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19. Audited Annual Financial Report Fiscal 2007CITY OF KALISPELL, MONTANA AUDITED ANNUAL FINANCIAL FISCAL YEAR 2007 July_2006 - June 34 2007 CITY OF KALISPELL ANNUAL FINANCIAL REPORT TABLE OF CONTENTS INTRODUCTORY SECTION Letterof Transmittal ............apass rrr.ra•0004,00060.bora.&wrrsarwa**aa.0&rrrr4,4,w.*aa..arrarr0*0+raw■040* 0rroa.ras&0000.waaa...w*rra+rrrr&rwaa.awww.w.w0.a..r 3-5 ElectedOfficials ..................... 00rr.40040*9.a6r60600600609*600000»rra060•■0aa*rwrrrrsr■■■■000000.+.rrraraos0rsaw0awaawaww4,.ars0.bsaarraaw0awr.4,a4,w.ww•rarrbrar t FINANCIAL SECTION Managements Discussion and Analysis......a.......r..aa.s.w.w...rr..a.a.a.w.w..aNOrsasrrr0sbww0aawwwwwaaasarassrsrwwaaawwwwas■orasrrbr6ar0r4,swwia 7.17 IndependentAuditor's Report*.w.r+rrw0iii4,rawwrwwwrr0rsirsaw■a0w00rsrwssrrwrwwwwrrwrsrabssaswwwaawarwrrrrrarsrrawaswwwrw0wrrrrwrrrsrrrra0wwwwaarawwrrwwaa 18-19 Basic Financial Statements: Government -wide Financial Statements: Statementof Net Assetsasw.s6rrb0sarwwwraaa•60000&wras4,w4,r..arbrr+r6r0rwwa. rr■■0060000•aw.a0•r.0rrrr0srwa00raww.0.0.04,■■r.rrr0rrrrra9awra0 20 Statementof Activities..........s4,w■■00000900000.0000.rs0swsarwa0rr.+rrrrassiaaw0wiwaw0rwburaar6s9s.4,a*.0000■r.•■0ass6srrwswaa*raoar.rr0rrw00s• 21 Fund Financial Statements: BalanceSheet — Governmental Funds s4,*a6ara0a0iasw0wra+4,6rarrsssaiw*004,0■r*rrrrraass0w00wwi*w.awrrwrr6rrsaa6aa9wa000..rrr.r.6rb.■ra 22 Reconciliation of the Balance Sheet — Governmental Funds to the Statement of Net Assets......... 23 Statement of Revenues, Expenditures, and Changes in Fund Balances -- Governmental Funds... 24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds to the Statement of Activities......wwa0.0r.6rbsrwsrs*0wir.w.rr■6asw0r9a. *roaa6r0rasisariw4,.w4,i0r* 25 BalanceSheet — Proprietary Funds aarr.+.aa.■......r........0...0*006soon w0a4,0iw....w.r00orrw9wwaaaau.0.osbs6&r.0rrr0ww.*r06000060660 26 Statement of Revenues, Expenses, and Changes in Net Assets — Proprietary Funds.............$00000600 27 Statementof Cash Flows — Proprietary Funds.....■..ar6r6aaraaa0a*.00000006■bssa0w..0a.ra.00000000.04,awaw0wraaa6rrra6i00aaa*ar 28 Statement of Fiduciary Net Assets -- Fiduciary Funds ..................4,.0000•arr9rr4,0i.0a4,.*rarrr.a0sr.aaawwa*.0000&0&.000 29 Notes to the Financial Statements a.■•&00000*04,0.0*■0rr&rrwai*4,i.*000600■waw►0000■..a&rrrrasai0a0waaao►a0raba■aaw**spo...or&6rrara0apose w■+.ow 30-58 Required Supplementary Information: Single Audit Section: Schedule of Expenditures of Federal Awards.............■waaarrawawaa0•w*r*.aarao0sawaawwawaw+rrr.rar.0raraasw.wa0ws■000006066■ 59 Notes to the Schedule of Expenditures of Federal Awards .........s.*a..*on&br00ar**a***04,0■000066.r9rr0rwwr4,.06a0rr..rw* 60 Budgetary Comparison Schedule --- General and Major Special Revenue Funds .....ww*.wrra.rirri*w.airww 61 Budgetary Comparison Schedule — Budget to GAAP Reconciliation — General and Major SpecialRevenue Funds ................. ■0004,0000■•0•.aa.rraar0sa*a.a.6w■rasrasr4,a.a04,w.r4,.0000•o0saa.w•4,w*00a0rara6rrr6waaa• 62 Report on Compliance and on Internal Control over Financial Reporting based on an Audit of Financial Statements Performed in Accordance with Government AuditingStandards ................ 4,+.■■■s6asaaai..arrbrrrriaww4,*•a■■00000am. •oi•ooa.wsssrrarmean aaa•w.*a*a*a060arssasaa*0waw0.&.*a&a@arrrr.rs63-64 Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in accordance with OMB Circular A-133.a.0.r■rr6rraa0a9ar4,.a.4,r.rrarrarrrw0rarr.6J-66 Schedule of Findings and Questioned Costs.s...■.....•............•■....+.bass.......w..r...masa................................67-68 Report on other Compliance, Financial, and Internal Accounting Control Matters ■a&0000■0*.ra■0000000009*0000.r+arrrawrw..4,0•.rr.awa0w0*•+bra.aria...*4,&.r•aro■rara0arwar6rrbrrarawara04,s.4,*.0000000►0000*■a.4,.w.0.006rraa.aswsw9w0*ala•*4,r 69 Report on Prior Audit Report Recommendations ■w+...................rrr......•w.■.rr.r......■.............................. 70 CITY OF KALISPELL ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Supplementary Information: Combining and Individual Fund Statements and Schedules: Combining.Balance Sheet — Nonmajor Governmental Funds■...ww.....ww.rr..■r.wrwaw■.wwwwww.w..www►.r..ww...rrr..r• 71-78 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds...rr..+.■..w...w...w......r..•rs.rsrrr•w.r..■..•.w•.r.w.rw■•rar•wwwww.■.a.w.wr.wrrr..rw.+..rr.rs+as►w 79-86 Schedule of Revenues, Expenditures, and Changes in Fund Balances -- Budget and Actual — Major Debt Service and Capital Project Fundsw...r..wr..rr..r.......a..w.w..w.....w.w.. 87-88 Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual ---- Nonmajor Governmental Funds....wr.■.wr.r■rr■••+w■wws•■wwwr.r.■rrrr■rrr•wrarrrw.s...w.wr.s.....89..143 Combining Balance Sheet — Nonmajor Enterprise Fundsw....aw.a.w..■wrawsr.•+r■•..•s.w.■..w.rrw..w.r+rsrrr.ws..w..w.w.• 105 Combining Statement of Revenues, Expenditures, and Changes in Net Assets — Nonmajor EnterpriseFunds ..............ww.wwww...■r.r.+...■....w..w............................wyw.w.s.err......wwwwwwww■..r.rwr+r...+rsr..ar.aws..waw.. 106 Combining Statement of Cash Flaws — Nonmajor Enterprise Funds....ww...r+..r................................. 107 MISCELLANEOUSSTATISTICS wwwrr.r.r+r....ww.■w..■.rr■rrrrrr.r.w.w.www..rw.rr.rrrwr+rrw.r.....swwwaw.+.srrrr.wr.r.wa....wwawww.w...r..r.rrrs.r 108-112 VIOIE tWl [ChN The City OfKalispell Incorporated 1892 Telephone (406) 758-7700 FAX (406) 758-7758 Post Office Box 1997 Kalispell, MT Zip 59903-1997 November 27, 2007 To the Honorable Mayor, members of the City Council, and Citizens of the City of Kalispell, Montana: State law requires that all general-purpose local governments publish within six months of the close of each. fiscal year a complete set of financial statements presented in. conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that requirement, the annual financial report for the City of Kalispell, Montana for the fiscal year ended June 30, 2007, is submitted for your review. The Finance Office prepared this report. Responsibility for the accuracy and completeness of the presented data, including all disclosures, rests with the City. we believe the data, as presented, is accurate in all material aspects; that it is presented in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain an understanding of the City's financial affairs have been included. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A.). