Fiscal Year 2016 CAFR FINALFISCAL YEAR 2016 July 1, 2015 - June 30, 2016
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
CityElected and Appointed Officials........................................................................................................................ 11
FINANCIAL SECTION
IndependentAuditor's Report...................................................................................................................................12-14
Management's Discussion and Analysis...................................................................................................................
15-26
Basic Financial Statements:
Government -wide Financial Statements:
Statementof Net Position...........................................................................................................................
27
Statementof Activities................................................................................................................................
28
Governmental Fund Financial Statements:
BalanceSheet — Governmental Funds.....................................................................................................
29
Reconciliation of the Balance Sheet — Governmental Funds to the Statement of Net Assets ...........
30
Statement of Revenues, Expenditures, and Changes in Fund Balances — Governmental Funds ....
31
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds to the Statement of Activities...........................................................................
32
Proprietary Fund Financial Statements:
Statement of Net Position — Proprietary Funds......................................................................................
33
Statement of Revenues, Expenses, and Changes in Net Position — Proprietary Funds .....................
34
Statement of Cash Flows — Proprietary Funds.......................................................................................
35
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position — Fiduciary Funds........................................................................
36
Notes to the Financial Statements..................................................................................................................
37-86
Required Supplementary Information other than Management Discussion and Analysis:
Schedule of Funding Progress and Employer Contributions — Other Post -Employment
HealthcareBenefits.....................................................................................................................................
87
Schedule of Proportionate Share of the Net Pension Liability..............................................................
88
Scheduleof Contributions..........................................................................................................................
89
Budgetary Comparison Schedule — General and Major Special Revenue Funds ..............................
90-92
Notes to Required Supplementary Information...........................................................................92-A —
92-D
Supplemental Information:
Combining and Individual Governmental Fund Statements and Schedules:
Combining Balance Sheet — Nonmajor Governmental Funds.............................................................
93-98
Combining Statement of Revenues, Expenditures and Changes in Fund Balances —
NonmajorGovernmental Funds..........................................................................................................
99-105
Budgetary Comparison Schedule —
MajorDebt Service Funds....................................................................................................................
106
Budgetary Comparison Schedule—
NonmajorGovernmental Funds...........................................................................................................107-124
Combining and Individual Proprietary Fund Statements:
Combining Statement of Net Position — Nonmajor Proprietary Funds ............................................. 125
Combining Statement of Revenues, Expenditures, and Changes in Fund Net Position — Nonmajor
ProprietaryFunds................................................................................................................................ 126
Combining Statement of Cash Flows — Nonmajor Proprietary Funds .............................................. 127
Combining and Individual Agency Fund Statements:
Combining Statement of Fiduciary Net Position - Agency Funds ...................................................... 128
Combining Statement of Changes in Assets and Liabilities - Agency Funds .................................. 129
CITY OF KALISPELL
ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
STATISTICAL SECTION
Financial Trends
NetPosition by Component............................................................................................................................ 130
Changesin Net Position.................................................................................................................................. 131
Fund Balances of Governmental Funds....................................................................................................... 132
Changesin Fund Balances, Governmental Funds...................................................................................... 133
Revenue Capacity
MarketValue of Taxable Property............................................................................................................... 134
Directand Overlapping Property Tax Rates............................................................................................... 135
PrincipalProperty Tax Payers....................................................................................................................... 136
PropertyTax Levies and Collections............................................................................................................. 137
Water — Sewer - Sold by Type of Customer................................................................................................. 138
Waterand Sewer Rates................................................................................................................................... 139
Debt Capacity
Ratios of Outstanding Debt by Type............................................................................................................. 140
Ratiosof General Bonded Debt Outstanding.............................................................................................. 141
LegalDebt Margin Information.................................................................................................................... 142
PledgedRevenue Coverage............................................................................................................................ 143
Demographics and Economics
Demographicand Economic Statistics.......................................................................................................... 144
PrincipalEmployers........................................................................................................................................ 145
Operating Section
Full-time Equivalent City Government Employees by Function/Program............................................. 146
Capital Assets Statistics by Function/Program........................................................................................... 147
REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS
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................................................................................................................ 148-149
2
� as
r
li?O1VT�N�
December 19, 2016
City ®f Kalispell
Post Office Box 1997 - Kalispell, Montana 59903-1997
Telephone (406) 758-7701 Fax - (406) 758-7758
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, 2016, 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, 2016, are free of material
misstatement. The independent audit involved examining, on a test basis, evidence supporting
3
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, 2016, 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 #3, 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
council for review. The council is required to hold public hearings on the proposed budget and
111
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 2016 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, and the community development miscellaneous 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 sixth year of implementation, the recorded "rate subsidy"
liability is $2,110,870.
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 at the end of fiscal year
2016 of $9,936,743. The City participates in three State of Montana cost -sharing multi -employer
5
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 Affecting Financial Condition
The City of Kalispell was not immune to the effects of the nation-wide economic downturn of
2006 to 2009. Two of the Flathead Valley's core industries were hit particularly hard. The
logging industry is still virtually shut down, which has trickled 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 new construction comparable to the
first few years of this century and home foreclosures have slowed substantially. 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, 2015 estimated population of Kalispell is 22,052
according to the U.S. Census Bureau, an increase of 2,125 (11%) from the 2010 census
population of 19,927.
The not seasonally adjusted unemployment rate for the 2015 calendar year for City of Kalispell
was 5.7 percent. This compares to 6.4 percent for the 2014 calendar year. A positive adjustment
of over 10%. The most current unadjusted unemployment rate available (September 2016) for
the City of Kalispell, and Flathead County, is 4.5 percent. In comparison, the State of Montana's
current unemployment rate for the same period is 3.5 percent and the U.S. rate is 4.8%. The
City's unemployment rate has continued to improve from 14 percent high in January of 2011.
According to the United States Census Bureau, the 2014 per capita annual income, the most
current information available, for Kalispell was $38,928, in 2014 dollars. This is approximately
5% less than the State of Montana's estimated per capita income ($40,599) in 2014 dollars, and
17% less than the Nation's estimated per capita income of $46,414 in 2014 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.
6
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.
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. The next reappraisal is anticipated to be complete by
the end of 2016 for the State legislature to review during the 2017 legislative session. Any
changes made will affect the 2017 tax year.
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, 2015, 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, 2015.
This was the 61h 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
Government Finance Officers Association
Presented to
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
VNIMMMM
Executive Director/CEO
Vej
MUNICIPAL JUDGE
Lori Adams
CITY OF KALISPELL, MONTANA
ORGANIZATIONAL CHART
CITY COUNCIL
MAYOR
Marc Johnson
WARD I
WARD 11 WARD III
Karl Gabriel
Wayne Saverud Jim Atkinson
Sandy Carlson
Chad Graham Rod Kuntz
CITY CLERK
Aimee Brunckhorst __ __ _
CITY MANAGER
Doug Russell
i
I
FINANCE
Rick Wills
77
_r f
HUMAN PUBLIC WORKS INFORMATION
RESOURCES Susie Tumer TECHNOLOGY
Terry Milton Erika Billiet
10
WARD IV
Tim Kluesner
Phil Guiffnda
PLANNING, PARKS &
BUILDING & RECREATION
COMMUNITY Chad Fincher
DEVELOPMENT
TO Jentz
PUBLIC SAFETY _ PUBLIC SAFETY LEGAL
FIRE POLICE Charlie Harball
Dave Dedman Roger Nasset
CITY OF KALISPELL, MONTANA
CITY ELECTED AND APPOINTED OFFICIALS
ELECTEDTERM
OFFICIALS EXPIRES
Mayor Mark Johnson 12/2017
Council members:
Kari Gabriel
Ward I
12/2019
Jim Atkinson
Ward III
12/2017
Sandy Carlson
Ward I
12/2017
Rod Kuntz
Ward III
12/2019
Wayne Saverud
Ward II
12/2019
Phil Guirida
Ward IV
12/2019
Chad Graham
Ward II
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
FINANCIAL
r � r
WIPF I,.
INDEPENDENT AUDITOR'S REPORT
City Council Members
City of Kalispell
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, and the aggregate remaining
fund information of the City of Kalispell, Montana (the City), as of and for the year ended June 30, 2016 and
the related notes to the financial statements, which collectively comprise the City'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; 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 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, and the aggregate remaining fund information of the City of
Kalispell, as of June 30, 2016, and the respective changes in financial position and, where applicable, cash
flows thereof for the year then ended in accordance with accounting principles generally accepted in the United
States.
Emphasis of Matter
As discussed in Note J to the financial statements, the 2015 financial statements have been restated to
correct a misstatement. Our opinions are not modified with respect to this matter.
12
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States require that the management's discussion and
analysis on pages 15-26, Schedule of Funding Progress and Employer Contributions on page 87, Schedule of
Proportionate Share of the Net Pension Liability on page 88, Schedule of Contributions on page 89 and
Budgetary Comparison Schedules on pages 90-92 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, 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's basic financial statements. The introductory section, combining and individual non -major
fund financial statements, budgetary comparisons, and the statistical section, are presented for purposes of
additional analysis and are not a required part of the financial statements.
The combining and individual non -major fund financial statements, and budgetary comparisons (other than the
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. Such information has been subjected
to the auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting and
other records used to prepare the financial statements or to the 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 non -major fund financial statements, and budgetary comparisons
(other than the major funds), are fairly stated in all material respects in relation to the financial statements as a
whole.
The introductory section and statistical tables 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 19, 2016
on our consideration of the City'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's internal control over financial reporting and compliance.
CCl�p�r,�.' LLP
Wipfli LLP
Helena, Montana
December 19, 2016
14
1 1 1
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, 2016. 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 $160,070,902 (net position). Of this amount, $11,128,425 (unrestricted net position) may
be used to meet the government's ongoing obligations to citizens and creditors.
➢ Total net position increased by $5,253,335 over the prior fiscal year net position.
➢ As of June 30 the City's governmental funds reported combined ending fund balances of
$18,869,723, an increase of $1,851,699 over the prior year. Of this amount, $3,506,525 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 $2,549,850 (11 %)
during fiscal year 2016. The result of minimal new borrowing.
AN OVERVIEW OF THE FINANCIAL STATEMENTS
There are three main components to the City of Kalispell's financial statements: 1) government -
wide financial statements, 2) fund financial statements, and 3) notes to the financial statements.
Other supplementary material is included in this report in addition to the basic financial
statements themselves. The City of Kalispell intends for this discussion and analysis to be used
in conjunction with the basic financial statements, and other material, as an introduction and also
as a means to help the user better understand the information.
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad
overview of the City of Kalispell's finances. The way information is presented in these
statements is comparable to how the financial information of a private -sector business would be
presented.
The statement of net position presents information on all of the City of Kalispell's assets and
liabilities. The difference between these two (assets minus liabilities) is reported as net position.
Net position can be a useful tool in evaluating the financial health of an entity. A substantial
decrease in net position may be a sign of deteriorating financial outlook.
The change in net position during the most recent fiscal period is presented by the statement of
activities. The statement of activities reports changes in net position at the time the event takes
place without regard to the corresponding cash transaction. This results in some revenues and
expenses being reported in this statement that will not result in cash flow until a future fiscal
period. Some examples of this would be uncollected but earned taxes and earned leave benefits.
15
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 position and the
governmental fund statement of revenues, expenditures, and changes in fund balance to
the government -wide statement of activities. These reconciliations can be useful in
contrasting, comparing and understanding the long-term impact (government -wide
statements) of near -term decisions (governmental fund statements).
The City of Kalispell maintains numerous individual governmental funds. The
governmental fund balance sheet and statement of revenues, expenditures, and changes
in fund balance present information separately only for funds which are considered
major. Major funds are determined by a formula which considers the percentage of total
governmental assets, liabilities, revenues, and expenditures contained in each individual
fund. The City of Kalispell has four major governmental funds; the General Fund
(always a major fund), the Street Maintenance (special revenue) Fund, the Community
Development — Miscellaneous (special revenue) Fund, and the Special Improvement
District 344 (debt service) Fund. All non -major funds are presented as a group.
The City of Kalispell adopts an annual appropriated budget for its funds. A budgetary
comparison statement has been provided for the general fund and the major special
revenue funds to demonstrate compliance with this budget.
16
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
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 section for required
supplementary information on pages 87 - 92.
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 93 of this report.
17
As mentioned prior, net position can be an important indicator of an entities financial well-being.
For the period ending June 30, 2016, the City of Kalispell's assets exceeded liabilities by
$160,070,902.
The largest portion of the City's net position ($130,351,074 or 82%) 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
Change
Change
FV16
FV15
Inc Dec
FV16
FV15
Inc Dec
Current and other assets
$ 24,400,176
$ 22,579,029
S 1.821,147
$ 21,795,645
$ 17,457,975
S-1,337,670
Capital assets
77,098,433
80,019,468
(2.921 035)
73,751,878
74,385,165
(633.287)
Total assets and deferred outflow ofresources
101,498,609
102.598.497
(1.099.888)
95,547,523
91,843,140
3.704,383
Long-term debt outstanding
$ 18,946,330
$ 17,106,004
S 1,840,326
$ 15,858,902
$ 15,498,880
$ 360.022
Other liabilities
1,476,865
4,683,537
(3206,672)
693,133
2,218,978
(1.525.845)
Total liabilities and deferred inflow ofresources
20,423,195
21,789.541
(1,366,346)
16,552,035
17.717 858
(1.165.823)
Invested in capital assets, net ofdebt
70,056,388
71,610,586
(1,554,198)
60,294,686
59,797,010
497,676
Restricted
9,406,621
8,581,135
825,486
9,184,782
7,061,197
2.123585
Unrestricted (deficit)
1,612,405
617,235
995,170
9,516,020
7,267,075
2.248,945
Total net position
$ 81,075,414
$ W808,956
$ 266,459
S 78995,498
S 74,125?82
S 4,870,206
An additional portion of the City's net position ($18,591,403 or 12%) represents resources that
are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net assets ($11,128,425 or 6%) 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 2016 in comparison to fiscal year
2015 restated ($160.1 million compared to $154.9 million).
18
Changes in Net Position
Revenues
Progran revenues (by major source):
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues (by major source):
Property taxes for general purposes
Video poker apportionment
Miscellaneous
Interest/investment earnings
State entitlement
Gas Tax
Contributions & donations
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 ofcapital assets
Transfers - net
Increase (decrease) in net position
Governmental
Business -type
Activities
Activities
Change
Change
FY16
FY15
Inc Dec
FY16
FY15
Inc Dec
$
6,604,026
$ 6,003,479
S 600,547 $
10,139,580
$ 9,212,044
S 927,536
1,354,890
1,838,425
(483 535)
137,048
27,721
109.327
942,125
3,232,618
(2.290.493)
3,338,669
1,098,222
1_ 240.447
8,357,904
7,584,776
773,128
-
61,925
57,350
4,575
-
-
46,573
132,571
(85.998)
140,616
2,101
138515
105,557
72,531
33.026
132,339
113,963
18,376
3,132,559
3,134,703
(2.144)
-
-
-
369,749
364,622
5,127
2,550
-
2.550
S
20.977.858
S1_2.421.075
S 11.443.217) S
13.888,252
S 10.454,0.51
S 3.434.201
$
5,823,767
$ 5,401,242
S 422,525
$
9,113,674
$ 9,575,487
(401.813)
$
2,581,002
$ 2,773,097
(192.095)
$
2,057,468
$ 2,062,669
(5.201)
$
928,661
$ 683,164
245.497
$
286,401
$ 331,811
)15A 10)
$
154,091
$ 154,715
.S (624)
$
2,657,816
$ 2,542,119
115.697
$
5,204,622
$ 5,077,643
126.979
$
880,679
$ 816,686
63.993
S
20.790A73
5 '_0.827A70
S (36.-4�i7) S
8.597?OS
$ 8591.163
S 306.0-45
186.885
1593.605
(1,406.720)
.1,991.044
.8(12.888
3.138_ 1i6
78,497
11,610
66.887
(3,091)
46,710
t49.801)
35,000
(65,000)
100.000
(35,000)
65,000
(100.000)
S
300.382
S 1.540.215
S (1.239.833) S
4.952,953
5 1.974.598
$ 2.978.355
Governmental Activities. Governmental activities in fiscal year 2016 increased the City's net
position by $300,382. In fiscal year 2015, governmental activities increased net position by over
$1.5 million. Specifically, revenues were down about 7%, and expenses showed only a minimal
reduction from the prior fiscal period. The key elements of the overall net position change were:
➢ Total program revenues decreased substantially ($2,173,481 or 20%), while general
revenues increased ($730,264 or 7%). Capital grants and contributions (program
revenues) were down almost $2.3 million from fiscal year 2015. The majority of this
amount was a street donated in fiscal year 2015 valued at almost $2,000,000. A GASB
34 adjustment, which resulted in reduced property taxes for general purposes (general
revenue) in fiscal year 2015 contributed to the $773,128 increase in that revenue for
fiscal year 2016.
Governmental activities program expenses decreased by less than 1/2% ($36,497). A
$461,813 reduction in public safety expenses, attributed to the GASB 68 adjustment, was
offset by an increase in general government expenses of $422,525.
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 chart
illustrates the different revenue sources for the City's governmental activities and how much
each source contributes.
19
10000000
9000000
sonnnaa
7000000
�ronnnan
�sao0oo0
Q 4000000
3000000
1000000
1000000
Governmental Activities
by function (in Millions)
Total Cost Net Cost
of Services of Services
FY16
FY15
FY16
FY15
Public Safety
9.1
9.6
5.9
6.1
Public Works
2.6
2.8
(0.8)
(1.1)
Parks and Recreation
2.1
2.1
1.2
1.3
Community Development
0.9
0.7
0.6
0.3
General Government
5.8
5.4
4.7
2.8
Debt Service
0.3
0.3
0.3
0.3
Totals
$ 20.8
$ 20.9
$ 11.9
$ 9.7
Expenses and Program Revenues - Governmental Ar_ti;ities for fiscal .mar 20 16
pelf gov't QUb safety pub worts pai irec comm dev
Activity
Revenue by Source - Governmental Activities fiscal year 2016
Other
,«o
State entitle
1 _` c�o
Operating
lts.ccntributions
Edo
capitai
grantsEaontnbutions
5 46
20
Business -type activities. Business -type activities increased the City of Kalispell's net position
by $4,952,953. The factors leading to this result were:
➢ Revenues of the City's business -type activities increased $3,434,201. Capital grants and
contributions revenue of business -type activities increased over 200% from $1,098,222 to
$3,338,669, attributable to an increase in the amount of capital contributed (both impact
fees and developers infrastructure contributions). Charges for services also showed a
substantial increase of $927,536 (10%). Extremely high water and sewer consumption
because of an unusually hot summer and fall of 2015 powered this increase.
➢ Expenses increased slightly, about 4%, from the prior fiscal year.
The following charts help illustrate the information presented above related to business -type
activities net assets.
8000000
7000000
6000000
5000000
O'000000
Q
3000000
2000000
10D1000
Expenses antl Rrcgrain Reuenues - Business-wpe ActrnOes for fucai ;ear 2018
airport :;pater sewer solid vaste
Activity
Revenues by Source - Business-ype Activities for fiscal year 2016
Capital
grants/contribute
ons
24%
Operating
grants/contributi
ons
1%
Investment/othe
Earnings
2%
21
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 2016, the City of Kalispell's governmental funds reported combined
ending fund balances of $18,869,723, an increase of $1,851,699 in comparison with the prior
fiscal year restated. Of the ending fund balance, $15,115,101 (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 ($3,158,913); assets are limited by specific voter
approved bonds ($348,262); assets are limited by specific special assessments ($776,385); assets
are limited by state law ($10,730,092); assets are limited by contribution restrictions ($101,449).
$3,467,239 or 19% is available for spending at the City's discretion. Following is a short
analysis of each major governmental fund.
The general fund is the chief operating fund of the City of Kalispell. At the end of fiscal year
2016 unassigned fund balance of the general fund was $3,242,167, while total fund balance was
$3,684,355. The fund balance increased $420,533 during fiscal year 2016. Revenues and other
financing sources increased only slightly from fiscal year 2015. Expenditures and other
financing uses increased about 5%, or $466,000. Of this, almost $300,000 was public safety
expenditures. At the end of fiscal year 2016, unassigned fund balance represents 29% of total
general fund expenditures, a 2% improvement from fiscal year 2015. The general fund balance
of $442,188 is non -spendable and assigned as follows:
GENERAL FUND BALANCE - TOTAL
$
3,684,355
NONSPENDABLE
Long-term recievables
$ 6,023
Prepaids
$ 211, 093
TOTAL NONSPENDABLE
$
217,116
ASSIGNMENTS
Capital Equipment
$101,906
Downtown Parking
$ 23,542
Misc.
$ 99,624
TOTAL ASSIGNMENTS
$
225,072
UNASSIGNED
$
3,242,167
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, 2016, the fund balance of this fund was $1,947,397, a $418,757
increase from the prior fiscal year.
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 2016, the fund balance of this fund decreased
$145,305 to $476,352.
22
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, 2016, for SID 344 was $404,038, a decrease of $65,520 from fiscal
year 2015.
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
$ 5,593,928
18%
$ 2,422,855
8%
Sewer
3,179,951
7%
2,500,409
6%
Other
742,141
20%
29,689
1 %
Total
$ 9,516,020
12%
$ 4,952,953
7%
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.
The City of Kalispell's general fund expenditures budget for fiscal year 2016 was $11,746,863.
Actual expenditures for the year were $11,461,929, a favorable variance of $284,934. Actual
public safety expenditures were $138,195 less than budgeted, mostly due to personal services
savings. Actual general government expenditures were $134,676 less than budgeted, the result
of most general government departments making efforts to hold down expenditures where
possible, and unneeded contingencies.
Actual revenues of the general fund were $11,882,462, $151,647 less than the budgeted amount
of $12,034,109. The only revenue category significantly under budget was fines and forfeitures.
This deficit may be the result of new rulings making it more difficult for the Municipal Court to
fine and/or collect.
23
Capital Assets
At the end of 2016, the City of Kalispell has $150,850,311, 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
2016 2015 2016 2015 2016 2015
Major Governmental funds capital asset events during the fiscal year 2016 included the
following:
➢ The police department purchased (3) vehicles, and a parking monitoring vehicle at a cost of
$113,122.
➢ The police department used mostly grant funds of to purchase a robotic tactical camera and
throw phone costing $29,600 and $30,000, respectively.
➢ The ambulance department used 90% grant funds to purchase EMS cots for about $100,000.
➢ The street department used the Montana Air and Congestion Initiative grant to purchase a
new street sweeper and a sander combination unit. These items valued at about $235,000
required a City contribution of $39,147.
➢ The street department purchased equipment costing $209,310. This included a grader, roller,
and a pickup mounted street striper.
➢ Paved 6 alleys at a total cost of $28,374. Replaced 1,589', 5.3 blocks, of sidewalks valued at
$71,412.
➢ Disposed assets with a cost basis of $295,127.
Major Business -type funds capital asset events during the fiscal year 2016 included the
following:
➢ Developer's contributed (21) fire hydrants valued at $69,696.
➢ Replaced (7) and installed (4) new fire hydrants at a total cost of $33,523.
➢ ' 6,968 linear feet of new water main valued at $427,164 was installed and contributed to the
City by developers.
➢ The water department installed 251 new meters, including 108 new domestic meters of
various sizes.
➢ Accepted Silverbrook well and pump house, valued at $365,000, from developer.
➢ Completed project replacing water main on 2nd Ave )AN, total project cost was $208,650.
➢ Completed project replacing water main on 2nd Ave E, total project cost was $163,382.
➢ Completed project replacing sewer main in 2nd Alley E, total project cost was $184,010.
24
➢ Completed project replacing water main on I" Alley EN, total project cost was $261,157.
➢ Developer's contributed 569 linear feet of new sanitary sewer main valued at $34,153.
➢ Purchased a 2016 Peterbilt sidearm solid waste truck for $263,359.
➢ The sewer department has over $1.5 million in construction projects in progress as of June
30, 2016.
Additional information on capital assets can be found in the notes of the basic financial
statements (Note D. Capital Assets pages 49-51).
Debt
At the end of fiscal year 2016, the City of Kalispell had total long-term debt outstanding of
$21,068,166. Of this amount, $2,350,000 comprises debt backed by the full faith and credit of
the government and $1,708,000 represents bonds secured solely by specific revenue sources (i.e.,
revenue bonds). The remainder consists of $12,731,000 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 $2,761,499 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 $1,517,667 of loans for the purchase of other property and equipment.
CITY OF KALISPELL'S OUTSTANDING DEBT
General obligation bonds
Governmental
activities
2016
$ 2,350,000
2015
$ 2,805,000
Business -type
activities
2016
2015
Total
2016
$ 2,350,000
2015
$ 2,805,000
Revenue/Urban Renewal bonds
$ 1,098,000
1,257,000
610,000
675,000
$ 1,708,000
$ 1,932,000
SRF loans
12,731,000
13,759,000
$ 12,731,000
$13,759,000
Assessments
$ 2,761,499
3,074,242
$ 2,761,499
$ 3,074,242
Contract debt/loans
$ 1,401,475
1,893,621
116,192
154,155
$ 1,517,667
$ 2,047,776
Total
$ 7,610,974
$ 9,029,863
$13.457,192
$14.588.155
$ 21.068.166
$ 23.618.018
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 52-57).
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The City's elected and appointed officials considered many factors when adopting the fiscal year
2017 budget for tax rates and fees that will be charged by the business -type activities. Some of
these factors include: capital improvements identified in the City's Capital Improvement
Program, inflation rates, the City's collective bargaining units, the local economy, and the
citizen's ability to pay. For the year, inflation rates continued to remain at relatively low yet
increasing levels. The Bureau of Labor Statistics of the U.S. Department Labor reported the
Consumer Price Index -Unadjusted for All Items at 1.5 percent for the last calendar year, its
largest 12 month increase since October 2014. The index for all items less food and energy rose
2.2 percent for the 12 months ending September. The food index declined 0.3 percent over the
span, and the energy index fell 2.9 percent. Inflation rates have a significant impact on the cost
of City projects.
25
Request for Information
This financial report is designed to provide a general overview of the City of Kalispell's finances
for all those with an interest in the government's finances. Questions concerning any of the
information provided in this report or requests for additional financial information should be
addressed to the City of Kalispell, Finance Director, P.O. Box 1997, Kalispell, MT 59903-1997.
PIZ
I�' 1 1, �` �. J.
