debt service account. The debt service
account was zero as of June 30, 2015, as all debt service payments were made as of the end of the fiscal year, leaving no
accrued interest or principal balance.
60
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
Reserve Account - The City shall keep in the reserve account an amount equal to the lesser of 10% of the original principal
($1,493,875), the maximum amount of principal and interest required in the current or any subsequent fiscal year
($1,182,693), or 125% of the average debt service payable in any fiscal year ($14,328,642 / 18 years = $796,036). The City
is in compliance with the 125% of the average debt service payable in any fiscal year. As of June 30, 2015, the debt service
reserve account contains $1,109,313.
Rates and Charges - Rates and charges will be made and kept sufficient to provide gross income and revenues adequate to
pay promptly the reasonable and current expenses of operating and maintaining the system and to produce in each fiscal year
net revenues 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.
Cash Flow Coverage
*Operating Revenue
$ 5,209,732
Impact Fees Pledged for Debt
320,000
Total
5,529,732
Less: Operating Expense (excludes depreciation)
2,795,707
Available for Debt Service
$ 2,734,025
-Maximum Debt Service
$1,182,693
Estimated Coverage FY15
231 %
*includes interest revenue
**includes all sewer fund borrowings
Loans/Contracted Debt
Origination
Interest
Due
Principal
Balance
Purpose
Date
Rate
Term
Date
Amount
30-Jun-15
Business -type Activities
BOI:Garbage Truck
6/13/2015
varies
5 years
2/15/2019
$ 172,988
$ 154,155
Total loans/contracted debt
- Business -type Activities
$ 154,155
Governmental Activities
BOI:Fire Truck
4/22/2005
varies
10 years
8/15/2015
$ 279,900
$ 16,672
BOI:BucketTruck
12/30/2010
varies
5years
2/15/2016
28,300
5,805
BOI:Mower
3/4/2011
varies
5 years
2/15/2016
71,220
14,731
BOI:Dump Truck
6/15/2012
varies
5 years
2/15/2017
124,865
56,364
BOI:Compactor
12/30/2011
varies
5 years
2/15/2017
45,928
18,786
BOI: Stumper
2/1/2013
varies
5 years
2/15/2018
20,000
12,139
BOI: P/U & Tractor
2/1/2013
varies
5 years
2/15/2018
45,000
27,313
BOI: Dump Trucks (2)
5/24/2013
varies
5 years
2/15/2018
174,698
117,341
BOI:Boom Truck
8/23/2013
varies
5 years
2/15/2018
97,651
65,562
BOI: Dump Trucks (2)
2/28/2014
varies
5 years
2/15/2019
162,696
140,713
Rocky Mtn Bank - Fire Truck
3/7/2008
3.95%
10 years
3/1/2018
575,000
196,175
Capital One Public Funding -
201 1 st Ave E - City Hall
10/25/2007
4.85%
12 years
9/15/2019
1,420,165
626,942
Sub total BOI
loans/contracted debt
$ 3,045,423
$1,298,543
USDA: Intermediary
Relending Program
10/12/2004
1.00%
30 years
10/12/2034
$ 520,000
$ 398,273
Relending Program
11/27/2006
1.00%
30 years
11/27/2036
257,500
196,805
Sub total USDA Intermediary
777,500
595,078
Total loans/contracted debt
- Governmental
Activities
$ 3,822,923
$1,893,621
BOI - Board of Investments Intercap Loan Program
61
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Requirements to amortize debt
The annual requirements to amortize all long-term debt outstanding, excluding compensated absences payable, as of June 30,
2015, were as follows:
Governmental Activities:
SPECIAL
G.O.
ASSESSMENT
CONTRACTED
INTERMEDIARY
REVENUE
FOR FISCAL
BONDS
BONDS
LOANS/DEBT
LOAN PROGRAM
BONDS
YEAR ENDED
PRINCIPAL
INTEREST
PRINCIPAL INTEREST
PRINCIPAL
INTEREST
PRINCIPAL INTEREST
PRINCIPAL INTEREST
TOTAL
2016
$ 455,000
$ 47,963
$ 327,506
$ 147,061
$ 373,532
$ 41,837
$ 26,148 $
5,951
$ 159,000
$ 52,563
$ 1,636,561
2017
465,000
41,138
325,580
132,183
346,625
30,908
26,410
5,689
164,500
45,913
1,583,946
2018
470,000
34,163
324,458
117,037
318,679
19,869
26,674
5,425
175,000
38,948
1,530,253
2019
475,000
27,113
318,504
101,466
183,188
9,548
26,940
5,159
181,000
31,618
1,359,536
2020
485,000
18,800
244,386
85,977
76,519
1,856
27,210
4,889
191,000
23,800
1,159,437
2021-2025
455,000
13,700
1,229,808
251,790
140,186
20,309
92,500
70,220
2,273,513
2026-2030
304,000
16,815
147,337
13,158
111,500
50,220
643,030
2031-2035
154,775
5,643
136,500
26,040
322,958
2036-2040
19,398
290
46,000
2,420
68,108
TOTAL
$ 2,805,000
$ 182,877
$3,074,242 $ 852,329
$ 1,298,543
$ 104,018
$ 595,078 $
66,513
$1,257,000
$ 341,742
$10,577,342
Business -type
Activities:
SRF
REVENUE
CONTRACTED
FOR FISCAL
LOANS
BONDS
LOANS/DEBT
YEAR ENDED
PRINCIPAL
INTEREST
PRINCIPAL INTEREST
PRINCIPAL
INTEREST
TOTAL
2016
$ 1,028,000
$ 310,687
$ 65,000
$ 31,695
$ 37,963
$ 1,927
$ 1,475,272
2017
1,052,000
287,202
65,000
28,835
38,343
1,452
1,472,832
2018
1,076,000
263,183
70,000
25,943
38,728
973
1,474,827
2019
1,101,000
238,615
70,000
22,793
39,121
489
1,472,018
2020
1,125,000
261,477
75,000
19,643
1,481,120
2021-2025
5,687,000
679,705
330,000
41,225
6,737,930
2026-2030
2,483,000
118,440
2,601,440
2031-2035
207,000
11,975
218,975
TOTAL
$13,759,000
$2,171,284
$ 675,000
$ 170,134
$ 154,155
$ 4,841
$ 16,934,414
F. Pensions
Pension liabilities. pension expense. deferred outflows of resources. deferred inflows of resources related to pensions
The City of Kalispell (the Employer) participates in the Public Employees Retirement System (PERS), Municipal Police
Officers Retirement System (MPORS), and the Firefighters' Unified Retirement System (FURS), defined benefit pension
plans.
At June 30, 2015, the City of Kalispell reported a liability of $9,192,076 for its proportionate share of the net pension
liability. The net pension liability was measured as of June 30, 2014. Depending on the pension plan, the total pension
liability used to calculate the net pension liability was determined by actuarial valuations ranging June 30, 2013 to June 30,
2014. For actuarial valuations performed June 30, 2013, the total pension liability was then rolled -forward using generally
accepted actuarial procedures to the measurement date of June 30, 2014. The City of Kalispell's proportion of the net pension
liability was based on a projection of the City of Kalispell's long-term share of future payroll covered by the pension plans,
relative to the projected future payroll covered by the pension plans of all participating employers, actuarially determined.
For the year ended June 30, 2015, the City of Kalispell recognized pension expense of $1,689,688 for its proportionate share
62
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
of pension expense for all pension plans. The City of Kalispell also recognized grant revenue of $1,015,738 for the support
provided by the State of Montana for its proportionate share of the pension expense that is associated with the employer.
At June 30, 2015, the City of Kalispell reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Differences between expected and actual experience
Changes of assumptions
Net difference between projected and actual earnings on pension plan
investments
Changes in proportion and differences between employer contributions
and proportionate share of contributions
Employer contributions subsequent to the measurement date
Total
Deferred Outflows Deferred Inflows of
of Resources Resources
1,971,725
- 646
1,029,119
$ 1,029,119 $ 1,972,371
$1,029,119 reported as deferred outflows of resources related to pensions resulting from the City of Kalispell's employer
contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year
ended June 30, 2016. Other amounts reported as deferred outflows and inflows of resources related to pensions will be
recognized in pension expense as follows:
Yearended:
June 30, 2016
$ (493,147)
June 30, 2017
(493,147)
June 30, 2018
(493,147)
June 30, 2019
(493,147)
June 30, 2020
Thereafter
General information about the Pension Plans
Plan Dcscription (PERS)
The PERS-Defined Benefit Retirement Plan (DBRP), administered by the Montana Public Employee Retirement
Administration (MPERA), is a multiple -employer, cost -sharing plan established July 1, 1945, and governed by Title 19,
chapters 2 & 3, Montana Code Annotated (MCA). This plan covers the State, local governments, certain employees of the
Montana University System, and school districts.
All new members are initially members of the PERS-DBRP and have a 12-month window during which they may choose to
remain in the PERS-DBRP or join the PERS-DCRP by filing an irrevocable election. Members may not be members of both
the defined contribution and defined benefit retirement plans. All new members from the universities also have a third option
to join the university system's Montana University System Retirement Program (MUS-RP). For members that choose to join
the PERS-DCRP or the MUS-RP, a percentage of the employer contributions will be used to pay down the liability of the
PERS-DBRP.
The PERS-DBRP provides retirement, disability, and death benefits to plan members and their beneficiaries. Benefits are
established by state law and can only be amended by the Legislature. Benefits are based on eligibility, years of service, and
highest average compensation. Member rights are vested after five years of service.
63
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
Summary of Benefits
Member's highest average compensation (HAC)
Hired prior to July 1, 2011 - highest average compensation during any consecutive 36 months;
Hired on or after July 1, 2011 — highest average compensation during any consecutive 60 months;
Hired on or after July 1, 2013 — 110% annual cap on compensation considered as part of a member's highest average
compensation.
Eligibility for benefit
Service retirement:
Hired prior to July 1, 2011: Age 60, 5 years of membership service;
Hired on or after July 1, 2011: Age 65, 5 years of membership service;
Early retirement, actuarially reduced:
Hired prior to July 1, 2011: Age 50, 5 years of membership service; or
Hired on or after July 1, 2011: Age 55, 5 years of membership service.
Vesting
5 years of membership service
Monthly benefit formula
Members hired prior to July 1, 2011:
• Less than 25 years of membership service: 1.785% of HAC per year of service credit;
• 25 years of membership service or more: 2% of HAC per year of service credit.
Members hired on or after July 1, 2011:
• Less than 10 years of membership service: 1.5% of HAC per year of service credit;
• 10 years or more, but less than 30 years of membership service: 1.785% of HAC per year of service credit;
• 30 years or more of membership service: 2% of HAC per year of service credit.
Guaranteed Annual Benefit Adjustment (GABA)*
• 3% for members hired prior to July 1, 2007
• 1.5% for members hired on or after July 1, 2007
After the member has completed 12 full months of retirement, the member's benefit increases by the applicable percentage
(provided below) each January, inclusive of other adjustments to the member's benefit.
*At this time, as a result of permanent injunction issued in the AMRPE vs State litigation, the GABA rate in effect is being
used in the calculation. Clarification of the GABA rate for members hired on or after July 1, 2013 is pending.
Total number of members (employees) covered by benefit terms as of June 30, 2015:
1. Active plan members: 28,237
2. Inactive members entitled to but not yet receiving benefits or a refund:
Vested: 2,925
Non -Vested: 8,839
3. Inactive members and beneficiaries currently receiving benefits:
Service Retirements: 20,080
Disability Retirements: 176
Survivor Benefits: 425
64
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Overview of Contributions
1. Rates are specified by state law for periodic employer and employee contributions.
The State legislature has the authority to establish and amend contribution rates to the plan.
2. Member contributions to the system:
a. Plan members are required to contribute 7.90% of member's compensation. Contributions are deducted
from each member's salary and remitted by participating employers.
b. The 7.90% member contributions is temporary and will be decreased to 6.9% on January 1 following
actuary valuation results that show the amortization period has dropped below 25 years and would
remain below 25 years following the reduction of both the additional employer and additional member
contribution rates.
Employer contributions to the system:
a. State and University System employers are required to contribute 8.27% of members' compensation.
b. Local government entities are required to contribution 8.17% of members' compensation.
c. School district employers contributed 7.90% of members' compensation.
d. Following the 2013 Legislative Session, PERS-employer contributions were temporarily increased.
Effective July 1, 2013, employer contributions increased 1.0%. Beginning July 1, 2014, employer
contributions will increase an additional 0.1 % a year over 10 years, through 2024. The employer
additional contributions including the 0.27% added in 2007 and 2009, terminates on January 1 following
actuary valuation results that show the amortization period of the PERS-DBRP has dropped below 25
years and would remain below 25 years following the reductions of both the additional employer and
member contributions rates.
Effective July 1, 2013, the additional employer contributions for DCRP and MUS-RP is allocated to the
defined benefit plan's Plan Choice Rate unfunded liability.
Effective July 1, 2013, employers are required to make contributions on working retirees' compensation.
Member contributions for working retirees are not required.
Non Employer Contributions
a. Special Funding
i. The State contributes 0.1% of members' compensation on behalf of local government entities.
ii. The State contributes 0.37% of members' compensation on behalf of school district entities.
b. Not Special Funding
i. The State contributes from the Coal Tax Severance fund
Stand -Alone Statements
The PERS financial information is reported in the Public Employees' Retirement Board's Comprehensive Annual Financial
Report for the fiscal year ended. It is available from the PERB at 100 North Park, PO Box 200131, Helena MT 59620-0131,
406-444-3154.
CAFR information including our stand alone financial statements can be found on our web site at
http://mpera.mt.gov/annualReports.shtml
The latest actuarial valuation and experience study can be found at our website at
http://mpera.mt.gov/actuarialValmtions.asy
65
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Actuarial Assumptions
The Total Pension Liability as of June 30, 2014, is based on the results of an actuarial valuation date of June 30, 2014.There
were several significant assumptions and other inputs used to measure the Total Pension Liability. The actuarial assumptions
used in the June 30, 2014 valuation were based on the results of the last actuarial experience study, dated May 2010 for the
six year period July 1, 2003 to June 30, 2009. Among those assumptions were the following:
• General Wage Growth* 4.00%
• *includes Inflation at 3.00%
• Merit Increases 0% to 6%
• Investment Return 7.75%
• Postretirement Benefit Increases:
0 3% for members hired prior to July 1, 2007
0 1.5% for members hired on or after July 1, 2007
After the member has completed 12 full months of retirement, the member's benefit increases by the
applicable percentage (provided below) each January, inclusive of other adjustments to the member'
benefit.
*At this time as a result of permanent injunction issued in the AMRPE vs State litigation, the GABA rate in
effect is being used in the calculation. Clarification of the GABA rate for members hired on or after
July 1, 2013 is pending.
• Mortality assumptions among contributing members, terminated vested members, service retired members and
beneficiaries based on RP 2000 Combined Employee and Annuitant Mortality Tables projected to 2015 with
scale AA.
• Mortality assumptions among Disabled Retirees are based on RP 2000 Combined Employee and Annuitant
Mortality Tables with no projections. No future mortality improvement is assumed.
Discount Rate
The discount rate used to measure the Total Pension Liability was 7.75%. The projection of cash flows used to determine the
discount rate assumed that contributions from participating plan members, employers, and non -employer contributing entities
will be made based on the Board's funding policy, which establishes the contractually required rates under Montana Code
Annotated. The State contributes 0.1% of salaries for local governments and 0.37% for school districts. In addition, the State
contributes coal severance tax and interest money from the general fund. The interest is contributed monthly and the
severance tax is contributed quarterly. Based on those assumptions, the System's fiduciary net position was projected to be
adequate to make all the projected future benefit payments of current plan members through the year 2122. Therefore, the
long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to
determine the Total Pension Liability. No municipal bond rate was incorporated in the discount rate.
Target Allocations
Long -Term Expected
Target Asset Real
Asset Class Allocation Rate of Return
Cash Equivalents 2.00% -0.25%
Domestic Equity 36.00% 4.80%
Foreign Equity 18.00% 6.05%
Fixed Income 24.00% 1.68%
Private Equity 12.00% 8.50%
Real Estate 8.00% 4.50%
The long-term expected return on pension plan assets is reviewed as part of the regular experience studies prepared for the
System. The most recent analysis, performed for the period covering fiscal years 2003 through 2009, is outlined in a report
dated May 2010, which is located on the MPERA website. Several factors are considered in evaluating the long-term rate of
return assumption including rates of return adopted by similar public sector systems, and by using a building block method in
66
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense
and inflation) are developed by the investment consultant for each major asset class. These ranges were combined to produce
the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation
percentage and then adding expected inflation. The assumption is intended to be a long term assumption and is not expected
to change absent a significant change in the asset allocation, a change in the inflation assumption, or a fundamental change in
the market that alters expected returns in future years. Best estimates are presented as the arithmetic real rates of return for
each major asset class included in the System's target asset allocation as of June 30, 2014, is summarized in the above table.
Sensitivity Analysis
1.0q Decrease
6.75q
Current Discount Rate
7.75q
1.0q Increase
8.75q
PERS' Net Pension
Liability
$ 1,982,275,000
$ 1,246,011,000
$ 625,045,000
Employer's
proportionate share of
the net pension liability
$ 8,651,070
1 $ 5,437,857
1 $ 2,727,828
In accordance with GASB 68 regarding the disclosure of the sensitivity of the Net Pension Liability to changes in the discount
rate, the above table presents the Net Pension Liability calculated using the discount rate of 7.75%, as well as what the Net
Pension Liability would be if it were calculated using a discount rate that is 1.00% lower (6.75%) or 1.00% higher (8.75%)
than the current rate.
Summary of Significant Accounting Policies
The Montana Public Employee Retirement Administration (MPERA) prepares its financial statements using the accrual basis
of accounting. For the purposes of measuring the Net Pension Liability, deferred inflows of resources and deferred outflows
of resources related to pensions, Pension Expense, information about the fiduciary net position and additions to/deductions
from fiduciary net position have been determined on the same accrual basis as they are reported by MPERA. For this purpose,
member contributions are recognized in the period in which contributions are due. Employer contributions are recognized
when due and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the
accounting period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting
period when due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred.
Investments are reported at fair value. MPERA adheres to all applicable Governmental Accounting Standards Board (GASB)
statements.
Net Pension Liability
In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers are required to
recognize and report certain amounts associated with their participation in the Public Employees' Retirement System (PERS).
Statement 68 became effective June 30, 2015 and includes requirements to record and report their proportionate share of the
collective Net Pension Liability, Pension Expense, Deferred Inflows and Deferred Outflows of resources associated with
pensions.
In accordance with Statement 68, PERS has a special funding situation in which the State of Montana is legally responsible
for making contributions directly to PERS on behalf of the employers. Due to the existence of this special funding situation,
local governments and school districts are required to report the portion of the State of Montana's proportionate share of the
collective Net Pension Liability that is associated with the employer.
The State of Montana also has a funding situation that is not Special Funding whereby the State General Fund provides
contributions from the Coal Severance Tax and interest. All employers are required to report the portion of Coal Tax
Severance Tax and interest attributable to the employer.
67
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Net Pension Liability
Net Pension Liability
Percent of Collective
as of 6/30/13
as of 6/30/14
NPL
Employer
Proportionate Share
$ 6,999,661
$ 5,437,857
0.436421%
State of Montana
Proportionate Share
associated with
Employer
85,453
66,405
0.554400q
Total
$ 7,085,114
$ 5,504,262
0.990821q
At June 30, 2015, the employer recorded a liability of $5,437,857 for its proportionate share of the Net Pension Liability. The
Net Pension Liability was measured as of June 30, 2014, and the Total Pension Liability used to calculate the Net Pension
Liability was determined by an actuarial valuation as of July 1, 2014. The employer's proportion of the Net Pension Liability
was based on the employer's contributions received by PERS during the measurement period July 1, 2013, through June 30,
2014, relative to the total employer contributions received from all of PERS' participating employers. At June 30, 2014, the
employer's proportion was 0.436421%.
Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the
measurement of the Total Pension Liability.
Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date.
Changes in proportionate share: There were no changes between the measurement date of the collective Net Pension Liability
and the employer's reporting date that are expected to have a significant effect on the employer's proportionate share of the
collective NPL.
Pension Expense
Pension Expense as of
6/30/14
Employers
Proportionate Share $ 265,322
State of Montana
Proportionate Share
associated with the
Employer 153,760
Total: $ 419,082
At June 30, 2015, the employer recognized a Pension Expense of $419,082 for its proportionate share of the PERS' Pension
Expense. The employer also recognized grant revenue of $153,760 for the support provided by the State of Montana for its
proportionate share of the Pension Expense that is associated with the employer.
Recognition of Beginning Deferred Outflow — GASB 71
At June 30, 2015, the employer recognized a beginning deferred outflow of resources for the employers FY2014
contributions of $421,428.
