Fiscal 2017 Comprehensive Annual Financial ReportCITY OF
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR 2017 July 1, 2016 - June 30, 2017
CITY OF KALISPELL
ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letterof Transmittal............................................................................................................................................ 3-8
Government Finance Officers' Association Certificate of Achievement.......................................................... 9
OrganizationalChart........................................................................................................................................... 10
City Elected and Appointed Officials.................................................................................................................. 11
FINANCIAL SECTION
IndependentAuditor's Report.............................................................................................................................12-14
Management's Discussion and Analysis..............................................................................................................15-26
Basic Financial Statements:
Government -wide Financial Statements:
Statementof Net Position.....................................................................................................................
27
Statementof Activities.........................................................................................................................
28
Governmental Fund Financial Statements:
Balance Sheet — Governmental Funds................................................................................................
29
Reconciliation of the Balance Sheet — Governmental Funds to the Statement of Net Assets.........
30
Statement of Revenues, Expenditures, and Changes in Fund Balances — Governmental Funds...
31
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds to the Statement of Activities......................................................................
32
Proprietary Fund Financial Statements:
Statement of Net Position — Proprietary Funds.................................................................................
33
Statement of Revenues, Expenses, and Changes in Net Position — Proprietary Funds ..................
34
Statement of Cash Flows — Proprietary Funds..................................................................................
35
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position — Fiduciary Funds...................................................................
36
Notes to the Financial Statements............................................................................................................37-84
Required Supplementary Information other than Management Discussion and Analysis:
Schedule of City's Total Liability and Related Ratios — Other Post -Employment
HealthcareBenefits..............................................................................................................................
85
Schedule of City Contributions — Other Post -Employment Healthcare Benefits ............................
86
Schedule of Proportionate Share of the Net Pension Liability.........................................................
87
Schedule of Contributions —Post-Employment Benefits....................................................................
88
Budgetary Comparison Schedule — General and Major Special Revenue Funds...........................89-91
Notes to Required Supplementary Information......................................................................
92-94
Supplemental Information:
Combining and Individual Governmental Fund Statements and Schedules:
Combining Balance Sheet — Nonmajor Governmental Funds.........................................................
95-100
Combining Statement of Revenues, Expenditures and Changes in Fund Balances —
Nonmajor Governmental Funds....................................................................................................101-107
Budgetary Comparison Schedule —
MajorDebt Service Funds..............................................................................................................
108
Budgetary Comparison Schedule —
Nonmajor Governmental Funds....................................................................................................109-127
Combining and Individual Proprietary Fund Statements:
Combining Statement of Net Position — Nonmajor Proprietary Funds .........................................
128
Combining Statement of Revenues, Expenditures, and Changes in Fund Net Position — Nonmajor
ProprietaryFunds..........................................................................................................................
129
Combining Statement of Cash Flows — Nonmajor Proprietary Funds ..........................................
130
Combining and Individual Agency Fund Statements:
Combining Statement of Fiduciary Net Position - Agency Funds ..................................................
131
Combining Statement of Changes in Assets and Liabilities - Agency Funds ...............................
132
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CITY OF KALISPELL
ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
STATISTICAL SECTION
Financial Trends
Net Position by Component...................................................................................
Changes in Net Position.........................................................................................
Fund Balances of Governmental Funds...............................................................
Changes in Fund Balances, Governmental Funds ...............................................
Revenue Capacity
.............. 133
.............. 134
.............. 135
.............. 136
Market Value of Taxable Property........................................................................................................ 137
Direct and Overlapping Property Tax Rates......................................................................................... 138
Principal Property Tax Payers............................................................................................................... 139
Property Tax Levies and Collections...................................................................................................... 140
Water — Sewer - Sold by Type of Customer........................................................................................... 141
Waterand Sewer Rates........................................................................................................................... 142
Debt Capacity
Ratios of Outstanding Debt by Type...................................................................................................... 143
Ratios of General Bonded Debt Outstanding........................................................................................ 144
Legal Debt Margin Information............................................................................................................. 14.5
Direct and Overlapping Governmental Activities Debt........................................................................ 146
Pledged Revenue Coverage..................................................................................................................... 147
Demographics and Economics
Demographic and Economic Statistics................................................................................................... 148
PrincipalEmployers................................................................................................................................. 149
Operating Statistics
Full-time Equivalent City Government Employees by Function/Program......................................... 150
Operating Indicators by Function.......................................................................................................... 151
Capital Assets Statistics by Function/Program..................................................................................... 152
REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS
Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and
Other Matters based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards.......................................................................................................... 153-154
ON
City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903-1997
Telephone (406) 758-7701 Fax - (406) 758-7758
December 22, 2017
To the Honorable Mayor, members of the City Council, and Citizens of the City of Kalispell,
Montana:
CAFR TRANSMITTAL
State law requires that all general-purpose local governments publish within six months of the
close of each fiscal year (by December 31) a complete set of financial statements presented in
conformity with generally accepted accounting principles (GAAP). State law also requires a
biannual audit of these statements in accordance with generally accepted auditing standards by a
firm of licensed certified public accountants to be completed within 9 months of the close of
every other fiscal year (by March 31). It is the belief of the City Council and the Executive staff
that an annual audit assures a higher level of financial management and fiscal responsibility.
Pursuant to this policy and these requirements, the audited annual financial report for the City of
Kalispell, Montana for the fiscal year ended June 30, 2017, is submitted for your review.
Management Representation
The Finance Office prepared this report. Responsibility for the accuracy and completeness of
the presented data, including all disclosures, rests with the City. We believe the data, as
presented, is accurate in all material aspects; that it is presented in a manner designed to fairly
set forth the financial position and results of operations of the City as measured by the financial
activity of its various funds; and that all disclosures necessary to enable the reader to gain an
understanding of the City's financial affairs have been included.
To provide a reasonable basis for making these representations, management of the City has
established and maintained an internal control system designed to ensure that the assets of the
City are protected from loss, theft or abuse, and to ensure that adequate accounting data are
compiled to allow for the preparation of financial statements in conformity with accounting
principles generally accepted in the United States (US GAAP) and to comply with laws and
regulations. The system of internal control is designed to provide reasonable, but not absolute,
assurance that these objectives are met. The concept of reasonable assurance recognizes that:
(1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation
of costs and benefits requires estimates and judgments by management.
Independent Auditor
Wipfli LLP, a firm of licensed certified public accountants has audited the financial statements
of the City. The goal of the independent audit was to provide reasonable assurance that the
financial statements of the City for the fiscal year ended June 30, 2017, are free of material
misstatement. The independent audit involved examining, on a test basis, evidence supporting
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the amounts and disclosures in the financial statements; assessing the accounting principles used
and significant estimates made by management; and evaluating the overall financial statement
presentation. The independent auditors concluded, based upon the audit, that there was a
reasonable basis for rendering an unmodified opinion that the City's financial statements for the
fiscal year ended June 30, 2017, are fairly presented in conformity with US GAAP. The
independent auditor's report is presented as a component of the financial section of this report.
Transmittal Letter
GAAP require that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management's Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement MD&A and should be read in
conjunction with it. The City of Kalispell's MD&A immediately precedes the City's basic
financial statements within this report.
Profile of the City of Kalispell
The City of Kalispell, incorporated in 1892, is the county seat of Flathead County located in the
western part of the State of Montana. This historically has been one of the top growth areas in
the state. The City of Kalispell is empowered to levy a property tax on both real and personal
properties located within its boundaries. It also is empowered by state statute to extend its
corporate limits by annexation, which occurs periodically when deemed appropriate by the
governing council.
The City of Kalispell is operated under the council-manager form of government. Policy -making
and legislative authority are vested in a governing council consisting of the mayor and eight
other members. The governing council is responsible for, among other things, passing
ordinances, adopting the budget, appointing boards, and hiring the City Manager. The City
Manager is responsible for carrying out the policies and ordinances of the governing council, and
for overseeing the day-to-day operations of the City. The council is elected on a non -partisan
basis. Council members are elected by district to serve four-year staggered terms, with four
council members elected every two years. The mayor is elected at large for a four-year term.
All significant operations of the City, as defined by the National Council of Governmental
Accounting, Statement 93, have been included in the accompanying financial statements. The
City provides a full range of municipal services including police, fire, building, planning and
zoning, city court, parks and recreation, streets, community development and general
administrative services. The City also operates as Enterprise funds: water, sewer, solid waste,
and an airport.
In addition, the City presents financial data for two component units on the combined statements.
The Downtown Business Improvement District and the Tourism Business Improvement District
are both discretely presented governmental type component units.
The annual budget serves as the foundation for the City of Kalispell's financial planning and
control. All departments of the City of Kalispell are required to submit requests for
appropriation to the City Manager. The City Manager uses these requests as the starting point
for developing a proposed budget. The City Manager then presents this proposed budget to the
council for review. The council is required to hold public hearings on the proposed budget and
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to adopt a final budget. The appropriated budget is prepared by fund, function, and department.
Budgetary control is decentralized to the point that individual department heads are responsible
for expending within individual fund budgetary limits.
Budget to Actual Comparisons
The State municipal budget law stipulates that money, other than payments from agency funds,
may not be drawn from the treasury of a municipality except pursuant to an appropriation.
Therefore, a legally adopted budget is required for all funds, with the exception of agency funds.
The City legally adopts a budget for the required funds. Consistent with past years, the City
established the legal spending level at the fund level for the fiscal year 2017 budget. The City
Manager and Finance Director may make transfers of appropriations within a fund. Transfers
between funds, however, require approval of the City Council. Budget -to -actual comparisons
are provided in this report for each individual governmental fund for which an appropriated
annual budget has been adopted. For the general fund, the street maintenance special revenue
fund, and the community development miscellaneous fund, the comparison is part of the required
supplementary information.
Other Postemplovment Benefits — GASB Statement 75
The City of Kalispell reported the net opeb liability, required under the Governmental
Accounting Standards Board (GASB) Statement No. 75, in this financial report and the related
financial statements. Although the City reported this liability, related deferred outflows, and
related expenses and expenditures, the City does not agree that this represents a legal liability
and further believes that the presentation of this activity in the financial statements will
eventually be misleading to the users of the statements. In this, the 1st year of GASB 75
implementation, the recorded net opeb liability is $3,985,328. This liability was reported in
fiscal year 2016 as net opeb obligation ($2,110,870) under GASB 45 guidance. This very
significant (89%) increase is the result of no longer, under GASB 75 guidance, being able to
amortize the remaining liability over 30 years. The City is now required to record the entire
liability.
The City plans to continue funding the employee health insurance plan on a "pay as you go"
basis, and does not plan to fund this liability. City management feels it would be fiscally
irresponsible to take an amount equal to the actuarially determined liability and place it in an
irrevocable trust fund that would never be used and would most likely increase as the City, and
the related number of employees serving it, continues to grow. Retirees can leave the plan at
anytime and the City would have unwisely used funds collected from its citizens. Insurance rates
have been historically set so each plan offered is fiscally sound. Rates can be changed and
benefits altered at anytime to ensure the plans remain properly funded.
Because the City will not be funding this liability, it will continue to increase. The financial
statements will reflect the impact of this very large net opeb liability. Management does not feel
it has legal substance as nothing in state law or any contractual agreement requires the city to
offer the same rates to retirees, spouses and their dependents as other participants.
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Pension Liability — GASB Statement 68
The City implemented GASB Statement 68, Accounting and Financial Reporting for Pensions
for fiscal year 2015. This statement resulted in a net pension liability at the end of fiscal year
2017 of $11,766,204. The City participates in three State of Montana cost -sharing multi -
employer pension plans. The State legislature determines the rates all employers and employees
pay to participate. Each plan has a different level of net pension liability. GASB Statement 68
requires the City to record its share of the net pension liabilities even though we have made all
statutorily required contributions. See Note F for a description of the plans the City participates
in.
Factors Affecting Financial Condition
The City has started to see new construction comparable to the first few years of this century and
home foreclosures have slowed substantially. Kalispell Regional Medical Center continues to
grow and, although they are considered not for profit, their expansion helps the City's economy
in many other ways. Healthcare, in general, has grown over 180% since 1990 and now
employees over 6,300 people in Flathead County. Economist are predicting another 21 percent
increase in health care employment opportunities locally, over the next 10 years.
Although Kalispell is not in close proximity of a major metropolitan center, hundreds of
technology and manufacturing companies, from computer equipment to food and beverage to
pharmaceuticals, have found the area to be favorable for their operations.
Tourism is one of the area's major economic drivers. With Glacier National Park visitations
setting annual records, a major ski resort within a few miles, the proximity to Canada, and other
shoulder season draws, there is not many days of the year that visitors don't purchase services in
Kalispell and the Flathead Valley.
Montana experienced a population increase between the 2000 and 2010 census of 9.7 percent.
Kalispell, however, experienced an increase of 40.1 percent, while Flathead County experienced
growth equal to 22.1 percent. The July 1, 2015 (most current) estimated population of Kalispell
is 22,052 according to the U.S. Census Bureau, an increase of 2,125 (11%) from the 2010 census
population of 19,927.
The unemployment rate for the 2016 calendar year for Flathead County (City of Kalispell is not
available separately) was 5.6 percent. This compares to 5.7 percent for the 2015 calendar year, a
positive adjustment of just under 2%. The most current unemployment rate (not seasonally
adjusted) available (September 2017) for Flathead County is 4.0 percent. In comparison, the
State of Montana's September 2017 unemployment rate (not seasonally adjusted) is 3.4 percent
and the U.S. rate is 4.1%. The County's unemployment rate has continued to improve from a
high of 14 percent in January of 2011.
According to the United States Census Bureau, the 2015 per capita annual income, the most
current information available, for Flathead County was $24,966. This is approximately 5% less
than the State of Montana's estimated per capita income ($26,381), and 14% less than the
Nation's estimated per capita income of $28,930.
Cel
Revenue Growth and Reform
City revenues can be considered statutorily limited, circumstantial or discretionary. The City has
very little control over the growth of restricted and circumstantial revenues. Although the City
`controls' the growth or discretionary revenue, it is still subject to typical community pressures
for conservative growth.
Since November 1986 and the passage of Initiative 105, which limited certain property taxes to
the 1986 levels, the ability of the City to raise revenue for basic services is increasingly difficult.
Then, the legislature, with S13184, lowered tax rates forcing the City to increase mill levies to
maintain the same level of revenue. The City's cash reserves in most funds vary between 10%
and 20% of appropriations. State law allows for reserves of 50%. Reserves provide for cash flow
between tax revenue receipts to keep the City from having to borrow funds for operations.
Additional revenues generated by increased taxable valuation come with the additional costs of
an increased service area. The City of Kalispell's Police and Fire Departments, Courts system,
Building Department, Public Works and Parks have felt the increased pressure from the influx of
people to Flathead County. These pressures impact the budgets of all departments.
The Montana constitution and state law require periodic reappraisal of property in the interest of
equal taxation (15-7-111, MCA). The State of Montana, through the Department of Revenue
(DOR), is responsible for valuing all taxable real and personal property. Every other year, the
DOR is required by state law to conduct a reappraisal of residential, commercial, industrial,
agricultural and forestland property in the state.
New reappraisal values were used for property tax purposes in tax year 2017 (fiscal year 2018).
Statewide, taxable values rose about 8%. In Flathead County, reappraisals resulted a taxable
value increase of about 9%. The City of Kalispell also showed an increase of about 8%. The
next reappraisal is anticipated to be complete by the end of 2018 for the State legislature to
review during the 2019 legislative session. Any changes made will affect the 2019 tax year
(fiscal year 2020).
Maior Initiatives
On April 21, 2014, the City Council voted unanimously to annex 40.69 acres located on the east
side of Whitefish Stage Road, north of East Oregon Street, and west of East Oregon Lane
(formerly McElroy -Wilkins gravel pit). The owner of this property, Flathead County Economic
Development Authority, intends to develop a rail -served industrial park that will be the new
home of several of the rail -served industrial business that are currently located within the City of
Kalispell's Core Area, as well as provide additional rail -served industrial land for other business
ventures. The proposed rail -served industrial park and relocation of industrial uses out of the
Core Area will facilitate removal of the railroad tracks from the Core Area and encourage
commercial investment in the recently expanded Westside Urban Renewal Tax -Increment
Finance (TIF) District.
In October, 2015, the City of Kalispell was awarded a $10 million Transportation Income
Generating Economic Recovery (TIGER) grant from U.S. Department of Transportation to help
fund the Glacier Rail Park and Kalispell Core Area Development projects. The emphasis of this
grant will be to remove the railroad tracks from the City of Kalispell to assist further
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development without the tracks being an impediment, and to construct a Rail Park outside of the
core area, to accommodate establishments that need or prefer rail service for their business.
Awards and Acknowledements
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of
Kalispell for its comprehensive annual financial report for the fiscal years ended June 30, 2016.
This was the 7' consecutive year that the City of Kalispell had submitted and achieved this
prestigious award. In order to be awarded a Certificate of Achievement, a government must
publish an easily readable and efficiently organized comprehensive annual financial report. This
report must satisfy both generally accepted accounting principles and applicable legal
requirements. A Certificate of Achievement is valid for a period of one year only. We believe
that our current comprehensive annual financial report continues to meet the Certificate of
Achievement Program's requirements and we are submitting it to the GFOA to determine its
eligibility for another certificate.
The completion of the Annual Financial Report on a timely basis was made possible by the entire
staff of the Finance Department and the cooperation of all City departments. I would also like to
give recognition to the mayor, governing council, and the city manager for their consistent
support for maintaining the highest standards in the management of the City of Kalispell's
finances.
Respectfully submitted,
r
Rick Wills
Finance Director
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Kalispell
Montana
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2016
*1fre 4 4.% PA0 t. - i; -
Executive Director/CEO
6
MUNICIPAL JUDGE
Lori Adams
CITY CLERK
Aimee Brunckhorst
CITY OF KALISPELL, MONTANA
ORGANIZATIONAL CHART
CITIZENS OF KALISPELL
CITY COUNCIL
MAYOR
Mark Johnson
WARD I WARD II WARD III
Karl Gabriel Wayne Saverud Jim Atkinson
Sandy Carlson Chad Graham Rod Kuntz
CITY MANAGER
Doug Russell
FINANCE
Rick Wills
HUMAN PUBLIC WORKS I INFORMATION
RESOURCES Susie Turner TECHNOLOGY
TerryMitton Enka Billiet
10
WARD IV
Tim Kluesner
Phil Guiflrida
PLANNING, PARKS &
BUILDING & RECREATION
COMMUNITY Chad Fincher
DEVELOPMENT
PUBLIC SAFETY PUBLIC SAFETY LEGAL
FIRE POLICE Charlie Harball
Dave Dedman RogerNasset
CITY OF KALISPELL, MONTANA
CITY ELECTED AND APPOINTED OFFICIALS
TERM
ELECTED OFFICIALS EXPIRES
Mayor Mark Johnson 12/2017
Council members:
Kari Gabriel
Ward I
12/2019
Jim Atkinson
Ward III
12/2017
Sandy Carlson
Ward I
12/2017
Rod Kuntz
Ward HI
12/2019
Wayne Saverud
Ward H
12/2019
Phil Guiffrida
Ward IV
12/2019
Chad Graham
Ward H
12/2017
Tim Kluesner
Ward IV
12/2017
Municipal Court Judge:
Lori Adams
12/2017
APPOINTED CITY OFFICIALS
City Manager
Doug Russell
Attorney
Charles Harball
City Clerk
Aimee Brunckhorst
Police Chief
Roger Nasset
Fire Chief
Dave Dedman
Finance Director
Rick Wills
Public Works Director
Susie Turner
Parks Director
Chad Fincher
Planning Director
Tom Jentz
Community Development Manager
Katharine Thompson
Human Resource Director
Terry Mitton
City Treasurer
Deb Diest
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FINANCIAL
r � r
WIPFL1L..
INDEPENDENT AUDITOR'S REPORT
City Council Members
City of Kalispell
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining
fund information of the City of Kalispell, Montana (the City), as of and for the year ended June 30, 2017 and
the related notes to the financial statements, which collectively comprise the City's basic financial statements
as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly,
we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of significant accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business -type activities, the aggregate discretely
presented component units, each major fund, and the aggregate remaining fund information of the City of
Kalispell, as of June 30, 2017, and the respective changes in financial position and, where applicable, cash
flows thereof forthe yearthen ended in accordance with accounting principles generally accepted in the United
States.
12
Change in Accounting Principle
As discussed in Note 1 to the financial statements, in 2017, the City adopted new accounting guidance, GASB
Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions.
Our opinions are not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States require that the management's discussion and
analysis on pages 15-26, Schedule of City's Total OPEB Liability, Contributions and Related Ratios for the OPEB
plan on pages 85 and 86, Schedule of Proportionate Share of the Net Pension Liability on page 87, Schedule of
Contributions on page 88, and Budgetary Comparison Schedules on pages 89-91 be presented to supplement
the basic financial statements. Such information, although not a part of the basic financial statements, is required
by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting
for placing the basic financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States, which consisted of inquiries of management about the
methods of preparing the information and comparing the information for consistency with management's
responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of
the basic financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The introductory section, combining and individual non -major
fund financial statements, budgetary comparisons, and the statistical section, are presented for purposes of
additional analysis and are not a required part of the financial statements.
The combining and individual non -major fund financial statements, and budgetary comparisons (other than the
major funds), are the responsibility of management and were derived from and relate directly to the underlying
accounting and other records used to prepare the financial statements. Such information has been subjected
to the auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting and
other records used to prepare the financial statements or to the financial statements themselves, and other
additional procedures in accordance with auditing standards generally accepted in the United States of America.
In our opinion, the combining and individual non -major fund financial statements, and budgetary comparisons
(other than the major funds), are fairly stated in all material respects in relation to the financial statements as a
whole.
The introductory section and statistical tables have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance
on them.
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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 22, 2017
on our consideration of the City's internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that
report is to describe the scope of our testing of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on the internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the City's internal control over financial reporting and compliance.
C(l�p�.' LLP
Wpfli LLP
Helena, Montana
December 22, 2017
14
1 1 1
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Kalispell, we offer readers of the City of Kalispell's financial
statements this narrative overview and analysis of the financial activities of the City of Kalispell
for the fiscal year ended June 30, 2017. 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 and deferred outflows of the City of Kalispell exceeded its liabilities and deferred
inflows at the close of the most recent fiscal year by $164,414,837 (net position). Of this
amount, $15,051,097 (unrestricted net position) may be used to meet the government's
ongoing obligations to citizens and creditors.
➢ Total net position increased by $4,813,178 over the prior fiscal year due to increases in utility
revenues and building reserves for necessary future large projects in utility funds.
➢ As of June 30 the City's governmental funds reported combined ending fund balances of
$21,197,113, an increase of $2,361,324 over the prior year. Of this amount, $3,891,114
(19%) is available for spending at the government's discretion (committed, assigned, and
unassigned fund balances).
➢ At fiscal year-end, the total of the committed, assigned, and unassigned components of fund
balance for the general fund was $3,891,114, or 34% of total general fund expenditures.
➢ The City's total debt, excluding compensated absences, decreased by $2,252,832 (11%)
during fiscal year 2017. The result of minimal new borrowing.
AN OVERVIEW OF THE FINANCIAL STATEMENTS
There are three main components to the City of Kalispell's financial statements: 1) government -
wide financial statements, 2) fund financial statements, and 3) notes to the financial statements.
Other supplementary material is included in this report in addition to the basic financial
statements themselves. The City of Kalispell intends for this discussion and analysis to be used
in conjunction with the basic financial statements, and other material, as an introduction and also
as a means to help the user better understand the information.
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad
overview of the City of Kalispell's finances. The way information is presented in these
statements is comparable to how the financial information of a private -sector business would be
presented.
The statement of net position presents information on all of the City of Kalispell's assets and
deferred outflows of resources, and liabilities and deferred inflows of resources. The difference
between these two (assets and deferred outflows of resources minus liabilities and deferred
inflows of resources) is reported as net position. Net position can be a useful tool in evaluating
15
the financial health of an entity. A substantial decrease in net position may be a sign of
deteriorating financial outlook.
The change in net position during the most recent fiscal period is presented by the statement of
activities. The statement of activities reports changes in net position at the time the event takes
place without regard to the corresponding cash transaction. This results in some revenues and
expenses being reported in this statement that will not result in cash flow until a future fiscal
period. Some examples of this would be uncollected but earned taxes and earned leave benefits.
The government -wide financial statements of the City of Kalispell are segregated to distinguish
between functions supported predominantly by taxes and intergovernmental revenues
(governmental activities) and those that are intended to recover the majority of their costs
through user fees and charges for services (business -type activities). The governmental activities
of the City of Kalispell include general government/administration, public safety, public works,
parks and recreation, and community development. The business -type activities of the City of
Kalispell include water distribution, sewer collection and treatment, solid waste collection, and
an airport.
The government -wide financial statements include, in addition to the primary government
described in the above paragraph, a legally separate Business Improvement District and a legally
separate Tourism Business Improvement District. The financial information of these component
units is reported separately on the Government -wide financial statements.
Fund Financial Statements
The City of Kalispell, like most other governmental entities, uses fund accounting. Funds are set
up to account for specific activities or objectives of the government. Funds also aide in ensuring
compliance with legal requirements. The City of Kalispell categorizes its funds as either
governmental, proprietary, or fiduciary.
➢ Governmental funds correspond with the functions reported as governmental activities in
the government -wide financial statements. Governmental fund financial statements, by
focusing on near -term inflows and outflows of spendable resources, may be more useful
in evaluating a government's short-term fiscal health than the government -wide financial
statements.
A reconciliation has been prepared to help users more easily compare the governmental
fund balance sheet to the government -wide statement of net position and the
governmental fund statement of revenues, expenditures, and changes in fund balance to
the government -wide statement of activities. These reconciliations can be useful in
contrasting, comparing and understanding the long-term impact (government -wide
statements) of near -term decisions (governmental fund statements).
The City of Kalispell maintains numerous individual governmental funds. The
governmental fund balance sheet and statement of revenues, expenditures, and changes
in fund balance present information separately only for funds which are considered
major. Major funds are determined by a formula which considers the percentage of total
16
governmental assets, liabilities, revenues, and expenditures contained in each individual
fund. The City of Kalispell has four major governmental funds; the General Fund
(always a major fund), the Street Maintenance (special revenue) Fund, the Community
Development — Miscellaneous (special revenue) Fund, and the Special Improvement
District 344 (debt service) Fund. All non -major funds are presented as a group.
The City of Kalispell adopts an annual appropriated budget for its funds. A budgetary
comparison statement has been provided for the general fund and the major special
revenue funds to demonstrate compliance with this budget.
➢ The City of Kalispell maintains two different types of proprietary funds. Enterprise
funds and internal service funds. Enterprise funds are used to report the same functions
presented as business -type activities in the government -wide financial statements.
Water, sewer, solid waste, and the airport make up the City of Kalispell's enterprise
funds. The City of Kalispell uses two internal service funds to accumulate and allocate
its information technology transactions and central garage transactions internally among
its various functions. Under the old reporting model internal service funds were reported
as proprietary funds because they recovered most of their cost through user fees from
other funds. Under the new model these funds are eliminated through an allocation
process and categorized as either a governmental or business -type activity. Because the
City of Kalispell's internal service funds benefit governmental more so than business -
type functions, they have been included within the governmental activities in the
government -wide financial statements.
Information in the proprietary fund financial statements is of the same type as that
provided in the government -wide financial statements, however, it is more detailed.
Individual fund data is provided for the water fund, and the sewer fund, classified as
major funds. Individual data is not required for the airport fund or the solid waste fund,
because they are not classified as major funds.
➢ The City of Kalispell maintains four funds to account for resources held by the
government for the benefit of outside parties. These fiduciary funds are not reflected in
the government -wide financial statements because the resources are not available to
support the City of Kalispell's own programs. The City of Kalispell must ensure that the
assets reported in these funds are used for their intended purpose. The accounting
method used for fiduciary funds is similar to that used for proprietary funds.
Notes to the Financial Statements
The information contained in the government -wide and fund financial statements is meant to be
used in concurrence with the notes to the financial statements. The notes present further detail of
the data provided by these statements.
Other Information
GASB Statement 75 — Accounting and Financial Reporting for Postemployment Benefits Other
Than Pensions schedules, GASB Statement 68 — Accounting and Financial Reporting for
17
Pensions schedules, and the general and major special revenue funds budgetary comparison
schedules is included in the section for required supplementary information on pages 85 - 94.
The combining statements for non -major governmental and non -major proprietary funds are
presented immediately following the required supplementary information section. Combining
and individual fund statements and schedules can be found beginning on page 95 of this report.
ANALYZING THE CITY AS A WHOLE
As mentioned prior, net position can be an important indicator of an entities financial well-being.
For the period ending June 30, 2017, the City of Kalispell's assets and deferred outflows of
resources exceeded liabilities and deferred inflows of resources by $164,414,837.
The largest portion of the City's net position ($129,611,786 or 79%) reflects its net investment in
capital assets (e.g., land, buildings, machinery and equipment, infrastructure). The City uses
these capital assets to provide services to citizens; consequently, these assets are not available for
future spending. Although the City's investment in capital assets is reported net of related debt,
it should be noted that the resources needed to repay this debt must be provided from other
sources, since the capital assets themselves cannot be used to liquidate these liabilities. A
summary of net position is shown in the following table.
Governmental Business -type
Activities Activities
Change
Change
FY17
FY16
Inc(Dee)
FY17
FY16
Inc(Dee)
Current and Other Assets
$25,888,993
$23,464,181
$ 2,424,812
$ 25,316,957
$ 21,649,985
$ 3,666,972
Capital Assets
75,028,235
77,098,433
(2,070,198)
72,856,366
73,751,878
(895,512)
Total Assets
100,917,228
100,562,614
354,614
98,173,323
95,401,863
2,771,460
Deferred Outflows of Resource
2,796,962
935,995
1,860,967
428,710
145,660
283,050
Long-term Liabilities Outstandi
$21,249,971
$18,946,330
$ 2,303,641
$ 15,050,929
$ 15,858,902
$ (807,973)
Other Liabilities
975,448
809,737
165,711
477,351
485,310
(7,959)
Total Liabilities
22,225,419
19,756,067
2,469,352
15,528,280
16,344,212
(815,932)
Deferred Inflow of Resources
136,310
667,128
(530,818)
11,377
207,823
(196,446)
Net Position:
Net Investment in Capital Asse
69,120,365
70,056,388
(936,023)
60,491,421
60,294,686
196,735
Restricted
9,350,293
9,406,621
(56,328)
10,401,661
9,184,782
1,216,879
Unrestricted (deficit)
2,881,803
1,612,405
1,269,398
12,169,294
9,516,020
2,653,274
Total net position
$81,352,461
$81,075,414
$ 277,047
$83,062,376
$ 78,995,488
$ 4,066,888
An additional portion of the City's net position ($19,751,954 or 12%) represents resources that
are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net assets ($15,051,097 or 9%) may be used to meet the City's ongoing obligations
to citizens and creditors.
At June 30, the City is able to report positive balances in all three categories of net position, both
for the City as a whole, as well as for its separate governmental and business -type activities.
Net position of the City increased about 3% for fiscal year 2017 in comparison to fiscal year
2016 restated ($164.4 million compared to $159.6 million).
18
Changes in Net Position
Governmental Business -type
Activities Activities
Change
Change
FY17
FY16
Inc(Dec)FY17
FY16
Inc(Dec)
Revenues
Program revenues (by major source):
Charges for services
$ 7,613,019
$ 6,604,026 $
1,008,993 $
12,457213 $
10,139,580
$ 2,317,633
Operating grants and contributions
1,470,485
1,354,890
115,595
32,653
137,048
(104,395)
Capital grants and contributions
1,544,350
942,125
602,225
131,626
3,338,669
(3207,043)
General revenues (by major source):
Property taxes for general purposes
8,848,481
8,357,904
490,577
-
-
-
Video poker apportionment
63,950
61,925
2,025
-
-
-
Miscellaneous
130,740
46,573
84,167
19,631
140,616
(120,985)
Interest/investment earnings
159,362
105,557
53,805
227,052
132,339
94,713
State entitlement
3,184,831
3,132,559
52272
-
-
-
Gas Tax
371,303
369,749
1,554
-
-
-
Contributions & donations
5,325
2,550
2,775
-
-
-
Total revenues
$ 23,391,846
$ 20,977,858 $
2,413,988 $
12,868,175 $
13,888252
$ (1,020,077)
Program expenses
General goverrunent
$ 5,841,775
$ 5,823,767 $
18,008
Public safety
10,968,010
9,113,674
1,854,336
Public works
2,660,513
2,581,002
79,511
Parks and recreation
2,184222
2,057,468
126,754
Community development
853,455
928,661
(75,206)
Debt service -interest
242,110
286,401
(44,291)
Airport
$
155,876 $
154,091
$ 1,785
Water
2,734,979
2,657,816
77,163
Sewer
4,955,925
5204,622
(248,697)
Solid Waste
872,161
880,679
(8,518)
Total expenses
$ 22,750,085
$ 20,790,973 $
1,959,112 $
8,718,941 $
8,897208
$ (178,267)
Excess (deficiency) before
special items and transfers
$ 641,761
$ 186,885 $
454,876 $
4,149234 $
4,991,044
$ (841,810)
Gain (loss) on sale of capital assets 22,183 78,497 (56,314) - (3,091) 3,091
Transfers- net 35,000 35,000 (35,000) (35,000)
Increase (decrease) in net position $ 698,944 $ 300,382 $ 398,562 $ 4,114234 $ 4,952,953 $ (838,719)
Governmental Activities. Governmental activities in fiscal year 2017 increased the City's net
position by $698,944. In fiscal year 2016, governmental activities increased net position by just
over $300,000. Specifically, revenues were up over 12%, however, expenses also showed an
increase from the prior fiscal period of over 10%. The key elements of the overall net position
change were:
➢ Total program revenues increased substantially ($1,726,813 or 20%), while general
revenues increased ($687,175 or 6%). Charges for services (program revenues) were up
over $1 million from fiscal year 2016. The majority of this increase ($935,681) was
public safety related, and 84% of the public safety charges for services increase
($780,416) was building department permits, licenses and fees. A grant from the State
of Montana to develop playing fields at the City's youth sports complex ($850,002) more
than offset other decreases in the capital grants and contributions revenue for fiscal year
2017.
➢ Governmental activities program expenses increased by more than 10% ($1,959,112).
Public safety expenses increased by $1,854,336, or 95% of the total increase. Nearly $1
million of this increase is from the annual GASB 68 pension adjustment. The balance of
the public safety expense increase is comprised of a fire/ambulance and police wage and
benefit increase, and increased spending in the building department due to an increase in
demand.
19
The table and charts on the following page help illustrate the information presented above. The
table and bar chart present the cost and net cost (total cost less revenues generated by the
activity) of each of the City's largest programs; General Government (administration), Public
Safety (police and fire), Public Works (streets, light maintenance and signs and signals), Culture
and Recreation (parks, urban forestry, pool, etc.), and Community Development. Net cost shows
the financial burden placed on City taxpayers by each of these functions. The pie chart
illustrates the different revenue sources for the City's governmental activities and how much
each source contributes.
12000000
10000000
8000000
06000000
E
Q
-4000000
2000000
Governmental Activities
by function (in Millions)
Total Cost Net Cost
of Services of Services
FY17
FY16
FY17
FY16
Public Safety
11.0
9.1
6.2
5.9
Public Works
2.7
2.6
(0.6)
(0.8)
Parks and Recreation
2.2
2.1
0.6
1.2
Community Development
0.9
0.9
0.7
0.6
General Government
5.8
5.8
5.0
4.7
Debt Service
0.2
0.3
0.2
0.3
Totals
$ 22.8
$ 20.8
$ 12.1
$ 11.9
Expenses and Program Revenues - Governmental Activities for fiscal year
2017
gen gov't pub safety pub works parks/rec comm dev
Activity
Revenue by Source - Governmental Activities fiscal year
Other 2017
3%
State \
entitlement
14%
Charges for
services
32%
Property
taxes Operating
38 �0 grants/contrib
utions
6%
Capital
grants/contrib
utions
7%
20
Business -type activities. Business -type activities increased the City of Kalispell's net position
by $4,114,234. In fiscal year 2016, business -type activities increased the City's net position by
almost $5 million. The factors leading to this decrease of about 17% result were:
➢ Overall, revenues of the City's business -type activities decreased slightly over
$1,000,000. Program revenues of the City's business -type activities decreased $993,805.
The majority of this decrease can be attributed to the much above normal water
consumption in fiscal year 2016. The above normal water consumption because of the
dry weather affects both revenue of the water fund and sewer fund.
➢ Expenses decreased slightly from the prior fiscal year.
The following charts help illustrate the information presented above related to business -type
activities net position.
C
O4
E
Q
,,3
Expenses and Program Revenues - Business -type Activities for fiscal year 2017
000000
ONE
000000
.expense
s
000000
000000
000000
000000
000000
0
FTT
airport water sewer solid waste
Activity
Revenues by Source - Business -type Activities for fiscal year 2017
Operating gran
0
Capital grants/contributions
1%
�--stment/other
amings
2%
21
ANALYZING THE CITY'S INDIVIDUAL FUNDS
Governmental Funds
The focus of the City of Kalispell's governmental funds is to provide information on near -term
inflows, outflows, and balances of spendable resources (fund balance). Spendable fund balance
(restricted, committed, assigned, and unassigned) is a useful tool when assessing the net
resources a government has available to spend at the end of a fiscal period.