:�'
City of Kalispell, Montana
Statement of Net Position
June 30, 2016
Component Units
Governmental
Business -type
Downtown
Tourism
Activities
Activities
Total
BID
BID
ASSETS
Cash and investments S
13,947,830
S 12,405,577
$ 26,353,407
$ 18,367
$ 180,804
Taxes and assessments receivable, net
3,356,140
65,000
3,421,140
1,055
Accounts receivable - net
205,674
430,790
636,464
3,803
Notes and loans receivable
2,199,257
-
2,199,257
Contracts receivable
80,969
666,896
747,865
Due from other governments
982,209
146,094
1,128,303
11,245
Prepaids
297,567
198,617
496,184
Inventories
-
138,243
138,243
Properties held for sale
1,258,465
-
1,258,465
Other debits
6,892
-
6,892
Restricted assets:
Cash and investments
1,129,178
7,598,768
8,727,946
Capital assets (net of accumulated depreciation):
-
-
-
Land
2,395,299
1,762,512
4,157,811
Construction in Progress
-
1,752,557
1,752,557
Depreciable
74,703,134
70,236,809
144,939,943
1,933
Total assets $
100,562,614
$ 95,401,863
$ 195,964,477
S 30,667
S 186,540
DEFERRED OUTFLOWS OF RESOURCES
Collective contributions related to pensions
27,024
4,205
31,229
Contractually required contributions related to pensions
908,971
141,455
1,050,426
Total deferred outflows of resources S
935,995
$ 145,660
S 1,081,655
$ -
$
Total assets and deferred outflows of resources $
101,498,609
$ 95,547,523
S 197,046,132
S 30,667
S 186,540
LIABILITIES
Accounts payable
$ 367,147
$ 369,727
$ 736,874
$ 3,568 $
52,093
Retainage
-
17,464
17,464
Accrued payroll
442,590
89,829
532,419
Deferred revenue
-
8,290
8,290
Current portion of long-term liabilities
Bonds and notes - not capital
26,410
-
26,410
Bonds and notes - capital
1,256,462
1,155,343
2,411,805
Compensated absences payable
1,000,689
207,547
1,208,236
Long-term liabilities, due in more than one year
Bonds and notes - not capital
542,519
-
542,519
Bonds and notes - capital
5,785,583
12,301,849
18,087,432
Compensated absences
381,495
98,853
480,348
Other credits
869
-
869
Other post employment benefits - health
1,773,131
337,739
2,110,870
Net pension liability
8,179,172
1,757,571
9,936,743
Total liabilities
$ 19,756,067
$ 16,344,212
S 36,100,279
$ 3,568 $
52,093
DEFERRED INFLOWS OF RESOURCES
Diff. between est. and actual earnings on pension plan inv.
$ 667,128
$ 207,823
$ 874,951
$ $
52,093
Total deferred inflows of resources
$ 667,128
$ 207,823
$ 874,951
$ $
52,093
NET POSITION
Net investment in capital assets
S 70,056,388
$ 60,294,686
S 130,351,074
S $
1,933
Restricted for capital projects
576,162
6,078,269
6,654,431
Restricted for debt service
491,942
1,467,713
1,959,655
Restricted for special projects
8,338,517
1,448,800
9,787,317
Restricted for other purposes
-
190,000
190,000
Unrestricted
1,612,405
9,516,020
11,128,425
27,099
132,514
Total net position
S 81,075,414
S 78,995,488
S 160,070,902
S 27,099 S
134,447
See accompanying Notes to the Financial Statements
27
18
F
W
c»
O 7 M 0
7 Q. 00 rn O
-^ r-
CO M 00
00 h 00 M
�O h 7 rt W
S cl W N IO
GD
GD N o0 �1
`-� M N •- l�
CA
� va
h �
d N lO
V oo
h O N C
N vl N O
n V O N
1
M N O 'nI0
N n M -lcO
C, � h D\
7 N \O O\
00 Kl In 10
d N ll O
AW
O M ON
10 N 7 7
\O
00 �O O\
7 00 1� N
N V 00
va v3
IN
O1 ^ vi CO 10 Oi
t- M M O 00 00
l� `r CO GO N 10 N 00
7 v O` N
N 1� V1 00 O
�O <t v1 V1 7 M D,
n O oo W
� cs3
00 vl 1 0o N ' �O
N Q N O m 7
000 N ENO n � �
N��000 .`o•
v1 N � Oi hl
N D v O
N N 10
n rA
r- ^ ^ M
V 1
N CO 00 ol O 00 00
07 OO N O n � N
N
� sn
N
E
r:
ss� �
� 1 �
Obi V M
v N
h 10
ono o I oho
oO O 00
V1 O
<r •- lo ao
d' 'n Q` 10 O`<71
vl 'O ONO In M 'O
M N ^
00 M N Vl
FH A
I I�E i � O 7 M
7 (N�l n M Vl
`-' N 7
ca cf3 t/i
O N t� v1 'n 7 v1 U O 00
O O
00 M r N
c
'O
C
Q�
o -
4
y O U
N. CO N
CM t:U
O p U O O p
va
O
Q' U h ^U' F G CU.p Cc
R
C7 C7 F F
ss a
rn Irn
00 �
'n 'n
z�.
FA tN
W 7 M
vt N N
^ � O
� r
(A fR
V1 N M
� W
N
O
Q
I/
C
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 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.
City of Kalispell, Montana
Balance Sheet
Governmental Funds
June 30,2016
Other
Total
Street
Governmental
Governmental
General Fund
Maintenance
CD Misc.
SID 344
Funds
Funds
ASSETS
Cash and investments
$
1,994,808 $
1,797,945 $
484,750
$ 396,339 $
9,033,663 $
13,707,505
Taxes and assessments receivable, net
220,245
78,279
2,258,860
798,756
3,356,140
Accounts receivable - net
2,254
-
203,420
205,674
Notes and loans receivable
-
29,494
2,169,763
2,199,257
Contracts receivable
37,943
-
-
37,943
Advances to other funds
1,300,000
1,300,000
Due from other funds
55,159
55,159
Due from other governments
474,104
182,684
7,699
317,722
982,209
Prepaids
211,093
38,820
3,643
-
27,804
281,360
Properties held for sale
-
-
1,258,465
-
1,258,465
Other debits
6,023
-
869
6,892
Restricted assets:
Cash and investments
$
- $
- $
-
$ $
1,129,178 $
1,129,178
Total assets
$
4,301,629 $
2,097,728 $
1,776,352
$ 2,662,898 $
13,681,175 $
24,519,782
LIABILITIES
Accounts payable
127,566
43,491
141,018
312,075
Accrued payroll
269,463
28,561
132,769
430,793
Due to other funds
-
-
-
55,159
55,159
Advances from other funds
1,300,000
-
1,300,000
Other credits
869
869
Total liabilities
$
397,029 $
72,052 $
1,300,000
$ $
329,815 $
2,098,896
Deferred inflows ofresources
Unavailable revenue - deferred accounts receivable
-
-
-
195,023
195,023
Unavailable revenue - deferred taxes and assessments
220,245
78,279
2,258,860
798,756
3,356,140
Total deferred inflows ofresources
220,245
78,279
2,258,860
993,779
3,551,163
FUND BALANCES
Nonspendable - not in spendable form $
$
$
$ $
$
-
Long -tern recievables
6,023
6,023
Prepaids
211,093
38,820
3,643
27,804
281,360
Restricted
-
_
_
_
_
General Government
53,147
53,147
Public Safety
-
1,584,370
1,584,370
Public Works
1,908,577
653,573
2,562,150
Culture and Recreation
-
-
898,974
898,974
Community Development
472,709
8,478,303
8,951,012
Debt Service
- 404,038
661,410
1,065,448
Unrestricted Fund Balances:
_
_
Assigned
-
Capital Equipment
101,906
101,906
Parking
23,542
23,542
Miscellaneous
99,624
99,624
Unassigned fimd balance
3,242,167
-
-
3,242,167
Total fund balances $
3,684,355 $
1,947,397 $
476,352 $ 404,038 $
12,357,581 $
18,869,723
Total liabilities, deferred inflows ofresources, and fimd 1 $
4,301,629 $
2,097,728 $
1,776,352 $ 2,662,898 $
13,681,175 $
24,519,782
See accompanying Notes to the Financial Statements
PIZ
City of Kalispell, Montana
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position
June 30, 2016
Total fund balances - governmental funds $ 18,869,723
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in
the funds. 76,944,361
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 356,356
Deferred outflow of resources related to pensions.
- contributions made subsequent to the measurement date, recognized on the statement of net position 908,971
- collective contributions 27,024
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
(7,610,974)
- Compensated absences
(1,351 779)
- Other post employment benefits
(1,773,131)
- Net pension liability
(8,179,172)
- Deferred inflow of resources - related to pensions
(667,128)
Taxes, assessments and accounts receivable will be collected this year, but are not available soon enough to
pay for the current period's expenditures and, therefore, are reported as unavailable revenue in the funds.
- deferred taxes and assessments 3,356,140
- ambulance 195,023
Total net position - governmental activities $ 81,075,414
See accompanying Notes to the Financial Statements
9111
City of Kalispell, Montana
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2016
Other
Total
Street
Governmental
Governmental
General Fund
Maintenance
CD Misc.
SID 344
Funds
Funds
REVENUES
Taxes and assessments
$
5,526,215 $
$ $
282,237 $
3,515,979 $
9,324,431
Licenses and permits
80,963
-
583,428
664,391
Intergovernmental
4,088,345
1,654,843
5,743,188
Charges for services
800,715
2,292,261
1,540
1,840,828
4,935,344
Fines and forfeitures
495,347
-
-
-
495,347
Miscellaneous
8,641
4,381
-
275,630
288,652
Investment earnings
30,773
9,193
4,047
61,544
105,557
Total revenues
$
11,030,999 $
2,305,835
$ 5,587 $
282,237 $
7,932,252 $
21,556,910
EXPENDITURES
General government
S
2,991,835 S
-
$ - $
$
- $
2,991,835
Public safety
7,737,211
-
1,803,488
9,540,699
Public works
40,131
1,641,556
509,325
2,191,012
Parks and recreation
-
-
-
1,550,843
1,550,843
Community development
60,972
-
220,892
641,306
923,170
Debt service - principal
16,673
110,802
-
225,000
1,528,245
1,880,720
Debt service - interest
103
3,817
122,757
159,724
286,401
Capital outlay
139,442
209,310
-
581,884
930,636
Total expenditures
$
10,986,367 $
1,965,485
$ 220,892 $
347,757 $
6,774,815 $
20,295,316
Excess (deficiency) of revenues over expenditures
$
44,632 $
340,350
$ (215,305) $
(65,520) $
1,157,437 $
1,261,594
OTHER FINANCING SOURCES (USES)
Issuance of debt
$ - $
-
$ $
$
461,833 $
461,833
Proceeds from the sale of general capital asset disposition
1,463
88,389
3,420
93,272
Transfers in
850,000
-
70,000
1,102,611
2,022,611
Transfers out
(475,562)
(9,982)
-
(1,502,067)
(1,987,611)
Total other financing sources (uses)
$ 375,901 $
78,407
$ 70,000 $
$
65,797 $
590,105
Net Change in Fund Balance
$ 420,533 $
418,757
$ (145,305) $
(65,520) $
1,223,234 $
1,851,699
Fundbalances- beginning
$ 3,266,749 $
1,528,640
$ 621,657 $
469,558 $
11,165,344 $
17,051,948
Restatements
(2,927)
-
(30,997)
(33,924)
Fundbalances - beginning, restated
$ 3,263,822 $
1,528,640
$ 621,657 $
469,558 $
11,134,347 $
17,018,024
Fund balance - ending
$ 3,684,355 $
1,947,397
$ 476,352 $
404,038 $
12,357,581 $
18,869,723
See accompanying Notes to the Financial Statements
31
City of Kalispell, Montana
Reconciliation of the Statement of Revenues, Expenditures.
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30, 2016
Amounts reported for governmental activities in the statement of
activities are different because:
Net change in fund balances - total governmental funds $ 1,851,699
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 930,636
- Depreciation expense (3,862,890)
In the Statement of Activities, the loss or gain on the sale or disposal of capital assets is recognized. The
fund financial statements recognize only the proceeds from the sale of these assets:
- Proceeds from the sale of capital assets (93,272)
- Gain on the sale of capital assets 78,497
Revenues in the Statement of Activities that do not provide current financial resources are not reported as
revenues in the funds:
- Donated capital assets 16,173
- Long-term receivables (deferred revenue) (214,329)
The change in compensated absences is shown as an expense in the
Statement of Activities (44,262)
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 1,880,720
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 (461,833)
Changes to net pension liability are shown as revenues/expenses on the Statement of Activities 397,669
The increase in other post employment benefits is shown as an expense in the
Statement of Activities (246,894)
Internal service funds are used by management to share 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 68,468
Change in net position - Statement of Activities $ 306,382
See accompanying Notes to the Financial Statements
32
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.
Information Technology Fund — used to account for the goods and services provided by
the information technology department to other departments of the City on a cost -
reimbursement basis.
Central Garage Fund — used to account for the goods and services provided by the central
garage to other departments of the City on a cost -reimbursement basis.
City of Kalispell, Montana
Statement of Net Position
Proprietary Funds
June 30, 2016
Governmental
Business -Type Activities
- Enterprise Funds
Activities
Non -major
Internal
Water
Sewer
Enterprise
Totals
Service Funds
ASSETS
Cash and investments
$ 6,061,836 $
5,310,771 $
1,032,970 $
12,405,577 $
240,325
Taxes and assessments receivable, net
-
27,303
37,697
65,000
-
Accounts receivable - net
198,993
231,474
323
430,790
-
Contracts receivable
171,698
495,198
-
666,896
43,026
Due from other governments
-
69,771
76,323
146,094
-
Prepaids
67,433
98,112
33,072
198,617
16,207
Inventories
138,243
-
-
138,243
-
Restricted assets:
Cash and investments
1,316,076
6,282,692
-
7,598,768
Capital assets (net of accumulated depreciation):
Land
91,587
311,380
1,359,545
1,762,512
Construction in Progress
-
1,752,557
-
1,752,557
-
Depreciable
25,830,243
42,666,494
1,740,072
70,236,809
154,072
Total assets
33,876,109
57,245,752
4,280,002
95,401,863
453,630
DEFERRED OUTFLOWS OF RESOURCES
Collective contributions related to pensions
1,389
2,010
806
4,205
-
Contractually required contributions related to
pensions 46,726
67,613
27,116
141,455
Total deferred outflows of resources
48,115
69,623
27,922
145,660
LIABILITIES
Accounts payable
Retainage
Accrued payroll
Other credits
Current portion of long-term liabilities
Bonds and notes - capital
Compensated absences payable
Long-term liabilities, due in more than one year
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 i
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
68,575
295,077
6,075
369,727
55,072
-
17,464
-
17,464
-
30,265
44,648
14,916
89,829
11,797
8,290
-
-
8,290
-
196,000
921,000
38,343
1,155,343
-
53,711
105,529
48,307
207,547
21,372
1,661,000
10,563,000
77,849
12,301,849
-
23,250
41,337
34,266
98,853
9,033
211,087
126,652
-
337,739
-
533,227
899,079
325,265
1,757,571
-
2,785,405
13,013,786
545,021
16,344,212
97,274
58,491
111,995
37,337
207,823
-
58,491
111,995
37,337
207,823
24,064,830 33,246,431 2,983,425 60,294,686 154,072
1,063,170 5,015,099 - 6,078,269 -
358,400 1,109,313 1,467,713
- 1,448,800 1,448,800
- 190,000 - 190,000 -
5,593,928 3,179,951 742,141 9,516,020 202,284
$ 31,080,328 $ 44,189,594 $ 3,725,566 $ 78,995,488 $ 356,356
33
City of Kalispell, Montana
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds
For the Fiscal Year Ended June 30, 2016
OPERATING REVENUES
Charges for services
Miscellaneous revenues
Special assessments
Total operating revenues
OPERATING EXPENSES
Personal services
Supplies
Purchased services
Building materials
Fixed charges
Loss/bad debt expense
Depreciation
Total operating expenses
Operating income (loss)
Governmental
Business-Tvpe Activities - Enterprise Funds Activities
Non -major Internal Service
Water Sewer Enterprise Totals Funds
$ 3,307,170 $ 4,656,492 $
227,902 34,535
- 852,713
$ 3,535,072 $ 5,543,740 $
1,058,298 $ 9,021,960 $ 1,025,728
7,697 270,134 489
- 852,713 -
1,065,995 $ 10,144,807 $ 1,026,217
$ 1,063,891 $
1,631,083 $
542,819 $
3,237,793 $
410,871
68,603
112,306
57,880
238,789
303,556
299,286
833,433
78,351
1,211,070
187,448
38,281
32,858
-
71,139
-
235,590
447,508
140,886
823,984
30,073
3,037
3,878
-
6,915
-
887,498
1,862,456
213,026
2,962,980
27,040
$ 2,596,186 $
4,923,522 $
1,032,962 $
8,552,670 $
958,988
$ 938,886 $
620,218 $
33,033 $
1,592,137 $
67,229
NON -OPERATING REVENUES (EXPENSES)
Intergovernmental income
$
60,547
$ 65,506
$ 26,272
$ 152,325
$
Impact Fees
587,094
1,850,064
-
2,437,158
-
Other income
-
135,390
-
135,390
Interest revenue
48,968
76,178
7,192
132,338
1,239
Gain (loss) on sale of capital assets
(3,091)
-
-
(3,091)
-
Debt service interest expense
(61,630)
(281,100)
(1,808)
(344,538)
-
Total non -operating revenues (expenses)
$
631,888
$ 1,846,038
$ 31,656
$ 2,509,582
$ 1,239
Income (loss) before contributions and trans $
1,570,774
$ 2,466,256
$ 64,689
$ 4,101,719
$ 68,468
Contributions of infrastructure - developers
852,081
34,153
-
886,234
-
Transfers out
-
-
(35,000)
(35,000)
-
Change in net position
$
2,422,855
$ 2,500,409
$ 29,689
$ 4,952,953
$ 68,468
Net Position - Beginning of the year
$
28,657,473
$ 41,771,932
$ 3,695,877
$ 74,125,282
$ 287,888
Restatements
-
(82,747)
-
(82,747)
-
Net Position - Beginning of the year - Restated
$
28,657,473
$ 41,689,185
$ 3,695,877
$ 74,042,535
$ 287,888
Net Position - End of the year
$
31,080,328
$ 44,189,594
$ 3,725,566
$ 78,995,488
$ 356,356
See accompanying Notes to the Financial Statements
34
City of Kalispell, Montana
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2016
Governmental
Business - Type Activities
Activities
Non -major
Internal Service
Water Sewer
Enterprise
Totals
Fund
Cash flows from operating activities:
Cash received from customers
$ 3,252,399 $ 4,640,620 $
1,048,744 $
8,941,763 $
1,025,757
Cash received from assessments
- 853,729
-
853,729
-
Cash received from miscellaneous sources
227,902 34,535
7,697
270,134
Cash payments for claims
(606,321) (1,426,117)
(290,953)
(2,323,391)
(516,626)
Cash payments to employees
(985,479) (1,521,756)
(511,683)
(3,018,918)
(406,507)
Net cash provided (used) by operating activities
1,888,501 2,581,011
253,805
4,723,317
102,624
Cash flows from capital and related financing activities:
Principal paid on bonds, loans and advances
(193,000)
(900,000)
(37,963)
(1,130,963)
Interest paid on bonds, loans and advances
(61,630)
(281,100)
(1,808)
(344,538)
Acquisition and construction of capital assets
(564,328)
(727,606)
(263,359)
(1,555,293) (36,862)
Proceeds from government grants
15,277
-
15,277
Impact fees
417,893
1,390,342
-
1,808,235 -
Sale of capital asset
-
-
15,500
15,500
Net cash provided (used) by capital and related financing activities
(385,788)
(518,364)
(287,630)
(1,191,782) (36,862)
Cash flows from non -capital financing activities:
Transfers between funds
-
(35,000)
(35,000)
Hydrant meter deposits
2,550
$2,550
Prepaid rent
(51,372)
(77,058)
(25,686)
(154,116)
Settlement of lawsuit
135,390
135,390
Net cash provided (used) from non -capital financing activities
(48,822)
58,332
(60,686)
(51,176) -
Cash flows from investing activities:
Interest on investments
48,968
76,178
7,192
132,338 1,239
Net cash provided (used) by investing activities
48,968
76,178
7,192
132,338 1,239
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning
Restatements
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
Bad Debt
Pension Adj.
Other Post Employment Benefits Expense
Changes in assets and liabilities:
Accounts receivable - net
Taxes and assessments receivable, net
Prepaid expenses
Increase Comp Abs
Decrease in due from County
Accounts payable
Accrued payroll
Net cash provided (used) by operating activities
The City received non cash contributions
of land and infrastructure as follows:
See accompanying notes to the financial statements
1,502,859
2,197,157
(87,319)
3,612,697
67,001
5,875,053
9,479,053
1,120,289
16,474,395
173,324
-
(82,747)
(82,747)
-
$ 7,377,912 $
11,593,463 $
1,032,970 $
20,004,345 $
240,325
$ 938,886 $
620,218 $
33,033 $
1,592,137 $
67,229
887,498
1,862,456
213,026
2,962,980
27,040
3,037
(1,454)
-
1,583
-
38,909
70,576
23,506
132,991
29,392
17,635
47,027
(54,771)
(10,540)
348
(64,963)
($460)
(14,774)
(21,817)
(36,591)
(4,401)
(1,487)
79
(5,809)
(11,867)
5,575
10,973
3,877
20,425
2,814
-
15,790
11,915
27,705
-
35,439
(12)
(13,836)
21,591
15,246
8,937
11,630
3,674
24,241
2,622
$ 1,888,501 $
2,581,011 $
253,805 $
4,723,317 $
102,624
$ 852,081 $
34,153
$
886,234
M,
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, 2016
Cash and short-term investments
Total assets
LIABILITIES
Due to others
Total liabilities
Agency
Funds
$ 551,361
$ 551,361
551,361
$ 551,361
See accompanying Notes to the Financial Statements
36
j
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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, 2016, and for the year then ended.
The more significant accounting policies of the City are described below.
Recently Implemented Accounting Pronouncements
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.
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 City's 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.
37
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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 2" Avenue East to 2"d 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.
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.
38
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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
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
Governmental funds are used to account for the City's general government activities. Governmental fund types use the flow
of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual
basis of accounting, revenues are recognized when susceptible to accrual. (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
39
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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 General 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 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.
40
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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.
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.
41
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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 2016
are described below:
Governmental Funds
Accepted a Homeland Security - Stonegarden Grant (fund 2915), for $120,000, and amended the budget that amount to enhance
the cooperation and coordination between Local, State and Federal law enforcement agencies in a joint mission to secure United
States' land borders.
Assets, Liabilities, and Net Assets oi- Equity
L 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 3, 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 lendingiborrowing 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.
Taxes
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.
Is
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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 $168,981 at June 30, 2016.
Ambulance accounts receivable $367,350
Times allowance percentage 46%
@ June 30, 2016 $168,981
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, 2016:
Water $ 16,536
Sewer $ 23,282
Contracts
The following are contracts payable to the City of Kalispell on June 30, 2016.
FUND
Source
Amount
General - Major Governmental
Municipal Court
$ 37,943
Information Technology - Internal Service
Charter (formerly Bresnan)
43,026
Water- Major Proprietary
Impact Fees
171,698
Sewer- Major Proprietary
Impact Fees
495,198
Total Proprietary
666,896
Total City contracts receivable
$ 747,865
3. Inventories and Prepaid Items
Inventories for materials and supplies for governmental fund types are expended at the time of purchase. The amounts on
hand in governmental funds are not significant. 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 in both
government -wide and fund financial statements. Prepaid items arise when charges are entered in the accounts for benefits not
yet received. In subsequent periods, when the benefit criteria are met, or when the City has a legal claim to the resources, the
prepaid items are removed from the balance sheet and expenses are recognized.
43
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
On June 30, 2016, the City reported prepaid expenses in the following funds.
FUND Purpose Amount
General - Major Governmental Workers Compensation $
106,082
General - Major Governmental Health Insurance
105,011
Parks Health Insurance
11,691
Ambulance Health Insurance
11,310
Building Department Health Insurance
4,803
Street Maintenance - Major Governmental Health Insurance
13,134
Street Maintenance - Major Governmental Prepaid rent
25,686
CD Misc. - Major Governmental Prepaid rent
3,643
Total Governmental Funds
281,360
Information Technology- Internal Service Health Insurance
2,225
Information Technology - Internal Service Prepaid maintenance contract:
10,795
Central Garage - Internal Service Health Insurance
3,187
Total Internal Service
16,207
Total Governmental Activities
297,567
Water - Major Proprietary Health Insurance
16,061
Water - Major Proprietary Prepaid rent
51,372
Sewer- Major Proprietary Health Insurance
21,054
Sewer - Major Proprietary Prepaid rent
77,058
Solid Waste Health Insurance
7,386
Solid Waste Prepaid rent
25,686
Total Proprietary Funds
198,617
Total City prepaids $496,184
The City pays quarterly in advance for Health Insurance and Workers' Compensation insurance. Some information technology
maintenance contracts span up to three years. A number of City departments have prepaid four years of office rent.
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 GASB, 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 3, 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.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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`t' 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.
45
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Excess of expenditures over appropriations
For the year ended June 30, 2016, all City funds expenditures were less than or equal to budgeted appropriations.
NOTE 3. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS
A. Cash and Investments
At June 30, 2016, the carrying amount of the City's deposits in local banks and investments is $35,061,081. Interest bearing
account balances are covered by the Federal Depository Insurance Corporation (FDIC) up to $250,000 per bank, per depositor.
In addition, all noninterest bearing transaction account balances are fully insured by FDIC coverage. The remaining balances are
covered by collateral held by the pledging bank's agent in the City's name.
The City's cash and investments are reported as follows:
Unrestricted
Restricted
Total
Governmental activities$13,947,830
$1,129,178
$15,077,008
Business -type activities 12,405,577
7,598,768
20,004,345
Fiduciary funds 551,361
551,361
Component unit 18,367
18,367
$26,923,135
$8,727,946
$35,651,081
Custodial credit risk for deposits is the risk that in the event of a financial institution failure, the City's deposits may not be
returned or the City will not be able to recover the collateral securities in the possession of the outside party. The City minimizes
custodial credit risk by restrictions set forth in state law. Types of securities that may be pledged as collateral are detailed in
Section 17-6-103 of the Montana Code Annotated (MCA).
On June 30, 2016, the book value approximated the fair value of the investments, therefore no unrealized gain or loss was
recorded for the year. 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, 2016 along with their related interest rates and maturity dates.
I_n_v_estment
Est. Yield_
Maturity Date
Credit Risk Rating
Amount
STIPAccount
0.56%(varies)
N/A
N/A
$10,023,702
Federal National Mtg Assn
0.890%
11/7117
S&P AA+
1,405,000
Federal Farm Cr Banks
0.890%
12/26/17
S&P AA+
2,000,000
Federal Hone Loan Mortgage Corp.