Dcfcrrcd Inflows and Outflows
At June 30, 2015, the employer reported its proportionate share of PERS' deferred outflows of resources and deferred inflows
of resources related to PERS from the following sources:
68
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
Deferred Outflows of
Deferred Inflows of
Resources
Resources
Differences between actual and expected
experience
$ -
$
Changes in assumptions
Difference between projected and actual
earnings on pension plan investments
1,405,053
Changes in proportion differences between
employer contributions and proportionate share
of contributions
646
Difference between actual and expected
contributions
Contributions paid to PERS subsequent to the
measurement date- FY 2015 Contributions
450,942
Total:
$ 450,942
$ 1,405,699
Amounts reported as deferred outflows of resources related to pensions resulting from the employer's contributions
subsequent to the measurement date will be recognized as a reduction of the Net Pension Liability in the year ended June 30,
2016. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension
Expense as follows:
Year ended June 30:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Amount recognized in
Pension Expense as an
increase or (decrease)
to Pension Expense
2016
$ 351,478
$ 351,478
2017
351,478
351,478
2018
351,478
351,478
2019
351,478
351,478
2020
after There
Plan Description (MPORS)
The Municipal Police Officers' Retirement System (MPORS), administered by the Montana Public Employee Retirement
Administration (MPERA), is a multiple -employer, cost -sharing defined benefit plan that was established in 1974 and is
governed by Title 19, chapters 2 & 9 of the MCA. This plan covers all municipal police officers employed by first- and
second-class cities and other cities that adopt the plan. Benefits are established by state law and can only be amended by the
Legislature. The MPORS provides retirement, disability, and death benefits to plan members and their beneficiaries. Benefits
are based on eligibility, years of service, and final average compensation. Member rights for death and disability are vested
immediately. All other rights are vested after five years of service.
Summary of Benefits
Member's final average compensation (FAQ
Hired prior to July 1, 1977 - average monthly compensation of final year of service.
Hired on or after July 1, 1977 - final average compensation (FAC) for last consecutive 36 months.
Hired on or after July 1, 2013 — 110% annual cap on compensation considered as a part of a member's final average
compensation.
Eligibility for benefit
20 years of membership service, regardless of age.
Early Retirement
Age 50, 5 years of membership service.
69
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Vesting
5 years of membership service.
Monthly benefit formula
2.5% of FAC per year of service credit.
Guaranteed Annual Benefit Adjustment (GABA)
Hired on or after July 1, 1997, or those electing GABA - after the member has completed 12 full months of retirement, the
member's benefit increases by a maximum of 3% each January, inclusive of all other adjustments to the member's benefit.
Minimum benefit adjustment (non-GABA)
If hired before July 1, 1997 and member did not elect GABA - the monthly retirement, disability or survivor's benefit may not
be less than `/z the compensation of a newly confirmed officer in the city that the member was last employed.
Deferred Retirement Option Plan (DROP)
Beginning July 2002, eligible members of MPORS can participate in the DROP by filing a one-time irrevocable election with
the Board. The DROP is governed by Title 19, Chapter 9, Part 12, MCA. A member must have completed at least twenty
years of membership service to be eligible. They may elect to participate in the DROP for a minimum of one month and a
maximum of 60 months and may participate in the DROP only once. A participant remains a member of the MPORS, but will
not receive membership service or service credit in the system for the duration of the member's DROP period. During
participation in the DROP, all mandatory contributions continue to the retirement system. A monthly benefit is calculated
based on salary and years of service to the date of the beginning of the DROP period. The monthly benefit is paid into the
member's DROP account until the end of the DROP period. At the end of the DROP period, the participant may receive the
balance of the DROP account in a lump -sum payment or in a direct rollover to another eligible plan, as allowed by the IRS. If
the participant continues employment after the DROP period ends, they will again accrue membership service and service
credit. The DROP account cannot be distributed until employment is formally terminated.
Total number of members (employees) covered by benefit terms as of June 30, 2015:
1. Active plan members: 743
2. Inactive members entitled to but not yet receiving benefits or a refund: Vested: 60
Vested: 60
Non -vested: 103
3. Inactive members and beneficiaries currently receiving benefits: Service Retirements: 694
Service Retirements: 694
Disability Retirements: 21
Survivor Benefits: 29
Overview of Contributions
1. Rates are specified by state law for periodic employer and employee contributions
The State legislature has the authority to establish and amend contribution rates to the plan.
2. Member contributions to the system:
a. Member contribution rates are dependent upon date of hire as a police officer. For fiscal year 2015:
i. If employed on or before June 30, 1975, member contributions as a percentage of salary are 5.8%;
ii. If employed after June 30, 1975 and prior to July 1, 1979, member contributions as a percentage of
salary are 7.0%;
iii. If employed after June 30, 1979 and prior to July 1, 1997, member contributions as a percentage of
salary are 8.5%; and,
70
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
iv. If employed on or after July 1, 1997 and for members electing GABA, member contributions as a
percentage of salary were 9.0%.
3. Employer contributions to the system:
a. The employers are required to contribute 14.41% of member's compensation.
b. The State contributes 29.37% of member's compensation from the general fund.
Stand -Alone Statements
The MPORS financial information is reported in the Public Employees' Retirement Board's Comprehensive Annual Financial
Report for the fiscal year ended. It is available from the PERB at 100 North Park, PO Box 200131, Helena MT 59620-0131,
406-444-3154.
CAFR information including our stand alone financial statements can be found on our web site at
http://mpera.mt.gov/annualReports.shtml
The latest actuarial valuation and experience study can be found at our website at
htti)://Mpera.mt.gov/actuarialValuations.asp
Actuarial Assumptions
The Total Pension Liability as of June 30, 2014, is based on the results of an actuarial valuation date of June 30, 2014.There
were several significant assumptions and other inputs used to measure the Total Pension Liability. The actuarial assumptions
used in the June 30, 2014 valuation were based on the results of the last actuarial experience study, dated May 2010 for the
six year period July 1, 2003 to June 30, 2009. Among those assumptions were the following:
• General Wage Growth* 4.00%
• *includes Inflation at 3.00%
• Merit Increases 0% to 7.3%
• Investment Return 7.75%
• Postretirement Benefit Increases:
If electing GABA or hired on or after July 1, 1997 3.00%
After the member has completed 12 full months of retirement, the member's benefit increases
by the applicable percentage each January, inclusive of other adjustments to the member's
benefit.
Minimum Benefit Adjustment 50% of a newly confirmed officer
• Mortality assumptions among contributing members, terminated vested members, service retired members and
beneficiaries based on RP 2000 Combined Employee and Annuitant Mortality Tables projected to 2015 with
scale AA.
• Mortality assumptions among Disabled Retirees are based on RP 2000 Combined Employee and Annuitant
Mortality Tables with no projections. No future mortality improvement is assumed.
Discount Rate
The discount rate used to measure the Total Pension Liability was 7.75%. The projection of cash flows used to determine the
discount rate assumed that contributions from participating plan members, employers, and non- employer contributing entities
will be made based on the Board's funding policy, which establishes the contractually required rates under Montana Code
Annotated. The State contributes 29.37% of salaries pensionable payroll paid by employers. Based on those assumptions, the
System's fiduciary net position was projected to be adequate to make all the projected future benefit payments of current plan
members through the year 2122. Therefore, the long-term expected rate of return on pension plan investments was applied to
all periods of projected benefit payments to determine the Total Pension Liability. No municipal bond rate was incorporated
in the discount rate.
71
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
Target Allocations
Long -Term Expected
Target Asset
Real
Asset Class
Allocation
Rate of Return
Cash Equivalents
2.00%
-0.25%
Domestic Equity
36.00%
4.80%
Foreign Equity
18.00%
6.05%
Fixed Income
24.00%
1.68%
Private Equity
12.00%
8.50%
Real Estate
8.00%
4.50%
The long-term expected return on pension plan assets is reviewed as part of the regular experience studies prepared for the
System. The most recent analysis, performed for the period covering fiscal years 2003 through 2009, is outlined in a report
dated May 2010, which is located on the MPERA website. Several factors are considered in evaluating the long-term rate of
return assumption including rates of return adopted by similar public sector systems, and by using a building block method in
which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense
and inflation) are developed by the investment consultant for each major asset class. These ranges were combined to produce
the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation
percentage and then adding expected inflation. The assumption is intended to be a long term assumption and is not expected
to change absent a significant change in the asset allocation, a change in the inflation assumption, or a fundamental change in
the market that alters expected returns in future years. Best estimates are presented as the arithmetic real rates of return for
each major asset class included in the System's target asset allocation as of June 30, 2014, is summarized in the above table.
Sensitivity Analysis
1.0% Decrease
6.75%
Current Discount Rate
7.75%
1.0% Increase
MPORS' Net Pension
Liability
$ 226,560,623.00
$ 157,135,903.00
$ 102,022,702.00
Employers
proportionate share of
the net pension
liability
$ 3,402,624.33
$ 2,359,961.94
$ 1,532,238.58
In accordance with GASB 68 regarding the disclosure of the sensitivity of the Net Pension Liability to changes in the discount
rate, the above table presents the Net Pension Liability calculated using the discount rate of 7.75%, as well as what the Net
Pension Liability would be if it were calculated using a discount rate that is 1.00% lower (6.75%) or 1.00% higher (8.75%)
than the current rate.
Summary of Significant Accounting Policies
The Montana Public Employee Retirement Administration (MPERA) prepares its financial statements using the accrual basis
of accounting. For the purposes of measuring the Net Pension Liability, deferred inflows of resources and deferred outflows
of resources related to pensions, Pension Expense, information about the fiduciary net position and additions to/deductions
from fiduciary net position have been determined on the same accrual basis as they are reported by MPERA. For this purpose,
member contributions are recognized in the period in which contributions are due. Employer contributions are recognized
when due and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the
accounting period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting
period when due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred.
Investments are reported at fair value. MPERA adheres to all applicable Governmental Accounting Standards Board (GASB)
statements.
72
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Net Pension Liability
In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers are required to
recognize and report certain amounts associated with their participation in the Municipal Police Officers' Retirement System
(MPORS). Statement 68 became effective June 30, 2015 and includes requirements to record and report their proportionate
share of the collective Net Pension Liability, Pension Expense, Deferred Inflows and Deferred Outflows of resources
associated with pensions.
In accordance with Statement 68, MPORS has a special funding situation in which the State of Montana is legally responsible
for making contributions directly to MPORS on behalf of the employers. Due to the existence of this special funding situation,
employers are required to report the portion of the State of Montana's proportionate share of the collective Net Pension
Liability that is associated with the employer.
Liability
Liability
Collective
as of 6/30/13
as of 6/30/14
NPL
Employer
Proportionate Share
$ 2,688,843
$ 2,359,962
1.501860%
State of Montana
Proportionate Share
associated with
Employer
$ 5:131,783
$ 4,767,405
3.034631%
Total
$ 8,120,626
$ 7, 127,367
4.536491
At June 30, 2015, the employer recorded a liability of $2,359,962 for its proportionate share of the Net Pension Liability. The
Net Pension Liability was measured as of June 30, 2014, and the Total Pension Liability used to calculate the Net Pension
Liability was determined by an actuarial valuation as of July 1, 2014. The employer's proportion of the Net Pension Liability
was based on the employer's contributions received by MPORS during the measurement period July 1, 2013, through June
30, 2014, relative to the total employer contributions received from all of MPORS' participating employers. At June 30,
2014, the employer's proportion was 1.501860%.
Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the
measurement of the Total Pension Liability.
Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date.
Changes in proportionate share: There were no changes between the measurement date of the collective Net Pension Liability
and the employer's reporting date that are expected to have a significant effect on the employer's proportionate share of the
collective NPL.
Pension Expense
Pension Expense
as of 6/30/14
Employers
Proportionate Share $ 253,8 99
State of Montana
Proportionate Share
associated with the
At June 30, 2015, the employer recognized a Pension Expense of $766,656 for its proportionate share of the MPORS'
Pension Expense. The employer also recognized grant revenue of $512,807 for the support provided by the State of Montana
for its proportionate share of the Pension Expense that is associated with the employer.
73
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Recognition of Beginning Deferred Outflow
At June 30, 2015, the employer recognized a beginning deferred outflow of resources for the employers FY2014
contributions of $292,989.
Dcfcrrcd Inflows and Outflows
At June 30, 2015, the employer reported its proportionate share of MPORS' deferred outflows of resources and deferred
inflows of resources related to MPORS from the following sources:
Deferred Outflows
Deferred Inflows of
of Resources
Resources
Differences between actual and expected
experience
$
$
Changes in assumptions
Difference between projected and actual
earnings on pension plan investments
289.741
Changes in proportion differences
between employer contributions and
proportionate share of contributions
Contributions paid to PERS subsequent to
the measurement date - FY 2015
Contributions
304234
Total:
$ 304:234
$ 289,741
Amounts reported as deferred outflows of resources related to pensions resulting from the employer's contributions
subsequent to the measurement date will be recognized as a reduction of the Net Pension Liability in the year ended June 30,
2016. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension
Expense as follows:
Year ended June 30:
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Amount recognized
in Pension Expense
as an increase or
(decrease) to
Pension Expense
2016
$ 72,435
$ (72,435)
2017
72,435
72,435
2018
72,435
72,435
2019
72,435
72,435
2020
Thereafter
Plan Description (FURS)
The Firefighters' Unified Retirement System (FURS), administered by the Montana Public Employee Retirement
Administration (MPERA), is a multiple -employer, cost -sharing defined benefit plan established in 1981, and governed by
Title 19, chapters 2 & 13, MCA. This system provides retirement benefits to firefighters employed by first- and second-class
cities, other cities and rural fire district departments that adopt the plan, and to firefighters hired by the Montana Air National
Guard on or after October 1, 2001. Benefits are established by state law and can only be amended by the Legislature. The
FURS provides retirement, disability, and death benefits to plan members and their beneficiaries. Benefits are based on
eligibility, years of service, and either final monthly compensation or final average compensation. Effective July 1, 2005, the
benefits are based on highest average compensation and highest average compensation. Member rights for death and disability
are vested immediately. All other member rights are vested after five years of service.
74
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
Summary of Benefits
Member's compensation
Hired prior to July 1, 1981 and not electing GABA - highest monthly compensation (HMC);
Hired after June 30, 1981 and those electing GABA — highest average compensation (HAC) during any consecutive 36
months.
Hired on or after July 1, 2013 — 110% annual cap on compensation considered as a part of a member's highest average
compensation.
Eligibility for benefit
20 years of membership service, regardless of age.
Early Retirement
Age 50, 5 years of membership service.
Vesting
5 years of membership service.
Monthly benefit formula
1) Members hired prior to July 1, 1981 and not electing GABA are entitled to the greater of:
2.5% of HMC per year of service, OR
i) if less than 20 years of service -
2% of HMC for each year of service;
ii) if more than 20 years of service -
50% of the member's HMC plus 2% of the member's HMC for each year of service over 20 years
Members hired on or after July 1, 1981 and those electing GABA:
2.5% of HAC per year of membership service
Guaranteed Annual Benefit Adjustment (GABA)
Hired on or after July 1, 1997, or those electing GABA - after the member has completed 12 full months of retirement, the
member's benefit increases by a maximum of 3% each January, inclusive of all other adjustments to the member's benefit.
Minimum Benefit Adjustment (non-GABA)
If hired before July 1, 1997, the monthly retirement, disability or survivor's benefit may not be less than `/z the compensation
of a newly confirmed firefighter employed by the city that last employed the member (provided the member has at least 10
years of membership service). If a benefit falls below that minimum, the benefit is increased and paid to the benefit recipient.
Total number of members (employees) covered by benefit terms as of June 30, 2015:
1. Active plan members: 627
2. Inactive members entitled to but not yet receiving benefits or a refund: Vested: 21
Vested: 21
Non -vested: 71
3. Inactive members and beneficiaries currently receiving benefits:
Service Retirements: 580
Disability Retirements: 9
Survivor Benefits: 20
75
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Overview of Contributions
1. Rates are specified by state law for periodic employer and employee contributions.
The State legislature has the authority to establish and amend contribution rates to the plan.
2. Member contributions to the system:
a. For members hired prior to July 1, 1997 and not electing GABA, member contributions as a percentage of
salary are 9.5%, and
b. For members hired on or after July 1, 1997 and members electing GABA, member contributions as a
percentage of salary are 10.7%.
3. Employer contributions to the system:
a. The employers are required to contribute 14.36% of member's compensation.
b. The State contributes 32.61% of member's compensation from the general fund.
c. Effective July 1, 2013, employer and state contributions are required to be paid on working retiree
compensation. Member contributions are not required for working retirees.
Stand -Alone Statements
The FURS financial information is reported in the Public Employees' Retirement Board's Comprehensive Annual Financial
Report for the fiscal year ended. It is available from the PERB at 100 North Park, PO Box 200131, Helena MT 59620-0131,
406-444-3154.
CAFR information including our stand alone financial statements can be found on our web site at
htti)://Mpera.mt.gov/annualReports.shtml
The latest actuarial valuation and experience study can be found at our website at
http://Mpera.mt.gov/actuarialValmtions.asp
Actuarial Assumptions
The Total Pension Liability as of June 30, 2014, is based on the results of an actuarial valuation date of June 30, 2014.There
were several significant assumptions and other inputs used to measure the Total Pension Liability. The actuarial assumptions
used in the June 30, 2014 valuation were based on the results of the last actuarial experience study, dated May 2010 for the
six year period July 1, 2003 to June 30, 2009. Among those assumptions were the following:
• General Wage Growth* 4.00%
• *includes Inflation at 3.00%
• Merit Increases 0% to 7.3%
• Investment Return 7.75%
• Postretirement Benefit Increases:
If electing GABA or hired on or after July 1, 1997 3.00%
After the member has completed 12 full months of retirement, the member's benefit increases
by the applicable percentage each January, inclusive of other adjustments to the member's
benefit.
Minimum Benefit Adjustment 50% of a newly confirmed officer
• Mortality assumptions among contributing members, terminated vested members, service retired members and
beneficiaries based on RP 2000 Combined Employee and Annuitant Mortality Tables projected to 2015 with
scale AA.
• Mortality assumptions among Disabled Retirees are based on RP 2000 Combined Employee and Annuitant
Mortality Tables with no projections. No future mortality improvement is assumed.
76
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
Discount Rate
The discount rate used to measure the Total Pension Liability was 7.75%. The projection of cash flows used to determine the
discount rate assumed that contributions from participating plan members, employers, and non- employer contributing entities
will be made based on the Board's funding policy, which establishes the contractually required rates under Montana Code
Annotated. The State contributes 32.61% of salaries pensionable payroll paid by employers. Based on those assumptions, the
System's fiduciary net position was projected to be adequate to make all the projected future benefit payments of current plan
members through the year 2122. Therefore, the long-term expected rate of return on pension plan investments was applied to
all periods of projected benefit payments to determine the Total Pension Liability. No municipal bond rate was incorporated
in the discount rate.
Target Allocations
Long -Term Expected
Target Asset
Real
Asset Class
Allocation
Rate of Return
Cash Equivalents
2.00%
-0.25%
Domestic Equity
36.00%
4.80%
Foreign Equity
18.00%
6.05%
Fixed Income
24.00%
1.68%
Private Equity
12.00%
8.50%
Real Estate
8.00%
4.50%
The long-term expected return on pension plan assets is reviewed as part of the regular experience studies prepared for the
System. The most recent analysis, performed for the period covering fiscal years 2003 through 2009, is outlined in a report
dated May 2010, which is located on the MPERA website. Several factors are considered in evaluating the long-term rate of
return assumption including rates of return adopted by similar public sector systems, and by using a building block method in
which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense
and inflation) are developed by the investment consultant for each major asset class. These ranges were combined to produce
the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation
percentage and then adding expected inflation. The assumption is intended to be a long term assumption and is not expected
to change absent a significant change in the asset allocation, a change in the inflation assumption, or a fundamental change in
the market that alters expected returns in future years. Best estimates are presented as the arithmetic real rates of return for
each major asset class included in the System's target asset allocation as of June 30, 2014, is summarized in the above table.
Sensitivity Analysis
1.0% Decrease
urrent Discount RatE
1.0% Increase
8.75
FURS' Net Pension
Liability
$ 156,823,891
$ 97,616,579
$ 49,290,705
Employer's
proportionate share
of the net pension
liability
$ 2 239 913
$ 1,394,256
$ 704,018
In accordance with GASB 68 regarding the disclosure of the sensitivity of the Net Pension Liability to changes in the discount
rate, the above table presents the Net Pension Liability calculated using the discount rate of 7.75%, as well as what the Net
Pension Liability would be if it were calculated using a discount rate that is 1.00% lower (6.75%) or 1.00% higher (8.75%)
than the current rate.
77
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Summary of Significant Accounting Policies — 79
The Montana Public Employee Retirement Administration (MPERA) prepares its financial statements using the accrual basis
of accounting. For the purposes of measuring the Net Pension Liability, deferred inflows of resources and deferred outflows
of resources related to pensions, Pension Expense, information about the fiduciary net position and additions to/deductions
from fiduciary net position have been determined on the same accrual basis as they are reported by MPERA. For this purpose,
member contributions are recognized in the period in which contributions are due. Employer contributions are recognized
when due and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the
accounting period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting
period when due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred.
Investments are reported at fair value. MPERA adheres to all applicable Governmental Accounting Standards Board (GASB)
statements.
Net Pension Liability
In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers are required to
recognize and report certain amounts associated with their participation in the Firefighters' Unified Retirement System
(FURS). Statement 68 became effective June 30, 2015 and includes requirements to record and report their proportionate
share of the collective Net Pension Liability, Pension Expense, Deferred Inflows and Deferred Outflows of resources
associated with pensions.
In accordance with Statement 68, FURS has a special funding situation in which the State of Montana is legally responsible
for making contributions directly to FURS on behalf of the employers. Due to the existence of this special funding situation,
employers are required to report the portion of the State of Montana's proportionate share of the collective Net Pension
Liability that is associated with the employer.