At the end of fiscal year 2017, the City of Kalispell's governmental funds reported combined
ending fund balances of $21,197,113, an increase of $2,361,324 in comparison with the prior
fiscal year restated. Of the ending fund balance, $17,305,999 (82%) is restricted, indicating that
constraints placed on the use of resources are externally imposed, or imposed by law because:
assets are limited by specific grant agreements ($3,207,706); assets are limited by specific voter
approved bonds ($79,294); assets are limited by specific special assessments ($3,395,029); assets
are limited by state law ($10,208,301); assets are limited by contribution restrictions ($100,299).
$3,891,114 or 18% is available for spending at the City's discretion. Following is a short
analysis of each major governmental fund.
The general fund is the chief operating fund of the City of Kalispell. At the end of fiscal year
2017 unassigned fund balance of the general fund was $3,381,494, while total fund balance was
$4,143,327. The fund balance increased $458,972 during fiscal year 2017. Revenues and other
financing sources increased only slightly, about 2%, from fiscal year 2016. Expenditures and
other financing uses increased about 1%. At the end of fiscal year 2017, unassigned fund
balance represents 30% of total general fund expenditures, a 1% improvement from fiscal year
2016. The general fund balance of $761,833 is non -spendable and assigned as follows:
GENERAL FUND BALANCE - TOTAL $ 4,143,327
NONSPENDABLE
Long-term recievables $ 6,023
Prepaids $ 246,190
TOTAL NONSPENDABLE $ 252,213
ASSIGNMENTS
Capital Equipment $181,906
Downtown Parking $ 23,542
Misc. $ 304,172
TOTAL ASSIGNMENTS $ 509,620
UNASSIGNED $ 3,381,494
The Street Maintenance fund is a special revenue fund established to account for the
maintenance, construction, equipment and other costs incurred in the maintenance of the City's
streets. Assessments on properties within the City of Kalispell boundaries are the main source of
this funds revenue. At June 30, 2017, the fund balance of this fund was $2,255,776, a $308,379
increase from the prior fiscal year.
The Community Development — Miscellaneous fund is a special revenue fund used to account
for various activities of the department. There is a loan housed in the fund and various grants
have also been accounted for in this fund. This funds primary income sources are loan
repayment money and grant revenue. hi fiscal year 2017, the fund balance of this fund decreased
$151,257 to $325,095.
22
Special Improvement District 344 (debt service) fund was established by the City of Kalispell in
fiscal year 2006 for the purpose of servicing the debt attributable to the construction of the
infrastructure needed in the technical/industrial development known as Old School Station.
Fund balance at June 30, 2017, for SID 344 was $331,315, a decrease of $72,723 from fiscal
year 2016.
Proprietary Funds
The City of Kalispell's proprietary funds financial statements provide the same type of
information found in the government -wide financial statements, but in more detail. Unrestricted
net position and the total growth in net position of the proprietary funds by fund are:
Proprietary Fund Net Position
of
Unrestricted Funds total Change in % Change in
Net Position Net Position Net Position Net Position
Water $ 6,493,477 20% $ 1,384,940 4%
Sewer 4,727,495 10% 2,676,236 6%
Other 948,322 25% 53,058 1%
Total $12,169,294 15% $ 4,114,234 5%
For the discussion regarding major changes in net position of the proprietary funds see the
explanation above in the business -type activities of the statement of activities.
GENERAL FUND BUDGETARY HIGHLIGHTS
The City of Kalispell's general fund expenditures budget for fiscal year 2017 was $11,864,179.
Actual expenditures for the year were $11,573,490, a favorable variance of $290,689. Actual
general government expenditures were $167,057 less than budgeted, the result of most general
government departments making efforts to hold down expenditures where possible, and
unneeded contingencies.
Actual revenues of the general fund were $11,128,259, $208,424 less than the budgeted amount
of $111,336,683. There were two revenue categories significantly under budget. The fines and
forfeitures deficit may be the result of new rulings making it more difficult for the Municipal
Court to fine and/or collect. The intergovernmental deficit is the result of $361,000 of transfers
to special revenue funds re -categorized as an intergovernmental revenue of the special revenue
fund for financial reporting purposes.
23
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of 2017, the City of Kalispell has $147,884,601, net of depreciation, invested in a
broad range of capital assets, including police and fire equipment, streets, buildings, land, park
facilities, garbage collection equipment, and water and sewer lines.
CITY OF KALISPELL'S CAPITAL ASSETS
(NET OF DEPRECIATION)*
Governmental Business -type Total
activities activities
Storm Sewer system 10,125,538 9,938,618 10,125,538 9,938,618
Total $ 75,028,235 $ 77,098,433 $ 72,856,366 $ 73,751,878 $ 147,884,601 $ 150,850,311
'assets of the City's internal service funds included in governmental activities
Major Governmental funds capital asset events during the fiscal year 2017 included the
following:
➢ The police department purchased (5) vehicles at a cost of $143,575.
➢ The fire department purchased a vehicle at a cost of $35,849.
➢ The building department purchased (2) vehicles at a cost of $63,145.
➢ An ambulance was purchased for about $170,000.
➢ The development of new fields started at the City's youth sports complex thru the use of a
State grant. This approximately $2 million project will be complete in fiscal year 2018.
➢ The street department purchased equipment costing $258,043. This included two trucks and
a snow blower.
➢ The parks department purchased equipment costing $114,661. This included a pickup, a
field groomer and a mower.
➢ Paved 6 alleys at a total cost of $38,750. Replaced 794', 2.6 blocks, of sidewalks valued at
$49,351.
➢ Disposed assets with a cost basis of $130,870.
Major Business -type funds capital asset events during the fiscal year 2017 included the
following:
➢ Developer's contributed (6) fire hydrants valued at $28,688.
➢ Replaced (5) fire hydrants at a total cost of $12,797.
➢ 1,411 linear feet of new water main valued at $99,915 was installed and contributed to the
City by developers.
➢ The water department installed 264 new meters, including 119 new domestic meters of
various sizes.
➢ Completed project replacing sewer main in 2nd Alley WN, total project cost was $662,510.
➢ Completed project replacing sewer main in Peterson School alley, total project cost was
$197,756.
➢ Replaced digested sludge line at the waste water treatment plant at a cost of $150,512.
24
➢ Completed phase 1 of the Sylvan Drive storm water repair project. Phase I cost was over
$500,000.
➢ Purchased a pickup for the solid waste department for $45,405.
➢ The sewer department has over $1.5 million in construction projects in progress as of June
30, 2017.
➢ Disposed assets with a cost basis of $374,375.
Additional information on capital assets can be found in the notes of the basic financial
statements (Note D. Capital Assets pages 49-51).
Debt
At the end of fiscal year 2017, the City of Kalispell had total long-term debt outstanding of
$18,815,334. Of this amount, $1,885,000 comprises debt backed by the full faith and credit of
the government and $1,478,500 represents bonds secured solely by specific revenue sources (i.e.,
revenue bonds). The remainder consists of $11,742,096 outstanding on State Revolving Fund
loans for construction/expansion of the wastewater treatment plant, the extension of sewer lines
south on Highway 93, and the construction of a water storage facility and the related
distribution/supply system. There is also $2,427,060 of special assessment debt for which the
City of Kalispell is liable in the event of default by the property owners subject to the
assessment, and $1,282,678 of loans for the purchase of other property and equipment.
CITY OF KALISPELL'S OUTSTANDING DEBT
Govemmental Business -type Total
activities activities
2017 2016 2017 2016 2017 2016
Contract debt/loans 1,204,829 1,401,475 77,849 116,192 1,282,678 1,517,667
Total $ 6,450,389 $ 7,610,974 $ 12,364,945 $ 13,457,192 $ 18,815,334 $ 21,068,166
Other obligations of the City of Kalispell include accrued vacation pay and sick leave
(compensated absences). More detailed information about the City's long-term liabilities is
presented in the notes to the financial statements (Note E. Long -Term Debt pages 52-56).
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The City's elected and appointed officials considered many factors when adopting the fiscal year
2018 budget for tax rates and fees that will be charged by the business -type activities. Some of
these factors include: capital improvements identified in the City's Capital Improvement
Program, inflation rates, the City's collective bargaining units, the local economy, and the
citizen's ability to pay. For the year, inflation rates continued to increase. The Bureau of Labor
Statistics of the U.S. Department Labor reported the Consumer Price Index -Unadjusted for All
Items at 2.9 percent for the last calendar year. The index for all items less food and energy rose
2.7 percent for the 12 months ending September. The food index increased 1.9 percent over the
span, and the energy index advanced 7.6 percent. Inflation rates have a significant impact on the
cost of City projects.
25
Request for Information
This financial report is designed to provide a general overview of the City of Kalispell's finances
for all those with an interest in the government's finances. Questions concerning any of the
information provided in this report or requests for additional financial information should be
addressed to the City of Kalispell, Finance Director, P.O. Box 1997, Kalispell, MT 59903-1997.
26
I�' 1 1, �` �. J.
:�'
City of Kalispell, Montana
Statement of Net Position
June 30, 2017
Component Units
Governmental Business -Type Downtown Tourism
ASSETS
Cash and investments
$
15,649,807 $
14,183,066 $
29,832,873 $
22,753
$ 193,291
Taxes and assessments receivable, net
3,206,726
52,717
3,259,443
2,147
Accounts receivable - net
252,600
448,907
701,507
Notes and loans receivable
1,978,201
-
1,978,201
Contracts receivable
85,570
242,705
328,275
Due from other governments
1,822,697
143,110
1,965,807
7,074
Prepaids
321,254
160,084
481,338
Inventories
-
113,425
113,425
Properties held for sale
1,258,465
-
1,258,465
Other debits
6,784
-
6,784
Restricted assets:
Cash and investments
1,306,889
9,972,943
11,279,832
Capital assets (net of accumulated depreciation):
Land
2,395,299
1,762,512
4,157,811
Construction in Progress
885,147
1,899,903
2,785,050
Depreciable
71,747,789
69,193,951
140,941,740
Total assets
$
100,917,228 $
98,173,323 $
199,090,551 $
31,974
$ 193,291
DEFERRED OUTFLOWS OF RESOURCES
OPEB differences/changes
789,252
140,637
929,889
Contractually required contributions related to pensions
2,007,710
288,073
2,295,783
Total deferred outflows of resources
$
2,796,962 $
428,710 $
3,225,672 $
-
$ -
Total assets and deferred outflows of resources
$
103,714,190 $
99,602,033 $
202,316,223 $
31,974
$ 193,291
LIABILITIES
Accounts payable
$
736,004 $
403,789 $
1,139,793 $
2,687 $
72,219
Retainage
36,699
20,251
56,950
Accrued payroll
199,428
47,571
246,999
Current portion of long-term liabilities
Bonds and notes - not capital
26,674
-
26,674
Bonds and notes - capital
1,274,985
1,184,728
2,459,713
Compensated absences payable
1,013,589
201,419
1,215,008
Other credits
3,317
5,740
9,057
Long-term liabilities, due in more than one year
Bonds and notes - not capital
515,845
-
515,845
Bonds and notes - capital
4,632,885
11,180,217
15,813,102
Compensated absences
398,023
121,002
519,025
Net OPEB liability
3,382,586
602,743
3,985,329
Net pension liability
10,005,384
1,760,820
11,766,204
Total liabilities
$
22,225,419 $
15,528,280 $
37,753,699 $
2,687 $
72,219
DEFERRED INFLOWS OF RESOURCES
Diff. between est. and actual earnings on pension plan
inv. $
136,310 $
11,377 $
147,687 $
$
Total deferred inflows ofresources
$
136,310 $
11,377 $
147,687 $
- $
-
NET POSITION
Net investment in capital assets
$
69,120,365 $
60,491,421 $
129,611,786 $
$
Restricted for capital projects
818,266
7,044,258
7,862,524
Restricted for debt service
1,000,298
1,226,947
2,227,245
Restricted for special projects
7,531,729
1,940,456
9,472,185
Restricted for other purposes
-
190,000
190,000
Unrestricted
2,881,803
12,169,294
15,051,097
29,287
121,072
Total net position
$
81,352,461 $
83,062,376 $
164,414,937 $
29,287 $
121,072
See accompanying Notes to the Financial Statements
WA
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General Fund — this is the City's primary operating fund and accounts for the financial
operations of the City not accounted for in any other fund. Principal sources of revenue
are property taxes, state and local shared revenue, charges for services, and fines and
forfeitures. Principal expenditures are for public safety.
Street Maintenance — Accounts for special assessment revenues levied, received, and
expended to keep streets clean, safe, and drive -able.
Community Development Loan Miscellaneous Fund — this fund was originally
established to account for Urban Development Assistance Grants (UDAG). In fiscal year
2015, this fund, with dollars borrowed from the General fund, purchased six undeveloped
properties from Flathead County at the Old School Station Industrial/Technical Park, a
City special improvement district.
SID 344 Debt Service Fund — this fund accounts for the resources accumulated and
payments made for principal and interest on the bonds sold to finance the development of
the Old School Station Industrial and Technology Park.
City of Kalispell, Montana
Balance Sheet
Governmental Funds
June 30,2017
Other
Total
Street
Governmental
Governmental
General Fund
Maintenance
CD Misc.
SID 344
Funds
Funds
ASSETS
Cash and investments
$ 1,654,557 $
2,124,361 $
359,457 $
331,315 $
10,858,271 $
15,327,961
Taxes and assessments receivable, net
260,990
102,679
-
2,104,199
738,858
3206,726
Accounts receivable - net
-
-
-
-
252,600
252,600
Notes and loans receivable
-
-
20,955
-
1,957,246
1,978201
Contracts receivable
40,731
-
-
-
3,408
44,139
Advances to other funds
1,300,000
-
-
-
-
1,300,000
Due from other funds
636,711
-
-
-
212
636,923
Due from other governments
439,486
180,799
-
-
1,202,412
1,822,697
Prepaids
246,190
32,397
2,468
-
28,292
309,347
Properties held for sale
-
-
1,258,465
-
-
1258,465
Other debits
6,023
-
-
-
761
6,784
Restricted assets:
Cash and investments
$ - $
- $
- $
- $
1,306,889 $
1,306,889
Total assets
$ 4,584,688 $
2,440,236 $
1,641,345 $
2,435,514 $
16,348,949 $
27,450,732
LIABILITIES
Accounts payable
$ 61,477 $
58,420 $
- $
- $
516,468 $
636,365
Retainage
-
6,435
-
-
30,264
36,699
Accrued payroll
116,538
16,726
-
-
59,590
192,854
Due to other funds
-
-
16,250
-
620,673
636,923
Advances from other funds
-
-
1,300,000
-
-
1,300,000
Other credits
2,356
200
-
-
761
3,317
Total liabilities
$ 180,371 $
81,781 $
1,316,250 $
- $
1,227,756 $
2,806,158
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable
$ - $
- $
- $
- $
240,735 $
240,735
Unavailable revenue - deferred taxes and assessments
260,990
102,679
-
2,104,199
738,858
3206,726
Total deferred inflows of resources
$ 260,990 $
102,679 $
- $
2,104,199 $
979,593 $
3,447,461
FUND BALANCES
Nonspendable - not in spendable form
Long-term recievables
$ 6,023 $
- $
- $
- $
- $
6,023
Prepaids
246,190
32,397
2,468
-
28,292
309,347
Restricted
General Government
-
-
-
-
63,742
63,742
Public Safety
-
-
-
-
2,522,110
2,522,110
Public Works
-
2,223,379
-
-
902,836
3,126215
Culture and Recreation
-
-
-
-
1,042,139
1,042,139
Community Development
-
-
322,627
-
8,913,498
9236,125
Debt Service
-
-
-
331,315
668,983
1,000298
Unrestricted Fund Balances:
Assigned
Capital Equipment
181,906
-
-
-
-
181,906
Parking
23,542
-
-
-
-
23,542
Miscellaneous
304,172
-
-
-
-
304,172
Unassigned fund balance
3,381,494
-
-
-
-
3,381,494
Total fund balances
$ 4,143,327 $
2,255,776 $
325,095 $
331,315 $
14,141,600 $
21,197,113
Total liabilities, deferedinflows ofresources, and fund
$ 4.584.688 $
2,440,236 $
1,641,345 $
2,435,514 $
16.348.949 $
27,450,732
See accompanying Notes to the Financial Statements
29
City of Kalispell, Montana
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position
June 30, 2017
Total fund balances - governmental funds $ 21,197,113
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in
the funds. 74,807,258
An internal service fund is used by management to charge the costs of providing services within the
government. The assets and liabilities of the internal service funds are included in governmental activities
in the government -wide statement of net position 458,472
Deferred outflow of resources related to pensions.
- contributions made subsequent to the measurement date, recognized on the statement of net position 2,007,710
- collective contributions 789,252
Long-term liabilities are not due and payable in the current period and therefore are not reported as
liabilities in the funds.
- Bonds and notes (6,450,389)
- Compensated absences (1,380,136)
- Other post employment benefits (3,382,586)
- Net pension liability (10,005,384)
- Deferred inflow of resources - related to pensions (136,310)
Taxes, assessments and accounts receivable will be collected this year, but are not available soon enough to
pay for the current periods expenditures and, therefore, are reported as unavailable revenue in the funds.
- deferred taxes and assessments 3,206,726
- ambulance 240,735
Total net position - governmental activities $ 81,352,461
See accompanying Notes to the Financial Statements
ME
City of Kalispell, Montana
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2017
Other
Total
Street
Governmental
Governmental
General Fund
Maintenance
CD Misc.
SID344
Funds
Funds
REVENUES
Taxes and assessments
$ 5,625,579 $
2,483,634 $
- $
264,910 $
4,082,403 $
12,456,526
Licenses and permits
131,644
-
-
-
1,098281
1229,925
Intergovernmental
3,921,872
-
-
-
2,392,963
6,314,835
Charges for services
925,165
14,962
1,281
-
2,065,099
3,006,507
Fines and forfeitures
454,547
-
-
-
-
454,547
Miscellaneous
33,641
1,789
-
-
102,645
138,075
Investment earnings
35,811
15,549
4,302
-
103,701
159,363
Total revenues
$ 11,128,259 $
2,515,934 $
5,583 $
264,910 $
9,845,092 $
23,759,778
EXPENDITURES
General government
$ 2,495,710 $
- $
- $
- $
- $
2,495,710
Public safety
8,777,695
-
-
-
2,095,915
10,873,610
Public works
39,891
1,789,811
-
-
497,976
2,327,678
Parks and recreation
-
-
-
-
1,714235
1,714,235
Community development
80,770
-
206,840
-
565,845
853,455
Debt service -principal
-
111,946
-
225,000
957,926
1294,872
Debt service -interest
-
3,016
-
112,633
126,461
242,110
Capital outlay
179,424
319,342
-
-
1293,818
1,792,584
Total expenditures
$ 11,573,490 $
2,224,115 $
206,840 $
337,633 $
7252,176 $
21,594254
Excess (deficiency) of revenues over expenditures
$ (445,231) $
291,819 $
(201257) $
(72,723) $
2,592,916 $
2,165,524
OTHER FINANCING SOURCES (USES)
Issuance of debt
$ - $
- $
- $
- $
134287 $
134287
Proceeds from the sale of general capital asset disposition
3203
16,560
-
-
6,750
26,513
Transfers in
901,000
-
50,000
-
69234
1,020,234
Transfers out
-
-
-
-
(985234)
(985,234)
Total other financing sources (uses)
$ 904,203 $
16,560 $
50,000 $
- $
(774,963) $
195,800
Net Change in Fund Balance
$ 458,972 $
308,379 $
(151257) $
(72,723) $
1,817,953 $
2,361,324
Fund balances -beginning
$ 3,684,355 $
1,947,397 $
476,352 $
404,038 $
12,357,581 $
18,869,723
Restatements
-
-
-
-
(33,934)
(33,934)
Fund balances - beginning, restated
$ 3,684,355 $
1,947,397 $
476,352 $
404,038 $
12,323,647 $
18,835,789
Fund balance - ending
$ 4,143,327 $
2,255,776 $
325,095 $
331,315 $
14,141,600 $
21,197,113
See accompanying Notes to the Financial Statements
31
City of Kalispell, Montana
Reconciliation of the Statement of Revenues, Expenditures.
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30, 2017
Amounts reported for governmental activities in the statement of
activities are different because:
Net change in fund balances - total governmental funds $ 2,361,324
Governmental funds report capital outlays as expenditures while governmental activities report
depreciation expense to allocate those expenditures over the life of the assets:
- Capital assets purchased 1,786,274
- Depreciation expense (3,930,316)
In the Statement of Activities, the loss or gain on the sale or disposal of capital assets is recognized. The
fund financial statements recognize only the proceeds from the sale of these assets:
- Proceeds from the sale of capital assets (26,513)
- Gain on the sale of capital assets 22,183
Revenues in the Statement of Activities that do not provide current financial resources are not reported as
revenues in the funds:
- Donated capital assets 11,269
- Long-term receivables (deferred revenue) (103,702)
The change in compensated absences is shown as an expense in the
Statement of Activities (28,357)
Repayment of debt principal is an expenditures in the governmental funds, but the repayment reduces long-
term debt in the Statement of Net Position:
- Long-term debt principal payments 1,294,872
Long term debt proceeds provide current financial resources to the governmental funds, but issuing debt
increases long-term liabilities in the Statement of Net Position:
- Proceeds from the sale of long-term debt (134,287)
Changes to net pension liability are shown as revenues/expenses on the Statement of Activities (223,679)
The increase in other post employment benefits is shown as an expense in the
Statement of Activities (432,240)
Internal service funds are used by management to share the costs of certain activities, to individual funds.
The net revenue of the internal service funds is reported with the governmental activities of the
Government -Wide Statement of Activities 102,116
Change in net position - Statement of Activities $ 698,944
See accompanying Notes to the Financial Statements
32
Water Fund — Accounts for the City's water utility operations, including water impact
fees.
Sewer Fund — Accounts for the City's sewer and storm water utility operations, including
sewer and storm impact fees.
Information Technology Fund — used to account for the goods and services provided by
the information technology department to other departments of the City on a cost -
reimbursement basis.
Central Garage Fund — used to account for the goods and services provided by the central
garage to other departments of the City on a cost -reimbursement basis.
ASSETS
Current assets:
Cash and investments
Taxes and assessments receivable, net
Accounts receivable - net
Contracts receivable
Due from other governments
Prepaids
Inventories
Restricted assets:
Cash and investments
Total current assets
Noncurrent assets:
Capital assets (net of accumulated depreciation):
Land
Construction in Progress
Depreciable
Total noncurrent assets
Total assets
City of Kalispell, Montana
Statement of Net Position
Proprietary Funds
June 30, 2017
Business -Type Activities - Enterprise Funds
Non -major
Governmental
Activities
Internal
$ 7,477,911 $
5,492,375 $
1,212,780 $
14,183,066 $
321,846
-
29,418
23,299
52,717
-
194,444
252,342
2,121
448,907
-
40,918
201,787
-
242,705
41,431
-
63,969
79,141
143,110
-
54,589
78,845
26,650
160,084
11,907
113,425
-
-
113,425
-
1,886,943
8,086,000
9,972,943
-
$ 9,768,230 $
14,204,736 $
1,343,991 $
25,316,957 $
375,184
$ 91,587 $
311,380 $
1,359,545 $
1,762,512 $
-
183,950
1,715,953
-
1,899,903
$ 35,170,109 $ 58,751,072 $ 4,252,142 $ 98,173,323 $ 596,161
DEFERRED OUTFLOWS OF RESOURCES
OPEB differences/changes
$
69,183 $
71,454 $
- $
140,637 $
Pension plan subsequent contributions/changes
98,372
135,385
54,316
288,073
Total deferred outflows of resources
$
167,555 $
206,839 $
54,316 $
428,710 $
-
LIABILITIES
Current liabilities:
Accounts payable
$
114,624 $
277,698 $
11,467 $
403,789 $
99,639
Retainage
2,539
17,712
-
20,251
-
Accrued payroll
16,315
23,260
7,996
47,571
6,574
Bonds and notes - capital
203,000
943,000
38,728
1,184,728
-
Compensated absences payable
58,697
86,714
56,008
201,419
21,648
Other credits
5,740
-
-
5,740
-
Total current liabilities
$
400,915 $
1,348,384 $
114,199 $
1,863,498 $
127,861
Noncurrent liabilities:
Bonds andnotes- capital
$
1,521,096 $
9,620,000 $
39,121 $
11,180,217 $
-
Compensated absences
27,051
53,584
40,367
121,002
9,828
Net OPEB liability
296,506
306,237
-
602,743
-
Net pension liability
601,290
827,528
332,002
1,760,820
-
Total noncurrent liabilities
$
2,445,943 $
10,807,349 $
411,490 $
13,664,782 $
9,828
Total liabilities
$
2,846,858 $
12,155,733 $
525,689 $
15,528,280 $
137,689
DEFERRED INFLOWS OF RESOURCES
Pension -dill. between projected and actual earnings
$
3,885 $
5,347 $
2,145 $
11,377 $
-
Totaldeferredinflowsofresources
$
3,885 $
5,347 $
2,145 $
11,377 $
-
NET POSITION
Net investment in capital assets
$
23,677,783 $
33,983,336 $
2,830,302 $
60,491,421 $
220,977
Restricted for capital projects
1,626,727
5,417,531
-
7,044,258
-
Restricted for debt service
260,216
966,731
1,226,947
Restricted for special projects
428,718
1,511,738
1,940,456
Restricted for other purposes
-
190,000
190,000
-
Unrestricted
6,493,477
4,727,495
948,322
12,169,294
237,495
Total net position
$
32,486,921 $
46,796,831 $
3,778,624 $
83,062,376 $
458,472
See accompanying Notes to the Financial Statements
33
City of Kalispell, Montana
Statement of Revenues, Expenses, and Changes
in Net Position
Proprietary Funds
For the Fiscal Year Ended June
30, 2017
Governmental
Business -Type Activities
- Enterprise Funds
Activities
Non -major
Internal
Water
Sewer
Enterprise
Totals
Service Funds
OPERATING REVENUES
Charges for services
$ 2,954,669 $
4,526,174 $
1,083,945
$ 8,564,788
$ 1,120,257
Miscellaneous revenues
233,695
13,190
-
246,885
1,087
Special assessments
-
868,798
868,798
-
Total operating revenues
$ 3,188,364 $
5,408,162 $
1,083,945
$ 9,680,471
$ 1,121,344
OPERATING EXPENSES
Personal services
$ 1,067,727 $
1,364,373 $
476,020
$ 2,908,120
$ 431,261
Supplies
66,525
119,502
84,050
270,077
306,754
Purchased services
338,553
899,738
79,225
1,317,516
226,436
Building materials
72,221
74,230
-
146,451
-
Fixed charges
221,982
422,716
150,214
794,912
25,680
Depreciation
911,985
1,814,966
236,871
2,963,822
31,460
Total operating expenses
$ 2,678,993 $
4,695,525 $
1,026,380
$ 8,400,898
$ 1,021,591
Operating income (loss)
$ 509,371 $
712,637 $
57,565
$ 1,279,573
$ 99,753
NON -OPERATING REVENUES (EXPENSES)
Intergovernmental income
$ 11,150
$ 15,346
$ 6,157
$ 32,653 $
hupact Fees
704,557
2,077,588
-
2,782,145
-
Interest revenue
88,717
128,042
10,293
227,052
2,363
Gain (loss) on sale of capital assets
(1,472)
-
15,700
14,228
-
Debt service interest expense
(55,986)
(260,400)
(1,657)
(318,043)
-
Total non -operating revenues (expenses)
$ 746,966
$ 1,960,576
$ 30,493
$ 2,738,035 $
2,363
Income (loss) before contributions and transfers $ 1,256,337
$ 2,673,213
$ 88,058
$ 4,017,608 $
102,116
Contributions of infrastructure - developers
128,603
3,023
-
131,626
-
Transfers out
-
-
(35,000)
(35,000)
-
Change in net position
$ 1,384,940
$ 2,676,236
$ 53,058
$ 4,114,234 $
102,116
Net Position - Beginning of the year
$ 31,080,328
$ 44,189,594
$ 3,725,566
$ 78,995,488 $
356,356
Restatements
21,653
(68,999)
-
(47,346)
-
Net Position - Beginning of the year - Restated
$ 31,101,981
$ 44,120,595
$ 3,725,566
$ 78,948,142 $
356,356
Net Position - End of the year
$ 32,486,921
$ 46,796,831
$ 3,778,624
$ 83,062,376 $
458,472
See accompanying Notes to the Financial Statements
34
City of Kalispell, Montana
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2017
Governmental
Business - Type Activities
Activities
Non -major
Internal Service
Water
Sewer
Enterprise
Totals
Fund
Cash flows from operating activities:
Cash received from customers
$
2,959,218 $
4,506265 $
1,093,727 $
8,559,210 $
1,122,937
Cash received from assessments
-
871,527
-
871,527
-
Cash received from miscellaneous sources
233,695
13,190
246,885
Cash payments for claims
(632,788)
(1,466,149)
(301,675)
(2,400,612)
(510,003)
Cash payments to employees
(1,060,651)
(1,581,812)
(517,829)
(3,160,292)
(435,412)
Net cash provided (used) by operating activities
$
1,499,474 $
2,343,021 $
274,223 $
4,116,718 $
177,522
Cash flows from capital and related financing activities:
Principal paid on bonds, loans and advances
$
(196,000) $
(921,000) $
(38,343) $
(1,155,343) $
-
Interest paid on bonds, loans and advances
(55,986)
(260,400)
(1,657)
(318,043)
Acquisition and construction of capital assets
(245,145)
(1,675,750)
(45,405)
(1,966,300)
(98,365)
Proceeds from bonds, loans and advances
63,096
-
63,096
Impact fees
835,336
2,370,999
-
3206,335
Sale of capital asset
-
-
15,700
15,700
Net cash provided (used) by capital and related financing activities $
401,301 $
(486,151) $
(69,705) $
(154,555) $
(98,365)
Cash flows from non -capital financing activities:
Transfers between funds
$
- $
$
(35,000) $
(35,000) $
Hydrant meter deposits
(2,550)
($2,550)
Net cash provided (used) from non -capital financing activities
$
(2,550) $
$
(35,000) $
(37,550) $
-
Cash flows from investing activities:
Interest on investments
$
88,717 $
128,042 $
10,292 $
227,051 $
2,364
Net cash provided (used) by investing activities
$
88,717 $
128,042 $
10,292 $
227,051 $
2,364
Net increase(decrease)in cash and cash equivalents
$
1,986,942 $
1,984,912 $
179,810 $
4,151,664 $
81,521
Cash and cash equivalents at beginning
7,377,912
11,593,463
1,032,970
20,004,345
240,325
Cash and cash equivalents at end
$
9,364,854 $
13,578,375 $
1,212,780 $
24,156,009 $
321,846
Reconciliation of operating income (loss) to net cash provided
(used) by operating activities:
Operating income (loss)
$
509,371 $
712,637 $
57,565 $
1279,573 $
99,753
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation
911,985
1,814,966
236,871
2,963,822
31,459
Pension Adj.
(25,650)
(228,615)
(48,692)
(302,957)
-
Other Post Employment Benefits Expense
37,889
39,132
77,021
-
Changes in assets and liabilities:
Accounts receivable - net
4,549
(19,909)
(1,797)
(17,157)
$1,594
Increase in Inventory
24,818
-
24,818
-
Taxes and assessments receivable, net
-
(3,236)
14,398
11,162
-
Prepaid expenses
12,844
19,266
6,422
38,532
4,300
Increase Comp Abs
8,787
(6,568)
13,803
16,022
1,071
Decrease in due from County
-
5,965
(2,819)
3,146
-
Accounts payable
28,831
30,771
5,392
64,994
44,567
Accrued payroll
(13,950)
(21,388)
(6,920)
(42,258)
(5222)
Net cash provided (used) by operating activities
$
1,499,474 $
2,343,021 $
274,223 $
4,116,718 $
177,522
The City received non cash contributions
of land and infrastructure as follows:
See accompanying notes to the financial statements
$ 128,603 $
3,023 $ - $ 131,626 $ -
35
AGENCY FUNDS
Agency Funds — used to account for assets held by the City as an agent for individuals,
private organizations, other governments, and/or other funds.
City of Kalispell, Montana
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2017
Agency
Funds
ASSETS
Cash and short-term investments $ 111,544
Total assets $ 111,544
LIABILITIES
Due to others 111,544
Total liabilities $ 111,544
See accompanying Notes to the Financial Statements
WO
j
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Kalispell's accompanying financial statements have been prepared in conformity with generally accepted
accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB), the accepted
standard -setting body for establishing governmental accounting and financial reporting principles.
The accompanying financial statements present the financial position of the City and the various funds and fund types, the
results of operations of the City and the various funds and fund types, and the cash flows of the proprietary funds. The
financial statements are presented as of June 30, 2017, and for the year then ended.
The more significant accounting policies of the City are described below
Recently Implemented Accounting Pronouncements
For the fiscal year ended June 30, 2017, the City implemented GASB Statement 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions. This statements purpose is to improve accounting and financial reporting by
state and local governments for postemployment benefits other than pensions (OPEB). Another purpose is to improve the
information provided by state and local governmental employers about financial support for OPEB that is provided by other
entities.
Financial Reporting Entity
In determining the financial reporting entity, the City complies with the provisions for GASB statement No. 14, The Financial
Reporting Entity, and includes all component units of which the City appointed a voting majority of the units' board; the City
is either able to impose its will on the unit or a financial benefit or burden relationship exists.
Primary Government
The City of Kalispell is a political subdivision of the State of Montana governed by an elected Mayor and Council duly
elected by the registered voters of the City. The City utilizes the City Manager form of government. The City is considered a
primary government because it is a general purpose local government. Further, it meets the following criteria: (a) It has a
separately elected governing body (b) It is legally separate and (c) It is fiscally independent from the State and other local
governments.
The accompanying financial statements present the primary government and its component units, entities for which the
government is considered to be financially accountable. These financial statements include all funds, agencies, boards,
commissions and authorities which meet the criteria for inclusion in the City's financial report. These criteria include
financial accountability, appointment of a majority of the secondary government and the financial benefit or burden derived
by the primary government from a secondary government.
Discretely Presented Component Units
Discretely presented component units are separate legal entities that meet the component unit criteria described above but do
not meet the criteria for blending. The City's discretely presented component units, the Downtown Business Improvement
District and the Tourism Business Improvement District are legally separate organizations of the City, but the City is
financially accountable. Neither the Business Improvement District nor the Tourism Business Improvement District issue
financial statements separate from the City of Kalispell. The two component units are reported in separate columns to
emphasize that they are legally separate from the City.
37
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
Downtown Business Improvement District
On September 2, 2003, by resolution 4828, the City created the Downtown Business Improvement District (BID). The Mayor
and City Council appointed the Board of Directors. The City is able to impose its will on the BID as it is authorized to levy
assessments to support the activities of the BID. The annual budget of the BID is subject to approval by the City Council.
The purpose of said Business Improvement District is to promote the health, safety, prosperity, security and general welfare of
the inhabitants of the City of Kalispell and the proposed district, and appears to be of special benefit to the property within the
District. The District boundaries are roughly 2nd Avenue East to 2nd Avenue West between Center Street and 4' Street South.
Publicly owned property and owner occupied single family dwellings are exempt from the assessments related to the District.
Tourism Business Improvement District
On May 3, 2010, by resolution 5425, the City created the Tourism Business Improvement District (TBID). The Mayor with
the approval of the City Council appointed seven owners of property within the district to act as the Board of Trustees of the
District. The City is able to impose its will on the TBID as it is authorized to levy assessments to support the activities of the
TBID. The annual budget of the TBID is subject to approval by the City Council. The purpose of said Tourism Business
Improvement District is to promote the health, safety, prosperity, security and general welfare of the inhabitants of the City of
Kalispell and the proposed district, and appears to be of special benefit to the property within the District. The District is
made up of those properties within the corporate limits of the City of Kalispell with five or more rooms providing overnight
stays for transient patrons at its business.
Basis of Presentation, Measurement Focus, and Basis of Accounting
Government -wide Financial Statements
The government -wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report
information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the
effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported
by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant
extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate
component units for which the primary government is financially accountable.
Eliminations have been made to minimize the double -counting of business -type activities.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by
program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The general
government function of the City includes expenses which are, in essence, indirect expenses of other functions. These
expenses are allocated to each related function. Program revenues include 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants
and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment.
Taxes and other items not properly included among program revenues are reported instead as general revenues.
Indirect expenses reported in the statement of activities must be allocated to the different functions of the City. These
expenses include administration, data processing, and central garage. The administrative cost allocation is based on each
functions percentage of total City expenses. Data processing is allocated based approximately on that functions usage of the
City's computer servers. Central garage expenses are allocated to the other functions of the City based on actual invoicing.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the
latter are excluded from the government -wide financial statements. Major individual governmental funds and major
individual enterprise funds are reported as separate columns in the fund financial statements.
38
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
Certain eliminations have been made as prescribed by GASB 34 in regards to inter -fund activities, payables and receivables.
All internal balances in the Statement of Net Position have been eliminated except those representing balances between the
governmental activities and business -type activities, which are presented as internal balances and eliminated in the total
primary government column. In the Statement of Activities, internal service fund transactions have been eliminated; however,
those transactions between governmental and business -type activities have not been eliminated.
Measurement Focus and Basis of Accounting
On the government -wide Statement of Net Position and the Statement of Activities, both governmental and business -type
activities are presented using the economic resources measurement focus and the accrual basis of accounting. Under the
accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred,
regardless of the timing of the cash flows. Property taxes are recognized as revenues in the year for which they are levied.
Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been
met. The City generally applies restricted resources to expenses incurred before using unrestricted resources when both
restricted and unrestricted net assets are available.
The City has chosen not to accrue the interest payable of general long-term debt at year end. This practice results in interest
expense reported for governmental activities on the statement of activities to equal the interest expenditure on the statement of
revenues, expenditures, and changes in fund balance. Although, this is contrary to full accrual accounting, the City feels that
it is immaterial in the presentation of its financial statements.