1.040%
2/26/18
S&P AA+
250,000
Federal Farm Cr Banks
1.020%
3/12/18
S&P AA+
1,000,000
Federal National Mtg Assn
0.990%
3/27/18
S&P AA+
1,750,000
Federal National Mtg Assn
1.070%
10/29/18
S&P AA+
500,000
Federal Home Loan Bank
1.390%
10/29/19
S&P AA+
500,000
Federal Hone Loan Bank
1.390'k
10/29/19
S&P AA+
1,000,000
Federal Hone Loan Bank
1.6701%
11/25/19
S&P AA+
250,000
Federal Farm Cr Banks
1.490%
2/18/20
S&P AA+
500,000
Federal Hone Loan Bank
1.410%
5/26/20
S&P AA+
120,000
Federal Agric Mtg Corp
1.8901/.
7/15/20
N/A
1,000,000
Federal Farm Cr Banks
1.6709/6
10/29/20
S&P AA+
895,000
Federal Farm Cr Banks
1.690%
2/17/21
S&P AA+
1,000,000
Federal Hone Loan Mortgage Corp.
1.240%
4/28/21
S&P AA+
1,000,000
Federal Home Loan Bank
1.5900/0
5/25/21
S&P AA+
380,000
Wells Fargo Bank
1.180%
2/26/19
N/A
248,000
S&C Bonds - internal
3.00%-6.00%
varies
N/A
43,500
Demand deposits
N/A
N/A
N/A
11,782,949
Petty cash
N/A
N/A
N/A
2,930
Total
$ 35,651,081
47
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
The City invests in the Short -Term Investment Pool (STIP) managed by the State of Montana, Board of Investments. The pool invests
in short-term, highly liquid investments, and as such, the City has reported these investments as cash equivalents. Amounts invested
by the City in STIP may be redeemed at any date at the carrying value on that date. Audited financial statements for the State of
Montana's Board of Investments are available at 2401 Colonial Drive, 3`d Floor, Helena, Montana 59620.
Investments in the pool are reported at a Net Asset Value (NAV). The fair value of pooled investments is determined annually and is
based on year-end market prices. The NAV at June 30, 2016 is $1.000207, resulting in an unrealized gain of $2,075. The unit value
of the pool is fixed at $1 for both participant redemptions and purchases. Investments in STIP are carried at cost, but reported using
the NAV. STIP income is automatically reinvested in additional units. The STIP is not rated by a national rating agency.
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.
B. Interfund Receivables and Payables (Due to/from Other Funds)
The composition of interfund balances and due to/from as of June 30, 2016, was as follows:
Receivable Fund
General Fund - Major Governmental
General Fund - Major Governmental
General Fund - Major Governmental
General Fund - Major Governmental
General Fund - Major Governmental
General Fund - Major Governmental
Payable Fund
Stonegarden Grant - Special Revenue Fund
Law Enforcement Grants - Special Revenue Fund
Drug Enforcement Grants - Special Revenue Fund
Health Levy - Special Revenue Fund
G.O. Bonds - Debt Service Fund
S & C's
Total - Due To Other Funds (Governmental Funds)
W ;N
Amount
Purpose
$ 856
S/T Loan
19,483
S/T Loan
6,055
S/T Loan
26,029
S/T Loan
2,012
S/T Loan
724
S/T Loan
$ 55,159
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
C. Transfers
The following is an analysis of transfers between funds during Fiscal Year 2016:
From
General - Major Governmental
General - Major Governmental
General - Major Governmental
General - Major Governmental
West Side TIF - Special Revenue
Parks - in - Lieu
Ambulance
Old School Tech TIF
Old School Industrial TIF
Health
Health
Streets - Major Governmental
Airport TIF - Debt Service
Solid Waste - Nonmajor Proprietary
D. Capital Assets
To
Ambulance
Drug Grant
COPS Grant
Law Enforcement Block Grant
West Side TIF - Debt Service
Trails
Fire Grants
CD Misc - Major Governmental
CD Misc - Major Governmental
General - Major Governmental
Parks
Trails
Airport TIF - Special Revenue
Gas Tax - Special Revenue
TOTAL
Amount
Purpose
$ 380,000
Operations
57,500
Match
34,562
Match
3,500
Match
32,340
Operations
3,859
Match
9,868
Match
60,000
Operations
10,000
Operations
850,000
Operations
86,000
Operations
9,982
Match
450,000
Operations
35,000
Operations
$ 2,022,611
Capital asset activity for the year ended June 30, 2016 was as follows:
Assets Contributed
In fiscal year 2016, Governmental Activities report contributed assets from private sources with a value of $16,173. These
contributed assets are sidewalk replacement or repair paid for by homeowner's directly or by Sidewalk & Curb assessments.
In fiscal year 2016, Business -type Activities report contributed assets from private sources with a value of $886,234. The Water
fund received contributions from developers in the amount of $852,081. Contributed to the Water fund were twenty-one (21)
new fire hydrants ($69,696), and six thousand nine hundred sixty eight linear feet (6968') of water mains ($417,385). The water
fund also received a water pumping plant consisting of a well house and all necessary appurtenances valued at $365,000. The
Sewer fund received contributions from developers in the amount of $34,153. Contributed to the Sewer fund were five hundred
sixty nine linear feet (569') of sanitary mains.
Gain (Loss) on Sale/Disposal of Capital Assets
In fiscal year 2016, Business -type Activities report a loss on disposal of assets of $3,091. Residential and commercial meters
were replaced with a depreciated value of $3,091, resulting in a loss on disposal of capital assets in the Water fund.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Balance
Balance
Governmental Activities:
July 1, 2015
Additions
Contributions Deductions
June 30, 2016
Capital assets not being depreciated:
Land (Asset type: 010)
$ 2,395,299
$
$ $
$ 2,395,299
Total capital assets not being depreciated
2,395,299
2,395,299
Capital assets being depreciated:
Buildings (Asset type: 020)
17,163,639
26,319
17,189,958
Improvements other than buildings (Asset type:
030) 15,569,367
153,832
16,173
15,739,372
Machinery and equipment
General (Asset type: 040)
8,383,108
750,485
- (295,127)
8,838,466
Ambulance (Asset type: 100)
398,059
-
-
398,059
Parking (Asset type: 230)
123,794
(2,898)
120,896
Infrastructure (Asset type: 031)
83,135,184
83,135,184
Total capital assets being depreciated
124,773,151
930,636
66,173 (2 88,025)
125,421,935
Less accumulated depreciation for:
Buildings (Asset type: 020)
(7,882,221)
(588,919)
-
(8,471,140)
Improvements other than buildings (Asset type:
030) (7,495,088)
(601,797)
(8,096,885)
Machinery and equipment
General (Asset type: 040)
(4,675,383)
(583,594)
280,353
(4,978,624)
Ambulance (Asset type: 100)
(382,149)
(8,458)
-
(390,607)
Parking (Asset type: 230)
(115,559)
(1,744)
2,898
(114,405)
Infrastructure (Asset type: 031)
(26,742,833)
(2,078,379)
-
_ (28,821,212)
Total accumulated depreciation
(47,293,233)
(3,862,891)
283,251
(50,872,873)
Total capital assets being depreciated, net
Governmental activities capital assets, net
77,479,918 (2,932,255) 16,173 (14,774) 74,549,062
$79,875,217 $ (2,932,255) $ 16,173 $ (14,774) $76,944,361
Balance
Balance
Internal service funds:
July 1, 2015
Additions Contributions
Deductions June 30, 2016
Information Technology (Asset type: 200)
$ 230,570
$ 36,862 $
$ $ 267,432
Less accumulated depreciation - Information Technology
(175,162)
(18,473)
(193,635)
Central Garage (Asset type: 220)
272,893
272,893
Less accumulated depreciation - Central Garage
(184,050)
(8,568)
(192,618)
Internal service funds assets, net
$ 144,251
$ 9,821 $
$ $ 154,072
Governmental activities depreciation was charged to functions/programs of the primary government as follows:
Governmental Activities:
General Government
Public Safety
Public Works
Parks and Recreation
Total Governmental Activities
$ 2,493,125
563,104
334,092
472,570
$ 3, 862, 891
50
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Balance
Construction
Balance
Business -type activities:
July 1, 2015
Additions
Contributions
in Progress
Deductions
June 30, 2016
Capital assets not being depreciated:
Land
Airport (Asset type: 210)
$ 1,347,867
$
$
$
$
$ 1,347,867
Water (Asset type: 070)
105,958
105,958
Sewer (Asset type: 120)
282,137
282,137
Sewer (Storm) (Asset type: 150)
26,550
26,550
Construction in progress
Water
208,357
(208,357)
-
Sewer
1,442,786
760,210
(450,439)
1,752,557
Total capital assets not being depreciated
3,413,655
760,210
(658,796)
3,515,069
Capital assets being depreciated:
Airport (Asset type: 210)
1,962,813
-
-
1,962,813
Water
General Plant (Asset type: 060)
1,376,904
-
-
1,376,904
Source of Supply (Asset type: 070)
4,770,726
10,483
10,845
4,792,054
Transmision and Distribution (Asset type: 080)
27,741,742
292,838
487,081
197,512
(41,431)
28,677,742
Pumping Plant (Asset type: 090)
3,604,237
45,761
365,000
-
4,014,998
Sewer
General Plant (Asset type: 130)
1,002,189
-
(59,991)
942,198
Transmision and Distribution (Asset type: 140)
24,373,655
22,165
34,153
438,913
(7,776)
24,861,110
Storm Sewer System (Asset type: 150)
14,655,901
-
14,655,901
Treatment Plant Equipment (Asset type: 180)
357,682
28,233
-
-
385,915
Treatment Plant (Asset type: 190)
39,377,898
23,500
11,526
(124,780)
39,288,144
Solid Waste
Buildings (Asset type: 111)
316,731
-
316,731
Machinery and equipment (Asset type: 110)
1,474,558
263,353
-
1,737,911
Total capital assets being depreciated
121,015,036
686,333
886,234
658,796
(233,978)
123,012,421
Less accumulated depreciation for:
Airport (Asset type: 210)
Water
General Plant (Asset type: 060)
Source of Supply (Asset type: 070)
Transmision and Distribution (Asset type: 080)
Pumping Plant (Asset type: 090)
Sewer
General Plant (Asset type: 130)
Transmision and Distribution (Asset type: 140)
Storm Sewer System (Asset type: 150)
Treatment Plant Equipment (Asset type: 180)
Treatment Plant (Asset type: 190)
Solid Waste
Buildings (Asset type: 111)
Machinery and equipment (Asset type: 110)
Total accumulated depreciation
Total capital assets being depreciated, net
Business -type activities capital assets, net
(947,541) (96,379) (1,043,920)
(1,111,309)
(45,659)
(1,156,968)
(997,550)
(108,073)
(1,105,623)
(8,332,562)
(649,894)
38,345
(8,944,111)
(1,755,251)
(83,872)
(1,839,123)
(880,487)
(18,947)
59,991
(839,443)
(10,270,148)
(684,755)
7,776
(10,947,127)
(4,372,064)
(345,219)
(4,717,283)
(339,037)
(3,227)
(342,264)
(19,932,438)
(810,306)
124,780
(20,617,964)
(273,366)
(8,523)
(281,889)
(831,773)
(108,124)
(939,897)
(50,043,526)
(2,962,978)
230,892
(52,775,612)
70,971,510
(2,276,645) 886,234
658,796 (3,086)
70,236,809
$74,385,165
$ (1,516,435) $ 886,234
$ $ (3,086)
$73,751,878
Business -type activities depreciation was charged to functions/programs of the primary government as follows:
Business -type Activities:
Airport $ 96,379
Water 887,498
Sewer 1,862,454
Solid Waste 116,647
Total Business -type Activities $ 2,962,978
51
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
E. Long -Term Debt
During the year ended June 30, 2016, the following changes occurred in liabilities reported in long-term debt:
Balance
Balance
Due within
July 1, 2015
Additions
Reductions
June 30, 2016
1 year
Governmental Activities:
G.O. Bonds
$ 2,805,000
$
-
$ (455,000)
$ 2,350,000
$
465,000
Revenue Bonds
1,257,000
(159,000)
1,098,000
164,500
Assessments
3,074,240
14,765
(327,506)
2,761,499
326,739
Contract Debt/Loans
1,298,543
447,068
(913,066)
832,545
300,223
Intermediary Program
595,078
-
(26,148)
568,930
26,410
Compensated Absences
1,307,516
1,002,719
(958,455)
1,351,780
979,362
Governmental Activities Sub Total
$10,337,377
$
1,464,552
$ (2,839,175)
$ 8,962,754
$
2,262,234
Internal Service Funds:
Compensated Absences
$ 27,590
$
23,158
$ (20,344)
$ 30,404
$
21,372
Internal Service Funds Sub Total
—$ 27,590
$
23,158
$ (20,344)
$ 30,404
$
21,372
Business -type Activities:
Revenue Bonds
$ 675,000
$
-
$ (65,000)
$ 610,000
$
65,000
SRF
13,759,000
-
(1,028,000)
12,731,000
1,052,000
Contract Debt/Loans
154,155
-
(37,963)
116,192
38,344
Compensated Absences
285,974
212,714
(192,288)
306,400
207,549
Business -type Activities Sub Total
$14,874,129
$
212,714
$ (1,323,251)
$ 13,763,592
$
1,362,893
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, 2016 were as follows:
Origination Interest Due Principal Annual Balance
Purpose Date Rate Term Date Amount Payment June 30, 2016
Pool/Fire Hall Refunding 6/13/2012 1%-2% 10 years 2022 $4,145,000 varies $ 2,350,000
Total G.O. Bonds $4,145,000 $ 2,350,000
52
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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
Purpose
Date
Rate
Term
SID343
6/12/2001
3.6%-5.5%
20 years
SID344
6/15/2006
3.7%-5.1%
20 years
SID345
5/15/2014
3.00%
15 years
2008 S&C
1/3/2009
3.50%
8 years
2009 S&C
1/4/2010
3.50%
8 years
2010 S&C
1/6/2011
3.00%
8 years
2011 S&C
1/6/2012
3.25%
8 years
2012 S&C
4/12/2013
3.25%
8 years
2013 S&C
1/2/2014
3.25%
8 years
2014 S&C
1/2/2015
3.25%
8 years
2015 S&C
1 /4/2016
3.50%
8 years
2016 S&C
6/30/2016
undetermined
8 years
Total Special Assessment Bonds
SID's 343 Assessments
Due
Principal
Annual
Balance
Date
Amount
Payment
June 30, 2016
2021
1,581,500
varies
235,000
2026
4,520,000
varies
2,270,000
2029
242,000
varies
213,000
2017
8,981
varies
1,122
2018
7,629
varies
1,907
2019
942
varies
353
2020
5,792
varies
2,896
2021
3,981
varies
2,488
2022
17,472
varies
13,104
2023
7,845
varies
6,864
2024
9,273
varies
9,273
2025
5,493
varies
5,492
$6,410,908
$ 2,761,499
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 $163,207.
SID 344 Bonds
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 fimd ($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, 2016, these reserves have been fully reestablished.
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.
53
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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.
Issue
Interest
Purpose
Date
Rate
Governmental Activities:
2005A - Airport TIF
Sep-05
3.8%-4.40%
2012 - West Side TIF
Mar-12
variable
Governmental Activities Sub Total
Business -type Activities:
2004 Water Refunding
May-04
2.5%-4.85%
Business -type Activities Sub Total
Total Revenue
Bonds
Final
Bonds
Balance
Term
Maturity
Issued
June 30, 2016
10 years
2020
$ 1,445,000
$ 650,000
25 years
2037
500,000
448,000
$ 1, 445,000
$ 1, 998,000
20 years 2024 $ 1,840,000 $ 610,000
1,840,000 610,000
$ 3,785,000 $ 1,708,000
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
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, 2016, 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 maximum principal and interest in the current or any subsequent year.
Maximum P & I $ 252,906
Total Reserve Requirement $ 252,906
Reserve balance 6/30/16 2 2
54
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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.
Cash Flow Coverage
Water Service Charges
$ 3,307,170
*Misc. Revenue
276,870
Total Operating Revenue
3,584,040
Less: Operating Expense (excludes depreciation)
1,708,688
Available for Debt Service
$1,875,352
"Maximum Debt Service
$ 252,906
Estimated Coverage FY16
742%
`includes interest revenue
—includes all water fund borrowings
State Revolving Fund — the City has five (5) loan agreements with the State Revolving Fund (SRF). These obligations are to be
repaid from the operating income of the fund.
SRF LOANS
Purpose
2013 Sewer - WWTP Digester Lid
2012 Sewer - Hwy 93 S
2012 Water - Sheepherders Well/Storage
2012 Water - Main & Idaho Main
2012 Sewer - WWTP System Improvements
Sewer Debt Required Information
Interest
Amount
Outstanding
Origination
Rate
Term
Borrowed
June 30, 2016
FY13
3.00%
20 years
$ 1,102,748
$ 966,000
FY13
2.25%
12 years
1,009,000
702,000
FY13
2.25%
15 years
1,340,000
1,025,000
FY13
2.00%
8 years
404,000
222,000
FY13
2.25%
15 years
12,827,000
9,816,000
Total SRF Loans
$16,682,748
$12,731,000
Operating Reserve — The city shall keep in the operating reserve account an amount equal to one month's operating expenses. As
of June 30, 2016, the operating reserve account contains $250,000.
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, 2016, 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
($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 ($13,147,541 / 17 years = $773,385 * 1.25 = $966,731). The City
is in compliance with the 125% of the average debt service payable in any fiscal year. As of June 30, 2016, the debt service
reserve account contains $966,731.
55
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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
$ 5,619,918
Impact Fees Pledged for Debt
320,000
Total
5,939,918
Less: Operating Expense (excludes depreciation)
3,061,066
Available for Debt Service
$2,878,852
**Maximum Debt Service
$1,182,693
Estimated Coverage FY16
243%
*includes interest revenue
**includes all sewer fund borrowings
Loans/Contracted Debt
Origination
Interest
Due
Principal
Balance
Purpose
Date
Rate
Term
Date
Amount
June 30, 2016
Business -type Activities
BOI:Garbage Truck
6/13/2015
varies
5 years
2/15/2019
$ 172,988
$
116,192
Total loanstcontracted debt
- Business -type Activities
$
116,192
Governmental Activities
BOI:Dump Truck
6/15/2012
varies
5 years
2/15/2017
124,865
28,358
BOI:Compactor
12/30/2011
varies
5 years
2/15/2017
45,928
9,421
BOI: Stumper
2/1/2013
varies
5years
2/15/2018
20,000
8,139
BOI: P/U & Tractor
2/1/2013
varies
5 years
2/15/2018
45,000
18,314
BOI: Dump Trucks (2)
5/24/2013
varies
5 years
2/15/2018
174,698
78,618
BOI:Boom Truck
8/23/2013
varies
5 years
2/15/2018
97,651
43,917
BOI: Dump Trucks (2)
2/28/2014
varies
5 years
2/15/2019
162,696
106,004
1301:201 1st Ave E -City Hall
9/11/2015
varies
5 years
8/15/2020
412,571
372,101
BOI:Chip Truck
1/8/2016
varies
5 years
2/15/2021
34,498
34,498
Rocky Mtn Bank - Fire Truck
3/7/2008
3.95%
10 years
3/1/2018
575,000
133,175
Sub total BOI
loans/contracted debt
$1,692,907
$
832,545
USDA: Intermediary
Relending Program
10/12/2004
1.00%
30 years
10/12/2034
$ 520,000
$
380,182
Relending Program
11/27/2006
1.00%
30 years
11/27/2036
257,500
188,748
Sub total USDA Intermediary
777,500
568,930
Total loans/contracteddebt- GovernmentalActivities
$2,470,407
$
1,401,475
BOI - Board of Investments Intercap Loan Program
56
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Requirements to amortize debt
The annual requirements to amortize all long-term debt outstanding, excluding compensated absences payable, as of June 30,
2016, 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
2017
$ 465,000
$ 41,138
$ 326,739
$ 132,670
$ 300,222
S 15,491
$ 26,410
S 5,689
164,500
45,913
S 1,523,772
2018
470,000
34,163
326,303
117,513
266,747
9,236
26,674
5,425
175,000
38,948
1,470,009
2019
475,000
27,113
320,349
101,878
125,463
4.116
26,940
5,159
181,000
31,618
1,298,636
2020
485,000
18,800
246,232
86,324
91,051
2,172
27,210
4,889
191,000
23,800
1,176,478
2021
225,000
9,100
246,508
74,629
49,062
760
27,482
4,617
17,000
15,460
669,618
2022-2026
230,000
4,600
1,239,368
191,743
141,587
18,907
96,000
66,520
1,988,725
2027-2031
56,000
3,000
148,810
11,685
116,000
45,760
381,255
2032-2036
134,249
4,095
143,000
20,580
301,924
2037-2041
9,568
96
14,500
580
24,744
TOTAL
S 2,350,000
$ 134,914
$2,761,499
$ 707,757
S 832.545
$ 31,775
$ 568,930
S 60,562
$1,098,000
$ 289,179
7 8,855,161
Business -type
Activities:
SRF
REVENUE
CONTRACTED
FOR FISCAL
LOANS
BONDS
LOANS/DEBT
YEAR ENDED
PRINCIPAL
INTEREST
PRINCIPAL
INTEREST
PRINCIPAL
INTEREST
TOTAL
2017
1,052,000
287.202
65,000
28,835
38,343
$ 1,801
S 1,473,181
2018
1,076,000
263,183
70,000
25,943
38,728
1,207
1,475,061
2019
1,101,000
238.615
70,000
22,793
39,121
606
1,472,135
2020
1,125,000
213,477
75,000
19,643
1,433,120
2021
1,127,000
187,769
75,000
16,005
1,405,774
2022-2026
5,693,000
549,870
255,000
25,220
6,523,090
2027-2031
1,418,000
66,206
1,484,206
2032-2036
139,000
6,275
145,275
TOTAL
$ 12,731,000
$ 1,812,597
$ 610,000
$ 138,439
$ 116,192
S 3,614
S 15,411,842
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, 2016, the City of Kalispell reported a liability of $9,936,743 for its proportionate share of the net pension liability.
The net pension liability was measured as of June 30, 2015. Depending on the pension plan, the total pension liability used to
calculate the net pension liability was determined by actuarial valuations ranging June 30, 2014 to June 30, 2015. For actuarial
valuations performed June 30, 2014, the total pension liability was then rolled -forward using generally accepted actuarial
procedures to the measurement date of June 30, 2015. 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, 2016, the City of Kalispell recognized pension expense of $1,649,323 for its proportionate share of
pension expense for all pension plans. The City of Kalispell also recognized grant revenue of $1,017,693 for the support
provided by the State of Montana for its proportionate share of the pension expense that is associated with the employer.
57
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
At June 30, 2016, the City of Kalispell reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Actual and Expected Experience
Changes in Assumptions
Actual vs. Expected Investment Earnings
Changes in Proportion Share and Differences between Employer
Contributions and Proportionate Share of Contributions
Employer contributions subsequent to the measurement date -
Deferred Outflows Deferred Inflows of
of Resources_ Resources
$ $ 61,003
- $ 687,259
31,229 $ 126,689
FY 2016 Contributions $ 1,050,428
Total $ 1,081,657 $ 874,951
beginning balance $ 1,029,119
CY change $ 52,538
$ 1,081,657
$1,050,427 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, 2017. 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, 2017 (344,042)
June 30, 2018 (344,042)
June 30, 2019 (343,886)
June 30, 2020 190,329
June 30, 2021 (2,081)
Thereafter 0
General information about the Pension Plans
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Pension Amount Totals
GASB Statement 68, Paragraph 74 requires that when employees are provided benefits through more than one pension system,
whether provided through cost -sharing, single -employer or agent pension plans, the employer must combine the amounts reported
as a total or aggregate for all pensions.
Net Pension Liability
In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non -employer
contributing entity are required to recognize and report certain amounts associated with their participation in the Public
Employees' Retirement System (PERS). Statement 68, which became effective June 30, 2015, includes requirements for
employers to record and report their proportionate share of the collective Net Pension Liability (NPL), Pension Expense, and
Deferred Inflows and Deferred Outflows of resources associated with pensions.
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, the State is required to report a
proportionate share of a local government or school district's collective NPL that is associated with the non -State employer.
58
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
The State of Montana also has a funding situation that is not Special Funding whereby the State General Fund provides
contributions from the Coal Tax Severance fund. All employers are required to report the portion of Coal Tax Severance income
and earnings attributable to the employer.
The Total Pension Liability (TPL) used to calculate the NPL was determined by an actuarial valuation as of June 30, 2014, with
update procedures to roll forward the TPL to the measurement date of June 30, 2015. For most employers, their June 30, 2016
reporting will use the 2016 reporting values presented in these notes.
Percent of
Percent of
As of
Net Pension
Net Pension
Collective
Collective
Change in
reporting
Liability as of
Liability as of
NPL as of
NPL as of
Percent of
date:
6/30/2016
6/30/2015
6/30/2016
6/30/2015
Collective NPL
Employer Proportionate
Share
$ 5,961,419
$ 5,437,857
0.426464%
0.436421%
-0.009957%
State of Montana
Proportionate Share
associated with the
Em to er
$ 73,226
$ 66 405
0.005238 %
0.005329%
0.000091
Total
$ 6,034,645
$ 5,504,262
0.431702%
0.441750%
0.010048%
The Table above displays the employer proportionate share of the NPL and the employer's proportion of NPL for June 30, 2015
and 2016. The employer's proportion of the NPL was based on the employer's contributions received by PERS during the
measurement period July 1, 2014, through June 30, 2015, relative to the total employer contributions received from all PERS'
participating employers.
As of the employer's reporting date the employer recorded a liability of $ 5,961,419
and the employer's proportionate share was 0.426464%
Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the
measurement of the TPL.
Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date.
Changes in proportionate share: Between the measurement date of the collective NPL and the employer's reporting date there
were no changes in proportion that may have an effect on the employer's proportionate share of the collective NPL.
Pension Expense
As of reporting date
Pension Expense as of
Pension Expense as of
6/30/2016
6/30/2015
Employees Proportionate Share of PERS
$ 350,160
$ 414,083
State of Montana Proportionate Share
associated with the Employer
$ 4,550
$ 4,999
Total
$ 354,710
1 $ 419,082
At June 30, 2016, the employer recognized its proportionate share of the PERS' Pension Expense of $354,710. The employer
also recognized grant revenue of $4,550 for the support provided by the State of Montana for the proportionate share of the
Pension Expense that is associated with the employer, and grant revenue of $143,068 from the Coal Tax Fund.
59
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Recognition of Deferred Inflows and Outflows
At June 30, 2016, the employer reported its proportionate share of PERS' deferred outflows of resources and deferred inflows
of resources related to PERS from the following sources:
Deferred Outflows of
Deferred Inflows of
Resources
Resources
Actual vs. Expected Experience
$
$ 36,067
Changes in Assumptions
$
$ -
Actual vs Expected Investment Earnings
$
$ 504,697
Changes in Proportion Share and
Differences between Employer
Contributions and Proportionate Share of
Contributions
$ -
$ 118,177
Employer Contributions subsequent to the
measurement date - FY2016 Contributions
$ 444,584
Total
$ 444,584
$ 658,941
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 NPL beginning in the year ended June 30, 2017.