Net Pension Liability
Net Pension Liability
Percent of Collective
as of 6/30/13
as of 6/30/14
NPL
Employer
Proportionate Share
$ 1,784,565
$ 1,394,256
1.428298%
State of Montana
Proportionate Share
associated with
Employer
$ 4 025 892
$ 3 145 374
3.222719 k
Total
$ 5,810,4527
$ 4,539,630
4.651017 k
At June 30, 2015, the employer recorded a liability of $1,394,256 for its proportionate share of the Net Pension Liability. The
Net Pension Liability was measured as of June 30, 2014, and the Total Pension Liability used to calculate the Net Pension
Liability was determined by an actuarial valuation as of July 1, 2014. The employer's proportion of the Net Pension Liability
was based on the employer's contributions received by FURS during the measurement period July 1, 2013, through June 30,
2014, relative to the total employer contributions received from all of FURS' participating employers. At June 30, 2014, the
employer's proportion was 1.428298%.
Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the
measurement of the Total Pension Liability.
Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date.
Changes in proportionate share: There were no changes between the measurement date of the collective Net Pension Liability
and the employer's reporting date that are expected to have a significant effect on the employer's proportionate share of the
collective NPL.
78
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Pension Expense
Pension Expense as
of 6/30/14
Employer's
Proportionate Share $ 154,778
State of Montana
Proportionate Share
associated with the
At June 30, 2015, the employer recognized a Pension Expense of $503,950 for its proportionate share of the FURS' Pension
Expense. The employer also recognized grant revenue of $349,172 for the support provided by the State of Montana for its
proportionate share of the Pension Expense that is associated with the employer.
Recognition of Beginning Deferred Outflow
At June 30, 2015, the employer recognized a beginning deferred outflow of resources for the employers FY 2014
contributions of $268,156.
Deferred Inflows and Outflows
At June 30, 2015, the employer reported its proportionate share of FURS' deferred outflows of resources and deferred inflows
of resources related to FURS from the following sources:
Deferred Outflows of
Deferred Inflows of
Resources
Resources
Differences between actual and expected
experience
$ -
$
Changes in assumptions
Difference between projected and actual
earnings on pension plan investments
276,931
Changes in proportion differences between
employer contributions and proportionate
share of contributions
Contributions paid to PERS subsequent to
the measurement date - FY 2015
Contributions
273,944
Total:
$ 273,944
$ 276,931
Amounts reported as deferred outflows of resources related to pensions resulting from the employer's contributions
subsequent to the measurement date will be recognized as a reduction of the Net Pension Liability in the year ended June 30,
2016. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension
Expense as follows:
Year ended June 30:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Amount recognized in
Pension Expense as an
increase or (decrease)
to Pension Expense
2016
$ 69,233
$ 69,233
2017
69,233
69,233
2018
69,233
69,233
2019
69,233
69,233
2020
Thereafter
79
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
G. 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. In accordance with Montana State law (see below), retirees may
remain on the City's health plan as long as they wish, at a rate that does not cover all of the related costs. This results in the
reporting of an implied rate subsidy in the financial statements and footnotes. The City's contract with Allegiance Benefits
details the plan eligibility. MMIA is the administrator of the benefit plan which covers both active and retired members. The
City's retirees may continue coverage for themselves and their covered eligible dependents if they are eligible for public
employees' retirement by virtue of their employment with the City of Kalispell. The City's current labor contracts do not
include any obligations for payments to retirees.
Montana Codes Annotated (MCA) Section 2-18-704 states (1) an insurance contract or plan issued under this part must
contain provisions that permit:
(a) The member of a group who retires from active service under the appropriate retirement provisions of a defined
benefit plan provided by law or, in the case of the defined contribution plan provided in Title 19, chapter 3, part 21,
a member with at least 5 years of service and who is a least age 50 while in covered employment to remain a
member of the group until the member becomes eligible for medicare under the federal Health Insurance for the
Aged Act, 42 U.S. C. 1395, as amended, unless the member is a participant in another group plan with substantially
the same or greater benefits at an equivalent cost or group plan with substantially the same or greater benefits at an
equivalent cost;
(b) The surviving spouse of a member to remain a member of the group as long as the spouse is eligible for retirement
benefits accrued by the deceased member as provided by law unless the spouse is eligible for medicare under the
federal Health Insurance for the Aged Act or unless the spouse has or is eligible for equivalent insurance coverage
as provided in subsection (1)(a);
(c) The surviving children of a member to remain members of the group as long as they are eligible for retirement
benefits accrued by the deceased member as provide by law unless they have equivalent coverage in subsection
(1)(a) or are eligible for insurance coverage by virtue of the employment of a surviving parent or legal guardian.
For FY2015, the City of Kalispell has recorded other post employment benefits in the governmental funds. This recording
resulted in an expense of $250,843 on the statement of activities, governmental activities, general government. OPEB is
recorded on an accrual basis in the governmental funds. Other post employment benefits expenses were also recorded in the
water fund ($28,648), and sewer fund ($19,131). In prior years, the City of Kalispell considered other post employment
benefits of the water fund and sewer fund immaterial.
Funding Policy. The plan is unfunded by the City and plan members receiving benefits contribute 100 percent of their cost of
the benefits on a pay-as-you-go basis. The City plan's administratively established retiree medical, dental and vision
premiums vary between $392 and $1,658 per month depending on the medical plan selected, family coverage, and Medicare
eligibility. The plan provides different coinsurance amounts depending on whether members use preferred, non -preferred, or
other hospitals. For fiscal year ended June 30, 2015, the City has 14 retired members receiving benefits.
Annual OPEB Cost and Net OPEB Obligation. The City's annual other post -employment benefit (OPEB) cost (expense) is
calculated based on the annual required contribution of the employer (ARC). The ARC represents a level of funding that, if
paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities (or
funding excess) over a period not to exceed thirty years.
80
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
The following table shows the components of the City's annual OPEB cost for the year, the amount implicitly contributed to
the plan, and changes in the City's net OPEB obligation to the Retiree Health Plan:
Total
Annual required contribution/Annual OPEB Cost (Expense)
$322,519
Interest on beginning of year net OPEB obligation
$65,136
Adjustment to the Annual Required Contribution
-$89,033
Annual OPEB Cost
$298,622
Contributions made (implicit)
$0
Increase in net OPEB obligation
$298,622
Net OPEB obligation - beginning of year
$1,518,327
Net OPEB obligation - end of year
$1,816,949
The June 30, 2015 year-end OPEB obligation is reported in the City's funds as follows:
Functions/Programs Expenses
Primary Government:
Governmental activities:
General government $250,843
Total governmental activities 250,843
Business -type activities:
Water 28,648
Sewer 19,131
Total business -type activities 47,779
Total primary government
$298,622
Funded Status and Funding Progress. The projection of future benefit payments for an ongoing plan involves estimates of
the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples
include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the
funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual
results are compared with past expectations and new estimates are made about the future. The schedule of funding progress,
presented as required supplementary information following the notes to the financial statements, presents multiyear trend
information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liabilities for benefits. The City has elected not to fund this liability.
SCHEDULE OF FUNDING
PROGRESS
Retiree Medical Plan
Actuarial
Valuation
Date
Actuarial
Value of
Assets
(b)
Actuarial
Accrued
Liability (AAL)
(a)
$ 2,145,522
Unfunded
AAL (UAAL)
(a - b)
$2,145,522
Funded Ratio( a / b)
0.0%
Covered
Payroll (c)
UAAL as a
Percentage of
Covered Payroll
(( a - b ) / c )
6/30/2011
$
$ 8,831,832
24.3%
6/30/2013
$
$ 2,311,036
$ 2,311,036
0.0%
$ 10,995,940
21.0%
6/30/2015
$
$ 2,623,748
$ 2,623,748
0.0%
$ 10,299,726
25.5%
81
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
Actuarial Methods and Assumptions. As of June 30, 2015 (most current information), the City's actuarially accrued liability
(AAL) for benefits was $2,623,748. The AAL by status breakdown is shown below:
Active participants:
Retirees, Dependents, and Surviving Spouses:
Total AAL
Normal Cost
Impact on Statement of Activities
Annual OPEB Cost
Impact on Statement of Net Assets
Assumed Contributions
Percentage of Annual OPEB Cost contributed
Net OPEB Obligation at June 30
Fiscal Fiscal Fiscal
2013 2014 2015
$1,616,159 N/A $2,000,936
$ 694,877 N/A $ 622,812
$2,311,036 N/A $2,623,748
$ 191,764 N/A $ 165,159
$ 320,116 $ 314,531 $ 298,622
$ (46,131) $ 61,533 $
-14q 20% 0
$1,265,329 $1,518,327 $1,816,949
Participant Information
Active participants: 179 N/A 178
Retirees, Dependents, and Surviving Spouses: 12 N/A 14
Total 191 N/A 192
The following key assumptions were chosen by the City:
1. Discount Rate: 4.29%
2. Healthcare (inflation) Trend Rates: 4%
3. Retirees are required to pay 100% of the total premium developed for the active population.
4. Program valued as it stands today.
5. Expected Long Term Rate of Return on Assets: N/A
6. Participation Rate: 20% of future retirees are assumed to elect medical coverage. 70% of the future retirees
who elect medical coverage and are married are assumed to elect spousal coverage as well.
7. Marital Assumption: For future retirees, 60% are assumed to be married, and males are assumed to be 3 years
older than females.
8. Amortization method: 30 year open (level dollar).
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the
probability of events far into the future. Examples, as detailed above, include assumptions about future employment,
mortality, and the healthcare cost trend. Actuarially determined amounts are subject to continual revisions as actual results
are compared with past expectations, and new estimates are made about the future. Actuarial calculations reflect a long-term
perspective. The schedule of funding progress, presented as required supplementary information following the notes to the
financial statements, is designed to present multiyear trend information about whether the actuarial value of plan assets is
increasing or decreasing over time relative to the actuarial liabilities for benefits. The City of Kalispell has elected not to fund
this liability.
The benefits the plan is expected to provide are assigned to appropriate accounting periods using the Projected Unit Credit
cost method as described under Governmental Accounting Standards Board Statement No. 45. For each participant, an
actuarial present value of benefit total payments is determined as of the measurement date. Projections of benefits for
financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and
include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The methods and assumptions used include techniques that are
designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets,
consistent with the long-term perspective of the calculations.
82
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
H. Amounts Due From/To other Governments
On June 30, 2015, the amounts due from other governments consisted of the following:
General Fund Amount Debt Service Funds Amount
Due from: Due from:
Flathead County -Taxes $ 517,234 Flathead County -Taxes $ 196,970
Total Governmental Funds $ 1,386,954
Special Revenue Funds
Amount
Due from:
Flathead County -Taxes
$
520,831
Flathead County Sheriff Dept.
$
3,530
Flathead County -EMS Levy
$
66,998
State of Montana-MDOT
$
3,002
U.S. Department of Justice
$
13,132
U.S. Department of Housing and Urban Dev. $
5,620
EPA
$
59,637
Sub Total $
672,750
L Restricted Cash/Investments
Enterprise Funds Amount
Due from:
Flathead County -Taxes $ 176,465
Total Business -type Funds $ 176,465
Total City of Kalispell $ 1,563,419
The following restricted cash/investments were held as of June 30, 2015. These amounts are reported within the
cash/investment account on the Combined Balance Sheet.
RESTRICTED CASH:
Business-tvoe Activities
Water Bond Reserve (includes SRF & BOI)
Plant Investment/Impact Fees (1)
Sewer Operating Reserve (2)
Bond Contingency
Plant Investment/Impact Fees (sanitary) (1)
Plant Investment/Impact Fees (treatment plant) (1)
Plant Investment/Impact Fees (storm) (1)
Treatment Plant Replacement (3)
Total business -type activities restricted cash/investments
Governmental Activities
Impact Fees
Growth related Capital (1)
Urban Forestry
Developers (4)
Debt Service
Airport TI F Bond Reserve
Debt Service
SID 343 Bond Reserve
Debt Service
SID 345 Bond Reserve
Debt Service
Revolving Fund- SID 344 Bond Reserve
Debt Service
Revolving Fund- SID 345 Bond Reserve
Total governmental activities restricted cashlnvestments
Total restricted cashlnvestments
1-Jul-14 Additions
Subtractions
30-Jun-15
$ 411,258 $
-
$ (52,858) $
358,400
889,082
239,813
(218,189)
910,706
190,000
-
-
190,000
1,109,313
-
-
1,109,313
2,184,570
221,370
(759,162)
1,646,778
409,413
279,056
(225,000)
463,469
1,056,838
104,086
-
1,160,924
1,531,873
419,099
(729,364)
1,221,608
7,782,347
1,263,424
(1,984,573)
7,061,198
452,621
56,887
(35,080)
474,428
92,282
4,130
(2,360)
94,052
184,875
-
(123,814)
61,061
57,795
-
(1,479)
56,316
11,172
-
11,172
17,293
208,707
226,000
12,100
12,100
828,138
269,724
(162,733)
935,129
$ 8,610,485
$ 1,533,148
$ (2,147,306)
$ 7,996,327
(1) Plant investment/impact fee cash. Montana State legislation regulating impact fees to fund capital improvements, MCA
7-6-1601 through 7-6-1604 (see 7-6-1603 below related to expending impact fees), became effective April 19, 2005 and
sets forth the procedures and requirements for the imposition of impact fees by local governments. On October 16, 2006,
by ordinance no. 1587, the Kalispell City Council authorized and established the procedure and imposition of impact fees
to fund capital improvements related to additional capacity (growth).
MCA 7-6-1603 states that "the collection and expenditure of impact fees must be reasonably related to the benefits
accruing to the development paying the impact fees..."
(2) Sewer operating reserve cash is restricted by ordinance no. 859 (1 month operating expenses).
(3) Treatment plant replacement cash is restricted by an agreement with Flathead County Water District (third party).
(4) Urban forestry receives cash from developers to be used to plant trees in new city developments (third party).
83
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
J. Restatements
During the 2015 fiscal year, the following adjustments relating to prior years' transactions were made to fund balance or
retained earnings accounts.
Fund
Amount
Reason
General Fund - Major Gov'tal
$ 2,979
Prior period expenditures overstated -from COPS Grant
Parks
$ (800)
Prior period expenditures understated
CD Loan Revolving - Major Gov'tal
$ (170,905)
Prior period revenues overstated - to RD Loan Rev.
CD Loan Revolving - Major Gov'tal
$ 1,718,991
Correction of error - deferred revenue adjustment
CD Misc. - Major Gov'tal
$ 44,717
Correction of error - deferred revenue adjustment
RD Loan Revolving
$ 170,905
Prior period revenues understated - from CD Loan Rev.
RD Loan Revolving
$ 552,572
Correction of error - deferred revenue adjustment
RD Loan Revolving
$ 39,901
Prior period revenues understated
COPS Grant
$ (2,979)
Prior period expenditures understated - to General fund
Subtotal - Governmental Fund Financials
$ 2,355,381
Governmental Funds - Loans rec. adjustment
$ (2,316,280)
Correction of error - deferred revenue adjustment
Governmental Funds - Pension related (GASB 68)
$ (8,599,108)
Prior period expenses understated (GASB No. 68)
Total Statement of Activities - Gov'tal Funds
$ (8,560,007)
Water Fund - Major Proprietary
$ (570,743)
Prior period expenses understated (GASB No. 68)
Sewer Fund - Major Proprietary
$ (971,375)
Prior period expenses understated (GASB No. 68)
Solid Waste
$ (349,271)
Prior period expenses understated (GASB No. 68)
Total Proprietary funds/Business-type activities
$ (1,891,389)
Correction of prior period misstatement
In 2015, the City identified that several governmental funds loan receivables had been classified as an asset and deferred
revenue. The City corrected the error with a prior period adjustment to the following governmental funds:
CD Revolving Loan: Increase prior period restricted fund balance by $1,718,991
CD Miscellaneous: Increase prior period restricted fund balance by $44,717
Other Governmental Funds: Increase prior period restricted fund balance by $552,572
K. Joint Ventures
Joint ventures are independently constituted entities generally created by two or more governments for a specific purpose
which are subject to joint control, in which the participating governments retain 1) an ongoing financial interest or 2) an
ongoing financial responsibility.
1. City -County Health Department
The City -County Health Department is operated under an interlocal agreement between Flathead County and the City of
Kalispell. The Department operates under the supervision and control of the City -County Health Board. The Board consists
of seven members, six of whom are appointed by the Board of County Commissioners. The Department is financed, in
addition to revenue generated by providing health services, by the City and the County levying an identical mill levy in order
that all property within the City of Kalispell and all property in Flathead County outside the City limits are taxed equally. The
operation is accounted for in the County Health Fund and is included in the general purpose financial statements of Flathead
County within the Special Revenue Fund.
84
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
2. 911 Dispatch Center
The 911 Dispatch Center is operated under an interlocal agreement between Flathead County, the City of Columbia Falls, the
City of Whitefish, and the City of Kalispell. The Center operates under the supervision and control of the Flathead
Emergency Communications Center Board. The Board consists of six members, the Flathead County Sheriff, a County
Commissioner chosen by the Board of County Commissioners, the County Attorney or other elected County officer, and an
elected official or designee from each of the cities of Kalispell, Whitefish, and Columbia Falls. The Department is financed
by funds received by all members from the State (9-1-1 fees) pursuant to Section 10-4-302, M.C.A. Any additional operating
funds needed will be shared proportionally by all members. Under the supervision of the Board, the Director shall hire and
direct staff to carry out the responsibilities of the County's Office of Emergency Services and the Flathead County Fire
Service Area.
L. County Provided Services
The City of Kalispell is provided various financial services by Flathead County. The County serves as cashier and treasurer
for the City for tax assessment collections and other revenues received by the County which are subject to distribution to the
various taxing jurisdictions located in the County. The collections made by the County on behalf of the City are accounted
for in an agency fund in the City's name and are periodically remitted to the City by the County Treasurer. The County
charges the City for fees associated with City Special Assessments.
M. Risk Management
The City faces a considerable number of risks of loss, including a) damage to and loss of property and contents, b) employee
torts, c) professional liability, i.e., errors and omissions, d) environmental damage, e) workers' compensation, i.e. employee
injuries, and f) medical insurance costs of employees. A variety of methods are used to provide insurance for these risks.
Commercial policies, transferring all risks of loss, except for relatively small deductible amounts are purchased for property
and content damage and professional liabilities. The City participates in two statewide public risk pools operated by the
Montana Municipal Insurance Authority, for workers' compensation and for tort liability coverage. Employee medical
insurance is provided through a state-wide health insurance pool administered by MMIA. 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 pool offering Worker's Compensation and Liability Coverage. Both public entity risk pools
currently operate as common risk management and insurance programs for the member governments. The liability limits for
damages in tort action are $750,000 per claim and $1.5 million per occurrence with an $11,250 deductible per occurrence.
State tort law limits the City's liability to $1.5 million. The city pays an annual premium for its employee injury insurance
coverage, which is allocated to the employer funds based on total salaries and wages. The agreements for formation of the
pools provide that they will be self-sustaining through member premiums. The tort liability plan and workers' compensation
program issued bonds in the amount of $4.41 million and $7.610 million, respectively, to immediately finance the necessary
insurance reserves. All members signed a contingent note for a pro rata share of this liability in case operating revenue was
insufficient to cover the debt service. The City's share is $201,445 for liability and $281,715 for Workers' Compensation to
finance the necessary insurance reserves. Based on the plan's current financial position, the City doesn't expect to make any
payment on these notes. Separate financial statements are available from the Montana Municipal Insurance Authority.
On October 1, 2004, Kalispell signed a 5 year agreement with many other Montana Cities, since then extended, and through
the Montana Municipal Insurance Authority, to create a state wide health insurance pool. The City pays the total monthly
premium for employees who only choose to cover themselves. For employees who choose to cover additional dependents, the
City pays a percentage of the extra costs.
85
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2015
N. Pending 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.
Damages
Loss
Litigant
Requested
Potential
Status
Teagan Carlin
unspecified
unknown
Not filed
Brown
unspecified
unknown
Litigation ongoing
Burke
unspecified
unknown
Litigation ongoing
J. Briggs
unspecified
unknown
Not filed
K. Curtis
unspecified
unknown
Litigation ongoing
O. Receivables
Taxes Receivable
The following governmental funds had taxes receivable at June 30, 2015.
FUND
Source
Amount
General - Major Governmental
Taxes
$ 220,187
Westside TIF
Taxes
17,327
Parks
Taxes
29,304
Old School "Tech" TIF
Taxes
11,918
Old School "Ind" TIF
Taxes
14,958
Health Levy
Taxes
29,383
Light District
Taxes
6,310
Street Maintenance - Major Governmental
Taxes
39,869
Forestry
Taxes
5,109
G.O. Bonds
Taxes
20,124
Airport TIF debt service
Taxes
38,505
SID 344 - Major Governmental
Taxes
2,415,436
SID 345
Taxes
222,630
S & C's
Taxes
37,232
SID 343
Taxes
429,888
Total Governmental Funds
$ 3,538,180
Accounts Receivable
At June 30, 2015, the Ambulance fund had accounts receivable deferred net of $227,312. Total net accounts receivable of the
Ambulance fund is $230,657. The difference is the result of $3,345 being receivable prior to the Ambulance fund conversion
from a proprietary fund to a special revenue fund.
Loans Receivable
Community Development Loan Revolving
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
86
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
account at First Federal (Glacier). 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 $36,268 recorded as housing rehab loans receivable as of June 30, 2015, in the Community Development Loan
Revolving Fund.
Other loans receivable of the Community Development Loan Revolving Fund:
Hampstead Partners
In August of 2002, the City of Kalispell entered into two (2) notes receivable agreements with 2' Avenue West Partners, L.P.