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City of Kalispell's MD&A immediately precedes the City's basic financial statement within this report. Reporting Entity..and Services Provided The City of Kalispell, incorporated in 1892, is located in the western part of the state, which is considered to be one of the top growth areas in the state. The City of Kalispell is empowered to levy a property tax on both real and personal properties located within its boundaries. It also is empowered by state statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the governing council. The City of. Kalispell is operated under the council-manager form of government. Policy-making and legislative authority are vested in a governing council consisting of the mayor and eight other members. The governing council is responsible, among other things, for passing ordinances, adopting the budget, appointing 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 safety, planning and zoning, city court, parks and recreation, streets, community development and general administrative services, The City also operates as Enterprise funds: water, sewer, ambulance, solid waste, and an airport, In addition, the City presents financial data for two component units on the combined statements. The Kalispell Parking Commission is a discretely presented proprietary type component unit. The Downtown Business Improvement District is a discretely presented governmental type component unit. The annual budget serves as the foundation for the City of Kalispell's financial planning and control. All departments of the City of Kalispell are required to submit requests for appropriation to the City Manager. The City Manager uses these requests as the starting point for developing a proposed budget. The City Manager then presents this proposed budget to the council for review. The council is required to hold public hearings on the proposed budget and to adopt a final budget. The appropriated budget is prepared by fund, function, and department. Budget -to -actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. For each major governmental fund the comparison is part of the basic financial statements. Accounting stern and BudggtM. Control The City's accounting records for general governmental operations are maintained on a modified accrual basis. Under this method, revenues are recorded when measurable and available; expenditures are recorded when services or goods are received and the liabilities are incurred. Accounting records for enterprise funds are recorded on the accrual basis. Cinder this method, revenues are recorded when the services are performed; expenditures are recorded when the goods or services are received and the liabilities are incurred. In developing the City's accounting system, consideration is given to the adequacy of internal accounting controls. Internal controls are designed to provide reasonable assurance regarding the safeguarding of assets and the accuracy and reliability of accounting data used for preparing financial data and maintaining accountability for assets. Budgetary control is maintained by an annual appropriation system. The Mayor and Council evaluate the budget proposals of the various City departments to determine the appropriate level of the operating and public service programs. After giving due consideration to the input received from the citizens, the City Council adopts the budget. The budget is controlled through an on line accounting system. The control is decentralized to the point that individual department heads are responsible for expending within budgetary limits. Cash Management The City's demand deposits are interest bearing money market accounts. The City also utilizes the Statewide Investment Pool (S.T.I.P), and obligations of the U.S. Treasury for cash temporarily idle during the year. flares of return vary based on markets. fneiirnnr-P The City joined other Montana cities and towns to form a self-insurance pool offering worker's compensation and liability coverage. In March 1493, the Montana Municipal Insurance Authority issued tax exempt refunding bonds for $4,410,000 to fund the liability program reserves. Debt service on the bonds is to be paid through interest earnings on bond proceeds and other funds of the authority. On October 1, 2004, MM IA established, and the City joined, the Employee Benefits Program for its members, providing a more affordable health, dental, and vision insurance option for members to offer their employees. PosternplUment Benefits The City of Kalispell provides pension benefits for substantially all of its full -tune employees. These benefits are provided through the Montana Public Employees' Retirement System (PERS); Municipal Police Queer's Retirement System (MPORS): and the Firefighters' Unified Retirement System(FURS). The City of Kalispell has no obligation in connection with employee benefits offered through this plan beyond its snatching contributions. Additional information on the City of Kalispell's pension arrangements can be found in the notes to the financial statements. Prospects for the Future Since November 1986 and the passage of Initiative 105, which limited certain property taxes to the 1986 levels, the ability 4 of the City to raise revenue for basic services is increasingly difficult. Then, the legislature, with SB 184, lowered tax rates forcing the City to increase mill levies to maintain the same level of revenue. The City's cash reserves vary between 10% and 20% of appropriations. State law allows for reserves of 50%. Reserves provide for cash flow between tax revenue receipts to keep the City from having to borrow funds for operations. Additional revenues generated by increased taxable valuation come with the additional costs of an increased service area. The City of Kalispell's Police and Fiore Departments, Courts system, Building Department, Public Works and Parks have felt the increased pressure from the influx of people to Flathead County. These pressures impact the budgets of all departments. The outlook for the City of Kalispell is to continue providing basic services while looking for additional ways to fund the increasing costs of those services. Acknowledgments In conclusion, I am able to report that the City of Kalispell is in sound financial condition and should continue to enjoy good financial health. I wish to express my thanks to Amy Robertson and Deb Heist of the finance department as well as the administrative staff of the various departments. without your help and input this report would not be possible. I would also like to give recognition to the mayor, governing council, and the city manager for their consistent support for maintaining the highest standards in the management of the City of K.alispell's finances. In accordance with Section 7-6-4111, MCA I hereby transmit the City of Kalispell Annual Financial Report as of June 301, 2007 for the fiscal year then ended. Res fully submitted, Date Rick Wills Assistant Finance Director CITY OF KALISPELL ANNUAL FINANCIAL REPORT JUNE 309 2007 ELECTED OFFICIALS Manager/Council form of Government Mayor Pamela B. Kennedy 1/1/2010 Council members: Kari Gabriel Ward I 1/1/2008 Jim Atkinson Ward I11 1/1/2010 Robert flafferman Ward I 1/112010 Randy Kenyon Ward III 111/2008 Bob Merron Ward II 11112008 M. Duane Larson Ward IV 111/2008 Hank Olsen Ward II 1/1/2010 Tim Kluesner Ward IV 1/1/2010 Other City Officials: City Manager Jim Patrick Attorney Charles Harball Police Chief Roger Nasset Fire Chief Randy Brodehl Finance Director Amy Robertson City Judge Heidi Ulbricht Public Works Director James Hansz Parks Director Michael Baker Community Development Director Vacant Planning Director Tom Jentz Assistant Finance Director Rich Wills n FESIANCIA, A SE.