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18. Audited Consolidated Annual Financial Report Fiscal 2006CITY OF KALISPELL, MONTANA AUDITED CONSOLIDATED ANNUAL FINANCIAL REPORT FISCAL YEAR 2006 Jul 1 005 - June 30 2006 CITY OF KALISPELL ANNUAL FINANCIAL REPORT TABLE OF CONTENTS INTRODUCTORY SECTION Letterof Transmittal ..►.......•■•■r.................■....,............../......••.r•r....•r\r••.r.......■••...R.r..•■••.►.■■..ir•............r.►\...r.r...,■..,. 3-5 ElectedOfficials................r....•..•.....►....,.\......■...■.........■..►..r...........r....■......................■..... ....r.■..........■.........■... 6 FINANCIAL SECTION Management's Discussion and Analysis 7-17 IndependentAuditor's Report......■.■..........r...........................■......................■i..........►.........•.•..r.......................... 18-t9 Basic Financial Statements: Single Audit Section: Government -wide Financial Statements: Scheduleof Expenditures of Federal Awards■r....................■.................r.............■■........■............■...... Statementof Net Assets.................................................................................................r...r..r.r...r..a...... 20 Statementof Activities.....................►............■......................................►.........................................r..... 21 Fund Financial Statements: Budgetary Comparison Schedule — Budget to GAAP Reconciliation -- General and Major BalanceSheet — Governmental Funds...............r.....R....r................►•......r...•■.■Ni...,..!►lr.....f!►./...r+.R...r.►. 22 Reconciliation of the Balance Sheet — Governmental Funds to the Statement of Net Assets ........ 23 Statement of Revenues, Expenditures, and Changes in Fund Balances — Governmental Funds.. 24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - AuditingStandards...................■a\...►....,......r.....................r..................../.....■a•r••....r,r►lrr...,,►l..r.....►a\R Governmental Funds to the Statement of Activities........................................l../....,........,,........... 25 Statement of Net Assets — Proprietary Funds.................................................................................... 26 Statement of Revenues, Expenses, and Changes in Fund Net Assets — Proprietary Funds ........... 27 Statementof Cash Flows — Proprietary Funds ........r..............................................r........l............r.... 28 Statement of Fiduciary Net Assets — Fiduciary Funds..........................lr.......r....................R.r........... 29 Notesto the Financial Statements............................................................................................................ 30-59 Required Supplementary Information: Single Audit Section: Scheduleof Expenditures of Federal Awards■r....................■.................r.............■■........■............■...... 60 Notes to the Schedule of Expenditures of Federal Awards............................................................... 61 Budgetary Comparison Schedule -- General and Major Special Revenue Funds ........................... 62 Budgetary Comparison Schedule — Budget to GAAP Reconciliation -- General and Major SpecialRevenue Funds ............r......■.■..........■........■.■.........■.■r...r.............■.■.............•.............................. 63 Report on Compliance and on Internal Control over Financial Reporting based on an Audit of Financial Statements Performed in Accordance with Government AuditingStandards...................■a\...►....,......r.....................r..................../.....■a•r••....r,r►lrr...,,►l..r.....►a\R 64-65 Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in accordance with OMB Circular A-133 .......................................... 66-67 Schedule of Findings and Questioned Costs....................................................................................... 68-69 Report on other Compliance, Financial, and Internal Accounting Control Matters ►•.....•....\►.i\\/.•.....•■..►.....■•■■.R,..R.........r■R.!/....!•\/..•r..•...►.......r.\........•►.•r......1.•../...r..••■......\.\■.rr..a..\►•R►...\...• 70 Report on Prior Audit Report Recommendations./....■...............r......................•............................... 71 CITY OF KALISPELL ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Other Supplementary Information: Combining and Individual Fund Statements and Schedules'- Combining chedules;Combining Balance Sheet — Nonmajor Governmental Funds.......................................................... 72-81 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — NonmajorGovernmental Funds......■.........■.....■■■.........■.......■■•....■........■...........• ..............................■ 82-91 Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual — Nlajor Debt Service and Capital Project Funds ......................................... 92-93 Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual — Nonmajor Governmental Funds.................................................................. 94-108 Combining Balance Sheet — Nonmajor Enterprise Funds................................................................109 Combining Statement of Revenues, Expenditures, and Changes in Net Assets -- Nonmajor EnterpriseFunds...............................................................................................................................114 Combining Statement of Cash Flows — Nonmajor Enterprise Funds ..............................................111 STATISTICALSECTION ........................................................................... ..//•.......i.fs!!!.■...•.../......+►«I......•...!/... 112-116 INTRODUCTORY SECTION The City OfKali'bspell incorporated 1892 Telephone (406) 758-7700 FAX' (446) 758-7758 Post Office Box 1997 Kalispell, MT Zip 59903-1997 November 27, 2006 To the Honorable Mayor, members of the City Council, and Citizens of the City of Kalispell, Montana State law requires that all general-purpose local govenunents publish within six months of the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that requirement, the annual financial report for the City of Kalispell, Montana for the fiscal year ended June 30, 2006, is submitted for your review. 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. 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 statement within this report. Re pgrtin_ EntiM and Services Provided The City of Kalispell, incorporated in 1892, is located in the western part of the state, which is considered to be 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, among other things, for passing ordinances, adopting the budget, appointing con=ttees, 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 -today 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 sewices including police, fire, building safety, planning and zoning, city court, parks and recreation, streets, community development and general administrative services. The City also operates as Enterprise funds: water, sewer, ambulance, solid waste, and an airport. In addition, the City presents financial data for two component units on the combined statements. The Kalispell Parking Commission is a discretely presented proprietary type component unit. The Downtown Business Improvement District is a discretely presented governmental type component unit. 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 to adopt a final budget. The appropriated budget is prepared by fund, funetion3 and depwtment. Budget -to -actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. For each major governmental fund the comparison is part of the basic financial statements. Accounting, S stem and BgftgtM Control The City's accounting records for general governmental operations are maintained on a modified accrual basis. Under this method, revenws are recorded when measurable and available; expenditures are reomded when services or goods are received and the liabilities are incuiTed_ Accounting records for enterprise funds are recorded on the accYnia1 basis. Under this method, revenues are recorded when the services are performed; expenditures are recorded when the goods or maces are received and the liabilities are incurred. In developing the City's accounting system, consideration isgiven to the adequacy of internal accounting controls. Internal controls are designed to provide reasonable assurance regarding the safeguarding of assets and the accuracy and reliability of accounting data used for preparing; financial data and maintaining accountability for assets. Budgetary control is maintained by an annual appropriation system. The Mayor and Council evaluate the budget proposals of the various City departments to determine the appropriate level of the operating and public service programs. After giving due consideration to the input received from the citizens, the City Council adapts the budget. The budget is controlled through an on line mounting syr. The control is decentralmed to the point that individual depart=nt heads are responsible for expending within budgetary limits. Cash Mananent The City's demand deposits are interest bearing money market mounts. The City also utilizes the Statewide Investment Pool (S. T . I. P), and obligations of the U.S. Treasury for cash. ternpkwarily idle during the year. Rates of return vary based on markets. Insurance The City joined other Montana cities and towns to form a self insurance pool offering worker's compensation and liability covex-age. In Mamh 1993, the Montana Municipal Insurance Authority issued tax exempt refunding bonds for $4,4 10,000 to fund the liability program reserves. Debt service on the bonds is expected to be paid through interest earnings on bond proceeds and other funds of the authority. Refunding Bonds for worker's compensation were sold in February 1994 bringing the total debt for the NO&A worker's Compensation pool to $C,f 14, 7 53 . Postemployment Benefits The City of Kalispell provides pension benefits for substantially all of its full-time employees. These benefits are provided through the Montana Public Employees' Retirement System (PERS); Municipal Police Office -"s Retirement System MPORS): and the Firefighters' f mfied R t SystemMM). The City of Kalispell has no obligation in connection with employee benefits offered through this plan beyond its matching contributions. Additional information on the City of KAispell's pension arrangements can be found in the notes to the financial statements. Pros is for the Future Since November 1986 and the passage of Initiative 105 (to limit certain property taxes to the 1956 levels) to the recent passage of SB 184,1 the ability of the City to raise revenue for basic services is increasingly difficult. The legislature, with SB 184, has lowered tax rates forcing the City to 'increase mill levies to maintain the same level of revenue. The City's financial position has improved considerably over the last several years. The additional revenue from increased taxable valuation and other sources, such as gambling, has brought our milled funds out of a deficit position allowing us to build cash reserves, The City's cash reserves 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. Additional revenues generated by increased taxable valuation carne 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 outlook for the City of Kalispell is to continue providing basic services while looking for additional ways to fund the increasing costs of those services. Acknowled�nens In conclusion, I am able to report that the City of Kalispell is in sound financial condition and should continue to enjoy good financial health. I wish to express my thanks to Amy Robertson and Deb Deist of the finance department as well as the administrative staff of the various departments. without your help and input this report would not be possible. 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. In accordance with Section 7-6-4111, MCA I hereby transmit the City of Kalispell Annual Financial Report as of June 30, 2006 for the fiscal year then ended. R Iy submitted, F 40007 Dat 'ck wills Assistant Finance Director CITY OF KALISPELL ANNUAL FINANCIAL REPORT JUNE 30, 2006 ELECTED OFFICIALS Mans erlCounci.l form of Government Mayor Pamela B. Kennedy 1/1/2010 Council members: Dari Gabriel Ward I 111/2008 Jim Atkinson Ward III 1/1/2010 Robert Hafferman Ward I 1/1/2010 Randy Kenyon Ward III 1/1/2008 Bob Merron Ward II 1/1/2008 M. Duane Larson Ward IV 1/1/2008 Dank Olsen Ward II 1/1/2010 Tim Kluesner Ward IV 1111201.0 Other City Officials. City Manager Jim Patrick Attorney Charles Harball Police Chief Frank Garner Fire Chief Randy Brodehl Finance Director Amy Robertson City Judge Heidi Ulbricht Public Works Director Names Hansz Parks Director Michael Baker Community Development Director Susan Moyer Planning Director Tom Jentz Assistant Finance Director Dick wills i FINANCIAL SECTION MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the City of Kalispell, we offer readers of the City of K.alispell's financial statements this narrative overview and analysis of the financial activities of the City of Kalispell for the fiscal year ended June 30, 2006. 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 $80,270,088(net assets). Of this amount, $14,613,980(unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. ➢ As of the close of the current fiscal year, the City of Kalispell's governmental funds reported combined ending fund balances of $11,168,936, a modest increase of $148,796 from, the prior year. ➢ Revenues of the governmental funds increased from $13,212,850 to $15,076,640. Taxes and assessments revenue increased by $832,500 or 17%. Intergovernmental revenue also showed a substantial increase of $380,090 for fiscal year 2006. This increase can be attributed to a CDBG public facilities grant of $474,050. ➢ The City now has its own planning department accounted for in the general fund. This change helped increase licenses and permits revenue from $116,257 to $393,700. ➢ Charges for services in the general fund increased 40%, from $ 841,492 to $1,171,358. Over 50% of this increase can be directly attributed to the city's aquatic facility being accounted for in the general fund. ➢ Governmental fund expenditures were up $8,548,164 from fiscal year 2005. Most of this increase $5,615,897 is attributable to capital outlay in fiscal year 2006 of $7,667,087. Of this amount, $2,746,774 was for Fire Station #62, $1,100,000 was for the Wells Fargo building, $1,748,819 was for City Airport improvements, and $1,270,03 0 construction in progress of the Old School Station SID. ➢ Proceeds of long-term debt of the governmental funds increased by $4,570,366. Mostly attributable to the Old School Station SID. ➢ At the end of the current fiscal year, unreserved fund balance for the general fund decreased $5211653 (23%) to $1,745,591. This fund balance represents 18 percent of total general fund expenditures. ➢ General fund expenditures were up over $Z million. Personal service expenditures of the fire and police departments (public safety) were up more than $1.5 million. ➢ The City of K.alispell's total debt increased by $6,790,857 during; the current fiscal year. This increase can be attributed to the $41,520,000 SID debt to be used in the development of the Old School Station and the $2,000,000 of revenue bonds for City Airport projects. For fiscal year 2006, the City of Kalispell revenues for governmental activities exceeded expenses by $4,317,648 (change in net assets). This substantial increase is a result of property taxes for general purposes increasing $5,569,947 to $10,322,742. This increase occurred due to the SID 344 debt service funds' deferred assessments receivable ($4,520,000) being reclassified to current year revenue under GASB 34. ➢ Net assets of the City's business -type activities increased to $50,483,488, up 22% from the prior fiscal year. Two-thirds of these net assets ($33,305,438) are invested in capital assets, net of related debt. $6,521,277 is unrestricted net assets. VA ➢ In the City's business -type activities, capital grants and contributions revenue was $516361802. $21,660,264 of this was contributed to the City Airport by the governmental funds. The balance is water, sewer and storm water infrastructure contributed by developers. AN OVERVIEW of THE FINANCIAL STATEMENTS There are three main components to the City of Kalispell's financial statements. l) government - wide financial statements, Z) 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 ofKalispell'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 assets 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 assets. NT -f l osets can be a useful tool in evaluating the financial health of an entity. A substantial 'n net assets may be a sign of deteriorating financial position. Th.e change in net assets during the most recent fiscal period is presented by the statement of The statement of activities reports changes in net assets at the time the event takes - y int 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 PC, 10d. Some examples of this would be uncollected but earned taxes and earned leave benefits. The government -wide financial statements of the City of Kalispell are segregated to distinguish between functions supported predominantly by taxes and intergovernmental revenues (governmental activities) and those that are intended to recover the majority of their costs through user fees and charges for services (business -type activities). The governmental activities of the City of Kalispell include general government/administration, public safety, public works, culture and recreation, and housing and community development. The business -type activities of the City of Kalispell include water distribution, sewer collection and treatment, solid waste collection, ambulance service, and an airport. The government -wide financial statements include, in addition to the primary government described in the above paragraph, a legally separate parking commission, and a legally separate Business Improvement District. The financial information of these component units is reported separately on the Government -wide financial statements. ►P Fund Financial Statements The City of Kalispell, like most other governmental entities, uses fund accounting. Funds are set up to account for specific activities or objectives of the government. Funds also aide in ensuring compliance with legal requirements. The City of Kalispell categorizes its funds as either governmental, proprietary, or fiduciary. Governmental funds correspond with the functions reported as governmental activities in the government -wide financial statements. Governmental fund financial statements, by focusing on near-term inflows and outflows of spendable resources, may be more useful in evaluating a government's short-term fiscal health than the government -wide financial statements. A reconciliation has been prepared to help users more easily compare the governmental fund balance sheet to the government -wide statement of net assets and the governmental fund statement of revenues, expenditures, and changes in fund balance to the government -wide statement of activities. These reconciliations can be useful in contrasting, comparing and understanding the long-term impact (government -wide statements) of near-term decisions (governmental fund statements). The City of Kalispell maintains numerous individual governmental funds. The governmental fund balance sheet and statement of revenues, expenditures, and changes in fund balance present information separately only for funds which are considered major. Major funds are determined by a formula which considers the percentage of total governmental assets, liabilities, revenues, and expenditures contained in each individual fund. The City of Kalispell has five major governmental funds; the General Fund (always a major fund), the Community Development Loan Revolving (special revenue) Fund, the Special Improvement District 343 (debt service) Fund, the Special Improvement District 344 (debt service) Fund, and the Fire Station #62 (construction) 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 fund to demonstrate compliance with this budget. ➢ The City of Kalispell maintains two different types of proprietary funds. Enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. Water, sewer, solid waste, ambulance, and the airport make up the City of Kalispell's enterprise funds. The City of Kalispell uses an internal service fund to accumulate and allocate its data processing 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 this 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 fund benefits governmental more so than business -type functions, it has been included within the governmental activities in the government -wide financial statements. Information in the proprietary fund financial statements is of the same type as that Z provided in the government -wide financial statements, however, it is more detailed. Individual fund data is provided for the airport, the water fund, and the sewer fund. Individual data is not required for the ambulance fund or the solid waste fund, because they are not classified as major funds. ➢ The City of Kalispell maintains two 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. ANALYZING THE CITY AS A WHOLE As mentioned prior, net assets can be an important indicator of an entities financial well-being. For the period ending June 30, 2006, the City of Kalispell's assets exceeded liabilities by $80127008. Current and other assets Capital assets Total assets Long-term debt outstanding Other liabilities Total liabilities Net assets: Invested in capital assets, net of debt Restricted Unrestricted (deficit) Total net assets CITY OF KALISPELL'S NET ASSETS Governmental Business -type Activities Activities 16,426,368 9,879,627 $ 6,546,741 7,69,197 7,834,971 S (565,774) 2,912,619 1,374,903 1,537,716 1,115,640 1,387,434 (271,794) 19,338,987 11,254,530 8,084,457 8384,837 9,222,405 (837,568) 12,270,552 15,365,719 Change 33,305,438 26,714,449 Change FY06 FY05 Inc Dec FY06 FY05 Inc Dee $ 21,307,311 S 15,548,114 $ 5,759,197 $ 17,687,637 $ 15,318,650 S 2,308,987 27,818,276 23,883,729 3,934,547 41,180,688 35,289,264 5,891,424 49,125,587 39,431,843 9,693,744 58,868,325 54,607,914 8,260,411 16,426,368 9,879,627 $ 6,546,741 7,69,197 7,834,971 S (565,774) 2,912,619 1,374,903 1,537,716 1,115,640 1,387,434 (271,794) 19,338,987 11,254,530 8,084,457 8384,837 9,222,405 (837,568) 12,270,552 15,365,719 (3,095,167) 33,305,438 26,714,449 6,590,989 9,423,345 6,496,492 2,926,853 10,656,773 1,827,022 8,829,751 8,492,703 6,315,102 1,777,601 6,521,277 12,844,038 (6,322,761) S 29,786,600 $ 28,177,313 5 1,609,287 S 50,483,488 S 41,385,509 $ 9,097,979 Investment in capital assets (e.g., land, buildings, machinery, and equipment), net of any related debt still outstanding on those assets makes up 57% of the City of Kalispell's net assets. These capital assets are used to provide services to the citizens of Kalispell and are not spendable. Therefore, repayment of the debt related to capital assets must be provided from other sources. Restricted net assets equal $20,080,118 or 25% of total net assets. $10,656,773 of this is restricted in the enterprise funds to remain in compliance with enabling legislation and third party restrictions. The $9,423,345 restricted in governmental activities consist of $1,241,434 for debt service, $2,642,734 for capital projects, and $5,539,177 for other purposes. The remaining balance ($14,613,980) of unrestricted net assets may be used to meet the City of Kalispell's ongoing obligations to citizens and creditors. At the end of fiscal year 2006, the City of Kalispell is able to report positive balances in all categories of net assets. 10 CITY OF KALISPELL'S CHANGE IN NET ASSETS Governmental Business -type Activities Activities Change Change FY06 FY05 Inc Dee FY06 FY05 Inc Dec Revenues Program revenues (by major source): Charges for services $ 4,898,064 $ 4,057,264 $ 840,800 $ 9,411,651 $ 9,246,477 $ 165,174 Operating grants and contributions 1,793,603 1,583,210 210,393 79,501 96,702 (17,201) Capital grants and contributions 158,695 4291455 (270,760) 5,636,802 4,856,418 780,384 General revenues (by major source): Public works $ 2,196,190 1,890,861 Property taxes for general purposes 10,322,742 4,752,795 5,569,947 - - - Miscellaneous 29,828 378 29,450 - - - Interest/ Investment earnings 364,000 332,066 31,934 610,797 179,428 431,369 State entitlement 2,065,556 - 2,065,556 - - - Grants and entitlements not restrictet - 2,158,118 (2,158,118) - - - Gas tax 318,622 - 318,622 - - - Contributions & Donations 204,176 - 204,176 - .