(Hampstead Partners) for property on 2nd Avenue West in Kalispell. The property consists of a 40-unit low-income apartment
complex known as 2' Avenue West Independent Living Center. As stipulated in the agreement, this property is restricted as
low income housing, and shall remain as such for a period of thirty-five years.
One of these notes is for $480,000, and bears interest at 1% per annum. The second of these notes is for $400,000, and bears
interest at 4.81% per annum. These loans mature on February 28, 2032. Payments of interest on the note are due on or
before the last day of the taxable year, to the extent there is surplus cash, as defined by the note. Unpaid interest shall accrue
until paid, but not compound on the first loan. Payments of principal are not required until the maturity date of the loans. The
notes are secured by a deed of trust on the property. Accrued interest as of June 30, 2015, is $62,055, and $316,971,
respectively.
Community Development Block Grant Economic Development Program
In fiscal year 2007, the City entered into a community development program with funding from a community development block
grant economic development program. Eligibility for these low interest loans is tied to the creation of jobs within Kalispell with a
percentage of the jobs created to be filled by low and moderate -income persons.
The following loans have been made by the City using the economic development program funds:
A 15 year loan at 5% to Distinctive Countertops in October 2006.
Original Loan amount $ 288,619
June 30, 2015 balance $ 242,708
A 15 year loan at 6% to AGAPE Home Care in May 2009.
Original Loan amount $ 42,500
June 30, 2015 balance $ 23,318
A 10 year loan at 3% to Norm's News in January 2013.
Original Loan amount $ 50,000
June 30, 2015 balance $ 31,221
87
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
A 10 year loan at 3% to Smith/Red & Black in May 2013.
Original Loan amount $ 50,000
June 30, 2015 balance $ 40,753
A 10 year loan at 3% to Wheaton's in April 2014.
Original Loan amount $ 41,500
June 30, 2015 balance $ 38,119
A 10 year loan at 3% to Sail MT & Ameriprise in April 2015.
Original Loan amount $ 17,000
June 30, 2015 balance $ 16,632
Rural Development Loan Revolving
On May 5, 2003, the City Council passed Resolution No. 4780 establishing an Economic Development Revolving Loan Fund
(ED RLF) for small business retention and expansion. The resolution also created an Economic Development Loan Review
Committee to process all applications for assistance. Additionally, on August 16, 2004 and again on November 6, 2006, the
City Council, by Resolution No. 4929 and 5158, respectively, authorized the City Manager to enter into loan agreements with
the United States Department of Agriculture, Rural Development office, in the amount of $520,000 and $750,000. These
monies will be used to assist in the retention and expansion of small business, which may stimulate economic development
activity by assisting the private sector where a funding gap exists and alternative sources of public and private financing are
not adequate.
The following loans have been made by the City using the Rural Development funds:
A 15 year loan at 5% to Flathead Health and Fitness in November 2004.
Original Loan amount $ 165,000
June 30, 2015 balance $ 65,019
A 15 year loan at 6.5% to Distinctive Countertops in July 2006.
Original Loan amount $ 175,000
June 30, 2015 balance $ 146,317
A 10 year loan at 7% to Crossroads Realty in June 2007.
Original Loan amount $ 150,000
June 30, 2015 balance $ 107,614
A 7 year loan at 7% to Unfinished Furniture Creations in April 2006.
Original Loan amount $ 50,000
June 30, 2015 balance $ 6,900
*The balance of this loan $35,425 was forgiven. The defaulting parties (Bott/Thomas) agreed and signed
promissory notes for $5000 each.
A 6 month loan at 5.25% to Glacier Valley Endodontics, Inc. in January 2012.
Original Loan amount $ 35,000
June 30, 2015 balance $ 26,349
A 10 year loan at 5.29% to Parkman Properties, LLC (The Edge Salon), in February 2012.
Original Loan amount $ 77,000
June 30, 2015 balance $ 55,695
88
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
A 10 year loan at 3% to Whipps, LLC in December 2011.
Original Loan amount
$
50,000
June 30, 2015 balance
$
33,533
A 10 year loan at 3% to Bill
and
Jana Goodman in June 2013.
Original Loan amount
$
34,660
June 30, 2015 balance
$
25,600
A 15 year loan at 6% to Tree Frog
Tavern in July 2013.
Original Loan amount
$
50,000
June 30, 2015 balance
$
45,916
A 15 year loan at 6% to Tiebuckers, Inc. in July 2013.
Original Loan amount
$
50,000
June 30, 2015 balance
$
45,916
UDAG
The following loan was made by the City using Urban Development Assistance Grant (UDAG) funds:
A 20 year redevelopment loan at 5% with Big Sky Manor in August 1999.
Original Loan amount $ 124,000
June 30, 2015 balance $ 36,956
SUMMARY COMMUNITY DEVELOPMENT LOANS RECEIVABLE
From
CD Loan Revolving - Major Governmental
UDAG - Major Governmental
To
Various
Distinctive Countertops
AGAPE Home Care
Norm's News
Smith/Red & Black
Wheatons
Sail MT & Ameriprise
Hampstead Partners*
Hampstead Partners - Interest Portion*
Big Sky Manor
Subtotal Major Fund
Amount Purpose
$ 36,268 Housing Rehab
242,708 Jobs
23,318 Jobs
31,222 Jobs
40,753 Jobs
38,119 Jobs
16,632 Jobs
880,000 Low Income Housing
379,026 Low Income Housing
36,956 Urban Dev. Assistance
1,725,002
Rural Development Loan Revolving Flathead Health and Fitness
65,019 Small Business
Distinctive Countertops
146,317 Small Business
Crossroads Realty
107,615 Small Business
Unfinished Furniture - Bott/Thomas
6,900 Small Business
Glacier Valley Endodontics, Inc
26,349 Small Business
Parkman Properties, LLC
55,695 Small Business
Whipps, LLC
33,533 Small Business
Bill and Jana Goodman
25,600 Small Business
Tree Frog Tavern
45,916 Small Business
Tiebuckers, Inc.
45,916 Small Business
Subtotal Other Governmental Funds
558,860
Total Governmental Funds $
2,283,862
*Long Term Loans Receivable - Matures 2032
89
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2015
P. City Court Contracts Receivable
Contracts receivable of the City Court, because of the uncertainty regarding when and if they will be collected, are no longer
booked as an asset on the balance sheet of the General Fund. These receivables, at June 30, 2015, amounted to $2,358,647.
Q. Wastewater Treatment Plant agreement with Evergreen
The City of Kalispell entered into an Interlocal Agreement with the Evergreen Sewer District #1 for treatment of sewage from
the district at the City's plant. The Evergreen district sewer went into operation in July 1994. The City bills Evergreen
monthly for debt service at 12% of the principle and interest due for the plant. The City also bills for maintenance and
operation and replacement costs per the agreement based on metered flows. Evergreen Sewer District has an equity interest in
the replacement account carried on the City's books. The balance of the account as of June 30, 2015 is $1,216,731 of which
Evergreen's interest is $296,168.
R. Subsequent Events
Sanitary Sewer Treatment Agreement
In 1990, the City of Kalispell entered into an agreement with the Evergreen Sewer District to convey sewage to the Kalispell
Wastewater Treatment Plant. This agreement expired in July of 2015. A new agreement was reviewed and discussed at a
City Council work session on July 13, 2015.
At a regular meeting of the City Council on July 20, 2015, the new agreement was approved. The new agreement provides for
a formula, based on prior fiscal year expenses, where a residence in Evergreen will be paying the same amount for sewer
treatment as would a resident in Kalispell. The new agreement also includes a base fee, based on the same formula, to be paid
by the Evergreen users. According to the new agreement, the Evergreen Sewer District no longer has an equity interest in the
reserve/replacement cash account which will still be funded by the City.
Utility Monthly Billing
To provide water and sewer customers with improved service, monthly billing was proposed to City Council during the
development of the fiscal year 2016 budget. The proposed change from bi-monthly was reviewed with the City Council
during the October 12, 2015, work session. On October 19, 2015, the City Council passed Resolution 5740 indicating its
intent to implement monthly billing.
At a regular meeting of the City Council on November 16, 2015, after a public hearing, Resolution 5742 was passed. With
this resolution the City Council determined it was in the best interest of the City of Kalispell and its ratepayers to convert to
monthly billing. The City plans to implement monthly billing in January of 2016.
Tiger Grant
The City of Kalispell was awarded a $10 million Transportation Income Generating Economic Recovery (TIGER) grant from
U.S. Department of Transportation for the Glacier Rail Park and Kalispell Core Area Development projects. The emphasis of
this grant will be to remove the railroad tracks from the City of Kalispell to assist further development without the tracks
being an impediment, and to construct a Rail Park outside of the core area, to accommodate establishments that need or prefer
rail service for their business.
90
REQUIRED SUPPLEMENTARY
INFORMATION OTHER THAN
MANAGEMENT DISCUSSION AND
ANALYSIS
CITY OF KALISPELL
SCHEDULE OF FUNDING PROGRESS - OTHER POST -EMPLOYMENT HEALTHCARE BENEFITS
Fiscal Year Ended June 30, 2015
Actuarial
Actuarial
UAAL as a
Actuarial
Value of
Accrued
Unfunded
Percentage of
Valuation
Assets
Liability (AAL)
AAL (UAAL)
Covered
Covered Payroll
Date
(b)
(a)
(a-b)
Funded Ratio( a/b)
Payroll(c)
((a-b)/c)
6/30/2009
$ -
$
3,008,915
$ 3,008,915
0.0%
Not Available
Not Available
6/30/2011
$ -
$
2,145,522
$ 2,145,522
0.0%
$ 8,831,832
24.3%
6/30/2013
$ -
$
2,311,036
$ 2,311,036
0.0%
$ 10,995,940
21.0%
6/30/2015
$ -
$
2,623,748
$ 2,623,748
0.0%
$ 10,299,726
25.5%
See independent auditor's report
91
CITY OF KALISPELL
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
Fiscal Year Ended June 30, 2015
Last 10 Fiscal Years'
* The schedules are presented to illustrate the requirement to show information for 10 years.
However, until a full 10-year trend is compliled, the schedules present information for those years for
which information is available.
2015
PERS MPORS FURS
City's proportion of the net pension
liability (asset) 0.436421% 1.501860% 1.428298%
City's proportionate share of the net
pension liabiltiy (asset). $5,437,857 $2,359,962 $1,394,256
City's covered -employee payroll $4,940,282 $2,015,102 $1,855,316
City's proportionate share of the net
pension liability (asset) as a percentage
of its covered -employee payroll 110.07% 117.11% 75.15%
Plan fiduciary net position as a
percentage of the total pension liability 79.87% 67.01% 76.71%
See independent auditor's report
92
CITY OF KALISPELL
SCHEDULE OF CONTRIBUTIONS
Fiscal Year Ended June 30, 2015
Last 10 Fiscal Years'
* The schedules are presented to illustrate the requirement to show information for 10 years. However,
until a full 10-year trend is compliled, the schedules present information for those years for which
information is available.
2015
PERS MPORS FURS
Contractually required contributions $ 450,942 $
Contributions in relation to the
contractually required contribution
Contribution deficiency (excess)
City covered -employee payroll
Contributions as a percentage of
covered payroll
450,942
$ 5,538,571 $
8.14%
304,234 $ 273,944
304,234 273,944
2,315,391 $ 2,039,538
13.14% 13.43%
See independent auditor's report
93
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2015
General Fund
ACTUAL
AMOUNTS
VARIANCE
BUDGETED AMOUNTS
(BUDGETARY
WITH FINAL
ORIGINAL
FINAL
BASIS) See Note A
BUDGET
RESOURCES (INFLOWS):
Taxes and assessments
$ 5,159,000
$ 5,159,000
$ 5,716,754
$ 557,754
Licenses and permits
65,300
65,300
82,297
16,997
Intergovernmental
3,994,039
3,994,039
4,027,078
33,039
Charges for services
795,505
795,505
768,614
(26,891)
Fines and forfeitures
605,000
605,000
538,234
(66,766)
Miscellaneous
31,100
31,100
27,898
(3,202)
Investment earnings
10,000
10,000
12,779
2,779
Amounts available for appropriation
$ 10,659,944
$ 10,659,944
$ 11,173,654
$ 513,710
CHARGES TO APPROPRIATIONS (OUTFLOWS);
General government
$ 2,759,735
$ 2,759,735
$ 2,623,226
$ 136,509
Public safety
7,616,820
7,616,820
7,451,258
165,562
Public works
289,237
289,237
267,736
21,501
Community development
68,693
68,693
55,379
13,314
Debt service - principal
70,775
70,775
70,775
-
Debt service -interest
5,504
5,504
5,280
224
Capital outlay
150,202
150,202
152,773
(2,571)
Total charges to appropriations
$ 10,960,966
$ 10,960,966
$ 10,626,427
$ 334,539
OTHER FINANCING SOURCES (USES)
Issuance of debt
$ -
$ -
$ -
$ -
Proceeds from the sale of general capital asset disposition
11,000
11,000
11,610
610
Transfers in
665,000
665,000
665,000
-
Transfers out
(358,500)
(358,500)
(369,476)
(10,976)
Total other financing sources (uses)
$ 317,500
$ 317,500
$ 307,134
$ (10,366)
Net change in fund balance
$ 854,361
Fund balance - beginning of the year
$ 2,409,409
Restatements
2,979
Fund balance - beginning of the year - restated
$ 2,412,388
Fund balance - end of the year
$ 3,266,749
See independent auditor's report
94
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2015
Street Maintenance
ACTUAL
AMOUNTS VARIANCE
BUDGETED AMOUNTS (BUDGETARY WITH FINAL
ORIGINAL FINAL BASIS) See Note A BUDGET
RESOURCES (INFLOWS):
Taxes and assessments
$ $
$
$
Licenses and permits
Intergovernmental
-
Chargesforservices
2,109,000
2,109,000
2,174,473
65,473
Fines and forfeitures
-
-
-
-
Miscellaneous
4,000
4,000
3,399
(601)
Investment earnings
6,700
6,700
6,880
180
Q * ;I I r I --- :.:
e ')110 inn e
1 110 inn e
1 1 Qn '7a') a
FQ na,)
CHARGES TO APPROPRIATIONS (OUTFLOWS);
General government $
Public safety
Public works
Community development
Debt service - principal
Debt service -interest
Capital outlay
Total charges to appropriations $
OTHER FINANCING SOURCES (USES)
Issuance of debt $
Proceeds from the sale of general capital asset dispositic
Transfers in
Transfers out
Total other financing sources (uses) $
Net change in fund balance
Fund balance - beginning of the year
Restatements
Fund balance - beginning of the year - restated
Fund balance - end of the year
1,969,816
1,969,816
1,705,055
264,761
115,182
115,182
97,165
18,017
5,846
5,846
3,298
2,548
301,070
301,070
253,907
47,163
2,391,914
$ 2,391,914
$ 2,059,425
$ 332,489
$ -
$ 116,195
$ 116,195
$
$ 116,195
$ 116,195
7A 1 Q77
$ 1,287,118
$ 1,287,1I
$ 1,528,640
See independent auditor's report
95
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2015
CD Loan Revolving
ACTUAL
AMOUNTS
VARIANCE
BUDGETED AMOUNTS
(BUDGETARY
WITH FINAL
ORIGINAL
FINAL
BASIS) See Note A
BUDGET
RESOURCES (INFLOWS):
Taxes and assessments
$
$
$ $
Licenses and permits
Intergovernmental
Charges for services
70,863
70,863
18,262
(52,601)
Fines and forfeitures
-
-
-
Miscellaneous
-
-
-
-
Investment earnings
1,750
1,750
4,274
2,524
Amounts available for appropriation
$ 72,613
$ 72,613
$ 22,536 $
(50,077)
CHARGES TO APPROPRIATIONS (OUTFLOWS);
General government
$ -
$ -
$ - $
Public safety
Public works
-
-
-
-
Community development
452,370
452,370
2,471
449,899
Debt service - principal
-
-
-
-
Debt service -interest
Capital outlay
-
-
-
Total charges to appropriations
$ 452,370
$ 452,370
$ 2,471 $
449,899
OTHER FINANCING SOURCES (USES)
Issuance of debt
$ -
$
$ - $
-
Proceeds from the sale of general capital asset dispositic
Transfers in
Transfers out
Total other financing sources (uses)
$
$
$ $
Net change in fund balance
$ 20,065
Fund balance - beginning of the year
$ 434,414
Restatements
1,548,086
Fund balance - beginning of the year - restated
$ 1,982,500
Fund balance - end of the year
$ 2,002,565
See independent auditor's report
96
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2015
CD Misc
ACTUAL
AMOUNTS
VARIANCE
BUDGETED AMOUNTS
(BUDGETARY
WITH FINAL
ORIGINAL
FINAL
BASIS) See Note A
BUDGET
RESOURCES (INFLOWS):
Taxes and assessments
$
$
$ $
Licenses and permits
-
Intergovernmental
30,000
30,000
29,614
(386)
Charges for services
9,820
9,820
2,059
(7,761)
Fines and forfeitures
-
-
-
Miscellaneous
-
-
-
-
Investment earnings
800
800
2,071
1,271
Amounts available for appropriation
$ 40,620
$ 40,620
$ 33,744 $
(6,876)
CHARGES TO APPROPRIATIONS (OUTFLOWS);
General government
$ -
$ -
$ - $
Public safety
Public works
-
-
-
-
Community development
261,933
261,933
45,281
216,652
Debt service - principal
-
-
-
-
Debt service -interest
Capital outlay
-
-
-
Totalchargesto appropriations
$ 261,933
$ 261,933
$ 45,281 $
216,652
OTHER FINANCING SOURCES (USES)
Issuance of debt
$ -
$
$ - $
-
Proceeds from the sale of general capital asset dispositic
-
-
Transfers in
327,649
327,649
Transfers out
-
-
Total other financing sources (uses)
$
$
$ 327,649 $
327,649
Net change in fund balance
$ 316,112
Fund balance - beginning of the year
$ 260,828
Restatements
44,717
Fund balance - beginning of the year - restated
$ 305,545
Fund balance - end of the year
$ 621,657
See independent auditor's report
97
SUPPLEMENTAL INFORMATION
COMBINING AND INDIVIDUAL
FUND STATEMENTS AND
SCHEDULES
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Airport TIF — Accounts for monies received and expended for approved projects in
this TIF district.
Westside TIF — Accounts for monies received and expended for approved projects in this
TIF district.
Parks in Lieu — Accounts for monies received by developer's for the purpose of making
improvements in specific City parks.
Parks — Accounts for the monies received and expended in the operations of the City's
Parks Department.
Ambulance — Accounts for the monies received and expended in the operations of the
City's Ambulance Department.
Old School TIF's — Accounts for monies received and expended for approved projects in
these TIF districts.
Health Levy — Accounts for revenue from the permissive mill levy which provides
funding for the fiscal year 2003 health insurance premium rate increase.
Building Department — Accounts for all activity of enforcing the building regulations
adopted by the City.
Impact Fees — Accounts for street and public safety impact fees received and allowed and
approved expenditures of each.
Light Maintenance — Accounts for special assessment revenues levied, received, and
expended for street lighting.
Gas Tax — Accounts for revenues from State gasoline taxes apportioned from the State of
Montana Department of Highways.
Fores — Accounts for special assessment revenues levied, received, and expended to
care for almost 7000 trees.
MACI Grant — Accounts for grant monies received and City matching monies used to
purchase equipment (street sweeper) through the Montana Air & Congestion Initiative.
Rural Development Loan Revolving (2) — Accounts for monies received, grant and
other, and expended in the process of providing gap financing for business retention,
expansion, or start-up.
Law Enforcement Grants (Stonegarden, Drug Enforcement, CHRP) — Accounts for
multiple grants received by the Police Department and all related revenues and
expenditures.
Preserve America Grant - Accounts for grant monies received for and expenditures
related to efforts to promote the City's historic downtown as a destination.
CDBG — ED FVCC Grant — Accounts for pass-thru grant monies received for and
expenditures related to expanding the welding/metals fabrication program at Flathead
Valley Community College.
EPA Brownfields Loan Revolving Grant - Accounts for grant monies received for and
expenditures related to environmental assessments.
Fire Grants - Accounts for multiple grants received by the Fire Department and all related
revenues and expenditures.
Hazmat Grant — Accounts for the grant monies received for and expenditures related to
respond and remedy hazmat calls of the City Fire Department.
Trails Grant - Accounts for grant monies received by the Parks Department and all
related revenues and expenditures for the expansion of the urban trail system.
DEBT SERVICE FUNDS
G.O. Bonds — Accounts for the debt service payments associated with the Woodland
Water Park and the Fire Station 952 general obligation bonds.
City Hall Debt Service — Accounts for the debt service payments associated with the new
City Hall at 201 1st Avenue East.
Airport TIF Debt Service - Accounts for the debt service payments associated with the
Airport Tax Increment District.
Westside TIF Debt Service - Accounts for the debt service payments associated with the
Westside Tax Increment District.
Debt Service Revolving — Accounts for monies associated with the closing out of debt
service funds and covering other debt service fund payment shortages.
S & C's - Accounts for the debt service payments associated with Sidewalk & Curb
bonds.
SID 343 - Accounts for the debt service payments associated with the Special
Improvement District #343 bonds.
SID 345 - Accounts for the debt service payments associated with the Special
Improvement District 9345 bonds.
CAPITAL PROJECT FUNDS
S & C Construction —Accounts for the monies received for and expenditures related to
sidewalk and curb construction.