---,,--,-,CTION 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, 2007. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal. FINANCIAL HIGHLIGHTS ➢ The assets of the City of Kalispell exceeded its liabilities at the close of the recent fiscal year by $137,738,286(net assets). Of this amount, $13,480,896(unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. ➢ As of the close of fiscal year 2007, the City of Kalispell's governmental funds reported combined ending fund balances of $8,704,481, a decrease of $2,464,855 from the prior fiscal year. ➢ Revenues of the governmental funds increased from $15,076,640 to $17,230,981. Taxes and assessments revenue increased by $680,687 or 12%. Licenses and permit revenue also showed a substantial increase of $661,590 for fiscal year 2007. This increase of 93% can be attributed primarily to building and zoning fees (general fund), but is also the result of moving fire prevention fees from charges for services. ➢ Governmental fund expenditures decreased $1,511,068 from fiscal year 2006. Capital outlay decreased $3,313,604, however, this decrease was offset by increased spending for public safety ($749,684), and housing and community development ($583,404). After borrowing over $ 8 million in fiscal year 2006, proceeds of long-term, debt of the governmental funds totaled only $150,000 in fiscal year 2007. ➢ At the end of the current fiscal year, unreserved fund balance for the general fund decreased $441228 (3%) to $1,701,363. This fund balance represents 16 percent of total general fund expenditures. ➢ General fund expenditures were up $628,873. More than 80% of this increase can be attributed to personal services expenditures of the fire and police departments (public safety), which were up more than $500,000. ➢ The City of Kalispell's total debt decreased by $1,802,575 during the current fiscal year. ➢ Net assets of the City's business -type activities increased to $62,710,565, up $12,227,077 from the prior fiscal year. Most of this increase ($11,691,93 3) is invested in capital assets, net of related debt. $6,004,775 is unrestricted net assets. In the City's business -type activities, capital grants and contributions revenue was $101087,410. water, sewer and storm water infrastructure contributed by developers was $615245301. 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. 7 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 assets presents information on all of the City of Kalispell's assets and liabilities. The difference between these two (assets minus liabilities) is reported as net assets. Net assets can be a useful tool in evaluating the financial health of an entity. A substantial decrease in net assets may be a sign of deteriorating financial position. The change in net assets during the most recent fiscal period is presented by the statement of activities. The statement of activities reports changes in net assets 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, culture and recreation, and housing and community development. The business -type activities of the City of Kalispell include water distribution, sewer collection and treatment, solid waste collection, ambulance service, and an airport. The government -wide financial statements include, in addition to the primary government described in the above paragraph, a legally separate parking commission, and a legally separate Business Improvement District. The financial information of these component units is reported separately on the Government -wide financial statements. Fund Financial Statements The City of Kalispell, like most other governmental entities, uses fund accounting. Funds are set up to account for specific activities or objectives of the government. Funds also aide in ensuring compliance with legal requirements. The City of Kalispell categorizes its funds as either governmental, proprietary, or fiduciary. Governmental funds correspond with the functions reported as governmental activities in the government -wide financial statements. Governmental fund financial statements, by focusing on near-term inflows and outflows of spendable resources, may be more useful in evaluating a government's short-term fiscal health than the government -wide financial statements. A reconciliation has been prepared to help users more easily compare the governmental. fund balance sheet to the government -wide statement of net assets and the governmental fund statement of revenues, expenditures, and changes in fund balance to the government -wide statement of activities. These reconciliations can be useful in N contrasting, comparing and understanding the long-term impact (government -wide statements) of near-term decisions (governmental fund statements). The City of Kalispell maintains numerous individual governmental funds. The governmental fund balance sheet and statement of revenues, expenditures, and changes in fund balance present information separately only for funds which are considered major. Major funds are determined by a formula which considers the percentage of total governmental assets, liabilities, revenues, and expenditures contained in each individual fund. The City of Kalispell has five major governmental funds; the General Fund (always a major fund), the Community Development Loan Revolving (special revenue) Fund, the Special Improvement District 343 (debt service) Fund, the Special Improvement District 344 (debt service) Fund, and the Special Improvement District 344 (construction) Fund. All non -major funds are presented as a group. The City of Kalispell adopts an annual appropriated budget for its funds. A budgetary comparison statement has been provided for the general fund and the major special revenue fund to demonstrate compliance with this budget. The City of Kalispell maintains two different types of proprietary funds. Enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. Water, sewer, solid waste, ambulance, and the airport male up the City of Kalispell's enterprise funds. The City of Kalispell uses an internal service fund to accumulate and allocate its data processing transactions internally among its various functions. Under the old reporting model internal service funds were reported as proprietary funds because they recovered most of their cost through user fees from other funds. Under this new model these funds are eliminated through an allocation process and categorized as either a governmental or business -type activity. Because the City of Kalispell's internal service: fund benefits governmental more so than business -type functions, it has been included within the governmental activities in the government -wide financial statements. Information in the proprietary fund financial statements is of the same type as that 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, and the ambulance fund. 