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension
Expense as follows:
For the Reporting Year ended June 30:
Amount of deferred outflows and deferred inflows
recognized in future years as an increase or (decrease) to
Pension Expense
2017
$ 263,453
2018
$ 263,453
2019
$ 263,298
2020
$ 131,262
2021
$
Thereafter
$
Plan Description (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 participants of
both the defined benefit and defined contribution 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).
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.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Summary of Benefits
Eligibility for benefit
Service retirement:
Hired prior to July 1, 2011: Age 60, 5 years of membership service;
Age 65, regardless of membership service; or
Any age, 30 years of membership service.
Hired on or after July 1, 2011: Age 65, 5 years of membership service;
Age 70, regardless of membership service.
Early retirement, actuarially reduced:
Hired prior to July 1, 2011: Age 50, 5 years of membership service; or
Any age, 25 years of membership service.
Hired on or after July 1, 2011: Age 55, 5 years of membership service.
Vesting
5 years of membership service
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
Compensation Cap
Hired on or after July 1, 2013 — 110% annual cap on compensation considered as part of a member's highest average
compensation.
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.
61
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Guaranteed Annual Benefit Adjustment (GABA)x
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.
3% for members hired prior to July 1, 2007
• 1.5% for members hired on or after July 1, 2007 and June 30, 2013
Members hired on or after July 1, 2013:
a) 1.5% for each year PERS is funded at or above 90%;
b) 1.5% is reduced by 0.1 % for each 2% PERS is funded below 90%; and
c) 0% whenever the amortization period for PERS is 40 years or more.
Overview of Contributions
Rates are specified by state law for periodic member and employer contributions and are a percentage of the member's
compensation. Contributions are deducted from each member's salary and remitted by participating employers. The State
legislature has the authority to establish and amend contribution rates to the plan. Member and employer contribution rates are
shown in the table below.
1. Member contributions to the system of 7.9% are 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. Effective July 1, 2014, following the 2013 Legislative Session, PERS-employer contributions increase an additional
0.1 % a year and will continue over 10 years through 2024. The additional employer contributions including the
0.27% added in 2007 and 2009, will terminate on January I following an actuary valuation that shows the
amortization period of the PERS-DBRP has dropped below 25 years and remains below the 25 years following the
reduction of both the additional employer and member contributions rates.
b. Effective July 1, 2013, employers are required to make contributions on working retirees' compensation. Member
contributions for working retirees are not required.
c. The portion of employer contributions allocated to the PCR are included in the employers reporting. The PCR was
paid oft' effective March 2016 and the contributions previously directed to the PCR are now directed to member
accounts.
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 a portion of Coal Severance Tax income and earnings from the Coal
Trust Permanent Trust fund.
62
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
State &
Fiscal
Universities
Local Government
School Districts
Year
Member
Employer
Employer State
Employer
State
Hired Hired
<7/01/11 >7/01/11
2016
7.9 %
7.9 %
8.370 %
8.270 %
0.10 %
8.00 %
0.370 %
2015
7.9 %
7.9 %
8.270 %
8.170%
0.10 %
7.90 %
0.370 %
2014
7.9 %
7.9 %
8.170 %
8.070 %
0.10 %
7.80 %
0.370 %
2012-2013
6.9 %
7.9 %
7.170 %
7.070 %
0.10 %
6.80 %
0.370 %
2010-2011
6.9 %
7.170 %
7.070 %
0.10 %
6.80 %
0.370 %
2008-2009
6.9 %
7.035 %
6.935 %
0.10 %
6.80 %
0.235 %
2000-2007
6.9 %
6.900 %
6.800 %
0.10 %
6.80 %
0.100 %
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/actuarialValuations.asl2
Actuarial Assumptions
The TPL used to calculate the NPL was determined by an actuarial valuation as of June 30, 2014, with update procedures to
roll forward the TPL to June 30, 2015. There were several significant assumptions and other inputs used to measure the TPL.
The actuarial assumptions used in the June 30, 2015 valuation were based on the results of the last actuarial experience study,
dated June 2010 for the six year period July 1, 2003 to June 30, 2009. Among those assumptions were the following:
Investment Return (net of admin expense) 7.75 %
Admin Expense as °% of Payroll 0.27%
General Wage Growth' 4%
'includes Inflation at 3%
Merit Increases 0°% to 6%
Post Retirement Increases
Guaranteed Annual Benefit Adjustment (GABA)
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 members' benefit.
3% for members hired prior to July 1, 2007
1.5% for members hired between July 1, 2007 and June 30, 2013
Members hired on or after July 1, 2013
a) 1.5% for each year PERS is funded at or above 90%;
b) 1.5% is reduced by 0.1 % for each 2% PERS is funded below 90%; and
c) 0% whenever the amortization period for PERS is 40 years or more.
Mortality assumptions among contributing members, terminated vested members, service retired members and beneficiaries
are 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.
63
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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 2123. 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. A municipal bond rate was not incorporated in the discount rate.
Target Allocations
The long-term expected return on pension plan assets is reviewed as part of the regular experience study prepared for the
System. The most recent analysis, performed for the period of fiscal years 2003 through 2009, is outlined in a report dated
June 2010 and is located on the MPERA website. Several factors are considered in evaluating the long term rate of return
assumption. These factors include rates of return adopted by similar public sector systems, as well as the utilization of 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 an 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. Summarized in the table below
are best estimates of the arithmetic real rates of return for each major asset class included in the System's target asset
allocation as of June 30, 2015.
Asset Class
Target Asset Allocation
Long -Term Expected Real
Rate of Return
Cash Equivalents
2.00 %
-0.25
Domestic Equity
36.00 %
4.55
Foreign Equity
18.00%
6.10
Fixed Income
24.00 %
1.25
Private Equity
12.00%
8.00%
Real Estate
8.00 %
4.25
Sensitivity Analysis
1.0% Decrease
Current Discount
1.0%Increase
6.75%
Rate
8.75%
Employer's Net
Pension Liability
$9,191,218
1 $5,961,419
$3,233,928
The above table presents the NPL calculated using the discount rate of 7.75% as well as what the NPL would be if it were
calculated using a discount rate that is 1% lower or 1% higher 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.
64
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
MUNICIPAL POLICE OFFICERS' RETIREMENT SYSTEM
Pension Amount Totals
GASB Statement 68, Paragraph 74 requires that when employees are provided benefits through more than one pension
system, whether provided through cost -sharing, single -employer or agent pension plans, the employer must combine the
amounts reported as a total or aggregate for all pensions.
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). GASB Statement 68, which became effective June 30, 2015, includes requirements for employers to record and
report their proportionate share of the collective Net Pension Liability (NPL), Pension Expense, and Deferred Inflows and
Deferred Outflows of resources associated with pensions.
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, the State is required to report a
proportionate share of a local government' collective NPL that is associated with the non -State employer.
The Total Pension Liability (TPL) used to calculate the NPL was determined by an actuarial valuation as of June 30, 2014,
with update procedures to roll forward the TPL to the measurement date of June 30, 2015. For most employers, their June 30,
2016 reporting will use the 2016 reporting values presented in these notes.
Percent of
Percent of
Change in
Net Pension
Net Pension
Collective
Collective
Percent of
Liability as of
Liability as of
NPL as of
NPL as of
Collective
As of reporting date:
6/30/2016
6/30/2015
6/30/2016
6/30/2015
NPL
Employer Proportionate
Share
$ 2,523,431
$ 2,359,962
1.525462 %
1.501860%
0.023602 %
State of Montana
Proportionate Share
associated with the
er
$ 5,112,710
$ 4,767,405
09073211,
3.03938%
TEmlo
$ 7,636,141
$ 7,127,3
535798
.01714%
00.0396%
The Table above displays the employer proportionate share of the NPL and the employer's proportion of NPL for June 30,
2015 and 2016. The employer's proportion of the NPL was based on the employer's contributions received by MPORS
during the measurement period July 1, 2014, through June 30, 2015, relative to the total employer contributions received from
all MPORS' participating employers.
As of the employer's reporting date the employer recorded a liability of $2,523,431, and the employer's proportionate share
was 1.525462%.
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.
65
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Changes in proportionate share: Between the measurement date of the collective NPL and the employer's reporting date there
were no changes in proportion that may have an effect on the employer's proportionate share of the collective NPL.
Pension Expense
As of reporting date
Pension Expense as of
Pension Expense as of
6/30/2016
6130/2015
Employer's Proportionate Share of MPORS
$ 266,393
$ 253,850
State of Montana Proportionate Share
associated with the Employer
$ 519,978
$ 512,806
Total
$ 786,371
$ 766,656
At June 30, 2016, the employer recognized its proportionate share of the MPORS' Pension Expense of$786,371. The employer
also recognized grant revenue of $519,978 for the support provided by the State of Montana for the proportionate share of the
Pension Expense that is associated with the employer.
Recognition of Deferred Inflows and Outflows
At June 30, 2016, 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 of
Resources
Deferred Inflows of
Resources
Actual vs. Expected Experience
$
$
23,046
Changes in Assumptions
$
$
Actual vs Expected Investment Earnings
$
$
94,800
Changes in Proportion Share and Differences
between Employer Contributions and
Pro ortionate are of Contributions
Employer Contributions subsequent to the
measurement date - FY2016 Contributions
$ 324,684
Total
$ 355,914
$
117,846
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 NPL beginning in the year ended June 30, 2017.
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension Expense
as follows:
For the Reporting Year ended June 30:
Amount of deferred outflows and deferred inflows
recognized in future years as an increase or
(decrease) to Pension Expense
2017
$ 39,365
2018
$ (39,365)
2019
$ 39,365
2020
$ 31,480
2021
Thereafter
••
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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 established in 1974 and governed by
Title 19, chapters 2 & 9, MCA. This plan provides retirement benefits to 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.
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 only participate in the DROP 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 date as 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.
The balance held by MPERA for MPORS DROP participants as of June 30, 2016, was approximately $7 million.
Summary of Benefits
Eligibility for benefit
20 years of membership service, regardless of age.
Age 50, 5 years of membership service.
Vesting
Death and disability rights are vested immediately
5 years of membership service for all other rights
Member's highest average compensation (HAC)
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.
Compensation Cap
Hired on or after July 1, 2013 — 1 10% annual cap on compensation considered as part of a member's highest average
compensation.
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.
67
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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 1/2 the compensation of a newly confirmed officer in the city that the member was last employed.
Overview of Contributions
Rates are specified by state law for periodic member and employer contributions and are a percentage of the member's
compensation. Contributions are deducted from each member's salary and remitted by participating employers. The State
legislature has the authority to establish and amend contribution rates to the plan. Member and employer contribution rates are
shown in the table below.
Member
Hired
Hired
>6/30/97
Fiscal Year
<7/1/75
Hired >6/30/75
Hired >6/30f79 GABA
Employer State
2000-2016
5.80 %
7.00 %
8.50 % 9.00 %
14.41 % 29.37 %
1998-1999
7.80 %
9.00 %
10.50 % 11.00 %
14.41 % 29.37 %
1997
7.80 %
9.00 %
10.50 %
14.36 % 29.37 %
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
http://mpera.mt.gov/actuarialValuations.asp
Actuarial Assumptions
The TPL used to calculate the NPL was determined by an actuarial valuation as of June 30, 2014, with update procedures to
roll forward the TPL to June 30, 2015. There were several significant assumptions and other inputs used to measure the TPL.
The actuarial assumptions used in the June 30, 2015 valuation were based on the results of the last actuarial experience study,
dated June 2010 for the six year period July 1, 2003 to June 30, 2009. Among those assumptions were the following:
Investment Return (net of admin expense) 7.75%
Admin Expense as % of Payroll 0.20%
General Wage Growth' 4.00%
'includes Inflation at 3.00%
Merit Increases 0%to 7.3%
Post Retirement Increases
i. 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.
ii. Minimum Benefit Adjustment (non-GABA)
If hired before July 1, 1997 and member did not elect GABA - the monthly retirement, disability or survivors
benefit may not be less than the compensation of a newly confirmed officer in the city that the member was last
employed.
z
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Mortality assumptions among contributing members, terminated vested members, service retired members and beneficiaries
are 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 2123. 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. A municipal bond rate was not
incorporated in the discount rate.
Target Allocations
Asset Class
Target Asset Allocation
Long -Term Expected
Real Rate of Return
Cash Equivalents
2.00%
-0.25%
Domestic Equity
36.00 %
4.55
Foreign Equity
18.00 %
6.10
Fixed Income
24.00 %
1.25
Private Equity
12.00 %
8.00
Real Estate
8.00 %
4.25
The long-term expected return on pension plan assets is reviewed as part of the regular experience study prepared for the
System. The most recent analysis, performed for the period of fiscal years 2003 through 2009, is outlined in a report dated
June 2010 and is located on the MPERA website. Several factors are considered in evaluating the long-term rate of return
assumption. These factors include rates of return adopted by similar public sector systems, as well as the utilization of 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 an 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.
Summarized in the table above are best estimates of the arithmetic real rates of return for each major asset class included in the
System's target asset allocation as of June 30, 2015.
Sensitivity Analysis
1.0% Decrease
Current Discount
1.0% Increase
6.75 %
Rate
8.75
Employer's Net Pension
Liability
$3,562,700
$2,523,431
$1,600,819
The above table presents the NPL calculated using the discount rate of 7.75% as well as what the NPL would be if it were
calculated using a discount rate that is 1% lower or 1% higher than the current rate.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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.
FIREFIGHTERS' UNIFIED RETIREMENT SYSTEM
Pension Amount Totals
GASB Statement 68, Paragraph 74 requires that when employees are provided benefits through more than one pension
system, whether provided through cost -sharing, single -employer or agent pension plans, the employer must combine the
amounts reported as a total or aggregate for all pensions.
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, which became effective June 30, 2015, includes requirements for employers to record and report their
proportionate share of the collective Net Pension Liability (NPL), Pension Expense, and Deferred Inflows and Deferred
Outflows of resources associated with pensions.
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, the State is required to report a
proportionate share of a local government's collective NPL that is associated with the non -State employer.
The Total Pension Liability (TPL) used to calculate the NPL was determined by an actuarial valuation as of June 30, 2014,
with update procedures to roll forward the TPL to the measurement date of June 30, 2015. For most employers, their June 30,
2016 rertortinii will use the 2016 reporting values presented in these notes.
Percent of
Percent o
Net Pension
Net Pension
Collective
Collective
Change in
Liability as of
liability as of
NPL as of
NPL as of
Percent of
As of reporting date:
6/30/2016
6/30/2015
6/30/2016
6/30/2015
Collective NPL
Employer Proportionate
Share
S 1,451,892
S 1.394,256
1.419569%
1.428298%
-0.008729%
State of Montana
Proportionate Share
associated with the
Em to er
$ 3233.749
8 3,145,374
3.161757%
3.222172%
-0.060415%
Total
$ 4.685.641
$ 4,539%11
4 111326%
4.650470%
-0.069144
The Table above displays the employer proportionate share of the NPL and the employer's proportion of NPL for June 30,
2015 and 2016. The employer's proportion of the NPL was based on the employer's contributions received by FURS during
the measurement period July 1, 2014, through June 30, 2015, relative to the total employer contributions received from all
FURS' participating employers.
As of the employer's reporting date the employer recorded a liability of $1,451,892 and the employer's proportionate share
was 1.419569%.
70
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the
measurement of the TPL.
Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date.
Changes in proportionate share: Between the measurement date of the collective NPL and the employer's reporting date there
were no changes in proportion that may have an effect on the employer's proportionate share of the collective NPL.
Pension Expense
As of reporting date
Pension Expense as of
Pension Expense as of
6/30/2016
6/30/2016
Employees Proportionate Share of FURS
$ 158,144
$ 154,778
State of Montana Proportionate Share
associated with the Employer
$ 350,098
$ 349,172
Total
$ 508,242
$ 503,950
At June 30, 2016, the employer recognized its proportionate share of the FURS' Pension Expense of $508,242 The employer also
recognized grant revenue of $350,098 for the support provided by the State of Montana for the proportionate share of the Pension
Expense that is associated with the employer. (Two years of pension expense are documented in the above table but are not
necessary for the employer's disclosures.)
Recognition of Deferred Inflows and Outflows
At June 30, 2016, 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
Actual vs. Expected Experience
$
$ 1,892
Changes in Assumptions
$
$
Actual vs Expected Investment Earnings
$
$ 87,761
Changes in Proportion Share and
Differences between Employer
Contributions and Proportionate Share of
Contributions
$
$ 8,512
Employer Contributions subsequent to the
measurement date - FY2016 Contributions
$ 281,160
Total
$ 281,160
$ 98,165
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 NPL beginning in the year ended June 30, 2017.
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension Expense
as follows:
For the Reporting Year ended June 30:
Amount of deferred outflows and deferred inflows
recognized in future years as an increase or (decrease) to
Pension Expense
2017
$
41,223
2018
$
41,223
2019
$
41,223
2020
$
27,586
2021
$
2,081
Thereafter
$
-
71
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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 plan 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.
Summary of Benefits
Eligibility for benefit
20 years of membership service, regardless of age.
Age 50, 5 years of membership service.
Vesting
Death and disability rights are vested immediately.
5 years of membership service for all other rights.
Member's highest average compensation (HAC)
Hired prior to July 1, 1981 and not electing GABA - highest monthly compensation (HMC)
Hired on or after June 30, 1981 and those electing GABA — highest average compensation (HAC) during
any consecutive 36 months.
Compensation Cap
Hired on or after July 1, 2013 — 110% annual cap on compensation considered as part of a member's
highest average compensation.
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
2) 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 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 firefighter employed by the city that last employed the member
(provided the member has at least 10 years of membership service).
72
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Overview of Contributions
Rates are specified by state law for periodic member and employer contributions and are a percentage of the member's
compensation. Contributions are deducted from each member's salary and remitted by participating employers. The State
legislature has the authority to establish and amend contribution rates to the plan. Member and employer contribution rates are
shown in the table below.
Member
Fiscal Year Non-GABA GABA Employer State
1998 - 2016 9.50 % 10.70 % 14.36 % 32.61
1997 7.80 % 14.36 % 32.61
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 financial
our stand alone statements can be found on our web site at
http://mpera.mt.gov/annualReports.shtmI
The latest actuarial valuation and experience study can be found at our website at
http://mpera.mt.gov/actuarialValuations.asp
Actuarial Assumptions
The TPL used to calculate the NPL was determined by an actuarial valuation as of June 30, 2014, with update procedures to
roll forward the TPL to June 30, 2015. There were several significant assumptions and other inputs used to measure the TPL.
The actuarial assumptions used in the June 30, 2015 valuation were based on the results of the last actuarial experience study,
dated June 2010 for the six year period July 1, 2003 to June 30, 2009. Among those assumptions were the following:
Investment Return (net of admin expense) 7.75%
Admin Expense as % of Payroll 0.19
General Wage Growth* 4.00%
*includes Inflation at 3.00
Merit Increases 0 % to 7.3
Post Retirement Increases
i. Guaranteed Annual Benefit Adjustment (GABA)
Members 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.
ii. Minimum Benefit Adjustment (non-GABA)
Members hired before July 1, 1997 and member did not elect GABA - the monthly retirement, disability or
survivor's benefit may not be less than 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).
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.
73
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Discount Rate
The discount rate used to measure the TPL 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 the Montana Code Annotated.
The State contributes 32.61 % of salaries 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
2123. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected
benefit payments to determine the TPL. A municipal bond rate was not incorporated in the discount rate.
Target Allocations
Asset Class
Target Asset Allocation
Long -Term Expected Real Rate
of Return
Cash Equivalents
2.00%
-0.25
Domestic Equity
36.00 %
4.55%
Foreign Equity
18.00%
6.10%
Fixed Income
24.00%
1.25%
Private Equity
12.00%
8.00%
Real Estate
8.00%
4.25
The long-term expected return on pension plan assets is reviewed as part of the regular experience study prepared for the
System. The most recent analysis, performed for the period of fiscal years 2003 through 2009, is outlined in a report dated
June 2010 and is located on the MPERA website. Several factors are considered in evaluating the long-term rate of return
assumption. These factors include rates of return adopted by similar public sector systems, as well as the utilization of 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 an 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 ►ong 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. Summarized in the table above
are best estimates of the arithmetic real rates of return for each major asset class included in the System's target asset
allocation as of June 30, 2015.
Sensitivity Analysis
1.0% Decrease
Current Discount
1.0% Increase
6.75 %
Rate
8.75
Employer's Net Pension
Liability
$ 2,342,258
$ 1,451,892
$ 726,311
The above table presents the NPL calculated using the discount rate of 7.75% as well as what the NPL would be if it were
calculated using a discount rate that is 1 % lower or I % higher 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
74
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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.
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 FY2016, the City of Kalispell has recorded other post employment benefits in the governmental funds. This recording
resulted in an expense of $246,894 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
($29,392), and sewer fund ($17,635).
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 $421 and $1,779 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, 2016, the City has 14 retired members receiving benefits.
75
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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.
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 $77,947
Adjustment to the Annual Required Contribution-$106,545
Annual OPEB Cost $293,921
Contributions made (implicit) $0
Increase in net OPEB obligation $293,921
Net OPEB obligation - beginning of year $1,816,949
Net OPEB obligation - end of year $2,110,870
The June 30, 2016 year-end OPEB obligation is reported in the City's funds as follows:
Functions/Programs Expenses
Primary Government:
Governmental activities:
General government $246,894
Total governmental activities 246,894
Business -type activities:
Water
Sewer
Total primary government
29,392
17,635
Total business -type activities 47,027
$293,921
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
Unfunded
AAL (UAAL)
a - b
Funded Ratio a / b
Covered
Payroll c
UAAL as a
Percentage of
Covered Payroll
a - b / c
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
1 $ 2,623,748
1 0.0%
$ 10,299,726
25.5%
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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
Participant Information
Active participants:
Retirees, Dependents, and Surviving Spouses:
Total
Fiscal
Fiscal
Fiscal
2014
2015
2016
N/A
$2,000,936
N/A
N/A
$ 622,812
N/A
N/A
$2.623,748
N/A
N/A
$ 165,159
N/A
$ 314,531
$ 298,622
$ 293,922
$ 61,533
$ -
$ -
20%
0%
0 %
$1,518,327
$1,816,949
$2,110,870
N/A
178
N/A
N/A
14
N/A
N/A
192
N/A
The following key assumptions were chosen by the City:
I. 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.
77
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
H. Amounts Due From/To other Governments
On June 30, 2016, the amounts due from other governments consisted of the following:
General Fund
Amount
Debt Service Funds Amount
Due from:
Due from:
Flathead County -Taxes
$
472,804
Flathead County -Taxes $ 80,535
State of Montana -License Fees
$
1,300
Total Governmental Funds $ 982,209
Sub Total $
474,104
Enterprise Funds Amount
Special Revenue Funds
Amount
Due from:
Due from:
Flathead County -Taxes $ 146,094
Flathead County -Taxes
$
381,913
Total Business -type Funds $ 1 66,094
Flathead County Sheriff Dept.
$
9,209
Kalispell School District #5
$
1,197
Total City of Kalispell $ 1,128,303
State of Montana-MDOT
$
13,655
U.S. Department of Justice
$
21,596
Sub Total $
427,570
I. Restricted Cash/Investments
The following restricted cash/investments were held as of June 30, 2016. These amounts are reported within the cash/investment
account on the Combined Balance Sheet.
RESTRICTED CASH:
Bu�cFtype 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
Public Safety Growth related Capital (1)
Urban Forestry
Developers (4)
Debt Service
Airport TIF 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 cash/investments
Total restricted cash/investments
July 1, 2015 Additions Subtractions June 30, 2016
$ 358,400 $ - $ (105,494) 252,906
910,706 404,466 (252,002) 1,063,170
190,000 - - 190,000
1,109,313 - (142,582) 966,731
1,646,778 851,543 (630,477) 1,867,844
463,469 374,750 (366,841) 471,378
1,160,924 259,761 (82,746) 1,337,939
1,221,608 437,002 (209,810) 1,448,800
7,061,198 2,327,522 (1,789,952) 7,598,768
474,428
172,103
(70,369)
576,162
94,052
9,380
(1,983)
101,449
61,061
83,439
144,500
56,316
1,479
57,795
11,172
11,172
226,000
-
226,000
12,100
12,100
935,129
266,401
(72,352)
1,129,178
$ 7,996,327 $
2,593,923 $
(1,862,304) $
8,727, 446
(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).
78
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
J. Restatements
During the 2016 fiscal year, the following adjustments relating to prior years' transactions were made to fund balance or net
position accounts.
Fund
General Fund - Major Gov'tal
CD Loan Revolving
Subtotal - Governmental Fund Financials
Total Statement of Activities - Gov'tal Funds
Amount
$ (2,927)
$ (30,997)
$ (33,924)
$ (33,924)
Reason
Prior period revenues overstated - bandshell refund
Prior period revenues overstated - loan stipulation
Sewer Fund - Major Proprietary $ (82,747) Prior period revenues overstated - impact fees overcharged
Total Proprietary funds/Business-type activities $ (82,747)
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.
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.
79
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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 $281,715 for Workers' Compensation to
finance the necessary insurance reserves. Based on the plan's current financial position, the City doesn't expect to make any
payment on these notes. Separate financial statements are available from the Montana Municipal Insurance Authority.
On October 1, 2004, Kalispell signed a 5 year agreement with many other Montana Cities, since then extended, and through
the Montana Municipal Insurance Authority, to create a state wide health insurance pool. The City pays the total monthly
premium for employees who only choose to cover themselves. For employees who choose to cover additional dependents, the
City pays a percentage of the extra costs.
N. Pending Litigation
The following is a list of litigation pending against the City and the amount of damages claimed by the Plaintiff. The City
Attorney has made no evaluation as to the outcome of each case. The City has liability insurance that may cover all or part of
the damages. Accordingly, no provision has been made in the financial statements for these contingent liabilities.
Litigant
Burke
Challinor
James Cossitt
Ryan Pengally
McKeag Johns
Damages Loss
Requested Potential
unspecified unknown
unspecified unknown
unspecified none
unspecified unknown
unspecified unknown
Status
Litigation ongoing
Filed
Litigation ongoing
Not filed
Not filed
.E$
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
O. Receivables
Taxes Receivable
The following governmental funds had taxes receivable at June 30, 2016
FUND
Source
Amount
General - Major Governmental
Taxes
$ 220,245
Westside TIF
Taxes
(14,134)
Parks
Taxes
31,449
Old School "Tech" TIF
Taxes
16,134
Old School "Ind" TIF
Taxes
20,377
Health Levy
Taxes
33,825
Light District
Taxes
14,538
Street Maintenance - Major Governmental
Taxes
78,279
Forestry
Taxes
7,044
G.O. Bonds
Taxes
18,717
Airport TIF debt service
Taxes
49,678
SID 344 - Major Governmental
Taxes
2,258,860
SID 345
Taxes
217,315
S & C's
Taxes
44,048
SID 343
Taxes
359,765
Total Governmental Funds
$ 3,356,140
Accounts Receivable
At June 30, 2016, the Ambulance fund had accounts receivable deferred net of $195,023. Total net accounts receivable of the
Ambulance fund is $198,368. 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
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 $1,880 recorded as housing rehab loans receivable as of June 30, 2016, in the Community Development Loan
Revolving Fund.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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"d Avenue West Partners, L.P.