- - Permits & Licenses 54,432 - 54,432 - - - Gain on sale of Capital Assets (61,395) 18,570 (79,965) 459,892 (30,663) 490,555 Total revenues $ 20,148,323 $ 13,331,856 $ 6,816,467 $ 16,198,643 $ 14,348,362 $ 1,850,281 Program expenses General government $ 2,688,413 $ 2,050,695 $ 637,718 Public safe safety, $ 6,875 372 5,853,586 1 021 786 ............................................ Public works $ 2,196,190 1,890,861 305,329 = _ Culture and recreation $ 1,719,630 1,587 454 132,176 _ _ _ Housingand community develo mer ty F_ $ 1,482,210 1 112 746 369 464 :: _ __ - Debt service -interest $ 529,263 288,363 240,900 = - - _ - - - - _ _ ____ Miscellaneous $ 1,053 1,517 464 - - __ _ _ Ai r't __ __- 105429 $ $ $ 105,429 Water _ -II-_ $ 1,808,613 1668 032 140,581 Sewer = $ 3,570,618 3,191,852 852 > 378 766 , Ambulance = $ 1,383,918 1 167 458 216,460 Solid Waste _ _ _ $ 615,882 548,514 67,368 Total expenses $ 15,492,131 $ 12,785,222 $ 2,706,909 $ 7,484,460 $ 6,575,856 $ 908,604 Excess (deficiency) before special items and transfers 4,656,192 546,634 4,109,558 8,714,183 7,772,506 941,677 Special Items - - - .- - - Extraordinary Items - _ - - - Transfers - net (3,060,201) - (3,060,201) 399,939 - 399,939 Increase (decrease) in net assets $ 1,595,991 $ 546,634 $ 1,049,357 $ 9,114,122 $ 7,772,506 $ 1,341,616 Governmental activities. Governmental activities increased the City of Kalispell's net assets by $1,595,991 accounting for 15% of the City's growth in total net assets. Overall revenues were up by $6,816,467. Property taxes for general purposes, which includes revenue from real property taxes, personal property taxes, and property assessments, increased $5,569,947. The majority of this increase is the $4,709,268 GASB #34 adjustment to eliminate deferred revenue. Governmental funds program revenues increased by 13% over fiscal year 2005. Governmental funds expenditures increased 22% to $15,492,131. Over one-third (113) of this increase is public safety expenditures. General government expenditures were up 31 % to $2,688,413. Most of this increase can be attributed to the creation of the City's own planning department. Business -type activities. Business -type activities increased the City of Kalispell's net assets by $9,114,122, accounting for 85% of the growth in the City's net assets. Revenues and expenses of the City's business -type activities remained consistent with fiscal year 2005, the approximately $1 million increase in revenues offset with a similar increase in expenses. The 11 addition of a new airport enterprise fund with net assets of more than $3.5 million at June 30, 2006, contributed 32% to the growth in net assets of business -type activities. ANALYZING THE CITY'S INDIVIDUAL FUNDS Governmental Fronds 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). Unreserved fund balance 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 2006, the City of K.alispell's governmental funds reported combined ending fund balances of $11,165,936, an increase of $145,796 in comparison with the prior fiscal year. Of the ending fund balance, $3,884,168 is reserved for either debt service or capital projects and, therefore, is not available for new spending. The general fund is the chief operating fund of the City of Kalispell. At the end of fiscal year 2006 unreserved fund balance of the general fund was $1,7457591. Unreserved fund balance as a percentage of total fund expenditures can be a good tool to use to measure the liquidity of the general fund. For fiscal year 2006, unreserved fund balance represented 18% of total general fund expenditures. The 23% decrease in the fund balance of the general fund during fiscal year 2006 was mainly due to the increased cost of operating the City's public safety departments. The Community Development Loan Revolving fund is a special revenue fund used to make low interest housing and commercial loans within a designated area. Principal and interest from these loans or the purchase and subsequent resale of a fixed asset are the only sources of revenue in this fund.. At June 30, 2006, the fund balance of this fund was $556,998, a slight increase of $1,148 over June 30, 2005. Special Improvement District 343 (debt service) fund was established by the City of Kalispell in fiscal year 2001 for the purpose of servicing the debt attributable to the reconstruction of Sunnyview Drive. This project was funded through the sale of bonds and a small contribution from the City of Kalispell. The fund balance increased from $84,897 to $105,040 during the fiscal year 2006 operating period. This increase was the result of debt service expense of less than the tax proceeds used to pay the debt service. 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 all the infrastructure needed in the industrial/commercial development known as Old School Station. Fund balance at June 30, 2006, for SID 344 was $233,937. The Fire Station #62 (construction) fund was established in fiscal year 2003 for the accounting of resources accumulated and appropriated in the construction of a new fire station located on the north end of Kalispell. 12 8000000 7000000 6000000 5000000 C E 4044000 Q 3000004 2000000 1000000 a Expenses and Program Revenues - Governmental Activities for fiscal year 2006 gen govt pub safety pub works culturelrec comm dev mist debt service Activity Revenue by Source - Governmental Activities fiscal year 2006 Other State entitlement 5% WRIN Charges for services 10% • °= 24% 13 r o e aten grn i a tslcontr butions % Capital grants/contributions 1% Property taxes 51% 13 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 assets of all proprietary funds at the end of the fiscal year amounted to $61521,277. Of this amount, $1,653,248 was attributable to the water fund and $33752,071 to the sewer. The total growth in net assets of all proprietary funds equaled $9,114,122. The water funds increase in net assets for fiscal year 2006 was $2,516,258, however, only $335,650 of this was attributable to operations (operating income). The sewer funds net assets increased $3,011 1566, with $114,899 of the total from operations. Hookup fees, a non-operating revenue of the water and Sewer funds accounted for 23% or $1,874,269 of the proprietary fund increase in net assets. Other factors concerning the finances of the water and sewer funds have already been addressed in the discussion of the City of Kalispell's business -type activities. 7000000 6000000 5000000 4000000 0 E Q 3000000 2000000 1000000 Expenses and Program Revenues - Business -type Activities for fiscal year 2006 airport water sewer solid waste ambulance Activity Revenues by Source - Business -type Activities for fiscal year 2006 Gain or lnvestrnen 4' Capital grants/contributions 34% Net transfers kiperatirlg gran tslcon trib utions 0% Charges for services 57% 14 GENERAL FUND BUDGETARY HIGHLIGHTS There were no revisions to the City of Kalispell's general fund budget of $10,370,600 during fiscal year 2006. Actual expenditures for the year were $10,170,424, a favorable variance of $200,176. Actual revenues of the general fund were $9,346,114, below the budgeted amount of $91575y989. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital A ssets At the end of 2006, the City of Kalispell has $68,998,964 invested in a broad range of capital assets, including police and fire equipment, buildings, land, park facilities, garbage collection equipment, and water and sewer lines. The City of Kalispell has not yet booked some infrastructure; therefore, the dollar amount related to these assets is not included in the total. These assets, which include streets, will represent a significant increase in the capital assets of the City of Kalispell when booked. Major capital asset events during the fiscal year 2006 included the following: The City purchased the Wells Fargo bank building to be used as a consolidated City Hall for $1.1 million. ➢ Land was purchased for the construction of a new parking lot near the Gateway West Mall for $156,910. ➢ Construction was completed and Fire Station #62 was put into service at a cost of $2,9901157 1. ➢ Almost $200,000 worth of improvements to the Kidsport complex were donated to the City. ➢ Improvements to various City parks totaled $117,771. ➢ Governmental funds added equipment worth $274,349. ➢ City installed (1) and replaced (11) fire hydrants valued at $42,859. Developer's installed 55 new fire hydrants valued at $309,195. ➢ 27,425 linear feet of new water main valued at $943,557 was installed and contributed to the City by developer's. ➢ The water department replaced 1279 old meters with the new radio read type, and installed 343 new meters. ➢ Upgrades to the City's water supply system were booked at $346,497. ➢ The City finished replacement of the Liberty Street lift station (#-4) at a cost of $129,658. ➢ Sanitary sewer mains (25,710 linear feet) and lift stations (3) contributed by developer's totaled $1,347,131. ➢ Storm water collection mains (11,347 linear feet) contributed by developer's totaled $385,259. ➢ Equipment was replaced at the Waste Water Treatment Plant equaling $404,463. ➢ A new ambulance was purchased for $107,463. ➢ Property was purchased for the expansion of the City Airport for $767,265. ➢ Airport improvements for fiscal year 2006 were booked for $1,601,521. 15 CITY OF KALISPELL'S CAPITAL ASSETS (NET OF DEPRECIATION) Governmental Business -type Total activitiesactivities I....... . . .... t r I ani e p ;ent ' '' C ty°t Data r° ..e l di d Debt At the end of fiscal year 2005, the City of Kalispell had total long-tenrn debt outstanding of $24,1881995. Of this amount, $5,085,000 comprises debt backed by the full faith and credit of the government and $7,072,773 represents bonds secured solely by specified revenue sources (i.e., revenue bonds). The remainder consists of $1,51.7,000 outstanding on a SRF loan for construction of the wastewater treatment plant, another SRF loan for $1,359,000 which financed the extension of sewer lines south on Highway 93, $5,730,774 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 $557,533 of loans for the purchase of equipment. The City of Kalispell also has debt outstanding on the books of $1,050,082 for the purchase of the Wells Fargo bank building, a USDA — Intermediary Relen.ding Program loan for $477,500, and a $215,533 for the financing of the Courtyard Apartments. The Courtyard debt is paid for by the rent proceeds attributed to those apartments. CITY OF KALISPELL'S OUTSTANDING DEBT 2oas ........... 200G 209 2996 Land 2,502,765 ..:.....:.....:.....:.....:....:.......::........:........ : ` :' ` ``� 1 6107492 $� _ :.045 �� $ 4,113,257 8 Buildings $11,474,673 98 172,555 -'1 ,x' 4 : $11,647,228 'I ,43 Improvements not buildings $10,543,724 ............ 1 �, General obligation bo nds:34 -:: ........... 4 724 10 5 3 0 Machineryand ui ment $ 1,974,267 ;; 974; 715,537 75 ', 1 $ 2,689,80 4 Construction in Pro ress $ 1,322,848 3 54 893,888 � 3 $ 2,216,736.. ........ 66. Source of Su l 404,988_42,5 2,985,000 3��, $ 494,988 4� Pum to Plant Assessments . ... . .... 1 22 4 995 : : 1 224 995 3 Plant Treatment a 499 4 48 8 830 , 4 . 4 $ 4488,830 ... . 4:8: 34 Transmission and Distribution $ ........... 24,040,199 t:54 $24,949,199 ral Plant Gene:. $ 7,875,255 8, 15 4' 4 1 8 99 $ 2} S 5 2,450,254R '' `::7' 4 2 4 2 50 5 , .. .a , . Storm Sewers tem 5,178,959 #93�, ` $ 5,178,954 ,M 7 . Total$27,8181277 s... ...... ..�.............. 1 41 8 688' $ , D r $ " ` �................................ . 58 998 9fi5 $ r . `; bg 59 ' 7 , r t r I ani e p ;ent ' '' C ty°t Data r° ..e l di d Debt At the end of fiscal year 2005, the City of Kalispell had total long-tenrn debt outstanding of $24,1881995. Of this amount, $5,085,000 comprises debt backed by the full faith and credit of the government and $7,072,773 represents bonds secured solely by specified revenue sources (i.e., revenue bonds). The remainder consists of $1,51.7,000 outstanding on a SRF loan for construction of the wastewater treatment plant, another SRF loan for $1,359,000 which financed the extension of sewer lines south on Highway 93, $5,730,774 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 $557,533 of loans for the purchase of equipment. The City of Kalispell also has debt outstanding on the books of $1,050,082 for the purchase of the Wells Fargo bank building, a USDA — Intermediary Relen.ding Program loan for $477,500, and a $215,533 for the financing of the Courtyard Apartments. The Courtyard debt is paid for by the rent proceeds attributed to those apartments. CITY OF KALISPELL'S OUTSTANDING DEBT 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. 16 Governmental Business -type Total activities activities 200s � � 2096 X 05 200s . oo General obligation bo nds:34 $................. 6,085,000 0 ...................... .... .... $ 508509 o x . �. ...... Revenue/Urban Renewal bands 2,183,5 23 : ��:� 4 `' ' 8 9 250 8 � �� $ 7,072,773 . : SRF loans 2,985,000 3��, $ 2,985,000 5� Assessments $ 5,730,774 s.... , .... ............r.:.:.::...::...::...........,...:....: . .:: 5,730,774 499 debt/loans $ 2,314,448 y , �23Contract $ 213147,W + Total $ 16,313,74598 $ 7,875,255 8, 15 4' 4 1 8 99 $ 2} S 5 ' ' 5 -�� 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. 16 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES ➢ Flathead County's unemployment rate (unadjusted) stood at 3.5% as of June of 2006, which is an improvement from the June 2005 rate of 4 percent. This is the same as the State's unemployment rate, but compares favorably to the nations rate of 4.6 percent. ➢ Flathead County and Northwest Montana have been experiencing rapid population growth for many years. The City of Kalispell's population grew 19.4% between the 1990 and 2000 census, and is estimated to have grown 5.7% from 2000-2002. Kalispell and the surrounding area have experienced a 13% population growth rate over the past 10 years, which exceeds all other Montana counties. ➢ The City also continues to grow through the annexation of adjacent area. This puts more strain on all City departments, from Fire and police to Solid Waste, Water and Sewer. ➢ Energy costs continue to rise. The City's electric and natural gas costs have increased approximately 87% and 133%, respectively, since fiscal year 2000. ➢ Cost of health, liability, and property insurance continue to rise. All of these factors were considered in preparing the City of Kalispell's budget for the 2007 fiscal year. During fiscal year 2006, unreserved fund balance in the General Fund decreased to $1,745,591. The City of Kalispell has appropriated $509,912 of this amount for spending in the 2007 fiscal year budget. The City has determined that using this available fund balance is necessary in order to continue providing city services in the manner that the citizens have come to expect. The City continues to levy the maximum mills permitted by law. Water and sewer rates were increased 10% and 5%, respectively, for the 2007 budget year. These rate increases were recommended by the recently completed rate study conducted by an outside firm and adopted by the City Council. The rates were deemed necessary for the City to finance many current and future water and sewer infrastructure and capacity replacement needs as identified by the recently completed facility pian. 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. 17 Denning, Downey & Associates, P.C. CERTIFIED PUBLIC A CCO UNTANTS 1740 US. Hwy 93 South - Suite 101 Kalispell, AIT 59901 INDEPENDENT AUDITOR'S REPORT Mayor and City Council City of Kalispell Flathead County Kalispell, Montana We have audited the accompanying financial statements of the governmental activities, the business -type activities, the discretely presented component units, each maj or fund, and the aggregate remaining fund information of City of Kalispell, Flathead County, Montana, as of and for the year ended June 30, 2006, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of City of Kalispell management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our 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 discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Kalispell, Flathead County, Montana, as of June 30, 2006, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated February 22, 2007, on our consideration of the City of Kalispell's internal control over financial reporting and 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 and should be considered in assessing the results of our audit. -18- Robert g...Robert K Denning, CPA - Kim M. Downey, CPA The management's discussion and analysis and budgetary comparison information on pages 7 through 17 and 62 through 63, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in. the United States of America. we have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. 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, combini g and nonrnajor fund financial statements, and the statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. These sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we express no opinion on them. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations, and is also not a required part of the basic financial statements of City of Kalispell, Flathead County, Montana. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. February 22, 2007 -19- BASIC FINANCIAL STATEMENTS ASSETS Current assets: Cash and investnments Taxes and amewnents nwivable, net Ao autts receivable - net Notes and loam receivable Due from oder govt Prepaid expenses Invertors Other debits Total cutreat assets Noncurrent assets: Restricted cash and inveshnents Dcfaud assessnuris receivable Lang term portion of kmm 1 weivable Capital asses - land Capital assets in progress Capital assets - depwiaw net Total noncurrent ams Tata) Assets LIASILPTIES Current liabilities: Matured bonds payable Aoxwts payable Accrued Payroll Cunva portion of long-term liabilities Current pmtion of bang -term Vital liabili ies Curren portion of compowatod abwam payable Other current liabifitiiea Total current habititaes Nonicurrent liabilities: Deferred revenue - loans roceivable Nonc urrevit porion of leg -term liability Noncurrent pmfion of kag4erm capital habilifies Noncurrent potion of compwsated absences Total Total Liabilities NET ASSETS S Invested in capital assets, net of related debt Restricted for caul projects Resuicted for debt service Restricted for special pnajedts ReAricted for odu r purposes Unrestricted Taal net amts Total liabilities and net assets See accompariyin rotes to the fhwx ial Agemerts City of Kalispell, Flathead County, Montana Statenust of Net Assets June 30, 2006 Goveranwntal PSE Activities ActINIt�a Total RLD. f' 1 10,824,879 1 5,985,827 1 1618063,706 1 91.047 1 71.905 823,597 57,175 880,772 8.659 - 664,483 664,483 4.307 54,386 - 547386 1,154,644 142,393 1,296,997 24.877 122,663 - 122,663 1,100 - 190,985 184,985 8,273 - 8,273 12,984,402 1 7,430,863 1 20,415,265 1 120.583 1 77,212 267,443 1 10,656,774 1 10,924,217 � $ 5,766,417 - 5,766,417 2,289,049 - 2,289,049 2,502,765 1,610,492 4,113,257 1,322,849 893,889 2,216,738 23,992.,662 38,676,,307 62,669,969 25.199 36 141,1.85 - �... 1 51,837 462 1 87 - >`647 1 - 1 25,199 49? 125,587 1 58,868,325 1 107,,993,91.2 1 120.583 1 142,411 10,000 1 - 10,000 817,199 209,191 1,026,390 4.755 249,759 54,516 264,275 1.003 69,794 - 691794 930,327 832,986 1,763,313 102,631 14,873 113,504 76 684 12474 88 754 13,575 2 16 9'4 1119,644 3;3327030 1 - 1 19333 964,583 - 9649583 696,229 - 696,229 14,617,397 7,442,264 21,659,661 844,388 226,933 1,071,321 5.103 1 17,122,597 1 7,269,197 1 2473911,794 1 - 1 5.163 1 19 39,987 1 8,384,837 1 27,723,824 1 - 1 24.436 1 12,274,552 1 33,345,438 1 45,575,990 1i 1 25,199 2,642,734 2,424,633 5,067,367 1.,241,434 8,01.9,140 9,260,574 5,539,177 - 51539,177 - 213,040 213,000 8,092,703 6,521,277 14,613,480 120.583 52.776 1 29,786,644 1 54,483,488 1 80,270,088 1 120.553 1 77.975 1 49,1251587 1 58,868,325 1 107,993,912 1 120.583 1 102.411 20 F'unct#Qstsyroamm Primary govemment: Governmental activities: Genera! government Public safety Public works Culture and recreation Housing and community development Debt service - interest Miscellaneous Total Gvva=ental Activities Business -type activities: Airport Water sewer Ambulance Solid Waste Total business -type activities Total primary government Component units: Downtown B.I.D. EV Parking Commission Total component units See accompanying notes to the financial statements City of Kslisp4 Flathead County, Montana Statement of Activities For the Fiscal Year Ended June 30, 20% Net (Espenses) Revenues and _ . ,_... CI E!M in Net Assets .. Prosram Revenues _ - Primary Government - -- - Indirect Operating Capdal Business- Expense Cham for Grants and Grants and Governmental type Downtown Parking EXROM A1110"tion SaTkes Coutributioss Contributions Agfixifia 19W Ads, S 2,688413 S $ 434,172 S -$ - S (2,254,241) S S (2,254,241) S S 6,856,342 19,030 1,799,378 1,147,729 - (3,928,265) (3,928,265) 2,086, 531 109,659 1,499,638 - 5,000 (691,552) (691,552) 1,712,533 7,097 700,576 8,900 4,688 (1,005,466) (005,466) 1,461,529 20,681 464,300 606,424 - (411,486) (411,486) 529,263 - 30,550 149,007 (349,706) (349,706) 1,053 - - (M) (1,053) S 15,335,664 $ 156,467 S _ 4,898,064 S 1,793&3 S 158,695 $ �.1{ 8,641,769) S - $ (8,641,769) S - $ - S 103,724 S 1,705 $ 48,207 $ - $ 2,660,264 $ $ 2,603,042 $ 2,603,042 $ S 1,714,948 93,665 2,927,706 - 1,244,148 2,363,241 2,363,241 3,415,029 155,589 4,455,533 - 1,732,390 2,617,305 2,617,305 1,343,715 40,203 1,365,111 79,501 - 60,694 60,694 558 D49 57,833 615,094 - - (788)_ _ (7$8) $ 7,135,465 $ 348,995 S 9,411,651 S 79,501 $ 5 636,802 S - $ 7,643,494 $ 7.643 494 S S 22,471,129 S 505,462 $ 14 309 715 $ _ 1,873 104 $ 5,795,497 S (8,641,769) S 7,643,494 S (998,275) S S 5,000 $ 24,314 $ $ S $ $ $ 19,314 $ 113,551 4,170 121,036 3,315 S 11.8,551 4,170 S 145,350.1$ - S - S - S - S - S 19,314 $ 3,315 General Revenues: Property tares for general Purposes 10,322,742 - 10,322,742 46,138 Miscellaneous 29,825 - 29,828 IntereSVInvestment earnings 364,000 610,797 974,797 2,761 2,365 State entitlement 2,065,556 - 2,065,556 Gas tax 318,622 - 318,622 Contributions & donations 204,176 - 204,176 Permits & Licenses 54,432 - 54,432 Gain on We of Capital Assets (61,395) 459,892 398,497 Trnnsfers - net (3,060,201) (2,660,262) Total general revenues, special items and transfers S 10,237,760 S w _399,939 1,470,628 S 11,708,388 $ 48,899 565 Change in net assets S -1-595,991 _ S 9,114,122 _ S 10,710,113 $ 68,213 S 5,684 Net assets - beginning 28,177,313 41,385,509 69,562,822 52,370 72,295 Restatements 13,296 (16,143) (2,847) Restatements (GASB 434 and/or GASB 442) - - Net assets - beginning - restated S 28,190,609 S 41,369,366 S 69,559,975 S 52,370 $ 721295 Net assets - end S 29 786600 S 50,483 488 S 80270,088 $ 120,583 $ 77,975 ASSETS Current assets: Cash and investmm- tss Taxes and assessmefttis remvable, net Nates and k*m romvable Due from od w finWs Due from cOw governments PMpmd =pmks Other debits Total cuffew asseft Nomxrent assets: Advances to other hinds Deferred assessments receivable Long tcmn portion of bats receivable ToW namwent assets Total assets LUSILITIES CunergbiMm: y Mahwed bon& pwj" Acemmt s payable Avmsew d pa Dueto other finxi s Defi=ed revenue Deferred revenue -loam receivable Totat Cummer habdwm Nonc u'mdt habdibm, Advaeneea payable Nferred revenue - lef=s receivable Defcmed revenue -dem assemnents receivable TOW noncurrent haNWRm Total habilidw VUN D AALANCES Reserved for debt service Resaved for capital pro3em Unreserved reputed in general fund Unreserved reported m special revenue funds Toted Sand bibnw Total h&bdifiea w d #turd bakwe See notes to the finawW s#atenw to City of lfatlspeM F %ead Cowdy, Montane Halanm Shw Gari Funds 3me 30,20" Fire St dko Gemond Fmd CO U" Ser. '.IID 343 SLD 3" 062 Od r TOW Go vel GorvenuuenW Foods Foods 1,294 IM S 581,098 54,249 S 233,937 S 8,802,180 S 10,962,672 437,331 - 12,588 - 373,675 823,597 3,398 11,244 - - - 39,744 54,386 73,101 - - - - 2,308 75.409 55[3,773 - 54,792 - - 519,439 1,154. 04 I A663 _ .- - _ - 122, 3 S 19 S 50,242 S 117,628Y S 233237 S _ S %736,949� S � 13,201,604,_ - - - _ 59,440 59,0m - - 1,131,572 4,520,0000 - 114,845 5,766,417 z 1,717,339 - - - 544,8042,28941149 W S 26,W6 s ...._11717,339 $_ II131.572 $ .,, 4,520,000 S - S 718,649 S 11 466 S 2,546,754 S 7,310,581 S 1,249,200 S 4,753,937 $ S 14,455 -" �.��IM'yTR.