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 two funds to account for resources held by the government for the benefit of outside parties. These fiduciary funds are not reflected in the government -wide financial statements because the resources are not available to support the City of Kalispell's own programs. The City of Kalispell must ensure that the assets reported in these funds are used for their intended purpose. The accounting method used for fiduciary funds is similar to that used for proprietary funds. Notes to the Financial Statements The information contained in the government -wide and fund financial statements is meant to be used in concurrence with the notes to the financial statements. The notes present further detail of the data provided by these statements. I ANALYZING THE CITE'" AS A WHOLE As mentioned prior, net assets can be an important indicator of an entities financial well-being. For the period ending .Tune 30, 2007, the City of Kalispell's assets exceeded liabilities by $137,1738,286. Table I -Net Assets Governmental Business -type Activities Activities Change Change FY07 FY06 Inc Dec FY07 FY06 Inc Dec Current and other assets $ 18,769,410 $ 21,307,311 w 12,537 901; $ 18.442,828 $ 17,687,637 3 75�. 91 Capital assets 75,162,059 27,818.2 7 6 4 7 ,'�;u, 783 61.910,530 41,180,688 a ��, '2 342 Total assets 93.G31 469 49. 12 5 537 �d 3 �5, c132 7u,:�53.: 5c� �E 6c.325 5.,,') 3 3 Long-term debt outstanding 16, 383,061 16.426, 368 $ (43. yu7 t 7,181,741 1, 269,197 +; 3 ; 456) Other liabilities 2,524.687 2,912,619 391 v32 455,052 1,115,640 66G. X83 liabilities 9;0 1 i,^ 9C `2J.u' F13Cv . 3.:483 43,.,44;Total Invested in capital assets, net of debt 60.554, 766 12,270,552 48.284 14 44,997,3171 33,305,438 ` 691, X33 Restricted 6,996.8'4 9,423,345 2426,511=; 11,708,419 10,656,773 ' 51,6 6 Unrestricted (deficit) 7,476,121 8,092,703 = 616. E82 6,004,775 6,521,277 : 6, 02; Total net assets ,� z[^��' ., .�— —rn w 1 5,02 1 21 r� �� rnf('±± � S L j , i]li,t.�00 v R �w 45,24:41 2 i �. 's j !312 7 0 5.65 S n p :,G,48,;,438 m . •. hrj �' .. w .L C f yr r Investment in capital assets (e.g., land, buildings, machinery, and equipment), net of any related debt still outstanding on those assets makes up 77% of the City of Kalispell's net assets. These capital assets are used to provide services to the citizens of Kalispell and are not spendable. Therefore, repayment of the debt related to capital assets must be provided from other sources. Restricted net assets equal $18,705,253 or 14% of total net assets. Over $11,000,000 of this is restricted in the enterprise funds to remain in compliance with enabling legislation and third party restrictions. The $6,996,834 restricted in governmental activities consist of $1,168,326 for debt service, $1,159,493 for capital projects, and $4,639,015 for other purposes. The remaining balance ($13,480,896) of unrestricted net assets may be used to meet the City of Kalispell's ongoing obligations to citizens and creditors. At the end of fiscal year 2007, the City of Kalispell is able to report positive balances in all categories of net assets. 10 Table 2 - Changes in Net Assets Govemmental Business -type Activities Activities Change Change FY07 FY06 Inc Dec FY07 FY06 Inc aec Revenues Program revenues (by major source): Charges for seMces $ 5,597,6223 $ 4,898,E 699.559 $ 8,312,592 $ 9,411,851 ;1.098,9593 Operating grants and contributions 1,742,613 1,79303 (50,990) 121,E 79,541 41,763 Capital grants and contributions 5,473,543 158,695 5,114.348 10,0871410 5,6W,802 4,450,608 General revenues (by major source): Prop" taxes for genial purposes 5,374,154 10.322,742 {4,948.592) - - - misceftwus - 29,828 {29,828) - - lnterestlinvestrr*nt earinip 496,992 364,E 132.992 898,491 510,797 287,694 State enbkgmmt 2,106,049 2,065,5W 40,493 Gas tax 324,774 318,822 6.152 Cam & donatkm 143,796 204,176 (60,3801 - - Licen_ a 52,031 54,432.` [2,401) Gay (loss) on sale of capWasst 1,210,868 013 1.272.263 - 459,892° 459,892 Total revenues 22,522,439 S 20,148,323 S 2,374,' 16 S 19,415.857 S 16.198,643 S 3,2212' 4 Program expenses Genera! govemn eM $ 5,851,576 $ 2,688,413 $ 3.163.163 Pum safes $ 7,684,8D4 $ 6,875,372. 809,432 Pubs tis $ 1,979,249 $ 2,1961 190.(216=941) Cultum and recreafion $ 1,8%J81 $ 1,719,630 176,151 Housing aW de"bWent $ 3,706,504 $ 1,482,210`" 2,224,294 Debt service - irrtnd $ 736,927 $ 529,2, 207,564 Wisom $ (14,839).$ 1,153:: (.15,892) i pW Enterprise $ $ 105,4293 69,436 aW $ �1j74>80 2,080*�- $ 1,8W,613- 2?81 2,341 Sew:$ 4,037,350 $ 3,570,610,.- 466,732 ArnbAm $ 1,707,121 $ 1,383,918:= '323,203 $ 654,E $ 615,8U 38,957 Total expenses $ 21,840,302 3 15.492,131 S 6.347.871 $ 8.655,129 $ 484.460 S 1,170,669 Excess (deficiency) before special items and transfers 682,437 4,656,192 (1913.755) 10,764,728 8,714,183 2,056,545 TransfeCa - net 315141 _L3,0602011 ' .546.042 1,514.159 399,939,; 1.114,226 Increase (decrease) in net assets $ 831, 722) 1,595,991 1 {2,427.113} S 12,2 78.887 S 9, 114,122 3,164,76 5 Governmental activities. Net assets of the City's governmental activities decreased $831,722. Overall, revenues were up by $2,374,116. Property taxes for general purposes, which includes revenue from real property taxes, personal property taxes, and property assessments, decreased $4,948,592. The majority of this decrease is attributable to the large GASB #34 adjustment to eliminate deferred revenue in fiscal year 2006. Governmental funds capital grants and contributions (program revenue) was $5,374,150, compared to $158,965 in fiscal year 2006. The majority of this revenue ($4,576,115) was streets contributed by developers. Governmental funds expenditures increased 41% to $21,840,002. Approximately one-half (1/2) of this increase is general government expenditures. General government expenditures more than doubled to $5,851,576. Most of this increase can be attributed to the retroactive recording of city streets as assets and the related depreciation. Housing and