(Hampstead Partners) for property on 2"d Avenue West in Kalispell. The property consists of a 40-unit low-income apartment
complex known as 2"d 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, 2016, is $66,855, and $351,457,
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, 2016 balance $ 226,987
A 15 year loan at 6% to AGAPE Home Care in May 2009.
Original Loan amount $ 42,500
June 30, 2016 balance $ 20,332
A 10 year loan at 3% to Norm's News in January 2013.
Original Loan amount $ 50,000
June 30, 2016 balance $ 25,739
A 10 year loan at 3% to Smith/Red & Black in May 2013.
Original Loan amount $ 50,000
June 30, 2016 balance $ 35,725
A 10 year loan at 3% to Wheaton's in April 2014.
Original Loan amount $ 41,500
June 30, 2016 balance $ 34,416
A 10 year loan at 3% to Sail MT & Ameriprise in April 2015.
Original Loan amount $ 17,000
June 30, 2016 balance $ 15,176
M.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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, 2016 balance $ 56,823
A 15 year loan at 6.5% to Distinctive Countertops in July 2006.
Original Loan amount $ 175,000
June 30, 2016 balance $ 137,269
A 10 year loan at 7% to Crossroads Realty in June 2007.
Original Loan amount $ 150,000
June 30, 2016 balance $ 100,446
A 7 year loan at 7% to Unfinished Furniture Creations in April 2006.
Original Loan amount $ 50,000
June 30, 2016 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, 2016 balance $ 23,150
A 10 year loan at 5.29% to Parkman Properties, LLC (The Edge Salon), in February 2012.
Original Loan amount $ 77,000
June 30, 2016 balance $ 48,537
A 10 year loan at 3% to Whipps, LLC in December 2011.
Original Loan amount $ 50,000
June 30, 2016 balance $ 28,679
A 10 year loan at 3% to Bill and Jana Goodman in June 2013.
Original Loan amount $ 34,660
June 30, 2016 balance $ 22,306
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
A 15 year loan at 6% to Tree Frog Tavern in July 2013.
Original Loan amount $ 50,000
June 30, 2016 balance $ 43,543
A 15 year loan at 6% to Tiebuckers, Inc. in July 2013.
Original Loan amount $ 50,000
June 30, 2016 balance $ 43,543
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, 2016 balance $ 29,494
SUMMARY COMMUNITY DEVELOPMENT LOANS RECEIVABLE
From
To
Amount Purpose
UDAG - Major Governmental
Big Sky Manor
29,494 Urban Dev. Assistance
Subtotal Major Fund
29,494
CD Loan Revolving - Major Governmental
Various
$ 1,880 Housing Rehab
Distinctive Countertops
226,987 Jobs
AGAPE Home Care
20,332 Jobs
Norm's News
25,739 Jobs
Smith/Red & Black
35,725 Jobs
Wheatons
34,416 Jobs
Sail MT & Ameriprise
15,176 Jobs
Hampstead Partners*
880,000 Low Income Housing
Hampstead Partners - Interest Portion*
418,312 Low Income Housing
Rural Development Loan Revolving
Flathead Health and Fitness
56,823 Small Business
Distinctive Countertops
137,269 Small Business
Crossroads Realty
100,446 Small Business
Unfinished Furniture - Bott/Thomas
6,900 Small Business
Glacier Valley Endodontics, Inc
23,150 Small Business
Parkman Properties, LLC
48,537 Small Business
Whipps, LLC
28,679 Small Business
Bill and Jana Goodman
22,306 Small Business
Tree Frog Tavern
43,543 Small Business
Tiebuckers, Inc.
43,543 Small Business
Subtotal Other Governmental Funds
2,169,763
Total Governmental Funds
$ 2,199,257
*Long Term Loans Receivable - Matures 2032
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, 2016, amounted to $2,366,488.
O.
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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, and a new agreement was entered into
on July 1, 2015.
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. The City bills the District, monthly, a base charge of $5.55 per account. The City
also bills for maintenance and operation and replacement costs per the agreement based on metered flows, $2.55 per metered
gallon in fiscal year 2016. 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.
R. Fund Balance Classification by Major Purposes
The table presented below displays the City's fund balances by major purpose as displayed on page 29 of the governmental funds
balance sheet.
Other
Total
General
Street CD
SID Governmental
Governmental
Fund
Maint. Misc.
344 Funds
Funds
Nonspendable - not in spendable form
Lang -term recievables
6,023
- -
- -
6,023
Prepaids
211,093
38,820 3,643
27,804
281,360
Total nonspendable
217,116
38,820 3,643
27,804
287,383
Restricted
General Government -Health Insurance
-
- -
- 53,147
53,147
Public Safety-
-
- -
- 7,386
7,386
Public Safety -EMS
-
- -
- 219,093
219,093
Public Safety -Building Inspection
-
- -
- 718,609
718,609
Public Safety -Fire impact fees
-
- -
- 505,267
505,267
Public Safety -Police impact fees
70,879
70,879
Public Safety -Police grants
-
- -
- 16,157
16,157
Public Safety -Fire grants
-
- -
- 46,979
46,979
Public Works-
-
1,908,577 -
- 21,006
1,929,583
Public Works -Lighting District
-
- -
- 174,517
174,517
Public Works -Gas Tax
-
- -
- 458,050
458,050
Culture and Recreation-
-
- -
- 351,133
351,133
Culture and Recreation -Park improvements
-
- -
- 1,402
1,402
Culture and Recreation -Equipment
-
- -
- 49,905
49,905
Culture and Recreation -Programs
-
- -
- 246,000
246,000
Culture and Recreation -Urban forestry
-
- -
- 250,534
250,534
Community Development-
-
- 237,779
- -
237,779
Community Development -Old School Statior
-
- 234,930
- 22,159
257,089
Community Development -South Kalispell TIF
-
- -
- 1,413,508
1,413,508
Community Development-Westside TIF
-
- -
- 3,946,859
3,946,859
Community Development -Revolving loan fur
-
- -
- 3,095,777
3,095,777
Debt Service-SID
-
- -
404,038 371,921
775,959
Debt Services & C warrants
-
- -
- 426
426
Debt Service-G.O. Bands
-
- -
- 38,026
38,026
Debt Service -Capital
-
- -
- 7,641
7,641
Debt Service-TIF
243,396
243,396
Total restricted
1,908,577 472,709
404,038 12,329,777
15,115,101
Assigned
Capital Equipment
101,905
- -
- -
101,906
Parking
23,542
- -
- -
23,542
Miscellaneous
99,624
99,624
Total assigned
225,072
225,072
Unassigned
3,242,167
3,242,167
Total net position
3,684,355
1,947,397 476,352
404,038 12,357,581
18,869,723
85
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
S. Subsequent Events
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. The City expects to begin making draws from this award in the spring of 2017.
CITY OF KALISPELL
SCHEDULE OF FUNDING PROGRESS - OTHER POST -EMPLOYMENT HEALTHCARE BENEFITS
Fiscal Year Ended June 30, 2016
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
87
CITY OF KALISPELL
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
Fiscal Year Ended June 30, 2016
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 2016 2015 2016 2015 2016
PERS MPORS FURS
City's proportion of the net pension
liability (asset) 0.436421 % 0.426464% 1.501860% 1.525462% 1.428298% 1.419569%
City's proportionate share of the net
pension liabiltiy (asset). $5,437,857 $5,961,419 $2,359,962 $2,523,431 $1,394,256 $1,451,892
State of Montana's proportionate share
of the Net Pension Liability associated
with the Employer $66,405 $73,226 $4,767,405 $5,112,710 $3,145,374 $3,233,749
Total
$5,504,262
$6,034,645
$7,127,367
$7,636,141
$4,539,630
$4,685,641
City's covered -employee payroll
$4,940,282
$4,976,919
$2,015,102
$2,111,268
$1,855,316
$1,907,689
City's proportionate share of the net
pension liability (asset) as a percentage
of its covered -employee payroll
110.07%
119.78%
117.11 %
119.52%
75.15%
76.11 %
Plan fiduciary net position as a
percentage of the total pension liability
79.87%
78.40%
67.01 %
66.90%
76.71 %
76.90%
See independent auditor's report
88
CITY OF KALISPELL
SCHEDULE OF CONTRIBUTIONS
Fiscal Year Ended June 30, 2016
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 2016 2015 2016 2015 2016
PERS MPORS FURS
Contractually required contributions $ 450,942 $ 444,584 $ 304,234 $ 324,683 $ 273,944 $ 281,160
Contributions in relation to the
contractually required contribution
Contribution deficiency (excess)
Employer's Pensionable Payroll
Contributions as a percentage of
covered payroll
450,942 444,584 304,234 324,683 273,944 281,160
$ 4,976,919 $ 5,167,438 $ 2,111,268 $ 2,213,762 $ 1,907,689 $ 1,966,524
9.06% 8.60% 14.41 % 14.67% 14.36% 14.30%
See independent auditor's report
89
RESOURCES (INFLOWS):
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Miscellaneous
Investment earnings
Amounts available for appropriation
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)
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2016
General Fund
BUDGETED AMOUNTS
ORIGINAL FINAL
ACTUAL
AMOUNTS VARIANCE
(BUDGETARY WITH FINAL
BASIS) See Note A BUDGET
$ 5,564,895
$
5,564,895
$ 5,526,215
$
(38,680)
85,350
85,350
80,963
(4,387)
4,129,228
4,129,228
4,088,345
(40,883)
788,136
788,136
800,715
12,579
565,000
565,000
495,347
(69,653)
28,250
28,250
8,641
(19,609)
23,250
23,250
30,773
7,523
$ 11,184,109
$
11,184,109
$ 11,030,999
$
(153,110)
$ 3,126,511
$
3,126,511
$ 2,991,835
$
134,676
7,875,406
7,875,406
7,737,211
138,195
40,638
40,638
40,131
507
62,165
62,165
60,972
1,193
16,673
16,673
16,673
-
208
208
103
105
149,700
149,700
139,442
10,258
$ 11,271,301
$
11,271,301
$ 10,986,367
$
284,934
Proceeds from the sale of general capital asset disposition
- -
1,463 1,463
Transfers in
850,000 850,000
850,000 -
Transfers out
(475,562) (475,562)
(475,562) -
Total other financing sources (uses) $
374,438 $ 374,438 $
375,901 $ 1,463
Net change in fund balance
$
420,533
Fund balance - beginning of the year
$
3,266,749
Restatements
(2,927)
Fund balance - beginning of the year - restated
$
3,263,822
Fund balance - end of the year
$
3,684,355
See independent auditor's report
90
RESOURCES (INFLOWS):
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Miscellaneous
Investment earnings
Amounts available for appropriation
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)
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2016
Street Maintenance
ACTUAL
AMOUNTS VARIANCE
BUDGETED AMOUNTS (BUDGETARY WITH FINAL
ORIGINAL FINAL BASIS) See Note A BUDGET
2,311,000
2,311,000
2,292,261
(18,739)
5,000
5,000
4,381
(619)
5,000
5,000
9,193
4,193
$ 2,321,000
$
2,321,000
$ 2,305,835
$
(15,165)
2,167,624
2,167,624
1,641,556
526,068
110,802
110,802
110,802
-
4,169
4,169
3,817
352
295,771
295,771
209,310
86,461
$ 2,578,366
$
2,578,366
$ 1,965,485
$
612,881
Proceeds from the sale of general capital asset disposition - - 88,389 88,389
Transfers in - - - -
Transfers out (9,982) (9,982) (9,982) -
Total other financing sources (uses) $ (9,982) $ (9,982) $ 78,407 $ 88,389
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
See independent auditors report
91
$ 418,757
$ 1,528,640
$ 1,528,640
$ 1,947,397
RESOURCES (INFLOWS):
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Miscellaneous
Investment earnings
Amounts available for appropriation
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)
Proceeds from the sale of general capital asset dispositior
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
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2016
CD Misc.
ACTUAL
AMOUNTS
VARIANCE
BUDGETED AMOUNTS
(BUDGETARY
WITH FINAL
ORIGINAL FINAL
BASIS) See Note A
BUDGET
30,000 30,000
-
(30,000)
9,822 9,822
1,540
(8,282)
$ 41,122 $ 41,122 $ 5,587 $ (35,535)
420,795 420,795 220,892
$ 420,795 $ 420,795 $ 220,892 $
70,000 70,000 70,000
$ 70,000 $ 70,000 $ 70,000 $
$ (145,305)
$ 621,657
$ 621,657
$ 476,352
See independent auditor's report
92
199,903
199,903
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2016
A. Pension Plans
Changes of benefit terms
Public Employees Retirement System (PERS,) The following changes to the plan provisions were made as identified:
2013 Legislative Changes:
Working retirees — House Bill 95 — PERS, and FURS, effective July 1, 2013
® The law requires employer contributions on working retiree compensation.
® Member contributions are not required.
® Working retiree limitations are not impacted. PERS working retirees may still work up to 960 hours a year, without
impacting benefits.
Highest Average Compensation HAC) Cap — House Bill 97, effective July 1, 2013
® All PERS members hired on or after July 1, 2013 are subject to a 110% annual cap on compensation considered as part
of a member's highest or final average compensation.
® All bonuses paid to PERS members on or after July 1, 2013 will not be treated as compensation for retirement purposes.
House Bill 454 — Permanent Injunction Limits Application of the GABA Reduction passed under HB454
Guaranteed Annual Benefit Adjustment (GABA)
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 all other adjustments to the member's benefit.
® 3% for members hired prior to July 1, 2007
® 1.5% for members hired on or after July 1, 2007 and before July 1, 2013
® Members hired on or after July 1, 2013
a. 1.5% each year PERS is funded at or above 90%;
b. 1.5% is reduced by 0.1 % for each 2% PERS is funded below 90%; and,
C. 0% whenever the amortization period for PERS is 40 years or more.
2015 Legislative Changes:
General Revisions — House Bill 101, effective January 1, 2016
Second Retirement Benefit
1) Applies to PERS members who return to active service on or after January 1, 2016. Members who retire before January
1, 2016, return to PERS-covered employment, and accumulate less than 2 years of service credit before retiring again:
® Refund of member's contributions from second employment plus regular interest (currently 0.25%);
® No service credit for second employment;
® Start same benefit amount the month following termination; and
® GABA starts again in the January immediately following second retirement.
2) For members who retire before January 1, 2016, return to PERS-covered employment and accumulate two or more
years of service credit before retiring again:
® Member receives a recalculated retirement benefit based on laws in effect at second retirement; and,
® GABA starts in the January after receiving recalculated benefit for 12 months.
See independent auditor's report
92-A
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2016
3) For members who retire on or after January 1, 2016, return to PERS-covered employment and accumulate less than 5
years of service credit before retiring again:
® Refund of member's contributions from second employment plus regular interest (currently 0.25%);
® No service credit for second employment;
® Start same benefit amount the month following termination; and,
® GABA starts again in the January immediately following second retirement.
4) For members who retire on or after January 1, 2016, return to PERS-covered employment and accumulate five or more
years of service credit before retiring again:
® Member receives same retirement benefit as prior to return to service;
® Member receives second retirement benefit for second period of service based on laws in effect at second
retirement; and,
® GABA starts on both benefits in January after member receives original and new benefit for 12 months.
Revise DC Funding Laws — House Bill 107, effective July 1, 2015
Employer Contributions and the Defined Contribution Plan — for PERS
The PCR was paid off effective March 2016 and the contributions of 2.37%, .47%, and 1.0% increase previously
directed to the PCR are now directed to the Defined Contribution member's account.
Montana Police Officers Retirement (MPORS)
The following changes to the plan provision were made as identified:
2013 Legislative Changes:
Highest Average Compensation (HAC Cap — House Bill 97, effective July 1, 2013
® All MPORS members hired on or after July 1, 2013 are subject to a 110% annual cap on compensation considered as
part of a member's highest or final average compensation.
® All bonuses paid to MPORS members on or after July 1, 2013 will not be treated as compensation for retirement
purposes.
2015 Legislative Changes:
General Revisions — House Bill 101, effective January 1, 2016
MPORS DROP Survivor Benefits — Allow statutory beneficiary (spouse or dependent child) of a deceased DROP
Participant to receive a DROP benefit and a survivorship benefit rather than accumulated contributions or a lump sum
payment. 19-9-1206(1), MCA.
Firefighters Unified Retirement (FURS)
The following changes to the plan provision were made as identified:
2013 Legislative Changes:
Working Retirees — House Bill 95
® Requires employer contributions on working retiree compensation.
® Member contributions are not required.
® Working retiree limitations are not impacted, FURS retirees may still work up to 480 hours a year, without returning to
active service.
See independent auditor's report
92-B
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2016
Highest Average Compensation (HAC) Cap— House Bill 97, effective July 1, 2013
® All FURS members hired on or after July 1, 2013 are subject to a 110% annual cap on compensation considered as part
of a member's highest or final average compensation.
® All bonuses paid to FURS members on or after July 1, 2013 will not be treated as compensation for retirement purposes.
Changes in Actuarial Assumptions and Methods — all plans
Method and assumptions used in calculations of actuarially determined contributions
The following changes were adopted in 2013 based on the 2013 Economic Experience study:
General wage growth* - 4.0%
*includes inflation at— 3.0%
Investment rate of return — 7.75%, net of pension plan investment expense, and including inflation
The following Actuarial Assumptions are from the June 2010 Experience Study:
General wage growth* - 4.25%
*includes inflation at 3.0%
Merit increase — 0% to 7.3%
Investment rate of return — 8.0%, net of pension plan investment expense, and including inflation
Asset valuation method — 4-year smoothed market
Actuarial cost method — Entry age
Amortization method — Level percentage of pay, open
The following additions to the actuarial assumptions were adopted in 2014 based upon implementation of GASB 68:
Administrative expense as percentage of payroll
PERS — 0.27%
MPORS — 0.2%
FURS — 0.19%
B. Budgetary Comparison Schedules
BUDGETED FUNDS
The City adopts an annual budget for all of its funds in accordance with Title 7, Chapter 6, Part 40 of the Montana Code Annotated.
Statute requires the adoption ofa preliminary budget, public hearings on the preliminary budget and the final adoption ofthe budget by the
first Thursday after the first Tuesday in September or within 30 calendar days ofthe receipt of the certified taxable valuations from the
Department of Revenue. The City must also submit a copy ofthe final budget to the Department of Administration by the later of October
1 or 60 days after the receipt oftaxable values from the Department of Revenue.
State statute limits the making of expenditures or incurring of obligations to the amount of the final budget as adopted or as amended.
Budget transfers and amendments are authorized by law, and in some instances, may require further public hearings. Any budget
amendments providing for additional appropriations must identify the fund reserves, unanticipated revenue, or previously
unbudgeted revenue that will fund the appropriations.
Appropriations are created by fund, function, and activity and may further be detailed by department. Expenditure limitations
imposed by law extend to the department level which is identified as the legal level of budgetary control.
See independent auditor's report
92-C
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2016
BUDGETARY BASIS
The City's budgets are prepared on the budgetary basis (modified accrual) of accounting, which results in accounting for certain funds,
proprietary and internal service, on a basis other than generally accepted accounting principles (full accrual). The City's accounting
records are maintained on the basis of cash receipts and disbursements during the year. At year-end, certain adjustments are made to
the City's accounting records to reflect the basis of accounting described above. Reported budget amounts represent the originally
adopted budget and the final budget, which includes amendments. Total fund expenditures may not legally exceed the budgeted
expenditures. The budget lapses at the end of each year. Results of operations, on the budget basis of accounting, are presented for
the general fund and major special revenue funds with legally adopted annual budgets, to provide a meaningful comparison of actual
results with the budget.
See independent auditor's report
92-D
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.
Forestry — 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.
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.
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.
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 #52 general obligation bonds.
City Hall Debt Service — Accounts for the debt service payments associated with the new
City Hall at 201 Is' 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 #345 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, 2016
OLDSCHOOL
AIRPORT TIF
WESTSIDE TIF
PARKS IN LIEU
PARKS
AMBULANCE
TIF (TECH)
ASSETS
Cash and investments
1,414,253
4,002,943
1,402
672,760
264,719
9,731
Taxes and assessments receivable, net
-
(14,134)
-
31,449
-
16,134
Accounts receivable- net
5,052
198,368
-
Notes and loans receivable
-
-
Due from other governments
73,277
-
Prepaids
11,691
11,310
Other debits
-
-
Restricted assets:
Restricted cash and investments
-
-
-
-
-
_
Total assets
1,414,253
3,988,809
1,402
794,229
474,397
25,865
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
-
54,570
-
33,030
13,235
-
Accrued payroll
745
1,514
71,021
35,736
Due to other funds
-
-
-
-
Other credits
-
-
_
Total liabilities
745
56,084
104,051
48,971
Deferred inflows of resources
Unavailable revenue - deferred accounts receivabl
-
-
-
195,023
-
Unavailable revenue -deferred taxes and assessme
(14,134)
31,449
-
16,134
Total deferred inflows of resources
(14,134)
31,449
195,023
16,134
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
11,691
11,310
-
Restricted
General Government
-
-
Public Safety
219,093
Public Works
-
_
Culture and Recreation
-
-
1,402
647,038
-
Community Development
1,413,508
3,946,859
-
-
9,731
Debt Service
-
-
_
Unrestricted fund balance:
Unassigned
-
-
-
_
_
_
Total fund balance
1,413,508
3,946,859
1,402
658,729
230,403
9,731
Total liabilities and fund balance
1,414,253
3,988,809
1,402
794,229
474,397
25,865
See independent auditors report
93
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2016
PUBLIC
OLD SCHOOL
BUILDING
SAFETY
TIF (IND)
HEALTH LEVY
DEPT.
IMPACT FEES
LIGHT DIST.
GAS TAX
ASSETS
Cash and investments
10,279
-
735,148
7,388
164,313
465,859
Taxes and assessments receivable, net
20,377
33,825
-
-
14,538
-
Accounts receivable - net
-
-
-
Notes and loans receivable
-
-
-
Due from other governments
2,149
79,176
-
28,125
Prepaids
-
-
4,803
-
-
Other debits
-
869
Restricted assets:
Restricted cash and investments
-
-
-
576,162
-
-
Total assets
32,805
113,001
739,951
584,419
206,976
465,859
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
-
-
4,626
18
15,202
7,809
Accrued payroll
-
11,913
-
2,719
-
Due to other funds
26,029
-
-
-
Other credits
-
-
869
-
-
Totalliabilities
26,029
16,539
887
17,921
7,809
Deferred inflows of resources
Unavailable revenue - deferred accounts receivabl
-
-
-
-
-
_
Unavailable revenue - deferred taxes and assessmc
20,377
33,825
14,538
Total deferred inflows of resources
20,377
33,825
-
14,538
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
-
-
4,803
-
Restricted
General Government
53,147
-
-
Public Safety
-
718,609
583,532
-
-
Public Works
-
-
174,517
458,050
Culture and Recreation
-
_
_
Community Development
12,428
Debt Service
-
Unrestricted fund balance:
Unassigned
-
-
-
-
_
_
Total fund balance
12,428
53,147
723,412
583,532
174,517
458,050
Total liabilities and fund balance
32,805
113,001
739,951
584,419
206,976
465,859
See independent auditor's report.
al
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2016
Community
DRUG
URBAN
Development
RD REVOLVING STONEGARDEN ENFORCEMENT
FORESTRY
MACI GRANT Loan Revolving
LOAN (2) GRANT GRANT
ASSETS
Cash and investments
136,779
21,006 371,337
454,177
Taxes and assessments receivable, net
7,044
- -
-
Accounts receivable - net
-
-
-
Notes and loans receivable
-
1,658,567
511,196 - -
Due from other governments
16,502
-
- 5,469 9,209
Prepaids
-
- _
Other debits
-
Restricted assets:
Restricted cash and investments
101,449
- -
- -
Total assets
261,774
21,006 2,029,904
965,373 5,469 9,209
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
430 4,613 -
Accrued payroll
3,766 - 2,322
Due to other funds
- 856 6,055
Other credits
- - _
Total liabilities
4,196 5,469 8,377
Deferred inflows of resources
Unavailable revenue - deferred accounts receivabl
- - _
Unavailable revenue - deferred taxes and assessm(
7,044
Total deferred inflows of resources
7,044
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
See independent auditor's report.
- 832
- 21,006 _
250,534 - -
- 21029,904 965,373
250,534 21,006 2,029,904 965,373 - 832
261,774 21,006 2,029,904 965,373 5,469 9,209
95
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
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2016
LAW BROWNFIELDS
ENFORCEMEN LOAN HAZMAT Total Special
COPS Grant T GRANTS REVOLVING FIRE GRANTS GRANT Revenue Funds
7,832 100,500 4,066 44,197 8,888,689
- - - - 109,233
203,420
- - 2,169,763
9,678 21,301 244,886
- - 27,804
869
- - - - - 677,611
17,510 21,301 100,500 4,066 44,197 12,322,275
- 970
1,284 135,787
2,185 848
- 132,769
- 19,483
52,423
- -
- 869
2,185 21,301
1,284 321,848
Deferred inflows of resources
Unavailable revenue - deferred accounts receivabl 195,023
Unavailable revenue - deferred taxes and assessma 109,233
Total deferred inflows of resources 304,256
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
See independent auditor's report.
27,804
- - - 53,147
15,325 4,066 42,913 1,584,370
- - - 653,573
- 898,974
100,500 8,478,303
15,325 - 100,500 4,066 42,913 11,696,171
17,510 21,301 100,500 4,066 44,197 12,322,275
•z
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2016
AIRPORT TIF WESTSIDE TIF
City Hall Debt
DEBT
DEBT
SID
G.O..BONDS
Service
SERVICE
SERVICE
REVOLVING
S & C'S
ASSETS
Cash and investments
-
7,641
67,359
172
47,388
Taxes and assessments receivable, net
18,717
-
49,678
-
-
44,048
Accounts receivable - net
-
_
_
Notes and loans receivable
_
_
_
Due from other governments
40,038
31,365
1,150
Prepaids
_
_
_
Other debits
_
_
Restricted assets:
Restricted cash and investments
-
-
144,500
-
238,100
-
Total assets
58,755
7,641
292,902
172
285,488
45,198
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
_
_
_
_
_
_
Accrued payroll
_
_
Due to other funds
2,012
724
Other credits
_
Total liabilities
2,012
724
Deferred inflows of resources
Unavailable revenue - deferred accounts receivabl
-
_
-
Unavailable revenue - deferred taxes and assessm(
18,717
49,678
44,048
Total deferred inflows of resources
18,717
49,678
44,048
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
-
_
-
Restricted
General Government
Public Safety
Public Works
Culture and Recreation
Community Development
-
_
_
_
_
-
Debt Service
38,026
7,641
243,224
172
285,488
426
Unrestricted fund balance:
Unassigned
_
_
_
-
_
_
Total fund balance
38,026
7,641
243,224
172
285,488
426
Total liabilities and fund balance
58,755
7,641
292,902
172
285,488
45,198
See independent auditor's report.