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2014
OLDSCHOOL
AUtPORT TIF
WESTSIDE TIF PARKS
IN LIEU
PARKS
AMBULANCE
TIF (TECH)
ASSETS
Cash and investments
964,495
3,995,241
1,272
561,333
92,976
25,431
Taxes and assessments receivable, net
-
17,327
-
29,304
-
11,918
Accounts receivable - net
-
-
-
-
230,657
-
Notes and loans receivable
-
-
-
-
-
-
Due from other governments
-
89,720
-
87,332
66,998
-
Prepaids
-
-
-
11,549
10,647
-
Other debits
-
4,860
-
5,462
-
-
Restricted assets:
Restricted cash and investments
-
-
-
-
-
-
Total assets
964,495
4,107,148
1,272
694,980
401,278
37,349
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
-
80,088
-
47,129
7,558
-
Accrued payroll
566
1,165
-
73,321
31,067
-
Due to other funds
-
-
-
-
-
-
Other credits
Total liabilities
566
81,253
-
120,450
38,625
-
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable
-
-
-
-
227,312
-
Unavailable revenue - deferred loans
-
-
-
-
-
-
Unavailable revenue - deferred taxes and assessments
17,327
29,304
11,918
Total deferred inflows of resources
-
17,327
-
29,304
227,312
11,918
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
-
-
-
11,549
10,647
-
Restricted
General Government
-
-
-
-
-
-
Public Safety
-
-
-
-
124,694
-
Public Works
-
-
-
-
-
-
Culture and Recreation
-
-
1,272
533,677
-
-
Community Development
963,929
4,008,568
-
-
-
25,431
Debt Service
-
-
-
-
-
-
Unrestricted fund balance:
Unassigned
Total fund balance
963,929
4,008,568
1,272
545,226
135,341
25,431
Total liabilities and fund balance
964,495
4,107,148
1,272
694,980
401,279
37,349
See independent auditor's report
98
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2014
PUBLIC
OLD SCHOOL
BUILDING
SAFETY
TIF (END)
HEALTH LEVY
DEPT.
IMPACT FEES
LIGHT DIST.
GAS TAX
ASSETS
Cash and investments
12,929
27,382
433,214
7,119
7�.9 „_
370,567
Taxes and assessments receivable, net
14,958
29,383
-
-
6.310
-
Accounts receivable - net
-
-
-
-
-
-
Notes and loans receivable
-
-
-
-
-
-
Due from other governments
-
76,675
-
-
24,804
-
Prepaids
-
-
3,628
-
-
-
Other debits
-
-
-
869
-
-
Restricted assets:
Restricted cash and investments
-
-
-
474,428
-
-
Total assets
27,887
133,440
436,842
482,416
107,066
370,567
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
-
-
8,440
-
14,748
18,072
Accrued payroll
-
-
7,378
-
2,313
-
Due to other funds
-
-
-
-
-
-
Other credits
869
Total liabilities
-
-
15,818
869
17,061
18,072
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable
-
-
-
-
-
-
Unavailable revenue - deferred loans
-
-
-
-
-
-
Unavailable revenue - deferred taxes and assessments
14,958
29,383
6,310
Total deferred inflows of resources
14,958
29,383
-
-
6,310
-
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
-
-
3,628
-
-
-
Restricted
General Government
-
104,057
-
-
-
-
Public Safety
-
-
417,396
481,547
-
-
Public Works
-
-
-
-
83,695
352,495
Culture and Recreation
-
-
-
-
-
-
Community Development
12,929
-
-
-
-
-
Debt Service
-
-
-
-
-
-
Unrestricted fund balance:
Unassigned
Total fund balance
12,929
104,057
421,024
481,547
83,695
352,495
Total liabilities and fund balance
27,887
133,440
436,942
492,416
107,066
370,567
See independent auditor's report
99
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2014
DRUG
LAW
URBAN
RD REVOLVING STONEGARDEN ENFORCEMENT
ENFORCEMENT
FORESTRY
MACIGRANT
LOAN(2)
GRANT
GRANT
GRANTS
ASSETS
Cash and investments
125,225
60,153
406,774
-
4,400
-
Taxes and assessments receivable, net
5,109
-
-
-
-
-
Accounts receivable - net
-
-
-
-
-
-
Notes and loans receivable
-
-
558,860
-
-
-
Due from other governments
21,553
-
-
11,905
3,530
4,229
Prepaids
-
-
-
-
-
-
Other debits
-
-
-
-
-
941
Restricted assets:
Restricted cash and investments
94,052
-
-
-
-
-
Total assets
245,939
60,153
965,634
11,905
7,930
5,170
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
9
-
-
10,601
2,462
773
Accrued payroll
2,943
-
-
239
-
-
Due to other funds
-
-
-
1,065
-
3,837
Other credits
Total liabilities
2,952
-
-
11,905
2,462
4,610
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable
-
-
-
-
-
-
Unavailable revenue - deferred loans
-
-
-
-
-
-
Unavailable revenue - deferred taxes and assessments
5,109
Total deferred inflows of resources
5,109
-
-
-
-
-
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
-
-
-
-
-
-
Restricted
General Government
-
-
-
-
-
-
Public Safety
-
-
-
-
5,468
560
Public Works
-
60,153
-
-
-
-
Culture and Recreation
237,878
-
-
-
-
Community Development
-
-
965,634
-
-
-
Debt Service
-
-
-
-
-
-
Unrestricted fund balance:
Unassigned
Total fund balance
237,878
60,153
965,634
-
5,468
560
Total liabilities and fund balance
245,939
60,153
965,634
11,905
7,930
5,170
See independent auditor's report
100
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2014
CDBG-ED BROWNFIELDS
(FVCC) LOAN HAZMAT TRAILS Total Special
GRANT REVOLVING FIRE GRANTS GRANT GRANTS Revenue Funds
ASSETS
Cash and investments
-
100,210
2,260
18,444
9,678
7,295,055
Taxes and assessments receivable, net
-
-
-
-
-
114,309
Accounts receivable - net
-
-
-
-
-
230,657
Notes and loans receivable
-
-
-
-
-
558,860
Due from other governments
5,620
59,637
-
-
-
452,003
Prepaids
-
-
-
-
-
25,824
Other debits
-
-
-
243
-
12,375
Restricted assets:
Restricted cash and investments
-
-
-
-
-
568,480
Total assets
5,620
159,847
2,260
18,687
9,678
9,257,563
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
-
59,347
-
1,550
-
250,777
Accrued payroll
-
-
-
-
-
118,992
Due to other funds
2,086
-
-
-
-
6,988
Other credits
869
Total liabilities
2,086
59,347
-
1,550
-
377,626
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable
-
-
-
-
-
227,312
Unavailable revenue - deferred loans
-
-
-
-
-
-
Unavailable revenue - deferred taxes and assessments
114,309
Total deferred inflows of resources
-
-
-
-
-
341,621
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
-
-
-
-
-
25,824
Restricted
General Government
-
-
-
-
-
104,057
Public Safety
-
-
2,260
17,137
-
1,049,062
Public Works
-
-
-
-
-
496,343
Culture and Recreation
-
-
-
-
9,678
782,505
Community Development
3,534
100,500
-
-
-
6,080,525
Debt Service
-
-
-
-
-
-
Unrestricted fund balance:
Unassigned
Total fund balance
3,534
100,500
2,260
17,137
(9,678)
8,538,316
Total liabilities and fund balance
5,620
159,847
2,260
18,687
9,678
9,257,563
See independent auditor's report
101
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2014
AIRPORT TIF WESTSIDE TIF
City Hall Debt DEBT DEBT SID
G.O. BONDS Service SERVICE SERVICE REVOLVING S & CS
ASSETS
Cash and investments
11,945
330
-
871
45,366
92
Taxes and assessments receivable, not
20,124
-
38,505
-
-
37,232
Accounts receivable - net
-
-
-
-
-
-
Notes and loans receivable
-
-
-
-
-
-
Due from other governments
48,196
-
138,096
-
-
671
Prepaids
-
-
-
-
-
-
Other debits
-
-
-
-
-
-
Restricted assets:
Restricted cash and investments
-
-
61,061
-
238,100
-
Total assets
80,265
330
237,662
871
283,466
37,995
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
-
-
-
-
-
-
Accrued payroll
-
-
-
-
-
-
Due to other funds
-
-
-
-
-
-
Other credits
Total liabilities
-
-
-
-
-
-
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable
-
-
-
-
-
-
Unavailable revenue - deferred loans
-
-
-
-
-
-
Unavailable revenue - deferred taxes and assessments
20,124
38,505
37,232
Total deferred inflows of resources
20,124
-
38,505
-
-
37,232
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
-
-
-
-
-
-
Restricted
General Government
-
-
-
-
-
-
Public Safety
-
-
-
-
-
-
Public Works
-
-
-
-
-
-
Culture and Recreation
-
-
-
-
-
-
Community Development
-
-
-
-
-
-
Debt Service
60,141
330
199,157
871
283,466
763
Unrestricted fund balance:
Unassigned
Total fund balance
60,141
330
199,157
871
283,466
763
Total liabilities and fund balance
80,265
330
237,662
871
283,466
37,995
See independent auditor's report
102
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2014
ASSETS
Cash and investments
Taxes and assessments receivable, net
Accounts receivable - net
Notes and loans receivable
Due from other governments
Prepaids
Other debits
Restricted assets:
Restricted cash and investments
Total assets
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
Accrued payroll
Due to other funds
Other credits
Total liabilities
Total Nonmajor
Total Debt S & C Governmental
SID 343 SID 345 Service Funds CONSTRUCTION Funds
- 5,280 63,884 - $ 7,358,939
429,888 222,630 748,379 - 862,688
- - - - 230,657
- - - - 558,860
9,013 994 196,970 - 648,973
- - - - 25,824
- - - - 12,375
56,316 11,172 366,649 - 935,129
495,217 240,076 1,375,882 - $ 10,633,445
3,040
253,817
118,992
6,988
869
$ 380,666
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable - - - - 227,312
Unavailable revenue - deferred loans - - - - -
Unavailable revenue - deferred taxes and assessments 429,888 222,630 748,379 862,688
Total deferred inflows of resources 429,888 222,630 748,379 - 1,090,000
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
Restricted
General Government
Public Safety
Public Works
Culture and Recreation
Community Development
Debt Service
Unrestricted fund balance:
Unassigned
Total fund balance
Total liabilities and fund balance
25,824
- - - - 104,057
- - - - 1,049,062
- - - - 496,343
- - - - 782,505
- - - - 6,080,525
65,329 17,446 627,503 - 627,503
(3,040) (3,040)
65,329 17,446 627,503 (3,040) $ 9,162,779
495,217 240,076 1,375,882 - S 10,633,445
See independent auditor's report
103
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2014
OLDSCHOOL
REVENUES
AIRPORT TIF
WESTSIDE TIF
PARKS IN LIEU
PARKS
AMBULANCE
TIF (TECH)
Taxes and assessments
-
856,942
-
916,451
-
133,381
Licenses and permits
-
-
-
-
-
-
Intergovernmental
42,671
243,128
-
10,000
130,590
3,057
Charges for services
-
-
-
512,343
642,543
-
Miscellaneous
-
-
-
45,489
3
-
Investment earnings
4,659
24,168
65
2,593
-
182
Total revenues
47,330
1,124,138
65
1,486,876
773,136
136,620
EXPENDITURES
Public safety
-
-
-
-
957,248
-
Public works
-
-
-
-
-
-
Parks and recreation
-
-
-
1,428,922
-
-
Community Development
136,439
249,249
-
-
-
28,476
Debt service - principal
-
-
-
24,850
-
-
Debt service - interest
-
-
-
621
-
-
Capital outlay
12,000
Total expenditures
136,439
249,249
1,466,393
957,248
28,476
Excess (deficiency) ofrevenues over expenditures
(89,109)
874,889
65
20,483
(184,112)
108,144
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
-
-
-
Transfers in
450,000
-
-
70,000
310,000
180,366
Transfers (out)
(32,000)
(8,181)
(276,289)
Total other financing sources and uses
450,000
(32,000)
(8,181)
70,000
310,000
(95,923)
Net change in fund balance
360,891
842,889
(8,116)
90,483
125,888
12,221
Fund balances - beginning
603,038
3,165,679
9,388
455,543
9,453
13,210
Restatements
(800)
Fund balances - beginning restated
603,038
3,165,679
9,388
454,743
9,453
13,210
Fund balances - ending
963,929
4,008,568
1,272
545,226
135,341
25,431
See independent auditor's report
104
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2014
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
EXPENDITURES
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Issuance of debt
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
OLD SCHOOL
BUILDING
PUBLIC SAFETY
TIF (IND)
HEALTH LEVY
DEPT.
IMPACT FEES
LIGHT DIST.
GAS TAX
18,876
776,618
-
-
277,642
-
-
-
298,748
-
-
-
-
21,384
-
-
-
364,622
-
-
87,403
56,542
-
-
-
-
532
-
7,976
-
34
-
3,166
3,149
374
1,996
18,910
798,002
389,849
59,691
285,992
366,618
- - 369,345
4,501
-
-
- - -
-
287,587
411,613
- - -
30,250
21,430
-
- - -
4,829
816
-
29,119
64,453
398,464
39,580
309,833
476,066
18,910 798,002 (8,615)
20,111
(23,841)
(109,448)
53,378 - - - - 25,000
(59,360) (735,000)
(5,982) (735,000) 25,000
12,928 63,002 (8,615) 20,111 (23,841) (94,448)
1 41,055 429,639 461,436 107,536 436,943
1 41,055 429,639 461,436 107,536 436,943
12,929 104,057 421,024 481,547 83,695 352,495
See independent auditor's report
105
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2014
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
EXPENDITURES
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
OTBER FINANCING SOURCES (USES)
Issuance of debt
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
DRUG
URBAN RD REVOLVING STONEGARDEN ENFORCEMENT
FORESTRY MACI GRANT LOAN (2) GRANT GRANT CIURP GRANT
13,850 - - 78,260 31,967 -
215,822 - 32,610 - - -
13,391 - - - 2,287 -
1,217 - 779 - - -
244,280 - 33,389 78,260 34,254 -
- - - 78,260 95,992
- 161 - -
179,575 - - - -
- 10
8,278 - 25,889 - -
227 - 6,210 - -
188,080 161 32,109 78,260 95,992
56,200 (161) 1,280 - (61,738) -
- - - - 55,976 -
(10,976)
45,000
56,200
(161)
1,280
- (16,738) -
181,678
60,314
200,976
- 22,206 2,979
763,378
(2,979)
181,678
60,314
964,354
22,206
237,878
60,153
965,634
- 5,468 -
See independent auditor's report
106
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2014
LAW
PRESERVE
CDBG-ED
BROWNFIELDS
ENFORCEMENT
AMERICA
(FVCC)
LOAN
HAZMAT
REVENUES
GRANTS
GRANT
GRANT
REVOLVING
FIRE GRANTS
GRANT
Taxes and assessments
-
-
-
-
-
-
Licenses and permits
-
-
-
-
-
-
Intergovernmental
90,567
7,251
5,620
158,376
-
44,706
Charges for services
19,404
-
-
100,500
-
-
Miscellaneous
4,209
-
-
-
27,147
243
Investment earnings
-
-
-
-
-
167
Total revenues
114,180
7,251
5,620
258,876
27,147
45,116
EXPENDITURES
Public safety
120,326
-
-
-
-
39,022
Public works
-
-
-
-
-
-
Parks and recreation
-
-
-
-
-
-
Community Development
-
7,251
2,086
158,376
-
-
Debt service - principal
-
-
-
-
-
-
Debt service - interest
-
-
-
-
-
-
Capital outlay
10,976
24,887
Total expenditures
131,302
7,251
2,086
158,376
24,887
39,022
Excess (deficiency) ofrevenues over expenditures
(17,122)
-
3,534
100,500
2,260
6,094
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
-
-
-
Transfers in
14,476
-
-
-
-
-
Transfers (out)
Total other financing sources and uses
14,476
Net change in fund balance
(2,646)
-
3,534
100,500
2,260
6,094
Fund balances - beginning
3,206
-
-
-
-
11,043
Restatements
Fund balances - beginning restated
3,206
11,043
Fund balances - ending
560
-
3,534
100,500
2,260
17,137
See independent auditor's report
107
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2014
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
EXPENDITURES
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
TRAILS Total Special City Hall Debt AIRPORT TIF WESTSIDE TIF
GRANTS Revenue Funds G.O. BONDS Service DEBT SERVICE DEBT SERVICE
- 2,979,810 540,265 - 638,016 -
- 298,748 - - - -
3,247 1,249,296 - 100,715 - -
- 1,667,167 - - - -
- 101,277 - 56,041 - -
- 42,549 1,168 - 2,153 -
3,247 6,338,847 541,433 156,756 640,169 -
- 1,664,694
-
-
-
-
- 699,361
-
-
-
-
- 1,608,497
-
-
-
-
- 581,887
-
-
-
-
- 110,697
450,000
121,894
140,000
13,000
- 12,703
52,812
34,858
40,383
19,117
1,750 143,185
1,750 4,821,024
502,812
156,752
180,383
32,117
1,497 1,517,823
38,621
4
459,786
(32,117)
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
- -
-
Transfers in
8,181
1,167,377
-
- -
32,000
Transfers (out)
(1,121,806)
(450,000)
Total other financing sources and uses
8,181
45,571
(450,000)
32,000
Net change in fund balance
9,678
1,563,394
38,621
4 9,786
(117)
Fund balances - beginning
-
6,215,323
21,520
326 189,371
988
Restatements
759,599
Fund balances - beginning restated
6,974,922
21,520
326 189,371
988
Fund balances - ending
(9,678)
8,538,316
60,141
330 199,157
871
See independent auditor's report
108
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2014
SID
Total Debt Service
REVENUES
REVOLVING
S & CIS
SID 343
SID 345
Funds
Taxes and assessments
-
9,658
100,159
29,307
1,317,405
Licenses and permits
-
-
-
-
-
Intergovernmental
-
-
-
-
100,715
Charges for services
-
-
-
-
-
Miscellaneous
-
-
-
-
56,041
Investment earnings
654
-
-
-
3,975
Total revenues
654
9,658
100,159
29,307
1,478,136
EXPENDITURES
Public safety
-
-
-
-
-
Public works
-
-
-
-
-
Parks and recreation
-
-
-
-
-
Community Development
-
-
-
-
-
Debt service - principal
-
7,526
80,000
14,000
826,420
Debt service - interest
-
1,577
22,000
7,125
177,872
Capital outlay
Total expenditures
9,103
102,000
21,125
1,004,292
Excess (deficiency) ofrevenues over expenditures
654
555
(1,841)
8,182
473,944
OTTER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
-
-
Transfers in
1,250
-
-
-
33,250
Transfers (out)
(1,250)
(451,250)
Total other financing sources and uses
1,250
(1,250)
(418,000)
Net change in fund balance
1,904
(695)
(1,841)
8,182
55,844
Fund balances - beginning
281,562
1,458
67,170
9,264
571,659
Restatements
Fund balances - beginning restated
281,562
1,458
67,170
9,264
571,659
Fund balances - ending
283,466
763
65,329
17,446
627,503
See independent auditor's report
109
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2014
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
EXPENDITURES
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
OTTER FINANCING SOURCES (USES)
Issuance of debt
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
Total Nonmajor
S & C Governmental
rnivcraiTrrrniv >.....a�
298,748
- 1,350,011
- 1,667,167
157,318
46,524
$ 7,816,983
- 1,664,694
699,361
- 1,608,497
581,887
937,117
- 190,575
10,885 154,070
10,885 $ 5,836,201
(10,885) $ 1,980,782
7,845 $ 7,845
- 1,200,627
(1,573,056)
7,845 $ (364,584)
- $ 6,786,982
759,599
- $ 7,546,581
(3,040) $ 9,162,779
See independent auditor's report
110
BUDGETARY COMPARISON SCHEDULE - OTHER MAJOR
FUNDS
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2015
SID344
ACTUAL
AMOUNTS
VARIANCE
BUDGETED AMOUNTS
(BUDGETARY WITH FINAI
ORIGINAL FINAL
BASIS) See Note A
BUDGET
RESOURCES (INFLOWS):
Taxes and assessments
$ 308,015 $ 308,015
$ 1,261,667 $
953,652
Licenses and permits
- -
-
-
Intergovernmental
Charges for services
Fines and forfeitures
Miscellaneous
Investment earnings
-
Amounts available for appropriation
$ 308,015 $ 308,015
$ 1,261,667 $
953,652
CHARGES TO APPROPRIATIONS (OUTFLOWS);
General government $
Public safety
Public works
Community development
Debt service - principal
Debt service - interest
Capital outlay
Total charges to appropriations
OTHER FINANCING SOURCES (USES)
225,000 225,000 225,000 -
132,308 132,308 132,658 (350)
$ 357,308 $ 357,308 $ 357,658 $ (350)
Issuance of debt $
- $ - $
- $ -
Proceeds from the sale of general capital asset disposition
- -
-
Transfers in
32,000 32,000
8,000 (24,000)
Transfers out
(234,094) (234,094)
(233,744) 350
Total other financing sources (uses) $
(202,094) $ (202,094) $
(225,744) $ (23,650)
Net change in fund balance
$
678,265
Fund balance - beginning of the year
$
(208,707)
Restatements
Fund balance - beginning of the year - restated
$
(208,707)
Fund balance - end of the year
$
469,558
See independent auditor's report
111
BUDGETARY COMPARISON SCHEDULE - NONMAJOR
FUNDS
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
AIRPORT TIF
Westside TIT
Positive /
Positive /
(Segative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
308,345
856,842
548,497
Licenses and permits
-
-
-
Intergovernmental
14,832
42,671
27,839
95,000
243,128
148,128
Charges for services
-
-
-
-
-
-
Miscellaneous
-
-
-
-
-
-
Investment earnings
1,000
4,659
3,659
12,000
24,168
12,168
Total revenues
15,832
47,330
31,498
415,345
1,124,138
708,793
EXPENDITURES
Public safety
Public works
Parks and recreation
Community Development
786,066
136,439
649,627
2,553,404
249,249
2,304,155
Debt service - principal
-
-
-
-
-
-
Debt service - interest
Capital outlay
-
-
-
-
-
-
Total expenditures
786,066
136,439
649,627
2,553,404
249,249
2,304,155
Excess (deficiency) of revenues over expenditures
(770,234)
(89,109)
681,125
(2,138,059)
874,889
3,012,948
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
-
Transfers in
450,000
450,000
Transfers (out)
-
-
(32,000)
(32,000)
Total other financing sources and uses
450,000
450,000
(32,000)
(32,000)
-
Net change in fund balance
(320,234)
360,891
681,125
(2,170,059)
842,889
3,012,948
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
603,038
963,929
3,165,679
4,008,568