� IPf�fa S 21,3M" �► - 'S - S - 1<► - S - S 10,000 S 10,E 159 9{,a 25,400 - - - 629,210 814,174 191,535 - - - - 17,191 209,726 - r - - - 75,409 75.409 437,331 - 12,58$ - - 373,678 823,597 12,333 - - _ 64,347 76AM - 11,244 - - - 39,744 -- . -502$8- S 901,163 S 36 44 $ Gm S - x - S IM79 _ ; ?:&M! _ - - - - 59,000 34,000 _ 1,717,339 _ - - 544,804 2,262.143 - - 1 131 572 4zS2(iXOOO - 114845 . „ 517 6 4 - S - S1,717,339 S _ 1 131 572 S 4 2( OOO S - S 7'18 649 _ S 8,487,560 S 801.63 1 S 1,753,,583 S tr144,160 S _ 4,520,000 S - $ 1,.928,228_ _ S 10,147,134 - _ 145,040 233,.937 - 9(r2��,�4•5y7� 1,224■ 1,434 - - - - - 2,641, 34 2,V42,734 1,74.5,591 - - - - - 1,745,591 - 556,998 - - - ! X98&179 177 V39,177 $ 11,745a 1 S 5162M S 105zw S 233,937 $ - S L527,370 S11,1 S 754 x ?.,319,%1 S 1,249, 00 S 4,753,937 S - S 10,455,598 S_ 21,316 070 Otty of Kalispell, Flathead County, Montana RecowAntkm of the Goverua ental Funds mance Stet to the Statement of Net Assets June 30, 2006 Total fund balwwes - governmental funds Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Property taxes receivable will be, wllected this year, but are not available soon enough to pay for the current period's expenditures, and therefore am deferred in the funds. Loans receivable tlt will. be collected at some future dale teat are recopood as revenues on the statement of activities. An internal service fund is used by management to charge the costs of prm iding services within the government. The assets and liabilities of the internal service funds are included in governmental activities in the government -wide statement of net assets Long-term liabilities are not due and payable in the current period and therefore are not reported as liabilities in the funds. Total net its - gove?nummtsl activlt" See accompanying notes to the fnancud statements 23 11.168,936 27,803.051 6,590,014 1,348,548 134,514 (17.258,463) 29,786,640 City of KaHspeB, Mthead County, Mmbna Stdomwo of Re+vemms, Espen, grad Chanps in Fuad Babuwem Gowasmewtd Fumb For the Flsart Year Ended 3=w 30, 20" 24 ❑dw TOW Gm*"Iffrtenbi GovernmeuW Gemmid Fmd CD L4M Rew S11D 343 StD 344 3f3Fe Sbdm #62 Funds Fawk REVENUES Taxes Bred asmssnwnts 3,948,336 S - $ 127,343 $ - $ - $ 1,686,839 # 5,762,480 Lkerma rend parrots 393,700 - _ 318,954 712,654 Inti'-xg0vmVTIental 3,172 2''3 12,12 0 - - - 1,260,'70- 3 4,302,142 Charges for sa viRvs 1,17 3 ,358 82,342 - - 2,053,664 3,307,364 Fines and forkitum 519,391 _ - _ - 519,391 86855 - - - - 27,000 113,855 Investment earrnirrgs I E•242 24254 7x937 8,,150 -- - „ , , ,. 12.0 A 70 y8,15C� 3 754 Total rens erases S Q,-146,114 S 119, 11.6 S 12-X3 S 937 S � 5,46".0 S 15,076.640 EXPENDITURES Current Gen" govemment S 2,126,772 S - $ - S 2,126,772 Pubbe oaf 5-9'!9_802- - - 26,849 693,418 6;650.4 9 Pubk wo*s 513,810 - - _ - 1,572,080 2,085,890 Ctekm and ration 1,217,S�S _ - - - 132,.586 1,350,474 Hmusb* and oornurity developmerd - 95,897 - - 1,383,031 1,478,92$ Debt smiee - principal 72,353 - 50,000 - - 555,883 578,.236 Debt service - Interest 26,169 - 57,160 - - 445,935 529.263 1,053 - - - - - 1,453 Capitol ou#lsy 252,578 22 371 - - ? x746,774I5 Total S 10,170,424 1 AIMS Z ,, 107,I60 $ 22, ..�.r._3 S - - S 773 623 9297 S .,, W . .........7,1642C±71 7772 Exoeas de of revenues over es �'Y� S 824 10 S - - - -- 1 14$ S 20 1 d3 S 7 937 - t - .., ..x S 2 765 473 S 930 57 $ (7,491,13 OTHER FINANCV4G SOURCES (USES) Transftxs in S 349,196 S - $ - S 226,000 $ - $ 566,975 S 1,442,171 Trwmfax (out) 56,0 7 - - - _ (1,786,054) (1,542,110) ids ofgeneral long term debt 9,517 - - - - 8,030 350 8,+0V,867 Tahl other finwcmg sources wW uses S ^ 3112,657 $ - S - S 22 000 S - $ ill 11,27I S 7,639,92$ Net � in ted baWnae $ (521,653) x 1,148 I 2 ,1 3 $ „133x937 ; ^ „ ?x76S�d73) $ 3 180 694 S Fund bis _ S 2,257 2#4 S 555,854 $ 84,8'37 2,765,473 $ 5,345,6761 S 11..020 140 Fund bim6nom - beoming re ad S 2,267,M4 S 555,850 $ 765473 $ 5 675 S 11,020,140 Fund b l r - esidkxg s 1,745,591 s 556.998 S 105.040 S 233,937 S - $ 8.527,370 $ 11 168,936 see woompurfi3v notes to tile &Mbcw smements 24 City of Kalispelk Flathead County, Montana Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmentai Funds to the Statement of Activities For the Final Year Ended June 30, 2006 Amounts reported for governmental actrvities in the statement of activities are different because: Net change in fund balances - total governmental funds Governmental fimds report capital outlays as expenditures while governmental activities report depreciation expense to allocate #hale expenditures over the life of the assets: - Capital assets purchased - Depreciation expense - Capital contributed to Airport enterprise fund In the Statement of Activities, the loss or gain on the sale or disposal of capital assets is recognized. The fund financial statements recognize only the proceeds from the sale of these assets: - Gain (loss) on the disposal of capital. assets Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds: - Donated capital assets - Long-term receivables (deferred revenue) The change in compensated absences is shown as an expense in the Statement of Activities Repayment of debt principal, is an expenditures in the governmental finds, but the repayment reduces long-term debt in the Statement of Net Assets: - Long-term debt principal payments Long term debt proceeds provide current financial resources to the governmental funds, but issuing debt increases long4enn liabilities in the Statement of Net Assets: - Proceeds from the sale of long-term debt Internal service funds are used by management to chane the costs of certain activities, to individual funds. The net revenue of the internal service funds is reported with the governmental activities of the Government -Wide Statement of Activities net of the amounts allocated to business -type activities and depreciation expense. Change in net assets - Statement of Activities See accompanying notes to the financial statements 25 $ 148,796 7,667,087 (1,209,228) (21660,262) (61,395) 194,884 4,93 2,947 (94,670) 678,236 (8,039,867) 39,463 $ 1,595,991 Cf y it KirltspefL Flora Com, !Via e Shat �w1 Am� Jere 3i, �Mf c Beres -Typo Ag*vM§ s - F funds Acttrhin Olrwr dar■ o s -Type Dia Pnmmdmg wmw Stwar Tsftb Fri A.9SM Current assets: cash and rnvcsbT mm S 295,UO4 S 1,502,4C1� S 3,709,787 1 4?8,028 S Sy$5,$2 i � 125,ti5U Taxes and *wwwarierds raoeiv", net - - 22,970 34,205 57,175 - Accowts rcceivabk - net - 126,601 193,862 344,020 664,483 - Due Brom other Wvwmxnts 66,180 76,213 142,393 - llm,cntrm'es - i Rd,985 - _ 1 WQ 5 Total cuumd k"Ot - 235,004 1994 ; --22n799- ; 933A6 ; 7030 3 ; 125"650 Nanmunad e#s: Reshmed cash acrd invcshnents ; - S 2,876,183 ; 7,780,591 S - ; 10,656,774 S - csptw t"eta - land 1,34i,8ti�f3 14,.5011 248.00 - 1,0110,492 - C � - in � 295,409 609,401 - 993,899 - ' +- &Twilw fwt 69 69D 1 } , 1_4,2±22436 21,145,727 7M,464 1 464 38 676 30) , . 3 Tota.1 nc�rtcrm er l Assets S :x,217.548 S 18.118.666 . '+ � � ,7'R2,7R2 ; '"1 fi�4fr! � $ 1 t�7 �I�fi2 % 62 i l r_ 5 Toth "Nets S 3,512,552 S 19,92SAW S 33,775,581 S 11651„530 ; - 58,,8613,325 S 140,975 LL42 LFrM Current Mics: Ao tu* pay" ; 1,150 S 52,538 S 139,317 ; 16,186 S 209,191 ; 3,425 Aomwd payt'oU 344 8,024 12,911 29,237 50,316 1,033 Cumin portion of bng-teem cgAW }ia1xUm - 355,986 477,060 - 832,986 - CunxW portim of compaudod abu mss payable - _ - 10im 103,173 _ clther current hab+tes- Tota1 cumcm WxUicsS _ 1 494 S 428 622 _ . r ; 629 S 562% f 1 115640 ; 41058 Noncurterd liabum. Nonvvxr id portion of -term cMW habddws S - t 3,463.264 ; 3.579.0D0 S - S 7,1342.2611 ; - Nonce m*t PNIM of Oompemwed &bum= 1,528gg 5� ! 10 1 82t.794_ riomua t h%Nb in ; 115n ; 3,5172274 S 3667 1 S 82 794 ; r 269 197 .... -, Toted ; 3,022 S 3 2.945,996 S 4,296 729 $ 1.39 090 S 837 S .. 6,361 ABET A9SM Invested in caprW adiwb, rat of raimkd debt S 3,217,.548 S 11,423,235 S 17,946,191 ; 718,464 S 33,305,438 S 15,225 Restzicted Em copibd p moots - 2,424A33 - 2,424,633 - Resbkted for debt service - 451,550 7,567,599 - 9,019,140 - Restrktod for otlw purposes - - 213,0104 - 213,000 - Uruemric-4ed 291,982 1:6&3248 32752,071 793,97 o .. o,5211,277 . . 115 ,2$9 Total net aneft S .. 3,1,530 S ... 1529 E6" S 29 478 2 S . i.s512,440 S 501483 488 � 34 i Total and rid asses S 1,517,552 S 19,928,662 S 33,775,381 S 1,651 30 S 25 S 140,875 See notes to the iinaiciw sw=enb c City of Kalispell, Flathead County, Montana Statment of Rrvesms, Expeaws, MW Ckanges in Net AsUb Proprietary Fad For the Fiscal Year Ended Jost 30, 2006 Sec accompanying nofts to the financial oderricnts 27 Basineaa-Type AdMtks - Goveraw"tal Eu Funds Activltis Other Business -Type Dats P"wessing .. Alrpvrt Water Sewer Acdv #les Totals Fund OPERATING REVENUES Charges for services S 48,207 S 1,894,446 $ 310038,070 S 1,917,310 S 61,898,0333 $ 79,435 Miscellaneous revenues - 104,870 5,160 627 110,657 383 Special assessments - - 466 424 - ... - - 62112 - 5_2.92136 - Total operating revenues S 48,207 S 1,222216 S _ 3509L654 S ... l Z9801,649 S 7,537,826 $ 79,818 OPERATING EXPENSES personal services S 27,865 $ 632,040 $ 918,257 S 989,428 S 2,567,590 S 38,565 Supplies 346 44,374 99,583 99,944 244,247 37,551 Purchased services 17,885 268,528 743,687 141,093 1,131,193 27,295 Building nm&Tisls - 34,378 29,437 - 63,815 - Fixed charges 14,4030 123,9032 214,824 123,670 472,792 23,032 Los&glbsd debt expenm - 7,270 7,250 542,691 557,211. - Depreciudion 48,933 553,144 1,381,721 141:294_ 2,125,0392 w7 9,659 Total opcnfing expenses S 105,429 - $ 1,663,636 _ S 3Y.394)755 S 1:998,120 � 940 Ia1�1�7�V r `36 nay �3 lJV*1V1. 03pera#ing uYcomc (koas) S w (57,222) S , 335,684 S 114,899 $ - 17,4711 S 375886 $ (56,284) NONOPERAMG REVENUES (IK"ENSES) Hookups - 928,390 945,879 - 1,874,269 - Intergovernmental revenue - - - 79,0358 79,058 903,5030 Inknsst revenue 48,5061 151,168 394,561 15,561 614,796 5,247 Debt service interest ogxnw - (144,977) (175,863) (1,680) (322,520) - Gam (loss) sale of capital asset 458 043 1 849 - - 459,892_ - Total non-operating revenues (expenses) S 546,549 S . -� 935x434 S 1,1G4,577 S � 93,939 $ � - - 2,741,495- S - - 95,747 Income (loss) befit contributions and trans- S 4497327 $ � 1,27211103 S 3,279x476 S � 761458 S 3,477x381 S 39,463 Capital contributions 2,660,254 1,244,148 1,732,394 - 5,636,SD2 - Transfers in 399 939 - - - 399 939 Change in net awts $ 3,509530 $ 2,510x258 S 3,0112865 $ 757468 $ 9 114 122 S 39,463 Net assets - beginning S - S 13,473,648 S 26,475,929 $ 1,435,972 $ 41,385,509 S 87,932 R - �. „ (7,20018943 - _ (15143) - 7,I 19 � Net assets - beginning restated $ - S - ..13,46f, S _2_64661.9 S w1,435,972 S _41,3596 S 95 245) Nct assets - ending $ 3,509530 , 2z448 15,48666 S 29478;852 $ 1,;5 4403 $ 5[3,483,485 $ 134,514 Sec accompanying nofts to the financial oderricnts 27 City of Kaffirpell, Flathead County, Mentans Cooabined Sltatememt of Cash Flews All Proprietary Fund Types For the Flscal Year Ended dune 300 2006 28 Racism - Type Acdvhies Odwr Type Data Pr+rc m"g. -Ai^„pert -Water 9GWW Activities Totab - - FwW C m& flurry from operating activMer. Cash reomved from customers t 45,207 S 1,887,298 $ 3,012,474 S 1,340,794 6,288,773 $ 79,435 Cash received fi-mn amts - - 470,695 69,438 540,133 - C'ash received from xni�neaus souroes - 144,870 5,160 627 110,6.57 383 Cash paymeft for (27,451) (48.5,120) (1,244, 103) (320,979) (2,Ui 7,653) t83,453) Cash pwpTwnb to employees (25,993] (64097) $94 472 95$,251) (2,,51]{1,843) �35z2N) Net anh prmded (used) by operating activities S (5,267) S 884,951 S 1349,754 S 131 , 761,37 T L38 ,864) Cada fkmn Caen■ capital and related financing activities: Pnncipel pard on bawds, kwm and advances - (332,248) (604,942) (53,089) (990,279) - Interest paid on bonds, loons and advances - (144,977) (175,863) (1,650) (322,520) - Acyuoibm ind consftuction of capital aruets (606,217) (759,319) (911,052) (116,775) (2,393,363) (13,120) Procoodc tmm the &"" of cx assets 458,043 1,849 _ - 459,892 Proceeds fiom bonds, loam and a&mnces - 3,541297_ - - 354 287 Net dash provided (mead) by capes and slated fiamcing ac&ftics ; (148,174) $ (880,4D8j S„(1712544) S 02,891,,_ S 13,120 Cash II&M from MM -capital ffeanctsig arrtiyit#es: Trawfears between tunds 399,939 - - (40,000) 339,939 - lnterSavarnnvwtd revenue - - (6,167) 67,558 61,421 90,500 Proceeds of ficenus and perm for non operating - 9A390 945,879 - 11A741269 - Net enh prrrAded (used) Trym rkm-capital firww�V activities S 399,939 S 9'"15,390 S 939.712 S 27558 S 2,295,629 S W500 Cosi fie" fume Investing acthitlow Interest on � 48,SDb 151,108 394,561 10,561 61P,796 3,247 Not cash pro+vWed (used) by my seting actmtiea S 48, ^ S 151 168 S „ „ 394,561 S 16 561 S .. 610,796 S 5,247 Not larreave (decream) In rub and emb equivalents s 295,004 S 1,084,101 S 992,170 S 4,204 S 2,375,479 S 43,763 C&A MW cash equivalents at begim"ft - 3,294,490 10,498,2208 474,424 14,26 7,122 81,887 Cash MW cast egahakmb at sad S 295,004 $ 4,371591 $- --11490,378 S 4 628 S 16,642,601 $ 125,550 ReconHliathm of operating Income (loss) to net cash prodded (used) by operates actiritks: OpeMtmg imcvrW (Ives) S (57,222) S 335,680 S 114,899 $ (17,471) S 375,856 S (56,254) AtwtmentB to reconcile opawfi% imorm to net cash pc r vided ('meed) by operataV acdvi6es. Deproctabon 48,933 553,144 1,381,721 141,.294 2,125,092 9,659 ChwWw is ash and hW i ties: Accovaa receivable - net - 122 (181346} (33,825) (52,049) - Taxes and as.� reoeivable, net - - 4,271 6,726 10,997 - Prapeid erxpertse�x - 2,795 - - 2,795 3,513 Invenknies - (2.,860) - - (2,860) - Accamt3 payable 1,150 (13,873) (156,576) 3,728 (165,571) 912 Accrued peryrufl 1,872 9,943 21785 31,147 66,747 3,336 Net o h provi&d (used) by opt activities $ -(5,267) $ x384 951 $ 1349,754 S 131 599 S 2,361,037 S (38S64 Sea robes to the lanw=W zMtwnatft 28 City of Kalispell, Flathead County, Montana Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2006 NET ASSETS Assets held in trust See accompanying notes to tete financial statements 29 Agency Funds ASSETS Cash and short-term investments 201,214 Total assets 201 X214 LIABILITIES Accounts payable 1293,180 Other current liabilities 72,34 Total liabilities 201,214 NET ASSETS Assets held in trust See accompanying notes to tete financial statements 29 NOTES TO THE FINANCIAL STATEMENTS CITY OF KALI SPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 200 NOTE 1. SUMMARY OF SICNWICANT ACCOUNTING POLICIES The City complies with generally accepted accounting principles (GAAP). GAAP includes all relevant Governmental Accounting Standards Board (GASB) pronouncements. In the government -wide financial statements and the fund financial statements for the proprietary funds, Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before November 30, 1959, have been applied unless those pronouncements conflict with or contradict GASB pronouncements, in which. ease GASB prevails. For enterprise funds GASB statement Nos. 20 and 34 provide the City the option of electing to apply FASB pronouncements issued after November 30, 1959, The City has elected not to apply those pronouncements. Financial Reporting Entity In determining the financial reporting Entity, the city complies with the provisions for GASB statement No. 14, The Financial Departing 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 it's will on the unit or a financial benefit or burden relationship exists. Ptimary Government J The City of Kalispell is a political subdivision of the State of Montana governed by an elected Magor and Council duty elected by the registered voters of the City. The Citi utilizes the City Manager farm 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 Unim Discretely presented component units are separate legal entities that meet the component unit criteria described above but do not meet the criteria for blending. The Cities' two discretely presented component units, the Kalispell Parking Commission., and the Downtown Business Improvement District are legally separate organizations of the City, but the City is financially accountable. The component units are reported in a separate column to emphasize that they are legally separate from the City. Kalispell Parking. Commission The Kalispell City Council passed Resolution 4103, a Resolution of intention to create Special Parking District #2 on. June 21, 1993. Also passed was Resolution 4104, a resolution of intention to provide for fiznding the cost of maintaining, operati CITY OF KALISPELL NOTES TO FINANCIAL. STATEMENTS JUNE 303r 2046 Downtown Busines&s Improvement District On May 17, 2004, by resolution 4591 A, the City created the Downtown Business Improvement District. The purpose of which appears 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"d Avenue East to 2"dAvenue Nest. between Center Street and 4`h Street South. Publicly owned property and owner occupied single family dwellings are exempt from the assessments related to the District. Basis of Presentation, Measurement Focus, and Bads of Accounting Government --wide Financial Statements The government -wide financial statements (i.e., the Statement of Net Assets and the Statement of Activities) report information on all of the nonfiduciary activities of the primary government and its component waits. For the most part, the effect of ink 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 govermnent 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 are 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. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statemertts. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Certain eliminations have been made as prescribed by GASB 34 in regards to inter --fund activities, parables and receivables. All internal balances in the Statement of Net Assets 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, internalservice 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 Assets and the Statement of Activities, both governmental and business -type activities are presented using the economic resources measurement focus and the areal 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 taming 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 revenne 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. 31 CITY of KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 301) 2006 Fund Financial Statements Basis of Presentation Fund financial statements of the City are organized into funds. A fund. is an independent fiscal and accounting enti futy with a self- balancing elfbalancing set of accounts. Fund meting segregates funds according to their intended purpose and is used to aid managmnt 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 fend of the City or meets the following criteria: a. Total assets, liabilities, revenues, or expmditures/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 S 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 flog 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 ail. revenues available if they are coll.ected within 60 days atter year --end. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long --term debt which is recognized when due, and certain compensated absences and claims and judgements 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 gable 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. 32 CITY OF KALISPELL NOTES TO F INA.NC IAL STATEMENTS JUNE 3012006 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 Community Development Loan Revoh ring Fund was established to account for the lending and repayment of monies loaned to businesses and individuals for projects approved by the City's Community Development department. SID 343 is a debt service fund established to account for the resources accumulated and payments nude for principal and interest on the 20 year bonds sold to reconstruct Sunnyview Drive. SID 344 is a debt service fund established to account for the resources accumulated and payments made for principal and interest on the 20 year bonds sold to finance the construction of the Old School Station Industrial and Technology Park. The Fire Station #62 capital project fund was established to account for the resources accumulated and expenditures incurred for the construction of the North fire station. 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 eMxmses 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 fast, them unrestricted resources as they are needed_ Major Funds The City reports the following major proprietary ftmds : The Airport Fund was established in fiscal year 2006 and accounts for the activities of the City Airport. The Nater 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. 33 CITY OF KALISPELL NOTES TO FINANCIAL STATEUENTS JUNE 3012006 As a general rule the effect of interfund activity has been elimi sated 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. Budgets 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 adapted 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. Budget appropriation transfers may be made 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. Thi 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 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 2006 are described below: Created a revenue and appropriation budget for the SID 344 construction fund in the amount of $4,550,000 to accommodate the sale of bonds and appropriations related to the SICK. Assets, Liabilities, and Net Assets or Equity I. Cash, Cash Equivalents, and Investments The City's cash and cash equivalents are considered to be cash on hand, demand and time deposits, bidders bonds, bonds and warrants, and investments with the State of Montana's short-term investinent pool (STIP). The cash resources of the individual funds are combined to form a pool of cash and investments winch is managed by the City Treasurer. Investments are carried at cost, which does approximate fair value as described in Note III, A, except for investments in STIP and particular bonds, which are reported at fair value. For purposes of the statement of cash flows, the enterprise and internal services funds wider all funds (including restricted assets) held in the City's cash management pool to be cash equivalents. 34 CITY OF IALISPELL NOTES TO FINANCIAL. STATEMENTS JUNE 30, 2006 2. Receivables and Payables Transactions between funds that are representative of lendinglborrowmg arrangements outstanding at the end of the fiscal year are referred to as either interfund receivables/payables (i.e., the cuiTent portion. of interfund loans) or advances to/from other funds (i.e.,the non-current portion of intcrfund 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. 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 final ) taxes are billed within ten days aper 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 Bled upon the property. After three gears, the City may exercise the lien and take title to the property. Special assessments are bulled in two equal installments due November 30 and the following May 3 1. 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 dupe thirty days after billing. Mobile home taxes are billed in two halves, the fns 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 intermit charges. An allowance for uncollectible aunts was not maintained for real and personal property taxes and special assessments receivable. The direct write-off method is used for these accounts. A reserve for estimated uncollectible accounts receivable is maintained for the Water Fund, Sewer Fuad and the Ambulance Fund. The reserve balances are as follows for June 30, 2006: Water $ 91P240 Sewer $ 15,191 Ambulance $ 2183672 3. Inventories and Prepaid Items Inventories for materials and supplies for governmental fund types are expended at the time of purchase. Enterprise Fund inventory of materials and supplies are valued at cost and the First -In First -Out (FIFO) method is utilized. Certain payments to vendors reflect casts applicable to future accounting periods and are rewrded as prepaid items. 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 becawse 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. 35 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2005 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 defuaed by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two 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. All of the City's public domain or infrastructure capital assets have not yet been recorded in the City's financial statements. Public domain or infra -structure assets can include roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems and similar assets that are immovable and of value only to the governmental entity. The City of Kalispell has until fiscal year 2007 to retroactively report infrastructure assets. 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. Depreciation has been provided for the property, plant and equipment of the proprietary funds 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 Machinery, vehicles and equipment 5-20 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, but no more than 90 days into 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. The liability associated with governmental fund - type employees is reported in Governmental Activities column of the Statement of Net Assets, 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 Assets. 7. Lang - 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 assets. 