97
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2016
Total Nonmajor
Total Debt S & C Governmental
SID 343 SID 345 Service Funds CONSTRUCTION Funds
ASSETS
Cash and investments
5,987
11,196
139,743
5,231 $
9,033,663
Taxes and assessments receivable, net
359,765
217,315
689,523
-
798,756
Accounts receivable - net
-
-
-
203,420
Notes and loans receivable
-
-
2,169,763
Due from other governments
283
72,836
317,722
Prepaids
-
-
27,804
Other debits
-
-
-
869
Restricted assets:
Restricted cash and investments
57,795
11,172
451,567
1,129,178
Total assets
423,547
239,966
1,353,669
5,231 $
13,681,175
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
-
-
-
5,231
141,018
Accrued payroll
-
-
132,769
Due to other funds
2,736
55,159
Other credits
-
-
869
Total liabilities
2,736
5,231 $
329,815
Deferred inflows of resources
Unavailable revenue - deferred accounts receivabl
-
-
-
-
195,023
Unavailable revenue - deferred taxes and assessme
359,765
217,315
689,523
798,756
Total deferred inflows ofresources
359,765
217,315
689,523
993,779
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
-
-
-
27,804
Restricted
General Government
53,147
Public Safety
1,584,370
Public Works
653,573
Culture and Recreation
898,974
Community Development
-
-
-
8,478,303
Debt Service
63,782
22,651
661,410
661,410
Unrestricted fund balance:
Unassigned
-
-
-
_
Total fund balance
63,782
22,651
661,410
- $
12,357,581
Total liabilities and fund balance
423,547
239,966
1,353,669
5,231 $
13,681,175
See independent auditors report
W
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2016
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
Proceeds from the sale of general capital asset disposition
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
See independent auditor's report.
OLDSCHOOL
AIRPORT TIF
WESTSIDE TIF
PARKS IN LIEU
PARKS
AMBULANCE
TIF (TECH)
38,884
895,968
62,924
42,671
245,678
-
15,200
106,444
3,057
-
-
3,960
508,617
633,557
-
-
-
-
10,182
-
-
7,892
28,073
29
2,264
-
172
50,563
312,635
3,989
1,432,231
740,001
66,153
1,015,071
- - 1,335,802 -
50,984 342,004 - 21,853
- - 25,181 -
465
- - 46,700 - -
50,984 342,004 1,408,148 1,015,071 21,853
- 3,420
-
450,000 86,000
380,000
- (32,340) (3,859) -
(9,868) (60,000)
450,000 (32,340) (3,859) 89,420
370,132 (60,000)
449,579 (61,709) 130 113,503
95,062 (15,700)
963,929
4,008,568
1,272
545,226
135,341
25,431
963,929
4,008,568
1,272
545,226
135,341
25,431
1,413,508
3,946,859
1,402
658,729
230,403
9,731
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2016
OLD SCHOOL
BUILDING
PUBLIC SAFETY
REVENUES
TIF (IND)
HEALTH LEVY
DEPT.
IMPACT FEES
LIGHT DIST.
GAS TAX
Taxes and assessments
9,415
863,065
-
371,751
Licenses and permits
-
-
583,428
-
Intergovernmental
22,025
-
-
369,749
Charges for services
-
194,997
177,318
-
-
Miscellaneous
-
-
-
20,458
-
Investment earnings
84
-
4,509
3,903
546
2,483
Total revenues
9,499
885,090
782,934
181,221
392,755
372,232
EXPENDITURES
Public safety
-
-
480,546
8,867
-
-
Public works
-
-
279,536
229,789
Parks and recreation
-
_
Community Development
-
-
Debt service - principal
63,000
21,645
Debt service - interest
7,369
752
-
Capital outlay
-
-
-
71,888
Total expenditures
-
-
480,546
79,236
301,933
301,677
Excess (deficiency) ofrevenues over expenditures
9,499
885,090
302,388
101,985
90,822
70,555
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disposition
-
Transfers in
35,000
Transfers (out)
(10,000)
(936,000)
-
Total other financing sources and uses
(10,000)
(936,000)
-
-
-
35,000
Net change in fund balance
(501)
(50,910)
302,388
101,985
90,822
105,555
Fund balances - beginning
12,929
104,057
421,024
481,547
83,695
352,495
Restatements
-
-
-
-
-
_
Fund balances - beginning restated
12,929
104,057
421,024
481,547
83,695
352,495
Fund balances - ending
12,428
53,147
723,412
583,532
174,517
458,050
See independent auditor's report.
100
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2016
REVENUES
Taxes and assessments
Licenses and permits
hitergovernmental
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
Proceeds from the sale of general capital asset disposition
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
See independent auditor's report.
Community
DRUG
URBAN
Development
RD REVOLVING STONEGARDEN ENFORCEMENT
FORESTRY
MACI GRANT Loan Revolving
LOAN (2) GRANT
GRANT
13,650
195,950 -
- 52,073
30,036
218,352
- 55,885
30,827 -
-
2,911
-
-
1,498
- 3,524
1,062 -
-
236,411
195,950 59,409
31,889 52,073
30,036
52,073 92,172
215,041 -
-
- 1,073
51
8,353 -
26,148
180 -
5,951
34,679 235,097 -
- - -
258,253 235,097 1,073
32,150 52,073 92,172
(21,842) (39,147) 58,336
(261) - (62,136)
34,498
57,500
34,498 - -
57,500
12,656 (39,147) 58,336 (261)
- (4,636)
237,878 60,153 2,002,565 965,634
5,468
- - (30,997) -
-
237,878 60,153 1,971,568 965,634 5,468
250,534 21,006 2,029,904 965,373 832
101
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2016
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
LAW CDBG-ED
BROWNFIELDS
ENFORCEMENT (FVCC)
LOAN
HAZMAT
CHRP GRANT GRANTS GRANT
REVOLVING
FIRE GRANTS
GRANT
19,939 124,466
221,807
88,809
44,167
17,315
-
-
-
4,228
2,620
5,657
- -
-
-
252
19,939 146,009
221,807
91,429
50,076
39,176 90,469
814 24,300
3,534 221,807
- 59,600 - -
98,677 -
39,176 150,069 3,534 221,807
99,491 24,300
(19,237) (4,060) (3,534) -
(8,062) 25,776
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disposition
-
-
-
Transfers in
34,562
3,500
9,868
Transfers (out)
-
-
-
Total other financing sources and uses
34,562
3,500
9,868
-
Net change in find balance
15,325
(560) (3,534) -
1,806
25,776
Fund balances - beginning
-
560 3,534 100,500
2,260
17,137
Restatements
- - -
_
_
Fund balances - beginning restated
-
560 3,534 100,500
2,260
17,137
Fund balances - ending
15,325
- - 100,500
4,066
42,913
See independent auditor's report.
102
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2016
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
Proceeds from the sale of general capital asset disposition
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
See independent auditor's report.
TRAILS Total Special
City Hall Debt
AIRPORT TIF WESTSIDE TIF
GRANTS Revenue Funds
G.O. BONDS
Service
DEBT SERVICE DEBT SERVICE
2,242,007
470,773
671,711
583,428
-
-
-
1,595,721
9,122
50,000
1,840,828
-
-
46,056
-
229,574
-
56,291
1,302
-
1,929
6,364,331
481,197
279,574
673,640
1,803,488
509,325
1,550,843
641,306 - - -
144,327 455,000 667,412 145,000 14,000
- 14,717 48,312 17,422 34,573 19,039
19 570.160 - - - -
(23,519) 1,130,165 (22,115) (405,260) 494,067 (33A39)
34,498
412,571
3,420
-
_
13,841
1,070,271
32,340
-
(1,052,067)
-
(450,000)
-
13,841
56,122
412,571
(450,000)
32,340
(9,678)
1,186,287
(22,115) 7,311
44,067
(699)
9,678
10,540,881
60,141 330
199,157
871
-
(30,997)
- -
-
_
9,678 10,509,884 60,141 330 199,157 871
- 11,696,171 38,026 7,641 243,224 172
103
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30, 2016
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
SID Total Debt Service
REVOLVING S & C'S SID 343 SID 345 Funds
9,450 96,128 25,910 1,273,972
59,122
- 229,574
2,022 - - - 5,253
2,022 9,450 96,128 25,910 1,567,921
8,506
80,000
14,000
1,383,918
1,281
17,675
6,705
145,007
- 9,787
97,675
20,705
1,528,925
2,022 (337)
(1,547)
5,205
38,996
OTHER FINANCING SOURCES (USES)
Issuance of debt
412,571
Proceeds from the sale of general capital asset disposition
-
Transfers in
32,340
Transfers (out)
(450,000)
Total other financing sources and uses
-
-
-
(5,089)
Net change in fund balance
2,022
(337)
(1,547)
5,205
33,907
Fund balances - beginning
283,466
763
65,329
17,446
627,503
Restatements
-
-
-
-
-
Fund balances - beginning restated
283,466
763
65,329
17,446
627,503
Fund balances - ending
285,488
426
63,782
22,651
661,410
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, 2016
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
Proceeds from the sale of general capital asset disposition
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
See independent auditor's report.
Total Nonmajor
S & C Governmental
CONSTRUCTION Funds
$ 3,515,979
583,428
1,654,843
1,840,828
275,630
61,544
$ 7,932,252
1,803,488
509,325
1,550,843
641,306
1,528,245
- 159,724
11,724 581,884
11,724 $ 6,774,815
(11,724) $ 1,157,437
14,764 $ 461,833
- 3,420
1,102,611
- (1,502,067)
14,764 $ 65,797
3,040 $ 1,223,234
(3,040) $ 11,165,344
(30,997)
(3,040) $ 11,134,347
- $ 12,357,581
105
BUDGETARY COMPARISON SCHEDULE - OTHER MAJOR
FUNDS
RESOURCES (INFLOWS):
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Miscellaneous
Investment earnings
Amounts available for appropriation
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)
Proceeds from the sale of general capital asset dispositior
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
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2016
SID 344
ACTUAL
AMOUNTS
VARIANCE
BUDGETED AMOUNTS
(BUDGETARY
WITH FINAL
ORIGINAL
FINAL
BASIS) See Note A
BUDGET
$ 290,000
$ 290,000
$ 282,237
$ (7,763)
$ 290,000
$ 290,000
$ 282,237
$ (7,763)
225,000
225,000
225,000
-
122,758
122,758
122,757
1
$ 347,758
$ 347,758
$ 347,757
$ 1
$ (65,520)
$ 469,558
$ 469,558
$ 404,038
See independent auditor's report
106
BUDGETARY COMPARISON SCHEDULE - NONMAJOR
FUNDS
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
AIRPORT TIF
Westside TIF
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
15,400
38,884
23,484
Licenses and permits
-
-
-
-
-
Intergovernmental
42,671
42,671
244,000
245,678
1,678
Charges for services
-
-
-
-
-
Miscellaneous
-
-
-
-
-
-
Investment earnings
4,500
7,892
3,392
21,000
28,073
7,073
Total revenues
47,171
50,563
3,392
280,400
312,635
32,235
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation - - - - - -
Community Development 1,283,548 50,984 1,232,564 4,053,108 342,004 3,711,104
Debt service - principal - - - - - -
Debt service - interest
Capital outlay - - - - - -
Total expenditures 1,283,548 50,984 1,232,564 4,053,108 342,004 3,711,104
Excess (deficiency) of revenues over expenditur( (1,236,377) (421) 1,235,956 (3,772,708) (29,369) 3,743,339
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
- -
Transfers in
450,000 450,000
Transfers (out)
- -
(32,340) (32,340)
Total other financing sources and uses
450,000 450,000
(32,340) (32,340) -
Net change in fund balance
(786,377) 449,579
1,235,956 (3,805,048) (61,709) 3,743,339
Fund balances - beginning
963,929
4,008,568
Restatements
-
-
Fund balances - beginning restated
963,929
4,008,568
Fund balances - ending
1,413,508
3,946,859
See independent auditor's report
107
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
Parks in Lieu
Parks
Positive /
Positive /
(Negative)
(Negative)
Budget Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
901,000
895,968
(5,032)
Licenses and permits
-
-
-
Intergovernmental
-
-
15,000
15,200
200
Charges for services
3,960
3,960
522,415
508,617
(13,798)
Miscellaneous
- -
-
4,500
10,182
5,682
Investment earnings
6 29
23
2,000
2,264
264
Total revenues
6 3,989
3,983
1,444,915
1,432,231
(12,684)
EXPENDITURES
Current:
Public safety
- -
-
-
-
Public works
-
-
-
-
Parks and recreation
1,568,679
1,335,802
232,877
Community Development
-
-
-
Debt service - principal
25,168
25,181
(13)
Debt service - interest
487
465
22
Capital outlay
-
47,500
46,700
800
Total expenditures
-
1,641,834
1,408,148
233,686
Excess (deficiency) of revenues over expenditure
6 3,989
3,983
(196,919)
24,083
221,002
OTHER FINANCING SOURCES (USES)
Issuance of debt
_ -
Proceeds from the sale of general capital asset disp
- 3,420 3,420
Transfers in
86,000 86,000 -
Transfers (out) (3,859)
(3,859)
- - -
Total other financing sources and uses (3,859)
(3,859)
- 86,000 89,420 3,420
Net change in fund balance (3,853)
130
3,983 (110,919) 113,503 224,422
Fund balances - beginning
1,272
545,226
Restatements
-
_
Fund balances - beginning restated
1,272
545,226
Fund balances - ending
1,402
658,729
See independent auditor's report
108
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
AMBULANCE
OLD SCHOOL TIF (TECH)
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
-
66,989
62,924
(4,065)
Licenses and permits
-
-
-
-
-
Intergovernmental
120,000
106,444
(13,556)
3,056
3,057
1
Charges for services
621,000
633,557
12,557
-
-
-
Miscellaneous
-
-
-
-
-
_
Investment earnings
-
-
-
50
172
122
Total revenues
741,000
740,001
(999)
70,095
66,153
(3,942)
EXPENDITURES
Current:
Public safety
1,043,626 1,015,071
28,555
Public works
- -
-
Parks and recreation
- - _
Community Development
29,000 21,853 7,147
Debt service - principal
-
- - _
Debt service - interest
-
-
Capital outlay
170,000 -
170,000 - - -
Total expenditures
1,213,626 1,015,071
198,555 29,000 21,853 7,147
Excess (deficiency) of revenues over expenditur(
(472,626) (275,070)
197,556 41,095 44,300 3,205
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
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
See independent auditor's report.
380,000
380,000 -
(11,100)
(9,868) 1,232 (60,000) (60,000)
368,900
370,132 1,232 (60,000) (60,000) -
95,062 198,788 (18,905) (15,700) 3,205
(103,726)
135,341
135,341
230,403
25,431
�9,731
109
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
OLD SCHOOL TIF (IND)
Health Levy
Positive /
Positive /
(Negative)
(Negative)
Budget Actual Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
6,600 9,415 2,815
872,500
863,065
(9,435)
Licenses and permits
- - -
-
-
_
Intergovernmental
-
22,132
22,025
(107)
Charges for services
-
-
-
_
Miscellaneous
- - -
-
Investment earnings
- 84 84
-
-
Total revenues
6,600 9,499 2,899
894,632
885,090
(9,542)
EXPENDITURES
Current:
Public safety -
Public works
Parks and recreation -
Community Development -
Debt service - principal -
Debt service - interest -
Capital outlay -
Total expenditures - - - - -
Excess (deficiency) of revenues over expenditur( 6,600 9,499 2,899 894,632 885,090 (9,542)
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
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
See independent auditor's report.
(10,000)
(10,000)
(936,000)
(936,000)
(10,000)
(10,000)
(936,000)
(936,000)
(50,910) (9,542)
(3,400)
(501)
2,899 (41,368)
12,929
12,428
104,057
104,057
53,147
110
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
Building Department
Impact Fees
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
-
-
-
Licenses and permits
319,000
583,428
264,428
Intergovernmental
-
-
-
-
-
Charges for services
60,000
194,997
134,997
85,000
177,318
92,318
Miscellaneous
-
-
-
-
-
-
Investment earnings
2,000
4,509
2,509
2,500
3,903
1,403
Total revenues
381,000
782,934
401,934
87,500
181,221
93,721
EXPENDITURES
Current:
Public safety
477,011
480,546 (3,535)
10,000
8,867
1,133
Public works
-
-
-
-
-
Parks and recreation
-
Community Development
-
-
-
Debt service - principal
-
31,500
63,000
(31,500)
Debt service - interest
-
-
3,585
7,369
(3,784)
Capital outlay
11,000
- 11,000
450,000
-
450,000
Total expenditures
488,011
480,546 7,465
495,085
79,236
415,849
Excess (deficiency) of revenues over expenditun
(107,011)
302,388 409,399
(407,585)
101,985
509,570
OTHER FINANCING SOURCES (USES)
Issuance of debt -
Proceeds from the sale of general capital asset disp -
Transfers in
Transfers (out)
Total other financing sources and uses - - -
Net change in fund balance (107,011) 302,388 409,399 (407,585) 101,985 509,570
Fund balances - beginning 421,024 481,547
Restatements - -
Fund balances - beginning restated 421,024 481,547
Fund balances - ending 723,412 583,532
See independent auditor's report.
111
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
Light Maintenance
Gas Tax
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
371,000
371,751
751
-
Licenses and permits
-
-
-
-
-
Intergovernmental
-
-
369,748
369,749
1
Charges for services
-
-
-
-
-
Miscellaneous
5,000
20,458
15,458
-
-
Investment earnings
400
546
146
2,000
2,483
483
Total revenues
376,400
392,755
16,355
371,748
372,232
484
EXPENDITURES
Current:
Public safety
-
-
-
-
-
-
Public works
315,919
279,536
36,383
524,661
229,789
294,872
Parks and recreation
-
-
-
-
-
-
Community Development
-
-
-
Debt service - principal
21,647
21,645
2
Debt service - interest
820
752
68
-
-
-
Capital outlay
-
-
-
85,000
71,888
13,112
Total expenditures
338,386
301,933
36,453
609,661
301,677
307,984
Excess (deficiency) of revenues over expenditur(
38,014
90,822
52,808
(237,913)
70,555
308,468
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
_
-
Proceeds from the sale of general capital asset disp
-
-
Transfers in
-
35,000
35,000
Transfers (out)
-
-
-
Total other financing sources and uses
-
-------------
35,000
35,000
-
Net change in fund balance
38,014
90,822
52,808
(202,913)
105,555
308,468
Fund balances - beginning
83,695
352,495
Restatements
-
-
Fund balances - beginning restated
83,695
352,495
Fund balances - ending
174,517
458,050
See independent auditor's report
112
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
URBAN FORESTRY
MACI GRANT
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budge Actual
Variance
REVENUES
Taxes and assessments
-
-
Licenses and permits
-
-
- -
-
Intergovernmental
13,650
13,650
-
273,422 195,950
(77,472)
Charges for services
210,500
218,352
7,852
- -
Miscellaneous
450
2,911
2,461
Investment earnings
1,000
1,498
498
- -
Total revenues
225,600
236,411
10,811
273,422 195,950
(77,472)
EXPENDITURES
Current:
Public safety
Public works
-
-
- _
Parks and recreation
326,731
215,041
111,690
Community Development
-
-
-
Debt service - principal
12,853
8,353
4,500
Debt service - interest
1,147
180
967 - - -
Capital outlay
45,000
34,679
10,321 375,839 235,097 140,742
Total expenditures
385,731
258,253
127,478 375,839 235,097 140,742
Excess (deficiency) of revenues overexpenditure
(160,131)
(21,842)
138,289 (102,417) (39,147) 63,270
OTHER FINANCING SOURCES (USES)
Issuance of debt 45,000
34,498 (10,502)
Proceeds from the sale of general capital asset disp
-
-
Transfers in -
42,264 (42,264)
Transfers (out) -
-
-
Total other financing sources and uses 45,000
34,498 (10,502)
42,264 (42,264)
Net change in fund balance (115,131)
12,656 127,787
(60,153) (39,147) 21,006
Fund balances - beginning
237,878
60,153
Restatements
-
-
Fund balances - beginning restated
237,878
60,153
Fund balances - ending
250,534
21,006
See independent auditor's report
113
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
Community Development Loan Revolving
RD REVOLVING LOAN (2)
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
-
Licenses and permits
Intergovernmental
-
-
-
-
-
Charges for services
17,197
55,885
38,688
30,907
30,827
(80)
Miscellaneous
-
-
-
-
-
-
Investment earnings
2,000
3,524
1,524
650
1,062
412
Total revenues
19,197
59,409
40,212
31,557
31,889
332
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation
-
-
-
-
-
_
Community Development
253,710
1,073
252,637
260,000
51
259,949
Debt service - principal
-
-
-
26,342
26,148
194
Debt service - interest
5,983
5,951
32
Capital outlay
-
-
-
-
-
-
Total expenditures
253,710
1,073
252,637
292,325
32,150
260,175
Excess (deficiency) of revenues over expenditun
(234,513)
58,336
292,849
(260,768)
(261)
260,507
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
-
-
Proceeds from the sale of general capital asset disp
-
Transfers in
-
Transfers (out)
-
-
Total other financing sources and uses
-
-
-
-
-
Net change in fund balance
(234,513)
58,336
292,849
(260,768)
(261)
260,507
Fund balances - beginning
2,002,565
965,634
Restatements
(30,997)
-
Fund balances - beginning restated
1,971,568
965,634
Fund balances - ending
2,029,904
965,373
See independent auditor's report
114
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditure
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
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
See independent auditor's report.
STONEGARDEN GRANT
Drug Enforcement Grant
Positive /
Positive !
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
185,749
52,073
(133,676)
34,114
30,036
(4,078)
185,749
52,073
(133,676)
34,114
30,036
(4,078)
185,749
52,073
133,676
92,366
92,172
194
185,749
52,073
133,676
92,366
92,172
194
-
-
-
(58,252)
(62,136)
(3,884)
57,500
57,500
-
-
57,500
57,500
-
(752)
(4,636)
(3,884)
5,468
5,468
832
115
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
CHRP GRANT LAW ENFORCEMENT GRANTS
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
-
Licenses and permits
-
-
-
-
Intergovernmental
43,688
19,939
(23,749)
135,486
124,466
(11,020)
Charges for services
-
-
20,000
17,315
(2,685)
Miscellaneous
-
4,228
4,228
Investment earnings
-
-
-
-
-
-
Total revenues
43,688
19,939
(23,749)
155,486
146,009
(9,477)
EXPENDITURES
Current:
Public safety
58,250
39,176
19,074
99,386
90,469
8,917
Public works
-
-
-
-
-
-
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
-
-
Capital outlay
-
-
-
59,600
59,600
-
Total expenditures
58,250
39,176
19,074
158,986
150,069
8,917
Excess (deficiency) of revenues over expenditun
(14,562)
(19,237)
(4,675)
(3,500)
(4,060)
(560)
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
_
Proceeds from the sale of general capital asset disp
-
-
Transfers in
34,562
34,562
3,500
3,500
Transfers (out)
-
-
-
-
Total other financing sources and uses
34,562
34,562
3,500
3,500
Net change in fund balance
-
(560)
(560)
20,000
15,325
(4,675)
Fund balances - beginning
-
560
Restatements
-
Fund balances - beginning restated
-
560
Fund balances - ending
15,325
-
See independent auditor's report
116
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
CDBG - ED FVCC
BROWNFIELDS LOAN REVOLVING
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
Licenses and permits
-
-
Intergovernmental
710,213
221,807
(488,406)
Charges for services
-
-
Miscellaneous
-
Investment earnings
-
-
-
Total revenues
-
710,213
221,807
(488,406)
EXPENDITURES
Current:
Public safety
-
-
-
Public works
-
Parks and recreation
-
-
-
-
_
Community Development
3,534
3,534
810,713
221,807
588,906
Debt service - principal
-
-
-
-
-
Debt service - interest
Capital outlay
-
-
-
-
_
Total expenditures
3,534
3,534 -
810,713
221,807
588,906
Excess (deficiency) of revenues over expenditun
(3,534)
(3,534)
(100,500)
-
100,500
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
Proceeds from the sale of general capital asset disp
-
Transfers in
-
Transfers (out)
-
Total other financing sources and uses
-
-
Net change in fund balance
(3,534)
(3,534)
(100,500)
-
100,500
Fund balances - beginning
3,534
100,500
Restatements
-
-
Fund balances - beginning restated
3,534
100,500
Fund balances - ending
-
100,500
See independent auditor's report.