community development expenses also increased dramatically, from $1,482,210 to $3,706,504. The Old School Station (.SID 344) construction project was responsible for the majority of this increase. Business -type activities. Business -type activities increased the City of Kalispell's net assets by $12,278,887. Overall, revenues of the City's business -type activities increased 20%, while expenses increased only 16%. Business -type funds capital grants and contributions (program revenue) was $10,087,410, compared to $5,636,802 in fiscal year 2006. ANALYZING THE CITY'S INDIVIDUAL FUNDS Governmental Funds The focus of the City of Kalispell's governmental funds is to provide infonnation on near -tern inflows, outflows, and balances: of spendable resources (fund balance). Unreserved fund balance is a useful tool when assessing the net resources a government has available to spend at the end of a fiscal period. At the end of fiscal year 2007, the City of Kalispell's governmental funds reported combined ending fund balances of $8,704,081, a decrease of $2,464,855 in comparison with the prior fiscal year. Of the ending fund balance, $2,357,819 is reserved for either debt service or capital projects and, therefore, is not available for new spending. The general fund is the chief operating fund of the City of Kalispell. At the end of fiscal year 2007 unreserved fund balance of the general fund was $1,701,363. Unreserved fund balance as a percentage of total fund expenditures can be a good tool to use to measure the liquidity of the general fund. For fiscal year 2007, unreserved fund balance represented 16% of total general fund expenditures. The 3% decrease in the fund balance of the general fund during fiscal year 2007 was mainly due to the increased cost of operating the City's public safety departments. The Community Development Loan Revolving fund is a special revenue fund used to make low interest housing and commercial loans within a designated area. Principal and interest from these loans or the purchase and subsequent resale of a fixed asset are the only sources of revenue in this fund. At June 30, 2007, the fund balance of this fund was $349,631, a decrease of $2071,367 over June 30, 2006. Special Improvement District 343 (debt service) fund was established by the City of Kalispell in fiscal year 2001 for the purpose of servicing the debt attributable to the reconstruction of Sunnyview Drive. This project was funded through the sale of bonds and a small contribution from the City of Kalispell. The fund balance increased from $105,040 to $123,433 during the fiscal year 2007 operating period. This increase was the result of debt service expense of less than the revenues used to pay the debt service. Special Improvement District 344 (debt service) fund was established by the City of Kalispell in fiscal year 2006 for the purpose of servicing the debt attributable to the construction of all the infrastructure needed in the industrial/commercial development known as Old School Station. Fund balance at June 30, 2007, for SID 344 was $260,000. Special Improvement District 344 (construction) fund was established by the City of Kalispell in fiscal year 2006 for the accounting of resources accumulated and appropriated in the construction of the industrial/commercial development known as Old School Station. Fund balance in this fund at June 30, 2007 is $223,613. This project will be completed in fiscal year 2008. 12 9000400 8000000 7000000 6000000 5000004 0 E 4000000 3000000 2000000 1000400 0 Expenses and Program Revenues -Governmental Activities for fiscal year 2007 gen govt pub safety pub works culturelrec comm dev m Fsc debt service Activity Revenue by Source - Goverrunental Activities fiscal year 2007 State entitleri 9% Property taxe 24% Other 10% �s for services 25% Operating grantslcontnbutions 8% Capital grants/contributions 24% 3 Proprietary Funds The City of Kalispell's proprietary funds financial statements provide the same type of infori-nation found in the government --wide financial statements, but in more detail. Unrestricted net assets of all proprietary funds at the end of the fiscal year amounted to $6,004,775. Of this amount, $21,023,183 was attributable to the water fund and $3,116,639 to the sewer. The total growth in net assets of all proprietary funds equaled $12,278,887. The water funds increase in net assets for fiscal year 2007 was $5,658,945. Only $445,871 of this was attributable to operations (operating income). The sewer funds net assets increased $6,788,958, however, operations of the sewer fund showed expenses exceeding revenues by $84,572. Hookup (impact) fees, a non-operating revenue of the Water and Sewer funds accounted for 21 % or $2,577,366 of the proprietary fund increase in net assets. other factors concerning the finances of the water and sewer funds have already been addressed in the discussion of the City of Kalispell's business -type activities. Expenses and Program Revenues - Business -type Activities for fiscal year 2007 airport water sewer solid waste ambulance Activity Revenues by Source - Business -type Activities for fiscal year 2007 Investment E 4% Capital grantsfcontribut 48% Net transfers 7% t Charges for services 40% ,rating grants/conmounons {% 14 GENERAL FUND BUDGETARY HIGHLIGHTS The City of Kalispell's general fund expenditures budget of $11,001,488was revised to $11,132,988 during fiscal year 2007. Actual expenditures for the year were $10,799,297, a favorable variance of $333,691. Actual revenues of the general fund were $10,290,862, exceeding the revised budgeted amount of $9,095,223. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital .Assets At the end of 2007, the City of Kalispell has $127,072,589, 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. The City of Kalispell as of 20071, in accordance with GASB, has now booked all infrastructure, including streets. Major capital asset events during the fiscal year 2007 included the following: Retroactively booked streets within the City of Kalispell at $69,794,882. Continued remodeling the Wells Fargo bank building to be used as a consolidated City Hall for $507,641. y Constructed a new parking lot near the Gateway West Mall for $278,290, almost one-half (1/2) was contributed to the City. .� Replaced four (4) patrol cars and added two (2) motorcycles to the police department fleet. Purchased a $40,200 Toro Groundsrnaster for City parks maintenance. City installed (1) and replaced (10) fire hydrants valued at $35,311. Developer's installed 105 new fire hydrants valued at $516,206. City installed 10,990 linear feet of new water main and replaced 9 fire hydrants on Meridian Road. Approximately 70% of this $655,962 project was contributed to the City by the federal and state governments. 