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 36 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 3012006 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. NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Excess of expenditures over appropriations For the year ended June 30, 2006, all City funds expenditures were less than or equal to budgeted appropriations. B. Deficit Fund Balances The following Funds had deficit fund balances at June 30, 2006: Debt Service Funds: 2004 G.O. Bond (Fire Station #62) $ 5,437 2002 Sidewalk & Curb $ 82 2003 Sidewalk & Curb $ 110 2004 Sidewalk & Curb $ 1.1067 The deficit in the G.O. Bond fund was caused by a short -fall in anticipated revenue and will be eliminated as taxes are collected. The deficits in the Sidewalk and Curb funds will be eliminated as delinquent assessments are collected. 37 CITY OF KALISPFI. L NOTES To FINANCIAL STATEMENTS JUNE 30, 2006 NOTE 3. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS A. Cash and Cash Equivalents Investment Income Income from pooled investments is allocated to the individual funds based on the fund's month end cash balance in relation to total pooled investments. Cash Composition Cash and investments may include cash and cash items; demand, time, savings, and fiscal agent deposits; investments in the State Short -Term Investment Pool (STIP); repurchase agreements; U.S. government treasury bills, notes bonds, and other treasury obligations such as state and local government series; general obligations of certain agencies of the United States such as Federal Home Loan Funk; and U.S. government security money market funds if the fund meets certain conditions. Total City's (primary governmental and component units) composition of cash, deposits and investments at fair value as of June 30, 2406, are as follows: Cash on hand $ 2,230 Cash in banks: Demand Deposits 736,307 Savings Deposits 39,703 Bidders Bonds 69,871 Bonds/Warrants 70,774 STIP 19x2 16,878 Government Backed Securities 6119631,344 U. S. Treasury Notes _ _ 9952884 Total M 09429.91 Credit Risk Section 7-6-202, MCA.., limits investments of public money of a local government in the following eligible securities: (a) United States government treasury bills, notes and bonds and in the United States treasury obligations, such as state and local government series (SLGLS), separate trading of registered interest and principal of securities (STRIPS), or similar United States treasury obligations; (b) United States treasury receipts in a form evidencing the holder's ownership of future interest or principal payments on specific United States 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) ssociation;(ill) 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 m an escrow account to refund an outstanding bond issue in advance. 38 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 301> 2006 Section 7-6-205 and Section 7-6-2061.1 MCA, state that demand deposits may, be placed only in banks and Public money not necessary for immediate use by a county, city, or town that is not invested as authorize in Section 7-6-202 may be placed in time or savings deposits with a bank, savings and loan association, or credit union in the state or placed in repurchase agreements as authorized in Section 7-6-213. The City of Kalispell has no investment policy that would further limit its investment choices. The City of Kalispell has the following investments and their related credit, risk as reported by Standard and Poor's or Moody's investment service Short Term Investment Pool (STIP) Credit Quality ratings by the NRSRO as of June 30, 2006: Security Investment Type Fair Value Credit Qhter Rating Commercial Paper $1,421 ,0W,799 Al Corporate Fixed $ 2931>960;550 A l + Corporate Variable -Rate $ 2241>9917750 A 1 + U. S. government Indirect -Backed $ _ 248,8843529 A l + Total Investments _ 18S_845.628 Al Securities Lending collateral Investment Pool _ ._ ? 07 1 .g NR Audited financial statements for the State of Montana's Board of Investments are available at 555 Fuller Avenue in Helena, Montana. Custodial Credit Risk Custodial Credit risk is the risk that, in the event of a bank failure, the government's deposits may not be returned to it. The City of Kalispell does not have a deposit policy for custodial credit risk. All deposits are carried at cost plus accrued interest. As of June 30, 2006, $27,994,991 of the City of Kalispell's bank balance of $28,094,991 was exposed to custodial credit risk as follows: Depository Account. Balance Insured $ 1611649 Collateralized -Collateral held by the pledging bank's trust depm-txnent in the City's name $ 657,236 -Collateral held by the pledging bank's trust department, but not m the City's name $27,176,106 Total Deposits and Investments $27.994.991 39 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2005 Deposit Security Section 7-5-207, MCA, states (1) The local governing body may require security only for that portion of the deposits which is not guaranteed or insured according to law and, as to such unguaranteed or uninsured portion, to the extent of (a) 50% of such deposits if the institution in which the deposit is made has a net worth of total assets ratio of 6% or more; or (b) 100% if the institution in which the deposit is made has a net worth of total assets ratio of less than 6%. The amount of collateral held for the City of Kalispell deposits at June 30, 2005, equated or exceeded the amount required by State statues. Concentration of Credit Risk The City of Kalispell places no limit on the amount the entity may invest in any one issuer. The City of Kalispell's concentration of credit risk percentages follow for each investment issued that is not issued or explicitly guaranteed by the U.S. government, invested in mutual funds, external investment pools or other pooled investments: Bidder Bonds Bonds/Warrants % of credit risk 1% <1% Interest Rate Risk The City of Kalispell does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The following is a list of individual investments as of rune 30, 2006 along with their related interest rates and maturity dates. Investment Interest Rate Maturitv Date Amount STIP NIA NIA $19,216,878 Savings Account NIA NIA $ 39,703 Federal Home Loan Bank 4.58% 10/27/06 $ 1,036,747 U.S. Treasury Notes 4.0% 1215106 $ 995,564 Federal Home Loan Bank varies 4121109 $ 985,630 Federal Home Loan Bank 2.5% 10/29107 $ 982,500 Federal Home Loan Bank varies 12/7!07 $ 988,130 Federal Home Loan Bank 2.32% 10/27106 $ 994,370 Federal Home Loan Bank 4.0% 6129107 $ 995,111 Federal Home Loan Bank 4.25% 8128108 $ 992,500 Bidders Bonds NIA NIA $ 69,871 S&C Bonds NIA NIA $ 70,774 40 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 B. Interfund Receivables and Payables The composition of interfund balances as of June 30, 2006, were as follows: Due to/from other funds: Receivable Fund General ,- Major Governmental General - Major Governmental SID - Revolving (1) SID - Revolving (1) SID - Revolving (1) (I)Non-major Governmental Funds Pavable Fund Amount Purpose Health (1 ) $ 25,005 SIT Loan 2004 G.O. Bond (1) $ 47,437 SIT Loan 2002 S & C (1) $ 152 SIT Loan 2003 S & C (1) $ 418 SIT Loan 2004 S & C (1) $ 1, 737 S/T Loan Advances to/from other funds: Receivable Fund Payable Fund Amount Pu ase U DAG ( 1) Light Maintenance (1) $ 597000 LIT Loan ( I )Non -major Governmental Funds C. operating Transfers The following is an analysis of operating transfers in and out during Fiscal Year 2006: From Health (1) SID Revolving (1) Airport TIF -Debt Service (1) Westside TIF -Debt Service (1) General -Major Governmental General -Major Governmental Airport Construction (1) SID 344 Construction (1) 1996S&C(1) SID 344 Construction (1) Airport -Special Revenue Fund (1) Airport TIF -Special Revenue (1) To General -Major Governmental General -Major Governmental Airport TIF -Special Revenue (1) Westside TIF -Special Revenue (1) Drug Enforcement Grant (1) Universal Police Grant (1) Airport TIF -Debt Service (1) SID Revolving (1) SID Revolving (1) SID 344 -Debt Service (1) Airport -Major Enterprise Airport -Major Enterprise (1) Non -major Governmental Fund 41 Amount $ 342,554 $ 6t642 $ 100,000 $ 300,000 $ 23,000 $ 33,056 $ 226,000 184,875 $ 225, 000 $ 44 $ 226,000 $ 45,455 $ 353,476 Purpose Operating Excess Operating Operating Match Match Bond Reserve Bond Reserve Close Bond Reserve Close Operating CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 3012006 D. Capital Assets Capital asset activity for the year ended June 30, 2006 was as follows: In fiscal year 2006, the City of Kalispell created an Airport enterprise fund, which replaced the Airport special revenue fund. Many assets that had been accounted for in the general fixed asset account group have been transferred to the enterprise fund. This change resulted in an increase of $874,376 in transfers out for governmental funds (GFAAG), with a corresponding increase in capital contributions revenue for the Airport enterprise fund. The amounts transferred by category are: Land $58002 Buildings $ 71800 Improvements $295,229 Less: Depreciation 9 255 Total 74 7 f Also, in fiscal year 2006, assets totaling $1,785,887 were purchased for the Airport enterprise fund (contributions revenue) by the Airport TIF special revenue fund (transfer, $37,068) and Airport capital project fund (transfer, $1,748,819). The assets purchased by category are: Land $ 400,000 Buildings $ 23,319 Improvements $1,362,568 Total $L735-0887 42 Governmental Activities: Capital assets not being depreciated: Land Construction in Progress Total capital assets not being depreciated Capital assets being depreciated: Buildings Improvements other than buildings Machinery and equipment Total capital assets being depreciated Less accumulated depreciation for: Buildings Improvements other than buildings Machinery and equipment Total accumulated depreciation Total capital assets being depreciated, net City capital assets, net Internal service funds: Data Processing Less accumulated depreciation Internal service funds assets, net CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 Balance 3,545,593.. (355,170} Balance July 1, 2665 � UU 1U11� Additions Deductions June 30, 2006 $ 21783,407 $ 299,960 $ (580,602) $ 21502,765 3011545 11287,279 265,975) 17322,849 3,084,952 1v587,239 846, 577 3t825,614 967605 $�9,658} (106,263) 117735,353 $ 41045,407 $ ( 7, 800 ) 15, 772, 960 12;623,347 435,064 (295, 229) 12, 763,182 41096,228 274,349 (172, 483) 4,198, 494 28, 454, 928 41754,820 (4751512L w I� 32, 734, 236 (31852,155) $ (446,314) (1,7K739) (493,791) _(21081 , 018 269,122 (7,667,912)1, 209, 227 } ..«. 1U1. 11��.1.1.1�1 $ 182 (47298,287) 91073 (21219,457) 111,087 (21239,0531 .��I.I I I II PPPI.PI.P�W W�11 ...� 1201342 (87756,797) 20,787,016 3,545,593.. (355,170} 23,977,439 $ 23, 871, 968 $ 5,132, 832 $ (1120117 $ 27, 803, 053 Balance Balance July 1, 2005 Additions Deductions June 30, 2006 W■IIID $ 108,368 $ 13,120 $ 1219488 967605 $�9,658} (106,263) $ 11,763 $ 13,120 $ (9;658) $ 151225 43 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 3012006 Total capital assets being depreciated, net Business -type activities capital assets, net $ 34,694, 895 $ 6132559 $ L2134415691 $ 38V6761308 $ 35,289,263 $ 87235,985 $ (2,344,560) $ 41,180,688 Balance Balance Balance Busine activities: .July 11 2005 Additions Deductions June 30, 2006 Capital assets not being depreciated: $ 821748 Less accumulated depreciation a� 0n , (417!U2 Land 262,432 $ 11348,060 $ - $ 11610,492 Construction in progress 3311936 5617952 8931J888 Total capital assets not being depredated 594,368 1,910, 012 275041380 Capital assets being depreciated: Buildings 316,731 - 3167731 Machinery and equipment 118135,217 134,651 (114,009) 11825,859 Source of supply 7671838 - 767,838 Pumping plant 21438,474 - - 290389474 Treatment plant 14,9021150 4031852 (31418) 15, 302, 584 Transmission and distribution 2815461592 3,191,490 (81652) 311729,434 General punt 119751056 119761183 (84,135) 3,867,104 Storm sewer system 67673,114 423,859 - 71096,973 Total capital assets being depredated 57, 025,'!7"2 6,130, 035 ....22101214).629 944, 993 Less accumulated depreciation for: Buildings (128,495) - (157681) (144,176) Machinery and equipment (11454,202) 991733 (155,853) (11110,322) Source of supply (345,282) - (17,568) (362,850) Pumping plant (729,633) - (83,846) (813,479) Treatment plant (10,067,759) 37418 (749,413) (10,813,7'54) Transmission and distribution (77004,474) 81652 (693,409) (71689,231) General plant (11264,036) 84,135 (236,949) (1,416,850) Storm sewer system (1 17369396L - (181,G27)_ ,... .(I 1918YO2 Total accumulated depredation (22,3313,277) 195,938 (271341346) (24,258,685) Total capital assets being depreciated, net Business -type activities capital assets, net $ 34,694, 895 $ 6132559 $ L2134415691 $ 38V6761308 $ 35,289,263 $ 87235,985 $ (2,344,560) $ 41,180,688 44 Balance Balance Component Unit: Ju!y 1, 2065 _ Additions ...$. Deductions June 30, 2006 Parking Commission assets 82=748 $ - $ - $ 821748 Less accumulated depreciation a� 0n , (417!U2 X CamHent unit assets, net 29,940 i.iinir rir� ._25)198 44 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 Depreciation was charged to f inetionslprograms of the primary government as follows: Governmental Activities: General Government $ 501,187 Pudic safety 2251303 Public Works 1101300 Parks and Recreation 389,158 Community Development 3,282 Total Governmental Activities $11209,228 B usi nessr-tvoe Activities: Airport $ 48,933 Water 5537144 Sewer 113817721 Ambulance 351Y927 Solid Waste 1057387 Total Busines"pe Activities $ 2,125,092 The depreciation on the capital assets held by the City's internal service fund is included in general government. E. Long -Term Debt Changes in Long -Term Debt Liabilities — During the year ended June 30, goof , the following changes occurred in liabilities reported in long-term debt: (1)reported in long term debt account group (2)reported in enterprise funds (3) reported in component units (4)reported in internal service fund In prior years. the general fund was used to liquidate compensated absences and claims and judgments. 45 Due within -I_year $ 3009000 730,781 277,000 330,823 1947504 113,504 $ 11940,812 Balance Balance July 1, 2005 Additions Reductions June 30, 2008 (I)G.O. Bonds $ 67345,000 $ - $ (280, 000) $ 8, 005, 000 (1,2)Revenue Bonds 51838,115 21288,880 (852,022) $ 71072,773 (2)SRF Loan--WWTP 37253,850 - (287,880) $ 2,9807000 (1 )Assessments 1=258,498 41542,850 (88,574) $ 59730,774 (1)Contract DebtfLoans 9491535 11109,517 (222,204) $ 11836,948 (1)lntermediary Program 90,000 3871500 w $ 477,500 (1, 2,3,4)Cornpensated Absences 11054,958 134,970 $ 111891928 Total $18,588,2L6 $ 89461,517 9870, 0) $ 25, 378, 923 (1)reported in long term debt account group (2)reported in enterprise funds (3) reported in component units (4)reported in internal service fund In prior years. the general fund was used to liquidate compensated absences and claims and judgments. 45 Due within -I_year $ 3009000 730,781 277,000 330,823 1947504 113,504 $ 11940,812 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 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, 2006 were as follows: Origination Interest Due Principal Annual Balance Pur se Date Rate Term Date Amount Payment 30 -Jun -06 Aquatic Facility 4//512002 2%-4.9% 20 years 2022 $ 3,675,400 varies $ 3,210,000 Fire Station #62 4/112005 3%--5.5% 15 years 2020 3,000,000 varies 2,875,000 Total G.O. Bonds $ 578757000 $ 810851000 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. Total Special Assessment Bands 46 Principal Origination Interest Amount Due Purpose Date Rate Term Date SI D341 9/1/1995 6.06% 15 years 2011 S I D342 11/1/1995 6.34% 15 years 2011 SI D343 511212001 3.6%--5.5% 20 years 2021 S I D344 8/1512006 3.7%-5.1% 20 years 2028 1998 S&C 101111999 7.75% 8 years 2007 1999 S&C 11112000 8.50% 8 years 2008 2000 S&C 11212001 9.50% 8 years 2009 2002 S&C 1/212003 4.25% 8 years 2011 2003 S&C 11112004 4.00% 8 years 2012 2004 S&C 11312005 5.00% 8 years 2013 2005 S&C 11312000 7.25% 8 years 2014 Total Special Assessment Bands 46 Principal Annual Balance Amount Payment 30 --Jun- $ 1001000 varies $ 251000 2091000 vanes 251000 1,581,500 varies 11090,000 4,520,000 varies 41520,000 11687 varies 211 1,769 varies 442 21P315 varies 868 13,364 varies 8,352 131758 varies 101320 311093 varies 279731 $ 221850 varies 22,850 $ 8,497,936 $ 5,730,7"`1'4 CITY OF KALI SPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 Revenue Bands — Revenue bonds are directly related to and expected to be paid from the proprietary fund. The 2000 Westside Tax Increment bonds and the 2005 Airport Tax Increment bands are accounted for in the General Long -Term Debt Account Group, Pu 2001 Water 2004 Water Refunding 2004 Water 2002 Sewer/WWTP 2000 Westside TIF 2003 Water 2005 Water 2005A - Airport TIF 2005B - Ai rpo rt TIF Issue Interest Final Bonds Balance Date Date Term Maturi Issued 30--Jun-06 Jun -01 4.00'°/0 20 years 2021 $ 7819000 $ 818,000 May --04 2.5%--4.85% 24 years 2024 11$40,000 19595,000 May -04 2.7%-3.85% 10 years 2015 489,995 421,733 Apr -02 3.51% 9 years 2011 2,355, 000 19070,000 Mar --00 6.21% 10 years 2010 21500,000 288,523 Jan -03 2.85% 10 years 2013 907,500 681,890 Jun -05 3.80% 10 years 2015 517,000 502,827 Se"5 3.8%-4.40° 10 years 2020 17445,000 11445,000 Sep -05 3.55%-3.95% 5 years 2010 555,000 450,000 Total Revenue Bonds $117370,495 $7,072,773 Si at Provisions of the Series 2005 A' rt Urban Renewal. Tax. Increment Bond Reserve Account — The City shall maintain a debt service reserve account with a balance equal to the lesser of (Oten 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 OutAmuling Bonds (giving effect to any mandatory sinking fund redemption) m the then current or any future calendar year. Maximum amount of principal and interest due in any future fiscal year $184,875 City's Reserve $1845875 Si nificant Provisions of the Series 2000 Westside Urban Renewal Tax Increment Band Reserve Account — The City shall keep in the reserve account an amount equal to the rnaxnnum amount of principal and interest due on all outstanding bonds of the Westside Tax Increment District in the Then current or any future fiscal year. Max Principal and Debt Due in any future fiscal year City's Reserve Si ant Provisions of the Water Sy stem Revenue Bonds 01S Bond $82,569 $82,569 Debt Service Account - Monthly an amount equal to not less than 116 of the interest due within the next six months and 1112 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, 2006, as all debt service payments were made as of the end of the fiscal year, leaving no accrued interest or principal balance. 47 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 307 2006 Reserve Account - The City shall keep in the reserve account an amount equal to the lesser of 10% of the original principal or the maximum amount of principal and interest required in the current or any subsequent fiscal year. For the Water fund the City complies with the 10% of the original principal of all bonds. Original bond issues $41_515,509 Total Reserve Requirement (10%) $ 451,550 Reserve balance 6130106 451,550 Property Insurance - The City will cause all buildings, properties, fixtures, and equipment to be Dept 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 Coveraize Water Service Charges $1,894,446 Misc. Revenue 104,870 Total Operating Revenue $1,9991,316 Less: operating Expense (before depreciation) 13119,492 Available for Debt Service Maximum Debt Service $ 518,562 Coverage FY06 172% Sewer Revenue Bonds (Ordinances and Re aired Information Debt Service Account - Monthly an amount equal to not less than 1/6 of the interest due within the next six months and 1112 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, 2006, as all debt service payments were made as of the end of the fiscal year, leaving no accrued interest or principal balance. Reserve Account W The City shall keep in the reserve account an amount equal to the lesser of 10% of the original principal, the maximum amount of principal and interest required in the current or any subsequent fiscal year, or 125% of the average debt service payable in any fiscal year. The City is in compliance with the maximum amount of principal and interest required in the current or any subsequent year. As of June 30, 2006, the debt service reserve account contains $6301,260. 48 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS f NE 301) 2006 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 Coveraize Operating Revenue $31509,654 Less: Operating Expense (before depreciation) 210132034 Available for Debt Service $1.44" Maximum Debt Service $ 2415508 Coverage FY06 620% Operating Reserve Account — The City shall maintain an Operating Reserve equal to one month's operating expenses. The term operating expenses shall mean current expenses, paid or accrued, or operation, maintenance and current repair of the system and its facilities, and shall include administrative expenses of the city relating solely to the system, premiums for insurance on the properties, labor and the cost of materials and supplies used for current operation and for maintenance, and charges for the accumulation of appropriate reserve for current expenses which are not recurrent monthly but may reasonably be expected to be incurred in accordance with sound accounting practices. Such expenses shall not include any allowance for depreciation or renewals or replacements of capital assets of the system and shall not include any portion of the salaries and wages paid to any officer or employee of the City, except such portion as shall represent reasonable compensation for the performance of duties necessary to the operation of the system. The operating reserve account balance at June 30, 2006 was adequate. Audited Financial Statements - The City shall, within 120 days after the close of each fiscal year, cause to be prepared and supply to the original purchaser or purchasers of bonds issued hereunder and the bank or banks designated as agent for the payment of principal of and interest thereon a financial report with respect to the system of such fiscal year as prepared by an independent certified public accountant. The City is not in compliance with this requirement. State Revolving Fund — In November 1991, the City entered into an agreement with the State Revolving Fund ( S RF ) to borrow funds to partially finance the construction of a wastewater treatment plant facility. This obligation is to be repaid from the operating income of the sewer fund. In FY04, the City entered into another SRF agreement to borrow funds to finance the extension of sewer lines south of the City on Highway 93. Interest Amount Outstanding Purpose origination Rate -Term Borrowed 30 -Jun -06 Sewer FY92 4.00% Sewer FY04 3.75% Total SRF Loans 20 years $3,913,425 $1,617000 20 years 11475,800 1,389,000 $ 51389928.5. $2,986,000 49 Loans/Contracted Debt Governmental Funds Pur se *Board of Housing BOLPick Up/Aerator BOI:Building/Plow Trucks BOI:City Hall HVAC BOI:Streets Building 1301:17ire Truck BOI:Tractor/Mower BOI:Wells Fargo Bldg USDA: intermediary Rel ending Program CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 Origination Interest Due Principal Balance Date Rate Term Date Amount 30 -Jun -06 3/1/1995 6.00% 30 years 2/1/2025 $ 271,000 $ 218,633 5116/2003 2.85% 5 years 8/1512008 40,888 21,171 5/1812003 2.85% 5 years 8/15/2008 99,390 51,462 7/16/2004 2.70% 10 years 2115/2014 151,836 1319239 5116/2003 2.75% 5 years 8/15/2008 52,000 29,512 412212005 3.80% 10 years 8115/2015 279,900 268, 309 1212312004 3.80% 5 years 2/15/2010 77,425 65,840 9/16/2005 3.84% 10 years 8/15/2015 1,10❑, 000 1$0507782 Total BO I loans/contracted debt 21072,439 1,836t948 1011212004 1.00% 30 years 1011212034 477,500 477,500 Total loans/contracted debt $ 2, 549,939 $2,314,448 BDI - Board of Investments Intercap Loan Program *The board of housing loan is paid from the proceeds of the rents on the Courtyard Apartments per the agreement with Northwest Human Resources. Compensated Absences Payable — compensated absences payable, which represent vacation, sick leave and compensatory time earned by employees, and is payable upon termination, were as follows: General Long -Term Debt Account Group $ 944,716 Enterprise Funds 237,806 Data Processing Fund 21Y343 Parking Commission s, l03 Total 1.189.928 50 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 Requirements to amortize debt The annual requirements to amortize all long-term debt outstanding, excluding compensated absences payable, as of June 34, 2006, were as follows: F. State -Wide Retirement Pians Substantially all full-time City employees are eligible for one of three retirement plans: Montana Public Employees' Retirement System (PERS); Municipal Police Officer's Retirement System (MPORS): and