117
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
FIRE GRANTS
HAZMAT GRANT
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget Actual
Variance
REVENUES
Taxes and assessments
-
-
Licenses and permits
-
-
- -
Intergovernmental
99,900
88,809
(11,091)
44,167 44,167
Charges for services
-
-
Miscellaneous
8,700
2,620
(6,080)
- 5,657
5,657
Investment earnings
-
-
-
100 252
152
Total revenues
108,600
91,429
(17,171)
44,267 50,076
5,809
EXPENDITURES
Current:
Public safety
10,825
814
10,011
61,078
24,300
36,778
Public works
-
-
-
-
-
-
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
-
-
-
Capital outlay
111,000
98,677
12,323
-
-
-
Total expenditures
121,825
99,491
22,334
61,078
24,300
36,778
Excess (deficiency) of revenues over expenditun
(13,225)
(8,062)
5,163
(16,811)
25,776
42,587
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
Proceeds from the sale of general capital asset disp
-
-
Transfers in
11,100
9,868
(1,232)
-
Transfers (out)
-
-
-
Total other financing sources and uses
11,100
9,868
(1,232)
-
Net change in fund balance
3,931
(2,125)
1,806
(16,811)
25,776
42,587
Fund balances - beginning
2,260
17,137
Restatements
-
-
Fund balances - beginning restated
2,260
17,137
Fund balances - ending
4,066
42,913
See independent auditor's report
118
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
TRAILS GRANTS Total Special Revenue Funds
Positive /
Positive /
(Negative)
(Negative)
Budget Actual Variance Budget
Actual
Variance
REVENUES
Taxes and assessments
2,233,489
2,242,007
8,518
Licenses and permits
319,000
583,428
264,428
Intergovernmental
- 2,356,996
1,595,721
(761,275)
Charges for services
- 1,567,019
1,840,828
273,809
Miscellaneous
18,650
46,056
27,406
Investment earnings
38,206
56,291
18,085
Total revenues
6,533,360
6,364,331
(169,029)
EXPENDITURES
Current:
Public safety
2,038,291
1,803,488
234,803
Public works
840,580
509,325
331,255
Parks and recreation
1,895,410
1,550,843
344,567
Community Development
6,693,613
641,306
6,052,307
Debt service - principal
-
117,510
144,327
(26,817)
Debt service - interest
-
- 12,022
14,717
(2,695)
Capital outlay
23,519
23,519
- 1,378,458
570,160
808,298
Total expenditures
23,519
23,519
- 12,975,884
5,234,166
7,741,718
Excess (deficiency) of revenues over expenditun
(23,519)
(23,519)
- (6,442,524)
1,130,165
7,572,689
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
- 45,000
34,498
(10,502)
Proceeds from the sale of general capital asset disp
-
- -
3,420
3,420
Transfers in
9,982
13,841
3,859 1,109,908
1,070,271
(39,637)
Transfers (out)
-
-
- (1,053,299)
(1,052,067)
1,232
Total other financing sources and uses
9,982
13,841
3,859 101,609
56,122
(45,487)
Net change in fund balance
1,186,287
7,527,202
(13,537)
(9,678)
3,859 (6,340,915)
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
9,678
9,678
10,540,881
(30,997)
1 0 'ZOO 44A
119
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
G.O. BONDS
Positive /
(Negative)
Budge Actual Variance
481,600
470,773 (10,827)
9,122
9,122
1,000
1,302 302
491,722
481,197 (10,525)
City Hall Debt Service
Positive /
(Negative)
Budget Actual Variance
50,000
229,574
50,000
229,574
279,574
279,574
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation
Community Development
-
-
-
-
Debt service - principal
455,000
455,000
- 671,942
667,412
4,530
Debt service - interest
48,313
48,312
1 19,203
17,422
1,781
Capital outlay
-
-
-
-
Total expenditures
503,313
503,312
1 691,145
684,834
6,311
Excess (deficiency) of revenues over expenditure
(11,591)
(22,115)
(10,524) (411,571)
(405,260)
6,311
OTHER FINANCING SOURCES (USES)
Issuance of debt
412,571 412,571
Proceeds from the sale of general capital asset disp
- -
Transfers in
Transfers (out)
-
- -
Total other financing sources and uses
412,571 412,571 -
Net change in fund balance (11,591)
(22,115) (10,524)
1,000 7,311 6,311
Fund balances - beginning
60,141
330
Restatements
-
-
Fund balances - beginning restated
60,141
330
Fund balances - ending
38,026
7,641
See independent auditor's report
120
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
Airport TIF Debt Service Westside TIF Debt
Positive / Positive /
(Negative) (Negative)
Budget
Actual
Variance Budget Actual Variance
REVENUES
Taxes and assessments
644,869
671,711
26,842
Licenses and permits
-
-
-
Intergovernmental
Charges for services
Miscellaneous
-
-
-
Investment earnings
1,500
1,929
429
Total revenues
646,369
673,640
27,271
EXPENDITURES
Current:
Public safety
-
Public works
-
Parks and recreation
-
Community Development
-
-
-
-
Debt service - principal
145,000
145,000 -
14,000
14,000
Debt service - interest
34,573
34,573
19,039
19,039
Capital outlay
-
- -
_
_
Total expenditures
179,573
179,573
33,039
33,039
Excess (deficiency) of revenues over expenditure
466,796
494,067 27,271
(33,039)
(33,039)
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
_
Proceeds from the sale of general capital asset disp
-
Transfers in
32,340
32,340
Transfers (out)
(450,000)
(450,000)
-
-
Total other financing sources and uses
(450,000)
(450,000)
32,340
32,340
Net change in fund balance
16,796
44,067 27,271
(699)
(699)
Fund balances - beginning
199,157
871
Restatements
-
-
Fund balances - beginning restated
199,157
871
Fund balances - ending
243,224
172
See independent auditor's report
121
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
SID Revolving
S & C's
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
10,022
9,450
(572)
Licenses and permits
-
-
-
Intergovernmental
Charges for services
Miscellaneous
-
-
-
Investment earnings
850
2,022
1,172
-
-
-
Total revenues
850
2,022
1,172
10,022
9,450
(572)
EXPENDITURES
Current:
Public safety
-
-
-
-
-
-
Public works
Parks and recreation
Community Development
-
-
-
-
Debt service - principal
-
8,508
8,506
2
Debt service - interest
-
1,665
1,281
384
Capital outlay
-
-
-
_
Total expenditures
-
-
-
10,173
9,787
386
Excess (deficiency) of revenues over expenditur(
850
2,022
1,172
(151)
(337)
(186)
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
-
-
_
Proceeds from the sale of general capital asset disp
Transfers in
-
Transfers (out)
-
-
Total other financing sources and uses
-
-
-
-
-
-
Net change in fund balance
850
2,022
1,172
(151)
(337)
(186)
Fund balances - beginning
283,466
763
Restatements
-
-
Fund balances - beginning restated
283,466
763
Fund balances - ending
285,488
426
See independent auditor's report.
122
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
SID 343
SID 345
Positive /
Positive /
(Negative)
(Negative)
Budget Actual Variance
Budget Actual
Variance
REVENUES
Taxes and assessments
96,128 96,128 -
23,664 25,910
2,246
Licenses and permits
- - -
- -
-
Intergovernmental
- -
Charges for services
- -
Miscellaneous
- -
Investment earnings
- - -
- -
-
Total revenues
96,128 96,128 -
23,664 25,910
2,246
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation
-
Community Development
-
-
-
-
-
Debt service - principal
80,000
80,000
-
23,000
14,000
9,000
Debt service - interest
20,045
17,675
2,370
7,055
6,705
350
Capital outlay
-
-
-
-
-
-
Total expenditures
100,045
97,675
2,370
30,055
20,705
9,350
Excess (deficiency) of revenues over expenditur(
(3,917)
(1,547)
2,370
(6,391)
5,205
11,596
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
Proceeds from the sale of general capital asset disp
Transfers in
Transfers (out)
-
Total other financing sources and uses
-
-
-
Net change in fund balance
(3,917)
(1,547)
2,370
(6,391)
5,205
11,596
Fund balances - beginning
65,329
17,446
Restatements
-
-
Fund balances - beginning restated
65,329
17,446
Fund balances - ending
63,782
22,651
See independent auditor's report
123
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2016
Total Debt Service Funds S & C Construction
Positive / Positive /
(Negative) (Negative)
Budget
Actual
Variance Budge Actual Variance
REVENUES
Taxes and assessments
1,256,283
1,273,972
17,689
Licenses and permits
-
-
-
Intergovernmental
59,122
59,122
Charges for services
-
-
Miscellaneous
229,574
229,574
-
Investment earnings
3,350
5,253
1,903
Total revenues
1,548,329
1,567,921
19,592
EXPENDITURES
Current:
Public safety
Public works
_
Parks and recreation
Community Development
-
-
-
Debt service - principal
1,397,450
1,383,918
13,532
Debt service - interest
149,893
145,007
4,886 - -
Capital outlay
-
-
- 25,000 11,724 13,276
Total expenditures
1,547,343
1,528,925
18,418 25,000 11,724 13,276
Excess (deficiency) of revenues over expenditur(
986
38,996
38,010 (25,000) (11,724) 13,276
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disp
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
See independent auditor's report.
412,571
412,571 25,000 14,764 (10,236)
32,340
32,340
(450,000)
(450,000) - -
(5,089)
(5,089) - 25,000 14,764 (10,236)
33,907 38,010 - 3,040 3,040
(4,103)
627,503
661,410
(3,040)
(3,040)
124
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, 2016
ASSETS
Cash and investments $
Taxes and assessments receivable, net
Accounts receivable - net
Contracts receivable
Due from other governments
Prepaids
Restricted assets:
Capital assets - land
Capital assets - depreciable, net
Total assets $
DEFERRED OUTFLOWS OF RESOURCES
Collective contributions related to pensions $
Contractually required contributions related to pensions
Total deferred outflows of resources $
LIABILITIES
Accounts payable $
Accrued payroll
Current portion of long-term liabilities
Bonds and notes - capital
Compensated absences payable
Long-term liabilities, due in more than one year
Bonds and notes - capital
Compensated absences payable
Net pension liability
Total liabilities $
DEFERRED INFLOWS OF RESOURCES
Difference btwn est. and actual earnings on pension plan investn $
Total deferred inflows of resources $
NET POSITION
Net investment in capital assets $
Unrestricted
Total net position $
See independent auditor's report.
Airport Enterprise
147,012 $
323
125
Solid Waste Totals
885,958 $
1,032,970
37,697
37,697
-
323
76,323
76,323
33,072
33,072
1,359,545
-
1,359,545
907,216
832,856
1,740,072
2,414,096
$
1,865,906
$
4,280,002
-
$
806
$
806
-
27,116
27,116
-
$
27,922
$
27,922
263
$
5,812
$
6,075
-
14,916
14,916
-
38,343
38,343
-
48,307
48,307
-
77,849
77,849
-
34,266
34,266
-
325,265
325,265
263
$
544,758
$
545,021
-
$
37,337
$
37,337
-
$
37,337
$
37,337
2,266,761
$
716,664
$
2,983,425
147,072
595,069
742,141
2,413,833
$
1,311,733
$
3,725,566
City of Kalispell, Montana
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position
Nonmajor Proprietary Funds
For the Fiscal Year Ended .Tune 30, 2016
Airport
Enterprise
Solid Waste
Totals
OPERATING REVENUES
Charges for services
$
77,850
$
980,448
$
1,058,298
Miscellaneous revenues
-
7,697
7,697
Total operating revenues
$
77,850
$
988,145
$
1,065,995
OPERATING EXPENSES
Personal services
$
-
$
542,819
$
542,819
Supplies
-
57,880
57,880
Purchased services
45,881
32,470
78,351
Fixed charges
11,831
129,055
140,886
Depreciation
96,379
116,647
213,026
Total operating expenses
$
154,091
$
878,871
$
1,032,962
Operating income (loss)
$
(76,241)
$
109,274
$
33,033
NONOPERATING REVENUES (EXPENSES)
Intergovernmental revenue
-
26,272
26,272
Interest revenue
1,083
6,109
7,192
Gain (loss) sale of capital asset
-
-
-
Debt service interest expense
-
(1,808)
(1,808)
Total non -operating revenues (expenses)
$
1,083
$
30,573
$
31,656
Income (loss) before contributions and transfers
$
(75,158)
$
139,847
$
64,689
Transfers (out)
$
-
$
(35,000)
$
(35,000)
Change in net position
$
(75,158)
$
104,847
$
29,689
Net Position - beginning of the year
$
2,488,991
$
1,206,886
$
3,695,877
Restatements
-
-
-
Net Position - beginning of the year - restated
$
2,488,991
$
1,206,886
$
3,695,877
Net Position - end of the year
$
2,413,833
$
1,311,733
$
3,725,566
See independent auditor's report.
126
City of Kalispell, Montana
Combining Statement of Cash Flows
Nonmajor Proprietary Funds
Year Ended June 30, 2016
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
Airport
Solid Waste
Enterprise
Totals
$ 78,198
$
970,546
$
1,048,744
-
7,697
7,697
(57,646)
(233,307)
(290,953)
-
(511,683)
(511,683)
$ 20,552
$
233,253
$
253,805
$ -
$
(37,963)
$
(37,963)
-
(1,808)
(1,808)
-
(263,359)
(263,359)
-
15,500
15,500
$ -
$
(287,630)
$
(287,630)
$ -
$
(35,000)
$
(35,000)
$ -
$
(35,000)
$
(35,000)
$ 1,083
$
6,109
$
7,192
$ 1,083
$
6,109
$
7,192
$ 21,635
$
(83,268)
$
(61,633)
125,377
994,912
1,120,289
$ 147,012
$
911,644
$
1,058,656
$ (76,241)
$
109,274
$
33,033
96,379
116,647
213,026
348
-
348
-
79
79
-
(21,817)
(21,817)
-
11,915
11,915
-
3,877
3,877
66
(13,902)
(13,836)
-
3,674
3,674
-
23,506
23,506
$ 20,552
$
233,253
$
253,805
The City reed noncash contributions of land and infrastructure as follows: $ $ $
See independent auditor's report.
127
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.
ASSETS
Current assets:
Cash and investments
Total assets
LIABILITIES
Current liabilities:
Due to others
Total liabilities
See accompanying notes to the financial statements
City of Kalispell, Montana
Combining Statement of Fiduciary Net Position
Agency Funds
June 30,2016
TBID Clearing Payroll Clearing
Performance
Bonds Totals
2,996 $ 534,512 $ 13,853 $ 551,361
2,996 $ 534,512 $ 13,853 $ 551,361
2,996 $ 534,512 $ 13,853 $ 551,361
2,996 $ 534,512 $ 13,853 $ 551,361
128
City of Kalispell, Montana
Combined Statement of Changes in Assets and Liabilities
Agency Funds
For the Fiscal Year Ended June 30, 2016
Payroll Clearing
Balance
Balance
June 30, 2015
Additions
Deletions
June 30, 2016
ASSETS
Current assets:
Cash and investments
$
514,447
8,341,587
(8,321,522) $
534,512
Total assets
514,447
8,341,587
(8,321,522)
534,512
LIABILITIES
Current liabilities:
Due to others
$
514,447
8,341,587
(8,321,522) $
534,512
Total liabilities
$
514,447
8,341,587
(8,321,522) $
534,512
Performance Bonds
Balance
Balance
June 30, 2015
Additions
Deletions
June 30, 2016
ASSETS
Current assets:
Cash and investments
$
6,752
39,023
(31,922) $
13,853
Total assets
$
6,752
39,023
(31,922) $
13,853
LIABILITIES
Current liabilities:
Due to others
$
6,752
39,023
(31,922) $
13,853
Total liabilities
$
6,752
39,023
(31,922) $
13,853
Tourism Business Improvement District
Balance
Balance
June 30, 2015
Additions
Deletions
June 30, 2016
ASSETS
Cash and investments
$
3,425
551,003
(551,432) $
2,996
Total assets
$
3,425
551,003
(551,432) $
2,996
LIABILITIES
Due to others
$
3,425
551,003
(551,432) $
2,996
Total liabilities
$
3,425
551,003
(551,432) $
2,996
See accompanying notes to the financial statements
129
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
a0 V1
N O
00
M V1 N
00 N 0
M �C t
It
0
00 0o N
�O O
oo
t
C CDN C
O t t Q•
�O VO
C, ,-.
O O t �O
CD
O
C
0,00 .-�
N
C�
Q\
v1 N t`
M 1 � C
N O 0,
O C, d;
00
O 00 C
t-
00
r-
M .- .--• �C
~
64
�
f
W
O
W
M M
V -- N
C\
C, r
O O
N
C, M K
n M M N
v1 O_ ;; S.-
O
D1 z r-
In
N
C) CN 'rK
C) 10 �O
oc
t- O N
t ZO 00 Q`
69
6q
fF
t,
M
M .-. 00 (N
M Q\ 01
�C r.
t
l�
�n M 00
t� t-- In
t-
O
00 M ID N
M Q\ h oc
cr t-- '
00
vj O r
N
O C
M t, .;
O r- vl v1
N
00
... M
O V1 t
t
O
'n �O �n t`
o
N -- 00 tl
t'
00 r- 00
t
Ci
t�
00
69
69
f
0o t In
t-
C`
00
t-00
00 O
t� C, r
oo
t
N M 10
M C M
N
r-
N t`
-- C O N
M N v1 --
O
Ci Vi O
t
N N
n 7 Vl
O o0 l- oc
(-
t
M M �n
-• r- �
N
7
-- CO O C•
C`
N N t�
t�
10 10 oo
.-
C, t vi 0C
N
69
69
65
N M C,
t
10 01
N
oo N 10 IC
00 In t
lC t t
C,
v1
M r 00 C`
0o C\
N_ -- 'O C'
t�
N t- C)
C)Kl
M C" t'
N C, t
O �C N o0
�O
t-
C\ O cJ
C� -- M•-
N 1 C,
O
10 �O t--
O
69
69
69
10 10
t-
o0 M M t
00 N --
00 vl t�
N
^
C+ a
M M t
t
N
t\ N n t`
N C\ -^ M
WO N r CNi
-It
r U N
ot0
0 0
N o0 0o v�
vj 10
O
M t N
O
69
69
65
U 00
O
O M 01
N
O N
Loo 10 <t
O y+ lC m N
O
00
o0 C,
M D\ C�
M
10 10 N �n
O o0 N
U O N 'O M
N
C, N
cr
N 00 '0 [�
C 00 00 Vl
a U C) 10 CI,
(N
o0
^
t n M
O O n O O
00 N N M
C,
10
69
69
69
oo vl O
M
C\ M
C),
oo t�
F'^ N C)C1
t t
C,
C, t� C\
C� M 1n
1
Q\
.^..
t C\ �OC
t v1 C1 C�
(7y C)i n C' N vi r-
O O C, N
t
N
M t M
W t�
-
�-
'D Q\ O 'O
0010 W M
0
a O .-• O cl
^•
.--• �n n
v1
N lC lO IC!
10
CD 10
LA C7,
z6A
69
69
C,
10 10 W
O
--• v1 M Q\
O -� N
N 'C Q`
Ito0
00 10
C
ITQ\
C�
C� ( o0
�n -- C, b
00 t -: C�
'O
r t -- M
O 41 M O
O vl 00 "It00
N
t O N
�+ t �O
iD
^
M M N Q<
(\ N O C�
N (V 10 10
N
10
r
t
69
64
69
10 t .-•
.--. Vl
f� M 10 10
10
C\ GO
r-
t` 00 t
O
N Vl O W
O �n C, r-
O �n C� t
N
O
C\ O O
cl t� C
-7
t�
�n C, 00 M
r- t rl
N O �O f�
u>
t -- 10
N
1C
t-
t --
10
C C
p O
N N N N n C
O O O
N d N
N D N p N n
N N N N Cu O
C C O
79
U > U > U C
N C FJ N C O C E
C
U E 'O C U E 'O A E E 'D >
N .O N a)(6 -O N +- C N O
N p` N CO p` H p` 0)
C O N E w` C 'C N p O C L to N
E N p N C N
N > N N N N E
Ezx tT NZ2'D�Q ZIY: a
l9
> m N 2 E m
O
U` F- co F- n F
Unaudited statistical section
130
Expenses
Governmental actiaities:
General government
Public Safety
Public Works
Parks and recreation
Community Development
Miscellaneous
Interest
Total governmental activities expenses
Business -type activities:
Airport
Water
Sewer
Ambulance
Solid Waste
Total business -type activities expenses
Total primary government expenses
Program Revenues
Governmental activities:
Charges for services:
General government
Public Safety
Public Works
Parks and recreation
Community Development
Operating grants and contributions
Capital grants and contributions
Total governmental activities program revenues
Business -type activities:
Charges for services:
Airport
Water
Sewer
Ambulance
Solid Waste
Operating grants and contributions
Capital grants and contributions
Total business -type activities program revenues
Total primary government program revenues
CITY OF KALISPELL, MONTANA
CHANGES IN NET POSITION
Past Ten Fiscal Years
2,� 2008 2001) 2010 22011 2012 2013 2014 22015 2016
5,851,576
7,230,428
6,778,754
5,149.809
5,310,274
6,995454
6,709,523
5,688,135
5,401,242
5,823,767
7,684,804
9,608,419
8,W,,2262
9,015,732
8,729,290
8,536,332
9,293,138
9,269,827
9,575,487
9,113,674
1,979,249
2.326,750
2,327.255
3201,811
3,306,165
2,844,OOI
3,074,630
2,573,627
2,773,097
2,581,002
1.895,781
2,302240
2,009,168
1,860,308
1,945,939
1,913,920
1,991,585
2,123237
2,062,669
2,057468
3,706,504
979.002
1,012.555
1,629,656
2033,880
1,426,377
3,616,337
1,601,170
683,164
928,661
(14,839)
736.927
701,796
672,386
627,678
580,361
390.770
357,857
331,811
286,401
S 21,840.002 $ 23,148,625 $ 21,762,380 S
21,484.994 S
21,805,909 $
21.716.094 S
25,075,984 S
21,613,853 S
20,827.470 $
20,790,973
174,865
202,122
204,842
176,702
214,636
217,616
225,974
177,751
154715
154,091
2,080,954
2,394,777
2,597,419
2,638,011
2,689,293
2,592,628
2,660,877
2,625,046
2.542,119
2,657,816
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
5,204,622
1,707,121
654,839
762,782
772,132
801 909
718,139 '
749,481
783,967
812,650
816,686
880,679
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
8,8971208
S 30,495.131 S
31.225 094 S
30,690,835 S
31,078,M9 S
31,310,845 S
30,840,029 S
34 002 456 S
30 343 891 S
29,418,633 S
29 (,88 181
432,519
621,250
829,925
951,940
1,039,553
865,223
669,964
628,729
684,550
892,578
2.542,711
2441,274
1,867,539
1,622,104
1,678,825
1,753,969
1,928,011
2 033,870
1973,899
2219,795
1,650,116
2,269,770
2,604,731
2,098,848
2,312,530
2,226,027
2,201,616
2,172,122
2463,435
2,672,473
739,245
754,025
547,874
624,158
592,868
619,634
711,969
752,460
728,165
730.928
193623
507,699
228,999
136,598
28,161
243,088
170,429
283,134
153,431
88,252
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
1,354,890
5,473543
6,318,780
G 551 018
2,284 267
3 351 562
1385 939
1,378,649
1519 825
3,232,619
942,125
S 12,813,779 S
15,020 947 S
14 704,477 S
11,485 998 S
12,591.806 S
9,648,202 S
9,749 384 S
10,026,461 S
11074 522 $
8 901 041
69,297
91958
72,373
70,694
70,900
76,572
75,813
78,657
79,091
72,623
2,343047
2,722,421
2,562,569
2.624521
2.296,594
2430,380
2,740,512
2,985,959
3,019,276
3,535,072
3,813,703
4,104,509
4,163357
4,129,271
4,124,020
4,554.155
4.977,286
4967,223
5,141,294
5,543,740
1,463,513
623,132
709.514
758.236
767,404
805,613
851.563
M),643
951,676
973,393
998,145
121,264
10,465
2416
8,354
9,372
27,721
137,048
10.087410
9,486 451
1257 291
L280 807
8R8 609
679,690
1 O12 027
2,137,977
1,099,222
3,338.669
18.521,366
17.125 317
8,814,226
8.872.697
8,185 736
8,594.776
9,714.635
11, 12%864
10,337,987
13,615.297
S 31,335,145 S
32.146264 S
23,518.703 S
20,358,695 $
20377 542 S
18 242 978 $
19A64 019 $
21,156,325 S
21,412,509 S
22 516 338
Not (Expense)/ Revenue
Governmental activities (9026,223) (8,127,678) (7,057,903) (9,998,996) (9,214,103) (12,067,881) (15,326,(M) (11,587,392) (9,752,948) (11,999,932)
Business -type activities 9.866.237 9,048 948 (114,229) (720.318) (I 31 %200) (529,168) 788,163 2 399 826 1,746,824 4,718,099
Total primary government net expense $ 840014 S 921,170 S (7172132) $ (10719314) $ (10533.303) $ (12597049) S (14538437) S (9I87566) S (8006124) S (7171843)
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes
Property taxes
5.374,150
5,824,984
6.252,363
6,370,333
7,563,944
7469972
8,092,684
9,739,907
7,584,775
8,357,904
Misc.
98,469
106,783
151062
184,781
189,921
111,048
Investment earnings
.196,992
279.957
159,209
106,799
91,041
130.836
71.573
48,193
72,531
105,557
Grants and entitlements not restricted
2 301 876
2.221,506
2,223.398
2,608,937
2.316,990
2,603,949
2,657,356
2,835,264
3,134,703
3.132.559
Gas Tax
324,774
342226
354,678
361,349
366,1n4
361,157
360650
364,563
364,622
369,749
Gain (loss) sale of capital assets
1,210,868
(392)
(212,127)
11610
78497
Transfers
(1,514,159)
415,503
(194,558)
(112.574)
27188
(358169)
(218728)
(650(X1)
3500(1
Total governmental activities
S 8,194,501 S
9,093,176 S
8,989.647 S
9,252,468 S
10,314 764 S
10487 758 S
10,975,156 S
11,953,880 S
11,293,162 S
1 2190 314
Business -type activities:
Investment earnings
899,491
832.296
467,038
228.143
163,907
142.299
102,311
83,224
113,963
132,319
Gain floss) sale of capital assets
(41,786)
-
46,710
(3,091)
Other
(312,736)
-
2,101
140,616
Transfers
1.514,159
(415,503)
194,558
112,574
358,169
218,728
65 000
(35(X)0)
Total business -type activities
S 2,412,650 S
416.793 S
467,038 S
422,701 S
(36,255) S
l00 513 $
460.480 S
301,952 S
227,774 S
234,864
Total primary government
S 10,607.151 S
9.499969 S
9456685 S
9675,169 S
10279509 S
10588271 S
11435636 S
12255832 S
11520936 S
12425178
Change in Not Position
Governmental activities (831722) 955498 1931,744 (746,529) IX)0,661 (1,580,123) (4,351444) 366488 1,540,214 300,392
Business -type activities 12278,887 9465641 352809 (297617) (1355,455) (428655) 1248643 2701778 1974598 4952953
Total primary government S 11,447,165 S 10A2I,139 S 2,284,553 S (1,044.145)_ S____(254,794) S (2,W8,778) $ (3,102,801) $ 3,W8,266 $ 3,514.812 S 5,253,335
Unaudited statistical section
131
l� 2 10
00
00
10
O
M
N 00 N
M
vi N
O vi
0
^O
N
N cr
rq
00
%
10
[� [- m
O
000
N
M
M
n
�2
69
69 64 69
69
7
00 [�
G1
NCN
tt
V 00
t�
^ N O
M
�6
�O
Cy, W) r)
7
a\
10
N
M 10
rt
O
vi
N
N
69
69 69 69
69
O
00 ^
01
'n[- l�
1n
Wn
kn
'It^
7 V
CD
C
N ^� O
01 V r-
M
10
10
vj t�
01
N 10 00
O
p X
N O
O
M M O
�O
N
N
00
00
69
69 69 69
64
C1
00
It �
0000
N 0In
M) M
01
a,
00 O
00
Ci
O
1 On
N Vl
01
00
p
M M
n
M V
l�
N
o0
t�
l�
69
V4 69
V<
In
7 10
h
M W)
00
rt
v1
N oo
N C'
vl
N
10 v1
^ V
00
ON
1O It
ONI
m
M 00
d.