Fund Financial Statements
Basis of Presentation
Fund financial statements of the City are organized into funds. A fund is an independent fiscal and accounting entity with a
self -balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid
management in demonstrating compliance with finance -related legal and contractual provisions. The minimum number of
funds is maintained consistent with legal and managerial requirements. Funds are organized into three categories:
governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary
categories. Each major fund is displayed in a separate column in the governmental funds statements. All of the remaining
funds are aggregated and reported in a single column as non -major funds. A fund is considered major if it is the primary
operating fund of the City or meets the following criteria:
a. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or enterprise fund
are at least 10 percent of the corresponding total for all funds of that category or type; and
b. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or enterprise funds
are at least 5 percent of the corresponding total for all governmental and enterprise funds combined.
Measurement focus and Basis of Accounting
Governmental funds are used to account for the City's general government activities. Governmental fund types use the flow
of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual
basis of accounting, revenues are recognized when susceptible to accrual. (i.e., when they are "measurable and available")
"Measurable" means the amount of the transaction can be determined and "available" means collectible within the current
period or soon enough thereafter to pay liabilities of the current period. The City considers all revenues available if they are
collected within 60 days after year-end. Expenditures are recorded when the related fund liability is incurred except for un-
matured interest on general long-term debt which is recognized when due, and certain compensated absences and claims and
39
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
judgments which are recognized when the obligations are expected to be liquidated with expendable available financial
resources.
Real and personal property taxes, special assessments, charges for current services, and interest earnings are susceptible to
accrual. Other receipts and taxes become measurable and available when cash is received by the City and are recognized as
revenue at that time. The City recorded real and personal property taxes and assessments levied for the current year as
revenue. Taxes and assessments receivable remaining unpaid at year-end and not expected to be collected soon enough
thereafter to be available to pay obligations of the current year were recorded as deferred revenue, with a corresponding
reduction in revenues, as required by generally accepted accounting principles. In addition, prior period delinquent taxes and
assessments collected in the current period were recorded as revenue in the current period as required by generally accepted
accounting principles. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to
accrual criteria are met. Expenditure driven grants are recognized as revenue when the qualifying expenditures have been
incurred and all other grant requirements have been met.
Major Funds
The City reports the following major governmental funds:
The General Fund is always a major fund. This is the City's primary operating fund and it accounts for all financial
resources of the City except those required to be accounted for in other funds.
The Street Maintenance Fund (special revenue fund) was established to account for the repairs and other costs incurred in
the maintenance of the City's streets. An assessment on the City of Kalispell's tax payers is the main source of revenue for
this fund.
The Community Development Miscellaneous Fund (special revenue fund) was originally established to account for Urban
Development Assistance Grants (UDAG). These federal dollars were loaned to businesses and individuals for projects located
in economic development zones and approved by the City Community Development department. The main revenue source for
this fund is borrower's interest payments. In fiscal year 2015, this fund, with dollars borrowed from the General fund,
purchased six undeveloped properties from Flathead County at the Old School Station Industrial/Technical Park, a City
special improvement district. Taxes on these properties were five to seven years delinquent, thereby putting the City's SID
debt service fund at risk of not making the annual payment. The City intends to resell these properties for development.
SID 344 is a debt service fund established to account for the resources accumulated and payments made for principal and
interest of the 20 year bonds sold to finance the construction of the Old School Station Industrial and Technology Park.
Proprietary funds are accounted for using the accrual basis of accounting. These funds account for operations that are
primarily financed by user charges. The flow of economic resources focus concerns determining costs as a means of
maintaining the capital investment and management control. Revenues are recognized when earned and expenses are
recognized when incurred. Allocations of costs, such as depreciation, are recorded in proprietary funds.
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connections with a proprietary fund's
principal ongoing operations. The principal operating revenues for enterprise funds are charges to customers for sales and
services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non -operating revenues
and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted
resources first, then unrestricted resources as they are needed.
40
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
The City reports the following major proprietary funds:
The Water Fund accounts for the activities of the City's water distribution operations
The Sewer Fund accounts for the activities of the City's sewer collection and treatment operations and includes the storm
sewer system.
All Fiduciary funds reported account for assets held by the City of Kalispell in a trustee capacity (agency fund). 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 accrual basis of accounting.
The KPD Evidence agency fund is used to account for assets that the City holds as evidence, but will be returned to the owner
when it is no longer required.
The Payroll Clearing agency fund is used to account for assets payable to providers of payroll benefits until such time as it is
due.
The Performance Bond agency fund is used to hold assets provided by individuals and businesses until they have completed a
task required by contractual agreement with the City of Kalispell.
The Tourism Business Improvement District agency fund is used as a pass thru for fees paid by patrons of participating
lodging facilities to fund the Tourism Business Improvement District.
As a general rule the effect of inter -fund activity has been eliminated from the government -wide financial statements, and the
internal service funds have been absorbed into governmental -type activities on the government -wide financial statements.
Exceptions to this general rule are charges for services between various functions of the government. Elimination of these
charges would distort the direct costs and program revenues reported for the various functions concerned.
Budget Process
An annual appropriated operating budget is adopted each fiscal year for the general fund, special revenue funds, debt service
funds and capital projects funds on the modified accrual basis. In addition, a budget is adopted for the enterprise and internal
service funds on a full accrual basis. The appropriated budget is prepared by fund, function, and for the general fund and
certain other funds, by department.
The final budget is legally enacted by the City Council, after holding public hearings as required by State statutes, and within
forty-five days of the State providing final shared revenue figures. The City Manager and Finance Director may make budget
appropriation transfers within a fund between general classifications of salaries and wages, maintenance and operation and
capital outlay. Reported budget amounts represent the originally adopted budget as amended by resolution of the City
Council. It is management's responsibility to see that the budget is followed to the budgetary line item.
The City Council may amend a final budget when shortfalls in budgeted revenues require reductions in approved
appropriations to avert deficit spending; when savings result from unanticipated adjustments in projected expenditures; when
unanticipated state or federal monies are received; or when a public emergency occurs which could not have been foreseen at
the time of adoption.
41
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
The City Manager is granted budget amendment authority for the expenditure of funds from debt service funds, enterprise
funds, internal service funds, trust funds, federal and state grants accepted and approved by the City Council, special
assessments, and donations.
The procedure to amend the budget in total can be made only after the City prepares a resolution, notice is published of a
public hearing, and a public hearing is held in accordance with state law. There were no material budget amendments or
transfers for FY 2017.
Assets, Liabilities, and Net Assets or Equity
1. Cash, Cash Equivalents, and Investments
The City's cash and cash equivalents are considered to be cash on hand, demand and time deposits, government backed
securities, bonds and warrants, and investments with the State of Montana's short-term investment pool (STIP). The cash
resources of the individual funds are combined to form a pool of cash and investments which is managed by the City
Treasurer.
Investments are carried at cost, which does approximate fair value as described in Note 3, A, except for investments in STIP
and particular bonds, which are reported at fair value.
For purposes of the statement of cash flows, the enterprise and internal services funds consider all funds (including restricted
assets) held in the City's cash management pool to be cash equivalents.
2. Receivables
Between Funds
Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year
are referred to as either interfund receivables/payables (i.e., the current portion of interfund loans) or advances to/from other
funds (i.e., the non -current portion of interfund loans). All other outstanding balances between funds are reported as due
to/from other funds.
Advances between funds are offset by a fund balance reserve account in applicable governmental funds to indicate they are
not available for appropriation and are not expendable available financial resources.
Tares
Property tax levies are set within forty-five days of the State providing shared revenue figures, in connection with the budget
process. Real property (and certain attached personal property) taxes are billed within ten days after the third Monday in
October and are due in equal installments on November 30 and the following May 31. After those dates, they become
delinquent, and a lien is filed upon the property. After three years, the City may exercise the lien and take title to the
property. Special assessments are billed in two equal installments due November 30 and the following May 31. Personal
property taxes (other than those billed with real estate) are generally billed no later than the second Monday in July (normally
in May or June), based on the prior November's levies. Personal property taxes, other than mobile homes, are due thirty days
after billing. Mobile home taxes are billed in two halves, the first due thirty days after billing; the second due September 30.
The tax billings are considered past due after the respective due dates and are subject to penalty and interest charges.
42
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
An allowance for uncollectible accounts was not maintained for real and personal property taxes and special assessments
receivable. The direct write-off method is used for these accounts.
Amh7/Innce
An allowance, based on history, for estimated uncollectible accounts receivable of 55% is maintained for the Ambulance
fund. This allowance account has been adjusted to $298,320 at June 30, 2017.
Ambulance accounts receivable $542,400
Times allowance percentage 55%
@ June 30, 2017 $298,320
Water/Sewer
A reserve for estimated uncollectible accounts receivable of 0.5% of metered sales is maintained for the Water Fund and
Sewer Fund. The reserve balances are as follows for June 30, 2017:
Water
Sewer
$ 14,780
$ 22,644
Contracts
The following are contracts payable to the City of Kalispell on June 30, 2017.
FUND Source Amount
General - Major Governmental Municipal Court $ 40,731
Law Enforcement Grants Flathead Electric Cooperative (Roundup for Safety) $ 3,408
$ 44,139
Information Technology - Internal Service Charter (formerly Bresnan) 41,431
Water- Major Proprietary Impact Fees 40,918
Sewer- Major Proprietary Impact Fees 201,787
Total Proprietary 242,705
Total City contracts receivable $ 328,275
3. Inventories and Prepaid Items
Inventories for materials and supplies for governmental fund types are expended at the time of purchase. The amounts on
hand in governmental funds are not significant. Enterprise Fund inventory of materials and supplies are valued at cost and the
First -In First -Out (FIFO) method is utilized.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both
government -wide and fund financial statements. Prepaid items arise when charges are entered in the accounts for benefits not
yet received. In subsequent periods, when the benefit criteria are met, or when the City has a legal claim to the resources, the
prepaid items are removed from the balance sheet and expenses are recognized.
43
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
On June 30, 2017, the City reported prepaid expenses in the following funds.
FUND
Purpose
Amount
FUND
General - Major Governmental
Workers Compensation
$ 106,082
General - Major Governmental
Health Insurance
140,108
Water - Major Proprietary
Parks
Health Insurance
11,691
Water - Major Proprietary
Ambulance
Health Insurance
11,310
Sewer- Major Proprietary
Building Department
Prepaid expenditure
488
Sewer - Major Proprietary
Building Department
Health Insurance
4,803
Solid Waste
Street Maintenance - Major Governmental
Health Insurance
13,134
Solid Waste
Street Maintenance - Major Governmental
Prepaid rent
19,263
CD Misc. - Major Governmental
Prepaid rent
2,468
Total Governmental Funds
309,347
Information Technology - Internal Service
Health Insurance
2,225
Information Technology - Internal Service
Prepaid maintenance contracts
6,495
Central Garage - Internal Service
Health Insurance
3,187
Total Internal Service
11,907
Total Governmental Activities
321,254
Purpose Amount
Health Insurance
16,061
Prepaid rent
38,528
Health Insurance
21,053
Prepaid rent
57,792
Health Insurance
7,386
Prepaid rent
19,264
Total Proprietary Funds
160,084
Total City prepaids $481,338
The City pays quarterly in advance for Health Insurance and Workers' Compensation insurance. Some information
technology maintenance contracts span up to three years. A number of City departments have prepaid office rent.
4. Restricted Assets
Certain proceeds of the City's enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are
classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. When an
expense is incurred for which both restricted and unrestricted net assets are available, it is the City's policy to first apply the
restricted resources.
5. Capital Assets
Capital assets, which include property, plant, and equipment, are reported in the applicable governmental or business -type
activities columns in the government -wide financial statements. Capital assets are defined by the government as assets with
an initial, individual cost of more than $5,000 and an estimated useful life in excess of five years. Such assets are recorded at
historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition
value. As required by GASB, the City of Kalispell has retroactively reported its streets as part of capital assets in the
financial reports for fiscal year 2009. More detailed information on the City's streets and all capital assets can be found in
Note 3, D. Capital Assets.
Police vehicles are an exception despite a useful life less than 5 years. The City has determined that it is important to
capitalize and depreciate these because the total cost, as a group, is substantial.
The costs of normal maintenance and repairs that do not add to the value of the assets or extend asset lives are not capitalized.
Improvements are capitalized and depreciated over the remaining useful lives of the related assets. Major outlays for capital
assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of fixed
assets is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the
same period.
44
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
Depreciation has been provided for the property, plant and equipment of the City of Kalispell using the straight line method.
The useful lives of these assets have been estimated as follows:
Buildings
20-50 years
Improvements Other than buildings
10-50 years
Streets
40 years
Machinery, vehicles and equipment
3-20 years
Water and Sewer lines, pump stations
10-50 years
6. Compensated Absences
It is the City's policy and state law to permit employees to accumulate a limited amount of earned but unused vacation
benefits, which will be paid to employees upon separation from City service. Employees are allowed to accumulate and carry
over a maximum of two times their annual accumulation of vacation. Any vacation leave time accumulated over this
maximum carryover must be used within 90 days of the new calendar year. There is no restriction on the amount of sick leave
that may be accumulated. Upon separation, employees are paid 100 percent of accumulated vacation and 25 percent of
accumulated sick leave.
In fiscal year 2012, the City of Kalispell began offering a voluntary employees beneficiary association (VEBA) plan. A tax-
free post -retirement medical expense account used by retirees and their eligible dependents to pay for any eligible medical
expenses. The plan is funded by 50% of the employee's unused sick leave at the time of retirement, which is contributed by
the City into the plan. The benefit to the retiree of this plan is that they receive two times the amount of unused sick leave at
retirement, none of which is subject to tax.
The liability associated with governmental fund -type employees is reported in Governmental Activities column of the
Statement of Net Position, while the liability associated with proprietary fund -type employees is recorded in the respective
fund and the Business -type Activities column of the Statement of Net Position. For the purpose of reporting these
compensated absences payable as current or noncurrent, the City assumes all employees will use their vacation accumulated
as of June 30' in the succeeding fiscal year (current). The City also assumes sick leave accumulated as of June 30' will
remain accumulated in the succeeding fiscal year (long-term).
7. Long - Term Obligations
In the government -wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and
other long-term obligations are reported as liabilities in the applicable governmental activities, or proprietary fund type
statement of net position. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs
are expensed when incurred.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance
costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums
received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other
financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service
expenditures.
45
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
8. Net Position/Fund Balance
Net position in the government wide and proprietary fund financial statements show the amount of the capital assets less any
outstanding debt issued to fund them as "net investment in capital assets." Restricted net position are those that have
constraints placed on them either by external parties or imposed by law or enabling legislation.
The City implemented GASB Statement 54 for fiscal year 2011. As a result, the classifications for fund balance now used for
governmental funds are reported in two general classifications, non -spendable and spendable:
Non -spendable represents the portion of fund balance that is not in spendable form such as inventories and prepaids, and, in
the general fund, long term notes and loans receivable.
Spendable fund balance is further categorized as restricted, committed, assigned, and unassigned.
Restricted fund balance contains balances that can be spent only for the specific purposes stipulated by external parties or
through enabling legislation. External parties include grantors, debt covenants, votes, and laws and regulations of other
governments.
Committed fund balance includes amounts that can be used only for the specific purposes determined by a formal action of
the government's highest level of decision -making authority, the City Council. The City Council needs to formally adopt
a Resolution in order to establish, modify, or rescind a fund balance commitment.
Assigned fund balances are intended to be used by the government for specific purposes but do not meet the criteria to be
classified as restricted or committed. Assignments of fund balance are created by the governing body. The City Council
has the authority to express assignments in the General fund. In governmental funds other than the general fund, assigned
fund balance represents the remaining amount that is not restricted or committed. Also included in the assigned fund
balance for the general fund are assignments for the portion of the current general fund balance that is projected to be used
to fund expenditures and other cash outflows in excess of the expected revenues and other cash inflows in the next fiscal
year.
Unassigned fund balance is the residual classification for the government's general fund and includes all spendable
amounts not contained in the other classifications. In other funds, the unassigned classification should be used only to
report a deficit balance resulting from overspending for specific purposes for which amounts have been restricted,
committed, or assigned.
When both restricted and unrestricted resources are available, spending will occur in the following order, for the identified
fund types:
General Fund: restricted, committed, assigned, unassigned
Special Revenue Funds: restricted, committed, assigned
Debt Service Funds: assigned, committed, restricted
Capital Project Funds: restricted, committed, assigned
.O
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Excess of expenditures over appropriations
For the year ended June 30, 2017, all City funds expenditures were less than or equal to budgeted appropriations.
NOTE 3. DETAILED NOTES ON ALL FUNDS
A. Cash and Investments
At June 30, 2017, the carrying amount of the City's deposits in local banks and investments is $41,247,002. Interest bearing
account balances are covered by the Federal Depository Insurance Corporation (FDIC) up to $250,000 per bank, per
depositor. In addition, all noninterest bearing transaction account balances are fully insured by FDIC coverage. The
remaining balances are covered by collateral held by the pledging bank's agent in the City's name.
The City's cash and investments are reported as follows:
Unrestricted
Restricted
Total
Governmental activities $15,649,807
$1,306,889
$16,956,696
Business -type activities 14,183,066
9,972,943
24,156,009
Fiduciary funds 111,544
111,544
Component unit 22,753
22,753
$29,967,170
$11,279,832
$41,247,002
Custodial credit risk for deposits is the risk that in the event of a financial institution failure, the City's deposits may not be
returned or the City will not be able to recover the collateral securities in the possession of the outside party. The City
minimizes custodial credit risk by restrictions set forth in City policy and state law. Types of securities that may be pledged
as collateral are detailed in Section 17-6-103 of the Montana Code Annotated (MCA).
On June 30, 2017, the following interest rate risks and valuation inputs were associated with the City's deposits and
investments.
Credit Risk
Fair
Valuation
Investment
Maturities
Rating
Value
Inputs
Certificates of Deposit
Feb. 2 119
N/A
$ 248,000
Level 2
U.S. Government Bonds
Dec. 2017-
April 2022
S&P AA+
$15,550,000
Level 2
State of Montana -
Short Term Investment Pool Account
N/A
N/A
$15,124,486
S & C Bonds -internal
2017-2024
N/A
$ 40,060
Demand deposits
N/A
N/A
$10,281,526
Petty Cash
N/A
N/A
$ 2,930
$41,247,002
Credit risk is defined as the risk that an issuer or other counterpart to an investment will not fulfill its obligation. The above credit
risk rating indicates the probability that the issuer may default in making timely principal and interest payments. The credit ratings
presented in the previous tables are provided by Standard and Poor's Corporation (S&P). The City's investment policy is to hold
investments to maturity with the contractual understanding that these investments are low risk, locked in to a guaranteed rate of
return, and are, therefore, not impacted significantly by changes in short term interest rates. The City has no formal policy relating
to interest risk and no formal policy relating to credit risk.
47
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
The City voluntarily participates in the STIP (Short Term Investment Pool) administered by the Montana Board of Investments
(MBOI). A local government's STIP ownership is represented by shares, the prices of which are fined at $1.00 per share, and
participants may buy or sell shares with one business days' notice. STIP administrative expenses are charged daily against the
STIP income, which is distributed on the first calendar day of each month. Shareholders have the option to automatically reinvest
their distribution income in additional shares. STIP is not registered with the Securities and Exchange Commission. STIP is not
FDIC insured or otherwise insured or guaranteed by the federal government, the State of Montana, the MBOI or any other entity
against investment losses and there is no guaranteed rate of return on funds invested in STIP shares. The MBOI maintains a
reserve fund to offset possible losses and limit fluctuations in STIP's valuation. The STIP investment portfolio consists of
securities with maximum maturity of 2 years. Information on investments held in the STIP can be found in the Annual Report on
the MBOI website at http://invesbuent.com/AmualReportsAudits.
B. Interfund Receivables and Payables (Due to/from Other Funds)
The composition of interfund balances and due to/from as of June 30, 2017, was as follows:
Receivable Fund
General Fund -
Major Governmental
General Fund -
Major Governmental
General Fund -
Major Governmental
General Fund -
Major Governmental
General Fund -
Major Governmental
General Fund -
Major Governmental
General Fund -
Major Governmental
SID Revolving
Fund
C. Transfers
Payable Fund
Ambulance - Special Revenue Fund
Law Enforcement Grants - Special Revenue Fund
Stonegarden Grant - Special Revenue Fund
Health Levy - Special Revenue Fund
CD Misc. - Major Governmental
Kidsports Grant - Capital Project Fund
G.O. Bonds - Debt Service Fund
S & C's - Debt Service Fund
Total - Due To Other Funds (Governmental Funds)
Amount Purpose
$ 30,400 S/T Loan
1,945 S/T Loan
9,922 S/T Loan
18,907 S/T Loan
16,250 S/T Loan
537,834 S/T Loan
21,453 S/T Loan
212 S/T Loan
$ 636,923
The following is an analysis of transfers between funds during Fiscal Year 2017:
From
West Side TIF - Special Revenue
Old School Tech TIF
Old School Industrial TIF
Health
S&C
Solid Waste - Nonmajor Proprietary
To
West Side TIF - Debt Service
CD Misc
- Major Governmental
CD Misc
- Major Governmental
General -
Major Governmental
SID Revolving
Gas Tax
- Special Revenue
TOTAL
Amount Purpose
33,844 Operations
35,000 Operations
15,000 Operations
901,000 Operations
390 Operations
35,000 Operations
$ 1,020,234
48
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
D. Capital Assets
Capital asset activity for the year ended June 30, 2017 was as follows
Assets Contributed
In fiscal year 2017, Governmental Activities report contributed assets from private sources with a value of $11,269. These
contributed assets are sidewalk replacement or repair paid for by homeowner's directly or by Sidewalk & Curb assessments.
In fiscal year 2017, Business -type Activities report contributed assets from private sources with a value of $131,626. The
Water fund received contributions from developers in the amount of $128,603. Contributed to the Water fund were six (6)
new fire hydrants ($28,688), and one thousand ffour hundred eleven linear feet (1,411') of water mains ($99,915). The Sewer
fund received contributions from developers in the amount of $3,023. Contributed to the Sewer fund were one hundred thirty
linear feet (130') of sanitary mains.
Gain (Loss) on Sale/Disposal of Capital Assets
In fiscal year 2017, Business -type Activities report a gain on disposal of assets of $14,228. Residential and commercial
meters were replaced with a depreciated value of $1,472, resulting in a loss on disposal of capital assets in the Water fund. A
fully depreciated solid waste truck was sold resulting in a gain on disposal of capital assets in the Solid Waste fund of
$15,700.
49
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
Balance
Balance
Governmental Activities:
July 1, 2016
Additions
Contributions Transfers Deductions
June 30, 2017
Capital assets not being depreciated:
Land (Asset type: 010)
$ 2,395,299
$ -
$ $ $
$ 2,395,299
Construction in Progress
$ -
$ 885,147
$ $
$ 885,147
Total capital assets not being depreciated
2,395,299
885,147
3,280,446
Capital assets being depreciated:
Buildings (Asset type: 020)
17,189,958
39,314
17,229,272
Improvements other than buildings (Asset type: 030)
15,739,372
76,832
11,269
15,827,473
Machinery and equipment
General (Asset type: 040)
8,838,466
615,273
- (123,370)
9,330,369
Ambulance (Asset type: 100)
398,059
169,707
(7,500)
560,266
Parking (Asset type: 230)
120,896
-
120,896
Infrastructure (Asset type: 031)
83,135,184
83,135,184
Total capital assets being depreciated
125,421,935
901,126
11,269 (130,870)
126,203,460
Less accumulated depreciation for:
Buildings (Asset type: 020)
(8,471,140)
(588,732)
-
(9,059,872)
Improvements other than buildings (Asset type: 030)
(8,096,885)
(605,662)
(8,702,547)
Machinery and equipment
General (Asset type: 040)
(4,978,624)
(630,219)
119,041
(5,489,802)
Ambulance (Asset type: 100)
(390,607)
(25,854)
7,500
(408,961)
Parking (Asset type: 230)
(114,405)
(1,470)
-
(115,875)
Infrastructure (Asset type: 031)
(28,821,212)
(2,078,379)
-
(30,899,591)
Total accumulated depreciation
(50,872,873)
(3,930,316)
126,541
(54,676,648)
Total capital assets being depreciated, net
74,549,062
(3,029,190)
11,269 (4,329)
71,526,812
Governmental activities capital assets, net
$ 76,944,361
$ (2,144,043)
$ 11,269 $ $ (4,329)
$ 74,807,258
Balance
Balance
Internal service funds:
July 1, 2016
Additions
Contributions Transfers Deductions
June 30, 2017
Information Technology (Asset type: 200)
$ 267,432
$ 72,862
$ $ $
$ 340,294
Less accumulated depreciation - Information Technology
(193,635)
(22,228)
(215,863)
Central Garage (Asset type: 220)
272,893
25,503
298,396
Less accumulated depreciation - Central Garage
(192,618)
(9,232)
(201,850)
Internal service funds assets, net
$ 154,072
$ 66,905
$ $ $
$ 220,977
Governmental activities depreciation was charged to functions/programs of the primary government as follows:
Governmental Activities:
General Government
$ 2,494,895
Public Safety
571,422
Public Works
386,999
Parks and Recreation
477,000
Total Governmental Activities
$ 3,930,316
50
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
Balance
Construction
Balance
Business -type activities:
July 1, 2016
Additions
Contributions in Progress Deductions
June 30, 2017
Capital assets not being depreciated:
Land
Airport (Asset type: 210)
$ 1,347,867
$
$ $ $
$ 1,347,867
Water (Asset type: 070)
105,958
105,958
Sewer (Asset type: 120)
282,137
282,137
Sewer (Storm) (Asset type: 150)
26,550
26,550
Construction in progress
Water
-
183,950
183,950
Sewer/Storm
1,752,557
178,318
(214,922)
1,715,953
Total capital assets not being depreciated
3,515,069
362,268
(214,922)
3,662,415
Capital assets being depreciated:
Airport (Asset type: 210)
1,962,813
-
1,962,813
Water
General Plant (Asset type: 060)
1,376,903
(58,108)
1,318,795
Source of Supply (Asset type: 070)
4,792,054
-
4,792,054
Transmision and Distribution (Asset type: 080)
28,677,742
80,952
128,603 (35,934)
28,851,363
Pumping Plant (Asset type: 090)
4,014,998
-
-
4,014,998
Sewer
General Plant (Asset type: 130)
942,198
13,962
956,160
Transmision and Distribution (Asset type: 140)
24,861,110
646,666
3,023 213,600 (8,388)
25,716,011
Storm Sewer System (Asset type: 150)
14,655,901
529,350
-
15,185,251
Treatment Plant Equipment (Asset type: 180)
385,915
18,453
- -
404,368
Treatment Plant (Asset type: 190)
39,288,144
241,100
1,322 -
39,530,566
Solid Waste
Buildings (Asset type: 111)
316,731
-
316,731
Machinery and equipment (Asset type: 110)
1,737,911
45,405
- (174,822)
1,608,494
Total capital assets being depreciated
123,012,420
1,575,888
131,626 214,922 (277,252)
124,657,604
Less accumulated depreciation for:
Airport (Asset type: 210)
(1,043,920)
(95,474)
- - -
(1,139,394)
Water
General Plant (Asset type: 060)
(1,156,968)
(45,658)
58,108
(1,144,518)
Source of Supply (Asset type: 070)
(1,105,623)
(109,451)
-
(1,215,074)
Transmision and Distribution (Asset type: 080)
(8,944,111)
(669,123)
34,464
(9,578,770)
Pumping Plant (Asset type: 090)
(1,839,123)
(87,753)
(1,926,876)
Sewer
General Plant (Asset type: 130)
(839,443)
(17,629)
-
(857,072)
Transmision and Distribution (Asset type: 140)
(10,947,127)
(657,986)
8,388
(11,596,725)
Storm Sewer System (Asset type: 150)
(4,717,283)
(342,430)
(5,059,713)
Treatment Plant Equipment (Asset type: 180)
(342,264)
(7,973)
(350,237)
Treatment Plant (Asset type: 190)
(20,617,964)
(788,949)
-
(21,406,913)
Solid Waste
Buildings (Asset type: 111)
(281,889)
(9,292)
(291,181)
Machinery and equipment (Asset type: 110)
(939,897)
(132,105)
174,822
(897,180)
Total accumulated depreciation
(52,775,612)
(2,963,823)
275,782
(55,463,653)
Total capital assets being depreciated, net
70,236,808
(1,387,935)
131,626 214,922 (1,470)
69,193,951
Business -type activities capital assets, net
$ 73,751,877
$ (1,025,667)
$ 131,626 $ - $ (1,470)
$ 72,856,366
Business -type activities depreciation was charged to functions/programs of the primary government as follows:
Business -type Activities:
Airport $ 95,474
Water 911,985
Sewer 1,814,967
Solid Waste 141,397
Total Business -type Activities $ 2,963,823
51
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
E. Long -Term Debt
During the year ended June 30, 2017, the following changes occurred in liabilities reported in long-term debt:
Balance
Balance
Due within
July 1, 2016
Additions
Reductions
June 30, 2017
1 year
Governmental Activities-
G.O. Bonds
$ 2,350,000
$
-
$ (465,000)
$ 1,885,000
$ 470,000
Revenue Bonds
1,098,000
(164,500)
933,500
175,000
Assessments
2,761,499
4,300
(338,739)
2,427,060
326,841
Contract Debt/Loans
832,545
129,987
(300,224)
662,308
292,745
Intermediary Program
568,930
-
(26,409)
542,521
26,674
Compensated Absences
1,351,780
991,941
(963,584)
1,380,137
991,941
Governmental Activities Sub Total $ 8,962,754
$ 1,126,228
$ (2,258,456)
$ 7,830,526
$ 2,283,201
Internal Service Funds:
Compensated Absences
$ 30,404
$
21,648
$ (20,577)
$ 31,475
$ 21,648
1memal Service Funds Sub Total $ 30,404
$
21,648
$ (20,577)
$ 31,475
$ 21,648
Business -type Activities:
Revenue Bonds
$ 610,000
$
-
$ (65,000)
$ 545,000
$ 70,000
SRF
12,731,000
63,096
(1,052,000)
11,742,096
1,076,000
Contract Debt/Loans
116,192
-
(38,343)
77,849
38,728
Compensated Absences
306,400
214,754
(198,733)
322,421
214,755
Business -type Activities Sub Total $13,763,592
$
277,850
$ (1,354,076)
$ 12,687,366
$ 1,399,483
In prior years, the general fund was used to liquidate compensated absences and claims and judgments
General Obligation Bonds - The City issues general obligation bonds to provide funds for the acquisition and construction
of major capital facilities. General obligation bonds are direct obligations and pledge the full faith and credit of the City.
General obligation bonds outstanding as of June 30, 2017 were as follows:
Purpose
Pool/Fire Hall Refunding
Origination Interest
Date Rate Term
6/13/2012 1%-2% 10years
Total G.O. Bonds
Due Principal Annual Balance
Date Amount Payment June 30, 2017
2022 $4,145,000 varies $ 1,885,000
$4,145,000 $ 1,885,000
Special Assessment Debt - Special assessment bonds are secured by a lien on the assessed properties. The primary source of
repayment is the assessments levied against the benefiting properties. However, the City is liable, to an extent, for repayment
of these special assessment bonds. The City is authorized by State law to establish and has established a revolving fund to
ensure the payment of debt service on the bonds in the event that assessed property owners default.
Origination
Interest
Due
Principal
Annual
Balance
Purpose
Date
Rate
Term
Date
Amount
Payment
June 30, 2017
SID343
6/12/ 0001
3.6%-5.59%
20 years
2021
1,581,500
varies
155,000
SID344
6/15/2006
3.7%-5.1%
20years
2026
4,520,000
varies
2,045,000
SID345
5/15/2014
3.00%
15 years
2029
242,000
varies
187,000
2009 S&C
1/4/2010
3.25%
8 years
2018
7,629
varies
953
2010 S&C
1/6/2011
3.00%
8 years
2019
942
varies
235
2011 S&C
1/6/2012
3.00%
8 years
2020
5,792
varies
2,172
2012 S&C
4/12/2013
3.25%
8 years
2021
3,981
varies
1,991
2013 S&C
1/2/2014
3.25%
8 years
2022
17,472
varies
10,920
2014 S&C
1/2/2015
3.25%
8 years
2023
7,845
varies
5,884
2015 S&C
1/4/2016
3.50%
8 years
2024
9,273
varies
8,113
2016 S&C
6/30/2016
3.75%
8 years
2025
9,792
varies
9,792
Total Special Assessment Bonds
$ 6,406,226
$ 2,427,060
52
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
SID's 343 Assessments
In the event that all future and delinquent assessments are paid and that there are no future adjustments to assessments by the
City of Kalispell, there is a projected surplus of principal assessments in SID 343 of $184,144.
SID 344 Bonds
Pursuant to Resolution No. 5123, principal of and interest on the Bonds are secured by: (i) special assessments payable by
taxpayers in SID 344; (ii) certain tax increment revenues pledged to the Bonds; (iii) a bond reserve account ($226,000)
established in the SID 344 fund; (iv) the debt service revolving fund ($226,000).
In April 2015, the City of Kalispell became owner of six of the eleven unsold properties in Special Improvement District 344
by bringing the taxes current on those six properties. The City used these tax payments to replenish the debt service revolving
fund to its required amount of $226,000. These funds also allowed the City to make the fiscal year 2017 payments without
the use of reserve money, and replenish the district bond reserve account.
Revenue Bonds — Revenue bonds are directly related to and expected to be paid from the proprietary fund. The 2005 Airport
Tax Increment bonds and the 2012 West Side Tax Increment bonds are accounted for in the Government -wide financial
statements and are paid directly from tax increment in the district.
Purpose
Governmental Activities:
2005A - Airport TIF
2012 - West Side TIF
Governmental Activities Sub Total
Issue Interest Final Bonds Balance
Date Rate Term Maturity Issued June 30, 2017
Sep-05 3.8 %4 40 % 10 years 2020 $ 1,445,000 $ 500,000
Mar-12 variable 25 years 2037 500,000 433,500
$ 1,945,000 $ 933,500
Business -type Activities:
2004 Water Refunding May-04 2.5 %4 85 % 20 years 2024 $ 1,840,000 $ 545,000
Business -type Activities Sub Total 1,840,000 545,000
Total Revenue Bonds $ 3,785,000 $ 1,478,500
Significant Provisions of the Series 2005 Airport Urban Renewal Tax Increment Bond
Reserve Account — The City shall maintain a debt service reserve account with a balance equal to the lesser of: (i) ten percent
of the sum of the original principal amounts of each series of Bonds of which any Bond is Outstanding or (ii) the maximum
amount of principal and interest due on the Outstanding Bonds (giving effect to any mandatory sinking fund redemption) in
the then current or any future calendar year.
10% of the sum of the original principal amount $144,500
City's Reserve $144,500
Significant Provisions of the Series 2012 West Side Urban Renewal Tax Increment Note
The Note matures on January 1, 2037, and is subject to redemption, at the option of the City, in whole or in part, on July 1,
2014. Interest on the note is variable and adjusts at a rate equal to the Prime Rate as published in the Wall Street Journal plus
.75% on each interest payment date for the Note.
Reserve Account — The City is not required to maintain a debt service reserve account related to the Series 2012 West Side
Urban Renewal Tax Increment Note.
53
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
Water Debt Required Information
Debt Service Account - Monthly an amount equal to not less than 1/6 of the interest due within the next six months and 1/12
of the principal to become due within the next twelve months shall be credited to the debt service account. The debt service
account was zero as of June 30, 2017, as all debt service payments were made as of the end of the fiscal year, leaving no
accrued interest or principal balance.
Reserve Account - The City shall keep in the reserve account an amount equal to the lesser of 10% of the original principal or
the maximum amount of principal and interest required in the current or any subsequent fiscal year. For the Water fund the
City complies with the maximum principal and interest in the current or any subsequent year.
Maximum P & I $ 260,216
Total Reserve Requirement $ 260,216
Reserve balance 6/30/17 260 216
Property Insurance - The City will cause all buildings, properties, fixtures, and equipment to be kept insured in amounts that
are ordinarily carried.
Liability Insurance - The City will carry insurance against liability of the City and its employees.
Rates and Charges — Rates and charges will be made and kept sufficient to provide gross income and revenues adequate to
pay promptly the reasonable and current expenses of operating and maintaining the system and to produce in each fiscal year
net revenues in excess of such current expenses, equal to 125% of the maximum amount of principal and interest payable
from the Revenue Bond Account in any subsequent fiscal year.
Water Fund Cash Flow Debt Coverage
Water Service Charges $ 2,954,669
'Misc. Revenue 322,412
Total Operating Revenue 3,277,081
Less: Operating Expense (excludes depreciation) 1,767,008
Available for Debt Service $1,510,073
"Maximum Debt Service $ 260,216
Estimated Coverage FY17 580%
'includes interest revenue
"includes all water fund borrowings
State Revolving Fund — the City has five (6) loan agreements with the State Revolving Fund (SRF). These obligations are to
be repaid from the operating income of the fund.
SRF LOANS Interest Amount Outstanding
Purpose Origination Rate Term Borrowed June 30, 2017
2013 Sewer - WWTP Digester Lid FY13 3.00% 20 years $ 1,102,748 $ 922,000
2012 Sewer - Hwy 93 S FY13 2.25% 12 years 1,009,000 621,000
2012 Water - Sheepherders Well/Storage FY13 2.25% 15 years 1,340,000 942,000
2012 Water - Main & Idaho Main FY13 2.00% 8 years 404,000 174,000
2017 Water - 4th Ave E FY18 2.50% 20 years 63,096 63,096
2012 Sewer- WWTP System Improvements FY13 2.25% 15 years 12,827,000 9,020,000
Total SRF Loans $16,745,844 $11,742,096
54
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
Sewer Debt Required Information
Operating Reserve — The city shall keep in the operating reserve account an amount equal to one month's operating expenses.