See independent auditor's report
112
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
Parks in Lieu
Parks
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
887,000
916,451
29,451
Licenses and permits
-
-
-
Intergovernmental
10,000
10,000
-
Charges for services
504,500
512,343
7,843
Miscellaneous
20,000
45,489
25,489
Investment earnings
65
65
1,500
2,593
1,093
Total revenues
65
65
1,423,000
1,486,876
63,876
EXPENDITURES
Public safety
-
-
-
-
-
Public works
-
-
-
Parks and recreation
1,545,802
1,428,922
116,880
Community Development
-
-
-
Debt service - principal
24,850
24,850
-
Debt service - interest
882
621
261
Capital outlay
19,000
12,000
7,000
Total expenditures
1,590,534
1,466,393
124,141
Excess (deficiency) of revenues over expenditures
65
65
(167,534)
20,483
188,017
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
Transfers in
70,000
70,000
Transfers (out)
(9,388)
(8,181)
1,207
-
-
Total other financing sources and uses
(9,388)
(8,181)
1,207
70,000
70,000
-
Net change in fund balance
(9,388)
(8,116)
1,272
(97,534)
90,483
188,017
Fund balances - beginning
9,388
455,543
Restatements
-
(800)
Fund balances - beginning restated
9,388
454,743
Fund balances - ending
1,272
545,226
See independent auditor's report
113
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
AMBULANCE
OLD SCHOOL TIT (TECH)
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
51,550
133,381
81,831
Licenses and permits
-
-
-
-
-
-
Intergovernmental
100,000
130,590
30,590
724
3,057
2,333
Charges for services
605,000
642,543
37,543
-
-
-
Miscellaneous
-
3
3
-
-
-
Investment earnings
-
-
-
50
182
132
Total revenues
705,000
773,136
68,136
52,324
136,620
84,296
EXPENDITURES
Public safety
1,010,445
957,248
53,197
-
-
-
Public works
-
-
-
Parks and recreation
-
-
Community Development
24,000
28,476
(4,476)
Debt service - principal
-
-
Debt service - interest
Capital outlay
-
-
-
-
-
Total expenditures
1,010,445
957,248
53,197
24,000
28,476
(4,476)
Excess (deficiency) of revenues over expenditures
(305,445)
(184,112)
121,333
28,324
108,144
79,820
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
-
-
Transfers in
310,000
310,000
-
180,366
180,366
Transfers (out)
-
-
(280,765)
(276,289)
4,476
Total other financing sources and uses
310,000
310,000
(280,765)
(95,923)
184,842
Net change in fund balance
4,555
125,888
121,333
(252,441)
12,221
264,662
Fund balances - beginning
9,453
13,210
Restatements
-
-
Fund balances - beginning restated
9,453
13,210
Fund balances - ending
135,341
25,431
See independent auditor's report
114
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
OLD SCHOOL TIF (IND)
Health Levy
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
2,600
18,876
16,276
711,500
776,618
65,118
Licenses and permits
-
-
-
-
-
-
Intergovernmental
25,000
21,384
(3,616)
Charges for services
-
-
Miscellaneous
-
-
Investment earnings
-
34
34
-
-
-
Total revenues
2,600
18,910
16,310
736,500
798,002
61,502
EXPENDITURES
Public safety
-
-
-
-
-
-
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
-
-
-
-
-
-
Excess (deficiency) of revenues over expenditures
2,600
18,910
16,310
736,500
798,002
61,502
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
-
Transfers in
53,378
53,378
Transfers (out)
(59,360)
(59,360)
-
(735,000)
(735,000)
Total other financing sources and uses
(59,360)
(5,982)
53,378
(735,000)
(735,000)
-
Net change in fund balance
(56,760)
12,928
69,688
1,500
63,002
61,502
Fund balances - beginning
1
41,055
Restatements
-
-
Fund balances - beginning restated
1
41,055
Fund balances - ending
12,929
104,057
See independent auditor's report
115
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
Building Department
Impact Fees
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
-
-
Licenses and permits
317,000
298,748
(18,252)
Intergovernmental
-
-
-
-
-
Charges for services
50,100
87,403
37,303
105,000
56,542
(48,458)
Miscellaneous
-
532
532
-
-
-
Investment earnings
2,000
3,166
1,166
1,775
3,149
1,374
Total revenues
369,100
389,849
20,749
106,775
59,691
(47,084)
EXPENDITURES
Public safety
434,577
369,345
65,232
5,500
4,501
999
Public works
-
-
-
-
-
-
Parks and recreation
Community Development
-
-
Debt service - principal
30,250
30,250
-
Debt service - interest
-
-
-
4,789
4,829
(40)
Capital outlay
35,000
29,119
5,881
450,000
-
450,000
Total expenditures
469,577
398,464
71,113
490,539
39,580
450,959
Excess (deficiency) of revenues over expenditures
(100,477)
(8,615)
91,862
(383,764)
20,111
403,875
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
Transfers in
Transfers (out)
Total other financing sources and uses
-
-
-
Net change in fund balance
(100,477)
(8,615)
91,862
(383,764)
20,111
403,875
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
429,639
421,024
461,436
481,547
See independent auditor's report
116
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
Light Maintenance
Positive /
(Negative)
Budget Actual Variance
Gas Tax
Positive /
(Negative)
Budget Actual Variance
REVENUES
Taxes and assessments
237,000
277,642
40,642
Licenses and permits
-
-
-
-
-
Intergovernmental
360,000
364,622
4,622
Charges for services
-
-
-
Miscellaneous
-
7,976
7,976
-
-
-
Investment earnings
275
374
99
2,000
1,996
(4)
Total revenues
237,275
285,992
48,717
362,000
366,618
4,618
EXPENDITURES
Public safety
-
-
-
-
-
-
Public works
294,373
287,587
6,786
475,750
411,613
64,137
Parks and recreation
-
-
-
-
-
-
Community Development
-
-
Debt service - principal
21,430
21,430
Debt service - interest
816
816
-
-
-
Capital outlay
-
-
-
65,000
64,453
547
Total expenditures
316,619
309,833
6,786
540,750
476,066
64,684
Excess (deficiency) of revenues over expenditures
(79,344)
(23,841)
55,503
(178,750)
(109,448)
69,302
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
Transfers in
25,000
25,000
Transfers (out)
-
-
Total other financing sources and uses
-
25,000
25,000
-
Net change in fund balance
(79,344)
(23,841)
55,503
(153,750)
(84,448)
69,302
Fund balances - beginning
107,536
436,943
Restatements
-
-
Fund balances - beginning restated
107,536
436,943
Fund balances - ending
83,695
352,495
See independent auditor's report
117
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
URBAN FORESTRY
MACI GRANT
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget Actual Variance
REVENUES
Taxes and assessments
Licenses and permits
-
-
-
Intergovernmental
19,750
13,850
(5,900)
273,422 (273,422)
Charges for services
207,000
215,822
8,822
-
Miscellaneous
600
13,391
12,791
Investment earnings
500
1,217
717
-
Total revenues
227,850
244,280
16,430
273,422 (273,422)
EXPENDITURES
Public safety
-
-
Public works
-
-
-
161
(161)
Parks and recreation
294,170
179,575
114,595
-
-
Community Development
-
-
-
Debt service - principal
8,254
8,278
(24)
Debt service - interest
227
227
-
-
-
Capital outlay
-
-
-
376,000
-
376,000
Total expenditures
302,651
188,080
114,571
376,000
161
375,839
Excess (deficiency) of revenues over expenditures
(74,801)
56,200
131,001
(102,578)
(161)
102,417
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
-
Transfers in
42,264
(42,264)
Transfers (out)
-
Total other financing sources and uses
-
-
42,264
(42,264)
Net change in fund balance
(74,801)
56,200
131,001
(60,314)
(161)
60,153
Fund balances - beginning
181,678
60,314
Restatements
-
-
Fund balances - beginning restated
181,678
60,314
Fund balances - ending
237,878
60,153
See independent auditor's report
118
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
RD REVOLVING LOAN (2)
STONEGARDEN GRANT
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
Licenses and permits
-
-
Intergovernmental
-
-
143,016
78,260
(64,756)
Charges for services
85,374
32,610
(52,764)
-
-
Miscellaneous
-
-
-
Investment earnings
650
779
129
-
-
Total revenues
86,024
33,389
(52,635)
143,016
78,260
(64,756)
EXPENDITURES
Public safety
-
-
143,016
78,260
64,756
Public works
-
-
-
Parks and recreation
-
-
Community Development
125,000
10
124,990
Debt service - principal
25,889
25,889
-
Debt service - interest
7,361
6,210
1,151
-
Capital outlay
-
-
-
-
-
Total expenditures
158,250
32,109
126,141
143,016
78,260
64,756
Excess (deficiency) of revenues over expenditures
(72,226)
1,280
73,506
-
-
-
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
Transfers in
Transfers (out)
Total other financing sources and uses
-
-
Net change in fund balance
(72,226)
1,280
73,506
Fund balances - beginning
200,976
Restatements
763,378
Fund balances - beginning restated
964,354
Fund balances - ending
965,634
See independent auditor's report
119
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
Drug Enforcement Grant
Positive /
(Negative)
Budget Actual Variance
LAW ENFORCEMENT GRANTS
Positive /
(Negative)
Budget Actual Variance
REVENUES
Taxes and assessments
Licenses and permits
-
-
-
-
-
Intergovernmental
31,585
31,967
382
168,440
90,567
(77,873)
Charges for services
-
-
-
20,000
19,404
(596)
Miscellaneous
2,287
2,287
4,209
4,209
Investment earnings
-
-
-
-
-
-
Total revenues
31,585
34,254
2,669
188,440
114,180
(74,260)
EXPENDITURES
Public safety
97,383
95,992
1,391
180,064
120,326
59,738
Public works
-
-
-
-
-
-
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
-
-
-
Capital outlay
-
-
-
24,976
10,976
14,000
Total expenditures
97,383
95,992
1,391
205,040
131,302
73,738
Excess (deficiency) of revenues over expenditures
(65,798)
(61,738)
4,060
(16,600)
(17,122)
(522)
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
-
-
Transfers in
55,976
55,976
14,476
14,476
Transfers (out)
(10,976)
(10,976)
-
-
Total other financing sources and uses
45,000
45,000
-
14,476
14,476
-
Net change in fund balance
4,060
(20,798)
(16,738)
(2,124)
(2,646)
(522)
Fund balances - beginning
22,206
3,206
Restatements
-
-
Fund balances - beginning restated
22,206
3,206
Fund balances - ending
5,468
560
See independent auditor's report
120
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
Preserve America Grant
CDBG - ED FVCC
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
Licenses and permits
-
-
-
-
Intergovernmental
7,251
7,251
101,345
5,620
(95,725)
Charges for services
-
-
-
-
Miscellaneous
Investment earnings
-
-
-
-
Total revenues
7,251
7,251
101,345
5,620
(95,725)
EXPENDITURES
Public safety
-
-
-
-
Public works
Parks and recreation
-
-
-
-
-
Community Development
7,251
7,251
101,345
2,086
99,259
Debt service - principal
-
-
-
-
-
Debt service - interest
Capital outlay
-
-
-
-
-
Total expenditures
7,251
7,251
101,345
2,086
99,259
Excess (deficiency) of revenues over expenditures
-
-
-
3,534
3,534
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
Transfers in
Transfers (out)
Total other financing sources and uses
-
-
Net change in fund balance
3,534
3,534
Fund balances - beginning
-
Restatements
Fund balances - beginning restated
-
Fund balances - ending
3,534
See independent auditor's report
121
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
BROWNFIELDS LOAN REVOLVING
FIRE GRANTS
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
Licenses and permits
-
-
-
Intergovernmental
868,590
158,376
(710,214)
13,000
(13,000)
Charges for services
-
100,500
100,500
-
-
Miscellaneous
-
-
26,000
27,147
1,147
Investment earnings
-
-
-
-
-
Total revenues
868,590
258,876
(609,714)
39,000
27,147
(11,853)
EXPENDITURES
Public safety
-
-
19,000
-
19,000
Public works
-
-
Parks and recreation
-
-
-
Community Development
868,590
158,376
710,214
Debt service - principal
-
-
-
Debt service - interest
-
-
Capital outlay
-
-
-
20,000
24,887
(4,887)
Total expenditures
868,590
158,376
710,214
39,000
24,887
14,113
Excess (deficiency) of revenues over expenditures
-
100,500
100,500
-
2,260
2,260
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
Transfers in
Transfers (out)
Total other financing sources and uses
-
-
-
-
Net change in fund balance
100,500
100,500
2,260
2,260
Fund balances - beginning
-
-
Restatements
Fund balances - beginning restated
-
-
Fund balances - ending
100,500
2,260
See independent auditor's report
122
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
HAZMAT GRANT
TRAILS GRANTS
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
Licenses and permits
-
-
-
-
-
Intergovernmental
44,167
44,706
539
112,784
3,247
(109,537)
Charges for services
-
-
-
-
-
Miscellaneous
-
243
243
Investment earnings
100
167
67
-
-
Total revenues
44,267
45,116
849
112,784
3,247
(109,537)
EXPENDITURES
Public safety
55,310
39,022
16,288
-
-
Public works
-
-
-
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
-
-
-
Capital outlay
-
-
-
127,920
1,750
126,170
Total expenditures
55,310
39,022
16,288
127,920
1,750
126,170
Excess (deficiency) of revenues over expenditures
(11,043)
6,094
17,137
(15,136)
1,497
16,633
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
-
Transfers in
15,136
8,181
(6,955)
Transfers (out)
-
-
Total other financing sources and uses
-
-
15,136
8,181
(6,955)
Net change in fund balance
(11,043)
6,094
17,137
-
9,678
9,678
Fund balances - beginning
11,043
-
Restatements
-
Fund balances - beginning restated
11,043
-
Fund balances - ending
17,137
9,678
See independent auditor's report
123
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
Total Special Revenue Funds
G.O. BONDS
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
2,197,995
2,979,810
781,815
491,500
540,265
48,765
Licenses and permits
317,000
298,748
(18,252)
-
-
-
Intergovernmental
2,388,906
1,249,296
(1,139,610)
Charges for services
1,576,974
1,667,167
90,193
Miscellaneous
46,600
101,277
54,677
-
-
-
Investment earnings
21,850
42,549
20,699
500
1,168
668
Total revenues
6,549,325
6,338,847
(210,478)
492,000
541,433
49,433
EXPENDITURES
Public safety
1,945,295
1,664,694
280,601
Public works
770,123
699,361
70,762
Parks and recreation
1,839,972
1,608,497
231,475
Community Development
4,465,656
581,887
3,883,769
-
-
Debt service -principal
110,673
110,697
(24)
450,000
450,000 -
Debt service - interest
14,075
12,703
1,372
52,863
52,812 51
Capital outlay
1,117,896
143,185
974,711
- -
Total expenditures
10,263,690
4,821,024
5,442,666
502,863
502,812 51
Excess (deficiency) of revenues over expenditures
(3,714,365)
1,517,823
5,232,188
(10,863)
38,621 49,484
OTHER FINANCING SOURCES (USES)
Issuance of debt
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
982,852 1,167,377 184,525
(1,127,489) (1,121,806) 5,683
(144,637) 45,571 190,208
(3,859,002) 1,563,394 5,422,396 (10,863) 38,621 49,484
Fund balances - beginning 6,215,323
Restatements 759,599
Fund balances - beginning restated 6,974,922
Fund balances - ending 8,538,316
21,520
60,141
See independent auditor's report
124
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
City Hall Debt Service
Airport TIF Debt Service
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
645,000
638,016
(6,984)
Licenses and permits
-
-
Intergovernmental
100,715
100,715
Charges for services
-
-
-
Miscellaneous
56,038
56,041
3
-
-
-
Investment earnings
-
-
-
1,000
2,153
1,153
Total revenues
156,753
156,756
3
646,000
640,169
(5,831)
EXPENDITURES
Public safety
-
-
-
-
-
Public works
Parks and recreation
Community Development
-
-
-
-
Debt service -principal
116,191
121,894
(5,703)
140,000
140,000
Debt service - interest
40,562
34,858
5,704
40,383
40,383
Capital outlay
-
-
-
-
Total expenditures
156,753
156,752
1
180,383
180,383
Excess (deficiency) of revenues over expenditures
-
4
4
465,617
459,786
(5,831)
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
Transfers in
Transfers (out)
(450,000)
(450,000)
Total other financing sources and uses
(450,000)
(450,000)
Net change in fund balance
4
4
15,617
9,786
(5,831)
Fund balances - beginning
326
189,371
Restatements
-
-
Fund balances - beginning restated
326
189,371
Fund balances - ending
330
199,157
See independent auditor's report
125
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
Westside TIF Debt
SID Revolving
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
-
-
Investment earnings
1,000
654
(346)
Total revenues
1,000
654
(346)
EXPENDITURES
Public safety
-
-
-
Public works
Parks and recreation
Community Development
-
-
Debt service - principal
13,000
13,000
-
Debt service -interest
19,520
19,117
403
Capital outlay
-
-
-
Total expenditures
32,520
32,117
403
-
-
-
Excess (deficiency) of revenues over expenditures
(32,520)
(32,117)
403
1,000
654
(346)
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
-
-
Transfers in
32,000
32,000
224,515
1,250
(223,265)
Transfers (out)
-
-
(242,308)
-
242,308
Total other financing sources and uses
32,000
32,000
(17,793)
1,250
19,043
Net change in fund balance
(520)
(117)
403
(16,793)
1,904
18,697
Fund balances - beginning
988
281,562
Restatements
-
-
Fund balances - beginning restated
988
281,562
Fund balances - ending
871
283,466
See independent auditor's report
126
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
S & C's
SID 343
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
9,567
9,658
91
104,587
100,159
(4,428)
Licenses and permits
-
-
-
-
-
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
-
-
-
-
-
Total revenues
9,567
9,658
91
104,587
100,159
(4,428)
EXPENDITURES
Public safety
-
-
-
-
-
Public works
Parks and recreation
Community Development
-
-
-
-
Debt service - principal
7,526
7,526
-
80,000
80,000
-
Debt service - interest
1,588
1,577
11
24,480
22,000
2,480
Capital outlay
-
-
-
-
-
-
Total expenditures
9,114
9,103
11
104,480
102,000
2,480
Excess (deficiency) of revenues over expenditures
453
555
102
107
(1,841)
(1,948)
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
Transfers in
Transfers (out)
(1,250)
(1,250)
Total other financing sources and uses
(1,250)
(1,250)
-
Net change in fund balance
(797)
(695)
102
107
(1,841)
(1,948)
Fund balances - beginning
1,458
67,170
Restatements
-
-
Fund balances - beginning restated
1,458
67,170
Fund balances - ending
763
65,329
See independent auditor's report
127
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
SID 345
Total Debt Service Funds
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
21,125
29,307
8,182
1,271,779
1,317,405
45,626
Licenses and permits
-
-
-
-
-
-
Intergovernmental
100,715
100,715
Charges for services
-
-
-
Miscellaneous
56,038
56,041
3
Investment earnings
2,500
3,975
1,475
Total revenues
21,125
29,307
8,182
1,431,032
1,478,136
47,104
EXPENDITURES
Public safety
-
-
-
-
-
-
Public works
Parks and recreation
Community Development
-
-
-
-
Debt service - principal
14,000
14,000
820,717
826,420
(5,703)
Debt service -interest
7,125
7,125
186,521
177,872
8,649
Capital outlay
-
-
-
-
-
Total expenditures
21,125
21,125
1,007,238
1,004,292
2,946
Excess (deficiency) of revenues over expenditures
-
8,182
8,182
423,794
473,844
50,050
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
-
Transfers in
256,515
33,250
(223,265)
Transfers (out)
(693,558)
(451,250)
242,308
Total other financing sources and uses
(437,043)
(418,000)
19,043
Net change in fund balance
8,182
8,182
(13,249)
55,844
69,093
Fund balances - beginning
9,264
571,659
Restatements
-
-
Fund balances - beginning restated
9,264
571,659
Fund balances - ending
17,446
627,503
See independent auditor's report
128
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2015
S & C Construction
Positive /
(Negative)
Budget Actual Variance
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
EXPENDITURES
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest - -
Capital outlay 25,000 10,885 14,115
Total expenditures 25,000 10,885 14,115
Excess (deficiency) of revenues over expenditures (25,000) (10,885) 14,115
OTHER FINANCING SOURCES (USES)
Issuance of debt
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
25,000 7,845
(17,155)
25,000 7,845
(17,155)
- (3,040)
(3,040)
(3,040)
See independent auditor's report
129
COMBINING AND INDIVIDUAL
FUND STATEMENTS
NONMAJOR PROPRIETARY FUNDS
AIRPORT ENTERPRISE — Accounts for all monies received and expensed in the
operation of the City airport.