53,659 linear feet of new water main valued at $21,2551,537 was installed and contributed to the City by developer's. The water department replaced 557 meters, and installed 339 new meters. y Force mains for two (2) sewer lift stations were replaced at a total cost of $937,000. Replaced service lines and a manhole, and installed a new manhole and 455 linear feet of sewer main as part of the Meridian Road project. The Old School Station water well was placed in service at a value of $643,614. 45,443 linear feet of never sewer main valued at $1, 563,979 was installed and contributed to the City by developer's. � Developer's contributed 5 new lift stations valued at $1,419,349. City installed 3,440 linear feet of storm water main on Meridian Road. Approximately 70% of this $874,441 project was contributed to the City by the federal and state governments. Storm water collection mains (11,864 linear feet) contributed by developer's totaled $556,425. Equipment was replaced at the Waste Water Treatment Plant equaling $315,679. Solid Waste purchased a new truck for $202,579. 15 CITY OF KALISPELL'S CAPITAL ASSETS (NET OF DEPRECIATION) G ave m mental Business -type To tal activities a ctivities Construction in Progress 2007 2006 2007 2006 Source of Supply 2007 2006 Land $ 2,5021765 $ 2,502,765 $ 126 1049 2 14 610,4 2 $ 41132257 $ 4,113.257 Buildings $ 11,529,303 11 ,474,673 156,873 172,555 $ 11,677,1 76 11,647,228 Improvements not build in s $ 10,549,229 10,543,724 $ 10,549,229 10,543,724 Machinery and equipment $ 1,925,759 1,974,267 799,390 715,537 $ 2,725,149 2,689,804 Infrastructure $ 48,418,031 Construction in Progress $ 245,973 1,322,848 2,450,107 893,888 $ 2,696,080 2,216,736 Source of Supply 3 88,18 6 404,988 $ 388,185 404.988 Pumpin2 Plant 1,784,939 1,224,995 $ 1,784,939 1,224,995 Treatment Plant 4,871,584 4,488,830 $ 4,071,584 4,488,830 Transmission and Distribution .. .... ... ..... ................. 31,863,0'16 24,040,199 $ 31,863,016 24,040,199.. -- General Plant 2,23fi 182 2,450,254 $ 2 236 1 82 2,450.254 Storm Sewers stem 6,549,761 5 178,95€ $ 645491761 5,178.950 Total $751162,060 $27 818,277 $ 51,910,530 $41Z1804688 $ 127 072 590 $ 68 998,965 Debt At the end of fiscal year 2007, the City of Kalispell had total long-term. debt outstanding of 522,3701817. Of this amount, $5,785,000 comprises debt backed by the full faith and credit of the government and $6,2171027 represents bonds secured solely by specified revenue sources (i.e., revenue bonds). The remainder consists of $1,395,000 outstanding, on a SRF loan for construction of the wastewater treatment plant, another SRF loan for $1,314,000 which financed the extension of sewer lines south on Highway 93, $5,389,846 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 $473,803 of loans for the purchase of equipment. The City of Kalispell also has debt outstanding on the books of $956,565 for the purchase of the Wells Fargo bank building, a USDA —Intermediary R.elending Program loam for $627,500, and a $212,076 for the financing of the Courtyard Apartments. The Courtyard debt is paid for by the rent proceeds attributed to those apartments. CITY OF KALISPELUS OUTSTANDING DEBT Governi-nental Business -type Toth aCtiAes acWties 2047 2008 2007 2006 2007 2005 General obl'92tiw bonds $ 5,785,000 $ 6, 000 $ 5,7859000 $ 600857000 Revenue/Uri Renewal bonds $ 2,012,868 2,183 523 4, 204,159 4889,250 $ 6,217,027 $ 7,072,773 SRF loans 2,709,000 2,9887000 $ 2,709,000 $ 2,986,E Assessmerts $ 5,389,846 5,730,774 $ 5.389,846 $ 5,730,774 Contract debt/1oans $ 2,269,944 2,314,448 $ 2,269,944 $ 2,314,448 Total $15,45 7,658 $16,3137745 $ 6,913,159 $ 7,875,250 $ 22,370v817 $ 24,188,995 Other obligations of the City of Kalispell include accrued vacation pay and sick leave (compensated absences). More detailed information about the City's long-term liabilities is presented in the notes to the financial statements. 16 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES Flathead County's unemployment rate (unadjusted) stood at 2.4% as of June of 2007, which is an improvement from the June 2006 rate of 3.2 percent. This is only slightly better than the State's unemployment rate of 2.5%, but compares favorably to the nations rate of 4.7 percent. Flathead County and Northwest Montana have been experiencing rapid population growth for many years. The City of Kalispell's population grew 19.4% between the 1990 and 2000 census, and is estimated to have grown 31 % from 2000-2005. Kalispell and the rest of Flathead County has experienced a 15% population growth rate since 2000, which exceeds all other Montana counties except Gallatin. ➢ The City also continues to grow (estimated population of almost 20,000 in 2006) through the annexation of adjacent area. This puts more strain on all City departments, from Fire and Police to Solid Waste, water and Sewer. > Energy costs continue to rise. The City's electric and natural gas costs have approximately doubled since fiscal year 2000. Cost of health, liability, and property insurance continue to rise. All of these factors were considered in preparing the City of Kalispell's budget for the 2008 fiscal year. During fiscal year 2007, unreserved fund balance in the General Fund decreased to $ 1,701,363. The City of Kalispell has appropriated $660,002 of this amount for spending in the 2005 fiscal year budget. The City has determined that using this available fund balance is necessary in order to continue providing city services in the manner that the citizens have come to expect. The City continues to levy the maximum mills permitted by law. Water and surer rates were increased 10% and 5%, respectively, for the 2008 budget year. These rate increases were recommended by the recently completed rate study conducted by an outside flan and adopted by the City Council. The rates were deemed necessary for the City to finance many current and future water and sewer infrastructure and capacity replacement needs as identified by the recently completed facility plan. 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.U. Box 1997, Kalispell, MT 59903-1997. 