As of June 30, 2017, the operating reserve account contains $190,000.
Debt Service Account - Monthly an amount equal to not less than 1/6 of the interest due within the next six months and 1/12
of the principal to become due within the next twelve months shall be credited to the debt service account. The debt service
account was zero as of June 30, 2017, as all debt service payments were made as of the end of the fiscal year, leaving no
accrued interest or principal balance.
Reserve Account - The City shall keep in the reserve account an amount equal to the lesser of 10% of the original principal
($1,493,875), the maximum amount of principal and interest required in the current or any subsequent fiscal year
($1,182,693), or 125% of the average debt service payable in any fiscal year ($11,966,140 / 16 years = $747,884 * 1.25 —
$934,855). The City is in compliance with the 125% of the average debt service payable in any fiscal year. As of June 30,
2017, the debt service reserve account contains $966,731.
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.
Sewer Fund Cash Flow Debt Coverage
'Operating Revenue $5,536,204
Impact Fees Pledged for Debt 320,000
Total 5,856,204
Less: Operating Expense (excludes depreciation) 2,880,559
Available for Debt Service $2,975,645
"Maximum Debt Service $1,182,693
Estimated Coverage FY17 252%
'includes interest revenue
—includes all sewer fund borrowings
55
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
Loans/Contracted Debt
Origination
Interest
Due
Principal
Balance
Purpose
Date
Rate
Term
Date
Amount
June 30, 2017
Business -type Activities
BOI:Garbage Truck
6/13/2015
varies
5 years
2/15/2019
$ 172,988
$ 77,849
Total loanstcontracted debt
- Business -type Activities
$ 77,849
Governmental Activities
BOI:Stumper (Forestry)
2/1/2013
varies
5 years
2/15/2018
20,000
4,090
BOI:P/U & Tractor (Parks)
2/1/2013
varies
5 years
2/15/2018
45,000
9,202
BOI:Dump Trucks (2) (St. Maint.)
5/24/2013
varies
5 years
2/15/2018
174,698
39,507
BOI:Boom Truck (Light Maint.)
8/23/2013
varies
5 years
2/15/2018
97,651
22,055
BOI:Dump Trucks (2) (St. Maint.)
2/28/2014
varies
5 years
2/15/2019
162,696
70,947
BOI:2011stAve E-City Hall
9/11/2015
varies
5years
8/15/2020
412,571
291,121
BOI:Chip Truck (Forestry)
1/8/2016
varies
5 years
2/15/2021
34,498
27,724
BOI:Flatbed Chevy (Parks)
11/23/2016
varies
5 years
2/15/2022
30,966
30,966
BOI:Movver (Parks)
3/31/2017
varies
5 years
2/15/2022
59,707
59,707
BOLWoodland Bathroom (Parks)
6/30/2017
varies
5 years
8/15/2022
39,314
39,314
Rocky Mtn Bank - Fire Truck
3/7/2008
3.95%
10 years
3/1/2018
575,000
67,675
Sub total BOI
loans/contracted debt
$1,652,101
$ 662,308
USDA:I ntermediary
Relending Program
10/12/2004
1.00%
30 years
10/1212034
$ 520,000
$ 361,910
Relending Program
11/27/2006
1.00%
30 years
11/27/2036
257,500
180,611
Sub total USDA
Intermediary
777,500
542,521
Total loanstcontracted debt
- Governmental
Activities
$ 2,429,601
$ 1,204,829
BOI - Board of Investments Intercap Loan Program
Requirements to amortize debt
The annual requirements to amortize all long-term debt outstanding, excluding compensated absences payable, as of June 30,
2017, were as follows:
Governmental Activities:
SPECIAL
G.O.
ASSESSMENT
CONTRACTED
INTERMEDIARY
REVENUE
FOR FISCAL
BONDS
BONDS
LOANS/DEBT
LOAN PROGRAM
BONDS
YEAR ENDED
PRINCIPAL INTEREST
PRINCIPAL INTEREST
PRINCIPAL INTEREST
PRINCIPAL INTEREST
PRINCIPAL INTEREST
TOTAL
2018
470,000
34,163
326,841
117,688
292,745
16,900
26,674
5,425
175,000
43,433
1,508,869
2019
475,000
27,113
320,887
102,031
151,460
9,239
26,940
5,159
181,000
36,849
1,335,678
2020
485,000
18,800
246,769
86,455
117,048
5,453
27,210
4,889
191,000
29,838
1,212,462
2021
225,000
9,100
247,045
74,738
75,059
2,526
27,482
4,617
17,000
21,258
703,825
2022
230,000
4,600
246,548
62,803
25,996
650
27,757
4,342
17,500
20,333
640,529
2023-2027
1,012,970
130,704
143,003
17,492
100,000
86,185
1,490,354
2028-2032
26,000
1,455
150,299
10,197
120,500
56,540
364,991
2033-2037
113,156
2,752
131,500
20A33
267,841
TOTAL
$ 1,885,000 $
93,776
$2,427,060 $ 575,874
$ 662,308 $
34,768
$ 542,521 $
54,873
$ 933,500 $ 314,869
$ T524,549
Business -type
Activities:
SRF
REVENUE
CONTRACTED
FOR FISCAL
LOANS(1)
BONDS
LOANS/DEBT
YEAR ENDED
PRINCIPAL
INTEREST
PRINCIPAL INTEREST
PRINCIPAL INTEREST
TOTAL
2018
1,076,000
263,183
70,000
25,943
38,728 1,946
1,475,800 (1) The 2017 water fund SRF loan ($63,096) is
2019
1,101,000
238,615
70,000
22,793
39,121 978
1,472,507 not included on this schedule. The City has not
2020
1,125,000
213,477
75,000
19,643
1,433,120 drawn all funds for this loan. An amortization
2021
1,127,000
187,769
75,000
16,005
1,405,774 schedule will not be available until all funds have
2022
1,126,000
162,222
80,000
12,368
1,380,590 been drawn. Final loan amount will be approx-
2023-2027
5,727,000
419,504
175,000
12,853
6,334,357 imately $2,662,000.
2028-2032
327,000
39,050
366,050
2033-2037
70,000
1,575
71,575
TOTAL
$ 11,679,000 $ 1,525,395
$ 545,000 $ 109,605
$ 77,849 $ 2,924
$ 13,9 99773
56
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
F. Employee Benefit Plans
Pension Plans
Substantially all City of Kalispell full-time employees participate in one of three statewide, cost sharing, multiple -employer
retirement benefit plans administered by the Public Employees Retirement Board (PERB). The authority to establish or
amend contribution requirements for all plans, and provide cost of living adjustments for defined benefits plans is assigned to
the State legislature. PERB issues a publicly available comprehensive annual financial report that includes financial
statements and required supplementary information for these plans. It is available from the Montana Public Employees'
Retirement Administration (MPERA) at 100 North Park Avenue, Suite 200, P.O. Box 200131, Helena, Montana, 59620-0131
or at their website, http://myera.mt.gov.
The Montana Public Employees Retirement Administration (MPERA) prepares its financial statements using the accrual basis
of accounting. For the purposes of measuring the net pension liability, deferred inflows of resources and deferred outflows of
resources related to pensions, pension expense, information about the fiduciary net position and additions to, and deductions
from, fiduciary net position have been determined on the same accrual basis as they are reported by MPERA. For this
purpose, member contributions are recognized in the period in which contributions are due. Employer contributions are
recognized when due and the employer has made a formal commitment to provide the contributions. Revenues are
recognized in the accounting period they are earned and become measurable. Benefit payments and refunds are recognized in
the accounting period when due and payable in accordance with the benefit terms. Expenses are recognized the period
incurred. Investments are reported at fair value. MPERA adheres to all applicable Governmental Accounting Standards
Board (GASB) statements.
Contributions to pension plans are as required by state statue. Information about each plan follows:
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non -employer
contributing entity are required to recognize and report certain amounts associated with participation in the Public
Employees' Retirement System Defined Benefit Retirement Plan (the Plan). Employers are required to record and report their
proportionate share of the collective Net Pension Liability; Pension Expense; and Deferred Outflows and Deferred Inflows of
Resources associated with pensions.
Pension Amount Totals
Employers are provided guidance in GASB Statement 68, paragraph 74, that pension amounts must be combined as a total or
aggregate for reporting. This is true when employees are provided benefits through more than one pension, whether cost -
sharing, single -employer, or agent plans.
Net Pension Liability
The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). As GASB
Statement 68 allows, a measurement date of up to 12 months before the employer's fiscal year-end can be utilized to
determine the Plan's TPL. The basis for the TPL as of June 30, 2017, was determined by taking the results of the June 30,
2016, actuarial valuation and applying standard roll forward procedures. The roll forward procedure uses a calculation that
adds the annual normal cost (also called the service cost), subtracts the actual benefit payments and refunds for the plan year,
and then applies the expected investment rate of return for the year. The update procedures are in conformity with Actuarial
Standards of Practice issued by the Actuarial Standards Board.
57
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
Special Funding
The state of Montana, as the non -employer contributing entity, paid to the Plan additional contributions that qualify as special
funding. Those employers who received special funding are counties; cities & towns; school districts & high schools; and
other governmental agencies.
Not Special Funding
Per Montana law, state agencies and universities paid their own additional contributions. These employer paid contributions
are not accounted for as special funding for state agencies and universities but are reported as employer contributions. The
state of Montana, as the non -employer contributing entity, also paid to the Plan coal tax contributions that are not accounted
for as special funding for all participating employers.
The proportionate shares of the employer's and the state of Montana's NPL for June 30, 2017, and 2016, are displayed below.
The employer's proportionate share equals the ratio of the employer's contributions to the sum of all employer and non -
employer contributions during the measurement period. The state's proportionate share for a particular employer equals the
ratio of the contributions for a particular employer to the total state contributions paid. The employer recorded a liability of
$7,348,266 and the employer's proportionate share was 0.4314 percent.
Percent of
Percento
As of measurement
Net Pension
Net Pension
Collective
Collective
Change in
date:
Liability as of
Liability as of
NPL as of
NPL as of
Percent of
6/30/2017
6/30/2016
6/30/2017
6/30/2016
Collective NPL
Employer Proportionate
Share
$ 7,348,266
$ 5,961,419
0.4314 k
0.4265 %
0.0049
State of Montana
Proportionate Share
associated with the
Em to er
$ 89,787
$ 73,226
0.0053k
0.0052k
O.000Ok
Total
$ 7,438,053
$ 6,034,645
0.4367 k
0.4317 k
0.0050 k
Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the
measurement of the TPL.
Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date.
Changes in proportionate share: Between the measurement date of the collective NPL and the employer's reporting date
there were no changes in proportion that would have an effect on the employer's proportionate share of the collective NPL
since the previous measurement date.
Pension Expense
As of measurement date
Pension Expense as of
Pension Expense as of
6/30/2017
6/30/2016
Employer's Proportionate Share of PERS
S 488,800
$ 207,093
State of Montana Proportionate Share
associated with the Employer
S 7,524
$ 4,550
Grant Revenue - State of Montana Coal
Tax for employer
i 128,743
$ 143,068
Total
$ 925,067
$ 354,711
At June 30, 2017, the employer recognized $488,800 for its proportionate share of the Plan's pension expense and recognized
grant revenue of $7,524 for the state of Montana proportionate share of the pension expense associated with the employer.
Additionally, the employer recognized grant revenue of $128,743 from the Coal Severance Tax fund. (Two years of pension
expense are documented in the above table but are not necessary for the employer's disclosures.)
58
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
Recognition of Deferred Inflows and Outflows
At June 30, 2017, the employer reported its proportionate share of the Plan's deferred outflows of resources and deferred
inflows of resources from the following sources:
Deferred Outflows of
Deferred Inflows of
Resources
Resources
Expected vs. Actual Experience
$ 39,649
$ 24.323
Projected Investment Earnings vs. Actual
Investment Earnings
$ 691,325
Changes in Assumptions
Changes in Proportion and Differences
Between Employer Contributions and
Proportionate Share of Contributions
$ 23,153
Employer Contributions subsequent to the
measurement date
$ 471,214
Total
$ 1,202,188
$ 47,476
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension
Expense as follows:
For the Reporting Year ended June 30:
Amount of deferred outflows and deferred inflows
recognized in future years as an increase or (decrease) to
Pension Expense
2017
$ 33 470.00
2018
$ 33,470.00
2019
$ 392,855.00
2020
$ 246,856.00
2021
$
Thereafter
$
Plan Description (PERS)
The PERS-Defined Benefit Retirement Plan (DBRP), administered by the Montana Public Employee Retirement
Administration (MPERA), is a multiple -employer, cost -sharing plan established July 1, 1945, and governed by Title 19,
chapters 2 & 3, Montana Code Annotated (MCA). This plan covers the State, local governments, certain employees of the
Montana University System, and school districts.
All new members are initially members of the PERS-DBRP and have a 12-month window during which they may choose to
remain in the PERS-DBRP or join the PERS-DCRP by filing an irrevocable election. Members may not be participants of
both the defined benefit and defined contribution retirement plans. All new members from the universities also have a third
option to join the university system's Montana University System Retirement Program (MUS-RP).
The PERS-DBRP provides retirement, disability, and death benefits to plan members and their beneficiaries. Benefits are
established by state law and can only be amended by the Legislature.
59
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
Summary of Benefits
Eligibility for benefit
Service retirement:
Hired prior to July 1, 2011: Age 60, 5 years of membership service;
Age 65, regardless of membership service; or
Any age, 30 years of membership service.
Hired on or after July 1, 2011: Age 65, 5 years of membership service;
Age 70, regardless of membership service.
Early retirement, actuarially reduced:
Hired prior to July 1, 2011: Age 50, 5 years of membership service; or
Any age, 25 years of membership service.
Hired on or after July 1, 2011: Age 55, 5 years of membership service.
Vesting
5 years of membership service
Mcmbcr's highest average compensation (HAC)
Hired prior to July 1, 2011 - highest average compensation during any consecutive 36 months
Hired on or after July 1, 2011 — highest average compensation during any consecutive 60 months
Compensation Cap
Hired on or after July 1, 2013 — 110% annual cap on compensation considered as part of a member's highest average
compensation.
Monthly benefit formula
Members hired prior to July 1, 2011:
• Less than 25 years of membership service: 1.785% of RAC per year of service credit;
• 25 years of membership service or more: 2% of HAC per year of service credit.
Members hired on or after July 1, 2011:
• Less than 10 years of membership service: 1.5% of HAC per year of service credit;
• 10 years or more, but less than 30 years of membership service: 1.785% of HAC per year of service credit;
• 30 years or more of membership service: 2% of HAC per year of service credit.
Guaranteed Annual Benefit Adjustment (GABA)*
After the member has completed 12 full months of retirement, the member's benefit increases by the applicable percentage
(provided below) each January, inclusive of other adjustments to the member's benefit.
• 3% for members hired prior to July 1, 2007
• 1.5% for members hired on or after July 1, 2007 and June 30, 2013
Members hired on or after July 1, 2013:
a) 1.5% for each year PERS is funded at or above 90%;
b) 1.5% is reduced by 0.1% for each 2% PERS is funded below 90%; and
c) 0% whenever the amortization period for PERS is 40 years or more.
60
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
Overview of Contributions
Member and employer contribution rates are specified by state law and are a percentage of the member's compensation.
Contributions are deducted from each member's salary and remitted by participating employers. The Montana Legislature has
the authority to establish and amend contribution rates. Member and employer contribution rates are shown in the table below.
State &
Fiscal
Universities
Local Government
School Districts
Year
Member
Employer
Employer
State
Employer State
Hired
Hired
<7/01/11
>7/01/11
2017
7.9%
7.9%
8.470%
8.370%
0.10%
8.10%
0.370%
2016
7.9%
7.9%
8.370%
8270%
0.10%
8.00%
0.370%
2015
7.9%
7.9%
8270%
8.170%
0.10%
7.90%
0.370%
2014
7.9%
7.9%
8.170%
8.070%
0.10%
7.80%
0.370%
2012-2013
6.9%
7.9%
7.170%
7.070%
0.10%
6.80%
0.370%
2010-2011
6.9%
7.170%
7.070%
0.10%
6.80%
0.370%
2008-2009
6.9%
7.035%
6.935%
0.10%
6.80%
0235%
2000-2007
6.9%
6.900%
6.800%
0.10%
6.80%
0.100%
1. Member contributions to the system of 7.9% are temporary and will be decreased to 6.9% on January 1 following
actuary valuation results that show the amortization period has dropped below 25 years and would remain below 25 years
following the reduction of both the additional employer and additional member contribution rates.
2. Employer contributions to the system:
a. Effective July 1, 2014, following the 2013 Legislative Session, PERS-employer contributions increase an additional
0.1% a year and will continue over 10 years through 2024. The additional employer contributions including the
0.27% added in 2007 and 2009, will terminate on January 1 following an actuary valuation that shows the
amortization period of the PERS-DBRP has dropped below 25 years and remains below the 25 years following the
reduction of both the additional employer and member contributions rates.
b. Effective July 1, 2013, employers are required to make contributions on working retirees' compensation. Member
contributions for working retirees are not required.
c. The portion of employer contributions allocated to the PCR are included in the employers reporting. The PCR was
paid off effective March 2016 and the contributions previously directed to the PCR are now directed to member
accounts.
Non Employer Contributions:
a. Special Funding
i. The State contributes 0.1% of members' compensation on behalf of local government entities.
ii. The State contributes 0.37% of members' compensation on behalf of school district entities.
b. Not Special Funding
i. The State contributes a portion of Coal Severance Tax income and earnings from the Coal
Trust Permanent Trust fund.
61
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
Stand -Alone Statements
The financial statements of the Montana Public Employees Retirement Board (PERB) Comprehensive Annual Financial
Report (CAFR) and the GASB 68 Report disclose the Plan's fiduciary net position. The reports are available from the PERB
at PO Box 200131, Helena MT 59620-0131, (406) 444-3154 or the MPERA website at http://mpera.mt.gov/index.shtml
Actuarial Assumptions
The TPL used to calculate the NPL was determined by taking the results of the June 30, 2015, actuarial valuation and
applying standard roll forward procedures to update the TPL to June 30, 2016. There were several significant assumptions
and other inputs used to measure the TPL. The actuarial assumptions used in the June 30, 2016, valuation were based on the
results of the last actuarial experience study, dated June 2010, for the six -year period July 1, 2003 to June 30, 2009. Among
those assumptions were the following:
Investment Return (net of admin expense) 7.75%
Admin Expense as % of Payroll 0.27%
General Wage Growth' 4%
'includes Inflation at 3%
Merit Increases 0%to 6%
Post Retirement Increases
Mortality assumptions among contributing members, terminated vested members, service retired members and beneficiaries
are based on RP 2000 Combined Employee and Annuitant Mortality Tables projected to 2015 with scale AA.
Mortality assumptions among Disabled Retirees are based on RP 2000 Combined Employee and Annuitant Mortality Tables with
no projections. No future mortality improvement is assumed.
Discount Rate
The discount rate used to measure the Total Pension Liability was 7.75%. The projection of cash flows used to determine the
discount rate assumed that contributions from participating plan members, employers, and non -employer contributing entities
will be made based on the Board's funding policy, which establishes the contractually required rates under Montana Code
Annotated. The State contributes 0.1% of salaries for local governments and 0.37% for school districts. In addition, the State
contributes coal severance tax and interest money from the general fund. The interest is contributed monthly and the
severance tax is contributed quarterly. Based on those assumptions, the Sys's fiduciary net position was projected to be
adequate to make all the projected future benefit payments of current plan members through the year 2123. Therefore, the
long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to
determine the Total Pension Liability. A municipal bond rate was not incorporated in the discount rate.
Target Allocations
The long-term expected return on pension plan assets was reviewed as part of the regular experience study prepared for the
Plan. The experience study, performed for the period of fiscal years 2003 through 2009, was outlined in a report dated June
2010 and can be located on the MPERA website. The long-term expected rate of return on pension plan investments was
determined by considering information from various sources, including historical rates of return, rate of return assumptions
adopted by similar public sector systems, and by using a building-block method in which best -estimate ranges of expected
future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each
major asset class. These ranges were combined to produce the long-term expected rate of return by weighting the expected
future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of
arithmetic real rates of return for each major asset class included in the target asset allocation as of June 30, 2016, are
summarized below.
62
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
Asset Class
Target Asset Allocation
Real Rate of Return
Arithmetic Basis
Long -Term Expected Real
Rate of Return
(a)
(b)
(a)x (b)
Cash Equivalents
2.6%
4.00%
0.10%
Domestic Equity
36.0%
4.55%
1.64%
Foreign Eui
18.0%
6.35%
1.14%
Fixed Income
23.4%
1.00%
0.23%
Private E ui
12.0%
7.75%
0.93%
Real Estate
8.0 %
4.00 %
0.32
Total
100;
4.37
Inflation 3.00%
Portfolio Return Expectation 7.37%
Sensitivity Analysis
The sensitivity of the NPL to the discount rate is shown in the table below. A small change in the discount rate can create a
significant change in the liability. The NPL was calculated using the discount rate of 7.75%, as well as what the NPL would
be if it were calculated using a discount rate 1.00% lower or 1.00% higher than the current rate.
1.0% Decrease
Current Discount
1.0% Increase
(6.75%)
Rate
(8.751/6)
Employer's Net
Pension Liability
$10,662,875
$7,348,266
$4,493,054
Summary of Significant Accounting Policies
MPERA prepared financial statements using the accrual basis of accounting. The same accrual basis was used by MPERA for
the purposes of determining the NPL; Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions;
Pension Expense; the Fiduciary Net Position; and Additions to or Deductions from Fiduciary Net Position. Member
contributions are recognized in the period in which contributions are due. Employer contributions are recognized when due
and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the accounting
period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting period in
which they are due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred.
Investments are reported at fair value. MPERA adhered to all accounting principles generally accepted by the United States of
America. MPERA applied all applicable pronouncements of the Governmental Accounting Standards Board (GASB).
PERS Disclosure for the defined contribution plan
The City of Kalispell contributed to the state of Montana Public Employee Retirement System Defined Contribution
Retirement Plan (PERS-DCRP) for employees that have elected the DCRP. The PERS-DCRP is administered by the PERB
and is reported as a multiple -employer plan established July 1, 2002, and governed by Title 19, chapters 2 & 3, MCA.
All new PERS members are initially members of the PERS-DBRP and have a 12-month window during which they may
choose to remain in the PERS-DBRP or join the PERS-DCRP by filing an irrevocable election. Members may not be
participants of both the defined benefit and defined contribution retirement plans.
Member and employer contribution rates are specified by state law and are a percentage of the member's compensation.
Contributions are deducted from each member's salary and remitted by participating employers. The Montana Legislature has
the authority to establish and amend contribution rates.
Benefits are dependent upon eligibility and individual account balances. Participants are vested immediately in their own
contributions and attributable income. Participants are vested after 5 years of membership service for the employer's
contributions to individual accounts and the attributable income. Non -vested contributions are forfeited upon termination of
employment per 19-3-2117(5), MCA. Such forfeitures are used to cover the administrative expenses of the PERS-DCRP.
63
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
At the plan level for the measurement period ended June 30, 2016, the PERS-DCRP employer did not recognize any net
pension liability or pension expense for the defined contribution plan. Plan level non -vested forfeitures for the 289 employers
that have participants in the PERS-DCRP totaled $382,656.
MUNICIPAL POLICE OFFICERS' RETIREMENT SYSTEM
In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non -employer
contributing entity are required to recognize and report certain amounts associated with participation in the Municipal Police
Officers' Retirement System (the Plan). Employers are required to record and report the proportionate share of the collective
Net Pension Liability; Pension Expense; and Deferred Outflows and Deferred Inflows of Resources associated with pensions.
Pension Amount Totals
Employers are provided guidance in GASB Statement 68, paragraph 74, that pension amounts must be combined as a total or
aggregate for reporting. This is true when employees are provided benefits through more than one pension, whether cost -sharing,
single -employer, or agent plans.
Net Pension Liability
The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). As GASB Statement
68 allows, a measurement date of up to 12 months before the employer's fiscal year-end can be utilized to determine the Plan's
TPL. The basis for the TPL as of June 30, 2017, was determined by taking the results of the June 30, 2016, actuarial valuation and
applying standard roll forward procedures. The roll forward procedure uses a calculation that adds the annual normal cost (also
called the service cost), subtracts the actual benefit payments and refunds for the plan year, and then applies the expected
investment rate of return for the year. The update procedures are in conformity with Actuarial Standards of Practice issued by the
Actuarial Standards Board.
Special Funding
The Plan has a special funding situation in which the state of Montana is legally responsible for making contributions directly to
the Plan on behalf of the employers. Due to the existence of this special funding situation, the state is required to report a
proportionate share of a local government's collective NPL that is associated with the non -state employer.
The proportionate shares of the employer's and the state of Montana's NPL for June 30, 2017, and 2016, are displayed below. The
employer's proportionate share equals the ratio of the employer's contributions to the sum of all employer and non -employer
contributions during the measurement period. The state's proportionate share for a particular employer equals the ratio of the
contributions for a particular employer to the total state contributions paid. The employer recorded a liability of $2,822,947 and
the employer's proportionate share was 1.5682 percent.
Percent of
PercentChange
in
Net Pension
Net Pension
Collective
Collective
Percent of
As of measurement date:
Liability as of
Liability as of
NPL as of
NPL as of
Collective
6/30/2017
6/30/2016
6/30/2017
6/30/2016
NPL
Employer Proportionate
Share
$ 2,822,947
$ 2,523,431
1.5682%
1.5255%
0.0427%
State of Montana
Proportionate Share
associated with the
Em to er
1 5 603 673
1 5 112 711
3.1129 %
3.0907 %
0.0222
Total
$ 8,426,620
$ 7,636,142
4.6811 %
4.6162%
0.0649%
Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the
measurement of the Total Pension Liability.
64
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date.
Changes in proportionate share: Between the measurement date of the collective NPL and the employer's reporting date
there were no changes in proportion that may have an effect on the employer's proportionate share of the collective NPL since
the previous measurement date.
Pension Expense
As of reporting date
Pension Expense as of
Pension Expense as of
6/30/2017
6/30/2016
Employer's Proportionate Share of MPORS
$ 335,354
$ 266,393
State of Montana Proportionate Share
associated with the Employer
$ 600,458
$ 519,977
Total
$ 935,812
$ 786,370
At June 30, 2016, the employer recognized its proportionate share of the Plan's pension expense of $335,354. The employer also
recognized grant revenue of $600,458 for the support provided by the state of Montana for the proportionate share of the pension
expense that is associated with the employer. (Two years of pension expense are documented in the above table but are not
necessary for the employer's disclosures.)
Recognition of Deferred Inflows and Outflows
At June 30, 2017, the employer reported its proportionate share of the Plan's deferred outflows of resources and deferred inflows
of resources from the following sources:
Deferred Outflows of
Deferred Inflows of
Resources
Resources
Expected vs. Actual Experience
$
$ 57,511
Projected Investment Earnings vs. Actual
Investment Earnings
S 183,046
$
Changes in Assumptions
S
$
Changes in Proportion and Differences
Between Employer Contributions and
Proportionate Share of Contributions
S 76,301
$
Employer Contributions subsequent to the
measurement date
Is 353,045
Total
I $ 612,392
1 $ 57,511
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension
Expense as follows:
For the Reporting Year ended June 30:
Amount of deferred outflows and deferred inflows
recognized in future years as an increase or
(decrease)to Pension Expense
2017
$ 5,768.00
2018
$ (5,768.00)
2019
$ 77,763.00
2020
$ 59,307.00
2021
$
Thereafter
$
65
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
Plan Description (MPORS)
The Municipal Police Officers' Retirement System (MPORS), administered by the Montana Public Employee Retirement
Administration (MPERA), is a multiple -employer, cost -sharing defined benefit plan established in 1974 and governed by
Title 19, chapters 2 & 9, MCA. This plan provides retirement benefits to all municipal police officers employed by first- and
second-class cities and other cities that adopt the plan. Benefits are established by state law and can only be amended by the
Legislature. The MPORS provides retirement, disability, and death benefits to plan members and their beneficiaries.
Deferred Retirement Option Plan (DROP): Beginning July 2002, eligible members of MPORS can participate in the DROP
by filing a one-time irrevocable election with the Board. The DROP is governed by Title 19, Chapter 9, Part 12, MCA. A
member must have completed at least twenty years of membership service to be eligible. They may elect to participate in the
DROP for a minimum of one month and a maximum of 60 months and may only participate in the DROP once. A participant
remains a member of the MPORS, but will not receive membership service or service credit in the system for the duration of
the member's DROP period. During participation in the DROP, all mandatory contributions continue to the retirement system.
A monthly benefit is calculated based on salary and years of service to date as of the beginning of the DROP period. The
monthly benefit is paid into the member's DROP account until the end of the DROP period. At the end of the DROP period,
the participant may receive the balance of the DROP account in a lump -sum payment or in a direct rollover to another eligible
plan, as allowed by the IRS. If the participant continues employment after the DROP period ends, they will again accrue
membership service and service credit. The DROP account cannot be distributed until employment is formally terminated.
Summary of Benefits
Eligibility for benefit
20 years of membership service, regardless of age.
Age 50, 5 years of membership service.
Vesting
Death and disability rights are vested immediately
5 years of membership service for all other rights
Member's highest average compensation (HAC)
Hired prior to July 1, 1977 - average monthly compensation of final year of service;
Hired on or after July 1, 1977 — final average compensation (FAC) for last consecutive 36 months.
Compensation Cap
Hired on or after July 1, 2013 — 110% annual cap on compensation considered as part of a member's highest average
compensation.
Monthly benefit formula
2.5% of FAC per year of service credit.
Guaranteed Annual Benefit Adjustment (GABA)
Hired on or after July 1, 1997, or those electing GABA - after the member has completed 12 full months of retirement, the
member's benefit increases by a maximum of 3% each January, inclusive of all other adjustments to the member's benefit.
Minimum benefit adjustment (non-GABA)
If hired before July 1, 1997 and member did not elect GABA - the monthly retirement, disability or survivor's benefit may not
be less than `/z the compensation of a newly confirmed officer in the city that the member was last employed.
ZQ
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
Overview of Contributions
Rates are specified by state law for periodic member and employer contributions and are a percentage of the member's
compensation. Contributions are deducted from each member's salary and remitted by participating employers. The State
legislature has the authority to establish and amend contribution rates to the plan. Member and employer contribution rates are
shown in the table below.
Member
Hired
Hired
Hired
Hired
>6130197
Fiscal Year<7/1/75
>6/30/75
>6130179
GABA
Employer
State
2000-2017 5.80%
7.00%
8.50%
9.00%
14.41%
29.37%
1998-1999 7.80%
9.00%
10.50%
11.00%
14.41%
29.37%
1997 7.80%
9.00%
10.50%
14.36%
29.37%
Stand -Alone Statements
The financial statements of the Montana Public Employees Retirement Board (PERB) Comprehensive Annual Financial
Report (CAFR) and the GASB 68 Report disclose the Plan's fiduciary net position. The reports are available from the PERB
at PO Box 200131, Helena MT 59620-0131, (406) 444-3154 or the MPERA website at http://mpera.mt.gov/index.shtml
Actuarial Assumptions
The TPL used to calculate the NPL was determined by an actuarial valuation as of June 30, 2014, with update procedures to
roll forward the TPL to June 30, 2015. There were several significant assumptions and other inputs used to measure the TPL.
The actuarial assumptions used in the June 30, 2015 valuation were based on the results of the last actuarial experience study,
dated June 2010 for the six year period July 1, 2003 to June 30, 2009. Among those assumptions were the following:
Investment Return (net of admin expense) 7.75%
Admin Expense as % of Payroll 020%
General Wage Growth' 4.00%
'includes Inflation at 3.00%
Merit Increases 0% to 7.3%
Post Retirement Increases
I. Guaranteed Annual Benefit Adjustment (GABA)
Hired on or after July 1, 1997, or those electing GABA - after the member has completed 12 full months
of retirement, the member's benefit increases by a maximum of 3% each January, inclusive of all other
adjustments to the member's benefit
ii. Minimum Benefit Adjustment (non-GABA)
If hired before July 1, 1997 and member did not elect GABA - the monthly retirement, disability or
survivor's benefit may not be less than % the compensation of a newly confirmed officer in the city that
the member was last employed.
Mortality assumptions among contributing members, terminated vested members, service retired members and
and beneficiaries are based on RP 2000 Combined Employee and Annuitant Mortality Tables projected to
2015 with scale AA.
Mortality assumptions among Disabled Retirees are based on RP 2000 Combined Employee and
Annuitant Mortality Tables with no projections. No future mortality improvement is assumed.
Discount Rate
The discount rate used to measure the Total Pension Liability was 7.75%. The projection of cash flows used to determine the
discount rate assumed that contributions from participating plan members, employers, and non- employer contributing entities
will be made based on the Board's funding policy, which establishes the contractually required rates under Montana Code
Annotated. The State contributes 29.37% of salaries pensionable payroll paid by employers. Based on those assumptions, the
System's fiduciary net position was projected to be adequate to make all the projected future benefit payments of current plan
members through the year 2117. Therefore, the long-term expected rate of return on pension plan investments was applied to
67
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
all periods of projected benefit payments to determine the Total Pension Liability. A municipal bond rate was not
incorporated in the discount rate.
Target Allocations
The long-term expected return on pension plan assets was reviewed as part of the regular experience study prepared for the Plan.
The experience study, performed for the period of fiscal years 2003 through 2009, was outlined in a report dated June 2010 and
can be located on the MPERA website. The long-term expected rate of return on pension plan investments was determined by
considering information from various sources, including historical rates of return, rate of return assumptions adopted by similar
public sector systems, and by using a building-block method in which best -estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges
were combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target
asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset
class included in the target asset allocation as of June 30, 2016, are summarized below.
Asset Class
Target Asset Allocation
Real Rate of Return
Arithmetic Basis
Long -Term Expected
Real Rate of Return
(a)
(b)
(a) x (b)
Cash Equivalents
2.6%
4.00%
0.10%
Domestic Equity
36.0%
4.55%
1.64%
Foreign Equity
18.0%
6.35%
1.14%
Fixed Income
23.4%
1.00%
0.23%
Private E ui
12.0%
7.75%
0.93%
Real Estate
8.0%
4.00%
0.32%
Total 100.0% 4.37%
I nflatio n 3.00%
Portfolio Return Expectation 7.37%
Sensitivity Analysis
The sensitivity of the NPL to the discount rate is shown in the table below. A small change in the discount rate can create a
significant change the liability. The NPL was calculated using the discount rate of 7.75%, as well as what the NPL would be if
it were calculated using a discount rate 1.00% lower or 1.00% higher than the current rate.
1.0% Decrease
Current Discount
1.0% Increase
(6.75%)
Rate
(8.75 % )
Employer's Net Pension
Liabili
$3,800,948
$2,822,947
$1,756,120
Summary of Significant Accounting Policies
MPERA prepared financial statements using the accrual basis of accounting. The same accrual basis was used by MPERA for
the purposes of determining the NPL; Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions;
Pension Expense; the Fiduciary Net Position; and Additions to or Deductions from Fiduciary Net Position. Member
contributions are recognized in the period in which contributions are due. Employer contributions are recognized when due
and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the accounting
period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting period in
which they are due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred.
Investments are reported at fair value. MPERA adhered to all accounting principles generally accepted by the United States of
America. MPERA applied all applicable pronouncements of the Governmental Accounting Standards Board (GASB).
M:
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
FIREFIGHTERS' UNIFIED RETIREMENT SYSTEM
In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non -employer
contributing entity are required to recognize and report certain amounts associated with participation in the Firefighters'
Unified Retirement System (the Plan). Employers are required to record and report their proportionate share of the collective
Net Pension Liability; Pension Expense; and Deferred Outflows and Deferred Inflows of Resources associated with pensions.
Pension Amount Totals
Employers are provided guidance in GASB Statement 68, paragraph 74, that pension amounts must be combined as a total or
aggregate for reporting. This is true when employees are provided benefits through more than one pension, whether cost -sharing,
single -employer, or agent plans.
Net Pension Liability
The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). As GASB Statement
68 allows, a measurement date of up to 12 months before the employer's fiscal year-end can be utilized to determine the Plan's
TPL. The basis for the TPL as of June 30, 2017, was determined by taking the results of the June 30, 2016, actuarial valuation and
applying standard roll forward procedures. The roll forward procedure uses a calculation that adds the annual normal cost (also
called the service cost), subtracts the actual benefit payments and refunds for the plan year, and then applies the expected
investment rate of return for the year. The update procedures are in conformity with Actuarial Standards of Practice issued by the
Actuarial Standards Board.
Special Funding
The Plan has a special funding situation in which the state of Montana is legally responsible for making contributions directly to
the Plan on behalf of the employers. Due to the existence of this special funding situation, the state is required to report a
proportionate share of a local government's collective NPL that is associated with the non -state employer.
The proportionate shares of the employer's and the state of Montana's NPL for June 30, 2017, and 2016, are displayed below. The
employer's proportionate share equals the ratio of the employer's contributions to the sum of all employer and non -employer
contributions during the measurement period. The state's proportionate share for a particular employer equals the ratio of the
contributions for a particular employer to the total state contributions paid. The employer recorded a liability of $1,594,992 and
the employer's proportionate share was 1.3965 percent.