the Firefighters' Unified Retirement System(FURS). The plans are established by State law and administered by the State of Montana. The plans are cost-sharing multiple -employer defined benefit and/or defined contribution plans that provide retirement, disability and death benefits to plan members and beneficiaries. The City had a total payroll of $8,122,307 for FY06, of which $7,370,197 is covered by PERS, MPORS, or FURS. Component Unit payroll covered by PERS was $46,676 for the Parking Commission.. Contribution rates for the plans are required and determined by State law. The contribution rates, expressed as a percentage of covered payroll for the fiscal year ended June 30, 2006, were: PERS MPORS FURS SPECIAL 9% 10.7% Employer 6.8% 14.41% 14.36% State 0.1% 29.37% G.C. 2006 $ 280,547 ASSESSMENT $ 232,396 CONTRACTED REVENUE 51 FOR FISCAL BONDS BONDS LOANSlDEBT BONDS YEAR ENDED PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL INTEREST TOTAL 2007 300,040 266,645 330,930 271,087 $471,504 204,196 730,782 292,601 2,867, 745 2008 310,000 249,945 335,719 247,567 500,522 187,386 757,823 265,725 2,854,687 2009 330,000 233,520 320,498 233,479 501,700 164,736 783,502 234,518 2,801,953 2010 340,000 216,045 320,208 219,918 498,907 145,108 782,281 206,353 2,728,820 2011 355,000 203,645 320,208 206,158 501,052 128,420 732,626 173,251 2,620,360 2012-2016 1,990,000 802,980 1,543,212 823,279 1,626,118 353,827 1,788,758 541,682 9,469,856 2017-2021 2,185,000 348,410 1,415,000 479,563 580,061 146,004 1,242,040 208,985 6,605,023 2022-2026 275,000 13,475 1,145,000 175,583 $446,973 38,414 255,000 25,220 2,374,665 TOTAL 6,085,000 2,334,665 5,730,775 2,656,634 5,126,837 1,368,091 7,072,772 1,948,335 32,323,109 F. State -Wide Retirement Pians Substantially all full-time City employees are eligible for one of three retirement plans: Montana Public Employees' Retirement System (PERS); Municipal Police Officer's Retirement System (MPORS): and the Firefighters' Unified Retirement System(FURS). The plans are established by State law and administered by the State of Montana. The plans are cost-sharing multiple -employer defined benefit and/or defined contribution plans that provide retirement, disability and death benefits to plan members and beneficiaries. The City had a total payroll of $8,122,307 for FY06, of which $7,370,197 is covered by PERS, MPORS, or FURS. Component Unit payroll covered by PERS was $46,676 for the Parking Commission.. Contribution rates for the plans are required and determined by State law. The contribution rates, expressed as a percentage of covered payroll for the fiscal year ended June 30, 2006, were: PERS MPORS FURS Employee 6.9% 9% 10.7% Employer 6.8% 14.41% 14.36% State 0.1% 29.37% 32.61% The State contribution qualifies as an on behalf payment. These amounts have been recorded in the City's financial statements. The Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for all three plans. That report may be obtained by writing to Public Employees Retirement Division, P. 0. Box 200131, Helena, MT 58620-0131 or by calling 1-406--444-3154. The City's contributions for the years ending June 30, 2004, 2005 and 2006, as listed below, were equal to the required contributions for each year. PERS MPORS FURS PARKING COMM TRI CITY 2004 $ 219,461 $ 154,194 $ 163,934 S 21656 $ 14,377 2005 $ 245,330 $ 202,507 $ 193,135 $ 31406 $ 17,612 2006 $ 280,547 $ 2111227 $ 232,396 $ 3,174 51 CITY OF KAI..LISPELL NOTES TO FINANCIAL. STATEMENTS JUNE 30, 2006 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. Retirees may remain on the City's health plan as long as they wish, provided they pay the monthly premiums. State law requires the City to provide this benefit. No cost can be estimated for the above benefits, although there is the probability that there are higher medical costs for retirees which would result in additional costs to the insurance program. There are no other post -employment benefits provided by the City. H. Amounts Due From and Due To other Governments O n June 30, 2006, the amounts due from and due to other governments consisted of the following: General Fund Due from: Amount State of Montana $ 6,817 Flathead County 573,955 Total $580,772 Sr)ecial Revenue Funds Due from: Amount Flathead County $ 241, 509 M DOT 81799 Department of Justice 20,556 Total $ 274,864 Debt Service Funds Due from: Amount Flathead County $ 302,967 Entererise Funds Due from: Amount Flathead County $142,393 52 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 3012006 I. Restricted Cash/Investments The following restricted cash/investments were held as of June 30, 2006. These amounts are reported within the cash/investment account on the Combined Balance Sheet. Business -type Activities Amount Water Bond Reserve (includes SRF & Boli $ 451,550 Plant Investment 21424,633 Sewer operating Reserve 213,000 Bond contingency 030,200 Plant Investment (sanitary) 1,708,908 Plant Investment (treatment plant) 21734,892 Treatment Plant Replacement 27493,530 ow Total business -type activities restricted cash/investments $ 10,850, 773 Governmental Activities Westside TIF Bond Reserve 829588 Airport TIF Bond Reserve 1845875 Total governmental activities restricted cash/investments Total restricted cash/investments 267,443 $ 1 o, 924, 215 Plant investment is cash from new services (hookups) and is restricted to be used only for system growth (expansion). Operating reserve cash is restricted according to bond agreement (third party). Treatment plant replacement cash is restricted by an agreement with Evergreen (third party). J. Restatements During the current fiscal year, the following adjustments relating to prior years' transactions were made to fund balance and retained earnings accounts. Fund Amount Reason Statement of Activities $ 7,119 Governmental Funds -Internal Service Fund PIY Reporting Error Statement of Activities $ 8,177 Governmental Funds-GLTDAG P/Y Reporting Error Water Enterprise $ (7,200) Refund of Prior Fiscal Year Revenue Sewer Enterprise $ (12,800) Refund of Prior Fiscal Year Revenue Sewer Enterprise $ 3,857 Reduce Prior Fiscal Year Expense 53 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 K. Joint Ventures Joint ventures are independently constituted entities generally created by two or more governments for a specific purpose which are subj ect 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 consist 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, up to 5 mills, 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 City Health Fund and is included in the general purpose financial statements of Flathead County within the Special Revenue Fund. 2. Courtyard Apartments/Northwest Montana Human Resources The City entered into an agreement with Northwest Montana Human Resources for a joint venture construction project of the Courtyard Apartments. The City owns 16 units of the apartment complex built with Horne Grant and CDGB funds. NWMHR has built 16 units also. The agreement provides for the management of the housing complex for low income housing. All operations and maintenance of the housing complex are managed by Northwest Montana Human Resources. NWMHR maintains a trust fund in the City's name to record the revenues and expenses of the housing complex. As of June 30, 2006 the equity in the fund was $39,398. The debt payments on the mortgage are paid from the proceeds of the rents by NWMHR. The principal balance is recorded on the City's books in the Long --Term Debt Group of Accounts. The original amount of the loan was $271,000. The balance as of June 30, 2006 is $218,633. L. County Provided Services The City of Kalispell is provided various financial services by Flathead County. The County serves as cashier and treasurer for the City for tax assessment collections and other revenues received by the County which are subject to distribution to the various taxing jurisdictions located in the County. The collections made by the County on behalf of the City are accounted for in an agency fund in the City's name and are periodically remitted to the City by the County Treasurer. The County charges the City for fees associated with City Special Assessments. M. Risk Management The City faces a considerable number of risks of loss, including a) damage to and loss of property and contents, b) employee torts, c) professional liability, i.e., errors and omissions, d) environmental damage, e) workers' compensation, i.e. employee injuries, and f) medical insurance costs of employees. A variety of methods are used to provide insurance for these risks. Commercial policies, transferring all risks of loss, except for relatively small deductible amounts are purchased for property and content damage and professional liabilities. The City participates in two statewide public risk pools operated by the Montana Municipal Insurance Authority, for workers' compensation and for tort liability coverage. Employee medical insurance is provided through a state-wide health insurance pool administered by MMIA. Given the lack of coverage available, the City has no coverage for potential losses from environmental damages. 54 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 301) 2006 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 a $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 rataa 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. The City of Kalispell ceased its self funded employee health insurance plan on June 30, 2004. From July 1 through September 30, 20041 the City provided employees with a fully funded plan through Blue Cross/Blue Shield. On October 1, 2004, Kalispell signed a 5 year agreement with many other Montana Cities, 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. Liti ant Olson Kruckenberg West North Talmadge Budget Finance Lucas Damages Requested Loss Potential $ 11000 possible <10,000 none <105000 nominal >1 0, 000 remote >10,000 remote X10,000 possible Status 55 ,Justice Court District Court District Court District Court Federal Court District Court CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 0. Loans Receivable Communitv Development Loan Revolvin 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. 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 $1,644,000 recorded as loans receivable as of June 30, 2006 in the Community Development Loan Revolving Fund. The above mentioned loans are offset with deferred revenue accounts. Uncollected receivables in governmental funds are offset with deferred revenue accounts as explained in the "basis of accounting" 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, the City Council, by Resolution No. 4929, authorized the City Manager to enter into a loan agreement with the United States Department of Agriculture, Rural Development office, in the amount of $520,000. 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 301, 2006 balance $ 153,654 A 10 year loan at 7% to Valley Linen in January 2006. Original Loan amount $ 150,000 June 30, 2006 balance $ 1441724 A 7 year loan at 6.25% to Little Caesar's in March 2006. Original Loan amount $ 37,500 June 30, 2006 balance $ 36,061 A 7 year loan at 7% to Unfinished Furniture Creations in April 2006. Original Loan amount $ 50,000 June 30, 2006 balance $ 4$03 56 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 301 2006 UDAG The following loans were 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 301 2006 balance $ 95,063 A 20 year redevelopment loan at 6% with United Way in January 2000. Original Loan amount $ 133,500 June 34, 2006 balance $ 106,443 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, 2006, amounted to $937,349. Q. Wastewater Treatment Plant agreement with Evergreen The City of Kalispell entered into an Interlocal Agreement with the Evergreen Sewer District #1 for treatment of sewage from the district at the City's plant. The Evergreen district sewer went into operation in July 1994. The City bills Evergreen monthly for debt service at 22% of the principle and interest due for the plant. The City also bills for maintenance and operation and replacement costs per the agreement based on metered flows. Evergreen Sewer District has an equity interest in the replacement account carried on the City's books. The balance of the account as of June 30, 2006 is $2,493,530 of which Evergreen's interest is $514,452. R. Gateway West Mall Flathead County Economic Development Authority, Flathead County and the City of Kalispell entered into an inter -local agreement to purchase 59,000 square feet of the Gateway West Mall for $2.5 million and sign a ten-year lease with Stream International, Ltd. The City of Kalispell agreed to acquire the property by issuing a $2.5 million tax increment urban renewal bond. The City then conveyed the property to the Authority as "tenants in common". The County through the Authority became vested with an undivided 37% interest in the property with the City vested with the remaining 63% interest. As a result of this conveyance, the Authority recognized its portion of the building and the related debt on their books. The Authority is responsible for the operation maintenance of the property during the term of the initial ten-year lease. The Authority is also responsible for the carrying of property insurance against the property. The City has agreed to reimburse the Authority for its proportionate share of these costs. The Authority has agreed to levy up to two mills or $156,000 for the term of the bond, and has pledged $30,557 of the revenue generated each year to be remitted to the City of Kalispell in two equal installments of $15,284 that will be used toward the retirement of the tax increment bond. The authority shall also set up and contribute $3,000 to a building reserve fund each year of the lease. The reserve will be used for any repair or construction work deemed necessary in maintaining the property. 57 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 3 01 2006 The City issued the tax increment bonds in its name and agrees to be punctual in all debt payments, and will keep all proper records and meet all necessary requirements of the bond resolution. The City shall also set up and contribute $5,000 to a building reserve fund for each year of the lease. The reserve will be used for any repair or construction work deemed necessary in maintaining the property. The Authority shall manage this building reserve. The City has pledged the following revenues towards the repayment of the $2.5 million bond: 1. Tax increment money generated from the Westside Tax Increment District until the City reaches their share of the debt payment or $52,000. 2. The Authority's annual contribution of $30,557. The County has agreed that it will approve the Authority's levy for an ad valorem property tax of up to two mills on all taxable property in the County, until the tax increment bond is paid. Within 180 days of the payment in full of the Bond, either the authority or the City may give notice to each other of intent to purchase the property. The purchase price to be paid will be equal to the total debt service paid by the other party. The Authority has the first option of buying the property from the City. If neither the Authority nor the City want to purchase the property outright, then the City has granted American Capital a right of first refusal to purchase the property. The proceeds from the sale of the property shall be distributed based on the equity interest each entity holds. In August of 2003, Stream International closed their computer support call center in the Gateway West Mall building, and subsequently bought out the remaining portion of their 10 year contract with the City. In February of 2004 the City entered into an agreement with TeleTech Holdings, Inc. TeleTech, which will operate a call-in center, similar to Stream's operation, entered into a lease structured similar to Stream's. Rent abatement is tied to jobs created and maintained and pay. TeleTech will also pay the guaranteed minimum tax payment of $140,0001year. This ensures that the City will be able to meet its portion of the debt obligation related to the Gateway West Mall building. S. Long Term Loans Receivable Hampstead Partners In August of Zoog, the City of Kalispell entered into two (2) notes receivable agreements with 2nd Avenue West Partners, L.P. (Hampstead Partners) for property on 2nd Avenue West in Kalispell. The property consists of a 40 -unit low --income apartment complex known as 2 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, 2006, is $18,855, and $65,728, respectively. 58 CITY OF KALISPELL NOTES To FINANCIAL STATEMENTS JUNE 30, 2006 WestCoast Has itali Limited Partnershi Barbieri Agreement) On November 4, 19961, the Kalispell City Council, exercising the powers of an urban renewal agency, adopted Ordinance No. 1245, approving the Kalispell Center (Mall) Expansion as an urban renewal project, and authorizing the use of tax increment revenues (Downtown TIF) to finance certain acquisition and demolition necessary to the Kalispell Center (Mall) Expansion. This ordinance also authorized the entering into of a development agreement with Kalispell Center Limited Partnership (developer) in order to accomplish the Kalispell Center (Mall) Expansion. In accordance with ordinance No. 1245, on July 21, 1997, the City of Kalispell entered into a note receivable agreement with Barbieri Investment Company, Inc., in the amount of $890,900, for the acquisition, demolition and redevelopment of land owned by Equity Supply Company. This note has since been assigned to WestCoast Hospitality Limited Partnership as the beneficial owner of the Kalispell Center Property. Terms of this agreement stipulated that if the borrower invested $6.6 million toward the Kalispell Center Expansion within thirty (30) months from the closing of the sale of the Equity Property (April 1, 1998), all the debt would be forgiven. Also, any investment in the expansion, prior to or after the thirty (30) months, would reduce the principal on a pro rata basis. If the $6.6 investment was not made in this time frame, interest at 9% annually on the remaining principal was to begin to accrue and repayment of the principal and accrued interest would commence in 144 installments. Principal outstanding as of June 30, 20061, was $6461,158. On August 2, 2005, the City received a letter from WestCoast Hospitality Limited Partnership which conveyed their plans of an initial investment of $ 5 million by the summer of 2006 in the Kalispell Center. This investment in the project would reduce their repayment obligation by approximately $675,302, which is more than the principal balance of $640,866. Repayments of this loan have been suspended. The Downtown Tax Increment District sunset in fiscal year 2002. Any tax funds left at the sunset of this district were to be split on a pro rata basis between the taxing bodies (City, County, School District). Because this loan was made with tax increment funds, the County and School District argued that the principal payments on this loan should also be split and distributed. An agreement was reached between the three (3) taxing bodies regarding these funds. T. Subsequent Events WestCoast Hospitalfty Limited Partnership.1Barbieri Agreement) On December 4, 2006, the City Council, by resolution agreed that WestCoast Hospitality Limited Partnership (see section S. Long Term Loans Receivable) had made sufficient investment in the Kalispell Center Mall property to adequately fulfill the intent of the loan agreement with the City of Kalispell. All of the remaining debt is forgiven. 59 REQUIRED SUPPLEMENTARY INFORMATION CT O Fcdcra] Gramor/Pass-Through Passed thru the Som Dept. ojCommm Home ftW0F I = Grant Public Facilities Grant Todd U. S. Departmant of Homme sed Urban Deveiopmmt Ll. S. Passed thru the Surfs Deparnwnt of rrrmrportarton Commumny TranWmutim Edommat Progrw*CTEP) Highway Trac Safety -Kalispell OmVent Proaxtim H*may Traffie Safely -Kalispell Ocmpam Ptolnct m Total U. S. Deptartnea t of Transportation Direct: Nurturing Centtnr Jag Gram[ Universal Gram Passed thmugh Flathead County: Drug Comrul and SyA= Grant - Foanwls Grant Total U. S. Departemot of Jwalee Direor: FEMA Gram Total U. S. Department of Homer Somrity Direct: hwnnediarY MSB PREF= Todd U. S. Department of AXrkahmm Todd Federal Aawtance City of Kahq)ct , Fladmr W County, Monta m SCHEDULE OF EXPVfDFIIWMS OF FEDERAL AWARDS For NoW Ytar BWed Jmae 30,2M Frdctal Pana -T h ugh Award Bcpmuw Hal Foderal Matchil3d= Federal MatdVOl tr Bala= CFDA 4 Grantoes # Am" 1 -Jul -05 Roveauo Ravamw Expo jW= ExywAkturea 30-hm-06 14.239 M05-SG3001-17 $ 216,333 S 122,573 S 119,720 $ 2,555 14 228 MT-CDBG-05PF-06 S 500,000 $ 474,050 S 470,863 $ 3,187 S - S _596,625 S _5W,583 S - $ 6,042 20.205 STPE6799(23) $ 197,074 $ 4,688 S 4,688 S - 20.605 $ 41,100 S 14,888 $ 14,888 S - 20.605 06.09-02-15!06-11-03-15 $ 57,250 $ 34,701 $ 31,701 $ S $ 54,277 0 $ - $ 54277 $ - $ 16.527 2005CWAX0032 $ 289,798 $ 82,057 S 66,057 $ 16,000 16.738 2005DIBX0623 S 15,528 S 15,528 S 15,52E $ - 16.710 2003LNf"0313 $ 75,000 $ 1,549 $ 25,000 $ 33,056 $ 25,000 S 34,605 $ - S - 16.727 NIA NIA $ �. 9,042 $ 45,866 $ 23,000 $ 45,066 S 30,895 $ 1,147 ?S 10,591 $ 167,651 S 56,056 S 151,651 $ 65,500 $ 17,147 83.554 EMW-2003-FP-01886 S 21,420 $ 9,799 S 1,089 $ 9,799 $ __ _1,089 $ - S - h $ 9,799 4 S 1,089 # S 9.T99 # S 1=089 0 $ - 10.767 S 528,000 S 387,500 S 387,500 S - S - 4 $ 38T,500 4 S # $ 387,500 # $ # $ 10,591 - ___ 1.215,852 - 57,145 - 1,193,810 - 66 589 - _ 23,169 CITY OF KALISPELL FLATHEAD COUNTY, MONTANA NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Fiscal Year Ended June 301y 2006 Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of City of Kalispell. Flathead County. Montana, and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMIT Circular A-1331,, Audits of States, Local governments, and Non -Profit Organizations Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in preparation of, the basic financial statements. 61 Ci#y of Kjdigmll, Fuad County, Montana RmAgetary Cogrpwr6n Schedule For the Fiscal Year Eedrd dune 30,2W6 62 Geeeind FaW CD Lmm Rev. BUDGKI'ED ACTUAL BUDGKTED ACTUAL AMOUNTS AA40UNTS VARIX 4WIK AMOUTM AMOUNTS VARI kWE ORIGINAI.J (BUDGETARY WITH FINAL ORIGINAL) (BUDGETARY 'WITS FINAL FINAL BASM-See Note A BUDGET FINAL BASIS See Note A BUDGET RESOURCES (INFLt)WSt}: Taxes and asacessnients S 3,947,187 S 3,948,338 S 1,151 Licenses and perruits 481,029 393,700 (87,329) - - - Intergova mental 3,060,447 3,029,229 (31,218) - 12,120 12,120 Chw-fps for seryxixa 1,148,iC6 1,171,358 22,532 139,650 82,342 (57,308) Fm" and forfeittres 500,500 519,391. (81,109) .- _ _ 88,0[10 86,855 (11,14r5) - _ Investrrmnt e- ruin ? 250, 197,243 X243 k r 52, 1y 5 f) rti'(W 5'(W 24,954 24,954 1 9,954 Amounts available for appropriation S -92515,1989 $ 9,366,114 $ (229,875) S 144,650 $ - -- - 119,416 S (25,234) CHARGES TO APPRC3PRIATI0N9 (i3MI Q) SM: General govvenmmt S 2,202,464 S 2,126,772 S 75,692 S Public m&-ty 6,000,690 5,929,802 70,858 Public warms 530,357 513,810 16,54T Culture ao recreate 1,15.4,95 6 1,217,888 (52.,592) - - - Hotming and conmunity development - - - 164,000 95,897 68,1-03 Debt service - principal 86,936 72,353 14,583 - - _ Debt 9mvice - m#rnrvw 30,527 26,168 4,359 - « - MisceAaw" 1,155 1,053 102 - _ _ C,ag W m iday 353.475 282,578 70,897 -- 98,000 22,371 75,629 Total charms to $ 10,3 70,e $ 10�170,424 $ 204,176 & 262,0Q4 i S 118,268 S 143732 OTHER FINANCING SOURCES (USM: Transfers in S 354,333 S 349,196 S (1,357) $ Transfers (out) (59,OW) (56,056) (2,944) Proceeds of mal k cg tem debt 93517 9,517 Total Cdr Fines Sotu'ces {Uses} $ 301,970 $ 302,657 - - Net change in fund balance $ - _(521,653} $ 1,148 Ruxl balances - begin� of the year 2,267,244 555,850 Restater eats _ - Fund balances - begmnmg of the year - restated S - 8,267,244 $ 555,850 Fund woe caul of the year $ 1 7.41, 591 tl C $ 556"998 See accompanying notes to the financial statements 62 City of Kalispell, Flathead County, Montana Budgetary Comparison Schedule Budget -to -GAAP Reconciliation Note A - Explanation of differences between budgetary inflows and outflows and GAAP Revenues and Expenditures rarin�� 117.1r fl i"n T nn" IDr .r Sources/Inflows of resources Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule $ 9,346,114 $ 119,416 Total revenues as reported on the statement of revenues, expenditures and changes in fund balances-govemmental funds. $ 934� 14 $ 119,416 Uses/Outflows of resources Actual amounts (Budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 10 1 ?0.424 $ 119,268 Total expenditures as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds 10J 4 $ 111268 See accompanying notes to the financial statements 63 Denning, Downey &Associates, P. C. CERTIFIED P UBLIC A CCO UNTA NTS 1740 U.S. Hwy 93 South w Suite 101 Kalispell, ,114T 59901 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 Mayor and City Council City of Kalispell Flathead County Kalispell, Montana We have audited the financial statements of the governmental activities, the business -type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of City of Kalispell, Flathead County, Montana, as of and for the year ended June 30, 2006, which collectively comprise the City of Kalispell"s basic financial statements and have issued our report thereon dated February 22, 2007. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial RoortinR In planning and performing our audit, we considered City of Kalispell's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide an opinion on the internal control over financial reporting. our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. Compliance and other Matters As part of obtaining reasonable assurance about whether the City of K.alispell'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 that are required to be reported under Government Auditing Standards. -64- Robert K. Denning, CPA • Kim Af Downey, CPA This report is intended solely for the information and use of the audit committee, management, the Mayor and City Council, the Montana Department of Administration, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. CPA s, 121>1 C. February 22, 2007 -65- Denning, Downey & Associates, P.C. CERTIFIED PUBLIC A CCO UNTA NTS 1740 U.S Hivy 93 South - Suite 101 Kalispell, 1i T 59901 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Mayor and City Council City of Kalispell Flathead County Kalispell, Montana Compliance We have audited the compliance of City of Kalispell, Flathead County, Montana, with the types of compliance requirements described in the U.S. Office of Management and Budget (DMB) Circular A- 133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2006. The City's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable .to each of its major federal programs is the responsibility of the City's management. Our responsibility is to express an opinion of the City's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller general of the United States; and DMB Circular A-133, Audits of states, Local Governments and Non -Profit Organizations. Those standards and DMB Circular A-133 require that we plan and perforin the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. we believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City's compliance with those requirements. In our opinion, the City complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2006. Internal Control ,Over „Compliance The management of the City is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing an opinion on compliance and to test and report on internal control over compliance in accordance with DMB Circular A-133. -66- Robert K Denning, CPA •flim Alf. Downey, CPA Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laves, regulations, contracts and grants caused by error or fraud that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended for the information of the audit committee, management, the Mayor and City Council, the Montana Department of Administration, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. C 12 February 22, 2007 -67- City of Kalispell Flathead COUNTY, MONTANA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Fiscal year Ended June 30, 2006 Section I -- SummaEy of Auditor's Results Financial Statements Type of auditor's report issued Unqualified Internal control over financial reporting: Material weakness(es) identified? No Reportable condition(s) identified not considered to be material weaknesses None Reported Noncompliance material to financial statements noted? No Federal Awards Internal control over major programs: Material weakness(es) identified? No Reportable condition(s) identified not considered to be material weaknesses None Reported Type of auditor's report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with Circular A-13 31 Section .5 1 0(a)? No Identification of major programs: CFDA Number Name of Federal Program or Cluster 14.228 Public Facilities Grant 10.767 Intermediary Relending Program Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee? No W6 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Section ZI — Financial Statement Findings No Financial Statement Findings were reported. Section III -- Federal Award Findintzs and Questioned Costs No Federal Award Findings or Questioned Costs were reported. Denning, Downey & Associates, P.C. CERTIFIED PUBLIC ACCOUNTANTS 1740 U.S Hwy 93 South - Suite 101 Kalispell, MT 59901 REPORT ON OTHER COMPLIANCE, FINANCIAL, AND INTERNAL ACCOUNTING CONTROL MATTERS Mayor and City Council City of Kalispell Flathead County Kalispell, Montana There were no other compliance, financial, or internal accounting matters. a,K,� Q,aa.e�atoo , CPQ February 22, 2007 -70- Robert K Denning, C.P. • Kim M. Downey, CPA Denning, Downey &Assocites, P. C. CERTIFIED PUBLIC A CCO UNTA NTS 1740 U.S. Hwy 93 South - Suite 101 Kalispell, MT 59901 REPORT ON PRIOR AUDIT REPORT RECOMMENDATIONS Mayor and City Council City of Kalispell Flathead County Kalispell, Montana The prior audit report contained no prior recommendations. February 22, 2007 -71- Robert 71_Robert K Denning, CPA - Kim M Downey, CPA OTHER SUPPLEMENTARY INFORMATION City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, 2006 FUND BALANCES Reserved for debt service Reserved for capital projects - _ - _ - Unreserved reported in special revenue funds - 771,846 1,431,675 138,186 24 335 Total fund balance $ - $ 771,546 $ 1,431,675 $ 138111$6 $ 24,335 Total liabilities and fund balance $ - $ 791,172 $ 1,432,501 $ - 138,675 $ 92,087 See accompanying notes to the financial statements 72 Airport Airport TIF Westside TIF Parks in Lieu Health Levy ASSETS Current assets: Cash and investments $ - $ 787,648 $ 1,432,501 $ 138,675 $ Taxes and assessments receivable, net - 3,524 - - 421087 Notes and loans receivable - - - _ _ Due from other funds - - _ _ - Due from other governments - - - - 50,000 Total current assets $ - $ 791,172 $ 1,432,501 $ 138,675 $ 92,087 Noncurrent assets: Advances to other funds - - - _ _ Deferred assessments receivable Long term portion of loans receivable Total noncurrent assets $ - $ - $ _ $ - $ _ Total assets $ - $ 791,172 $ 1,432,501 $ 135,675 $ 92,487 LIABILITIES Current liabilities: Matured bonds payable $ w $ - $ M $ _ $ _ Accounts payable - 15,042 410 489 _ Accrued payroll - 760 416 - - Due to other funds - - _ _ 25,665 Due to other governments - - - _ - Deferred revenue - 3,524 - - 42,087 Deferred revenue -loans receivable - - - - _ Total current liabilities $ - $ 19,326 $ 826 $ 489 $ 67,752 Noncurrent liabilities: Advances payable - - - _ - Deferred revenue - loans receivable Deferred revenue -deferred assessments receivable Total noncurrent liabilities Total liabilities $ - $ 19,326 $ 826 $ 489 $ 67,752 FUND BALANCES Reserved for debt service Reserved for capital projects - _ - _ - Unreserved reported in special revenue funds - 771,846 1,431,675 138,186 24 335 Total fund balance $ - $ 771,546 $ 1,431,675 $ 138111$6 $ 24,335 Total liabilities and fund balance $ - $ 791,172 $ 1,432,501 $ - 138,675 $ 92,087 See accompanying notes to the financial statements 72 City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, 2000 73 Building Dept. Light Maint Decorative Li h#s Gas Tax Street ASSETS Current assets: Cash and investments $ 580,342 $ 136,592 $ 2,009 $ 270,925 $ 511,385 Taxes and assessments receivable, net - 9,912 403 56'323 Notes and loans receivable - - - - Due from other funds - Due from other governments - 22,612 1,593 - 149,277 Total current assets $ 584,342 $ 169,416 $ 405 $ 270,925 $ 715 985 Noncurrent assets: Advances to other funds - Deferred assessments receivable Long term portion of loans receivable - - - Total noncurrent assets Total assets $ 580,342 $ 1591416 $ 4,005 $ 270,925 $ 716,985 LIABILITIES Current liabilities: Matured bonds payable $ - $ - Accounts payable 3,041 701309 174 3,226 35,235 Accrued payroll 4,082 - - - 7,707 Due to other funds - - - Due to other governments - - 16,816 808 Deferred revenue - 9,912 403 - 56,323 Deferred revenue -loans receivable - - - - Total current habitities $ 7,123 $ 80,221 $ 577 $ 20,042 $ 100,073 Noncurrent liabilities: Advances payable _ 59,000 - - - Deferred revenue _ loans receivable _ - - Deferred revenue -deferred assessments receivable- - " Total noncurrent liabilities $ _ - $ 59,040 $ Total liabilities $ __7J23 $ 139,221 $ 577 $ 20,042 $ 100 473 FUND BALANCES Reserved for debt service - - - - Reserved for capital projects - - - Unreserved reported in special revenue funds 573,219 � - 30,195 3,428 250,883 616,912 Total fund balance $ 573,219 $ 30 195 $ 3,425 $ 254,883 $ 616,912 Total liabilities and fund balance $ 580,342 $ 169,416 $ 4,005 $ 270,925 $ 715,985 See accompanying notes to the financial statements 73 City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, 2006 74 Urban Forestry Courtyard^ UDAG RD Loan Rev. Drug Grant ASSETS Current assets: Cash and investments $ 87,881 $ 43,503 $ 821,123 $ 218,395 $ 1,113 Taxes and assessments receivable, net 6,989 - - - _ Notes and loans receivable - - 10,320 29,424 - Due from other funds - _ - _ Due from other governments 16,934 - _ _ 1,093 Total current assets $ 111,804 $ 43,503 $ 831,443 $ 247,519 $ 2,206 Noncurrent assets: Advances to other funds - - 59,000 - - Deferred assessments receivable - _ _ - _ Long term portion of loans receivable - _ 191,186 353,618 - Total noncurrent assets $ - $ - $ 250,186 $ 353,615 $ - Total assets $ 1 I 1,804 $ 43 503 $ 1,081,529 $ 601,437 $ 2,206 LIABILITIES Current Liabilities: Matured bonds payable Accounts payable 3,547 - 1,400 150,000 - Accrued payroll 1,454 - 1,627 - 1,059 Due to other funds - _ _ Due to other governments - 4,105 Deferred revenue 6,989 - - - _ Deferred revenue -loans receivable - _ 10,320 29,424 - Total current liabilities $ 111990 $ 4,105 $ 13,347 $ 179,424 $ 1,059 Noncurrent liabilities: Advances payable - _ _ _ _ Deferred revenue - loans receivable - - 191086 353,618 - Deferred revenue -deferred assessments receivable - - - _ _ Total noncurrent liabilities $ - $ - $ 191,186 $ 35161$ $ Total liabilities $ 11,990 $ 41,105 $ 204,533 $ 533,042 $ 1,059 FUND BALANCES Reserved for debt service - _ - - _ Reserved for capital projects - - - _ Unreserved reported in special revenue funds 99,814 39,398 877,096 68,395 1 147 Total fund balance $ 99,814 $ 39,398 $ 877,096 $ 68,395 $ 1,147 Total liabilities and fund balance $ 111,804 $ 43,503 $ 1,081,629 $ 601437 $ 21)206 See accompanying notes to the financial statements 74 City of Kalispell, Montana Nonmajor Governmental ]Funds Combining Balance Sheet June 30, 2006 Deferred revenue Universal Grant COPS Grant Nurturing Center MT Cultural Arts CDBG Head Start ASSETS - - - - - Current assets: $ 86 $ 8,799 $ 16,000 $ - $ 71 Cash and investments $ (4,470) $ 1,934 $ - $ - $ 3,329 Taxes and assessments receivable, net - - w - - Notes and loans receivable - - - - - Due from other funds - - - - - Due from other governments $ 4,556 8,799 $ 16,000 - - Total current assets $ 86 $ 10,733 $ 16,000 $ - $ 3,329 Noncurrent assets: Advances to other funds - - - - - Deferred assessments receivable - - - - - Long terra portion of loans receivable - - - - - Total noncurrent assets $ - $ 1,934 $ - $ - $ - Total assets $ 86 $ 10,733 $ 16 000 $ - $ 3,329 LrABILiTIES Current liabilities: Matured bonds payable - Accounts payable - 8,799 16,000 - 71 Accrued payroll 86 - - - - Due to other funds - - - - - Due to other governments - - - - - Deferred revenue - - - - - Deferred revenue -loans receivable - - - - - Total current liabilities $ 86 $ 8,799 $ 16,000 $ - $ 71 Noncurrent liabilities: Advances payable - - - - Deferred revenue - loans receivable - Deferred revenue -deferred assessments receivable - - - - Total noncurrent liabilities $ _ $ - $ -Total liabilities $ 86 $ 8,799 $ 16,000 $ - $ 71 FUND BALANCES Reserved for debt service - - - - - Reserved for capital projects - - - - - Unreserved reported in special revenue funds - 1,934 - - 3,259 Total fund balance $ - $ 1,934 $ - $ - $ 3,258 Total liabilities and fund balance $ 86 $ 10,733 $ 16,000 $ - $ 3,329 See accompanying notes to the financial statements 75 City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, 2006 ASSETS Current assets: Cash and investments $ Taxes and assessments receivable, net Notes and loans receivable Due from other funds Due from other governments Total current assets $ Noncurrent assets: Advances to other funds Deferred assessments receivable Long term portion of loans receivable Total Special I st Time Home FEMA Grant ISTEA Revenue Funds $ 28,384 $ 72,911 $ 5,484,484 - 119,238 - 39,744 - - 59,000 Total noncurrent assets $ - $ _ $ _ $ 603,804 Total assets $ - $ 28,384 $ 22,911 $ 6,118,134 LIABILITIES Current liabilities: Matured bonds payable $ _ $ - $ - $ - Accounts payable 837 - 348,584 Accrued payroll - - - 17,191 Due to other funds - - - 25,665 Due to other governments - - - 21,729 Deferred revenue - - - 119,238 Deferred revenue -loans receivable - - - 39,744 Total current liabilities $ _ $ 837 $ - $ 532,147 Noncurrent liabilities: Advances payable - _ _ 59,000 Deferred revenue - loans receivable - - - 544,844 Deferred revenue -deferred assessments receivable - - - - Total noncurrent liabilities $ _ $ - $ - $ 603,844 Total liabilities $ - $ 837 $ - $ 1 135 951 FUND BALANCES Reserved for debt service - - - Reserved for capital projects - - - Unreserved reported in special revenue funds - 27,547 2211911 4,9821179 Total fund balance $ - $ 27,547 $ 22,911 $ 4,982,179 Total liabilities and fund balance $ - $ 28,384 $ 221,911 $ 6,118,134 See accompanying notes to the financial statements 76 ASSETS Current assets: Cash and investments Taxes and assessments receivable, net Notes and loans receivable Due from other funds Due from other governments Total current assets Noncurrent assets: Advances to other funds Deferred assessments receivable Long term portion of loans receivable Total noncurrent assets Total assets LIABILITIES Current liabilities: Matured bonds payable Accounts payable Accrued payroll Due to other funds Due to other governments Deferred revenue Deferred revenue -loans receivable Total current liabilities Noncurrent liabilities: Advances payable Deferred revenue - loans receivable Deferred revenue -deferred assessments receivable Total noncurrent liabilities Total liabilities FUND BALANCES Reserved for debt service Reserved for capital projects Unreserved reported in special revenue funds Total fund balance Total liabilities and fund balance See accompanying notes to the financial statements City of Kalispell, Montana Nonmajor Govemmenta[ Funds Combining Balance Sheet June 36, 2066 2002 G.U. Bond 2004 G.U. Bond Airport TIF $ 3,021 $ - $ 124089 89 $ 32,861 32,453 46,907 40,000 421000 75,000 $ 75,882 $ 74,453 $ 246,096 Westside TIF StD Revolving 278,943 $ 285,075 135,410 - - 2,308 90,000 - 504.353 $ 287 383 77 $ - $ $ $ - $ - $ 75,882 $ 741,453 $ 246,096 $ 504353 $ 287,383 - 47,437 32,861 325,453 46,907 135,410 - $ 32,851 $ 79,890 $ 46,907 $ 135,410 $ W $ 32,861 $ 79,890 $ 46,907 $ 135,410 $ - 43,021 (5,437) 199,189 368,943 287,383 $ 43,021 $ 5,437 $ 199,189 287,383 368,943 $ $ $ 75,882 $ 74,453 $ 246,096 $ 504,353 $ 287,383 77 ASSETS Current assets: Cash and investments Taxes and assessments receivable, net Notes and loans receivable Due from other funds Due from other governments Total current assets $ Noncurrent assets: Advances to other funds Deferred assessments receivable Long term portion of loans receivable City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, goof 1996S&C 19975&C 1998S&C 19"S&C 2000S&C $ 198 - $ 244 Total noncurrent assets $ - $ - $ 211 $ 442 $ 868 Total assets $ - $ 244 $ 211 $ 442 $ 868 LIABILITIES Current liabilities: Matured bonds payable $ Accounts payable Accrued payroll Due to other funds Due to other governments Deferred revenue Deferred revenue -loans receivable Total current liabilities $ Noncurrent liabilities: Advances payable Deferred revenue - loans receivable Deferred revenue -deferred assessments receivable Total noncurrent liabilities $ Total liabilities $ FUND BALANCES Reserved for debt service Reserved for capital projects Unreserved reported in special revenue funds Total fund balance $ - $ 244 $ _ $ $ _ Total liabilities and fund balance $ _ $ 244 $ 211 $ 442 $ 868 See accompanying notes to the financial statements 78 - - 211 442 868 211 $ 442 $ SGS $ - $ 211 $ 442 $ 868 - 244 - - - Total fund balance $ - $ 244 $ _ $ $ _ Total liabilities and fund balance $ _ $ 244 $ 211 $ 442 $ 868 See accompanying notes to the financial statements 78 City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, 2006 79 2002 S & C 2003 S & C 2004 S & C 2005 S & C SID 341 ASSETS Current assets: Cash and investments $ - $ - $ - $ - $ 12,544 Taxes and assessments receivable, net 167 292 1,990 - 1,034 Notes and loans receivable - - - - - Due from other funds - - - - - Due from other governments 70 308 670 - 81 Total current assets $ 237 $ 600 $ 2,660 $ - $ 13,559 Noncurrent assets: Advances to other funds - - - - - Deferred assessments receivable 8,352 10,319 26,877 22,850 24,489 Long term portion of loans receivable - - - - - Total noncurrent assets $ 8,352 $ 10,319 $ 26,877 $ 22,850 $ 24,489 Total assets $ 8 589 $ 14,919 $ 29,537$ 22,850 $ 38,148 LLL-BILITIES Current liabilities: Matured bonds payable $ - $ - $ $ - $ 5,000 Accounts payable - - - - - Accrued payroll - Due to other funds 152 418 1,737 - - Due to other governments - - - - - Deferred revenue 167 292 1,990 - 1,034 Deferred revenue -loans receivable - - - - - Total current liabilities $ 319 $ 710 $ 3,727 $ - $ 6,034 Noncurrent liabilities: Advances payable - - - - Deferred revenue - loans receivable - - - - Deferred revenue -deferred assessments receivable 8,352 10,319 26,877 22,850 Total noncurrent liabilities $ 8,352 $ 10,319 $ .26,877 $ 22,550 _24,459 $ 24,489 Total liabilities $ 8,571 $ 11,029 $ 30,604 $ 22,850 $ 30,523 FUND BALANCES Reserved for debt service (82) (1 10) (1,067) - 7,625 Reserved for capital projects - - - - - Unreserved reported in special revenue funds - - - W - - Total fund balance $ (82) $ 110 $ (1,[167} $ - $ 7,625 Total Iiabilities and fund balance $ 8,589 $ 10,919 $ 29,537 $ 22,850 $ 38,148 See accompanying notes to the financial statements 79 City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, 2006 Total Debt Wells Fargo SID 342 Service Funds Project Airport Project SID 344 ASSETS Current assets: Cash and investments $ 7,748 711,718 $ _ $ - $ 3,005,982 Taxes and assessments receivable, net 3,326 2541,440 - - - Notes and loans receivable - - Due from other funds - 2,308 Due from other governments - 248 175 - - - Total current assets $ 11,074 1,216,641 $ - $ - $ 3905,982 Noncurrent assets: Advances to other funds - - Deferred assessments receivable 20,437 114,845 - - - Long term portion of loans receivable - - - - "Total noncurrent assets $ 20,437 114,845 $ - $ - $ - Total assets $ 31,511 1,331,486 $ - $ - $ 3,005,982 LIABILITIES Current liabilities: Matured bonds payable $ 5,000 10,000 $ - $ - $ - Accounts payable - - - _ 320,630 Accrued payroll - - - - Due to other funds - 49,744 _ _ - Due to other governments - - - 42,618 Deferred revenue 3,326 254440 _ - - Deferred revenue -loans receivable - - Total current liabilities $ 8,326 314,184 $ - $ - $ 363,248 Noncurrent liabilities: Advances payable - - _ - _ Deferred revenue - loans receivable - - - - - Deferred revenue -deferred assessments receivable 20,437 114,845 - - - Total noncurrent liabilities $ 20,437 114,845Total liabilities $ 28,763 429,029 $ - $ - $ 363,248 FIND BALANCES Reserved for debt service 2,748 902,457 - - - Reserved for capital projects - - - - 2,642,734 Unreserved reported in special revenue funds - - - _ - Total fund balance $ 21)748 9021457 $ - $ - $ 2,642,734 Total liabilities and fund balance $ 31,511 1,331,486 $ - $ - $ 3,005,982 See accompanying notes to the financial statements City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, 2006 81 Total Nonmajor Total Capital Governmental S & C Const, -Project Funds Funds ASSETS Current assets: Cash and investments $ - $ 3,005,982 $ 8,802,180 Taxes and assessments receivable, net - - 373,678 Notes and loans receivable _ - 39,744 Due from other funds - 2,308 Due from other governments - - 519,039 Total current assets $ - $ 3,005,982 $ 9,735,949 Noncurrent assets: Advances to other funds - - 59,000 Deferred assessments receivable - - 114,845 Long term portion of loans receivable - - 544,804 Total noncurrent assets $ - $ - $ 718,649 Total assets $ - $ 3€305,982 $ 10,455,598 LIABILITIES Current liabilities: Matured bonds payable $ - $ - $ 10,000 Accounts payable - 320,630 629,210 Accrued payroll - - 17,191 Due to other funds - - 75,409 Due to other governments - 42,618 64,347 Deferred revenue - - 373,678 Deferred revenue -loans receivable - - 39,744 Total current liabilities $ - $ 363,248 $ 1,209,579 Noncurrent liabilities: Advances payable - - 59,000 Deferred revenue - loans receivable - _ 544,844 Deferred revenue -deterred assessments receivable - _ 114,845 Total noncurrent liabilities $ _ $ - $ 718,649 Total liabilities $ - $ 363,248 $ 1,928,228 FUND BALANCES Reserved for debt service - - 9021)457 Reserved for capital projects - 2,642,734 2,642,734 Unreserved reported in special revenue funds - - 4,982,179 Total fund balance $ - $ 2,642,734 $ 8,527,370 Total liabilities and fund balance $ - $ 3,005,982 $ 10,455,598 See accompanying notes to the financial statements 81 City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2006 REVENUES Taxes and assessments Licenses and permits Intergovernmental Charges for services Miscellaneous Investment earnings Total revenues EXPENDITURES Current: Public safety Public works Culture and recreation Housing and community development Debt service - principal Debt service - interest Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers {out) Proceeds of general long term debt Total other financing sources and uses Net change in fund balance Fund balances _ beginning Restatements Fund balances - beginning restated Fund balances - ending See accompanying notes to the financial statements Ai rt Airport TIF Westside TIF Parks in Lieu Health Levy $ - $ 35,083 $ _ $ $ 364,967 - 10,153 - _ - - 53,829 _ 89,765 - - - - 582 - - - - 3,651 - $ - S 99.065 $ - S 93,998 S 360,967 14,861 - - - - 121,140 63,479 - 67,468 204,492 22,721 _ $ - S 243,469 $ 263,971 S 22,721 $ - $ _ $ (104,004) $ (263,971) $ 71,277 S 360,967 $ _ $ 104,000 S 300,000 S - $ - (46,464) (353,476) - - (342,554) $ (46,464) $ 253,476 S 304,000 S _ $ - (342,554) $ (46,464) $ (357,480) S 36,029 S 71,277 $ 18,413 $ 46,464 $ 1,1.29,326 S 1,395,646 S 66,909 $ 5,922 $ 46,464 S 1,129,326 S 1,395,646 S 66,909 S 5,922 $ - $ 771,846 $ 1,431,675 S 138,186 S 24,335 EA City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2006 REVENUES Building Dept. Light Maint Decorative -Lights Gas Tax Street Taxes and assessments S _ $ _ $ _ $ - - Licenses and permits 318,954 - - - Intergovernmental -- - - 318,622 - Charges for services 251,639 192,457 6,361 - 1,122,857 Miscellaneous 17,708 - - - - Investment earnings 21.734 _ - 11,270 14,593 Total revenues S 614,035 S 192,457 $ 6,361 $ 329,892 S 1,137,450 EXPENDITURES Current: Public safety 379,954 - - - - Public works - 220,334 6,879 235,519 872,945 Culture and recreation _ - _ - r Housing and community development - - ' _ - Debt service - principal 24,609 - - - 85,941 Debt service - interest 8,743 - - - 6.186 Capital outlay 65,963 - - 62,825 64,311 Total expenditures 479,229 S 220,334 $ 6,879 S 298,344 S 1,025,383 Excess (deficiency) of revenues over expenditures S 130,806 S (28,277) S 31,548 S 112.067 OTHER FINANCING SOURCES (USES) Transfers in - - S - S - - Transfers (out) Proceeds of general long term debt - _ - Total other financing sources and uses S - _ SNet change in fund balance S 130,806 $ 28,277 S 518 S 31,548 S 112,067 Fund balances - beginning S 442,413 S 58,472 S 3,946 S 219,335 S 504,845 Restatements - Fund balances - beginning restated S 442,413 S 58,472 S 3,946 S 219,335 S 544,845 Fund balances - ending $ 573,219 S 34,195 S 3,428 S 250,883 $ 616,912 See accompanying notes to the financial statements 83 City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 34, 2006 REVENUES Urban Forestry Courtyard UDAG RD Lmn Rev. Drug Grant Taxes and assessments Licenses and permits Intergovernmental 440 - - - 45,066 Charges for services 178,877 69,335 21,297 33,717 - Miscellaneous - - - _ - Investment earnings 1,512 631 39,792 - - Total revenues $ 180,789 S 69,966 S 61,089 $ 33,717 S 45,066 EXPENDITURES Current: Public safety - - - - 75,961 Public worms - - - - _ Culture and recreation 114,661 - - - T Housing and community development - 