17 Denning, Downey & Associates, P.C. CERTIFIED PUBLIC ACCOUNTANTS 1740 U.S Hwy 93 South - Suite 101 Kalispell, MT 59901 INDEPENDENT AUDITOR'S REPORT Mayor and City Council City of Kalispell Flathead County Kalispell, Montana We have audited the accompanying financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of City of Kalispell, Flathead County, Montana, as of and for the year ended June 30, 2007, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of City of Kalispell management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by man gement, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Kalispell, Flathead County, Montana, as of June 30, 2007, and the respective changes in financial position, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. _18 - Robert K Denning, CPA - Kim M. Downey, CPA In accordance with Government Auditing Standards, we have also issued our report dated February 15, Zoos, on our consideration of the City of Kalispell's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management's discussion and analysis and budgetary information on pages 7 through 17 and pages 59 through 60, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. we have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. office of Management and Budget Circular A-133, Audits of states, Local Governments, and Non -Profit organizations, and is not a required part of the basic financial statements of City of Kalispell, Flathead, County, Montana. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and , in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. ak/xti Pa, C/9fi February 15, 2008 19_ BASIC FINANCIAL STATEMENTS City of Kalispell, Flathead County, Fontana Statement of Net Assets June 30, 2007 See accompanying Notes to the Financial Statements 20 Downtown Business Kalispell Governmental Business -type Improvement Parking Activities Activities Total District Commission ASSETS Current assets: Cash and investments $ 8,431,811 $ 4,227,194 $ 12,659,005 $ $ 1.02,130 Taxes and assessments receivable, net 748,432 65,614 814,046 6,404 Accounts receivable - net 3,044 624,855 627,899 6,675 Notes and loans receivable 100,628 - 100,528 Due from other govemments 1,209,479 134,953 1,340,432 Prepaid expenses 114,741 - 114,741 1,100 Inventories - 185 793185,793 Total current assets 8 $ 10.60 ,135 $ 5,234,409 $ 151842,544 $ � 6,404 $ 109,905 Noncurrent assets - Restricted cash and investments $ 562,359 $ 13,208,419 $ 13,770,778 $ 119,189 $ Long term portion of loans receivable 2,181,493 - 2,181,493 Special assessments receivable deferred 5,417,423 5,417,423 Capital assets _land 2,502,765 1,610,492 4,113,257 Capital assets - construction in progress 245,973 2,450,107 2,696,080 Capital assets - depreciable, net 72,413,321 _ 47,849 931 120,263,252 20,945 Totl noncurrent assets $ 83,323,334 $ 65,118,949 $148,442,283__ _ $ 1191189 $ _ _ 20,945__ Total assets $ 93,931,469 $ 70,353,358 $ 164,284,827 $ 125,593 $ 130,850 LIABILITIES Current liabilities Accounts payable 1,091,827 312,874 1,404,701 405 874 Accrued payroll 324,138 142,178 46£,316 2,228 Current portion of long-term liabilities 74,197 - 74,197 Current portion of tong -term capital liabilities 957,091 803,159 1,760,250 Current portion of compensated absences payable 19,100 6,000 25,100 Other Current Liabilities 116,099 - 116,099 22,375 Total current liabilities $ 2,582,452 $ 11264,211 $ 3.846,663 $ 405 $ 25,477 Noncurrent liabilities Deferred revenue - NonCurrent Portion loans Receivable 988,623 - 988,623 Noncurrent portion of long-term liabilities 776,171 - 176,171 Noncurrent portion of long-term capital liabilities 13,650,201 6,110,000 19,760,201 Noncurrent portion of compensated absences 906,381 268,582 _ _ 1,174,883 _ 5,548 Total noncurrent liabilities $ 16,321 296 $ 6,378,582 $22,699 878_ _ $ -� $ 5 548 Total liabilities $ 18903 748 $ 7,642793 $ 26,546,541 $ 405 $ 31 025 NET ASSETS Invested in capital assets, net of related debt $ 60,554,766 $ 44,997,371 $ 105,552,137 $ $ 20,945 Restricted for capital projects 1,189,493 9,262,398 10,451,891 Restricted for debt service 1,168,326 1,018,676 2,187,002 Restricted for special projects 4,639,015 1,214,345 5,853,360 Restricted for other purposes - 213,000 213,E Unrestricted 7,476,121 6,004 775 13 480.896 125,188 78,880 Total net assests $ 75,027,721 $ 62,710,565 $ 137,738,286 $ 126,188 $ 99,825 Total liabilities and net assets $ 93,931.469 $ 70,353,358 $ _ 164,284,827 _ $ 125,593 $ 130,850 See accompanying Notes to the Financial Statements 20 � G 3 E &0W� Imm CM tR WD CV kNf S Fo7CDeh M r- 00 W's CA Y I- tt7 tf] [V Ci �C72�r-r- t7 to rF 10 to t!7 CS to t+} r- [1! w OMw ' W r#7 .-- to m t- iws q�II UM w C] Y ri r- C] to r ^ ay fn 0 w ro cm w t7 C3 Y [V ZV 'Re MNW `ef t l7 M - to C+I m r` •- Ck a ON Nr Co 0 r [V tr7 � .- LO to oo 0 `*tn*Mt4d NIS r•- try L7 N +t U'j r C7 3 r� r? ,- e7 . - cy co C7rM ltJJ fl- N m t'3 t� cs r - M. .r. fq aw `� til W tri r [V r C:► r- � W CV M .- v► v1 ens CD I* r- r tf3 C] iiSaO elk� tel i+s �► rt-+� .. rn c r► t11 tC m in rL! til c+f Go], co a c J to W tO - tsa tas iv Q to Y a+7 t{� �' �� ! �• isi m tiJ �w" r r- i47 00 tCl •! 111 LA r [V VO , o co w M r ►V r- tii f�1 fn I ♦y ry �+1 Y^► r - [L co w t['�iJ Y r- t[: 1C7 C-4 ' tr1 Q N Ctt rt . - av OI r [y uT-a C�7 h f- G7 W r- W tlt C7 til e+] al ~ 1'� c•r li 407 tV Q �h i!� '+t to w r7 r t0 60 CV as r` w •- ra - ` Ca w u a u ' ao V N t- Lf] M 1! 90 M M Q t7 ■r .- eqr N u7 r a0 rn Iri nr w CD f- 1�7 cla r- Co to v o 4d W; K7 ry V n r - ers e7 �C]CSWtcp i]e elk at as 4^ U% �M p Cn .r I %* yr vs rn In 0 vi es rotov•-10wr 17 r- CD cm r- sneo) r-0 mr co W9. 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YP" L0 {r[} r� v L..7 r e-- r r tt7 Ln © v e^ r N © r C6 CN CV r - r- T- Y r 93 rn a � is. � � �# �► � � r# iit fel � i1� m C C *, 1 1 0)C14 a 1 r©tt to c1� Cc3 + �]C14 rr� 1 r r tii o � 1 + r 1 tyy 1 Q) r t t��.t. crp iC�7 C7 C�1 rtl ® rM C LL '? _ 0CL > r- as © N Cy r- V-1 v i1 G7 N r- r N N r��-pp i��pp CJs C��] M C * CO rte• CL 0 Oggao J +r- a tot 60)� U �v as CD r- r nD Isa ta�vavN v •�- N©© fl- ! t i CO N v � � 1 � N � N f- CO r ccs 1 � 1 1 cq M CO 8 c�io U- co m M N M[Y] r co, cm an 6 to t � CN CN C3 r CODO tp CV a� (9 v •- N .-- N u7 N •-- cv m Cp as 04 69 W9, MY uc). r C r� (D® C > rfs m m o 4) "' " 4 as 0 �0ssar ❑ O x q4D at+ tii 0 0 U tC7�m- z0C3(L`1� 4cL) 22 C n Ty m C C 7 03 m 40 CL 0Cl) so t� c � C- Lis m m 0 m V a0.r v ❑ Z Z i2vo l P' R W itIx�� 2 42 E Ri �U nJ C iz 0 0 z CD c Cl E rn City of Kalispell, Flathead County, Montana Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets June 30, 2007 Total fund balances - governmental funds Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Property taxes receivable will be collected this year, but are not available soon enough to pay for the current period's expenditures, and therefore are deferred in the funds. An intemal 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 assets Long-term liabilities are not due and payable in the current period and therefore are not reported as liabilities in the funds. Loans receivable that will be collected at some future date that are recognized as revenues on the statement of activities. Total net assets - governmental activities See accompanying Notes to the Financial Statements 23 8,704,081 751152,970 5,155, 856 114,268 (15,381,218) 11271,764 75,027,721 0N��rn � N as 010 U) f- cnCD� 0 r `[! t7 r N !-- r V— C4 I T � C*3 r-- r r r N V- r w �..� E r r &0 Vol 60* F/4 Y! 60 fil). 