Percent of
Percentof
Changein
Net Pension
Net Pension
Collective
Collective
Percent of
As of rmeasurement
Liability as of
Liability as of
NPL as of
NPL as of
Collective
date:
6/30/2017
6/30/2016
6/30/2017
6/30/2016
NPL
Employer Proportionate
Share
$ 1,594,992
$ 1,451,892
1.3965%
1.4196%
-0.0231%
State of Montana
Proportionate Share
associated with the
Em o er
3610374
3,23374
0..0022%
Tot
$5,28,741$4685,61
43.51664005%%
43..51861148%%
-00209%
Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the
measurement of the TPL.
Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date.
M,
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
Changes in proportionate share: Between the measurement date of the collective NPL and the employer's reporting date
there were no changes in proportion that may have an effect on the employer's proportionate share of the collective NPL.
Pension Expense
As of reporting date
Pension Expense as of
Pension Expense as of
6/30/2017
6/30/2016
Employer's Proportionate Share of FURS
$ 201,815
$ 158,144
Employer Grant Revenue - State of Montana
Proportionate Share for the Employer
$ 468,491
$ 350,198
Total
$ 670,306
$ 508,342
At June 30, 2017, the employer recognized its proportionate share of the Plan's pension expense of $201,815. The employer
also recognized grant revenue of $468,491 for the support provided by the state of Montana for the proportionate share of the
pension expense that is associated with the employer. (Two years of pension expense are documented in the above table but
are not necessary for the employer's disclosures.)
Recognition of Deferred Inflows and Outflows
At June 30, 2017, the employer reported its proportionate share of FURS' deferred outflows of resources and deferred inflows
of resources related to FURS from the following sources:
Deferred Outflows of
Deferred Inflows of
Resources
Resources
Expected vs. Actual Experience
$
S 15,015
Projected Investment Earnings vs. Actual
Investment Earnings
$ 166,979
S
Changes in Assumptions
$
S
Changes in Proportion and Differences
Between Employer Contributions and
Proportionate Share of Contributions
1 $
$ 27,684
Employer Contributions subsequent to the
1
measurement date
$ 314,224
Total
I $ 481,203
Is 42,699
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension
Expense as follows:
For the Reporting Year ended June 30:
Amount of deferred outflows and deferred inflows
recognized in future years as an increase or
(decrease) to Pension Expense
2017
$ 12,118.00
2018
$ 12,118.00
2019
$ 79,809.00
2020
$ 50,624.00
2021
$ 2,705.00
Thereafter
$
Plan Description (FURS)
The Firefighters' Unified Retirement System (FURS), administered by the Montana Public Employee Retirement
Administration (MPERA), is a multiple -employer, cost -sharing defined benefit plan established in 1981, and governed by
Title 19, chapters 2 & 13, MCA. This plan provides retirement benefits to firefighters employed by first- and second-class
cities, other cities and rural fire district departments that adopt the plan, and to firefighters hired by the Montana Air National
70
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
Guard on or after October 1, 2001. Benefits are established by state law and can only be amended by the Legislature. The
FURS provides retirement, disability, and death benefits to plan members and their beneficiaries.
Summary of Benefits
Eligibility for benefit
20 years of membership service, regardless of age.
Age 50, 5 years of membership service.
Vesting
Death and disability rights are vested immediately.
5 years of membership service for all other rights.
Member's highest average compensation (HAC)
Hired prior to July 1, 1981 and not electing GABA - highest monthly compensation (HMC)
Hired on or after June 30, 1981 and those electing GABA — highest average compensation (HAC) during
any consecutive 36 months.
Compensation Cap
Hired on or after July 1, 2013 — 110% annual cap on compensation considered as part of a member's
highest average compensation.
Monthly benefit formula
1) Members hired prior to July 1, 1981 and not electing GABA are entitled to the greater of:
2.5% of HMC per year of service, OR
i) if less than 20 years of service -
2% of HMC for each year of service;
ii) if more than 20 years of service -
50% of the member's HMC plus 2% of the member's HMC for each year of service over 20 years
2) Members hired on or after July 1, 1981 and those electing GABA:
2.5% of HAC per year of membership service
Guaranteed Annual Benefit Adjustment (GABA)
Hired on or after July 1, 1997, or those electing GABA - after the member has completed 12 full months of retirement, the
member's benefit increases by a maximum of 3% each January, inclusive of all other adjustments to the member's benefit.
Minimum Benefit Adjustment (non-GABA)
If hired before July 1, 1997 and member did not elect GABA - the monthly retirement, disability or survivor's benefit may not
be less than `/z the compensation of a newly confirmed firefighter employed by the city that last employed the member
(provided the member has at least 10 years of membership service).
71
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
Overview of Contributions
Rates are specified by state law for periodic member and employer contributions and are a percentage of the member's
compensation. Contributions are deducted from each member's salary and remitted by participating employers. The State
legislature has the authority to establish and amend contribution rates to the plan. Member and employer contribution rates are
shown in the table below.
Member
Fiscal Year Non-GABA GABA Employer State
1998 - 2017 9.50% 10.70% 14.36% 32.61 %
1997 7.80% 14.36% 32.61%
Stand -Alone Statements
The financial statements of the Montana Public Employees Retirement Board (PERB) Comprehensive Annual Financial
Report (CAFR) and the GASB 68 Report disclose the Plan's fiduciary net position. The reports are available from the PERB
at PO Box 200131, Helena MT 59620-0131, (406) 444-3154 or the MPERA website at http://myera.mt.gov/index.shtml
Actuarial Assumptions
The TPL used to calculate the NPL was determined by taking the results of the June 30, 2015, actuarial valuation and
applying standard roll forward procedures to update the TPL to June 30, 2016. There were several significant assumptions
and other inputs used to measure the TPL. The actuarial assumptions used in the June 30, 2016, valuation were based on the
results of the last actuarial experience study, dated June 2010, for the sixyear period July 1, 2003 to June 30, 2009. Among
those assumptions were the following:
Investment Return (net of admin expense) 7.75%
Admin Expense as % of Payroll 0.19%
General Wage Growth` 4.00%
`includes Inflation at 3.00%
Merit Increases 0%to 7.3%
Post Retirement Increases
i. Guaranteed Annual Benefit Adjustment (GABA)
Members hired on or after July 1, 1997, or those electing GABA - after the member has completed 12 full
months of retirement, the member's benefit increases by a maximum of 3% each January, inclusive of all
other adjustments to the member's benefit
ii. Minimum Benefit Adjustment (non-GABA)
Members hired before July 1, 1997 and member did not elect GABA - the monthly retirement, disability or
survivor's benefit may not be less than % the compensation of a newly confirmed firefighter employed by
the city that last employed the member (provided the member has at least 10 years of membership service).
Mortality assumptions among contributing members, terminated vested members, service retired members and
and beneficiaries are based on RP 2000 Combined Employee and Annuitant Mortality Tables projected to
2015 with scale AA.
Mortality assumptions among Disabled Retirees are based on RP 2000 Combined Employee and
Annuitant Mortality Tables with no projections. No future mortality improvement is assumed.
Discount Rate
The discount rate used to measure the TPL was 7.75%. The projection of cash flows used to determine the discount rate
assumed that contributions from participating plan members, employers, and non -employer contributing entities will be made
based on the Board's funding policy, which establishes the contractually required rates under the Montana Code Annotated.
The State contributes 32.61% of salaries paid by employers. Based on those assumptions, the System's fiduciary net position
was projected to be adequate to make all the projected future benefit payments of current plan members through the year
2117. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected
benefit payments to determine the TPL. A municipal bond rate was not incorporated in the discount rate.
72
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
Target Allocations
The long-term expected return on pension plan assets was reviewed as part of the regular experience study prepared for the
Plan. The experience study, performed for the period of fiscal years 2003 through 2009, was outlined in a report dated June
2010 and can be located on the MPERA website. The long-term expected rate of return on pension plan investments was
determined by considering information from various sources, including historical rates of return, rate of return assumptions
adopted by similar public sector systems, and by using a building-block method in which best -estimate ranges of expected
future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each
major asset class. These ranges were combined to produce the long-term expected rate of return by weighting the expected
future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of
arithmetic real rates of return for each major asset class included in the target asset allocation as of June 30, 2016, are
summarized below.
Asset Class
Target Asset Allocation
Real Rate of Return
Arthimetic Basis
Long -Term Expected Real
Rate of Return
(a)
(b)
(a) x (b)
Cash Equivalents
2.6%
4.00%
-0.25%
Domestic Equity
36.0%
4.55%
4.55%
Foreign Equity
18.0%
6.35%
6.10%
Fixed Income
23.4%
1.00%
1.25%
Private E ui
12.0%
7.75%
8.00%
Real Estate
8.0%
4.00%
4.25%
Total 100.0% 4.37%
1 nflation 3.00%
Portfolio Return Expectation 7.37%
Sensitivity Analysis
The sensitivity of the NPL to the discount rate is shown in the table below. A small change in the discount rate can create a
significant change the liability. The NPL was calculated using the discount rate of 7.75%, as well as what the NPL would be if
it were calculated using a discount rate 1.00% lower or 1.00% higher than the current rate.
1.0% Decrease
Current Discount
1.0% Increase
6.75 %
Rate
8.75 %
Employer's Net Vension
Liability
$ 2,511,451
$ 1,594,992
$ 841,459
Summary of Significant Accounting Policies
MPERA prepared financial statements using the accrual basis of accounting. The same accrual basis was used by MPERA for
the purposes of determining the NPL; Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions;
Pension Expense; the Fiduciary Net Position; and Additions to or Deductions from Fiduciary Net Position. Member
contributions are recognized in the period in which contributions are due. Employer contributions are recognized when due
and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the accounting
period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting period in
which they are due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred.
Investments are reported at fair value. MPERA adhered to all accounting principles generally accepted by the United States of
America. MPERA applied all applicable pronouncements of the Governmental Accounting Standards Board (GASB).
73
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
G. Postemployment Health Insurance Benefits (OPEB)
Terminated employees may remain on the City's health insurance plan for up to 18 months if they pay the monthly premiums.
This benefit is required under federal C.O.B.R.A. law. In accordance with Montana State law (see below), retirees may
remain on the City's health plan as long as they wish. The City's contract with Allegiance Benefits details the plan eligibility.
MMIA is the administrator of the benefit plan which covers both active and retired members. The City's retirees may
continue coverage for themselves and their covered eligible dependents if they are eligible for public employees' retirement
by virtue of their employment with the City of Kalispell. To continue coverage, retirees are required to pay the full cost of the
benefit. The City's current labor contracts do not include any obligations for payments to retirees.
Montana Codes Annotated (MCA) Section 2-18-704 states (1) an insurance contract or plan issued under this part must
contain provisions that permit:
(a) The member of a group who retires from active service under the appropriate retirement provisions of a defined
benefit plan provided by law or, in the case of the defined contribution plan provided in Title 19, chapter 3, part 21,
a member with at least 5 years of service and who is a least age 50 while in covered employment to remain a
member of the group until the member becomes eligible for medicare under the federal Health Insurance for the
Aged Act, 42 U.S. C. 1395, as amended, unless the member is a participant in another group plan with substantially
the same or greater benefits at an equivalent cost or group plan with substantially the same or greater benefits at an
equivalent cost;
(b) The surviving spouse of a member to remain a member of the group as long as the spouse is eligible for retirement
benefits accrued by the deceased member as provided by law unless the spouse is eligible for medicare under the
federal Health Insurance for the Aged Act or unless the spouse has or is eligible for equivalent insurance coverage
as provided in subsection (1)(a);
(c) The surviving children of a member to remain members of the group as long as they are eligible for retirement
benefits accrued by the deceased member as provide by law unless they have equivalent coverage in subsection
(1)(a) or are eligible for insurance coverage by virtue of the employment of a surviving parent or legal guardian.
Funding Policy. MMIA health insurance rates are actuarially set annually and benefits altered to ensure the plans remain
properly funded. The City receives a monthly bill that it can allocate to participants as it wishes. The City pays MMIA the
monthly premiums and has no further liability for health claims. The City plans to continue funding the employee health
insurance plan on a "pay as you go" basis, and does not plan to fund this liability since it has paid the full amount due each
month.
OPEB Liabilities, OPEB Expenses, and Deferred Outflows of Resources Related to OPEB. The City's total other post -
employment benefit (OPEB) liability of $3,985,328 was measured as of June 30, 2017, and was determined by an actuarial
valuation as of that date.
Actuarial assumptions and other inputs. The total OPEB liability in the June 30, 2017 actuarial valuation was determined
using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless
otherwise specified:
Inflation 3.00 percent
Salary increases 2.80 percent
Discount rate 3.13 percent
Premium trend rate 4.50 percent
Retirees share of benefit -related costs 100 percent of projected premiums for retirees
74
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
The discount rate was based on the S&P Municipal Bond 20 Year High Grade Rate Index as of June 30, 2017.
Mortality rates were based on the RP-2000 Combined Mortality Table Projection AA Fully Generational.
The actuarial assumptions used in the June 30, 2017 valuation represents a reasonable long-term expectation of future OPEB
outcomes. The assumptions are tested with each valuation for ongoing reasonableness and are updated if appropriate.
Changes in the Total OPEB Liability.
Total OPEB
Liability
Restated balance at June 30,2016
$ 2,546,180.00
Changes for the year:
Service cost
$ 332,296.00
Interest
$ 79,695.00
Difference between expected
and actual experience
$ 13,222.00
Changes in assumptions
$ 1,013,936.00
Changes in benefit terms
$
Contributions by employer
$
$3,985,329
Restated Balance at 6/30/2016
The total OPEB liability at 6/30/2015, which was the date of the last full GASB 45 valuation, was called the Accrued
Actuarial Liability and totaled $2,623,748. This amount has been restated on a GASB 75 basis by making the following
changes:
• The actuarial cost method was changed from Projected Unit Credit with amortization on a level dollar basis over 30
years to Entry Age Normal, determined as a level percent of projected pay.
• The discount rate was changed from 4.29% based on the Moody's Aa bond index to 3.80% based on the S&P
Municipal Bond 20-Year High Grade Rate Index as of June 30, 2015.
• Includes the impact of the 40% federal high -cost employer -sponsored health plans excise tax (known as the Cadillac
Tax) for years 2020 and forward.
• Results rolled forward to 6/30/2016.
Changes in Assumptions
• The discount rate was changed from 3.80% to 3.13%.
• The mortality rates were updated to include mortality improvements.
• The termination and retirement rates were updated to be consistent with the pension actuarial valuation assumptions
for 6/30/2016.
• The trend assumption for premiums and age -adjusted premiums was changed from 4.0% to 4.5%.
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate. The following table presents the total OPEB
liability of the City, as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is
1-percentage-point lower or higher than the current discount rate.
1% Decrease Discount Rate 1% Increase
(2.13%) (3.13%) (4.13%)
Total OPEB Liability $ 4,958,299 $ 3,985,329 $3,305,999
75
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates. The following table presents the total
OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using a medical trend
rate that is 1-percentage-point lower or higher than the current trend rate.
1% Decrease Trend Rate 1% Increase
(3.5%) (4.5%) (5.5%)
Total OPEB Liability $ 3,061,308 $ 3,985,329 $5,372,759
For the year ended June 30, 2017, the City reported deferred outflows of resources related to OPEB from the following
sources:
Deferred Outflows
of Resources
Differences between expected
and actual experience $ 11,970
Changes in assumptions or other
inputs $ 917,919
Total $ 929,889
Amounts reported as deferred outflows of resources related to OPEB will be recognized in OPEB expense as follows:
Fiscal Year Ending
June 30:
2018 $ 97,269
2019 $ 97,269
2020 $ 97,269
2021 $ 97,269
2022 $ 97,269
Thereafter $ 443,544
$ 929,889
H. Amounts Due Fromfro other Governments
On June 30, 2017, the amounts due from other governments consisted of the following:
General Fund Amount
Due from:
Flathead County -Taxes $ 438,736
State of Montana -Gambling Fees $ 750
Sub Total $ 439,486
Special Revenue Funds
Amount
Due from:
Flathead County -Taxes
$
446,034
Flathead County EMS
$
51,434
Flathead County Sheriff Dept.
$
2,442
Montana Board of Crime Control
$
1,130
Montana DPHHS
$
22,084
State of Montana-MDOT
$
646
U.S. Department of Justice
$
29,539
EPA
$
13,531
Sub Total $
566,840
Debt Service Funds Amount
Due from:
Flathead County -Taxes $ 127,126
Capital Project Funds Amount
Due from:
Montana Dept. of Commerce $ 689,245
Total Governmental Funds $ 1,822,697
Funds Amount
Due from:
Flathead County -Taxes $ 143,110
Total Business -type Funds $ 143,110
Total City of Kalispell $ 1,965,807
lug
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
L Restricted Cash/InN�estments
The following restricted cash/investments were held as of June 30, 2017. These amounts are reported within the
cash/investment account on the Combined Balance Sheet.
RESTRICTED CASH:
Business-tvoe Activities
Water Bond Reserve (includes SRF & BOI)
Plant Investmentlimpact Fees (1)
Sewer Operating Reserve (2)
Bond Contingency
Plant Investmentlimpact Fees (sanitary) (1)
Plant Investmentlimpact Fees (treatment plant) (1)
Plant Investmentlimpact Fees (storm) (1)
Treatment Plant Replacement (3)
Total business -type activities restricted cash/investments
Governmental Activities
Impact Fees
Public Safety Growth related Capital (1)
Urban Forestry
Developers (4)
Debt Service
Airport TIF Bond Reserve
Debt Service
SID 343 Bond Reserve
Debt Service
SID 345 Bond Reserve
Debt Service
Revolving Fund - SID 344 Bond Reserve
Debt Service
Revolving Fund - SID 345 Bond Reserve
Total governmental activities restricted cash/investments
Total restricted cash/investments
July 1, 2016 Additions
Subtractions
June 30, 2017
$ 358,400
$ 2,310
$ (100,494)
260,216
1,063,170
805,878
(242,321)
1,626,727
190,000
-
-
190,000
1,109,313
-
(142,582)
966,731
1,867,844
1,053,499
(328,143)
2,593,200
471,378
756,854
(225,000)
1,003,232
1,337,939
483,160
-
1,821,099
1,448,800
426,468
(363,530)
1,511,738
7,846,844
3,528,169
(1,402,070)
9,972,943
576,162
299,038
(70,132)
805,068
101,449
2,100
(3,250)
100,299
144,500
-
-
144,500
57,795
(50,045)
7,750
11,172
11,172
226,000
226,000
12,100
12,100
1,129,178
301,138
(123,427)
1,306,889
$ 8,976,022
$ 3,829,307
$ (1,525,497)
$11,279,832
(1) Plant investment/impact fee cash. Montana State legislation regulating impact fees to fund capital improvements, MCA
7-6-1601 through 7-6-1604 (see 7-6-1603 below related to expending impact fees), became effective April 19, 2005 and
sets forth the procedures and requirements for the imposition of impact fees by local governments. On October 16, 2006,
by ordinance no. 1587, the Kalispell City Council authorized and established the procedure and imposition of impact fees
to fund capital improvements related to additional capacity (growth).
MCA 7-6-1603 states that "the collection and expenditure of impact fees must be reasonably related to the benefits
accruing to the development paying the impact fees..."
(2) Sewer operating reserve cash is restricted by ordinance no. 859 (1 month operating expenses).
(3) Treatment plant replacement cash is restricted by an agreement with Flathead County Water District (third party).
(4) Urban forestry receives cash from developers to be used to plant trees in new city developments (third party).
J. Restatements
During the 2017 fiscal year, the following adjustments relating to prior years' transactions were made to fund balance or net
position accounts.
Fund Amount Reason
RD Loan Revolving $ 33,934 Prior period revenues overstated - loan stipulation
Subtotal - Governmental Fund Financials $ 33,934
Governmental Funds - OPEB related (GASB 75) $ 387,963 GASB Change (GASB No. 75)
Total Statement of Activities - Gov'tal Funds $ 421,897
Water Fund - Major Proprietary $ (21,653) GASB Change (GASB No. 75)
Sewer Fund - Major Proprietary $ 68,999 GASB Change (GASB No. 75)
Total Proprietary funds/Business-type activities $ 47,346
77
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
K. Joint Ventures
Joint ventures are independently constituted entities generally created by two or more governments for a specific purpose
which are subject to joint control, in which the participating governments retain 1) an ongoing financial interest or 2) an
ongoing financial responsibility.
1. City -County Health Department
The City -County Health Department is operated under an interlocal agreement between Flathead County and the City of
Kalispell. The Department operates under the supervision and control of the City -County Health Board. The Board consists
of seven members, six of whom are appointed by the Board of County Commissioners. The Department is financed, in
addition to revenue generated by providing health services, by the City and the County levying an identical mill levy in order
that all property within the City of Kalispell and all property in Flathead County outside the City limits are taxed equally. The
operation is accounted for in the County Health Fund and is included in the general purpose financial statements of Flathead
County within the Special Revenue Fund.
2. 911 Dispatch Center
The 911 Dispatch Center is operated under an interlocal agreement between Flathead County, the City of Columbia Falls, the
City of Whitefish, and the City of Kalispell. The Center operates under the supervision and control of the Flathead
Emergency Communications Center Board. The Board consists of six members, the Flathead County Sheriff, a County
Commissioner chosen by the Board of County Commissioners, the County Attorney or other elected County officer, and an
elected official or designee from each of the cities of Kalispell, Whitefish, and Columbia Falls. The Department is financed
by funds received by all members from the State (9-1-1 fees) pursuant to Section 10-4-302, M.C.A. Any additional operating
funds needed will be shared proportionally by all members. Under the supervision of the Board, the Director shall hire and
direct staff to carry out the responsibilities of the County's Office of Emergency Services and the Flathead County Fire
Service Area.
L. County Provided Services
The City of Kalispell is provided various financial services by Flathead County. The County serves as cashier and treasurer
for the City for tax assessment collections and other revenues received by the County which are subject to distribution to the
various taxing jurisdictions located in the County. The collections made by the County on behalf of the City are accounted
for in an agency fund in the City's name and are periodically remitted to the City by the County Treasurer. The County
charges the City for fees associated with City Special Assessments.
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.
78
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
Effective July 1, 1987 The City of Kalispell joined with other Montana cities to form the Montana Municipal Insurance
Authority, a self-insurance pool offering Worker's Compensation and Liability Coverage. Both public entity risk pools
currently operate as common risk management and insurance programs for the member governments. The liability limits for
damages in tort action are $750,000 per claim and $1.5 million per occurrence with an $11,250 deductible per occurrence.
State tort law limits the City's liability to $1.5 million. The city pays an annual premium for its employee injury insurance
coverage, which is allocated to the employer funds based on total salaries and wages. The agreements for formation of the
pools provide that they will be self-sustaining through member premiums. The tort liability plan and workers' compensation
program issued bonds in the amount of $4.41 million and $7.610 million, respectively, to immediately finance the necessary
insurance reserves. All members signed a contingent note for a pro rata share of this liability in case operating revenue was
insufficient to cover the debt service. The City's share is $201,445 for liability and $281,715 for Workers' Compensation to
finance the necessary insurance reserves. Based on the plan's current financial position, the City doesn't expect to make any
payment on these notes. Separate financial statements are available from the Montana Municipal Insurance Authority.
On October 1, 2004, Kalispell signed a 5 year agreement with many other Montana Cities, since then extended, and through
the Montana Municipal Insurance Authority, to create a state wide health insurance pool. The City pays the total monthly
premium for employees who only choose to cover themselves. For employees who choose to cover additional dependents, the
City pays a percentage of the extra costs.
N. Pending Litigation
The following is a list of litigation pending against the City and the amount of damages claimed by the Plaintiff. The City
Attorney has made no evaluation as to the outcome of each case. The City has liability insurance that may cover all or part of
the damages. Accordingly, no provision has been made in the financial statements for these contingent liabilities.
Litigant
Challinor
James Cossitt
Ryan Pengally
McKeag Johns
Madison Brewer
Ethan Sloan
Damages Loss
Requested Potential
unspecified unknown
unspecified none
unspecified unknown
unspecified unknown
unspecified unknown
unspecified unknown
Status
Not filed
Will be dismissed 11/27/17
Not filed
Not filed
Filed -liability insurance
Filed -liability insurance
79
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
O. Receivables
Taxes Receivable
The following governmental funds had taxes receivable at June 30, 2017.
FUND
Source
Amount
General - Major Governmental
Taxes
$ 260,990
Westside TIF
Taxes
17,695
Parks
Taxes
43,060
Old School "Tech" TIF
Taxes
21,695
Old School"Ind" TIF
Taxes
24,958
Health Levy
Taxes
45,055
Light District
Taxes
14,824
Street Maintenance - Major Governmental
Taxes
102,679
Forestry
Taxes
8,759
G.O. Bonds
Taxes
21,991
Airport TIF debt service
Taxes
26,672
SID 344 - Major Governmental
Taxes
2,104,199
SID 345
Taxes
186,287
S & C's
Taxes
40,050
SID 343
Taxes
287,812
Total Governmental Funds
$ 3,206,726
Sewer - Major Business -type
Assessments
29,418
Solid waste
Assessments
23,299
Total Business -type Funds
52,717
Total City
$ 3,259,443
Accounts Receivable
At June 30, 2017, the Ambulance fund had accounts receivable deferred net of $240,735. Total net accounts receivable of the
Ambulance fund is $244,080. The difference is the result of $3,345 being receivable prior to the Ambulance fund conversion
from a proprietary fund to a special revenue fund.
Loans Receivable
Community Development Loan Revolving
The City entered into a community development program, which includes funding from a community development block
grant, to make available to eligible applicants (low -to -moderate income residents), a loan for at least one-half of the required
rehabilitation cost. These funds from the City, together with loans from the First Federal Savings Bank (now Glacier Bank) of
Montana, the lender, must provide the total funds required for the purchase and rehabilitation of the housing unit. At the time
the bank loans are closed with the borrower, the proceeds of the City's loan will be deposited into the borrower's construction
account at First Federal (Glacier). The City's loan is secured by the property, and filed in a third lien position. Repayment of
the City loan will not begin until 30 days after the Lender's loan (second lien) for construction of the unit has been paid off.
The City's loan is interest free until such time as repayment begins. The maximum amount of a private lender loan cannot
exceed $20,000 per property with a ten-year pay back.
In addition, when an owner -occupant is unable to afford a private lender loan at the pre -determined interest rate agreed to by
the City and lender, he or she may qualify for City financing. The City may provide a direct loan of up to $25,000 with a
varying interest rate (as low as zero percent) or with a longer amortization period (maximum of fifteen years) or a deferred
loan to be repaid simultaneously, at a later date, with a balloon payment, or to be released at the end of ten years.
80
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
The City has $955 recorded as housing rehab loans receivable as of June 30, 2017, in the Community Development Loan
Revolving Fund.
Other loans receivable of the Community Development Loan Revolving Fund:
Hampstead Partners
In August of 2002, the City of Kalispell entered into two (2) notes receivable agreements with 2' Avenue West Partners, L.P.
(Hampstead Partners) for property on 2nd Avenue West in Kalispell. The property consists of a 40-unit low-income apartment
complex known as 2' Avenue West Independent Living Center. As stipulated in the agreement, this property is restricted as
low income housing, and shall remain as such for a period of thirty-five years.
One of these notes is for $480,000, and bears interest at 1% per annum. The second of these notes is for $400,000, and bears
interest at 4.81% per annum. These loans mature on February 28, 2032. Payments of interest on the note are due on or
before the last day of the taxable year, to the extent there is surplus cash, as defined by the note. Unpaid interest shall accrue
until paid, but not compound on the first loan. Payments of principal are not required until the maturity date of the loans. The
notes are secured by a deed of trust on the property. Accrued interest as of June 30, 2017, is $71,655, and $387,602,
respectively.
Community Development Block Grant Economic Development Program
In fiscal year 2007, the City entered into a community development program with funding from a community development block
grant economic development program. Eligibility for these low interest loans is tied to the creation of jobs within Kalispell with a
percentage of the jobs created to be filled by low and moderate -income persons.
The following loans have been made by the City using the economic development program funds:
A 15 year loan at 5% to Distinctive Countertops in October 2006.
Original Loan amount
$ 288,619
June 30, 2017 balance
$ 187,961
A 15 year loan at 6% to AGAPE Home Care in May 2009.
Original Loan amount
$ 42,500
June 30, 2017 balance
$ 16,340
A 10 year loan at 3% to Norm's News in January 2013.
Original Loan amount
$ 50,000
June 30, 2017 balance
$ 19,092
A 10 year loan at 6% to SMP, LLC in August 2016.
Original Loan amount
$ 50,000
June 30, 2017 balance
$ 46,208
A 10 year loan at 3% to Wheaton's in April 2014.
Original Loan amount
$ 41,500
June 30, 2017 balance
$ 30,597
81
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
A 10 year loan at 3% to Sail MT & Ameriprise in April 2015.
Original Loan amount $ 17,000
June 30, 2017 balance $ 13,418
Rural Development Loan Revolving
On May 5, 2003, the City Council passed Resolution No. 4780 establishing an Economic Development Revolving Loan Fund
(ED RLF) for small business retention and expansion. The resolution also created an Economic Development Loan Review
Committee to process all applications for assistance. Additionally, on August 16, 2004 and again on November 6, 2006, the
City Council, by Resolution No. 4929 and 5158, respectively, authorized the City Manager to enter into loan agreements with
the United States Department of Agriculture, Rural Development office, in the amount of $520,000 and $750,000. These
monies will be used to assist in the retention and expansion of small business, which may stimulate economic development
activity by assisting the private sector where a funding gap exists and alternative sources of public and private financing are
not adequate.
The following loans have been made by the City using the Rural Development funds:
A 15 year loan at 6.5% to Distinctive Countertops in July 2006.
Original Loan amount
$ 175,000
June 30, 2017 balance
$ 114,106
A 10 year loan at 7% to Crossroads
Realty in June 2007.
Original Loan amount
$ 150,000
June 30, 2017 balance
$ 92,833
A 6 month loan at 5.25% to
Glacier Valley Endodontics, Inc. in January 2012.
Original Loan amount
$ 35,000
June 30, 2017 balance
$ 19,779
A 10 year loan at 5.29% to Parkman Properties, LLC (The Edge Salon), in February 2012.
Original Loan amount
$ 77,000
June 30, 2017 balance
$ 40,992
A 10 year loan at 3% to Whipps, LLC in December 2011.
Original Loan amount
$ 50,000
June 30, 2017 balance
$ 16,796
A 10 year loan at 3% to Bill
and Jana Goodman in June 2013.
Original Loan amount
$ 34,660
June 30, 2017 balance
$ 18,913
CD MISCELLANEOUS
The following loan was made by the City using Urban Development Assistance Grant (UDAG) funds:
A 20 year redevelopment loan at 5% with Big Sky Manor in August 1999.
Original Loan amount $ 124,000
June 30, 2017 balance $ 20,955
82
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
DUNE 30, 2017
SUMMARY COMMUNrrY DEVELOPMENT LOANS RECEIVABLE
From To Amount Purpose
CD Misc. - Major Governmental Big Sky Manor 20,955 Urban Dev. Assistance
Subtotal Major Fund 20,955
CD Loan Revolving Various
$ 955 Housing Rehab
Distinctive Countertops
187,961 Jobs
AGAPE Home Care
16,340 Jobs
Norm's News
19,092 Jobs
SMP LLC
46,208 Jobs
Wheatons
30,597 Jobs
Sail MT & Ameriprise
13,418 Jobs
Hampstead Partners'
880,000 Low Income Housing
Hampstead Partners - Interest Portion'
459,257 Low Income Housing
Rural Development Loan Revolving Distinctive Countertops
114,106 Small Business
Crossroads Realty
92,833 Small Business
Glacier Valley Endodontics, Inc
19,779 Small Business
Parkman Properties, LLC
40,992 Small Business
Whipps, LLC
16,796 Small Business
Bill and Jana Goodman
18,913 Small Business
Subtotal Other Governmental Funds
1,957,247
Total Governmental Funds
$ 1,978,202
'Long Term Loans Receivable - Matures 2032
P. City Court Contracts Receivable
Contracts receivable of the City Court, because of the uncertainty regarding when and if they will be collected, are no longer
booked as an asset on the balance sheet of the General Fund. These receivables, at June 30, 2017, amounted to $2,402,034.
Q. Wastewater Treatment Plant agreement with Evergreen
In 1990, the City of Kalispell entered into an agreement with the Evergreen Sewer District to convey sewage to the Kalispell
Wastewater Treatment Plant. This agreement expired in July of 2015. A new agreement was reviewed and discussed at a
City Council work session on July 13, 2015.
At a regular meeting of the City Council on July 20, 2015, the new agreement was approved. The new agreement provides for
a formula — based on prior fiscal year expenses. The City bills the District, monthly, a base charge per account. The City also
bills for maintenance and operation and replacement costs per the agreement based on metered flows. According to the new
agreement, the Evergreen Sewer District no longer has an equity interest in the reserve/replacement cash account which will
still be funded by the City.
83
CITY OF KALISPELL
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2017
R. Fund Balance Classification by Major Purposes
The table presented below displays the City's fund balances by major purpose as displayed on page 29 of the governmental
funds balance sheet.
Nonspendable - not in spendable form
Long-term recievables
Prepaids
Total nonspendable
Restricted
General Government -Health Insurance
Public Safety -
Public Safety -EMS
Public Safety -Building Inspection
Public Safety -Fire impact fees
Public Safety -Police impact fees
Public Safety -Police grants
Public Safety -Fire grants
Public Works -
Public Works -Lighting District
Public Works -Gas Tax
Culture and Recreation -
Culture and Recreation -Park improvements
Culture and Recreation -Equipment
Culture and Recreation -Programs
Culture and Recreation -Urban forestry
Community Development -
Community Development -Old School Station
Community Development -South Kalispell TI
Community Development-Westside TIF
Community Development -Revolving loan fu
Debt Service-SID
Debt Service-S & C warrants
Debt Service-G.O. Bonds
Debt Service -Capital
Debt Service-TIF
Total restricted
Assigned
Capital Equipment
Parking
Miscellaneous
Total assigned
Unassigned
Total net position
S. Subsequent Events
F
n
Other
Total
General
Street
CD
SID
Governmental
Governmental
Fund
Maint.
Misc.
344
Funds
Funds
6,023
-
-
-
6,023
246,190
32,397
2,468
28,292
309,347
252,213
32,397
2,468
28,292
315,370
-
-
-
63,742
63,742
13,199
13,199
5,574
5,574
1,589, 269
1,589,269
714,130
714,130
90,937
90,937
43,458
43,458
-
65,543
65,543
2,223,379
21,006
2,244,385
-
291,552
291,552
590,278
590,278
268,361
268,361
1,417
1,417
75,405
75,405
435,389
435,389
-
261,567
261,567
222,215
-
222,215
100,412
24,110
124,522
-
1,786,485
1,786,485
4,004,198
4,004,198
3,098,705
3,098,705
331,315
365,749
697,064
-
760
760
15,552
15,552
11,193
11,193
275,729
275,729
2,223,379
322,627
331,315
14,113,308
16,990,629
181,906 181,906
23,542 23,542
304,172 304,172
509,620 509,620
3,381,494 3,381,494
4,143,327 2,255,776 325,095 331,315 14,141,600 21,197,113
Tiger Grant
The City of Kalispell was awarded a $10 million Transportation Income Generating Economic Recovery (TIGER) grant from
U.S. Department of Transportation for the Glacier Rail Park and Kalispell Core Area Development projects. The emphasis of
this grant will be to remove the railroad tracks from the City of Kalispell to assist further development without the tracks
being an impediment, and to construct a Rail Park outside of the core area, to accommodate establishments that need or prefer
rail service for their business. The City expects to begin making draws from this award in the fall of 2017.
84
City of Kalispell
SCHEDULE OF CITY'S TOTAL LIABILITY AND RELATED RATIOS
OTHER POSTEMPLOYMENT BENEFITS
June 30, 2017
2017
Total OPEB Liability
Service cost
$
332,296
Interest
$
79,695
Difference between expected
and actual experience
$
13,222
Changes in assumptions
$
1,013,936
Changes in benefit terms
$
-
Contributions by employer
$
-
Net change in total OPEB liability
$
1,439,149
Total OPEB liability -beginning (restated)
$
2,546,180
Total OPEB liability -ending
$
3,985,329
Covered -employee payroll
$
10,456,215
Total OPEB liability as a percentage of covered -
employee payroll 38.11 %
Notes to Schedule:
Changes of assumptions. Changes of assumptions and other inputs
reflect the effects of changes in the discount rate each period. The
following are the discount rates used in each period:
6/30/2016 3.80%
6/30/2017 3.13%
Governmental Accounting Standards Board, Statement 75 requires
this information to be provided for 10 years. Because this is the first
year of implementation, 10 years is not available.
See independent auditor's report
85
City of Kalispell
SCHEDULE OF CITY CONTRIBUTIONS
OTHER POSTEMPLOYMENT BENEFITS
June 30, 2017
2017
Contractually required contribution $ -
Contributions in relation to the contractually
required contribution $ -
Contribution deficiency (excess) $ -
City's covered -employee payroll $ 10,456,215
Contributions as a percentage of covered -
employee payroll 0%
Governmental Accounting Standards Board, Statement 75 requires
this information to be provided for 10 years. Because this is the first
year of implementation, 10 years is not available.
See independent auditor's report
86
CITY OF KALISPELL
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
Last 10 Fiscal Years'
* The schedules are presented to illustrate the requirement to show information for 10 years. However, until a
full 10-year trend is compliled, the schedules present information for those years for which information is
available.
City's proportion of the net pension
liability (asset)
City's proportionate share of the net
pension liabiltiy (asset).