46,309 171,236 387,500 - Debt service - principal - - _ - _ Debt service - interest - 24,468 - 809 - Capital outlay - - - _ - Total expenditures $ 114,661 S 70,777 $ 171,236 S 388,309 S 75,961 Excess (deficiency) of revenues over expenditures $ 66,128 $ (811) S 4110,147 $ 4354.542} $ (30,895) OTHER FINANCING SOURCES (USES) Transfers in S - $ - $ - $ - $ 23,000 Transfers (out) - - - _ - Proceeds of general long tern debt - - - 387,500 - Total other financing sources and uses S - $ - S - S 387,540 S 23,000 Net change in fund balance S 66,128 S 811) $ (110,147) S 32,948 S (7,895) Fund balances - beginning S 33,686 S 40,249 $ 987,243 S 35,487 S 9,042 Restatements - - _ _ - Fund balances - beginning restated $ 33,686 S 40,209 S 987,243 S 35,487 S 9,042 Fund balances - ending S 99,814 S 39,398 S 877,096 S 68,395 $ 1,147 See accompanying notes to the financial statements 84 City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2006 REVENUES Universal Grant COPS Grant Nurturing Center _ MT Cultural Arts CDBG Head Start Taxes and assessments - - _ _ S - Licenses and pennits - - - - Intergovernmental 25,00-0 30,419 82,457 17,925 474,050 Charges for services - - - - - Miscellaneous - - Investment earnings - 35 - - _ Total revenues 25,000 34,454 82,457 S 17,925 S 474,450 EXPENDITURES Current: Public safety 59,605 47,554 82,457 - - Public works - - _ - Culture and recreation - - - 17,925 - Housing and community development - - - - 474,792 Debt service - principal - _ _ _ _ Debt service - interest -- Capital outlay - - - - - Total expenditures S 59,645 S 47,554 $ 82,057 S 17,925 S 470,792 Excess (deficiency) of revenues over expenditures $ 34,605 $ 17,104 $ - S - 3,258 OTHER FINANCING SOURCES (USES) Transfers in S 33,056 - Transfers (out) - Proceeds of general long term debt - Total other financing sources and uses $ 33,056Net change in fund balance S (1 1549) S { 17,1 S - $ - S 3,258 Fund balances - beginning S 1.549 S 19,034 S - Restatements - - Fund balances - beginning restated $ 1,549 $ 19,034 Fund balances - ending S - S 1,934 S _ S - $ 3,258 See accompanying notes to the financial statements 85 City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2006 E01UP Total Special REVENUES Ist Time Home FEMA Grant ISTEA Revenue Funds Taxes and assessments - - S - 3%,050 Licenses and permits - - - 318,954 Intergovernmental 122,575 57,920 4,688 1,188,875 Charges for services - - - 2,019,734 Miscellaneous - 8,710 - 27,000 Investment earnings - _ _ 93,218 Total revenues 122,575 66,630 4,688 S 4,043,831 EXPENDITURES Current: Public safety - 48,287 _ 693,418 Public works - - - 1,354,538 Culture and recreation - - - 132,586 Housing and community development 122,575 _ - 1,383,031 Debt service - principal - - - 114,550 Debt service - interest - - - 40,166 Capital outlay - - - 479,380 Total expenditures S 122,575 48,287 S - $ 4,189,669 Excess (deficiency) of revenues over expenditures S - S 18,343 S 4,688 S (145,838) OTHER FINANCING SOURCES (USES) Transfers in S _ S - S - S 456,056 Transfers (out) - - - (742,494) Proceeds of general long term debt - - 387,500 Total other financing sources and uses $ - $ - $ - $ 101,062 Net change in fund balance $ - S 18,343 S 4,688 S (44,776) Fund balances _ beginning $ - S 9,204 S 18,223 S 5,026,955 Restatements _ - Fund balances - beginning restated S - S 9,204 $ 18,223 $ 5,026,955 Fund balances - ending S - $ 27,547 $ 22,911 S 4,982,179 See accompanying notes to the financial statements E01UP City of Kalispell, Montana Nonmajor Govemmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2006 REVENUES 2042 G.U. Bond 24134 G.U. Bond Airport TIF Westside TIF SID Revolving - Taxes and assessments S 293,352 S 276,589 S 275,651 S 423,493 S _ Licenses and permits - _ - _ _ Intergovermental - - - 71,918 - Charges for services - - - 33,930 - Miscellaneous - - - - - Investment earnings 4,508 1,252 8,303 10,100 3,089 Total revenues S 297,860 S 277,841 S 283,954 S 539,441 S 3,089 EXPENDITURES Current: Public safety - - - - - Public works - - - - Cult= and recreation - - _ - _ Housing and community development - - - - - Debt service - principal 135,000 125,000 105,000 61,760 - Debt service - interest 154,713 158.278 64,640 20,808 - Capital outlay Total expenditures $ 289,713 S 283,278 $ 169,640 S - -82,568 S - Excess (deficiency) of revenues over expenditures S 8,147 $ - --- (5,437} S 114,314 S 456,873 $ 3,089 OTHER FINANCING SOURCES (USES) Transfers in S - S - S 184,875 S - S 226,044 Transfers (out) - - (100,000) (300,000) (6,642) Proceeds of general long term debt - - - - - Total other financing sources and uses $ - $ - S 84,875 S (300,000) S 219,402 Net change in fund balance $ 8,147 S (5,437)_ $ 199,189 S 156,873 S 222,431 Fund balances - beginning $ 34,874 S - S - S 212,070 $ 64,892 Restatements - - - - - - Fund balances - beginning restated S 34,874 $ - S - $ 211070 S 64,892 Fund balances - ending S 43,021 S 5,437) S 199,189 S 358,943 $ 287,383 See accompanying notes to the financial statements 87 City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2006 REVENUES 19%S&C 19975&C 19985&C 19"S&C 20005&C Taxes and assessments S 64 S 946 $ 244 277 399 Licenses and permits - - _ - _ Intergovernmental Charges for services Miscellaneous Investment earnings - - - _ _ Total revenues 64 946 244 277 S 399 EXPENDITURES Current: Public safety - _ _ Public works - - - Culture and recreation - _ - Housing and community development - - - - _ Debt service - principal - 500 211 221 289 Debt service - interest - 42 33 56 110 Capital outlay - - _ _ - Total expenditures $ - 542 S 244 $ 277 S 399 Excess (deficiency) of revenues over expenditures S 64 $ 404 S - OTHER FINANCING SOURCES (USES) Transfers in Transfers (out) (43) Proceeds of general long terns debt - Total other financing sources and uses $ (43} $ - $ - S Net change in fund balance $ 21 $ 404 S Fund balances - beginning S (21) $ (160) S - Restatements - - Fund balances - beginning restated S (21) S - 060} S - Fund balances - ending S - S 244 S See accompanying notes to the financial statements City of Kalispell, Montana Nonmajor Govemmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2006 REVENUES 2002 S & C 20-03 S & C 2004 S & C 2005 S & C S10341 Taxes and assessments S 1,943 S 2,079 S 5,272 _ 6,939 Licenses and permits _ - - - - Intergovernmental - - - - - Charges for services - - Miscellaneous Investment earnings - - - - - Total revenues $ 1,943 2,079 S 5,272 S _ $ 6,939 EXPENDITURES Current: Public safety - Public works -- Culture and recreation - - - - - Housing and community development - - - - - Debt service - principal 1,670 1,720 3,962 - 5,000 Debt service - interest 426 481 2,377 - 1,830 Capital outlay - - - - - Total expenditures S 2,096 S 2,201 S 6,339 $ - S 5,830 Excess (deficiency) of revenues over expenditures S (153)_ S (122 S (_1,467} S - S 109 OTHER FINANCING SOURCES (USES) Transfers in - Transfers (out) Proceeds of general long term debt - Total other financing sources and usesNet change iir fund balance $ (153 } S - -------(122) S (1,067) S - S 109 Fund balances - beginning S 71 S 12 S - S - S 7,516 Restatements - - - - - Fund balances - beginning restated $ 71 $ 12 S - S - S 7,516 Fund balances - ending S (82) S (110) $ (1,067) S - $ 7,625 See accompanying notes to the financial statements City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2016 Total Debt Service Wells Fargo REVENUES SID 342 Funds Project Airport Project SID 344 Taxes and assessments 3,541 1,290,789 S Licenses and permits - - Intergovernmental - 71,918 Charges for services - 33,930 Miscellaneous _ _ Investment earnings - 27,252 Total revenues S 3,541 S 1,423,889 - S - S EXPENDITURES Current: Public safety - - _ Public works - - - 66,306 155,236 Culture and recreation - - - _ Housing and community development - - Debt service - principal 5,000 445,333 Debt service - interest 1,975 405,769 - - _ Capital outlay - - 1,100,040 1,748,819 1,270,030 Total expenditures S 6,975 S 851,102 $ 1,100,000 S 1,815,125 S 1,425,266 Excess (deficiency) of revenues over expenditures $ (3.434) S 572,787 S (1,100,000) $ 1,815,125) S (1,425,266) OTHER FINANCING SOURCES (USES) Transfers in $ - $ 410,919 S Transfers (out) - (40-6,685) - (184,875) (452,000) Proceeds of general long term debt - _ 1,100,000 2,000,000 4,520,000 Total other financing sources and uses $ - $ 4,234 $ 1,100,000 $ 1,815,125 $ 4,068,000 Net change in fund balance $ (3,434) S 577,021 S - S - S 2,+542,734 Fund balances - beginning S 6,182 S 325,436 S Restatements - - Fund balances - beginning restated S 6,182 S 325,435 S Fund balances - ending S 2,748 S 902,457 S - S - S 2,642,734 See accompanying notes to the financial statements City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2466 91 Other Total Capital Governmental REVENUES S & C Const. Prat Funds - Funds — Taxes and assessments - $ - 1,586,839 Licenses and permits - - 318,954 Intergovernmental - - 1,260,793 Charges for services - - 2,053,664 Miscellaneous - - 27,000 Investment earnings - - 120,470 Total revenues $ - $ - $ 5,467,720 EXPENDITURES Current: Public safety - - 593,418 Public works - 221,542 1,572,080 Culture and recreation - - 132,586 Housing and community development - - 1,383,031 Debt service - principal - - 555,883 Debt service - interest - - 445,935 Capital outlay 17,135 4,135,984 4,615,354 Total expenditures S 17,135 $ 4,357,525 S 9,398,297 Excess (deficiency) of revenues over expenditures $ w 117,135) S (4,357,526) $ 3,930,577 OTHER FINANCING SOURCES (USES) Transfers in S - $ - 866,975 Transfers (out) - (636,875) (1,786,054) Proceeds of general long terra debt 22,850 7,642,850 -- 8,030,350 - Total other financing sources and uses S 22,850 S 7,005,975 S 7,111,271 Net change in fund balance $ 5,715 S 2,648,449 $ 3,180,694 Fund balances - beginning $ (5,715) $ (5,715) S 5346,676 Restatements - - - Fund balanus - beginning restated $ 5,715 S- _ (5,715} S 5,346,676 Fund balances - ending S - S 2,642,734 S 8,527,370 See accompanying notes to the financial statements 91 City of Kalispell, Montana Major Debt Service and Capital Project Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 36, 2006 RESOURCES (INFLOWS): Taxes and assessments Investment earnings Amounts available for appropriation CHARGES TO APPROPRIATIONS IUUTFLOWS); Public safety „ .-- Debt service - principal Debt service - interest Capital outlay Total charges to appropriations OTHER FINANCING SOURCES (USES): Transfers in Total Other Financing Sources (Uses) Net change in fund balance Fund balances - beginning of the year Restatements Fund balances - beginning of the year - restated Fund balance end of the year See accompanying notes to the financial statements SID 343 SID 344 BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINALI (BUDGETARY WITH FINAL ORIGINAL/ (BUDGETARY WITH FINAL FINAL BASIS) See Note A BUDGET FINAL BASIS) See,e Note A BUDGET $ 145,682 S 127,303 $ (18,379) $ - $ - $ _ - - - - 71937 71937 S 145,682 S 127,303 S (19,379) S _ S 7,937 S 7,937 100,000 44 V)n 50,000 417 t All 50,000 1 14A $ 158,320 S 107,160 S 51 r 160 S $ 84,897 $ 105,040 92 $ 226000 $ 226,000 $ 226,000 S `'' 6,000 $ 233,937 $ 233,937 City of Kalispell, Montana Major Debt Service and Capital Project Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2006 RESOURCES (INFLOWS): Taxes and assessments Investment earnings Amounts available for appropriation CHARGES TO APPROPRIATIONS OUTFLOWS : Public safety Debt service - principal Debt service - interest Capital outlay Total charges to appropriations OTHER FINANCING SOURCES (USES): Transfers in Total Other Financing Sources (Uses) Net change in fund balance Fund balances - beginning of the year Restatements Fund balances - beginning of the year - restated Fund balance end of the year See accompanying notes to the financial statements Fire Station #62 BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE ORIGINAL/ (B€TDGETARV WITH FINAL FINAL BAMS) See Norte A BUDGET 30P00 8050 (21,850) $ 30,000 S 8,150 T $ T (21,850) 26,849 26,849 2,768,623 ?,746,774? 1,849 $ _ 2,795,472 S 2,773623 $ r 21,849 - $ (2,765,473) ?,765,473 $ 2,765,473 93 City of Kalispell, Montana Nonmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2006 94 Airpwl Airport TIF Wea-tcitle TIF BUDGETED ACTUAL BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAL) {BUDGETARY WITH FINAL ORIGINAL! (BUDGETARY WITH FINAL ORIGINAL! (BUDGETARY WITH FINAL FINAL JASlS) See Nate AKYOGE FINAL @AOSD Ser Name A AUDGET FINAL OASIS} Sse Note A BUDGET RESOURCIIS (INFLOWS): Tars and assF sments S S - S - S 5.4W S 35.383 $ 29,683 S 1(.10 5 - S (I w) UCerSs . and polniis - - - - - - lnttxgov tTmental - - - 10,151 10J53 2 - - Charges. for stnices _ - - 57,647 53,829 (3.8 € 8) - - - Miscellaneous - - - - - Investtnel! earnings - - - -- Amunts available Px amopriation $ - $ - S - S 73.198 $ 59.065 S 25.867 S 11111 S - S (1{H1) CHARGE TO nl�»Ra�g_�,T14�O�1_T'Fi�UWS): Public. safety - _ - - - _ Public wcxks - - - - 14,861 (106 €) - - - Cultwe ami re:'eMiOn - - - - Wising and conmiunity dcvdoptnent - - 3W239 171.1441 259.1199 190.733 63.479 117,254 DeN service - rinncipal - - - - - - - DeN smite - interest - - - - - - - Capital outlay - - - 125,000 67,068 57,932 570,300 2W,492 369,808 Total charges to apffopnatiom S - S - S - S 505,239 S 203,1169 S 302,170 S 751.033 $ 263,971 S 487,062 OTHER FINANCING SOURCES (USES): Transfers in S 5 - S - S 1f1 .()W) $ 100'Wo S - S 44111,000 S itk],il[.1[1 $ (ItHJ,fw) Transt`trs (out) (46,464) (46.464) - (353,476) (353,476) - - - - Procceds of general long imm ddA Tcxal Other Financing Sources (Uses) S (46,464) S _ - (46.4(A) S - S (253,476) S (253,476) S - S 40),(*0 $ 300,1.1) S (1 [H mm) Net c€range in limit balance S -- - ---_- (46,464) 5 (357,4541) $ 36,029 Fund halances -nntng ofthe year 46.464 1,129.326 1,395,646 Restatements - - _ Fund balames - beginning of the year - restated S 46,464 S 1,129.326 S 1,395,(46 Fund balance end of the year S - S 77 i,$46 S 1,43 € ,675 See acuxnpanying notes to the Financial statements 94 City of Kalispell, Montana Nonmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended ,lune 30, 2606 95 $ 442.413 S 573.'19 Hc*M Levy Parks in L" 8 DepL BUDGETED BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS ORIGINAI.J FINAL (BUDGETARY BASIS} Sse N_ A WITH FINAL IIL„DtGET RESOURCES (INFLOWS). ORIGINALJ ()BUDGETARY o(e EiNAL Taxes and assessments 5 FINAI. aT Licenses aril permits 360,967 S 1,967 S- intergovernmental - - - - Charges For strvisivs (21.396) 26.[1[H) 89.765 63,765 Mlscellane tLi ?51.639 - 58' 592 Investment tannings 2S'(01 - 3.651 3.651 Anx mts available Fcx appmonation S ?6.1kx1 S 93.998 S 67.999 S Public safety 361).%7 S - - - Pub€ic ur(xks - - - - Culture and recreation 641242 - - - Wusing and ck rununity develormient 24,6119 - - - Dt4nt service - principal 16,057 - - - Debt semice - interest - 332.(W 65,`363 266.037 Capital outlay- - S 55,(1(H3 ",721 32,279 Total eharges to appropriations S 55.W) S 22,721 S 32,279 S OTHER FINANCING SOURCES [USES): (342,554) (34?.554) - Transfm in 5 - (342.554) S Y (342.554) S Transfers (out) S - - - Pre curls ofgcnea€ long tem debt - - - Tota€ Other F4uuvo-ing Sources (Uses) S - 442.413 Net c_l nge in Fund balance S 71,277 Fund balanus - begirt =g of the year 66.)09 Restatements - Fund Wants - beginning of she year - restated S 66,909 Fund Mance end of the year $ 130,186 See accompanying notes to the ftnawal statetretts 95 $ 442.413 S 573.'19 Hc*M Levy 8 DepL BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINALJ (BUDGETARY %VITH FINAL ORIGINALJ ()BUDGETARY WITH FINAL EiNAL BASIS} SA NoteA 1� FINAI. aT 359'(0) S 360,967 S 1,967 S- - - - 340,350 319,954 (21.396) - 135,110) ?51.639 116,639 - - - 2S'(01 17,708 (7,292) - - - 3,W0 21,734 19.734 359'WH) S 361).%7 S 1,967 S 03,350 S 610,035 S 1 [1fi.615 - - - 444,196 379,954 641242 - - - 5010) 24,6119 25.391 - - - 16,057 8,703 7,353 - - 332.(W 65,`363 266.037 - $ - S - 5 842,253 S 479,229 S 363,024 (342,554) (34?.554) - - - - (342.554) S Y (342.554) S - S S - S - S 18,413 S 130,906 S 47-) 442.413 95 $ 442.413 S 573.'19 RESOURCES (INFLOWS): Taxes and assessmt2m, Liaises and Gserrrrits Intergovcxrvnemal Charges kw wrvices MiscelIanems Inves-Milt earnings Annowts available for appropriati )n CHARGES "APPROPKATIONS (OUTFLOWS): Public safety Public works CWture ami recreation Musing and uotmnunity a e veto meat Debt service - principal Debt service - interest Capital outlay Total charges to appropnaticxrs OTHER FINANCING SOURCES (USES)., Transters m Transfers (out) Prcx:oeis of gene -al long term debit Total Other financing Sources fuses) Net change in Farxj balance Fund haiamtrs - beginning ofthe year Rextatenumts Fund balances - beginning of the year - restated Fund bal, we and of tete year See accompanying notes to the feta tial statements City of Kalispell, Montana Nonmajor Govemmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended ,dune 30, 2006 -- - Light NIAW ._.._. Decer2five Ligbb Gas Tax BUDGETED ACTUAL BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAL) (BUDGETARY WITH FINAL. ORIGINAL/ (BUDGETARY WITH FINAL ORIGINAL/ (BUDGETARY WITH FINAL FINAL kA.SIxS)c NsrLt A BUUGEZ FINAL {jSl See Nate A FINAL 5€515rr Nor A BLDGrT - - - - - - 318,622 318,622 - 187?40 192,057 4,917 6,361 6.361 - - - - - - - - - --- 2.500 11,270 8.770 S 187?4i:1 S 192,1357 S 4.817 $ 6.361 S 6.361 S - S 321,122 $ 329,892 $ 8,770 1-43.388 220.334 23,1354 100)41 6,879 3,121 295,8(W '35,519 - - - - - - 85,130 62,825 22,31]5 S 243,388 5 22`0,334 S 23,054 S 100K1 S 6,879 $ 3121 S 3811,930 S 299-144 5 82,596 72,300 - (72,3[]{)}- S 72,300 5 - (72,34}[x) 5(28.277) _ S 518 S 31-5u ,SR.472 3 946 1 t o z z c 96 S 219,335 5 250,883 RESOVRCF-S tINFLOWS): Taxes and assessments Ueenses arks prsuts Intergovernmental Charges for ser6ces MisMianc pus tnvetmtiirt comings Amounts available for ammipriation �1i1��r�•S TO AI'P)l�U'FRLATION�_f (�LITFLUW5}: Public aafily Public works Calture and toLreatio n Hawing and uxnmuriiry dev&.pmmt Debt sen -ice - principal Debt surviee - inttxw Capital outlay T(-vl charges to aMoriations OTHER FINANCING SOURCES (USES): Transfers in Transfers (out) Pruc xxis of getien] long term deft Tbta1 Other Finaacing Sources (Uses) Not orange m huxt balance Fund balances - bLTinning of tyre year Res-tatemmts Fund balances - tx�irtning of the year - resta€ed Fund ha lance aid of the year See accoroNnying nates to the financial stateinew City of Kalispell, Montana Nonmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances _ Budget and Actual Fof the Year Ended June 34, 2006 S 51.14,845 S 616,912 97 5 33.686 S 99,814 S 40,209 3 19,398 Street Urban Fnreshy Cover and BUDGETE13 ACTUAL BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAL/ (BUDGETARY WITH FINAL ORIGINAL/ (BUDGETARY WITH FINAL ORIGINAL/ (BUDGETARY WITH FINAL FINAL BASIS) .'+ee Note A BUDGET FINAL 5) S-er Nott SUMET FLNAL, IASIS) Sce_Nofe BUDGE - - - 440 400 - - 1.065,688 1.122,857 57,169 127,650 178,877 51,227 65,(0) 69,335 4,335 2,- 14.593 12,09-3 - 1.51" 1,512 - 631 631 S 1,069.198 S 1,13.7..4.50 S � 69,262 S� 127,650 S 1$41789 S 53 139 S 65,(1(}4 S 69,966 S 4,%6 948.3()3 972,945 75,358 - - - - - 127.640 114.661 11979 - - - - - _ - - - 41,00 46,349 (5,3[)9) 67,W0 85,941 (18,943) - - - - - - 5,434 6.196 (752) - - - 3009) 24,468 5.532 110,2() 60.311 254,6[]9 - - - - - - S 1,.3 15,057 1.025,383 S 3J€1 274 5 )27,6441 $ 114,601 S 1 979 S ",1,(110 S 7{),777 S 2123 - 5 i SU.t.I o S - S (( $(i,[ u:1f) S - S - S S - S - S S 112,067 S 66.1?8 S (81 1) 54)4.845 11.69A -U) _ 1119 S 51.14,845 S 616,912 97 5 33.686 S 99,814 S 40,209 3 19,398 R1 -SOURCES ONFLOWS): Taxes and asseyiments Licenses and permits €ntergov ernmenta€ Charges kw s.M-Ices Miscellaneous lovement wmings Amounts available fix avmgmation CHARGF�_APPRQPR�N5 (41fTF>l OW - Public safetv Public R Ixks Culture and rweation 9xxsing and w rununity devdMiw nt 0&4 service - prmc'ipal Debt sm'icc - interest Capital outlay Total charge; to appropriatirfrs OTHER FINANCING SOURCES (USES): Transfers m Transfers (out) Proceeds of general long term debt Total Other Financing Scnuces (Usm) Net change in fiutd Wlance Funic halances - beginning of the year Restatements Fund balances - beginning of the yvar - rostated Fund Mame end of the year See acc<xnpanmig nater: to the fumncial statements City of Kalispell, Montana Nonmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fuad Balances - Budget and Actual For the Year Ended June 30, 2006 - - 387.9X) 397,500 3157,5( S 397,5()) S $ 1_10,147) $ 32,9[18 987,243 35.487 $ EJZi7,243 $ 877,096 98 S 35,487 S 68 3 S 23.0W S 73,(XX) S - 23.0(W S 13,fAXI 5 S [7.895} 9,(]4? UDAG RD Loan R". DM Grwo BLMGETED ACTUAL BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS PARLANCE ORIGINAL/ (BUDGE'T'ARY WITH FINAL ORIGINAL/ (BUDGETARY WITH FINAL ORIGINAL/ (BUDGETARY WITH FINAL FtN_ AI, BA;STS} Sts Nati A BUDGET FINAL BASIS) See No4e A aumfT FAL BASIS) $a Nofe_A RUDGgT - - - 43'0.000 (430,00) N)'(W 45,066 (4.934) 21,'97 -21,297 - 4[).518 33,717 (6,811) - - - 3t],tYI:A1 39,79? 9.7C2 - - - - - - S 51,?97 S 61.089 S 9,792 S 470,528 S 33.717 S (436.811) S 5t1,[HNi 3 45,066 S (4,934 _ _ _ - - 77.973 75,961 268.159 171.236 9 0, 9213 438.891 387.5{11) 51,391 - - - - _ - 809 (8119) - - $ 268,159 S 171,236 S 96,923 S 438,891 S 388,3[19 S 50,58' S 77,973 S 75,%] S 1013 - - 387.9X) 397,500 3157,5( S 397,5()) S $ 1_10,147) $ 32,9[18 987,243 35.487 $ EJZi7,243 $ 877,096 98 S 35,487 S 68 3 S 23.0W S 73,(XX) S - 23.0(W S 13,fAXI 5 S [7.895} 9,(]4? RESOURCES (INFLOWS): Taxes and assessments Licenses and PaTruts intergoverrunerlta I Charges lox sm ices Mi.V-dlan00 s Inves-trrmt earnings Amounts available for aPPrormition C�rI> S TQ APPROPRIATION5iQ[TFL4W5L Public safety Public: works, Cohere and rec-reation I-k)using and Lonunity develMnent Deh ser6ce - pnmipal Dvbt scrn-ice - interest Capita! outlay Total charges to appropriations OTHER FINANCING SOURCES (USES): Trarrsf6r-, m Translcrs (out) Proceeds of general €ong term Glatt Ti al Othc-,r Financing Sources (Uses) Na change in frau( balance Fund balances - bm ~ nning of the year Reslatments Fund ha lances - beginning of the year • restated Farm balance ead of the year Scae accompan}ting rxAes to the financial statements City of Kalispell, Montana Nonmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2006 Universal Grast BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE ORIGINAL/ UNAL (BUDGETARY MIS) See N.QttA WITH FINAL BUDIGIET ACTUAL AMOUNTS AMOUNTS 23,W0 25'W0 IIx) 23'W0 S 25,0W S - 20.9) S 19.606 59,605 1 67,500 47,554 14.946 389,798 8?.057 207,741 - - - 65,W) - 65,0(H) - - S 59,606 S �- 59,605 S 1 5 127,500 S 47,554 S 79.9436 S 289,798 S 8',1)57 5 '[]7.741 S 36,000 S 33,056 S (2,94) S - S 36,I0) S 331006 S µ (2,944) 5 - 1..549 $ 1,549 S - 99 19,014 S 19,0 i4 S 1,934 CUPS Groot N&Hurhq Cester BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCIE AMOUNTS ,AMOUNTS VARIANCE ORIGINALJ (BUDGETARY WITH FINAL ORIGINALI (BUDGETARY WITH FINAL EIN&L PAW) S"-Nut SLllG1ET FI. _ � B�r'.Sy�l See No#sA BLTI>GF.T 101,11 ]4) 30,419 (7t},5#I1) 289,798 82,057 (207,741) - 35 35 - - _ _ - i f ().NY) $ 10,454 S , -- ( 79,546 S 299,799 S 82,057 S r (207,741) 19.606 59,605 1 67,500 47,554 14.946 389,798 8?.057 207,741 - - - 65,W) - 65,0(H) - - S 59,606 S �- 59,605 S 1 5 127,500 S 47,554 S 79.9436 S 289,798 S 8',1)57 5 '[]7.741 S 36,000 S 33,056 S (2,94) S - S 36,I0) S 331006 S µ (2,944) 5 - 1..549 $ 1,549 S - 99 19,014 S 19,0 i4 S 1,934 City of Kalispell, Montana Nonmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2006 100 NIT Cwtt" Arts CDRG Head Start Ist Three Hone BUDGETED ACTUAL BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS 'VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAL/ (>Q[fDGETARY WITH FINAL ORIGINAL/ (BUDGETARY WITH FINAL ORIGINAL) (BUDGETARY WITH FINAL FINA -AMISI See Note A BL!EtQE.T RN AL HASISl Sec Note A BUDGE FOAL S) �sc NQwA B[IDGET RESOURCES (INFLOWS): Taxes arid. assessments S - S bcroses and pmnits IntdxgovMunental 13,750 17,925 4,17-5 5{}(1,(.