^
01
Q
69
69 69
69
V'7 N
00 00
M
M Q1 h
n
7 �n 10 01
10
.-- 1O
N
a, In
10 ^
N
10
InQ\
-
rq
N
y
^
00
00
69
64 69 69
69
N
N
O t�
rq
O
O
O
N
00
N
r-
r-
00
M N
M
all
M
CO M
O n
O
r
n 01
N M
M
Q\ ^ O
69
N
t N
1p 10 01 .� C
N M M CO W I� N
C>
69 C
C
c � n
iu p N uQi
c o cu
m o v a c m '0 . >0 0
aoia c >w -a c N a'
a (D .0 Z > 0)
LL LL (n m N N N N N a)N L
C (A L
O a) w C C O O a)C a)
O Z of Q 01 L Z X D X Z) M
C N o (0 N
d _
U` i— Q h- Z
Unaudited statistical section
132
Revenues
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Miscellaneous
Investment earnings
Total revenues
Expenditures
General government
Public safety
Public works
Parks and recreation
Community development
Other
Capital outlay
Debt service:
Principal
Interest
Total expenditures
Excess of revenues
over (under) expenditures
CITY OF KALISPELL, MONTANA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
Past Ten Fiscal Years
(modified accrual basis of accounting)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
6,443,167 6,879,980 7,367,487 8,085,877 8,301,367 8,857,628 8,915,749 8,735,146 11,275,636 9,324,431
1,374,244 729,230 328,040 325,787 323,271 395,211 330,807 423,354 381,045 664,391
4,616,415 4,718,521 5,184,134 7,366,576 7,865,669 6,142,095 6,882,344 6,405,255 5,406,703 5,743,188
3,638,633 4,669,634 4,778,786 4,817,847 4,740,643 4,511,738 4,339,260 4,386,312 4,630,575 4,935,344
579,287 554,518 489,108 497,126 549,267 539,579 585,906 572,066 538,234 495,347
82,243 527,108 201,852 252,339 251,458 147,907 129,351 184,272 188,615 288,652
496,992 278,957 159,208 106,800 79,484 78,076 71,572 48,193 72,528 105,557
17,230,981 18,357,948 18,508,615 21,452,352 22,111,159 20,672,234 21,254,989 20,754,598 22,493,336 21,556,910
2,123,774 2,634,295 2,437,743 2,565,522 2,532,377 3,409,323 2,512,714 2,893,332 2,623,226 2,991,835
7,399,753 9,195,960 8,569,405 8,851,001 8,332,769 8,044,589 8,820,726 8,755,082 9,115,952 9,540,699
1,864,465 2,194,497 2,210,238 2,761,933 3,039,460 2,673,729 2,904,562 2,376,067 2,672,152 2,191,012
1,508,943 1,854,149 1,590,360 1,453,215 1,385,997 1,439,646 1,519,173 1,664,595 1,608,497 1,550,843
2,062,332 970,861 1,018,756 1,622,982 2,034,606 1,355,200 3,616,337 1,601,170 685,018 923,170
940
4,353,483 2,480,415 1,804,037 949,400 1,944,635 1,075,598 1,701,728 1,201,998 560,750 930,636
999,530 1,928,305 1,088,314 1,125,928 1,059,505 5,243,827 1,259,716 1,264,227 1,330,057 1,880,720
743,484 701,786 672,386 627,678 580,361 639,724 390,770 357,857 331,811 286,401
21,056,704 21,960,268 19,391,239 19,957,659 20,909,710 23,881,636 22,725,726 20,114,328 18,927,463 20,295,316
(3,825,723) (3,602,320) (882,624) 1,494,693 1,201,449 (3,209,402) (1,470,737) 640,270 3,565,873 1,261,594
Other Financing Sources (Uses)
Transfers in 1,044,868 1,529,504 1,290,617 1,740,512 1,229,303 1,414,504 1,512,214 1,639,721 2,201,276 2,022,611
Transfers out (1,044,868) (1,194,291) (1,290,617) (1,740,512) (1,229,303) (1,414,504) (1,512,214) (1,639,721) (2,176,276) (1,987,611)
Issuance of debt 150,000 2,162,081 8,980 7,629 100,462 4,821,585 243,680 403,623 124,040 461,833
Sales of capital assets 1,210,868 3,317 6,029 233,637 11,610 93,272
Bond premium 52,763
Total other financing sources (uses) 1,360,868 2,500,611 15,009 7,629 100,462 5,107,985 243,680 403,623 160,650 590,105
Net change in fund balances (2,464,855) (1,101,709) (867,615) 1,502,322 1,301,911 1,898,583 (1,227,057) 1,043,893 3,726,523 1,851,699
Debt service as a percentage of
noncapdal expenditures 10.44% 13.50% 10.01% 9.23% 8.65% 25,80% 7.85% 8.58% 9.05% 11.19%
Unaudited statistical section
133
I *A CLUVROMMIMIT49M
CITY OF KALISPELL, MONTANA
MARKET VALUE OF TAXABLE PROPERTY
Past Ten Fiscal Years
(in thousands of dollars)
Fiscal
Year
Real
Less
Total
Total
Estimated
Ended
Taxable
Tax
Taxable
Direct
Market
June 30,
Value
Increment
Valuation
Tax Rate
Value
2007
$32,494
$
701
$
31,793
166.90
$1,035,070
2008
$ 35, 810
$
923
$
34,887
162.85
$1,148,125
2009
$37,850
$
1,341
$
36,509
170.23
$1,190,541
2010
$39,522
$
1,540
$
37,982
169.81
$1,269,511
2011
$41,074
$
1,626
$
39,448
170.34
$1,360,162
2012
$41,785
$
1,716
$
40,069
175.93
$1,413,041
2013
$40,531
$
1,515
$
39,016
185.60
$1,450,786
2014
$40,798
$
1,464
$
39,334
185.10
$1,506,125
2015
$41,761
$
2,240
$
39,521
187.80
$1,587,574
2016
$38,953
$
1,000
$
37,953
205.60
$2,294,128
Source: Flathead County and Montana Department of Revenue
Note: Assessed by Montana Department of Revenue every other year
Unaudited statistical section
134
Taxable
Value as a
Percentage
of Market Value
3.07%
3.04%
3.07%
2.99%
2.90%
2.84%
2.69%
2.61 %
2.49%
1.65%
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
Community
Flathead
State
June 30,
Rate
Insurance
Service
Rate
District
College
County
Ed.
2007
134.90
13.50
18.50
166.90
331.98
17.50
115.88
46.00
2008
132.60
14.75
15.50
162.85
334.47
15.01
119.96
46.00
2009
138.76
16.22
15.25
170.23
334.05
15.43
104.51
46.00
2010
140.11
15.20
14.50
169.81
333.79
15.69
113.12
46.00
2011
141.50
14.64
14.20
170.34
333.52
15.96
122.77
46.00
2012
145.88
16.55
13.50
175.93
333.48
16.00
125.69
46.00
2013
154.60
18.50
12.50
185.60
333.96
15.52
125.96
46.00
2014
154.10
18.50
12.50
185.10
333.68
15.80
124.94
46.00
2015
156.80
18.50
12.50
187.80
332.58
16.90
128.88
46.00
2016
170.10
23.00
12.50
205.60
363.75
18.99
145.03
46.00
Source: Flathead County
Unaudited statistical section
135
CITY OF KALISPELL, MONTANA
PRINCIPAL PROPERTY TAX PAYERS
Current Year, and Ten Years Ago
2016
2006
Percentage
Percentage
of Total City
of Total City
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Taxpayer
Value
Rank
Value
Value
Rank
Value
CENTURYLINK INC
1,860,308
1
4.78%
995,774
1
3.07%
FLATHEAD ELECTRIC COOPERATIVE INC
1,772,106
2
4.55%
993,212
2
3.06%
NORTHWESTERN CORP TRANSMISSION & DISTRIBUTIO
944,534
3
2.42%
596,027
4
1.84%
FLATHEAD HOSPITAL DEVELOPMENT COMPANY LLC
508,052
4
1.30%
775,231
3
2.39%
TKG MOUNTAIN VIEW PLAZA LLC
374,458
5
0.96%
CHARTER COMMUNICATIONS INC
373,742
6
0.96%
WAL-MART ESTATE BUSINESS TRUST
352,534
7
0.91%
CROWN ENTERPRISES INC
251,977
8
0.65%
NORTHWEST HORIZONS INC 59.9%
219,776
9
0.56%
264,458
7
0.82%
STATE OF MONTANA DNRC
215,132
10
0.55%
TARGET CORPORATION
238,437
8
0.74%
HD DEVELOPMENT OF MARYLAND INC
207,012
9
0.64%
KALISPELL GOLDBERG LLC
502,392
5
1.55%
GVD COMMERCIAL PROPERTIES INC
494,803
6
1.53%
ROCKY MTN SUB SPECIALTY ASSOCIATES LLC
159,622
10
0.49%
Total
6,872,619
17.64%
5,226,968
16.12%
Total City Taxable Assessed Value
Source: Flathead County
$38,953,059
Unaudited statistical section
136
$32,417,808
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
Total Collections
to Date
Ended
for the
Percentage
in Subsequent
Percentage
June 30,
Fiscal Year
Amount
of Levy
Years
Amount
of Levy
2007
5,306,252
5,097,185
96.06%
178,290
5,275,475
99.42%
2008
5,831,659
5,614,138
96.27%
107,314
5,721,452
98.11%
2009
6,214,927
5,883,671
94.67%
274,773
6,158,444
99.09%
2010
6,449,723
6,036,354
93.59%
411,906
6,448,260
99.98%
2011
6,719,572
6,182,842
92.01 %
535,190
6,718,032
99.98%
2012
7,049,515
6,847,410
97.13%
201,156
7,048,566
99.99%
2013
7,241,555
6,817,096
94.14%
439,087
7,256,183
100.20%
2014
7,280,909
6,986,904
95.96%
287,514
7,274,418
99.91%
2015
7,422,232
7,179,788
96.73%
242,330
7,422,118
100.00%
2016
7,803,137
7,453,486
95.52%
n/a
7,453,486
95.52%
Source: Flathead County
City Manager's Recommended Budget
Unaudited statistical section
137
CITY OF KALISPELL, MONTANA
WATER SOLD BY TYPE OF CUSTOMER
Past Ten Fiscal Years
(in thousands of gallons)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Type of Customer
Residential
560,565
620,857
565,060
506,020
509,575
545,349
475,419
587,018
625,397
759,788
Commercial
550,512
556,018
527,405
540,942
515,959
495,461
544,564
494,608
516,693
644,066
Total
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
1,403,854
Total direct rate
$ 1.92
$ 2.05
$ 2.29
$ 2.30
$ 2.06
$ 2.14
$ 2.49 $
2.55 $
2.43 $
2.30
per 1000 gallons
SEWER SOLD BY TYPE OF CUSTOMER
Past Ten Fiscal Years
(in thousands of gallons)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Type of Customer
Residential
342,771
361,875
354,477
357,747
332,977
331,165
367,916
365,731
364,397
424,171
Commercial
580,838
544,071
519,402
521,204
449,167
527,307
538,810
482,325
497,854
527,792
Total
923,609
905,946
873,879
878,951
782,144
858,472
906,726
848,056
862,251
951,963
Total direct rate
$ 3.57
$ 3,77
$ 4.22
$ 3.79
$ 4.20
$ 4.37
$ 4.61 $
4.87 $
4.95 $
4.87
per 1000 gallons
Source: City of Kalispell Finance Department
Unaudited statistical section
138
Fiscal
Year
Ended
June 30,
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
CITY OF KALISPELL, MONTANA
WATER AND SEWER RATES
Water
Monthly
Base
Rate
in city out of city
$ 1.78
2.22
$ 1.88
2.34
$ 1.88
2.35
$ 1.88
2.35
$ 1.88
2.35
$ 1.88
2.35
$ 4.69
5.86
$ 7.50
9.38
$ 7.50
9.38
$ T50
9.38
Kate per
1000
Gallons
in city out of city
$ 2.21
2.76
$ 2.43
3.04
$ 2.43
3.04
$ 2.43
3.04
$ 2.43
3.04
$ 2.43
3.04
$ 2.43
3.04
$ 2.43
3.04
$ 2.43
3.04
$ 2.43
3.04
Irrigation (sprinkling)
Monthly
Rate per
Base
1000
Rate
Gallons
in city out of city
in city out of city
$ 1.78
2.23
$ 1.39
1.74
$ 1.88
2.35
$ 1.55
1.94
$ 1.88
2.35
$ 1.55
1.94
$ 1.88
2.35
$ 1.55
1.94
$ 1.88
2.35
$ 1.55
1.94
$ 1.88
2.35
$ 1.55
1.94
$ 4.69
5.86
$ 1.55
1.94
$ 7.50
9.38
$ 1.55
1.94
$ 7.50
9.38
$ 1.55
1.94
$ 7.50
9.38
$ 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
Monthly
Base
Rate
in city out of city
$ 1.78
2.23
$ 1.88
2.35
$ 1.88
2.35
$ 1.88
2.35
$ 4.69
5.86
$ 7.50
9.38
$ 7.50
9.38
$ 7.50
9.38
$ 8.44
10.55
$ 8.44
10.55
Rate per
1000
Gallons
in city out of city
$ 3.99
4.99
$ 4.19
5.24
$ 4.19
5.24
$ 4.19
5.24
$ 4.19
5.24
$ 4.19
5.24
$ 4.78
5.98
$ 4.78
5.98
$ 4.78
5.98
$ 4.78
5.98
Flathead County Water & Sewer District # 1
- Evergreen
Monthly
Rate per
Base
1000
Rate
Gallons
Trumble Cr* Evergreen** Trumble Cr* Evergreen**
1.31
1.47
1.63
6.69
6.21
1.85
10.63
6.37
1.76
14.14
6.37
1.48
14.14
6.37
1.67
14.36
6.84
1.74
11.38
6.84
1.78
11.57 11,243.28
6.45
2.69
Unaudited statistical section
139
"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.
1010 loll
CITY OF KALISPELL, MONTANA
RATIOS OF OUTSTANDING DEBT BY TYPE
Past Ten Fiscal Years
Governmental Activities
Business -Type Activities
Fiscal
Year
General
Special
Total
Percentage
Ended
Obligation
Notes
Revenue
Assessment
Revenue
Notes
Primary
of Personal
Per
June 30,
Bonds
Payable
Bonds
Bonds
Bonds
Payable
Government
Income
Capita
2007
5,785,000
2,269,944
222,868
5,389,846
8,703,159
22,370,817
3.45%
$ 1,156.89
2008
5,475,000
3,303,829
153,073
5,079,534
19,471,713
33,483,149
4.74%
$ 1,648.60
2009
5,145,000
3,062,562
78,876
4,760,665
22,193,000
35,240,103
4.68%
$ 1,660.62
2010
4,805,000
2,833,340
1,445,000
4,410,462
19,541,000
33,034,802
4.61%
$ 1,526.56
2011
4,450,000
2,682,566
1,325,000
4,077,194
18,410,000
30,944,760
4.43%
$ 1,552.91
2012
4,145,000
2,422,191
1,700,000
3,845,329
17,333,000
29,445,520
4.03%
$ 1,453.67
2013
3,700,000
2,380,835
1,558,000
3,457,647
15,938,483
27,034,965
3.43%
$ 1,319.62
2014
3,255,000
2,177,968
1,410,000
3,392,922
15,667,682
172,988
26,076,560
3.25%
$ 1,243.40
2015
2,805,000
1,893,621
1,257,000
3,074,242
14,434,000
154,155
23,618,018
2.82%
$ 1,097.59
2016
2,350,000
1,401,475
1,098,000
2,761,499
13,341,000
116,192
21,068,166
2.45%
$ 955.39
Source:
City Manager's Recommended Budget
City of Kalispell Finance
Department
Unaudited statistical section
140
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
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
414,292
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
172,267
6,475,655
16.5%
$
308.78
2015
2,805,000
3,074,242
531,588
5,347,654
13.5%
$
248.52
2016
2,350,000
2,761,499
765,985
4,345,514
11.4%
$
197.06
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
141
oD
O
00
0
C\
� M
CD
N M
00
I
�
0
O
N
M
�
M
Cq
00
M
M
O
W
N
M
�
M
n
�O
In
O
N
O_
M 01
O
M
lO
�O
O
O
N N
lO
1O
O
M
M
N
M
b9
n
O
v
o
OIn
O
O
00
N M
O
N
M
M
7
�
M
69
00
O
00
0
0
0
0
0 0
N O
0
7
0
lc
7
M10
O
NFfi
N
O
M
�
N
601)
m
00
o
m
C3, M
O �
O
N
�
1�
N
O,
N
V
V
N
69
V
o
N
^�
O
N
1
00
0
00
00
�
O C,
O O�
O
N
00
N
7
h
N
00
N
M
M_
7
M
O,
!—
o
00
M
O
O M
N
l�
V1
�
N
N
N
Q1
�
N
V
�
6R
a
O
m j
_
N
>
•�
(�6
N LY
a
O
X
2
E O
-
O
w �
O O
O
N
U c
N O
N
N N
R
f
iCc
fl
U
n m
CoC
>
`n Q
O
Q
Q
Y
O
N m
C
U
c Cu
m
w@
m
o o_
E
m e
g m
n
m
E
fl m
(D
Cu
o
c
o
:.
co
C�
E
�
a>
a
c
0
a
o
M
m
LO
2
=3
O
H
J
N
N
U)
Unaudited statistical section
142
CITY OF KALISPELL, MONTANA
PLEDGED REVENUE COVERAGE
Past Ten Fiscal Years
Water/Sewer Revenue Bonds
Special Assessment Bonds
Fiscal
Year
Utility
Less:
Special
Ended
Service
Operating
Debt Service
Assessment
Debt Service
June 30,
Charges"
Expenses"
Principal
Interest
Coverage
Collections
Principal
Interest
Coverage
2007
6,141,024
(3,794,101)
(532,655)
(222,847)
1,591,421
644,859
(340,929)
(277,456)
26,474
2008
7,628,374
(4,332,133)
(553,795)
(203,424)
2,539,022
607,086
(325,718)
(253,172)
28,196
2009
7,572,970
(4,676,950)
(579,197)
(182,006)
2,134,817
298,968
(327,423)
(241,088)
(269,543)
2010
7,213,024
(4,513,881)
(1,087,000)
(779,083)
833,060
711,971
(357,831)
(228,611)
125,529
2011
6,810,442
(4,478,406)
(1,131,000)
(737,866)
463,170
505,777
(334,210)
(212,843)
(41,276)
2012
7,359,224
(4,143,706)
(1,007,000)
(647,296)
1,561,222
332,474
(396,662)
(185,444)
(249,632)
2013
8,063,596
(4,410,574)
(1,387,000)
(446,979)
1,819,043
399,180
(391,662)
(186,121)
(178,603)
2014
8,289,654
(4,516,282)
(1,226,000)
(388,108)
2,159,264
197,682
(324,198)
(171,133)
(297,649)
2015
8,587,057
(4,370,296)
(1,242,000)
(369,564)
2,605,197
1,400,791
(326,526)
(163,360)
910,905
2016
9,523,918
(4,769,754)
(1,093,000)
(342,382)
3,318,782
404,275
(319,000)
(145,808)
(60,533)
*includes other revenues pledged for debt service
- excludes depreciation
Source: City of Kalispell Finance Department
Unaudited statistical section
143
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**
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
35.30
5,450
10.90%
2011
19,927
3,133,897
34,487
32.90
5,545
11.00%
2012
20,256
3,275,434
35,875
32.40
5,707
10.20%
2013
20,487
3,503,436
38,222
33.60
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
34.90
5,992
5.70%
2016
22,052
not available
not available
not available
6,053
4.50%
"School District 5
—unadjusted annual (calendar) - October unadjusted (2016)
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
144
CITY OF KALISPELL, MONTANA
PRINCIPAL PUBLIC AND PRIVATE INDUSTRY EMPLOYERS
Most current information and 2010
2016
2010
Estimated
Estimated
# of
# of
Private Employer
Employees
Employees
Industry
Kalispell Regional Healthcare
1000-4999
1000+
Healthcare
Teletech
500-999
500-999
Professional & Tech.
Applied Materials (Semitool Inc.)
500-999
500-999
Manufacturing
Immanuel Skilled Care Center
250-499
100-249
Healthcare
Summit Medical Fitness Center
250-499
not available
Healthcare
Cabela's
250-499
not available
Retail
Pathways Treatment Center
250-499
not available
Healthcare
Hospice -Home Options-KRMC
100-249
not available
Healthcare
Rosauers Food & Drug
100-249
not available
Retail
Flathead Electric Co -Op Inc
100-249
not available
Utility
KLJ
100-249
not available
Engineers -Consulting
Best Buy
100-249
not available
Retail
Home Depot
100-249
not available
Retail
Costco
100-249
not available
Retail
Flathead High School
100-249
not available
Education
Flathead Valley Community Colleg,
100-249
not available
Education
Healthcenter
100-249
not available
Healthcare
Heritage Place
100-249
not available
Healthcare
Daily Interlake
100-249
not available
Other
Target
100-249
not available
Retail
Lowe's Home Improvement
100-249
not available
Retail
Hilton Garden Inn
100-249
not available
Lodging
Kalispell Middle School
100-249
not available
Education
Flathead National Forest
100-249
not available
Government
U.S. Post Office
100-249
not available
Other
Class 6 - 100 to 249 employees
Class 7 - 250 to 499 employees
Class 8 - 500 to 999 employees
Class 9 - 1000 to 4999 employees
Sources: Montana Department of Labor & Industry
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 reports all 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.
Unaudited statistical section
145
CITY OF KALISPELL, MONTANA
Full -Time Equivalent City Government Employees by Function/Program
Past Ten Fiscal Years
FY 07
FY 08
FY 09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
General Government
Manager
2.00
2.00
2.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Human Resources
1.50
1.50
1.50
1.50
1.50
1.50
1.50
L50
1.50
1.50
City Clerk
1.00
1.00
1.34
1.34
1.34
1.34
1.24
1.23
1.58
1.33
Media Specialist
0.50
0.55
0.55
0.55
Finance
3.70
3.70
3.70
3.20
3.20
3.20
3.20
3.20
3.20
3.20
Attorney
5.00
5.00
4.66
4.66
4.66
4.66
4.66
4.67
4.67
4.67
Court
3.50
4.00
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
1.40
1.40
1.40
1 A0
1.45
1.45
Planning & Zoning
6.50
6.50
6.50
4.75
4.75
4.25
4.25
4.25
4.25
4.25
Building
6.50
7.50
7.50
5.25
3.45
3.95
3.95
3.95
5.20
5.20
Information Technology
1.00
1.00
1.00
1.00
1.00
1.50
2.25
2.25
2.15
2.55
Total General Government
31.70
33.20
33.70
28.25
26.85
27.35
27.45
27.45
29.00
29.15
Public Safety
Police
45.00
47.00
48.50
47.50
41.00
42.00
44.00
44.00
44.00
46.00
Fire
27.75
29.60
29.90
24.90
27.30
26.30
27.30
23.30
23.30
23.30
Ambulance
11.25
9.40
9.10
9.10
7.50
7.50
6.50
9.50
9.50
9.50
Total Public Safety
84.00
86.00
87.50
81.50
75.80
75.80
77.80
76.80
76.80
78.80
Public Works
DPW
1.90
1.90
0.15
0.15
0.25
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
11.00
11.45
12.05
12.30
12.65
12.35
12.25
12.25
12.25
12.25
Sign/signal
2.00
2.00
2.50
2.50
2.50
2.50
2.50
2.00
2.00
2.00
Light District
0.10
0.60
0.60
0.80
0.75
0.75
1.25
1.25
1.25
Water
12.95
15.20
15.75
15.95
15.60
15.25
14.90
14.80
14.80
15.30
Sewer
7.40
8.05
8.70
8.40
8.45
7.55
7.00
7.05
7.05
7.55
WWTP
7.40
9.40
9.40
8.40
8.05
7.90
7.55
7.55
7.55
8.55
Storm
4.60
5.35
6.00
6.20
6.40
6.45
6.20
6.20
6.20
6.20
Solid Waste
6.55
T35
7.55
7.60
7.35
7.25
7.35
7.40
7.40
7.40
Total Public Works
56.80
63.80
65.70
65.10
65.05
63.25
61.75
61.75
61.75
63.75
Parks and Recreation
Parks and Recreation
11.40
11.40
11.10
9.20
8.90
8.90
9.45
9.80
9.80
9.80
Forestry
2.55
2.55
2.80
2.80
3.00
3.00
3.20
2.85
1.80
1.80
Total Parks and Recreation
13.95
13.95
13.90
12.00
11.90
11.90
12.65
12.65
11,60
11.60
Community Development
UDAG/Comm. Dev.
3.50
3.50
2.00
2.00
2.00
2.00
2.00
2.00
1.75
1.75
Airport
Airport
0.75
0.75
1.00
1.00
0.50
0.50
0.50
0.50
0.00
0.00
Total all funds
190.70
201.20
203.80
180.80
182.15
181.15
189.85
182.10
180.90
185.05
Source: City Manager's Recommended Budget
Unaudited statistical section
146
CITY OF KALISPELL, MONTANA
Capital Asset Statistics by Function/Program
Past Ten Fiscal Years
FY 07
FY 08
FY 09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
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) 11.00
11.00
11.00
11.00
11.00
11.00
11.00
I1.00
11.00
I1.00
Patrol Units (Motorcycles) 2.00
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) 130.00
133.00
139.00
139.00
139.00
139.00
139.00
139.00
140.00
140.00
Sidewalk Replaced (Linear Feet) 225.00
1411.00
1060.00
1060.00
776.00
1704.00
1476.00
1510.00
1723.00
1589.00
New Sidewalks (Linear Feet) 400.00
Water
Mains (Miles) 104.00
116.00
125.00
125.50
126.00
126.00
126.00
128.00
128.00
129.50
Wastewater
Sanitary Mains (Miles) 108.00
119.00
130.00
130.50
130.50
130.50
130.50
131.00
131.00
131.00
Storm Mains (Miles) 40.00
47.00
52.00
52.00
52.00
52.00
53.00
53.00
53.50
53.50
Lift Stations 34.00
38.00
39.00
40.00
40.00
40.00
40.00
41.00
41.00
41.00
Treated Sewage (Gallons) 1029 mil
1039 mil
980 mil
991 mil
1129 mil
977 mil
955 mil
976 mil
976 mil
919 mil
Solid Waste
Collection Vehicles 8.00
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) 420.73
429.74
429.74
429.74
429.74
429.74
429.49
429.49
429.49
429.49
Miles of Trails 4.05
4.05
4.75
4.75
6.50
6.50
6.75
7.75
8.10
8.10
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
147
WIPF it
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 GOVERNMENT AUDITING STANDARDS
City Council Members
City of Kalispell
We have audited, in accordance with auditing standards generally accepted in the United States and the
standards applicable to financial audits contained in Go vernment 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, and the aggregate remaining
fund information of the City of Kalispell, Montana (the City) as of and for the year ended June 30, 2016, and
the related notes to the financial statements, which collectively comprise the City's basic financial statements,
and have issued our report thereon dated December 19, 2016.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City'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's internal control. Accordingly, we do not express an opinion on the
effectiveness of the City'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.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of 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.
148
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 City'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 City's internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
Wipfli LLP
Helena, Montana
December 19, 2016
149