State of Montana's proportionate share
of the Net Pension Liability associated
with the Employer
Total
City's covered -employee payroll
City's proportionate share of the net
pension liability (asset) as a percentage
of its covered -employee payroll
Plan fiduciary net position as a
percentage of the total pension liability
City's proportion of the net pension
liability (asset)
City's proportionate share of the net
pension liabiltiy (asset).
State of Montana's proportionate share
of the Net Pension Liability associated
with the Employer
Total
City's covered -employee payroll
City's proportionate share of the net
pension liability (asset) as a percentage
of its covered -employee payroll
Plan fiduciary net position as a
percentage of the total pension liability
2015 2016 2017 2015 2016 2017
PERS FURS
0.4364% 0.4265% 0.4314% 1.4283% 1.4196% 1.3965%
$5,437,857 $5,961,419 $7,348,266 $1,394,256 $1,451,892 $1,594,992
$66,405 $73,226 $89,787 $3,145,374 $3,233,749 $3,613,749
$5,504,262 $6,034,645 $7,438,053 $4,539,630 $4,685,641 $5,208,741
$4,978,271 $4,976,919 $5,167,438 $1,855,316 $1,907,689 $1,966,524
111.22% 119.78% 142.20% 75.15% 76.11 % 81.11 %
79.87% 78.40% 74.71 % 76.71 % 76.90% 75.48%
2015 2016 2017
MPORS
1.5019% 1.5255% 1.5682%
$2,359,962 $2,523,431 $2,822,947
$4,767,405 $5,112,710 $5,603,673
$7,127,367 $7,636,141 $8,426,620
$2,015,102 $2,111,268 $2,213,762
117.11 % 119.52% 127.52%
67.01 % 66.90% 65.62%
'The amounts presented for each fiscal year were determined as of June 30.
See independent auditor's report
87
CITY OF KALISPELL
SCHEDULE OF CONTRIBUTIONS
Last 10 Fiscal Years'
' The schedules are presented to illustrate the requirement to show information for 10 years. However, until a full 10-
year trend is compliled, the schedules present information for those years for which information is available.
Contractually required contributions
Contributions in relation to the
contractually required contribution
Contribution deficiency (excess)
Employer's Pensionable Payroll
Contributions as a percentage of
covered payroll
2015 2016 2017 2015 2016 2017
PERS FURS
$ 430,109 $ 444,391 $ 471,214 $ 279,275 $ 281,160 $ 314,224
430,109 444,391 471,214 279,275 281,160 314,224
$ 4,976,919 $ 5,167,438 $ 5,629,797 $ 1,907,689 $ 1,966,524 $ 2,188,185
8.64% 8.60% 8.37%
2015 2016 2017
MPORS
Contractually required contributions
$ 306,050
$ 324,287
$ 353,045
Contributions in relation to the
contractually required contribution
306,050
324,287
353,045
Contribution deficiency (excess)
$ -
$ -
$ -
Employer's Pensionable Payroll
$ 2,111,268
$ 2,213,762
$ 2,479,350
Contributions as a percentage of
covered payroll
14.50%
14.65%
14.24%
'The amounts presented for each fiscal year were determined as of June 30
14.64% 14.30% 14.36%
See independent auditor's report
88
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2017
General Fund
ACTUAL
AMOUNTS VARIANCE
BUDGETED AMOUNTS (BUDGETARY WITH FINAL
ORIGINAL FINAL BASIS) See Note A BUDGET
RESOURCES (INFLOWS):
Taxes and assessments
$ 5,635,000
$
5,635,000
$ 5,625,579
$ (9,421)
Licenses and permits
76,700
76,700
131,644
54,944
Intergovernmental
4,137,829
4,137,829
3,921,872
(215,957)
Charges for services
863,404
863,404
925,165
61,761
Fines and forfeitures
565,000
565,000
454,547
(110,453)
Miscellaneous
27,500
27,500
33,641
6,141
Investment earnings
31,250
31,250
35,811
4,561
Amounts available for appropriation
$ 11,336,683
$
11,336,683
$ 11,128,259
$ (208,424)
CHARGES TO APPROPRIATIONS (OUTFLOWS);
General government
$ 3,135,571
$
3,135,571
$ 2,968,514
$ 167,057
Public safety
8,326,873
8,326,873
8,304,891
21,982
Public works
40,020
40,020
39,891
129
Community development
85,873
85,873
80,770
5,103
Debt service - principal
25,000
25,000
-
25,000
Debt service - interest
15,000
15,000
-
15,000
Capital outlay
235,842
235,842
179,424
56,418
Total charges to appropriations
$ 11,864,179
$
11,864,179
$ 11,573,490
$ 290,689
OTHER FINANCING SOURCES (USES)
Issuance of debt
$
$
$
$
Proceeds from the sale of general capital asset disposition
-
-
3,203
3,203
Transfers in
901,000
901,000
901,000
-
Transfers out
-
-
-
-
Total other financing sources (uses)
$ 901,000
$
901,000
$ 904,203
$ 3,203
Net change in fund balance
$ 458,972
Fund balance - beginning of the year
$ 3,684,355
Restatements
-
Fund balance - beginning of the year - restated
$ 3,684,355
Fund balance - end of the year
$ 4,143,327
See independent auditor's report
89
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2017
Street Maintenance
ACTUAL
AMOUNTS VARIANCE
BUDGETED AMOUNTS (BUDGETARY WITH FINAL
ORIGINAL FINAL BASIS) See Note A BUDGET
RESOURCES (INFLOWS):
Taxes and assessments
$ 2,465,000
$ 2,465,000
$ 2,483,634
$ 18,634
Licenses and permits
-
-
-
-
Intergovemmental
-
-
-
-
Charges for services
5,000
5,000
14,962
9,962
Fines and forfeitures
-
-
-
-
Miscellaneous
3,500
3,500
1,789
(1,711)
Investment earnings
8,000
8,000
15,549
7,549
Amounts available for appropriation
$ 2,481,500
$ 2,481,500
$ 2,515,934
$ 34,434
CHARGES TO APPROPRIATIONS (OUTFLOWS);
General government
$
$
$
$
Public safety
-
-
-
-
Public works
2,537,660
2,537,660
1,789,811
747,849
Community development
-
-
-
-
Debt service - principal
111,946
111,946
111,946
-
Debt service - interest
3,447
3,447
3,016
431
Capital outlay
1,545,849
1,545,849
319,342
1,226,507
Total charges to appropriations
$ 4,198,902
$ 4,198,902
$ 2,224,115
$ 1,974,787
OTHER FINANCING SOURCES (USES)
Issuance of debt
$ 1,114,018
$ 1,114,018
$
$ (1,114,018)
Proceeds from the sale of general capital asset disposition
-
-
16,560
16,560
Transfers in
-
-
Transfers out
-
-
-
Total other financing sources (uses)
$ 1,114,018
$ 1,114,018
$ 16,560
$ (1,097,458)
Net change in fund balance
$ 308,379
Fund balance - beginning of the year
$ 1,947,397
Restatements
-
Fund balance - beginning of the year - restated
$ 1,947,397
Fund balance - end of the year
$ 2,255,776
See independent auditor's report
90
RESOURCES (INFLOWS):
Taxes and assessments $
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Miscellaneous
Investment earnings
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2017
CD Misc.
ACTUAL
AMOUNTS VARIANCE
BUDGETED AMOUNTS (BUDGETARY WITH FINAL
ORIGINAL FINAL BASIS) See Note A BUDGET
1,422 1,422 1,281 (141)
2.000 2.000 4302 2302
Amounts available for appropriation
$ 3,422
$ 3,422
$ 5,583
$ 2,161
CHARGES TO APPROPRIATIONS (OUTFLOWS);
General government
$
$
$
$
Public safety
Public works
-
-
-
-
Community development
342,517
342,517
206,840
135,677
Debt service - principal
-
-
-
-
Debt service - interest
Capital outlay
-
-
Total charges to appropriations
$ 342,517
$ 342,517
$ 206,840
$ 135,677
OTHER FINANCING SOURCES (USES)
Issuance of debt
$
$
$
$
Proceeds from the sale of general capital asset disposition
Transfers in
50,000
50,000
50,000
Transfers out
-
-
-
Total other financing sources (uses)
$ 50,000
$ 50,000
$ 50,000
$
Net change in fund balance
$ (151,257)
Fund balance - beginning of the year
$ 476,352
Restatements
-
Fund balance - beginning of the year - restated
$ 476,352
Fund balance - end of the year
$ 325,095
See independent auditor's report
91
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2017
A. Pension Plans
Changes of benefit terms
Public Employees Retirement System (PERS). The following changes to the plan provisions were made as identified:
2013 Legislative Changes:
House Bill 454 — Permanent Injunction Limits Application of the GABA Reduction passed under HB454
Guaranteed Annual Benefit Adjustment (GABA)
After the member has completed 12 full months of retirement, the member's benefit increases by the applicable percentage
(provided below) each January, inclusive of all other adjustments to the member's benefit.
• 3% for members hired prior to July 1, 2007
• 1.5% for members hired on or after July 1, 2007 and before July 1, 2013
• Members hired on or after July 1, 2013
a. 1.5% each year PERS is funded at or above 90%;
b. 1.5% is reduced by 0.1 % for each 2% PERS is funded below 90%; and,
C. 0% whenever the amortization period for PERS is 40 years or more.
2015 Legislative Changes:
General Revisions — House Bill 101, effective January 1, 2016
Second Retirement Benefit
1) Applies to PERS members who return to active service on or after January 1, 2016. Members who retire before
January 1, 2016, return to PERS-covered employment, and accumulate less than 2 years of service credit before
retiring again:
• Refund of member's contributions from second employment plus regular interest (currently 0.25%);
• No service credit for second employment;
• Start same benefit amount the month following termination; and
• GABA starts again in the January immediately following second retirement.
2) For members who retire before January 1, 2016, return to PERS-covered employment and accumulate two or more
years of service credit before retiring again:
• Member receives a recalculated retirement benefit based on laws in effect at second retirement; and,
• GABA starts in the January after receiving recalculated benefit for 12 months.
3) For members who retire on or after January 1, 2016, return to PERS-covered employment and accumulate less than 5
years of service credit before retiring again:
• Refund of member's contributions from second employment plus regular interest (currently 0.25%);
• No service credit for second employment;
• Start same benefit amount the month following termination; and,
• GABA starts again in the January immediately following second retirement.
4) For members who retire on or after January 1, 2016, return to PERS-covered employment and accumulate five or
more years of service credit before retiring again:
• Member receives same retirement benefit as prior to return to service;
• Member receives second retirement benefit for second period of service based on laws in effect at second
retirement; and,
See independent auditor's report
92
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2017
• GABA starts on both benefits in January after member receives original and new benefit for 12 months.
Revise DC Funding Laws — House Bill 107, effective July 1, 2015
Employer Contributions and the Defined Contribution Plan — for PERS
The PCR was paid off effective March 2016 and the contributions of 2.37%, .47%, and 1.0% increase previously
directed to the PCR are now directed to the Defined Contribution member's account.
Montana Police Officers Retirement (MPORS)
The following changes to the plan provision were made as identified:
2015 Lcgislativc Changes:
General Revisions — House Bill 101, effective January 1, 2016
MPORS DROP Survivor Benefits — Allow statutory beneficiary (spouse or dependent child) of a deceased DROP
Participant to receive a DROP benefit and a survivorship benefit rather than accumulated contributions or a lump
sum
payment. 19-9-1206(1), MCA.
Firefighters Unified Retirement (FURS)
The following changes to the plan provision were made as identified:
2015 Lcgislativc Changes:
1. If a PERS member transfers employment to a FURS covered position and fails to elect FURS membership within 90
days, the default is PERS membership.
Chanucs in Actuarial Assumptions and Methods — all plans
Method and assumptions used in calculations of actuarially determined contributions
There were no changes following the 2013 Economic Experience study.
The following Actuarial Assumptions are from the June 2010 Experience Study:
General wage growth* - 4.00%
*includes inflation at 3.0%
Merit increase — 0% to 7.3%
Investment rate of return — 7.75%, net of pension plan investment expense, and including inflation
Asset valuation method — 4-year smoothed market
Actuarial cost method — Entry age
Amortization method — Level percentage of pay, open
The following additions to the actuarial assumptions were adopted in 2014 based upon implementation of GASB 68:
Administrative expense as percentage of payroll
PERS — 0.27%
MPORS — 0.2%
FURS — 0.19%
See independent auditor's report
93
CITY OF KALISPELL
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2017
B. Budgetary Comparison Schedules
BUDGETED FUNDS
The City adopts an annual budget for all of its funds in accordance with Title 7, Chapter 6, Part 40 of the Montana Code Annotated.
Statute requires the adoption of a preliminary budget, public hearings on the preliminary budget and the final adoption of the budget
by the first Thursday after the first Tuesday in September or within 30 calendar days of the receipt of the certified taxable valuations
from the Department of Revenue. The City must also submit a copy of the final budget to the Department of Administration by the
later of October 1 or 60 days after the receipt of taxable values from the Department of Revenue.
State statute limits the making of expenditures or incurring of obligations to the amount ofthe final budget as adopted or as amended.
Budget transfers and amendments are authorized by law, and in some instances, may require further public hearings. Any budget
amendments providing for additional appropriations must identify the fund reserves, unanticipated revenue, or previously
unbudgeted revenue that will fund the appropriations.
Appropriations are created by fund, function, and activity and may further be detailed by department. Expenditure limitations
imposed by law extend to the department level which is identified as the legal level of budgetary control.
BUDGETARY BASIS
The City's budgets are prepared on the budgetary basis (modified accrual) of accounting, which results in accounting for certain
funds, proprietary and internal service, on a basis other than generally accepted accounting principles (full accrual). The City's
accounting records are maintained on the basis of cash receipts and disbursements during the year. At year-end, certain
adjustments are made to the City's accounting records to reflect the basis of accounting described above. Reported budget
amounts represent the originally adopted budget and the final budget, which includes amendments. Total fund expenditures may not
legally exceed the budgeted expenditures. The budget lapses at the end of each year. Results of operations, on the budget basis of
accounting, are presented for the general fund and major special revenue funds with legally adopted annual budgets, to provide a
meaningful comparison of actual results with the budget.
See independent auditor's report
94
COMBINING AND INDIVIDUAL
FUND STATEMENTS
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Airport TIF — Accounts for monies received and expended for approved projects in
this TIF district.
Westside TIF — Accounts for monies received and expended for approved projects in this
TIF district.
Parks in Lieu — Accounts for monies received by developer's for the purpose of making
improvements in specific City parks.
Parks — Accounts for the monies received and expended in the operations of the City's
Parks Department.
Ambulance — Accounts for the monies received and expended in the operations of the
City's Ambulance Department.
Old School TIF's — Accounts for monies received and expended for approved projects in
these TIF districts.
Health Levy — Accounts for revenue from the permissive mill levy which provides
funding for the fiscal year 2003 health insurance premium rate increase.
Building Department — Accounts for all activity of enforcing the building regulations
adopted by the City.
Impact Fees — Accounts for street and public safety impact fees received and allowed and
approved expenditures of each.
Light Maintenance — Accounts for special assessment revenues levied, received, and
expended for street lighting.
Gas Tax — Accounts for revenues from State gasoline taxes apportioned from the State of
Montana Department of Highways.
Fores — Accounts for special assessment revenues levied, received, and expended to
care for almost 7000 trees.
MACI Grant — Accounts for grant monies received and City matching monies used to
purchase equipment (street sweeper) through the Montana Air & Congestion Initiative.
Community Development Loan Revolving Fund — this fund accounts for the lending and
repayment of monies loaned to businesses and individuals for approved community
development projects.
Rural Development Loan Revolving (2) — Accounts for monies received, grant and
other, and expended in the process of providing gap financing for business retention,
expansion, or start-up.
Law Enforcement Grants (Stonegarden, Drug Enforcement, CHRP) — Accounts for
multiple grants received by the Police Department and all related revenues and
expenditures.
EPA Brownfields Grant — Accounts for Brownfields revitalization projects monies to be
used for phase I and phase II environmental assessments.
EPA Brownfields Loan Revolving Grant - Accounts for grant monies received for and
expenditures related to environmental assessments.
Fire Grants - Accounts for multiple grants received by the Fire Department and all related
revenues and expenditures.
Hazmat Grant — Accounts for the grant monies received for and expenditures related to
respond and remedy hazmat calls of the City Fire Department.
DEBT SERVICE FUNDS
G.O. Bonds — Accounts for the debt service payments associated with the Woodland
Water Park and the Fire Station #52 general obligation bonds.
City Hall Debt Service — Accounts for the debt service payments associated with the new
City Hall at 201 1st Avenue East.
Airport TIF Debt Service - Accounts for the debt service payments associated with the
Airport Tax Increment District.
Westside TIF Debt Service - Accounts for the debt service payments associated with the
Westside Tax Increment District.
Debt Service Revolving — Accounts for monies associated with the closing out of debt
service funds and covering other debt service fund payment shortages.
S & C's - Accounts for the debt service payments associated with Sidewalk & Curb
bonds.
SID 343 - Accounts for the debt service payments associated with the Special
Improvement District #343 bonds.
SID 345 - Accounts for the debt service payments associated with the Special
Improvement District 9345 bonds.
CAPITAL PROJECT FUNDS
S & C Construction —Accounts for the monies received for and expenditures related to
sidewalk and curb construction.
Kidsports Grant — Grant to provide funding for the infrastructure necessary to support the
development of eight new playing fields at the Kidsports facility.
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2017
OLDSCHOOL
AIRPORT TIF
WESTSIDE TIT
PARKS IN LIEU
PARKS
AMBULANCE
TIT (TECH)
ASSETS
Cash and investments
1,786,882
4,199,647
1,417
769,489
-
16,696
Taxes and assessments receivable, net
-
17,695
-
43,060
-
21,695
Accounts receivable - net
-
-
-
3,987
244,080
-
Notes and loans receivable
-
-
-
-
-
-
Contracts receivable
-
-
-
-
-
-
Due from other funds
-
-
-
-
-
-
Due from other governments
-
25,054
-
116,185
51,434
-
Prepaids
-
-
-
11,691
11,310
-
Other debits
-
-
-
-
-
-
Restricted assets:
Restricted cash and investments
-
-
-
-
-
-
Total assets
1,786,882
4,242,396
1,417
944,412
306,824
38,391
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
-
219,650
-
76,275
7,930
-
Retamage
-
-
-
-
-
-
Accrued payroll
397
853
-
34,231
10,875
-
Due to other funds
-
-
-
-
30,400
-
Other credits
-
-
-
-
-
Total liabilities
397
220,503
-
110,506
49,205
-
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable
-
-
-
-
240,735
-
Unavailable revenue - deferred taxes and assessments
-
17,695
-
43,060
-
21,695
Total deferred inflows of resources
-
17,695
-
43,060
240,735
21,695
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
-
-
-
11,691
11,310
-
Restricted
General Government
-
-
-
-
-
-
Public Safety
-
-
-
-
5,574
-
Public Works
-
-
-
-
-
-
Culture and Recreation
-
-
1,417
779,155
-
-
Community Development
1,786,485
4,004,198
-
-
-
16,696
Debt Service
-
-
-
-
-
-
Unrestricted fund balance:
Unassigned
-
-
-
-
-
-
Total fund balance
1,786,485
4,004,198
1,417
790,846
16,884
16,696
Total liabilities and fund balance
1,786,882
4,242,396
1,417
944,412
306,824
38,391
See independent auditor's report.
95
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2017
ASSETS
Cash and investments
Taxes and assessments receivable, net
Accounts receivable - net
Notes and loans receivable
Contracts receivable
Due from other funds
Due from other governments
Prepaids
Other debits
Restricted assets:
Restricted cash and investments
Total assets
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
Retamage
Accrued payroll
Due to other funds
Other credits
Total liabilities
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable
Unavailable revenue - deferred taxes and assessments
Total deferred inflows of resources
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
Restricted
General Government
Public Safety
Public Works
Culture and Recreation
Community Development
Debt Service
Unrestricted fund balance:
Unassigned
Total fund balance
Total liabilities and fund balance
See independent auditor's report.
OLD SCHOOL
BUILDING
PUBLIC SAFETY
TIF (IND)
HEALTH LEVY
DEPT.
IMPACT FEES
LIGHT DIST. GAS TAX
7,414
-
1,601,505
12,674
281,388 624,178
24,958
45,055
-
-
14,824 -
-
-
4,009
524
- -
-
82,649
-
-
26,064 -
-
-
5,291
-
- -
-
761
-
-
-
805,068
- -
32,372
127,704
1,610,805
819,027
322,276 624,178
- - 8,673 - 14,485 33,900
- - 7,572 - 1,415 -
- 18,907 - - - -
- 761
- 18,907 16,245 761 15,900 33,900
- - 5,291 - - -
- 63,742 - - - -
- - 1,589,269 818,266 - -
- - - - 291,552 590,278
7,414 - - - - -
7,414 63,742 1,594,560 818,266 291,552 590,278
32,372 127,704 1,610,805 819,027 322,276 624,178
96
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2017
ASSETS
Cash and investments
Taxes and assessments receivable, net
Accounts receivable - net
Notes and loans receivable
Contracts receivable
Due from other funds
Due from other governments
Prepaids
Other debits
Restricted assets:
Restricted cash and investments
Total assets
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
Retamage
Accrued payroll
Due to other funds
Other credits
Total liabilities
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable
Unavailable revenue - deferred taxes and assessments
Total deferred inflows of resources
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
Restricted
General Government
Public Safety
Public Works
Culture and Recreation
Community Development
Debt Service
Unrestricted fund balance:
Unassigned
Total fund balance
Total liabilities and fund balance
See independent auditor's report.
Community
DRUG
URBAN
Development Loan RDREVOLVING
STONEGARDEN
ENFORCEMENT
FORESTRY
MACI GRANT Revolving LOAN (2)
GRANT
GRANT
155,345
21,006 427,791 613,168
-
887
8,759
- - -
-
-
-
- 1,653,827 303,419
-
-
15,283
- - -
19,510
3,572
100.299
- - -
-
-
279,686
21.006 2,081,618 916,587
19.510
4,459
7,196 - - - 9,588 -
2,164 - - - - 985
- - - - 9,922 -
9,360 - - - 19,510 985
8,759 - - - - -
R Sao - - - - -
21,006
261,567
2,081,618
916,587
3,474
261,567 21,006 2,081,618 916,587 - 3,474
279,686 21,006 2,081,618 916,587 19.510 4,459
97
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2017
ASSETS
Cash and investments
Taxes and assessments receivable, net
Accounts receivable - net
Notes and loans receivable
Contracts receivable
Due from other funds
Due from other governments
Prepaids
Other debits
Restricted assets:
Restricted cash and investments
Total assets
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
Retamage
Accrued payroll
Due to other funds
Other credits
Total liabilities
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable
Unavailable revenue - deferred taxes and assessments
Total deferred inflows of resources
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
Restricted
General Government
Public Safety
Public Works
Culture and Recreation
Community Development
Debt Service
Unrestricted fund balance:
Unassigned
Total fund balance
Total liabilities and fund balance
See independent auditor's report.
COPS Grant
LAW
ENFORCEMENT
GRANTS
EPA
BrownSelds
Grant
BROWNFIELDS
LOAN
REVOLVING
FIRE GRANTS
31,134
9,936
-
3,408
739
-
13,531
100,500
-
4,757
-
41,070
4,147
13,531
100,500
4,757
-
1,086
-
2,190
12
1,945
13,531
-
-
-
-
-
1,086
4,147
13,531
-
-
39,984
-
-
-
-
-
-
100,500
4,757
-
39,984
-
-
100,500
4,757
41,070
4,147
13,531
100,500
4,757
98
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2017
ASSETS
Cash and investments
Taxes and assessments receivable, net
Accounts receivable - net
Notes and loans receivable
Contracts receivable
Due from other funds
Due from other governments
Prepaids
Other debits
Restricted assets:
Restricted cash and investments
Total assets
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
Retamage
Accrued payroll
Due to other funds
Other credits
Total liabilities
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable
Unavailable revenue - deferred taxes and assessments
Total deferred inflows of resources
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
Restricted
General Government
Public Safety
Public Works
Culture and Recreation
Community Development
Debt Service
Unrestricted fund balance:
Unassigned
Total fund balance
Total liabilities and fund balance
See independent auditor's report.
HAZMAT
Total Special
City Hall Debt
AIRPORT TIF
SH)
GRANT
Revenue Funds
G.O. BONDS
Service
DEBT SERVICE
REVOLVING
40,605
10,696,483
-
11,193
51,170
50,495
-
176,046
21,991
-
26,672
-
-
252,600
-
-
-
-
-
1,957,246
-
-
-
-
-
3,408
-
-
-
-
-
-
-
212
22,084
386,041
37,005
-
80,059
-
-
28,292
-
-
-
-
761
-
-
-
905,367
-
-
144,500
238,100
62,689
14,406,244
58,996
11,193
302,401
288,807
1,903 395,321 - - -
- 59,590 - - -
- 61,174 21,453 - -
761 -
1,903 516,946 21,453 - - -
- 240,735 - - - -
- 176,046 21,991 - 26,672 -
- 416,781 21,991 - 26,672 -
- 28,292 - - - -
- 63,742 - - - -
60,786 2,522,110 - - - -
- 902,836 - - - -
- 1,042,139 - - - -
- 8,913,498 - - - -
- - 15,552 11,193 275,729 288,807
60,786 13,472,617 15,552 11,193 275,729 288,807
62,689 14,406,244 58,996 11,193 302,401 288,807
99
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2017
Total Nonmajor
Total Debt
Governmental
S & C'S SID 343
SID 345
Service Funds
Kidsports Grant
Funds
ASSETS
Cash and investments
- 47,552
1,378
161,788
- $
10,858,271
Taxes and assessments receivable, net
40,050 287,812
186,287
562,812
-
738,858
Accounts receivable - net
- -
-
-
-
252,600
Notes and loans receivable
- -
-
-
-
1,957,246
Contracts receivable
- -
-
-
-
3,408
Due from other funds
- -
-
212
-
212
Due from other governments
972 8,680
410
127,126
689,245
1,202,412
Prepaids
- -
-
-
-
28,292
Other debits
- -
-
-
-
761
Restricted assets:
Restricted cash and investments
- 7,750
11,172
401,522
-
1,306,889
Total assets
41,022 351,794
199,247
1,253,460
689,245 $
16,348,949
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable
-
-
-
-
121,147
516,468
Retamage
-
-
-
-
30,264
30,264
Accrued payroll
-
-
-
-
-
59,590
Due to other funds
212
-
-
21,665
537,834
620,673
Other credits
-
-
-
-
-
761
Total liabilities
212
-
-
21,665
689,245 $
1,227,756
Deferred inflows of resources
Unavailable revenue - deferred accounts receivable
-
-
-
-
-
240,735
Unavailable revenue - deferred taxes and assessments
40,050
287,812
186,287
562,812
-
738,858
Total deferred inflows of resources
40,050
287,812
186,287
562,812
-
979,593
Fund Balance:
Nonspendable - not in spendable form:
Prepaid
-
-
-
-
-
28,292
Restricted
General Government
-
-
-
-
-
63,742
Public Safety
-
-
-
-
-
2,522,110
Public Works
-
-
-
-
-
902,836
Culture and Recreation
-
-
-
-
-
1,042,139
Community Development
-
-
-
-
-
8,913,498
Debt Service
760
63,982
12,960
668,983
-
668,983
Unrestricted fund balance:
Unassigned
-
-
-
-
-
-
Total food balance
760
63,982
12,960
668,983
- $
14,141,600
Total liabilities and fund balance
41,022
351,794
199,247
1,253,460
689,245 $
16,348,949
See independent auditor's report.
100
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30. 2017
OLDSCHOOL
REVENUES
AIRPORT TIF
WESTSIDE TIF PARRS IN LIEU
PARRS
AMBULANCE
TIF (TECH)
Taxes and assessments
350,000
285,343 -
1,087,221
-
59,881
Licenses and permits
-
- -
-
-
-
Intergovemmental
42,671
243,128 -
-
331,734
3,057
Charges for services
-
-
503,099
710,158
-
Miscellaneous
-
5,325 -
57,417
-
-
Investment earnings
15,391
41,119 15
3,498
-
150
Total revenues
408,062
574,915 15
1,651,235
1,041,892
63,088
EXPENDITURES
Public safety
-
-
-
-
1,085,704
-
Public works
-
-
-
-
-
-
Parks and recreation
-
-
-
1,492,440
-
-
Community Development
35,085
483,732
-
-
-
21,123
Debt service -principal
-
-
-
9,112
-
-
Debt service - interest
-
-
-
327
-
-
Capital outlay
-
-
-
153,976
169,707
-
Total expenditures
35,085
483,732
-
1,655,855
1,255,411
21,123
Excess (deficiency) of revenues over expenditures
372,977
91,183
15
(4,620)
(213,519)
41,965
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
129,987
-
-
Proceeds from the sale of general capital asset disposition
-
-
-
6,750
-
Transfers in
-
-
-
-
-
-
Transfers (out)
-
(33,844)
-
-
-
(35,000)
Total other financing sources and uses
-
(33,844)
-
136,737
-
(35,000)
Net change in fund balance
372,977
57,339
15
132,117
(213,519)
6,965
Fund balances -beginning
1,413,508
3,946,859
1,402
658,729
230,403
9,731
Restatements
-
-
-
-
-
-
Fund balances - beginning restated
1,413,508
3,946,859
1,402
658,729
230,403
9,731
Fund balances - ending
1,786,485
4.004.198
1,417
790.846
16,884
16.696
See independent auditor's report.
101
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30. 2017
OLD SCHOOL
BUILDING
PUBLIC SAFETY
REVENUES
TIF (IND)
HEALTH LEVY
DEPT.
IMPACT FEES
LIGHT DIST.
GAS TAX
Taxes and assessments
9,840
888,882
-
-
385,759
-
Licenses and permits
-
-
1,098281
-
-
-
Intergovemmental
-
22,713
-
-
-
371,303
Charges for services
-
-
460,560
307,775
-
1,137
Miscellaneous
-
-
-
-
20,502
-
Investment earnings
146
-
13,438
7,091
1,631
5,043
Total revenues
9,986
911,595
1,572,279
314,866
407,892
377,483
EXPENDITURES
Public safety
-
-
637,986
10,000
-
-
Public works
-
-
-
-
268,399
229,577
Parks and recreation
-
-
-
-
-
-
Community Development
-
-
-
-
-
Debt service -principal
-
-
-
65,500
21,862
-
Debt service - interest
-
-
-
4,632
596
-
Capital outlay
-
-
63,145
-
-
50,678
Total expenditures
-
-
701,131
80,132
290,857
280,255
Excess (deficiency) of revenues over expenditures
9,986
911,595
871,148
234,734
117,035
97,228
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
-
-
-
Proceeds from the sale of general capital asset disposition
-
-
-
-
-
-
Transfers in
-
-
-
-
-
35,000
Transfers (out)
(15,000)
(901,000)
-
-
-
-
Total other financing sources and uses
(15,000)
(901,000)
-
-
-
35,000
Net change in fund balance
(5,014)
10,595
871,148
234,734
117,035
132228
Fund balances -beginning
12,428
53,147
723,412
583,532
174,517
458,050
Restatements
-
-
-
-
-
-
Fund balances - beginning restated
12,428
53,147
723,412
583,532
174,517
458,050
Fund balances - ending
7,414
63,742
1.594.560
818.266
291,552
590,278
See independent auditor's report.
102
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30. 2017
Community
DRUG
URBAN
Development Loan RD REVOLVING STONEGARDEN
ENFORCEMENT
REVENUES
FORESTRY
MACI GRANT
Revolving
LOAN (2)
GRANT
GRANT
Taxes and assessments
209,634
-
-
-
-
-
Licenses and permits
-
-
-
-
-
-
Intergovemmental
19,250
-
-
-
93,146
98,197
Charges for services
3,758
-
48,553
16,559
-
-
Miscellaneous
9,450
-
-
-
-
-
Investment earnings
2,225
-
4,965
1,362
-
-
Total revenues
244,317
-
53,518
17,921
93,146
98,197
EXPENDITURES
Public safety
-
-
-
-
93,146
95,555
Public works
-
-
-
-
-
-
Parks and recreation
221,795
-
-
-
-
-
Community Development
-
-
1,804
675
-
-
Debt service - principal
10,824
-
-
26,409
-
-
Debt service - interest
665
-
-
5,689
-
-
Capital outlay
-
-
-
-
-
-
Total expenditures
233,284
-
1,804
32,773
93,146
95,555
Excess (deficiency) of revenues over expenditures
11,033
-
51,714
(14,852)
-
2,642
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
-
-
-
Proceeds from the sale of general capital asset disposition
-
-
-
-
-
Transfers in
-
-
-
-
-
-
Transfers (out)
-
-
-
-
-
-
Total other financing sources and uses
-
-
-
-
-
-
Net change in fund balance
11,033
-
51,714
(14,852)
-
2,642
Fund balances - beginning
250,534
21,006
2,029,904
965,373
-
832
Restatements
-
-
-
(33,934)
-
-
Fund balances - beginning restated
250,534
21,006
2,029,904
931,439
-
832
Fund balances - ending
261.567
21.006
2.081.618
916.587
-
3,474
See independent auditor's report.
103
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30. 2017
LAW
EPA
BROWNFIELDS
ENFORCEMENT
Brownlields
LOAN
REVENUES
CHRP GRANT
GRANTS
Grant
REVOLVING
FIRE GRANTS
Taxes and assessments
-
-
-
-
-
Licenses and permits
-
-
-
-
-
Intergovemmental
97,261
46,399
21,943
1,483
-
Charges for services
-
13,500
-
-
-
Miscellaneous
-
4,565
-
-
3,376
Investment earnings
-
-
-
-
-
Total revenues
97,261
64,464
21,943
1,483
3,376
EXPENDITURES
Public safety
72,602
64,464
-
-
2,685
Public works
-
-
-
-
-
Parks and recreation
-
-
-
-
-
Community Development
-
-
21,943
1,483
-
Debt service - principal
-
-
-
-
-
Debt service - interest
-
-
-
-
-
Capital outlay
-
-
-
-
Total expenditures
72,602
64,464
21,943
1,483
2,685
Excess (deficiency) of revenues over expenditures
24,659
-
-
-
691
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
-
-
-
Proceeds from the sale of general capital asset disposition
-
-
-
-
Transfers in
-
-
-
-
Transfers (out)
-
-
-
-
-
Total other financing sources and uses
-
-
-
-
-
Net change in fund balance
24,659
-
-
-
691
Fund balances -beginning
15,325
-
-
100,500
4,066
Restatements
-
-
-
-
-
Fund balances - beginning restated
15,325
-
-
100,500
4,066
Fund balances - ending
39,984
-
-
100.500
4,757
See independent auditor's report.
104
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30. 2017
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
EXPENDITURES
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disposition
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
HAZMAT Total Special City Hall Debt AIRPORT TIF WESTSIDE TIF
GRANT Revenue Funds G.O. BONDS Service DEBT SERVICE DEBT SERVICE
- 3276,560
473200 - 208,074 -
- 1,098281
- - - -
51,243 1,443,528
9,433 90,000 - -
- 21065,099
- - - -
- 100,635
- - - -
403 96,477
1,381 - 2,914 -
51,646 8,080,580
484,014 90,000 210,988 -
33,773 2,095,915
-
-
-
-
- 497,976
-
-
-
-
- 1,714235
-
-
-
-
- 565,845
-
-
-
-
- 133,707
465,000
80,980
150,000
14,500
- 11,909
41,488
5,468
28,483
19,516
- 437,506
-
-
-
-
33,773 5,457,093
556,488
86,448
178,483
34,016
17,873 2,623,487
(22,474)
3,552
32,505
(34,016)
- 129,987 - - - -
- 6,750 - - - -
- 35,000 - - - 33,844
- (984,844) - - - -
- (813,107) - - - 33,844
17,873 1,810,380 (22,474) 3,552 32,505 (172)
42,913 11,696,171 38,026 7,641 243,224 172
- (33,934) - - - -
42,913 11,662,237 38,026 7,641 243,224 172
60,786 13,472,617 15,552 11.193 275,729 -
105
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30. 2017
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
EXPENDITURES
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset disposition
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
Total Debt Service
SID REVOLVING S & CIS SID 343 SID 345 Funds
- 9,875 92,100 22,594 805,843
- - - - 99,433
2,929 - - - 7224
2,929 9,875 92,100 22,594 912,500
-
-
7,739
1,412
80,000
11,900
26,000
6285
824,219
114,552
-
9,151
91,900
32285
938,771
2,929
724
200
(9,691)
(26271)
390
-
-
(390)
-
-
-
-
34,234
(390)
390
(390)
-
-
33,844
3,319
334
200
(9,691)
7,573
285,488
426
63,782
22,651
661,410
285,488
426
63,782
22,651
661,410
288.807
760
63,982
12.960
668.983
106
City of Kalispell, Montana
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June 30. 2017
Total Nonmajor
S & C
Total Capital
Governmental
REVENUES
Kidsports Grant CONSTRUCTION
Project Funds
Funds
Taxes and assessments
- -
-
4,082,403
Licenses and permits
- -
-
1,098,281
Intergovernmental
850,002 -
850,002
2,392,963
Charges for services
- -
-
2,065,099
Miscellaneous
- 2,010
2,010
102,645
Investment earnings
- -
-
103,701
Total revenues
850,002 2,010
852,012
9,845,092
EXPENDITURES
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
- - - 2,095,915
- - - 497,976
- - - 1,714,235
- - - 565,845
- - - 957,926
- - - 126,461
850,002 6,310 856,312 1,293,818
850,002 6,310 856,312 7,252,176
- (4,300) (4,300) 2,592,916
OTHER FINANCING SOURCES (USES)
Issuance of debt - 4,300 4,300 134,287
Proceeds from the sale of general capital asset disposition - - - 6,750
Transfers in - - - 69,234
Transfers (out) - - - (985,234)
Total other financing sources and uses - 4,300 4,300 (774,963)
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
- - - 1,817,953
- - - 12,357,581
12,323,647
- - - 14,141,600
107
BUDGETARY COMPARISON SCHEDULE - OTHER MAJOR
FUNDS
RESOURCES (INFLOWS):
Taxes and assessments $
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Miscellaneous
Investment earnings
Amounts available for appropriation
CHARGES TO APPROPRIATIONS (OUTFLOWS);
City of Kalispell, Montana
Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2017
SID344
ACTUAL
AMOUNTS
BUDGETED AMOUNTS (BUDGETARY
ORIGINAL FINAL BASIS) See Note A
270,000 $ 270,000 $ 264,910 $
VARIANCE
WITH FINAL
BUDGET
(5,090)
$ 270,000 $ 270,000 $ 264,910 $ (5,090)
General government $ $ $ $
Public safety
Public works
Community development
Debt service - principal 225,000 225,000 225,000
Debt service - interest 112,633 112,633 112,633
Capital outlay - - -
Total charges to appropriations $ 337,633 $ 337,633 $ 337,633 $
OTHER FINANCING SOURCES (USES)
Issuance of debt $
Proceeds from the sale of general capital asset disposition
Transfers in
Transfers out
Total other financing sources (uses) $
Net change in fund balance
Fund balance - beginning of the year
Restatements
Fund balance - beginning of the year - restated
Fund balance - end of the year
$ (72,723)
$ 404,038
$ 404,038
$ 331,315
See independent auditor's report
108
BUDGETARY COMPARISON SCHEDULE - NONMAJOR
FUNDS
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
AIRPORT TIF
Westside TIT
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
350,000
350,000
280,000
285,343
5,343
Licenses and permits
-
-
-
-
-
Intergovernmental
42,671
42,671
243,128
243,128
Charges for services
-
-
-
-
Miscellaneous
-
-
8,500
5,325
(3,175)
Investment earnings
9,000
15,391
6,391
30,000
41,119
11,119
Total revenues
401,671
408,062
6,391
561,628
574,915
13,287
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation
-
-
-
-
-
-
Community Development
1,785,608
35,085
1,750,523
4,063,341
483,732
3,579,609
Debt service - principal
-
-
-
-
-
-
Debt service - interest
Capital outlay
-
-
-
-
-
-
Total expenditures
1,785,608
35,085
1,750,523
4,063,341
483,732
3,579,609
Excess (deficiency) of revenues over expenditures
(1,383,937)
372,977
1,756,914
(3,501,713)
91,183
3,592,896
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
Proceeds from the sale of general capital asset dispos
Transfers in
-
Transfers (out)
(32,340)
(33,844)
1,504
Total other financing sources and uses
(32,340)
(33,844)
1,504
Net change in fund balance
(1,383,937)
372,977
1,756,914
(3,534,053)
57,339
3,594,400
Fund balances - beginning
1,413,508
3,946,859
Restatements
-
-
Fund balances - beginning restated
1,413,508
3,946,859
Fund balances - ending
1,786,485
4,004,198
See independent auditor's report.