SOLID WASTE — Accounts for assessments received and expenses incurred in the
operation of the City solid waste department.
City of Kalispell, Montana
Combining Statement of Net Positon
Nonmajor Proprietary Funds
June 30, 2015
Airport Enterprise
ASSETS
Cash and investments $ 125,377 $
Taxes and assessments receivable, net -
Accounts receivable - net 672
Contracts receivable -
Due from other governments
Prepaids
Solid Waste Totals
994,912 $
1,120,289
15,880
15,880
-
672
15,500
15,500
88,238
88,238
7,465
7,465
Restricted assets:
Capital assets - land
1,359,545
-
1,359,545
Capital assets - depreciable, net
1,003,595
686,143
1,689,738
Total assets
$
2,489,189
$ 1,808,138
$
4,297,327
DEFERRED OUTFLOWS OF RESOURCES
Contractually required contributions related to pensions
-
34,263
34,263
Total deferred outflows of resources
-
34,263
34,263
LIABILITIES
Accounts payable
$
198
$ 19,714
$
19,912
Accrued payroll
-
11,242
11,242
Current portion of long-term liabilities
Bonds and notes - capital
37,963
37,963
Compensated absences payable
46,396
46,396
Long-term liabilities, due in more than one year
Bonds and notes - capital
116,192
116,192
Compensated absences payable
$
$ 32,299
$
32,299
Net pension liability
-
306,041
306,041
Total liabilities
$
198
$ 569,847
$
570,045
DEFERRED INFLOWS OF RESOURCES
Difference btwn est. and actual earnings on pension plan investment
-
65,668
65,668
Total deferred inflows of resources
65,668
65,668
NET POSITION
Net investment in capital assets
$
2,363,140
$ 531,988
$
2,895,128
Unrestricted
125,851
674,898
800,749
Total net position
$
2,488,991
$ 1,206,886
$
3,695,877
See independent auditor's report
130
City of Kalispell, Montana
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position
Nonmajor Proprietary Funds
For the Fiscal Year Ended June 30, 2015
OPERATING REVENUES
Charges for services
Miscellaneous revenues
Total operating revenues
OPERATING EXPENSES
Personal services
Supplies
Purchased services
Fixed charges
Depreciation
Total operating expenses
Operating income (loss)
Airport
Enterprise Solid Waste Totals
$ 79,091 $ 973,301 $ 1,052,392
2,101 92 2,193
$ 81,192 $ 973,393 $ 1,054,585
$ - $
489,632 $
489,632
-
85,122
85,122
44,932
20,518
65,450
13,316
119,600
132,916
96,467
100,644
197,111
$ 154,715 $
815,516 $
970,231
$ (73,523) $
157,877 $
84,354
NONOPERATING REVENUES (EXPENSES)
Intergovernmental revenue
Interest revenue
Gain (loss) sale of capital asset
Debt service interest expense
Total non -operating revenues (expenses) $
Income (loss) before contributions and transfers $
Transfers (out)
Change in net position
Net Position - beginning of the year
Restatements
Net Position - beginning of the year - restated
Net Position - end of the year
- 5,119
5,119
902 5,564
6,466
- 46,600
46,600
- (1,170)
(1,170)
902 $ 56,113 $
57,015
(72,621) $ 213,990 $
141,369
$ -
$
(25,000)
$
(25,000)
$ (72,621)
$
188,990
$
116,369
$ 2,561,612
$
1,367,167
$
3,928,779
-
(349,271)
(349,271)
$ 2,561,612
$
1,017,896
$
3,579,508
$ 2,488,991
$
1,206,886
$
3,695,877
See independent auditor's report
131
City of Kalispell, Montana
Combining Statement of Cash Flows
Nonmajor Proprietary Funds
Year Ended June 30, 2015
Cash flows from operating activities:
Cash received from customers
Cash received from miscellaneous sources
Cash payments for claims
Cash payments to employees
Net cash provided (used) by operating activities
Cash flows from capital and related financing activities:
Principal paid on bonds, loans and advances
Interest paid on bonds, loans and advances
Acquisition and construction of capital assets
Proceeds from the disposal of capital assets
Net cash provided (used) by capital and related financing activities
Cash flows from non -capital financing activities:
Transfers between funds
Net cash provided (used) from non -capital financing activities
Cash flows from investing activities:
Interest on investments
Net cash provided (used) by investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning
Restatement
Cash and cash equivalents at end
Reconciliation of operating income (loss) to net cash provided
(used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation
Changes in assets and liabilities:
Accounts receivable - net
Ppd health insurance
Taxes and assessments receivable, net
Due from county
Comp absences
Accounts payable
Accrued payroll
Pension expens adjustment
Net cash provided (used) by operating activities
r
Solid Waste
Enterprise
Totals
$ 81,268
$ 991,967
$ 1,073,235
-
92
92
(58,242)
(221,581)
(279,823)
-
(484,336)
(484,336)
$ 23,026
$ 286,142
$ 309,168
$
$ (18,833)
$ (18,833)
(1,170)
(1,170)
(80,598)
(80,598)
31,100
31,100
$
$ (69,501)
$ (69,501)
$
$ (25,000)
$ (25,000)
$
$ (25,000)
$ (25,000)
$ 902
$ 5,564
$ 6,466
$ 902
$ 5,564
$ 6,466
$ 23,928
$ 197,205
$ 221,133
101,449
797,707
899,156
$ 125,377
$ 994,912
$ 1,120,289
$ (73,523)
$ 157,877
$ 84,354
96,467
100,644
197,111
76
-
76
-
(970)
(970)
9,736
9,736
8,930
8,930
-
11,139
11,139
6
3,659
3,665
-
1,833
1,833
-
(6,706)
(6,706)
$ 23,026
$ 286,142
$ 309,168
See independent auditor's report
132
COMBINING AND INDIVIDUAL
FUND STATEMENTS
AGENCY FUNDS
TBID CLEARING — Accounts for monies received for and due to the Tourism Business
Improvement District.
PAYROLL CLEARING — Accounts for payroll deductions and expenses payable to
other agencies and vendors.
PERFORMANCE BONDS — Accounts for monies held by the City as a guarantee of
performance by developers or vendors.
City of Kalispell, Montana
Combining Statement of Fiduciary Net Position
Agency Funds
June 30, 2015
Performance
TBID Clearing Payroll Clearing Bonds Totals
ASSETS
Current assets:
Cash and investments 3.425 $ 514,447 $ 6,752 $ 524,624
Total assets 3.425 $ 514,447 $ 6,752 $ 524,624
LIABILITIES
Current liabilities:
Due to others 3,425 $ 514,447 $ 6,752 $ 524,624
Total liabilities 3,425 $ 514,447 $ 6,752 $ 524,624
See independent auditor's report
133
City of Kalispell, Montana
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the Fiscal Year Ended June 30, 2015
Payroll Clearing
Balance
Balance
June 30, 2014
Additions Deletions
June 30, 2015
ASSETS
Current assets:
Cash and investments
$
461,057
8,456,793 (8,403,403) $
514,447
Total assets
461,057
8,456,793 (8,403,403)
514,447
LIABILITIES
Current liabilities:
Due to others
$
461,057
9,394,886 (9,341,496) $
514,447
Total liabilities
$
461,057
9,394,886 (9,341,496) $
514,447
Performance Bonds
Balance
Balance
June 30, 2014
Additions Deletions
June 30, 2015
ASSETS
Current assets:
Cash and investments
$
36,329
33,265 (62,842) $
6,752
Total assets
$
36,329
33,265 (62,842) $
6,752
LIABILITIES
Current liabilities:
Due to others
$
36,329
71,107 (100,684) $
6,752
Total liabilities
$
36,329
71,107 (100,684) $
6,752
Tourism Business Improvement District
Balance
Balance
June 30, 2014
Additions Deletions
June 30, 2015
ASSETS
Cash and investments $ 2,066
549,404 (548,045) $
3,425
Total assets $ 2,066
549,404 (548,045) $
3,425
LIABILITIES
Due to others $ 2,066 549,404 (548,045) $ 3,425
Total liabilities $ 2,066 549,404 (548,045) $ 3,425
See independent auditor's report
134
STATISTICAL
SECTION
This part of the City of Kalispell's financial report presents detailed information as a
context for understanding what the information in the financial statements, note
disclosure and required supplementary information says about the government's overall
financial health.
Contents
Financial Trends
These schedules contain trend information to help the reader understand how the
government's financial performance and well-being have changed over time
Revenue Capacity
These schedules contain information to help the reader assess the government's
most significant local revenue source, the property tax.
Debt Capacity
These schedules present information to help the reader assess the affordability of
the government's current level of outstanding debt and the government's ability to
issue additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the government's financial activities
take place.
Operating Information
These schedules contain service and infrastructure data to help the reader
understand how the information in the government's financial report relates to the
services the government provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the City of Kalispell annual
financial report for the relevant year.
Note: The City of Kalispell implemented GASB Statement 34 in fiscal year 2003, therefore the data for prior years are
not shown; schedules presenting government -wide information include information beginning in that year.
FINANCIAL TRENDS
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unaudited statistical section
135
CITY OF KALISPELL, MONTANA
CHANGES IN NET POSITION
Put Ten Fiscal Years
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Expenses
Governmental activities:
General government
2,688,413
5,851,576
7,230,428
6,778,754
5,149,809
5,310,274
6,995,454
6,709,523
5,688,135
5,401,242
Public Safety
6,875,372
7,684,804
9,W8,419
8,%2,M2
9,015,732
8,729,290
8,536,332
9,293,138
9,M9,827
9,575,487
Public Works
2,196,190
1,979,249
2,326,750
2,327,255
3,201,811
3,306,165
2,844,001
3,074,630
2,573,627
2,773,097
Parks and recreation
1,719,630
1,895,781
2,302,240
2,009,168
1,860,308
1,845,939
1,913,920
1,991,585
2,123,237
2,062,669
Community Development
1,482,210
3,706,504
979,002
1,012,555
1,629,656
2,033,880
1,426,377
3,616,337
1,601,170
683,164
Miscellaneous
1,053
(14,839)
Interest
529,263
736,927
701,786
672,386
627,678
580,361
390,770
357,857
331,811
Total governmental activities expenses
$ 15,492,131 $
21,840,002 $
23,148,625 $
21,762,380 $
21,484,994 $
21,805,909 $
21,716,084 $
25,075,984 $
21,613,853 $
20,827,470
Business -type activities:
Airport
105,429
174,865
202,122
204,842
176,702
214,636
217,616
225,974
177,751
154,715
Water
1,808,613
2,080,954
2,394,777
2,597,419
2,638,011
2,689,293
2,592,628
2,6W,877
2,625,096
2,542,119
Sewer
3,570,618
4,037,350
4,716,788
5,354,062
5,976,393
5,882,868
5,564,219
5,255,654
5,114,591
5,077,643
Ambulance
1,383,918
1,707,121
Solid Waste
615,882
654,839
762,782
772,132
801,909
718,139
749,481
783,967
812,650
816,686
Total business -type activities expenses
7,484,460
8,655,129
8,076,469
8,928,455
9,593,015
9,504,936
9,123,944
8,926,472
8,730,038
8,591,163
Total pnmary government expenses
$ 22,976,591 $
30,495,131
$ 31,225,094 $
30,690,835 $
31,078,009 $
31,310,845 $
30,840,028 $
34,002,456 $
30,343,891 $
29,418,633
Program Revenues
Governmental activities:
Charges for services:
General government
434,172
432,519
621,250
829,925
951,940
1,039,553
865,223
669,964
628,729
684,550
Public Safety
1,799,378
2,542,711
2,441,274
1,867,539
1,622,104
1,6/8,825
1,753,%9
1,928,011
2,033,870
1,973,898
Public Works
1,499,638
1,650,116
2,269,770
2,W4,731
2,098,848
2,312,530
2,226,027
2,201,616
2,172,122
2,463,435
Parks and recreation
700,576
739,245
754,025
547,874
624,158
592,868
619,634
711,90
752,460
728,165
Community Development
464,300
193,623
507,6W
228,989
136,598
28,161
243,088
170,429
283,134
153,431
Operating grants and contributions
1,793,603
1,782,022
2,108,149
2,074,401
3,768,083
3,588,307
2,554,322
2,688,746
2,636,321
1,838,425
Capital grants and contributions
158,695
5,473,543
6,318,780
6,551,018
2,284,26/
3,351,562
1,385,939
1,378,649
1,519,825
3,232,618
Total governmental activities program revenues
$ 6,850,362 $
12,813,779 $
15,020,947 $
14,704,477 $
11,485,998 $
12,591,806 $
9,648,202 $
9,749,384 $
10,026,461 $
11,074,522
Business -type activities:
Charges for services:
Airport
48,207
69,297
91,958
72,373
70,04
70,900
76,572
75,813
78,657
79,091
Water
2,927,706
2,343,047
2,722,421
2,562,569
2,624,521
2,296,594
2,430,380
2,740,512
2,985,959
3,018,276
Sewer
4,455,533
3,813,703
4,104,508
4,163,757
4,129,271
4,124,020
4,554,155
4,977,286
4,96/,223
5,141,284
Ambulance
1,365,111
1,463,513
Solid Waste
615,094
623,132
709,514
758,236
767,404
805,613
851,563
900,643
951,676
973,393
Operating grants and contributions
79,501
121,264
10,465
2,416
8,354
8,372
27,721
Capital grants and contributions
2,976,538
10,087,410
9,486,451
1,257,291
1,280,807
888,609
679,690
1,012,027
2.137,977
1,098,222
Total business -type activities program revenues
12,467,690
18,521,366
17,125,317
8,814,226
8,872,697
8,185,736
8,594,776
9,714,635
11,129,864
10,337,987
Total pnmary government program revenues
$ 19,318,052 $
31,335,145 $
32,146,264 $
23,518,703 $
20,358,695 $
20,777,542 $
18,242,978 $
19,464,019 $
21,156,325 $
21,412,509
Net (Expense)/Revenue
Governmental activities (8,641,769) (9,026,223) (8,127,678) (7,057,903) (9,998,996) (9,214,103) (12,067,881) (15,326,600) (11,587,392) (9,752,948)
Business -type activities 4,983,230 9,866,237 9,048,848 (114,229) (720,318) (1,319,200) (529,168) 788,163 2,399,826 1,746,824
Total pnmary government net expense $ (3,658,539) $ 840,014 $ 921,170 $ (7,172,132) $ (10,719,314) $ (10,533,303) $ (12,597,049) $ (14,538,437) $ (9,187,566) $ (8,006,124)
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes
Property taxes
10,322,742
5,374,150
5,824,984
6,252,363
6,370,333
7,563,944
7,469,972
8,092,684
8,739,807
7,584,775
Misc.
98,40
106,783
151,062
184,781
189,921
Investment earnings
364,000
496,992
278,957
159,208
106,799
81,041
130,836
71,573
48,193
72,531
Grants and entitlements not restricted
2,353,992
2,301,876
2,221,506
2,223,398
2,608,937
2,316,980
2,W3,949
2,657,356
2,835,264
3,134,703
Gas Tax
318,622
324,774
342,226
354,678
361,349
366,904
361,157
3W,650
364,563
364,622
Gain (loss)sale of capital assets
(61,395)
1,210,868
(392)
(212,127)
11,610
Transfers
(3,060,201)
(1,514,159)
415,503
(194,558)
(112,574)
27,188
(358,169)
(218,728)
(65,000)
Total governmental activities
$ 10,237,760 $
8,194,501 $
9,083,176 $
8,989,647 $
9,252,468 $
10,314,764 $
10,487,758 $
10,975,156 $
11,953,880 $
11,293,162
Business -type activities:
Investment earnings
610,799
898,491
832,2%
467,038
228,143
163,907
142,299
102,311
83,224
113,963
Gain (loss) sale of capital assets
459,892
(41,786)
-
46,710
Other
(312,736)
-
2,101
Transfers
3,060,201
1,514,159
(415,503)
194,558
112,574
358,169
218,728
65,000
Total business -type activities
$ 4,130,892 $
2,412,650 $
416,793 $
467,038 $
422,701 $
(36,255) $
100,513 $
460,480 $
301,952 $
227,774
Total pnmary government
$ 14,368,652 $
10,607,151 $
9,499,969 $
9,456,685 $
9,675,169 $
10,278,509 $
10,588,271 $
11,435,636 $
12,255,832 $
11,520,936
Change in Net Position
Governmental activities
1,595,991
(831,722)
955,498
1,931,744
(746,528)
1,100,661
(1,580,123)
(4,351,444)
366,488
1,540,214
Business -type activities
9,114,122
12,278,887
9,465,641
352,809
(297,617)
(1,355,455)
(428,655)
1,248,643
2,701,778
1,974,598
Tote l pn m ary government
$ 10,710,113 $
11,447,165 $
10,421,139 $
2,284,553 $
(1,044,145) $
(254,794) $
(2,008,778) $
(3,102,801) $
3,068,266 $
3,514,812
Unaudited statistical section
136
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137
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138
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REVENUE CAPACITY
CITY OF KALISPELL, MONTANA
MARKET VALUE OF TAXABLE PROPERTY
Past Ten Fiscal Years
(in thousands of dollars)
Fiscal
Taxable
Year
Real
Less
Total
Total
Estimated
Value as a
Ended
Taxable
Tax
Taxable
Direct
Market
Percentage
June 30,
Value
Increment
Valuation
Tax Rate
Value
of Market Value
2006
$29,770
$
1,119
$
28,651
170.00
$ 893,658
3.21%
2007
$32,494
$
701
$
31,793
166.90
$1,035,070
3.07%
2008
$35,810
$
923
$
34,887
162.85
$1,148,125
3.04%
2009
$37,850
$
1,341
$
36,509
170.23
$1,190,541
3.07%
2010
$39,522
$
1,540
$
37,982
169.81
$1,269,511
2.99%
2011
$41,074
$
1,626
$
39,448
170.34
$1,360,162
2.90%
2012
$41,785
$
1,716
$
40,069
175.93
$1,413,041
2.84%
2013
$40,531
$
1,515
$
39,016
185.60
$1,450,786
2.69%
2014
$40,798
$
1,464
$
39,334
185.10
$1,506,125
2.61 %
2015
$41,761
$
2,240
$
39,521
187.80
$1,587,574
2.49%
Source: Flathead County and Montana Department of Revenue
Note: Assessed by Montana Department of Revenue every six years
Unaudited statistical section
139
CITY OF KALISPELL, MONTANA
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Past Ten Fiscal Years
(rate per $1000 of assessed value)
City of Kalispell
Overlapping Rates
Fiscal
General
Total
Year
Obligation
Direct
Kalispell
Ended
Basic
Health
Debt
Tax
School
Flathead
State of
June 30,
Rate
Insurance
Service
Rate
District
County
Montana
2006
137.00
12.50
20.50
170.00
375.51
112.64
46.00
2007
134.90
13.50
18.50
166.90
361.23
115.88
46.00
2008
132.60
14.75
15.50
162.85
351.09
119.96
46.00
2009
138.76
16.22
15.25
170.23
358.27
104.51
46.00
2010
140.11
15.20
14.50
169.81
350.47
113.12
46.00
2011
141.50
14.64
14.20
170.34
341.38
122.77
46.00
2012
145.88
16.55
13.50
175.93
337.15
125.69
46.00
2013
154.60
18.50
12.50
185.60
327.58
125.96
46.00
2014
154.10
18.50
12.50
185.10
335.79
124.94
46.00
2015
156.80
18.50
12.50
187.80
349.48
128.88
46.00
Source: Flathead County
Unaudited statistical section
140
CITY OF KALISPELL, MONTANA
PRINCIPAL PROPERTY TAX PAYERS
Current Year, and Nine Years Ago
2015
Taxable
Assessed
Taxpayer
Value
Rank
CENTURYLINK INC
2,032,381
1
FLATHEAD ELECTRIC COOPERATIVE INC
$ 1,763,130
2
NORTHWESTERN CORP TRANSMISSION & DISTRIBUTIOI
855,986
3
FLATHEAD HOSPITAL DEVELOPMENT COMPANY LLC
505,452
4
INLAND WESTERN KALISPELL MOUNTAIN VIEW LLC
374,458
5
BRESNAN COMMUNICATIONS LLD
371,620
6
WAL-MART ESTATE BUSINESS TRUST
352,534
7
STATE OF MONTANA DNRC
297,053
8
CROWN ENTERPRISES INC
266,937
9
NORTHWEST HEALTHCARE CORP
249,997
10
TARGET CORPORATION
HD DEVELOPMENT OF MARYLAND INC
KALISPELL GOLDBERG LLC
GVD COMMERCIAL PROPERTIES INC
ROCKY MTN SUB SPECIALTY ASSOCIATES LLC
Total
7,069,548
Total City Taxable Assessed Value $38,953,059
Source: Flathead County
2006
Percentage
Percentage
of Total City
of Total City
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Value
Value
Rank
Value
5.22%
995,774
1
3.07%
4.53%
$ 993,212
2
3.06%
2.20%
596,027
4
1.84%
1.30%
775,231
3
2.39%
0.96%
0.95%
0.91%
0.76%
0.69%
0.64%
264,458
7
0.82%
238,437
8
0.74%
207,012
9
0.64%
502,392
5
1.55%
494,803
6
1.53%
159,622
10
0.49%
18.15%
5,226,968
16.12%
Unaudited statistical section
141
CITY OF KALISPELL, MONTANA
PROPERTY TAX LEVIES AND COLLECTIONS
Past Ten Fiscal Years
Fiscal
Collected within the
Year
Taxes Levied
Fiscal Year of the Levy
Collections
Ended
for the
Percentage
in Subsequent
June 30,
Fiscal Year
Amount
of Levy
Years
2006
4,870,670
4,540,926
93.23%
310,262
2007
5,306,252
5,097,185
96.06%
178,290
2008
5,831,659
5,614,138
96.27%
107,314
2009
6,214,927
5,883,671
94.67%
274,773
2010
6,449,723
6,036,354
93.59%
411,906
2011
6,719,572
6,182,842
92.01%
535,190
2012
7,049,515
6,847,410
97.13%
202,105
2013
7,241,555
7,078,423
97.75%
163,132
2014
7,280,909
6,986,904
95.96%
293,943
2015
7,422,232
7,179,788
96.73%
n/a
Source: Flathead County
City Manager's Recommended Budget
Unaudited statistical section
142
Total Collections to Date
Percentage
Amount
of Levy
4,851,187
99.60%
5,275,475
99.42%
5,721,452
98.11%
6,158,444
99.09%
6,448,260
99.98%
6,718,032
99.98%
7,049,515
100.00%
7,241,555
100.00%
7,280,847
100.00%
7,179,788
96.73%
CITY OF KALISPELL, MONTANA
WATER SOLD BY TYPE OF CUSTOMER
Past Ten Fiscal Years
(in thousands of gallons)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Type of Customer
Residential 494,293 560,565 620,857 565,060 506,020 509,575 545,349 475,419 587,018 625,397
Commercial 504,591 550,512 556,018 527,405 540,942 515,959 495,461 544,564 494,608 516,693
Total 998,884 1,111,077 1,176,875 1,092,465 1,046,962 1,025,534 1,040,810 1,019,983 1,081,626 1,142,090
Total direct rate $ 1.80 $ 1.92 $ 2.05 $ 2.29 $ 2.30 $ 2.06 $ 2.14 $ 2.49 $ 2.55 $ 2.43
per 1000 gallons
SEWER SOLD BY TYPE OF CUSTOMER
Past Ten Fiscal Years
(in thousands of gallons)
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Type of Customer
Residential
326,351
342,771
361,875
354,477
357,747
332,977
331,165
367,916
365,731
364,397
Commercial
579,002
580,838
544,071
519,402
521,204
449,167
527,307
538,810
482,325
497,854
Total
905,353
923,609
905,946
873,879
878,951
782,144
858,472
906,726
848,056
862,251
Total direct rate
$ 3.40
$ 3.57
$ 3.77
$ 4.22
$ 3.79
$ 4.20
$ 4.37
$ 4.61 $
4.87 $
4.95
per 1000 gallons
Source: City of Kalispell Finance Department
Unaudited statistical section
143
Fiscal
Year
Ended
June 30,
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
CITY OF KALISPELL, MONTANA
WATER AND SEWER RATES
Water
Bi-Monthly
Rate per
Base
1000
Rate
Gallons
in city out of city
in city out of city
$ 2.85
3.56
$ 1.66
2.08
$ 3.00
3.75
$ 1.83
2.29
$ 3.25
4.06
$ 2.01
2.51
$ 3.55
4.44
$ 2.21
2.76
$ 3.75
4.69
$ 2.43
3.04
$ 3.75
4.69
$ 2.43
3.04
$ 3.75
4.69
$ 2.43
3.04
$ 3.75
4.69
$ 2.43
3.04
$ 3.75
4.69
$ 2.43
3.04
$ 9.38
11.73
$ 2.43
3.04
$ 15.00
18.75
$ 2.43
3.04
$ 15.00
18.75
$ 2.43
3.04
Irrigation (sprinkling)
Bi-Monthly
Rate per
Base
1000
Rate
Gallons
in city out of city
in city out of city
$ 2.85
3.56
$ 1.05
1.31
$ 3.00
3.75
$ 1.15
1.44
$ 3.25
4.06
$ 1.27
1.59
$ 3.55
4.44
$ 1.39
1.74
$ 3.75
4.69
$ 1.55
1.94
$ 3.75
4.69
$ 1.55
1.94
$ 3.75
4.69
$ 1.55
1.94
$ 3.75
4.69
$ 1.55
1.94
$ 3.75
4.69
$ 1.55
1.94
$ 9.38
11.73
$ 1.55
1.94
$ 15.00
18.75
$ 1.55
1.94
$ 15.00
18.75
$ 1.55
1.94
Some custormers pay to install a separate irrigation meter and
are then billed actual meter readings for their irrigation use.