((10 474,050 {25,9]0) 2116,333 12-2,57-5 (93,758) Charges i'or sen'icccs- Misccl €anecnrs Investment earnings - - Aimunts available firrapWop-,riat"i $ 13,75t1 S 17,925 S X3,175 S 54Xy"i S 47:i.if91 S [25.950] S 216,333 S 12-1,575 $ (93,758) SES TO APFRO PRUI TION {OLgELOW.b�L Public rafcty - - - _ _ _ - - Puhlic works - - Culture and teert-winn 13,750 171,92-5 (4,175) - - _ -- _ l-Idxistng and community devel(4v ent - - - 5(X)0W 47(],732 29,209 216,333 122,575 93.758 Bent service - principal - - - - - Debt senice - interest - - - Capital outlay - - - _ - _ - _ Total charges to appropriations $ 13,750 S 17,925 S 4,171 S 5s.k},iN1() $ 470,792 S 29,208 S 216333 $ 122,575 5 93.758 OTHER FINANCING SOURCES (USES): Transtcrs tri Transfers (exit) - Pro om s of general l(rrig term diene Total Other Financing Sources W") $ S - $ - 3 - S Net change in fiux3 Mince S - S 3.'58 $ - Fuml balances - beginning ofthe year - _ _ ke�statc�nesstx - Fund balances - beginning of the year - restated Fund halanc:e ettd def the year S - S 3,2513 3 - See accoinpanpng m)It s to the financial itaterne nts 100 RESOURCES (INFLOWS): Taxes and assesmwmts Licenses and peanuts Intergovernmental ntal Charges fix' Services MiuellanoAL-, Ino estmait. earnings Amounts availahie €tx am(-vriation 0MRGUTo AITROrRIATIQN�L- � � public safety Public: works Culture and re creait�n Housing anis oxn iumty development Delit samice - principal Debt service - tmterem Capital ou ay Total charges to appr,.4niations OTHER FINANCING SOURCES (USES): Transkrs in Tramsfers (out) Prixotxis orgenml long term debt Total OLhe r Finaming Smrces (Uses) Net change in fund balance Fund balarwes - beginning of the year Restatements Fwtii balani -es - hegirtning of the yttar - restated Fund halame end of the year 5ry accompanying notes to the financial stattimm s City of Kalispell, Montana Nonmajor Govemmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 20% !FEMA Grant ISTEA 2002 G.O. Bood BUDGETED ACTUAL BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAL/ (BUDGETARY WITH FINAL ORIGINAL (BUDGETARY WITH FINAL ORIGINAL! {BUDGETARY WITH FINAL FINAI. BASISb See Note A BUD E FINAL SA.SIS} Sec Noce A1R FIN I3.#SISl Sec Nott A y"ET S 293.352 S 16.352 2{15,`]99 57,920 0 48,079) 56.147 4,688 (51,459) - - 4,N)O 8,710 4,710 - - - - - - - - - - - - 2,0(.l!) 4,508 ?,508 5 2109'999 S 66,630 S [ 143.369) S 56.147 S 4.688 S 51,459 S 285,00) S 297.86{) S 12,860 17.E]Ek] 48-287 01,297) - - - - - - _ - - - l 35AX) l 3509) - - - - - - - 154.713 154,713 - 219,W0 - ' 18,(0) 74.370 - 74, 3 70 - - - $ 2350k) S 48,287 5 186,713 S 74.3741 S - 5 74,370 S 389,713 5 '199,713 S - s 3l'Mo 5 - S (21 1,9M) S - 21.800 S - S {21,SC1U) 5 5 18.343 S 4.688 S 8.147 sm 5 {)?t14 S ' 7 547 101 S 34,874 S .43;021,. City of Kalispell, Montana Nonmajor Govemmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended .dune 30, 2006 102 2004 G.O. Boad Alrport TIF Wrstihk TIF BUDGETED ACTUAL BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAL/ (BUDGETARY WITH FINAL ORIGINAL! (.BUDGETARY WITH FINAL ORIGINAL/ (BUDGETARY WITH FINAL FINS 1 S) Oce Notti A BL MET FIML BMW Stt Notc A113 _ DEFT FINAL RASISI Set Nate AAUDGE RESOURCES (INFLOWS): Taxes ami assessments S 301.336 S '76.Sii9 S (24,747) S 293,45() S '75.651 S { 17.7") S 3117.6713 S 423,493 S 115,823 Licenses arxi permits - - - - _ _ - - Intergovernmental - - _ - - 71.918 71,918 - Charges for semces - - - - - 27.')!15 33.930 6.t)25 M i sc ellaneents investmtrnt earnings Rx) 3.252 752 1(),(30() 8.303 1,597 S,(XY) 10,1 f)t3 5,100 Anxxutts available kir appropriation S 301,836 S 277.841 S (?.1,39$} S 3[13.45{3 S '83.954 S (19,496) S 412,493 S 539,431 S 120.948 C.�'zlF.� T� �4P�F�OP_I�IAT"IONS 40UTF>GOWS): Public safety - - - - - _ _ - Public w(xics - - Culture and rmTeation - - RAtsing and community dei dapmtnt - - - - Dart service-ixincipal 12504) 1'5,13()() - 1115,(131) 1054000 -61,760 61,760 - Debt service - intermt 158,278 158.278 - 70,743 64,641€ 5,103 '210 38 2(),8138 - Capital outlay - - - - _ - - Total charges to appn.rlx-iawftis 5 283,278 S 2$3,278 S - S 175,743 S 169.(4{} S 6,€113 S 81,568 S 82,568 S - OTHER FINANCING SOURCES (USES}: Transfers in 5 - S S - S 184,875 S 184,875 S - S - S - S - Trart.5fen (out) - - - (I 00'w()) { € ao'o 1()) (400J01) (3()()'() 3(}) 0 ck3,(ko) ProctyAls of general long t=n debt - - - - Tixal Other Financing Sources (Uses) $ - S - S - S 84,875 S 84.875 $ Net change in knd balance S T _ (5,437) S 199,189 S 156,873 Fund balances - outing taFthc year - - ? 12.1170 Restatancnts _ Form balances - Nyinning ortote ytar - restatW $ S - S 212,07T Fund bdlatxx emi of the year S _ _ _ {5,437) S 199.189 S 368 5)43 See accompanying "es to the financial suternLmLs 102 RESOURCES (INFLOWS): Taxes and assessments Licenses and pertrnits lntergovmunental Charges fur stnices FYIiscellBSlt) us Investment earnings Arnowls available fur approfwiation CHARGESPROPRIATIUI(S iOUT_F Public safely Public works Culture and ra."tion Housing and community dtNelcomernt Debt service - Principal Debt ; ice - interest Capital outlay Texal charges to aplxopriations OTHER FINANCING SOURCES (USES}. Transfers in Trmters (exit) Proceeds of geamal long term debt Total Other Financing Sources ([,lies} Not change in fund balance Fund balances - beginning of the year Restatements Fw'id balances - beginning of the year - restated Fund balance end of the: yiw See accompanying, tikes to the financial statemonts City of Kalispell, Montana Nanmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2006 $ +54.89' $ 297.383 103 SID Rev 199 S & C BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNT:; VARLANCE ORIGINAL! (BUDGETARY WITH FINAL ORIGINAU (BUDGETARY WTTH FINAL � e BBMIS) sty -N& A I$ U EINt o S 64 .150 3.089 -'539 - - - 5 55t) S 3.it89 S 2.539 S - 64 $ 64 $ - $ 2126.044 S 226.()44 S- (1(),1{NJ} (6,643) (3,459) - (43) 43 3 Il, l (X))_S 21 9.402 S 22' 586 $ - $ 43 $ 43 $ 222,491 l 64-892 (21) $ +54.89' $ 297.383 103 City of Kalispell, Montana Nonma}or Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended ,lune 30, 2006 i997S&C OTHER FINANCING SOURCES (USES), - Trans fm USES); Transfm in S - S S S Trans Cos ([lilt) Pmcoals of general 117 g term debit. - Total Other Financing Sources (Uses) S S - S _ S Net change in fiuui halalxe S 44 Fund balances - txVinning of the year Restate rnmts _ Fund halances - beginning of the year - restated S { l 60) Fund halance old orthe year S 244 Sae accompanying notes to the Simmial statciyxm s 104 BUDGETED ACTUAL BUDGETED ACTUAL S - AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAL! (BUDGETARY WITH FINAL ORIGINAL! (BUDGETARY WITH FINAL FINAL .BASIS) Sse Note A BUDGET FIN 0ASIS1 Sq„Ngft A RUDGET RESOURCES (INFLOWS) - Taxes and assessments S 693 S 946 $ 253 S 344 S 744 $ { 100) licenses aW pmnits - - Intergovernmental Charges for semees lnvestinmi earnings - - - - _ Amowits available forappropriatim S 693 S 9+16 S '53 S 344 S 744 S (ltl()) GGEN TO APPRUPRLkT.1.3?I!,_DUTFL0NV8): Public safety - - - _ - _ Public ivories - - - Culture ark# re crmi�on - - - Housint: and community development - - - _ - _ Debt u�:rvice - principal 500 500 211 - Debt service - interest 193 42 151 133 13 RX) Capital outlay - - - - Total charges to appropriations S 693 5 532 S 151 $ ..344 S 244 S 1 ill) OTHER FINANCING SOURCES (USES), - Trans fm USES); Transfm in S - S S S Trans Cos ([lilt) Pmcoals of general 117 g term debit. - Total Other Financing Sources (Uses) S S - S _ S Net change in fiuui halalxe S 44 Fund balances - txVinning of the year Restate rnmts _ Fund halances - beginning of the year - restated S { l 60) Fund halance old orthe year S 244 Sae accompanying notes to the Simmial statciyxm s 104 S - City of KaisW, Mord ria Nmrmt r Gmemmer" FlxxK SdvdLje of Revom*s, Experdkm. wd Changes in Fund BaWres - Budget and AcUml For to Year Erred .fie 30, 2006 105 1"914&C 2S"sAC 2rw aac 6vDG m ACTUAL BUDGWI" ACIQAL BTM ACTUAL AMOUNTS AMOUNTS VARL&NCZ AMOUNTS AMOUNTS VABIANCL AMOUNTS AMOUNTS VARIANC X ORAGMAJU OWDGWrAZY VViT,1: MAL OftACvG J NARY WfM V94AL ORUMNAU OWDGE'I•AW 'VVrrH VMAL RKSOURClU (HOWWS): DUN= Eb" SAM In Koo A Nam BVDM� Twm and ammawa x S 377 S 277 t (100) = 499 t 399 S (100) 1 2,1% S 1,943 S (233) I icvw" and penis - - - . . Cas s fiw ftnic" Auiapdr axailtble Wrappro{rriwtioa S 371 ! 277 S -- _ (too)- 499 ly 3951 : 108 x ._ 2a % >E T - _1 3 S -_�3) Ciemow pvtnza "s t - Z - 3 - 3 _ t - Public m6ty- - - - - - - - public WO& - - - - - - - - - Hoaxing snd commmity deveiopmet t - - - - - - - - - Dtbt m-vict -1,rr vipal 221 221 - 289 2� - 5.670 Ib74 - Debt sexrict - imwcet 156 36 108 210 110 108 325 426 100 C oohed Total cx to rpp-vEx4stioaa ! 377 I 271 S 1o[l S 494 t 349 S Lod S 2, i 16 _ _ S 20% 3 100 O'T'HER 11'3NANCDfG SOURCZS (UM): Trramfe" in f- Trmsfin (tAg) Promdr ofpwal logs _ - TOW (i. WS) t - S - ! S - S - S - ; - * S - Ntt chmgt in fiord balan¢e S -___ Pond bal.xn m - beginoing ofd* ytir Restatsmer�ts - - 71 Fund bolaw" - boska* of the Y*,W - resin" S - - S - - S _ 71 FwAWow* veld ofilit year s - - x _fg2) I- 4 'ace ming wwt to ore fimocw thammuft 105 City of Kalispell, Montana Nonmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2006 106 2003 S& C 2004 S& C 2005 S& C BUDGETED ACTUAL BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAL/ (BUDGETARY WITH FINAL ORIGINAL/ (BUDGETARY WITH FINAL ORIGINAL/ (BUDGETARY WITH FINAL FINAL B&S ]BUDGET FOAL BASIS) S" Notc A GE FINAL IIASls) Set Note A HUDGET RESOURCES (INFLOWS): Taxeg anct assessments S ? A)2 S '.07ci S (223) S 6.439 S 5,272'' S (1,167) S Licenses anti permits - - - - _ - Charges kv services Misceilanerxrs Imvestniml earnings - - - - - Arm-.Rmts a%railable for aprtc4viation S ?.302 5 1,079 5 t2 3) S 6,439 5 5,272 S (1,167) S CHARGES F T WS Genial goverrtment S _ S - 5 - S - S - S - S - S - S - Public safi�ty Public works Culture and ro-Teation Housing and c4mununity dm,elopment - - - - DM stnice - prindpal 1,720 1,720 - 3,962 3,962 - Dc -t sm ice - interest 592 491 101 22,477 2,377 1 W - - - Capital owtay - Total chargee to appropr-iatioris i ',3{1? S ",2' ()l S I S 6,439 S 6,339 S I00 S OTHER FINANCING SOURCES (USES): Transf rs in- Transfms (ovo Proccxxis of general long temT debt Total Other Financing Sources (Uses) S - S - S Nct change in Banc( balance S (122) S (1,067) S - Fund balances - begitrning of the ywr 12 Restatements - Fund halances - hiTinniag of dw year - restated S 12 Fund halanc e e nd of the yrarr S (1 € 0) S 1 J)67 S SM accorr hying (rtes to the f rtancial statements 106 City of Kalispell, Montana Nonmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 34, 2006 107 SII] 341 SID 342 Webs Fargo Project BUDGETED ACTUAL BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINALI (BUDGETARY WITH FINAL ORIGINAU (BUDGETARY WITH FINAL ORIGINALl (BUDGETARY WITH FINAL FINAL 6ASlS1 Ste Note A BUDGET EINAL 13.11DU FINA.G $�1.5I51 het Noll -A BUDGET RESOURCES (INFLOWS): Taxes and assessments $ 6,9.30 S 6.939 S 9 S 5,968 $ 3-541 S (3.42-7) $- I icensex and perrmis - - - - - Int(Igovia l unental - - - - - - - - - Charges for st.7 Y3CEs - - - - - - - - M- invmbnot earnings - - - - - - - Anv-)ants availahle for amopriation $ 6,930 S 6,939 S 9 5 5.955 $ 3,541 $ (2,427) S URGES TO APPROPRIATIONS (OUTFLOWIS) Genera 3 government - Public safety Public works - - - - - - Cuiture anti recreation- Hxwsing and cominumlY clon'eiomnent- Deht writ, - tsrinmmi- ❑t�bt ;device - m(erext 1.930 f ,8i4] IM 1,975 1.975 - - - - Capital outlay - - - - - - 1,1 T -;ii cl arge's to appropriathym $ 6,930 5 6,83t] S 100 S 6,975 $ 6,975 tit xir.: e % .. NC'ING SOURCES tUSES): TransiO - .: S - S S - S - S -- Trankfcrs {l, X; - - - - Prcc (*a l; o f general long term dot T- ,Ai Other Financing Sources (Uses) $ - 5 - $ S - $ _ $ - S 1,1[k7j*o Nei clum,:..:::i fi ml baimce S 109 $ (3.434) S - Fund li;alanlcs - winning of the year 7,516 6,192 Re"' ate merits - - - -.::: € halarwes - € e inning o€the,,tar - restauxt $ 7,515 $ 6.182 $ - eend o1'the }year 57 525 S ' 748$ - SoL Lv .:.sm2ng notes to the financial statemaits 107 City of Kat", Montana hiOt nmW Gowmwft FtN4B Sd*dule o( Revenue:;, EMxwdim. and ChwWs in Fund Babrxes - Budget and Act 1W For to Year' Edild Jtx* 30. M 108 Airirt h►Lw X1344 8 & C Cam. SUDC3>LM� ACTT AL BVDGVM ACMAL SYDGCTZD ACTL14L MdOUNTS AMOUNTS VAitlh,'iCI A11id%`N'n A)4OL T5 VARIANCE AMOUN-M A.l1 GLWIS 11AILiNCE CAU OVOMTANY rU= WrM WD(AL AURM COMOR[AU EKAL MUDGUARY W1Z WW4[AL ORIGO(AU QPJ C =ANLY WlTDIRCAL RZSDUIRCIS (VOLUWO:' T+cmrtd errarroseaah i - i - i - i - t- Lic"O" wd vmaib- - - - - - - - - Ammmift rnib ibl. for 1 2 - : s - 3 i - i s; s : C - i>t"k "6" - - - - - - - Poblit waarix 232,873 "1306 1"-%9 6681890 133,236 432,7" 5,6010 - 3,609 Csdk" rad a - - - - - - - - - Hoot* sead oaamnity drvek"nod Dtbt irw i c Hy6C*W ❑d* MWVK* - W1 *4 - _ - C#PW bbl!' 1,747,125 10S819 LI,b94) 391? 26419" 1 7� t130 2,6419" 43 404 17 135 27 "s Tem! chwrs 1n wpeuprps e 3LOKOW Z IA13,123 $ 1814A" i 4,52,0000- S 1,425JM 8 3 734 = 5.0,0W 3 17,133 i 32,863 011 FWAY'iCENG SOURCIM 012M Trmsfus is Z - s - % - 3 - i - 3 - # - 9 - i - Trmah" (00) - (184,87,5) 184,875 - (432,000) 43400 - Prvcwb d�rrd Cws�wwarit 6p t�AS,H4i_ - 4 24688 4 - 50 460 „ _ x{27.1 -m Tow Ct*wr Fiissrcir� � (1m.) i _ 7 tl9�Mi >< 1,115,1 i 9 _ 1>t4,t7 t �t,J M0 i m t 4 pW = 36th >r = 27139 Net r6mW is find We" i 3 2rd4 w f _ .. 5-I_13 Pod beil, - besWwim *(dw 7w 1CasCrlraWs Fund baboc- bm6wiw8 of** Yew - Hamid - s - _ - _ _ t � - i 83,7133 Pwd bar* wird of fie ym 1 i � - s" scssawpmy* :rebs so A* fiwcwid ! a arse 108 City of Kalispell, Flathead County, Montana Combbdng Balance Sheet Nonma jor Proprietary Fumb June 30, 2006 See acconvanying notes to the financial. 109 Ambuhuwe Solid Waste Totals ASSETS Currerrt assets: Cash and invesbmaits $ 117,131 361,497 $ 478,628 Taxes and assessnmo receivable, net - 34,205 34,205 Accounts receivable - net 344,420 - 344,020 Due from other goverxmwnts - 76,213 761213 Inventories _ - _ Total currcnt assets $ 461,151 $ 471,915 $ 933,066 Noncurrent assets: Restricted cash and investments Capital assets - land Capital assets - construction in progress .. _ Capital assets - depreciable, net 152,583 565,881. 718,464 Total nonmrrent assets $ 152 583 $ 565,881 $ 718,464 Total assets $ 613,734 $ 1,037,796 $ 17.65 IY530 LUBTLITIES Cu rerrt liabilities: Accounts payable $ 9,219 $ 6,967 $ 16,186 Accrued payroll 24,183 51054 29,237 Current portion of long-term capital liabilities - _ _ Current ixxtim of compemated abseom payable 10}8 113,873 Other current tiabilrties _ - _ Total current liabilities $ 449275 $ 12,021 $ 561296 Noncurrerd liabilities: Noncurrent portion of long-term capital liabilities $ - $ - $ - Noncurent portion of compenuted abwnm 35,538 47,256 82,794 Total notwwent liabilities $ 351P538 $ 47:,256 $ 821,794 Total liabilities $ 79,813 $ 59P277 $ 1391,090 NET ASSETS Invested in capital assets, net of related debt $ 152,583 $ 565,881 $ 718464 Reshicted for other purposes - _ - Unrestricted 381,338 412 638 7937976 Total net assets $ 533,921 $ 97851519 $ 11,512744_ Total liabilities and net assets $ 613,734 $ 1,037,796 $ 1,651,530 See acconvanying notes to the financial. 109 Oty of Ks& ed, Flathead County, Montana Combbitng Statement of Revenges, Erpeoca, and Changes in Net Assets Nonmaior Froprktw7 Fu mb For the FUcal Year F.Aw" Jme 30, 2006 OPERATING EXPENSES SON Personal services Ambu kwe Waste Totals GPERATLNG RENTNUES 45,494 54,450 7 ,944 Charges for so -vices S 1,302,216 $ 615,094 $ 1,917,310 Miscellaneous revenues 627 - 627 Special awawwnts 62,712 - 62,712 ToW operating revenues $ 19,365,555 $ 615,094 $ 1,980,649 OPERATING EXPENSES Personal services $ 625,492 $ 363,936 8�9,428 $ 9{� Supplies 45,494 54,450 7 ,944 Purchased services 82,097 18,996 101,093 Building materials - - - Fixed merges 52,142 71,528 123,670 LoaOMA debt expense 542,691 - 5421,691 D"mciation 35927 105,367 141z294 Total opaw* expenses S 1,383,943 $ 6147277 19998120 Operating income (loss) $ 18,28$ $ 817 17,471 NONOPERATING REVENUES (EXPENSES) Taxeslasses=ents revenue $ - $ - $ - Licenses/permits r+evemw - - - Intergoverrrmertal revenue 79,059 - 79,058 Interest revenue 3,501 11,060 16,561 Debt service interest ewe (75) (1,605) (1,680) Gain (loss) sar.le ofcVital asset - - - ToW revemus (expenks) $ 544,484 S ..._9,455_ $ 9339 ftwome (low) before mow and trade .....,. 6 ,196 $ 10 72 _ $ 76,468 Capital contributions - - - Tn umfers in Cham in net. ameu 66P 196 $ 10,272 $ 76 468 Net assets - beginning $ 467,725 $ 968,247 $ 1,435,972 Net assets - b mhaing restated $ 467725 $ 968 247 $ 1,435Z972 Net assts - ending $ 533,921 $ 978,519 $ 1,512,440 See accompanying nates to the f m aacial 110 City of KalispeIl, Flathead County, Montana Combining Statement of Cash Flows Nomnajor Proprietary F mb For the Ffacal Year Faded Jere 30, 2006 Cash flows 0rom capital and related financing a►ctivitles: Principal paid on bonds, kams and advances :ambulance Solid Waste Totals Cash ftom from operating wtivities: (75) (1,605) (1,6$,0) Cash received from amimners $ 7251700 S 5151094 $ 1103401794 Cash received from assessments 62,712 61)726 69,438 Cash received from misceHanemn sources 627 - 627 Cash paynwnts for claims (176,555) (144,424) (320,979) Gash paynwnts to employees 600,50 357,774 (958 281) Net cash provided (used) by operating activities $ 11 977 $ 119 622 $ 131 599 Cash flows 0rom capital and related financing a►ctivitles: Principal paid on bonds, kams and advances - (53,089) (53,089) Interest paid on bonds, loam and advxn= (75) (1,605) (1,6$,0) Acquisition and constriction of capital assets (114,526) (2,249) (116,775) Proceeds from the dispomd of capital assets Proceeds from bonds, loans and advances - Net cash provided (used) by capital and related financing activities S 114,6012 $ 56,943 $ (171,544) Cash Rom ftVM scavidwM: Transfers between funds (40,(100) w (40,000) hAergovernn=W revenue 79,058 (11,470) 57,588 Proceeds of licenses and permits for non operating- _ _ - Net cash provided (used) from non -capital financing activities $ 39,45'8 S 11,470 S 27,5$8 Cash flims from hives dag actvitiea: hAerest on invesUneub 5 541 - 11-1 16561 Net cash provided (ted) by investing activities $ 5IP501 _....., $ 11,060 $ 16,561. Net Increase (decrease) In cash and cash equivalents $ (58,065) S 62,269 S 4,204 Cash and cwh equivAeats at 1.75,196 299,228 474,424 Cash and cash egalvnlents at e" $ 117,131 $ 361,497 $ 478,628 of operating hwom (bm) to net cwh provided (used) by operating a►ctivitles: Operating income ) Ad a to reconcile opmding incto net cash provided (used) by operating activities: Depn�tion Changes in assets and liabilities: Accouids receivable - net Taxes and assessments receivable, net Ampaid cVemm Inventories Accounts payable A enied payroll Net cash provided (used) by operating activities See accoffipanying nates to the financial statememb ill $ (I 8,M) $ 817 S (17,471) 35,927 105,367 141,294 (33,825) - (33,825) 6,726 6:725 3,178 550 3,728 242985 671 31.,147 $ 11,977 $ 11.9,622 $ 131,599 STATISTICAL SECTION CITY OF KALISPELL, MONTANA Miscellaneous Statistics (unaudited) Class of City I st Date of Organization 1892 County Flathead Form of Government Council/ Manager Number of employees (non -elected) 177.25 Seasonal employees 100+ Elected Mayor} S Council persons, Municipal Judge 10 Population of the City - estimated 171684 Land area 2640 acres Registered Voters: active 91379 inactive 1,524 1 l 1.99 City Services: Police protection Fire Department, Ambulance Service and Building Inspection Parks & Recreation Community Developnwnt Public Works -Streets, Water, Sewer, Wastwater Treatment, Storm Sewer General Administration -City Manager, Attorney, Finance, City Clerk, Municipal Court. Number of building permits issued Miles of Struts & Alleys Municipal Water/Sewer.- Number ater/Sewer:Number of consumers Average daily water consumption (millions) Miles of water main Miles of sewer main Miles of storm main Water rate per 1,000 gallons $ 2.01 Sewer rate per 1,000 gallons S 3.50 Irrigation per 1,000 gallons $ 1.25 Customer service costs $3.00 each per billing period. 112 475 114 7,779 2.0 9'0 106 38 (increase to $2.21 July 1, 2006) (increase to $3.99 July 1, 2006) (increase to 51.41 July 1, 2006) CTTY OF KALISPELL, MONTANA General Revenues by Source Inst Ten Fiscal Years (unaudited) Fiscal licenses lntergovern- Charges Fines and mvestment year Taxes and fees mental for servim Forfeitures Earnings Miscellaneous Total 1997 S 5,424,233 S 333,434 S 1,987,629 S 878,404 S 395,299 $ 534,974 S 61,031 S 9,675,004 1998 S 5,241,477 $ 393,785 $ 2,056,585 S 790,766 $ 412,694 $ 3,122,635 S 96,048 S 12,113,993 1999 S 51,267,252 $ 362,190 S 37315,493 S 901,911 S 351,973 S 407,284 S 102,494 S 10,708,597 2000 S 5,050,429 S 459,656 S 3,071,032 S 863,632 S 379,517 $ 393,118 S 109,289 $ 10,326,673 2001 S 41429,943 S 522,917 S 3,732,442 S 989,851 S 391,665 S 713,357 S 157,551 S 10,937,726 2002 S 4,920,674 S 340,099 $ 4,294,120 $ 1,106,812 $ 399,861 $ 672,551 S 134,291 S 11,868,408 2003 S 4,936, 790 $ 610,299 S 4,150,234 $ 802,377 $ 453,892 $ 909,145 $ 549,155 S 12,411,892 2004 S 5,509,021 S 426,713 S 4,135,311 S 1,003,640 S 443,646 S 1,162,252 S 695,775 $ 1.3,376,361 2005 S 4,929,980 S 463,152 S 3,922,052 S 2,898,718 S 535,875 S 330,746 S 132,327 S 13,212,850 2006 S 5,762,480 S 71.2,654 S 4,302,142 $ 3,307,364 $ 519,391 S 358,754 S 113,855 S 15,076,640 Component wets wex+e e=luded to comply with GASB repoding 1998 investment earnings included repayment of the UDAG loan from Kall Tell Center Mall. Sources: FY 1937-2006 dna fmm the Fays A=W FumwW RgpoM Stal meant of Rtmvxss, and Chmps in Fuad Balwiew - Govanmmtal Funds 113 CITY OF KALISPELL, MONTANA General Governmental Expenditures by Function Last Ten Fiscal Years (unaudited) Component units were excludied to comply with GASB repixtzng requirements. souccs: FYI 996-2005 d a fi-om the Cdy`z Arm FawwW R port, StMm" ofRev+ ums, Rva4ftxvs, and OwWs m Fund Bdmm - God Funds 114 Legislative, Administrative Public parks Housing & Fiscal and support Safety Public Works Recreation & Community Capital Debt year services Culture Development outlay Service Total 1997 S 1,125,218 S 2,893,042 S 1,725,300 S 510,819 $ 652,296 $ 1,328,286 S 482,448 $ 8,717,409 1998 S 19194,016 S 2,940,163 S 11723,852 S 589,984 S 870,940 S 31682,896 S 372,950 $ 1.1,374,801 1999 S 1,208,880 S 3,116,875 S 1,501,822 S 660,359 S 1,795,463 S 2,829,146 S 406,509 S 11, 519,054 2000 S 1,223,943 $ 3,342,327 S 1,398,926 S 723,360 S 2,019,148 S 4,370,624 S 499,844 S 13,578,132 2001 $ 1,253,352 S 3,422,810 S 1,699,238 S 862,953 $ 1,593,421 $ 773,633 $ 718,962 S 10,314,369 2002 S 1,521,457 $ 3,739,192 S 2,639,936 S 1,073,442 S 1,539,580 S 1,195,946 S 930,689 S 12,640,242 2003 S 1,519,18-6 S 4,780,182 S 1,443,451 S 988,015 S 1,123,497 S 3,394,947 S 956,612 S 14,235,890 2044 S 1,658,495 S 5,150,657 S 1.,515,246 S 1,071,506 S 768,038 S 4,342,922 S 2,213,388 S 16,720,252 2045 $ 1,525,644 S 5,604,169 S 1.,791,913 $ 1,236,972 S 1,1091542 S 2.051,190 $ 700,152 S 14,019,608 2046 S 2,127,825 S 6,650,069 S 2,485,890 S 1,354,474 S 1,479,928 S 7,667,087 S 1,207,499 S 22,567,772 Component units were excludied to comply with GASB repixtzng requirements. souccs: FYI 996-2005 d a fi-om the Cdy`z Arm FawwW R port, StMm" ofRev+ ums, Rva4ftxvs, and OwWs m Fund Bdmm - God Funds 114 CITY OF KALISPELL, MONTANA Consolidated Tax Rates -Mall Levies Last Ten years (unaudited) 115 SD75 State School Flathead Valley Consolidated City Fiscal City of High School Elementary Equa)-iztin Community County County TOTAL car Kali ll Levy Levies Co a Le Health MILLS 1997 116.160 55.090 116.330 136.19 10.200 82.132 4.150 520.252 1998 116.164 54.600 120.020 133.33 10.0401 74.978 3.862 512.990 1999 111.160 61.720 126.33 133.95 10,410 78.793 1.561 523.924 2400 114.250 66.430 133.74 137.62 11.010 80.922 4.402 548.374 2001 122.000 67.500 124.760 138.630 11.920 94.224 4.652 553.686 2002 129.420 78.044 149.540 1403.880 12.030 89.973 4.652 604.835 21103 152.600 80.350 152.440 142.890 11.760 94.115 4.930 639.685 2044 144.654 903.000 153.120 148.420 11.570 96.120 5.090 638.970 2005 155.0300 77.810 147.310 146.760 11.140 1033.040 5.000 646.060 20()6 170. 99.400 160.770 147.03-0 14.310 107.328 5.300 704.135 Source: Montana Tax. Foundation General Fund 137 G.O. Bond - 2002 10 G.O. Bond - 2004 10.5 Permissive Health Levy 12.5 115 116 CITE'' OF KALISPELL, MONTANA Assessed Value of Taxable Property Last Ten Fiscal Years (unaudited) Urban Renewal Fiscal districts City taxable value # mills dollars year Market Value % CPI Taxable Value Taut Increment without increment 1 mill levied rated 1997 $ 551,112,670 3.9% 2.30% $ 24,433,839 $ 3,634,332 $ 20,799,507 $ 20,799 118.18 $2,416,012 1998 $ 5760856,663 4.5% 1.60% $ 25,376,E $ 3,902,752 $ 21,473,297 $ 21,473 116.16 $ 2,494,304 1999 $ 588,649,254 2.0% 2.20% $ 25,500,927 $ 4,330,212 $ 21,170,715 $ 21,170 111.15 $ 2,353,257 2000 $ 574,721,569 -2.4% 3.40% $ 24,932,008 $ 3,593,853 $ 21,338,155 $ 21,338 114.25 $ 2,437,867 2001 $ 592,339,335 3.0% 2.80% $23,08719% $ 11934,202 $ 21,153794 $ 211153 122.00 $ 2,580,E 2002 $ 622,610,786 4.9% 1.60% $ 23,411,193 $ 2,059,458 $ 21,351,734 $ 21,351 129.42 $ 2,763,248 2003 $ 678, 031, 534 8.2% 2.30% $ 24, 412, 901 $ 754,554 $ 23,658, 347 $ 23,654 152.6 $3)6091600 2004 $ 743,576,508 8.8% 2.70% $ 25,270,432 $ 817,184 $ 241453,248 $ 24,453 144.65 $ 3,537,128 2005 $ 818, 605,572 9.2% 3.40% $ 27,839,549 $ 925,426 $ 26,914,123 $ 26,914 155 $ 4,171,689 2006 $ 893,657,570 8.4% 3.30% $ 29,779,487 $ 1,119,387 $ 28,651,100 $ 28,651 170 $ 4,870,887 Notes: FY2DO 3 wwA� 12 ffAs for by the Wgkgdhze. An mal 12 mills was approved by the voters for the consMxtion of an a patks facA ty. The Downtown Urban Renewail DkdW ended in FY2002- The two dk&k tis are the Weshdde and the Airport Disbicts. 116