109
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
Parks in Lieu
Parks
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
1,098,000
1,087,221
(10,779)
Licenses and permits
-
-
Intergovernmental
-
-
Charges for services
518,800
503,099
(15,701)
Miscellaneous
20,000
57,417
37,417
Investment earnings
15
15
2,000
3,498
1,498
Total revenues
15
15
1,638,800
1,651,235
12,435
EXPENDITURES
Current:
Public safety
-
-
-
-
-
Public works
-
-
-
Parks and recreation
1,620,411
1,492,440
127,971
Community Development
-
-
-
Debt service -principal
29,112
9,112
20,000
Debt service - interest
-
784
327
457
Capital outlay
1,417
1,417
161,000
153,976
7,024
Total expenditures
1,417
-
1,417
1,811,307
1,655,855
155,452
Excess (deficiency) of revenues over expenditures
(1,402)
15
1,417
(172,507)
(4,620)
167,887
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
130,000
129,987
(13)
Proceeds from the sale of general capital asset dispos
-
6,750
6,750
Transfers in
-
-
Transfers (out)
-
-
-
Total other financing sources and uses
-
-
130,000
136,737
6,737
Net change in fund balance
(1,402)
15
1,417
(42,507)
132,117
174,624
Fund balances - beginning
1,402
658,729
Restatements
-
-
Fund balances - beginning restated
1,402
658,729
Fund balances - ending
1,417
790,846
See independent auditor's report
110
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
AMBULANCE
OLD SCHOOL TIT (TECH)
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
62,000
59,881
(2,119)
Licenses and permits
-
-
-
-
-
-
Intergovernmental
260,000
331,734
71,734
3,056
3,057
1
Charges for services
891,000
710,158
(180,842)
-
-
-
Miscellaneous
-
-
-
-
-
Investment earnings
-
-
100
150
50
Total revenues
1,151,000
1,041,892
(109,108)
65,156
63,088
(2,068)
EXPENDITURES
Current:
Public safety
1,116,239
1,085,704
30,535
Public works
-
-
-
Parks and recreation
-
-
-
Community Development
22,500
21,123
1,377
Debt service - principal
-
-
-
Debt service - interest
-
-
-
Capital outlay
170,000
169,707
293
-
-
-
Total expenditures
1,286,239
1,255,411
30,828
22,500
21,123
1,377
Excess (deficiency) of revenues over expenditures
(135,239)
(213,519)
(78,280)
42,656
41,965
(691)
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
Proceeds from the sale of general capital asset dispos
Transfers in
Transfers (out)
(35,000)
(35,000)
Total other financing sources and uses
(35,000)
(35,000)
-
Net change in fund balance
(78,280)
(135,239)
(213,519)
7,656
6,965
(691)
Fund balances - beginning
230,403
9,731
Restatements
-
-
Fund balances - beginning restated
230,403
9,731
Fund balances - ending
16,884
16,696
See independent auditor's report
III
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
OLD SCHOOL TIT (IND)
Health Levy
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
9,100
9,840
740
880,000
888,882
8,882
Licenses and permits
-
-
-
-
-
-
Intergovernmental
22,025
22,713
688
Charges for services
-
-
-
Miscellaneous
-
-
Investment earnings
-
146
146
-
-
-
Total revenues
9,100
9,986
886
902,025
911,595
9,570
EXPENDITURES
Current:
Public safety
-
-
-
-
-
-
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
Total expenditures
-
-
-
-
-
-
Excess (deficiency) of revenues over expenditures
9,100
9,986
886
902,025
911,595
9,570
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
-
Proceeds from the sale of general capital asset dispos
Transfers in
Transfers (out)
(15,000)
(15,000)
(901,000)
(901,000)
Total other financing sources and uses
(15,000)
(15,000)
(901,000)
(901,000)
-
Net change in fund balance
(5,900)
(5,014)
886
1,025
10,595
9,570
Fund balances - beginning
12,428
53,147
Restatements
-
-
Fund balances - beginning restated
12,428
53,147
Fund balances - ending
7,414
63,742
See independent auditor's report.
112
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
Building Department
Impact Fees
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
-
-
-
Licenses and permits
430,000
1,098,281
668,281
Intergovernmental
-
-
-
-
-
Charges for services
100,000
460,560
360,560
145,000
307,775
162,775
Miscellaneous
-
-
-
-
-
-
Investment earnings
4,500
13,438
8,938
4,400
7,091
2,691
Total revenues
534,500
1,572,279
1,037,779
149,400
314,866
165,466
EXPENDITURES
Current:
Public safety
641,901
637,986
3,915
10,000
10,000
Public works
-
-
-
-
-
Parks and recreation
Community Development
-
-
Debt service - principal
65,500
65,500
-
Debt service - interest
-
-
-
4,651
4,632
19
Capital outlay
65,000
63,145
1,855
560,000
-
560,000
Total expenditures
706,901
701,131
5,770
640,151
80,132
560,019
Excess (deficiency) of revenues over expenditures
(172,401)
871,148
1,043,549
(490,751)
234,734
725,485
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds from the sale of general capital asset dispos
Transfers in
Transfers (out)
Total other financing sources and uses
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
(172,401) 871,148 1,043,549
723,412
723,412
1,594,560
(490,751) 234,734 725,485
583,532
583,532
818,266
113
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
Light Maintenance
Gas Tag
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
381,500
385,759
4,259
Licenses and permits
-
-
-
-
-
Intergovernmental
369,748
371,303
1,555
Charges for services
-
1,137
1,137
Miscellaneous
5,000
20,502
15,502
-
-
-
Investment earnings
400
1,631
1,231
2,000
5,043
3,043
Total revenues
386,900
407,892
20,992
371,748
377,483
5,735
EXPENDITURES
Current:
Public safety
-
-
-
-
-
-
Public works
343,822
268,399
75,423
471,562
229,577
241,985
Parks and recreation
-
-
-
-
-
-
Community Development
-
-
Debt service - principal
21,862
21,862
-
Debt service - interest
681
596
85
-
-
-
Capital outlay
-
-
-
98,112
50,678
47,434
Total expenditures
366,365
290,857
75,508
569,674
280,255
289,419
Excess (deficiency) of revenues over expenditures
20,535
117,035
96,500
(197,926)
97,228
295,154
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
-
Proceeds from the sale of general capital asset dispos
-
-
Transfers in
35,000
35,000
Transfers (out)
-
-
Total other financing sources and uses
-
-
-
35,000
35,000
-
Net change in fund balance
20,535
117,035
96,500
(162,926)
132,228
295,154
Fund balances - beginning
174,517
458,050
Restatements
-
-
Fund balances - beginning restated
174,517
458,050
Fund balances - ending
291,552
590,278
See independent auditor's report.
114
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
URBAN FORESTRY
MACI GRANT
Positive /
Positive /
(Se-ative)
(Negative)
Budget
Actual
Variance
Budget Actual Variance
REVENUES
Taxes and assessments
210,250
209,634
(616)
Licenses and permits
-
-
-
-
Intergovernmental
16,750
19,250
2,500
375,067 (375,067)
Charges for services
-
3,758
3,758
-
Miscellaneous
-
9,450
9,450
Investment earnings
1,500
2,225
725
-
Total revenues
228,500
244,317
15,817
375,067 (375,067)
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation
364,600
221,795
142,805
Community Development
-
-
-
Debt service - principal
15,000
10,824
4,176
Debt service - interest
1,000
665
335
-
-
Capital outlay
40,000
-
40,000
433,202
433,202
Total expenditures
420,600
233,284
187,316
433,202
433,202
Excess (deficiency) of revenues over expenditures
(192,100)
11,033
203,133
(58,135)
58,135
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
40,000
-
(40,000)
-
Proceeds from the sale of general capital asset dispos
-
Transfers in
-
43,000
(43,000)
Transfers (out)
-
-
Total other financing sources and uses
40,000
-
(40,000)
43,000
(43,000)
Net change in fund balance
163,133
(152,100)
11,033
(15,135)
15,135
Fund balances - beginning
250,534
21,006
Restatements
-
-
Fund balances - beginning restated
250,534
21,006
Fund balances - ending
261,567
21,006
See independent auditor's report
115
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
Community Development Loan Revolving
RD REVOLVING LOAN (2)
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
-
-
-
-
Charges for services
51,096
48,553
(2,543)
82,274
16,559
(65,715)
Miscellaneous
-
-
-
-
-
-
Investment earnings
3,000
4,965
1,965
650
1,362
712
Total revenues
54,096
53,518
(578)
82,924
17,921
(65,003)
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation
-
-
-
-
-
-
Community Development
302,000
1,804
300,196
260,000
675
259,325
Debt service - principal
-
-
-
26,407
26,409
(2)
Debt service - interest
5,693
5,689
4
Capital outlay
-
-
-
-
-
-
Total expenditures
302,000
1,804
300,196
292,100
32,773
259,327
Excess (deficiency) of revenues over expenditures
(247,904)
51,714
299,618
(209,176)
(14,852)
194,324
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
Proceeds from the sale of general capital asset dispos
Transfers in
Transfers (out)
Total other financing sources and uses
-
-
-
Net change in fund balance
(247,904)
51,714
299,618
(209,176)
(14,852)
194,324
Fund balances - beginning
2,029,904
965,373
Restatements
-
(33,934)
Fund balances - beginning restated
2,029,904
931,439
Fund balances - ending
2,081,618
916,587
See independent auditor's report.
116
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
STONEGARDEN GRANT
Drug Enforcement Grant
Positive /
Positive /
(Negative)
(Negative)
Budget Actual Variance
Budget Actual Variance
REVENUES
Taxes and assessments
Licenses and permits
- -
- -
Intergovernmental
95,070 93,146 (1,924)
101,614 98,197 (3,417)
Charges for services
- -
- -
Miscellaneous
Investment earnings
- -
- -
Total revenues
95,070 93,146 (1,924)
101,614 98,197 (3,417)
EXPENDITURES
Current:
Public safety 95,070 93,146
1,924 99,975
95,555
4,420
Public works - -
- -
-
-
Parks and recreation
Community Development
Debt service - principal
Debt service - interest -
Capital outlay -
- -
-
-
Total expenditures 95,070 93,146
1,924 99,975
95,555
4,420
Excess (deficiency) of revenues over expenditures - -
- 1,639
2,642
1,003
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
Proceeds from the sale of general capital asset dispos
Transfers in
Transfers (out)
Total other financing sources and uses
-
-
-
Net change in fund balance
1,639
2,642
1,003
Fund balances - beginning
832
Restatements
-
Fund balances - beginning restated
832
Fund balances - ending
3,474
See independent auditor's report.
117
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
CHRP GRANT
LAW ENFORCEMENT GRANTS
Positive /
Positive /
(Negative)
(Negative)
Budget Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
Licenses and permits
- -
-
-
Intergovernmental
251,750 97,261
(154,489)
67,000
46,399
(20,601)
Charges for services
- -
20,000
13,500
(6,500)
Miscellaneous
2,500
4,565
2,065
Investment earnings
- -
-
-
-
Total revenues
251,750 97,261
(154,489)
89,500
64,464
(25,036)
EXPENDITURES
Current:
Public safety
191,750
72,602
119,148 89,500 64,464 25,036
Public works
-
-
- - - -
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
Capital outlay
-
-
- - - -
Total expenditures
191,750
72,602
119,148 89,500 64,464 25,036
Excess (deficiency) of revenues over expenditures
60,000
24,659
(35,341) - - -
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
Proceeds from the sale of general capital asset dispos
Transfers in
Transfers (out)
Total other financing sources and uses
-
-
Net change in fund balance
60,000
24,659
(35,341)
Fund balances - beginning
15,325
Restatements
-
Fund balances - beginning restated
15,325
Fund balances - ending
39,984
See independent auditor's report.
118
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
EPA Browniields Grant
BROWNFIELDS LOAN REVOLVING
Positive /
Positive /
(Negative)
(Negative)
Budget Actual Variance
Budget Actual Variance
REVENUES
Taxes and assessments
Licenses and permits
- -
- -
Intergovernmental
400,000 21,943 (378,057)
488,407 1,483 (486,924)
Charges for services
- -
- -
Miscellaneous
Investment earnings
- -
- -
Total revenues
400,000 21,943 (378,057)
488,407 1,483 (486,924)
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation -
- - -
-
-
Community Development 400,000
21,943 378,057 588,907
1,483
587,424
Debt service - principal -
- - -
-
-
Debt service - interest
Capital outlay -
- - -
-
-
Total expenditures 400,000
21,943 378,057 588,907
1,483
587,424
Excess (deficiency) of revenues over expenditures -
- - (100,500)
-
100,500
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
Proceeds from the sale of general capital asset dispos
Transfers in
Transfers (out)
Total other financing sources and uses
-
Net change in fund balance
(100,500)
-
100,500
Fund balances - beginning
100,500
Restatements
-
Fund balances - beginning restated
100,500
Fund balances - ending
100,500
See independent auditor's report.
119
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
FIRE GRANTS
HAZMAT GRANT
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget Actual
Variance
REVENUES
Taxes and assessments
Licenses and permits
-
- -
Intergovernmental
202,500
(202,500)
44,167 51,243
7,076
Charges for services
-
- -
-
Miscellaneous
5,200
3,376
(1,824)
- -
-
Investment earnings
-
-
200 403
203
Total revenues
207,700
3,376
(204,324)
44,367 51,646
7,279
EXPENDITURES
Current:
Public safety
5,200
2,685
2,515
61,078
33,773
27,305
Public works
-
-
-
-
-
-
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
-
-
Capital outlay
225,000
-
225,000
-
-
-
Total expenditures
230,200
2,685
227,515
61,078
33,773
27,305
Excess (deficiency) of revenues over expenditures
(22,500)
691
23,191
(16,711)
17,873
34,584
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
Proceeds from the sale of general capital asset dispos
-
Transfers in
18,434
(18,434)
Transfers (out)
-
Total other financing sources and uses
18,434
(18,434)
-
-
Net change in fund balance
(4,066)
691
4,757
(16,711)
17,873
34,584
Fund balances - beginning
4,066
42,913
Restatements
-
-
Fund balances - beginning restated
4,066
42,913
Fund balances - ending
4,757
60,786
See independent auditor's report.
120
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
Total Special Revenue Funds
G.O. BONDS
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
3,270,850
3,276,560
5,710
475,500
473,200
(2,300)
Licenses and permits
430,000
1,098,281
668,281
-
-
-
Intergovernmental
2,982,953
1,443,528
(1,539,425)
9,500
9,433
(67)
Charges for services
1,808,170
2,065,099
256,929
-
-
-
Miscellaneous
41,200
100,635
59,435
-
-
-
Investment earnings
57,765
96,477
38,712
500
1,381
881
Total revenues
8,590,938
8,080,580
(510,358)
485,500
484,014
(1,486)
EXPENDITURES
Current:
Public safety
2,310,713
2,095,915
214,798
Public works
815,384
497,976
317,408
Parks and recreation
1,985,011
1,714,235
270,776
Community Development
7,422,356
565,845
6,856,511
-
-
Debt service - principal
157,881
133,707
24,174
465,000
465,000 -
Debt service - interest
12,809
11,909
900
41,838
41,488 350
Capital outlay
1,753,731
437,506
1,316,225
- -
Total expenditures
14,457,885
5,457,093
9,000,792
506,838
506,488 350
Excess (deficiency) of revenues over expenditures
(5,866,947)
2,623,487
8,490,434
(21,338)
(22,474) (1,136)
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
170,000
129,987
(40,013)
Proceeds from the sale of general capital asset dispos
-
6,750
6,750
Transfers in
96,434
35,000
(61,434)
Transfers (out)
(983,340)
(984,844)
1,504
Total other financing sources and uses
(716,906)
(813,107)
(93,193)
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
(6,583,853) 1,810,380 8,397,241 (21,338) (22,474) (1,136)
11,696,171
(33,934)
11,662,237
13,472,617
38,026
38,026
15,552
121
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
City Hall Debt Service
Airport TIF Debt Service
Positive /
Positive /
(Negative)
(Negative)
Budget Actual Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
174,000
208,074
34,074
Licenses and permits
-
-
-
Intergovernmental
90,000 90,000
Charges for services
- -
Miscellaneous
-
-
-
Investment earnings
- -
1,500
2,914
1,414
Total revenues
90,000 90,000
175,500
210,988
35,488
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation
Community Development
-
-
-
-
Debt service - principal
80,980
80,980
- 150,000
150,000
Debt service - interest
5,768
5,468
300 28,483
28,483
Capital outlay
-
- -
-
Total expenditures
86,748
86,448
300 178,483
178,483 -
Excess (deficiency) of revenues over expenditures
3,252
3,552
300 (2,983)
32,505 35,488
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
- -
Proceeds from the sale of general capital asset dispos
Transfers in
Transfers (out)
Total other financing sources and uses
-
-
-
- -
Net change in fund balance
3,252
3,552
300 (2,983)
32,505 35,488
Fund balances - beginning
7,641
243,224
Restatements
-
-
Fund balances - beginning restated
7,641
243,224
Fund balances - ending
11,193
275,729
See independent auditor's report.
122
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
Westside TIT Debt
SID Revolving
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
-
-
Investment earnings
850
2,929
2,079
Total revenues
850
2,929
2,079
EXPENDITURES
Current:
Public safety
-
-
-
Public works
Parks and recreation
Community Development
-
-
Debt service - principal
14,500
14,500
Debt service - interest
19,516
19,516
Capital outlay
-
-
Total expenditures
34,016
34,016
-
-
-
Excess (deficiency) of revenues over expenditures
(34,016)
(34,016)
850
2,929
2,079
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
Proceeds from the sale of general capital asset dispos
-
-
-
-
Transfers in
32,340
33,844
1,504
390
390
Transfers (out)
-
-
-
-
-
Total other financing sources and uses
32,340
33,844
1,504
-
390
390
Net change in fund balance
(1,676)
(172)
1,504
850
3,319
2,469
Fund balances - beginning
172
285,488
Restatements
-
-
Fund balances - beginning restated
172
285,488
Fund balances - ending
-
288,807
See independent auditor's report.
123
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
S & C's
SID 343
Positive /
Positive /
(Se-ative)
(Negative)
Budget Actual
Variance
Budget Actual Variance
REVENUES
Taxes and assessments
9,291 9,875
584
92,100 92,100
Licenses and permits
- -
-
- -
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
- -
-
- -
Total revenues
9,291 9,875
584
92,100 92,100
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation
Community Development
-
-
-
-
-
Debt service - principal
7,741
7,739
2
80,000
80,000
Debt service - interest
1,529
1,412
117
13,040
11,900
1,140
Capital outlay
-
-
-
-
-
-
Total expenditures
9,270
9,151
119
93,040
91,900
1,140
Excess (deficiency) of revenues over expenditures
21
724
703
(940)
200
1,140
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
-
-
-
-
-
Proceeds from the sale of general capital asset dispos
Transfers in
-
-
-
Transfers (out)
400
(390)
(790)
Total other financing sources and uses
400
(390)
(790)
-
-
-
Net change in fund balance
421
334
(87)
(940)
200
1,140
Fund balances - beginning
426
63,782
Restatements
-
-
Fund balances - beginning restated
426
63,782
Fund balances - ending
760
63,982
See independent auditor's report.
124
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
SID 345
Total Debt Service Funds
Positive /
Positive /
(Se-ative)
(Negative)
Budget Actual
Variance
Budget
Actual
Variance
REVENUES
Taxes and assessments
23,108 22,594
(514)
773,999
805,843
31,844
Licenses and permits
- -
-
-
-
-
Intergovernmental
99,500
99,433
(67)
Charges for services
-
-
-
Miscellaneous
-
-
-
Investment earnings
- -
-
2,850
7,224
4,374
Total revenues
23,108 22,594
(514)
876,349
912,500
36,151
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation
Community Development
-
-
-
-
-
Debt service -principal
26,000
26,000
824,221
824,219
2
Debt service - interest
6,285
6,285
116,459
114,552
1,907
Capital outlay
-
-
-
-
-
Total expenditures
32,285
32,285
940,680
938,771
1,909
Excess (deficiency) of revenues over expenditures
(9,177)
(9,691)
(514) (64,331)
(26,271)
38,060
OTHER FINANCING SOURCES (USES)
Issuance of debt
-
-
Proceeds from the sale of general capital asset dispos
-
-
-
Transfers in
32,340
34,234
1,894
Transfers (out)
400
(390)
(790)
Total other financing sources and uses
- 32,740
33,844
1,104
Net change in fund balance
(9,177)
(9,691)
(514) (31,591)
7,573
39,164
Fund balances - beginning
22,651
661,410
Restatements
-
-
Fund balances - beginning restated
22,651
661,410
Fund balances - ending
12,960
668,983
See independent auditor's report.
125
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
lUdsports Grant
S & C Construction
Positive /
Positive /
(Negative)
(Negative)
Budget
Actual
Variance
Budget Actual Variance
REVENUES
Taxes and assessments
Licenses and permits
-
-
Intergovernmental
1,412,000
850,002
(561,998)
Charges for services
-
-
-
Miscellaneous
740,726
(740,726)
2,010 2,010
Investment earnings
-
- -
Total revenues
2,152,726
850,002
(1,302,724)
2,010 2,010
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest
- -
-
-
-
Capital outlay
850,002 850,002
25,000
6,310
18,690
Total expenditures
850,002 850,002
25,000
6,310
18,690
Excess (deficiency) of revenues over expenditures
1,302,724 - (1,302,724)
(25,000)
(4,300)
20,700
OTHER FINANCING SOURCES (USES)
Issuance ofdebt
-
25,000
4,300
(20,700)
Proceeds from the sale of general capital asset dispos
-
-
Transfers in
Transfers (out)
-
-
Total other financing sources and uses
-
25,000
4,300
(20,700)
Net change in fund balance
1,302,724 (1,302,724)
-
-
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report
126
REVENUES
Taxes and assessments
Licenses and permits
Intergovernmental
Charges for services
Miscellaneous
Investment earnings
Total revenues
City of Kalispell, Montana
Budgetary Comparison Schedule
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
Total Capital Project Funds
Positive /
(Negative)
Budget Actual Variance
1,412,000
850,002
(561,998)
740,726
2,010
(738,716)
2,152,726
852,012
(1,300,714)
EXPENDITURES
Current:
Public safety
Public works
Parks and recreation
Community Development
Debt service - principal
Debt service - interest - - -
Capital outlay 875,002 856,312 18,690
Total expenditures 875,002 856,312 18,690
Excess (deficiency) of revenues over expenditures 1,277,724 (4,300) (1,282,024)
OTHER FINANCING SOURCES (USES)
Issuance ofdebt 25,000 4,300
Proceeds from the sale of general capital asset dispos - -
Transfers in
Transfers (out) - -
Total other financing sources and uses 25,000 4,300
Net change in fund balance
Fund balances - beginning
Restatements
Fund balances - beginning restated
Fund balances - ending
See independent auditor's report.
(20,700)
1,302,724 - (1,302,724)
127
AIRPORT ENTERPRISE — Accounts for all monies received and expensed in the
operation of the City airport.
SOLID WASTE — Accounts for assessments received and expenses incurred in the
operation of the City solid waste department.
City of Kalispell, Montana
Combining Statement of Net Positon
Nonmajor Proprietary Funds
June 30, 2017
Airport Enterprise
Solid Waste
Totals
ASSETS
Current assets:
Cash and investments
$
164,687
$ 1,048,093
$ 1,212,780
Taxes and assessments receivable, net
-
23,299
23,299
Accounts receivable - net
2,121
-
2,121
Due from other governments
-
79,141
79,141
Prepaids
-
26,650
26,650
Total current assets
$
166,808
$ 1,177,183
$ 1,343,991
Noncurrent assets:
Capital assets (net of accumulated depreciation):
Land
1,359,545
-
1,359,545
Depreciable
811,742
736,864
1,548,606
Total noncurrent assets
$
2,171,287
$ 736,864
$ 2,908,151
Total assets
$
2,338,095
$ 1,914,047
$ 4,252,142
DEFERRED OUTFLOWS OF RESOURCES
Pension plan subsequent contributions/changes
-
54,316
54,316
Total deferred outflows of resources
$
-
$ 54,316
$ 54,316
LIABILITIES
Current liabilities:
Accounts payable
$
190
$ 11,277
$ 11,467
Accrued payroll
-
7,996
7,996
Bonds and notes - capital
38,728
38,728
Compensated absences payable
-
56,008
56,008
Total current liabilities
190
114,009
114,199
Noncurrent liabilities:
Bonds and notes - capital
-
39,121
39,121
Compensated absences payable
-
40,367
40,367
Net pension liability
-
332,002
332,002
Total noncurrent liabilities
-
411,490
411,490
Total liabilities
$
190
$ 525,499
$ 525,689
DEFERRED INFLOWS OF RESOURCES
Pension -dill. between projected and actual earnings
$
-
$ 2,145
$ 2,145
Total deferred inflows of resources
$
-
$ 2,145
$ 2,145
NET POSITION
Net investment in capital assets
$
2,171,287
$ 659,015
$ 2,830,302
Unrestricted
166,618
781,704
948,322
Total net position
$
2,337,905
$ 1,440,719
$ 3,778,624
See independent auditor's report
128
City of Kalispell, Montana
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position
Nonmajor Proprietary Funds
For the Fiscal Year Ended June 30, 2017
Airport
Enterprise
Solid Waste
Totals
OPERATING REVENUES
Charges for services
$
78,159
$
1,005,786
$
1,083,945
Total operating revenues
$
78,159
$
1,005,786
$
1,083,945
OPERATING EXPENSES
Personal services
$
-
$
476,020
$
476,020
Supplies
-
84,050
84,050
Purchased services
49,337
29,888
79,225
Fixed charges
11,065
139,149
150,214
Depreciation
95,474
141,397
236,871
Total operating expenses
$
155,876
$
870,504
$
1,026,380
Operating income (loss)
$
(77,717)
$
135,282
$
57,565
NONOPERATING REVENUES (EXPENSES)
Intergovernmental revenue
$
-
$
6,157
$
6,157
Interest revenue
1,789
8,504
10,293
Gain (loss) sale of capital asset
-
15,700
15,700
Debt service interest expense
-
(1,657)
(1,657)
Total non -operating revenues (expenses)
$
1,789
$
28,704
$
30,493
Income (loss) before contributions and transfer
$
(75,928)
$
163,986
$
88,058
Transfers (out)
$
-
$
(35,000)
$
(35,000)
Change in net position
$
(75,928)
$
128,986
$
53,058
Net Position - beginning of the year
$
2,413,833
$
1,311,733
$
3,725,566
Net Position - end of the year
$
2,337,905
$
1,440,719
$
3,778,624
See independent auditor's report.
129
City of Kalispell, Montana
Combining Statement of Cash Flows
Nonmajor Proprietary Funds
Year Ended June 30, 2017
Cash flows from operating activities:
Cash received from customers
Cash payments for claims
Cash payments to employees
Net cash provided (used) by operating activities
Cash flows from capital and related financing activities:
Principal paid on bonds, loans and advances
Interest paid on bonds, loans and advances
Acquisition and construction of capital assets
Proceeds from the disposal of capital assets
Net cash provided (used) by capital and related financing activities
Cash flows from non -capital financing activities:
Transfers between funds
Net cash provided (used) from non -capital financing activities
Cash flows from investing activities:
Interest on investments
Net cash provided (used) by investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning
Restatement
Cash and cash equivalents at end
Reconciliation of operating income (loss) to net cash provided
(used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:
Depreciation
Changes in assets and liabilities:
Accounts receivable - net
Taxes and assessments receivable, net
Due from county
Comp absences
Accounts payable
Prepaid Expenses
Accrued payroll
Pension expens adjustment
Net cash provided (used) by operating activities
See Independent Audits Report
Solid Waste
Enterprise
Totals
$ 76,362
$ 1,017,365
$ 1,093,727
(60,476)
(241,199)
(301,675)
-
(517,829)
(517,829)
$ 15,886
$ 258,337
$ 274,223
$
$ (38,343)
$ (38,343)
(1,657)
(1,657)
(45,405)
(45,405)
15,700
15,700
$
$ (69,705)
$ (69,705)
$
$ (35,000)
$ (35,000)
$
$ (35,000)
$ (35,000)
$ 1,789
$ 8,503
$ 10,292
$ 1,789
$ 8,503
$ 10,292
$ 17,675
$ 162,135
$ 179,810
147,012
885,958
1,032,970
$ 164,687
$ 1,048,093
$ 1,212,780
$ (77,717)
$ 135,282
$ 57,565
95,474
141,397
236,871
(1,797)
-
(1,797)
14,398
14,398
(2,819)
(2,819)
-
13,803
13,803
(74)
5,466
5,392
-
6,422
6,422
(6,920)
(6,920)
-
(48,692)
(48,692)
$ 15,886
$ 258,337
$ 274,223
130
COMBINING AND INDIVIDUAL
FUND STATEMENTS
AGENCY FUNDS
KPD EVIDENCE — Accounts for monies and property confiscated and/or retained as
evidence.
TBID CLEARING — Accounts for monies received for and due to the Tourism Business
Improvement District.
PAYROLL CLEARING — Accounts for payroll deductions and expenses payable to
other agencies and vendors.
PERFORMANCE BONDS — Accounts for monies held by the City as a guarantee of
performance by developers or vendors.
City of Kalispell, Montana
Combining Statement of Fiduciary Net Position
Agency Funds
June 30,2017
KPD EVIDENCE
TBID Clearing
Payroll Clearing
Performance
Totals
ASSETS
Current assets:
Cash and investments
$
10,207
2,600
$ 82,134
$ 16,603
$
111,544
Total assets
$
10,207
2,600
$ 82,134
$ 16,603
$
111,544
LIABILITIES
Current liabilities:
Due to others
$
10,207
2,600
$ 82,134
$ 16,603
$
111,544
Total liabilities
$
10,207
2,600
$ 82,134
$ 16,603
$
111,544
See independent auditor's report
131
City of Kalispell, Montana
Combined Statement of Changes in Assets and Liabilities
Agency Funds
For the Fiscal Year Ended June 30, 2017
KPD Evidence
Balance 7/1/16
Additions
Deletions
Balance 6/30/16
ASSETS
Current assets:
Cash and investments
$
-
11,875
(1,668)
$ 10,207
Total assets
-
11,875
(1,668)
10,207
LIABILITIES
Current liabilities:
Due to others
$
-
11,875
(1,668)
$ 10,207
Total liabilities
$
-
11,875
(1,668)
$ 10,207
Payroll Clearing
Balance 7/1/16
Additions
Deletions
Balance 6/30/17
ASSETS
Current assets:
Cash and investments
$
534,512
8,930,928
(9,383,306)
$ 82,134
Total assets
534,512
8,930,928
(9,383,306)
82,134
LIABILITIES
Current liabilities:
Due to others
$
534,512
8,930,928
(9,383,306)
$ 82,134
Total liabilities
$
534,512
8,930,928
(9,383,306)
$ 82,134
Performance Bonds
Balance 7/1/16
Additions
Deletions
Balance 6/30/17
ASSETS
Current assets:
Cash and investments
$
13,853
9,289
(6,539)
$ 16,603
Total assets
$
13,853
9,289
(6,539)
$ 16,603
LIABILITIES
Current liabilities
Due to others
$
13,853
9,289
(6,539)
$ 16,603
Total liabilities
$
13,853
9,289
(6,539)
$ 16,603
Tourism Business Improvement District
Balance 7/1/16
Additions
Deletions
Balance 6/30/17
ASSETS
Current assets:
Cash and investments
$
2,996
594,772
(595,168)
$ 2,600
Total assets
$
2,996
594,772
(595,168)
$ 2,600
LIABILITIES
Current liabilities:
Due to others $ 2,996 594,772 (595,168) $ 2,600
Total liabilities $ 2,996 594,772 (595,168) $ 2,600
See independent auditor's report.
132
This part of the City of Kalispell's financial report presents detailed information as a
context for understanding what the information in the financial statements, note
disclosure and required supplementary information says about the government's overall
financial health.
Contents
Financial Trends
These schedules contain trend information to help the reader understand how the
government's financial performance and well-being have changed over time
Revenue Capacity
These schedules contain information to help the reader assess the government's
most significant local revenue source, the property tax.
Debt Capacity
These schedules present information to help the reader assess the affordability of
the government's current level of outstanding debt and the government's ability to
issue additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the government's financial activities
take place.
Operating Information
These schedules contain service and infrastructure data to help the reader
understand how the information in the government's financial report relates to the
services the government provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the City of Kalispell annual
financial report for the relevant year.
Note: The City of Kalispell implemented GASB Statement 34 in fiscal year 2003, therefore the data for prior years are
not shown; schedules presenting government -wide information include information beginning in that year.