The City also bills customers a "sprinkling" rate based off of an
average usage in the "winter months" deduction.
Sources: City of Kalispell, Resolutions 4798/4799/5491
Sewer
Bi-Monthly
Rate per
Base
1000
Rate
Gallons
in city out of ci
in city out of city
$
2.85
3.56
$ 3.48
4.35
$
3.00
3.75
$ 3.62
4.53
$
3.25
4.06
$ 3.80
4.75
$
3.55
4.44
$ 3.99
4.99
$
3.75
4.69
$ 4.19
5.24
$
3.75
4.69
$ 4.19
5.24
$
3.75
4.69
$ 4.19
5.24
$
9.38
11.73
$ 4.19
5.24
$
15.00
18.75
$ 4.19
5.24
$
15.00
18.75
$ 4.78
5.98
$
15.00
18.75
$ 4.78
5.98
$
16.88
21.10
$ 4.78
5.98
Flathead County Water & Sewer District 91
- Evergreen
Monthly
Rate per
Base
1000
Rate
Gallons
out oLSLity
Trumble Cr* Evergreen*
1.55
1.37
1.36
1.31
1.47
1.63
13.37
6.21
1.85
21.27
6.37
1.76
28.29
6.37
1.48
28.29
6.37
1.67
28.71
6.84
1.74
22.77
6.84
1.78
"Evergreen has its own collections system and
only uses the City's sewage treatment plant,
which results in a reduced charge. The City
bills the district, which in turn bills the users
within the district. The district is counted as
1 sewer connection.
'The City of Kalispell entered into an agreement
with Flathead County Water & Sewer District #1 -
Evergreen to treat the wastewater from the
Trumble Creek subdivision. Present build out of
this subdivision is less than 30 residences.
Future build out could equal 400 residences.
Unaudited Statistical Section
144
DEBT CAPACITY
CITY OF KALISPELL, MONTANA
RATIOS OF OUTSTANDING DEBT BY TYPE
Past Ten Fiscal Years
Governmental Activities Business -Type Activities
Fiscal
Year
General
Special
Ended
Obligation
Notes
Revenue
Assessment
Revenue
June 30,
Bonds
Payable
Bonds
Bonds
Bonds
2006
6,085,000
2,314,448
288,523
5,730,774
9,770,250
2007
5,785,000
2,269,944
222,868
5,389,846
8,703,159
2008
5,475,000
3,303,829
153,073
5,079,534
19,471,713
2009
5,145,000
3,062,562
78,876
4,760,665
22,193,000
2010
4,805,000
2,833,340
1,445,000
4,410,462
19,541,000
2011
4,450,000
2,682,566
1,325,000
4,077,194
18,410,000
2012
4,145,000
2,422,191
1,700,000
3,845,329
17,333,000
2013
3,700,000
2,380,835
1,558,000
3,457,647
15,938,483
2014
3,255,000
2,177,968
1,410,000
3,392,922
15,667,682
2015
2,805,000
1,893,621
1,257,000
3,074,242
14,434,000
Source:
City Manager's Recommended Budget
City of Kalispell Finance Department
Total
Notes Primary
Payable Government
172,988
154,155
24,199,995
22,370,817
33,483,149
35,240,103
33,034,802
30,944,760
29,445,520
27,034,965
26,076,560
23,618,018
Percentage
of Personal
Per
Income
Capita
3.83 %
$ 1,313.05
3.30%
$ 1,156.89
4.71 %
$ 1,648.60
4.82 %
$ 1,660.62
4.43 %
$ 1,526.56
4.38 %
$ 1,552.91
3.80 %
$ 1,453.67
3.40 %
$ 1,319.62
320%
$ 1,243.40
2.83 %
$ 1,097.59
Unaudited statistical section
145
CITY OF KALISPELL, MONTANA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
Past Ten Fiscal Years
General Bonded Debt Outstanding
Percentage
Fiscal
of Actual
Year
General
Special
Externally
Net
Taxable
Ended
Obligation
Assessment
Restricted
Bonded
Value of
Per
June 30,
Bonds
Bonds
for Repayment
Debt
Property
Capita
2006
6,085,000
5,730,774
541,525
11274,249
39.4%
$ 583.04
2007
5,785,000
5,389,846
541,525
10,633,321
33.4%
$ 523.55
2008
5,475,000
5,079,534
541,525
10,013,009
28.7%
$ 471.84
2009
5,145,000
4,760,665
371,873
9,533,792
26.1%
$ 440.56
2010
4,805,000
4,410,462
541,525
8,673,937
22.8%
$ 435.29
2011
4,450,000
4,077,194
531,075
7,996,119
20.3%
$ 394.75
2012
4,145,000
3,845,329
414292
7,576,037
18.9%
$ 369.80
2013
3,700,000
3,457,647
349,694
6,807,953
17.4%
$ 332.31
2014
3,255,000
3,392,922
172267
6,475,655
16.5%
$ 308.78
2015
2,805,000
3,074242
531,588
5,347,654
13.5%
$ 248.52
Source:
City Manager's Recommended Budget
Montana Department of Revenue
Montana Department of Labor and
Industry,
Quarterly Census
of Employment
and Wages (QCEW) Program
Unaudited statistical section
146
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unaudited statistical section
147
CITY OF KALISPELL, MONTANA
PLEDGED REVENUE COVERAGE
Past Ten Fiscal Years
Water/Sewer Revenue Bonds
Fiscal
Year
Utility
Less:
Ended
Service
Operating
Debt Service
June 30,
Charges`
Expenses"
Principal
Interest
2006
5,508,970
(3,123,526)
(802,966)
(280,249)
2007
6,141,024
(3,794,101)
(532,655)
(222,847)
2008
7,628,374
(4,332,133)
(553,795)
(203,424)
2009
7,572,970
(4,676,950)
(579,197)
(182,006)
2010
7,213,024
(4,513,881)
(1,087,000)
(779,083)
2011
6,810,442
(4,478,406)
(1,131,000)
(737,866)
2012
7,359,224
(4,143,706)
(1,007,000)
(647,296)
2013
8,063,596
(4,410,574)
(1,387,000)
(446,979)
2014
8,289,654
(4,516,282)
(1,226,000)
(388,108)
2015
8,587,057
(4,370,296)
(1,242,000)
(369,564)
'includes other revenues pledged for debt service
" excludes depreciation
Source:
City of Kalispell
Finance Department
Assessment Bonds
Special
Assessment
Debt Service
Coverage
Collections
Principal
Interest
Coverage
1,302,229
149,008
(68,573)
(64,192)
16,243
1,591,421
644,859
(340,929)
(277,456)
26,474
2,539,022
607,086
(325,718)
(253,172)
28,196
2,134,817
298,968
(327,423)
(241,088)
(269,543)
833,060
711,971
(357,831)
(228,611)
125,529
463,170
505,777
(334,210)
(212,843)
(41,276)
1,561,222
332,474
(396,662)
(185,444)
(249,632)
1,819,043
399,180
(391,662)
(186,121)
(178,603)
2,159,264
197,682
(324,198)
(171,133)
(297,649)
2,605,197
1,400,791
(326,526)
(163,360)
910,905
Unaudited statistical section
148
DEMOGRAPHICS AND ECONOMICS
CITY OF KALISPELL, MONTANA
DEMOGRAPHIC AND ECONOMIC STATISTICS
Past Ten Fiscal Years
Fiscal
Per
Year
Capita
K-12
Annual
Ended
Personal
Personal
Median
School
Unemployment
June 30,
Population
Income (in thousands)
Income
Age
Enrollment*
Rate**
2006
18,422
2,604,434
31,556
36.10
5,063
4.10%
2007
19,337
2,905,427
34,252
35.20
5,086
3.60%
2008
20,310
3,074,726
35,261
34.20
5,290
3.70%
2009
21,221
3,220,970
35,685
33.30
5,425
6.00%
2010
21,640
2,965,360
32,619
34.50
5,450
10.90%
2011
19,927
3,133,897
34,487
34.80
5,545
11.00%
2012
20,256
3,275,434
35,875
34.80
5,707
10.20%
2013
20,487
3,503,436
38,222
34.80
5,985
9.00%
2014
20,972
3,614,032
38,832
34.60
5,992
7.90%
2015
21,518
3,700,289
38,982
37.60
5,992
5.00%
`School District 5
"unadjusted
annual (calendar) - October unadjusted (2015)
Sources: Kalispell Public Schools Audit Report
U.S. Census Bureau
U.S. Department of Commerce - Bureau of Economic Analysis
Montana Department of Labor & Industry
Unaudited statistical section
149
CITY OF KALISPELL, MONTANA
PRINCIPAL PUBLIC AND PRIVATE INDUSTRY EMPLOYERS
2015
and 2006 class sizes (available)
Private Employer
Kalispell Regional Medical Center
School District #5
L.C. Staffing
Flathead County
Teletech
National Flood Services
Applied Materials (Semitool Inc.)
Wal-Mart
Immanuel Lutheran Home
Costco
Class 6 - 100 to 249 employees
Class 7 - 250 to 499 employees
Class 8 - 500 to 999 employees
Class 9 - 1000+ employees
*Flathead County total employment
Rank
Estimated
#of
Employees
2015
Estimated
%of
Total Employment*
1
2,282
5.87%
2
750
1.93%
3
550
1.42%
4
492
1.27%
5
450
1.16%
6
422
1.09%
7
400
1.03%
8
390
1.00%
9
267
0.69%
10
232
0.60%
Sources: Montana Department of Labor & Industry
Montana West Economic Development
Staff
GASB, Statement 44 requires the demographic and economic information should
indicate the top ten employers in current year and nine years prior for comparison.
The State of Montana, Department of Labor only reports the top 20 private employers
in each county and does not rank them or provide the number of employees as they
consider it confidential information. Nine year prior information is not available. This
information will be updated as available.
2006
Class
Size
Industry
9
Healthcare
8
Education
7
Other
7
Government
8
Professional & Tech.
Finance & Insurance
8
Manufacturing
7
Retail
6
Healthcare
6
Retail
Unaudited statistical section
150
OPERATING STATISTICS
CITY OF KALISPELL, MONTANA
Full -Time Equivalent City Government Employees by Function/Program
Past Ten Fiscal Years
FY 06
FY 07
FY 08
FY 09
FY10
FY11
FY12
FY13
FY14
FY15
General Government
Manager
2.00
2.00
2.00
2.00
1.00
1.00
1.00
1.00
1.00
1.00
Human Resources
1.25
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1.50
City Clerk
1.00
1.00
1.00
1.34
1.34
1.34
1.34
1.24
1.23
1.58
Media Specialist
0.50
0.55
0.55
0.55
Finance
3.80
3.70
3.70
3.70
3.20
3.20
3.20
3.20
3.20
3.20
Attorney
3.00
5.00
5.00
4.66
4.66
4.66
4.66
4.66
4.67
4.67
Court
3.00
3.50
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
City Hall
1.00
1.00
1.00
1.00
1.00
1.40
1.40
1.40
1.40
1.45
Planning & Zoning
6.50
6.50
6.50
6.50
4.75
4.75
4.25
4.25
4.25
4.25
Building
6.50
6.50
7.50
7.50
5.25
3.45
3.95
3.95
3.95
5.20
Information Technology
1.00
1.00
1.00
1.00
1.00
1.00
1.50
2.25
2.25
2.15
Total General Government
29.05
31.70
33.20
33.70
28.25
26.85
27.35
27.45
27.45
29.00
Public Safety
Police
44.00
45.00
47.00
48.50
47.50
41.00
42.00
44.00
44.00
44.00
Fire
26.75
27.75
29.60
29.90
24.90
27.30
26.30
27.30
23.30
23.30
Ambulance
7.25
11.25
9.40
9.10
9.10
7.50
7.50
6.50
9.50
9.50
Total Public Safety
78.00
84.00
86.00
87.50
81.50
75.80
75.80
77.80
76.80
76.80
Public Works
DPW
2.05
1.90
1.90
0.15
0.15
0.25
0.25
0.25
0.25
0.25
Garage
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
Street Maint
11.05
11.00
11.45
12.05
12.30
12.65
12.35
12.25
12.25
12.25
Sign/signal
2.00
2.00
2.00
2.50
2.50
2.50
2.50
2.50
2.00
2.00
Light District
0.10
0.60
0.60
0.80
0.75
0.75
1.25
1.25
Water
13.05
12.95
15.20
15.75
15.95
15.60
15.25
14.90
14.80
14.80
Sewer
6.75
7.40
8.05
8.70
8.40
8.45
7.55
7.00
7.05
7.05
WWTP
7.80
7.40
9.40
9.40
8.40
8.05
7.90
7.55
7.55
7.55
Storm
3.40
4.60
5.35
6.00
6.20
6.40
6.45
6.20
6.20
6.20
Solid Waste
6.60
6.55
7.35
7.55
7.60
7.35
7.25
7.35
7.40
7.40
Total Public Works
55.70
56.80
63.80
65.70
65.10
65.05
63.25
61.75
61.75
61.75
Parks and Recreation
Parks and Recreation
9.95
11.40
11.40
11.10
9.20
8.90
8.90
9.45
9.80
9.80
Forestry
2.05
2.55
2.55
2.80
2.80
3.00
3.00
3.20
2.85
L80
Total Parks and Recreation
12.00
13.95
13.95
13.90
12.00
11.90
I L90
12.65
12.65
I L60
Community Development
UDAG/Comm. Dev.
2.30
3.50
3.50
2.00
2.00
2.00
2.00
2.00
2.00
L75
Airport
Airport
0.75
0.75
0.75
1.00
1.00
0.50
0.50
0.50
0.50
0.00
Total all funds 177.80 190.70 201.20 203.80 189.85 182.10 180.80 182.15 181.15 180.90
Source: City Manager's Recommended Budget
Unaudited statistical section
151
CITY OF KALISPELL, MONTANA
Capital Asset Statistics by Function/Program
Past Ten Fiscal Years
FY 06
FY 07
FY 08
FY 09
FY10
FY11
FY12
FY13
FY14
FY15
Police
Stations 1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Patrol Units (Cars) 10.00
11.00
11.00
11.00
11.00
11.00
11.00
11.00
11.00
11.00
Patrol Units (Motorcycles) 0.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
Fire
Stations 2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
Fire Trucks 4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
Ambulances 4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
Streets
Streets and Alleys (Miles) 114.00
130.00
133.00
139.00
139.00
139.00
139.00
139.00
139.00
140.00
Sidewalk Replaced (Linear Feet) 1466.00
225.00
1411.00
1060.00
1060.00
776.00
1704.00
1476.00
1510.00
1723.00
New Sidewalks (Linear Feet)
400.00
Water
Mains (Miles) 90.00
104.00
116.00
125.00
125.50
126.00
126.00
126.00
128.00
128.00
Wastewater
Sanitary Mains (Miles) 106.00
108.00
119.00
130.00
130.50
130.50
130.50
130.50
131.00
131.00
Storm Mains (Miles) 38.00
40.00
47.00
52.00
52.00
52.00
52.00
53.00
53.00
53.50
Lift Stations 29.00
34.00
38.00
39.00
40.00
40.00
40.00
40.00
41.00
41.00
Treated Sewage (Gallons) 1075 mil
1029 mil
1039 mil
980 mil
991 mil
1129 mil
977 mil
955 mil
976 mil
976 mil
Solid Waste
Collection Vehicles 7.00
8.00
8.00
8.00
8.00
8.00
8.00
8.00
8.00
8.00
Other Vehicles 2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
Parks
City Parks (Acres) 366.20
420.73
429.74
429.74
429.74
429.74
429.74
429.49
429.49
429.49
Source: City of Kalispell Finance Department
City of Kalispell Public Works Department
City of Kalispell Parks Department
City of Kalispell Police Department
Unaudited statistical section
152
INDEPENDENT AUDITOR'S
REPORTS
Wipfli LLP
910 North Last Chance Gulch
Helena, MT 59601
406.442.5520
fax 406.443.1017
www.wipfli.com
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING
STANDARDS
To the City Council Members
City of Kalispell, Montana
We have audited, in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States, the financial statements of the governmental activities, the
business -type activities, the aggregate discretely presented component units, each major fund, the aggregate
remaining fund information, and budgetary comparisons (for major funds) of the City of Kalispell as of and
for the year ended June 30, 2015, and the related notes to the financial statements, which collectively
comprise the City of Kalispell's basic financial statements, and have issued our report thereon dated
December 29, 2015.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City of Kalispell's
internal control over financial reporting (internal control) to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but
not for the purpose of expressing an opinion on the effectiveness of the City of Kalispell's internal control.
Accordingly, we do not express an opinion on the effectiveness of the City of Kalispell's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees in the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the entity's
financial statements will not be prevented, or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting that might be material weaknesses or significant deficiencies. Given these limitations,
during our audit we did not identify any deficiencies in internal control over financial reporting that we
consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
153
Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Kalispell's financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and material
effect on the 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 or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and
the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or
on compliance. This report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the entity's internal control and compliance. Accordingly, this communication is
not suitable for any other purpose.
G(l� LAP
Wipfli LLP
Helena, Montana
December 29, 2015
154