FINANCIAL, TRENDS
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Unaudited statistical section
133
CITY OF KALISPELL, MONTANA
CHANGES IN NET POSITION
Put Tea Fiscal Years
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Expenses
Governmental activities:
General government
7,230,428
6,78,754
5,149,809
5,310,274
6,995,454
6,709,523
5,688,135
5,401,242
5,823,]6]
5,841,]]5
Pudic Safety
9,608,419
8,%2,M2
9,015,732
8,729,290
8,536,332
9,293,138
9,269,82/
9,575,487
9,113,674
10,968,010
Pudic Works
2,326,750
2,327,255
3,201,811
3,306,165
2,844,001
3,074,630
2,573,627
2,73,097
2,581,002
2,660,513
Parks and recreation
2,302,240
2,00ol68
1,860,308
1,845,939
1,913,920
1,991,585
2,123,237
2,062,669
2,057,468
2,184,222
Community Development
979,002
1,012,555
1,629,656
2,033,880
1,426,3]]
3,616,337
1,601,170
683,164
928,661
853,455
Interest
701,786
672,386
627,678
580,361
390,]]0
357,857
331,811
286,401
242,110
Total governmental activities expenses
$ 23,148,625 $
21,762,380 $
21,484,994 $
21,805,909 $
21,716,084 $
25,075,984 $
21,613,853 $
20,827,470 $
20,]90,9]3 $
22,750,085
Business -type activities
Airport
202,122
204,842
176,702
214,636
217,616
225,974
1]],751
154,715
154,091
155,876
Water
2,394,777
2,597,419
2,638,011
2,689,293
2,592,628
2,660,8]]
2,625,046
2,542,119
2,657,816
2,734,979
S-
4,716,788
5,354,062
5,976,393
5,882,868
5,564,219
5,255,654
5,114,591
5,0]],643
5,204,622
4,955,925
Solid Waste
762,782
]]2,132
801,909
718,139
749,481
783,967
812,650
816,686
880,679
8'R,161
Total business -type activities expenses
8,076,469
8,928,455
9,593,015
9,504,936
9,123,944
8,926,472
8,730,038
8,591,163
8,897,208
8,718,941
Total primary government expenses
$ 31,225,094 $
30,690,835 $
31,078,009 $
31,310,845 $
30,840,028 $
34,002,456 $
30,343,891 $
29,418,633 $
29,08,181 $
31,469,026
Program Revenues
Governmental activities:
Charges for servces:
General government
621,250
829,925
951,940
1,039,553
865,223
669,964
628,7N
684,550
892,578
]89,16]
Public Safety
2,441,2/4
1,86/,539
1,622,104
1,678,825
1,753,969
1,928,011
2,033,870
1,W3,898
2,219,795
3,155,476
Public Works
2,269,]]0
2,604,731
2,098,848
2,312,530
2,2M,02/
2,201,616
2,172,122
2,463,435
2,672,473
2,885,492
Parks and recreation
754,025
547,874
624,158
592,868
619,634
711,969
752,460
728,165
730,928
716,491
Community Development
507,699
228,989
136,598
28,161
b3,088
170,429
283,134
153,431
88,252
66,393
Operating grants and contributions
2,108,149
2,074,401
3,768,083
3,588,307
2,554,322
2,688,746
2,636,321
1,838,425
1,354,890
1,470,485
Capital grants and contributions
6,318,780
6,551,018
2,284,267
3,351,562
1,385,939
1,378,649
1,519,825
3,232,618
942,125
1,544,350
Total governmental activities program n venues
$ 15,020,947 $
14,704,477 $
11,485,9% $
12,591,806 $
9,648,202 $
9,749,384 $
10,026,461 $
11,074,522 $
8,901'"1 $
10,627,854
Business -type activities
Charges for seances:
Airport
91,958
]2,3]3
70,694
70,900
]6,5]2
75,813
]8,65]
79,091
72,623
74,228
Water
2,722,421
2,562,50
2,624,521
2,296,594
2,430,380
2jt0,512
2,985,959
3,018,276
3,535,072
3,891,449
s-
4,IW,508
4,163,757
4,129,271
4,124,020
4,554,155
4,9]],286
4,967,223
5,141,284
5,543,740
7,485,750
Solid Waste
709,514
758,236
76/,404
805,613
851,563
900,643
951,676
973,393
988,145
1,005,786
Operating grants and contributions
10,465
2,416
8,354
8,372
21,M1
137,048
32,653
Capital grants and contributions
9,486,451
1,257,291
1,280,807
888,609
6/9,690
1,012,027
2,137,9]]
1,0%,222
3,338,669
131,626
Total business -type activities program revenues
17,125,317
8,814.226
8,872,697
8,185,736
8,594,]]6
9,714,635
11,129,864
10,337,987
13,615,297
12,621,492
Total primary government program revenues
$ 32,146,264 $
23,518,703 $
20,358,695 $
20,77,542 $
18,1t2,978 $
19,464,019 $
21,156,325 $
21,412,509 $
22,516,338 $
23,b 9,346
Net (Expense)/Revenue
Governmental activities (8,127,678) (7,057,903) (9,W8,996) (9,214,103) (12,067,881) (15,326,600) (11,587,392) (9,752,948) (11,889,932) (12,122,231)
Business -type activities 9,M,848 (114,229) (720,318) (1,319,200) (529,168) 788,163 2,399,826 1,746,824 4,718,089 3,902,551
Total primary government net expense $ 921,170 $ (7,172,132) $ (10,719,314) $ (10,533,303) $ (12,5W,049) $ (14,538,437) $ (9,187,566) $ (8,006,124) $ (7,171,843) $ (8,219,680)
General Revenues and Other Charges in Net Position
Governmental activities:
Taxes
Property taxes
5,8b,984
6,252,363
6,370,333
7,563,944
7,469,W2
8,W2,684
8,739,807
7,584,]]5
M57,904
8,848,481
Misc.
98,469
106,783
151,062
184,781
189,921
111,048
200,015
Investment earnings
278,957
159,208
106,799
81,041
130,836
]1,5]3
48,193
72,531
105,557
159,362
Grants and entitlements not restricted
2,221,506
2,223,398
2,W8,937
2,316,980
2,603,949
2,657,356
2,835,264
3,134,703
3,132,559
3,184,831
Gas Tax
342,2M
354,678
361,349
366,904
361,157
3W,650
3M,563
3M,622
30,749
371,303
Gain (I-) sale of capital assets
(392)
(212,127)
11,610
]8,49]
22,183
Transfers
415,503
(194,558)
(112,574)
27,188
(358,169)
(218,728)
(65,000)
35,000
35,000
Total governmental activities
$ 9,083,176 $
8,989,647 $
9,252,40 $
10,314,764 $
10,487,758 $
10,975,156 $
11,953,880 $
11;293,162 $
12,190,314 $
12,821,175
Business -type activities:
Investment earnings
832,296
467,038
228,143
163,907
142,299
102,311
83,2b
113,963
132,339
227,052
Gain (I-) sale of capital assets
(41,786)
-
46,710
(3,091)
-
Other
(312,]36)
-
2,101
140,616
19,631
Transfers
(415,503)
194,558
112,574
358,169
218,728
65,000
(35,000)
(35,000)
Total business -type activities
$ 416,793 $
467,038 $
422,701 $
(36,255) $
100,513 $
460,480 $
301,952 $
227,]]4 $
234,861 $
211,683
Total primary government
$ 9,4W,969 $
9,456,685 $
9,675,169 $
10,278,509 $
10,588,271 $
11,435,636 $
12,255,832 $
11,520,936 $
12,425,178 $
13,032,858
Change in Net Position
Governmental activities
955,498
1,931,744
(746,528)
1,100,661
(1,580,123)
(4,351,444)
366,488
1,540,214
300,382
6%,944
Business -type activities
9,465,641
352,809
(297,617)
(1,355,455)
(428,655)
1,248,643
2,701,]]8
1,974,598
4,952,953
4,114,234
Total primary government
$ 10,421,139 $
2,284,553 $
(1,044,145) $
(254,W4) $
(2,008,]]8) $
(3,102,801) $
3,00,266 $
3,514,812 $
5,253,335 $
4,813,178
Unaudited statistical section
134
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Unaudited statistical section
135
CITY OF KALISPELL, MONTANA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
Past Ten Fiscal Years
(modified accrual basis of accounting)
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Revenues
Taxes and assessments
6,879,980
7,367,487
8,085,877
8,301,367
8,857,628
8,915,749
8,735,146
11,275,636
9,324,431
12,456,526
Licenses and permits
729,230
328,040
325,787
323,271
395,211
330,807
423,354
381,045
664,391
1,229,925
Intergovernmental
4,718,521
5,184,134
7,366,576
7,865,669
6,142,095
6,882,344
6,405,255
5,406,703
5,743,188
6,314,835
Charges for services
4,669,634
4,778,786
4,817,847
4,740,643
4,511,738
4,339,260
4,386,312
4,630,575
4,935,344
3,006,507
Fines and forfeitures
554,518
489,108
497,126
549,267
539,579
585,906
572,066
538,234
495,347
454,547
Miscellaneous
527,108
201,852
252,339
251,458
147,907
129,351
184,272
188,615
288,652
138,075
I nvestment earnings
278,957
159,208
106,800
79,484
78,076
71,572
48,193
72,528
105,557
159,363
Total revenues
18,357,948
18,508,615
21,452,352
22,111,159
20,672,234
21,254,989
20,754,598
22,493,336
21,556,910
23,759,778
Expenditures
General government
2,634,295
2,437,743
2,565,522
2,532,377
3,409,323
2,512,714
2,893,332
2,623,226
2,991,835
2,495,710
Public safety
9,195,960
8,569,405
8,851,001
8,332,769
8,044,589
8,820,726
8,755,082
9,115,952
9,540,699
10,873,610
Public works
2,194,497
2,210,238
2,761,933
3,039,460
2,673,729
2,904,562
2,376,067
2,672,152
2,191,012
2,327,678
Parks and recreation
1,854,149
1,590,360
1,453,215
1,385,997
1,439,646
1,519,173
1,664,595
1,608,497
1,550,843
1,714,235
Community development
970,861
1,018,756
1,622,982
2,034,606
1,355,200
3,616,337
1,601,170
685,018
923,170
853,455
Capital outlay
2,480,415
1,804,037
949,400
1,944,635
1,075,598
1,701,728
1,201,998
560,750
930,636
1,792,584
Debt service:
Principal
1,928,305
1,088,314
1,125,928
1,059,505
5,243,827
1,259,716
1,264,227
1,330,057
1,880,720
1,294,872
Interest
701,786
672,386
627,678
580,361
639,724
390,770
357,857
331,811
286,401
242,110
Total expenditures
21,960,268
19,391,239
19,957,659
20,909,710
23,881,636
22,725,726
20,114,328
18,927,463
20,295,316
21,594,254
Excess of revenues
over (under) expenditures
(3,602,320)
(882,624)
1,494,693
1,201,449
(3,209,402)
(1,470,737)
640,270
3,565,873
1,261,594
2,165,524
Other Financing Sources (Uses)
Transfers in
1,529,504
1,290,617
1,740,512
1,229,303
1,414,504
1,512,214
1,639,721
2,201,276
2,022,611
1,020,234
Transfers out
(1,194,291)
(1,290,617)
(1,740,512)
(1,229,303)
(1,414,504)
(1,512,214)
(1,639,721)
(2,176,276)
(1,987,611)
(985,234)
Issuance of debt
2,162,081
8,980
7,629
100,462
4,821,585
243,680
403,623
124,040
461,833
134,287
Sales of capital assets
3,317
6,029
233,637
11,610
93,272
26,513
Bond premium
52,763
Total other financing sources (uses)
2,500,611
15,009
7,629
100,462
5,107,985
243,680
403,623
160,650
590,105
195,800
Net change in fund balances (1,101,709) (867,615) 1,502,322 1,301,911 1,898,583 (1,227,057) 1,043,893 3,726,523 1,851,699 2,361,324
Debt service as a percentage of
noncapdalexpenditures 13.50% 10.01% 9239,o 8.65% 25.80% 7.85°,o 8.58% 9.05% 11.199,o 7.769,o
Unaudited statistical section
136
I *A CLUVROMMIMIT49M
CITY OF KALISPELL, MONTANA
MARKET VALUE OF TAXABLE PROPERTY
Past Ten Fiscal Years
(in thousands of dollars)
Fiscal
Taxable
Year
Real
Less
Total
Total
Estimated
Value as a
Ended
Taxable
Tax
Taxable
Direct
Market
Percentage
June 30,
Value
Increment
Valuation
Tax Rate
Value
of Market Value
2008
$35,810
$
923
$
34,887
162.85
$1,148,125
3.04%
2009
$37,850
$
1,341
$
36,509
170.23
$1,190,541
3.07%
2010
$39,522
$
1,540
$
37,982
169.81
$1,269,511
2.99%
2011
$41,074
$
1,626
$
39,448
170.34
$1,360,162
2.90%
2012
$41,785
$
1,716
$
40,069
175.93
$1,413,041
2.84%
2013
$40,531
$
1,515
$
39,016
185.60
$1,450,786
2.69%
2014
$40,798
$
1,464
$
39,334
185.10
$1,506,125
2.61 %
2015
$41,761
$
2,240
$
39,521
187.80
$1,587,574
2.49%
2016
$38,953
$
1,000
$
37,953
205.60
$2,294,128
1.65%
2017
$39,229
$
1,211
$
38,018
212.70
$2,307,546
1.65%
Source:
Flathead County and
Montana Department
of Revenue
Note: Assessed by Montana
Department of Revenue every other
year
Unaudited statistical section
137
CITY OF KALISPELL, MONTANA
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Past Ten Fiscal Years
(rate per $1000 of assessed value)
City of Kalispell
Overlapping Rates
Fiscal
General
Total
Year
Obligation
Direct
Kalispell
Ended
Basic
Health
Debt
Tax
School
Community
Flathead
State
June 30,
Rate
Insurance
Service
Rate
District
College
County
Ed.
2008
132.60
14.75
15.50
162.85
334.47
15.01
119.96
46.00
2009
138.76
16.22
15.25
170.23
334.05
15.43
104.51
46.00
2010
140.11
15.20
14.50
169.81
333.79
15.69
113.12
46.00
2011
141.50
14.64
14.20
170.34
333.52
15.96
122.77
46.00
2012
145.88
16.55
13.50
175.93
333.48
16.00
125.69
46.00
2013
154.60
18.50
12.50
185.60
333.96
15.52
125.96
46.00
2014
154.10
18.50
12.50
185.10
333.68
15.80
124.94
46.00
2015
156.80
18.50
12.50
187.80
332.58
16.90
128.88
46.00
2016
170.10
23.00
12.50
205.60
363.75
18.99
145.03
46.00
2017
174.20
26.00
12.50
212.70
348.07
21.45
148.18
46.00
Source: Flathead County
Unaudited statistical section
138
CITY OF KALISPELL, MONTANA
PRINCIPAL PROPERTY TAX PAYERS
Current Year, and Six Years Ago
2017
2011
Percentage
Percentage
of Total City
of Total City
Taxable
Taxable
Taxable
Taxable
taxpayer
Value
Rank
Value
Value
Rank
Value
CENTURYLINK INC
1,860,308
1
4.74%
1,116,553
2
2.67%
FLATHEAD ELECTRIC COOPERATIVE INC
1,772,106
2
4.52%
2,699,165
1
6.46%
NORTHWESTERN CORP TRANSMISSION & DISTRIBUTION
944,534
3
2.41%
481,270
4
1.15%
FLATHEAD HOSPITAL DEVELOPMENT COMPANY LLC
508,052
4
1.30%
571,673
3
1.37%
TKG MOUNTAIN VIEW PLAZA LLC
374,458
5
0.95%
CHARTER COMMUNICATIONS INC
373,742
6
0.95%
WAL-MART ESTATE BUSINESS TRUST
352,534
7
0.90%
333,699
6
0.80%
CROWN ENTERPRISES INC (SPORTSMANS)
251,977
8
0.64%
NORTHWEST HORIZONS INC 59.9% (DAYS INN)
219,776
9
0.56%
STATE OF MONTANA DNRC
215,132
10
0.55%
TARGET CORPORATION
216,632
8
0.52%
HD DEVELOPMENT OF MARYLAND INC (HOME DEPOT)
187,013
10
0.45%
RED LION HOTELS LIMITED PARTNERSHIP
400,451
5
0.96%
KALISPELL HOTEL LLC
227,030
7
0.54%
VERIZON WIRELESS
187,883
9
0.45%
Total
6,872,619
17.52%
6,421,369
15.37%
Total City Taxable Assessed Value
Source: Flathead County
Unaudited statistical section
139
CITY OF KALISPELL, MONTANA
PROPERTY TAX LEVIES AND COLLECTIONS
Past Ten Fiscal Years
Fiscal
Collected within the
Year
Taxes Levied
Fiscal Year
of the Levy
Collections
Total Collections
to Date
Ended
for the
Percentage
in Subsequent
Percentage
June 30,
Fiscal Year
Amount
of Levy
Years
Amount
of Levy
2008
5,831,659
5,614,138
96.27%
107,314
5,721,452
98.11%
2009
6,214,927
5,883,671
94.67%
274,773
6,158,444
99.09%
2010
6,449,723
6,036,354
93.59%
411,906
6,448,260
99.98%
2011
6,719,572
6,182,842
92.01%
535,190
6,718,032
99.98%
2012
7,049,515
6,847,410
97.13%
201,156
7,048,566
99.99%
2013
7,241,555
6,817,096
94.14%
439,087
7,256,183
100.20%
2014
7,280,909
6,986,904
95.96%
277,536
7,264,440
99.77%
2015
7,422,232
7,179,788
96.73%
231,586
7,411,374
99.85%
2016
7,803,137
7,453,486
95.52%
315,814
7,769,300
99.57%
2017
9,020,188
8,612,172
95.48%
n/a
8,612,172
95.48%
Source: Flathead County
Unaudited statistical section
140
CITY OF KALISPELL, MONTANA
WATER SOLD BY TYPE OF CUSTOMER
Past Ten Fiscal Years
(in thousands of gallons)
Type of Customer
Residential
620,857
565,060
506,020
509,575
545,349
475,419
Commercial
556,018
527,405
540,942
515,959
495,461
544,564
Total
1,176,875
1,092,465
1,046,962
1,025,534
1,040,810
1,019,983
Total direct rate
$ 2.05
$ 2.29
$ 2.30
$ 2.06
$ 2.14
$ 2.49 $
per 1000 gallons
SEWER SOLD BY TYPE OF CUSTOMER
Past Ten Fiscal Years
(in thousands of gallons)
2014
2015
2016
2017
587,018
625,397
759,788
648,231
494,608
516,693
644,066
538,038
1,081,626
1,142,090
1,403,854
1,186,269
2.55 $
2.43 $
2.30 $
2.43
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Type of Customer
Residential
361,875
354,477
357,747
332,977
331,165
367,916
365,731
364,397
424,171
409,063
Commercial
544,071
519,402
521,204
449,167
527,307
538,810
482,325
497,854
527,792
507,824
Total
905,946
873,879
878,951
782,144
858,472
906,726
848,056
862,251
951,963
916,887
Total direct rate
$ 3.77
$ 4.22 $
3.79
$ 4.20
$ 4.37
$ 4.61 $
4.87 $
4.95 $
4.87 $
4.85
per 1000 gallons
Source: City of Kalispell Finance Department
Unaudited statistical section
141
Fiscal
Year
Ended
June 30,
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
CITY OF KALISPELL, MONTANA
WATER AND SEWER RATES
Water
Monthly
Base
Rate
in city out of city
$ 1.88 2.34
$ 1.88 2.35
$ 1.88 2.35
$ 1.88 2.35
$ 1.88 2.35
$ 4.69 5.86
$ 7.50 9.38
$ 7.50 9.38
$ 7.50 9.38
$ 7.50 9.38
Rate per
1000
Gallons
in city out of city
$ 2.43 3.04
$ 2.43 3.04
$ 2.43 3.04
$ 2.43 3.04
$ 2.43 3.04
$ 2.43 3.04
$ 2.43 3.04
$ 2.43 3.04
$ 2.43 3.04
$ 2.43 3.04
Irrigation (sprinkling)
Monthly
Rate per
Base
1000
Rate
Gallons
in city out of city
in city out of city
$ 1.88
2.35
$ 1.55
1.94
$ 1.88
2.35
$ 1.55
1.94
$ 1.88
2.35
$ 1.55
1.94
$ 1.88
2.35
$ 1.55
1.94
$ 1.88
2.35
$ 1.55
1.94
$ 4.69
5.86
$ 1.55
1.94
$ 7.50
9.38
$ 1.55
1.94
$ 7.50
9.38
$ 1.55
1.94
$ 7.50
9.38
$ 1.55
1.94
$ 7.50
9.38
$ 1.55
1.94
Some custormers pay to install a separate irrigation meter and
are then billed actual meter readings for their irrigation use.
The City also bills customers a "sprinkling" rate based off of an
average usage in the 'hinter months" deduction.
Sources: City of Kalispell, Resolutions 4798/4799/5491
Sewer
Monthly
Base
Rate
in city out of city
$ 1.88
2.35
$ 1.88
2.35
$ 1.88
2.35
$ 4.69
5.86
$ 7.50
9.38
$ 7.50
9.38
$ 7.50
9.38
$ 8.44
10.55
$ 8.44
10.55
$ 8.44
10.55
Rate per
1000
Gallons
in city out of city
$ 4.19
5.24
$ 4.19
5.24
$ 4.19
5.24
$ 4.19
5.24
$ 4.19
5.24
$ 4.78
5.98
$ 4.78
5.98
$ 4.78
5.98
$ 4.78
5.98
$ 4.78
5.98
Flathead County Water & Sewer District #1
- Evergreen
Monthly
Rate per
Base
1000
Rate
Gallons
Evergreen"
Evergreen"
1.47
1.63
1.85
1.76
1.48
1.67
1.74
1.78
11243.28
2.69
12,024.00
2.76
"Evergreen has its own collections system and
only uses the City's sewage treatment plant,
which results in a reduced charge. The City
bills the district, which in turn bills the users
within the district. The district is counted as
1 sewer connection.
Unaudited statistical section
142
1010 loll
CITY OF KALISPELL, MONTANA
RATIOS OF OUTSTANDING DEBT BY TYPE
Past Ten Fiscal Years
Governmental Activities
Business -Type Activities
Fiscal
Year
General
Special
Total
Percentage
Ended
Obligation
Notes
Revenue
Assessment
Revenue
Notes
Primary
of Personal
Per
June 30,
Bonds
Payable
Bonds
Bonds
Bonds
Payable
Government
Income
Capita
2008
5,475,000
3,303,829
153,073
5,079,534
19,471,713
33,483,149
4.74%
$ 1,648.60
2009
5,145,000
3,062,562
78,876
4,760,665
22,193,000
35,240,103
4.68 %
$ 1,660.62
2010
4,805,000
2,833,340
1,445,000
4,410,462
19,541,000
33,034,802
4.61 %
$ 1,526.56
2011
4,450,000
2,682,566
1,325,000
4,077,194
18,410,000
30,944,760
4.43 %
$ 1,552.91
2012
4,145,000
2,422,191
1,700,000
3,845,329
17,333,000
29,445,520
4.03 %
$ 1,453.67
2013
3,700,000
2,380,835
1,558,000
3,457,647
15,938,483
27,034,965
3.43 %
$ 1,319.62
2014
3,255,000
2,177,968
1,410,000
3,392,922
15,667,682
172,988
26,076,560
325 %
$ 1,243.40
2015
2,805,000
1,893,621
1,257,000
3,074,242
14,434,000
154,155
23,618,018
2.82 %
$ 1,097.59
2016
2,350,000
1,401,475
1,098,000
2,761,499
13,341,000
116,192
21,068,166
2.45 %
$ 955.39
2017
1,885,000
1,204,829
933,500
2,427,060
12,287,096
77,849
18,815,334
1.95 %
$ 826.65
Source:
City Manager's Recommended Budget
City of Kalispell Finance Department
Unaudited statistical section
143
CITY OF KALISPELL, MONTANA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
Past Ten Fiscal Years
General Bonded Debt Outstanding
Percentage
Fiscal
of Actual
Year
General
Special
Externally
Net
Taxable
Ended
Obligation
Assessment
Restricted
Bonded
Value of
Per
June 30,
Bonds
Bonds
for Repayment
Debt
Property
Capita
2008
5,475,000
5,079,534
541,525
10,013,009
28.7%
$
471.84
2009
5,145,000
4,760,665
371,873
9,533,792
26.1%
$
440.56
2010
4,805,000
4,410,462
541,525
8,673,937
22.8%
$
435.29
2011
4,450,000
4,077,194
531,075
7,996,119
20.3%
$
394.75
2012
4,145,000
3,845,329
414292
7,576,037
18.9%
$
369.80
2013
3,700,000
3,457,647
349,694
6,807,953
17.4%
$
332.31
2014
3,255,000
3,392,922
172267
6,475,655
16.5%
$
308.78
2015
2,805,000
3,074242
531,588
5,347,654
13.5%
$
248.52
2016
2,350,000
2,761,499
765,985
4,345,514
11.4%
$
197.06
2017
1,885,000
2,427,060
637,055
3,675,005
9.7%
$
161.46
Source:
City Manager's Recommended Budget
Montana Department of Revenue
Montana Department of Labor and
Industry,
Quarterly Census
of Employment
and Wages (QCEW) Program
Unaudited statistical section
144
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Unaudited statistical section
145
CITY OF KALISPELL, MONTANA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
June 30, 2017
Estimated
Estimated
Share of
Debt Percentage
Overlapping
Governmental Unit Outstanding Applicable (1)
Debt
Overlapping General Obligation Debt:
Flathead County
5,125,000
16.83%
862,363
Flathead Valley Community College
8,475,000
16.83%
1,426,054
Kalispell High School
32,520,000
33.27%
10,819,609
Kalispell Elementary
7,705,000
100.00%
7,705,000
West Valley Elementary
6,250,000
39.02%
2,438,597
City direct debt
5,907,868
100.00%
$ 5,907,868
Total direct and overlapping debt
29,159,492
Sources: Assessed value data used to estimate applicable percentages was provided by the State of
Montana, Department of Revenue. Debt outstanding data was provided by each governmental unit.
Note: Overlapping governments ar those that coincide, at least in part, with the geographic boundaries of
the City. This schedule extimates the portion of the outstanding debt of those overlapping governments that
is borne by the residents and businesses of Kalispell. This process recognizes that, when considering the
City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses
should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore
responsible for repaying the debt, or each overlapping government.
(1) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using
taxable assessed property values. Applicable percentages were estimated by determining the portion of
another governmental unit's taxable assessed value that is within the City's boundaries and dividing it by
each unit's total taxable assessed value.
Unaudited statistical section
146
CITY OF KALISPELL, MONTANA
PLEDGED REVENUE COVERAGE
Past Ten Fiscal Years
Water/Sewer Revenue Bonds
Fiscal
Year
Utility
Less:
Ended
Service
Operating
Debt Service
June 30,
Charges*
Expenses**
Principal
Interest
Coverage
2008
7,628,374
(4,332,133)
(553,795)
(203,424)
2,539,022
2009
7,572,970
(4,676,950)
(579,197)
(182,006)
2,134,817
2010
7,213,024
(4,513,881)
(1,087,000)
(779,083)
833,060
2011
6,810,442
(4,478,406)
(1,131,000)
(737,866)
463,170
2012
7,359,224
(4,143,706)
(1,007,000)
(647,296)
1,561,222
2013
8,063,596
(4,410,574)
(1,387,000)
(446,979)
1,819,043
2014
8,289,654
(4,516,282)
(1,226,000)
(388,108)
2,159,264
2015
8,587,057
(4,370,296)
(1,242,000)
(369,564)
2,605,197
2016
9,523,918
(4,769,754)
(1,093,000)
(342,382)
3,318,782
2017
9,133,285
(4,647,567)
(1,117,000)
(316,036)
3,052,682
'includes other
revenues pledged for debt service
" excludes depreciation
Source:
City of Kalispell
Finance Department
Special Assessment Bonds
Special
Assessment
Debt Service
Collections
Principal
Interest
Coverage
607,086
(325,718)
(253,172)
28,196
298,968
(327,423)
(241,088)
(269,543)
711,971
(357,831)
(228,611)
125,529
505,777
(334,210)
(212,843)
(41,276)
332,474
(396,662)
(185,444)
(249,632)
399,180
(391,662)
(186,121)
(178,603)
197,682
(324,198)
(171,133)
(297,649)
1,400,791
(326,526)
(163,360)
910,905
404,275
(319,000)
(145,808)
(60,533)
389,479
(338,739)
(132,230)
(81,490)
Unaudited statistical section
147
DEMOGRAPHICS AND ECONOMICS
CITY OF KALISPELL, MONTANA
DEMOGRAPHIC AND ECONOMIC STATISTICS
Past Ten Fiscal Years
Per
Capita K-12 Annual
Calendar Personal Personal School Unemployment
Year Population Income (in thousands) Income Enrollment* Rate**
2008
20,310
716,151
35,261
5,290
2009
21,221
757,271
35,685
5,425
2010
21,640
705,875
32,619
5,450
2011
19,927
687,222
34,487
5,545
2012
20,256
726,684
35,875
5,707
2013
20,487
783,054
38,222
5,985
2014
20,972
814,385
38,832
5,992
2015
21,518
838,815
38,982
5,992
2016
22,052
932,844
42,302
6,053
2017
22,761
not available
not available
6,053
`School District 5
"unadjusted annual (calendar) - October unadjusted (2017)
Sources: Kalispell Public Schools Audit Report
U.S. Census Bureau
U.S. Department of Commerce - Bureau of Economic Analysis
Montana Department of Labor & Industry
3.70%
6.00%
10.90%
10.90%
9.00%
7.70%
6.50%
5.70%
5.60%
4.50%
Unaudited statistical section
148
CITY OF KALISPELL, MONTANA
PRINCIPAL PUBLIC AND PRIVATE INDUSTRY EMPLOYERS
Most current information and 2010
Private Employer
Kalispell Regional Healthcare
Teletech
Applied Materials (Semitool Inc.)
Immanuel Lutheran Home
Summit Medical Fitness Center
AON Service Corporation - NFS
Applied Health Services
Brendan House
Glacier Bank
L C Staffing Service
McDonalds
Smith's Food & Drug
Super 1 Foods
Costco
Walmart
Healthcenter Northwest
2017
2010
Estimated
Estimated
# of
# of
Employees
Employees
Industry
1000+
1000+
Healthcare
250-499
500-999
Professional & Tech.
250-499
500-999
Manufacturing
100-249
100-249
Healthcare
100-249
not available
Healthcare
100-249
250-499
Insurance
100-249
not available
Healthcare
100-249
not available
Healthcare
250-499
250-499
Banking
250-499
100-249
Temp. Services
100-249
not available
Food
100-249
not available
Grocery
250-499
250-499
Grocery
100-249
not available
Retail
250-499
250-499
Retail
250-499
not available
Healthcare
Sources: Montana Department of Labor & Industry
The State of Montana, Department of Labor reports all employers
in each county and does not rank them or provide the number of employees as they
consider it confidential information. Nine year prior information is not available. This
information will be updated as available.
Unaudited statistical section
149
CITY OF KALISPELL, MONTANA
Full -Time Equivalent City Government Employees by Function/Program
Past Ten Fiscal Years
FY 08
FY 09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
General Government
Manager
2.00
2.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Human Resources
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1.50
1.50
City Clerk
1.00
1.34
1.34
1.34
1.34
1.24
1.23
1.58
1.33
1.33
Media Specialist
0.50
0.55
0.55
0.55
Finance
3.70
3.70
3.20
3.20
3.20
3.20
3.20
3.20
3.20
3.20
Attorney
5.00
4.66
4.66
4.66
4.66
4.66
4.67
4.67
4.67
4.67
Court
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
City Hall
1.00
1.00
1.00
1.40
1.40
1.40
1.40
1.45
1.45
1.45
Planning & Zoning
6.50
6.50
4.75
4.75
4.25
4.25
4.25
4.25
4.25
4.05
Building
7.50
7.50
5.25
3.45
3.95
3.95
3.95
5.20
5.20
6.75
Information Technology
1.00
1.00
1.00
1.00
1.50
2.25
2.25
2.15
2.55
2.55
Total General Government
33.20
33.70
28.25
26.85
27.35
27.45
27.45
29.00
29.15
30.50
Public Safety
Police
47.00
48.50
47.50
41.00
42.00
44.00
44.00
44.00
46.00
49.75
Fire
29.60
29.90
24.90
27.30
26.30
27.30
23.30
23.30
23.30
23.30
Ambulance
9.40
9.10
9.10
7.50
7.50
6.50
9.50
9.50
9.50
9.50
Total Public Safety
86.00
87.50
81.50
75.80
75.80
77.80
76.80
76.80
78.80
82.55
Public Works
DPW
1.90
0.15
0.15
0.25
0.25
0.25
0.25
0.25
0.25
0.25
Garage
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
Street Maint
11.45
12.05
12.30
12.65
12.35
12.25
12.25
12.25
12.25
13.25
Sign/signal
2.00
2.50
2.50
2.50
2.50
2.50
2.00
2.00
2.00
2.00
Light District
0.10
0.60
0.60
0.80
0.75
0.75
1.25
1.25
1.25
1.25
Water
15.20
15.75
15.95
15.60
15.25
14.90
14.80
14.80
15.30
15.30
Sewer
8.05
8.70
8.40
8.45
7.55
7.00
7.05
7.05
7.55
7.55
WWTP
9.40
9.40
8.40
8.05
7.90
7.55
7.55
7.55
8.55
8.55
Storm
5.35
6.00
6.20
6.40
6.45
6.20
6.20
6.20
6.20
6.20
Solid Waste
7.35
7.55
7.60
7.35
7.25
7.35
7.40
7.40
7.40
7.40
Total Public Works
63.80
65.70
65.10
65.05
63.25
61.75
61.75
61.75
63.75
64.75
Parks and Recreation
Parks and Recreation
11.40
11.10
9.20
8.90
8.90
9.45
9.80
9.80
9.80
10.60
Forestry
2.55
2.80
2.80
3.00
3.00
3.20
2.85
1.80
L80
2.00
Total Parks and Recreation
13.95
13.90
12.00
11.90
1 L90
12.65
12.65
11.60
1 L60
12.60
Community Development
UDAG/Comm. Dev.
3.50
2.00
2.00
2.00
2.00
2.00
2.00
L75
L75
2.00
Airport
Airport
0.75
1.00
1.00
0.50
0.50
0.50
0.50
0.00
0.00
0.00
Total all funds 20L20 203.80 189.85 182.10 1W80 182.15 181.15 180.90 185.05 192.40
Source: City Manager's Recommended Budget
Unaudited statistical section
150
CITY OF KALISPELL, MONTANA
OPERATING INDICATORS BY FUNCTION
Past Ten Fiscal Years
FY 08
FY 09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
General Government
Resolutions passed
75
89
60
71
66
59
51
41
44
57
Ordinances passed
25
13
21
25
12
12
12
14
17
15
Payroll claims processed
6792
6537
6170
6038
5985
6035
6063
5956
6169
6473
Accounts payable claims processed
7351
6624
6490
6178
6248
6461
6425
6704
6504
6716
Receipts processed
52116
22983
10440
10693
10749
10930
10984
10346
11775
13073
Conditional use permits granted
5
3
7
5
7
5
4
4
6
5
Public Safety
Calls for law enforcement service
26506
25976
25498
26550
27600
28650
29706
31419
34626
33186
Citations
8314
6713
6500
6300
6100
5877
5261
5233
5037
4680
Arrests
1849
1853
1865
1800
1700
1643
1316
1549
1734
1405
Calls for fire service
742
725
652
538
627
708
831
697
798
882
Calls for rescue service
2603
2571
2504
2037
2071
2197
2281
2560
2501
2673
Building permits issued:
Residential
271
208
227
188
175
258
270
195
195
222
Commercial
273
211
228
196
178
254
262
163
137
137
Public Works
Streets and alleys maintained (Miles)
133
139
139
139
139
139
139
140
140
144
Sidewalk replaced (linear feet)
1411
1060
1159
776
1704
1476
1510
1723
1589
794
Alleys paved
11
11
13
12
10
14
7
5
6
6
Parks
Park users (reservations)
146801
139727
129602
143190
157288
132291
144937
123633
103438
102533
Acres of parks
429.74
429.74
429.74
429.49
429.49
429.49
429.49
429.49
429.49
429.49
Recreation participants (rec, sports, youth, swim)
30539
48755
31931
27525
32109
36415
43490
41830
35697
35370
Miles of trails
4.00
4.00
4.00
4.70
6.35
6.85
7.98
8.10
8.10
8.85
Community Development
TIF Districts
4
4
4
4
4
4
4
4
4
4
New loans
1
1
0
0
3
3
3
1
0
1
Loans being serviced
15
16
16
13
16
19
21
22
19
20
Airport
Monthly tie down fees (average)
18
16
13
12
9
7
3
0
0
0
Monthly commercial fees (average)
6
4
5
4
5
6
7
7
6
6
Water
Average daily consumption (millions of gallons)
3.22
2.99
2.87
2.81
2.85
2.79
2.96
3.13
3.85
3.25
Number of customers
7110
7258
7362
7468
7530
7625
7641
7675
7785
7907
Sewer
Average daily wastewater treated (millions of gallo
2.8
2.7
2.7
3.1
2.7
2.6
2.7
2.7
2.5
2.7
Solid Waste
Refuse collected (tons per day)
21.1
20.0
20.7
21.1
21.3
23.0
24.1
25.0
26.0
26.9
Source: City of Kalispell
Unaudited statistical section
151
CITY OF KALISPELL, MONTANA
Capital Asset Statistics by Function/Program
Past Ten Fiscal Years
FY 07
FY 08
FY 09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
Police
Stations
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Patrol Units (Cars)
11.00
11.00
11.00
11.00
11.00
11.00
11.00
11.00
11.00
11.00
Patrol Units (Motorcycles)
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
Fire
Stations
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
Fire Trucks
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
Ambulances
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
Water
Mains (Miles)
104.00
116.00
125.00
125.50
126.00
126.00
126.00
128.00
128.00
129.50
Wastewater
Sanitary Mains (Miles)
108.00
119.00
130.00
130.50
130.50
130.50
130.50
131.00
131.00
131.00
Storm Mains (Miles)
40.00
47.00
52.00
52.00
52.00
52.00
53.00
53.00
53.50
53.50
Lift Stations
34.00
38.00
39.00
40.00
40.00
40.00
40.00
41.00
41.00
41.00
Solid Waste
Collection Vehicles
8.00
8.00
8.00
8.00
8.00
8.00
8.00
8.00
8.00
8.00
Other Vehicles
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
Source: City of Kalispell
Unaudited statistical section
152
INDEPENDENT AUDITOR'S
REPORTS
WIPFL1
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
City Council Members
City of Kalispell
We have audited, in accordance with auditing standards generally accepted in the United States and the
standards applicable to financial audits contained in Go vernment Auditing Standards issued by the Comptroller
General of the United States, the financial statements of the governmental activities, the business -type
activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining
fund information of the City of Kalispell, Montana (the City) as of and for the year ended June 30, 2017, and
the related notes to the financial statements, which collectively comprise the City's basic financial statements,
and have issued our report thereon dated December 22, 2017.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control over
financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances
for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing
an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the
effectiveness of the City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees in the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial
statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a
deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness,
yet important enough to merit attention by those charged with governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over financial
reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our
audit we did not identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements, noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed
no instances of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
153
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control
or on compliance. This report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering the City's internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
Wpfli LLP
Helena, Montana
December 22, 2017
154