0% OR. Act N i [D ' co [3 m[17 (93C4 " C41 ' C] $ N � � Co N V) r CD r- C3 r r r F C N CwiC6 td V) 0) r th t[3 C] C? LO O CG L� W) IT i�7 .- q� �- [� r �j N m N S�7 t!] e- j e� � W g7 C4 Ld U3 w �7 ty 1A 4I! UF! Vl N} i/l il4 i/} M O� D r r t r r r e t� 0) r. t / / / i � .rt E .�} CN) 0 C p CCV N xN- f� r- w a`Z 16 «7 C13 oi Cli Chi t ❑ NNN N N N 4wo 44 1 40 w V* V, �y tCr�''�� ^VAu N N � fV C�i N [tel N a v 2 to 9 40 V C (7): s r� r t � r r r r : [� 1 t p {rf i e s t 1 M r [may C O �j c+trll_i9 fnN �— AC Q �' :7 Q � � a 40 t* S& w A1 r r f r00 Ce`�' *�� ,C�� t� � M i�. � r r^ Ch ir1 [tii iV tl'1 Il] �U, U.v �0 U. �T Mtrp�I V CD M 0 [ �0 iii i- ��t�7] r r i� Q1 r M [m C 0a N 0 V d3 cNh � N �y Cfl C41 V LO c*} IT wi vV. V-1 ,-- 4�1 iH sA � il* iPl MI! ilk d� i� � C3 w � a rn u Jo w o CD EC� Lu p C C a C duns p / Co C 0 ® 'm m set � � � �. � g � � t� -Z W G W tJ e! o� W i. U D cm z IV �! ►- cUu.�5 (aaU=❑❑mU Saar -- I- a it 0 Z s.L a: u. U- 24 CIi 1�5 C U- 2 0 m co G C E o� V) City of Kalispell, Flathead County, 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, Zoo? Amounts reported for grovemmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets: - Capital asset expenditures - Capital asset expenditures (not capitalized) - Depreciation expense In the Statement of Activities, the transfer of capital assets to enterprise funds is recognized. The fund financial statements do not recognize this transaction, because there is no flow of current financial resources. Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds: - Donated capital assets - Long-term receivables (deferred revenue) The change in compensated absences is shown as an expense in the Statement of Activities Repayment of debt principal is an expenditures in the governmental funds, but the repayment reduces longterm debt in the Statement of Net Assets: - Long -tern debt principal payments Long term debt proceeds provide current financial resources to the governmental funds, but issuing debt increases long -tern liabilities in the Statement of Net Assets: - Proceeds from the sale of long --term debt Internal service funds are used by management to chane the costs of certain activities, to individual funds. The net revenue of the internal service funds is reported with the governmental activities of the Government -Wide Statement of Activities net of the amounts allocated to business -type activities and depreciation expense. Change in net assets - Statement of Activities See accompanying Notes to the Financial Statements 25 $ (2,464,855) 4,353,483 (2,813,734) (3,537,522) (1,306,683) 4,581,532 (500, 942) 21,158 1,068,087 (150,000) (20,246) $ (831,722) !r7 cq Cq p3 s t r r CD CO v [r7 L ❑a �oN Co ctrl r- `n n -M (I qcr G co o r 04 N C4 L CL U C >40 C rte• c � G ® o:a � € c �: � � 6 Eca � iv y � Q3 0 ri C C c C :3 0 I= � V 0 E .... ❑ 8� z % 0 0 � �. � C CJ r!1 69 Go 0 10 0 c CL .6... � ° c O- o' � 613 69, 69 v q_ to ra M a7 rn v f- <73 ti ti� v ,�� o w �> i rn ti ti to� o. t •v o 0) .°r�';°ra [77 M cor +r C3 N c0a v U) CD V) t-_ c +w+�� M M (D c7 v t - to M fl w � &L6C �:, = m c c c,7 v Cf] OD V) CV N (n co O E C] 47 +r (D co C4 ti Qi >> Iv N d"er cl "it' w CD -r- Y Y v c M r- tri N Cd N M CID N co V- r N 0 T^' u] V N CD qt W r c[] r- V) A V M r CD N W >® m c r- N M a C3 m N v N N a ti m Zto to V-:, [ti! v V to v 69 w 613 613 fA fi�3 v ' cf,! 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C3 h 1- v t` N- to r- t- Cii V e-- C'] v rl cr7 t[i tD N �' a iJO t N �" ❑'i �t L � N fz 0�7 ( OO ( V N ,- co c+i - N �' T- <" N cc N cd os {'"A v ti- e) 1!] st LV 0 v Q) � v r17 *� � C�] N c7 co co C� � QD CD �- Y= N r7 rn JI) M N7 v CQ CV N N N fI3 613 6R 613 03 V9. 93� 694 613 40 E L c �t L CL U C >40 C rte• c � G ® o:a � € c �: � � 6 Eca � iv y � Q3 0 ri C C c C :3 0 I= � V 0 E .... ❑ 8� z % 0 0 � �. � C CJ r!1 c y +° Go 0 10 0 c CL .6... ° Ura ° c O- o' a4 C o �� c X04 mocc �c_vQ ,�� z to `� �> B a a o. t •v o C . .E c m� E o awe I o. 0 o Wma + -o a JO IM a a Q v o W c C CL av o o its � �:, = m c c m > > v�v E W4� as :3❑ v m c w e8 Qi >> o o w �UF-d© 5i oW C)U <QUU oZZ W >® m c a C3 z J U Zto ciL'il'LrLC� 26 (D (D ' N N a r^ IT- ' (D o m O N ' ' ' N (D v ' rf 00 W W (0) T- 'W W M C7 00 0 0 0 'fit r- r CD cri M W v aO N v 0 W - C: !� N to to N " n C cvfl- (a Ci C (o am as v ti C vW C14 v N 0 � C7 e MC4*--4D NMc)vv C> -coMM r~ 00Ca00 to o) 000 r* � N r^ V N V LO N 0 M W ti a W W CO V- rl- W (D M 0 0 fl- a U 1 M 14 ti 0 N M� M O N V CO 't 400to to runic M W (D r M N 0 W 0 w w r w Iw Go w 0) o o CO wr- Ln w M- W N r- M D7 t•• M CV M t- OO VI cn r r✓WC4 N towC%4n r00tC)M0C14CM Q t` 00 C'7 r N M N o � � C) C� H W). 09 vl} (6 Vp 6% &3. ull 60l 611, N : N (MDOMDM N E N8� � Q ! r titiGM1 � � to v_ v iv_ N n r {+. N cn w to 0 N N t` v CV r` W C P r- W W C] O 00 t� E(00 DD Vt N o r tis M ao W � � 10. C C U. 6% 9). ta03� V* 60 69k t�t7 o (D W r• ' to © t- M v W C7 co V) to r- tC3 LV CV W Cn •- C: im N Co u1 CV W V-- N N C7 M W) to W N W a M r W) N Cil M 0 til C co co "I t• t[7 C? M a co ice- M r M M w M cn to ti wLO M w t) ") N CD N N +� M to r - s tv m V co w r-- N r- ew +r tt) a G C 0NtC'7t• QW F-0rl-0t-t)N W C%I0 t• C,00 N©N D ,� C9 r vtNi• CO t`r-�nC3)�vr~ NMa©WMWLf) It w 0 LO CD o in CO IW 0)Q N (Ir C7 h (C) stj e ' tCk tp (4 ty tC7 tD !-: et M (•3 co (x'wt M tp cD r d (r7 v N tt7 r CO (D u] to t• M r• N v C m N u] Tw r r 0) N d' CO tf3 wr +� C> 00 t- '4 q' N M M r r {+] e1' (d W N N [0 LL W ?L � � r W L o tel et W t- O] CO M Y n P- CV W r- (D t%- V W W© in ! LL M %^ 0 C] tri n W) CO IM r" W M CD � W Q M (D N v cn 06�t n f`ce) r CO r - to N t-cr) W) [t3 t37 vidC'fto C14 I— 06 CV 1�C14 tC3 +t N +^- r~ M r to co Ilt 04 c- © CM CO M M W 0� N N r r- st L6 wi tD 0 r > O r T- N o U 0 LL C E U), 03� ffj� Go). 0% tow 61l 6% WI m V D W U) _ 0 W x Qi CD > a >h i W �C m 4i1 C 0 w UJ a Cw (D' C c o UJ U)cn a x ❑ .m e ' ❑ C a 0 y > w ; t' LMv o -� � E a._ �_ mem w ED- - j 0 C: 13 (D 0 cCO ld-03La00L)a v v z v zrxz z 27 28 N C= p C7 C7 00 C) tf) rn 00 � 'r r n n ov r t •.« a v 7 r- vl� tl- 3� r- � AL3 P- 4 'Irr .-- t"- v. t' - G p0 � u GC 00 00 Ira .. CO s � A w 4,; ci c�4 604 t^ SA (jo% car �0% C N 7 [-v CT CT r- C\ -a N %0 00 ON ON 1--4 n C-4 m 00 00 m 0% M oo rn Wn cz� rn --- 00 tt rn t-- -r tit 0 \0 \0 110 "T 00 I'D -r v� .: 1,6 trC4 tr; r - .- , m ON N C4 06 06 06 \0 m n t- 06 t- tf � ntra eri ad 00 rn tT C, � N W CT Q m 06 `moi 4 06 O N t- 00 a" H �❑ ri � r4 .� w � In r; N � N r•i �-� �} 6f3 6+°3 €� �} E+►°3 �r �r oG n .-- Cy © ON W) 00 r r 000 rn Cn \D t- �n •--rt d17 tr CJ r� C4 -t t- ' ' ON In C3 rn 00 r.... - �o + " o Ch oc0 b= rn 00 > , f 1 r -C .I r- 0 rn C7 r: W(4 0©00 %CCl N c� «j 4^ 611� * �U © as � m t ' p a p r ti b. V7 W) .0 I'D CLI 1-0.w 4n Cr] � 00 rw ON �!' ' oQ Qti � 00 n en ++ G 00 r7' ri CV Q Q rn ❑! rn C10 �► A -- DO C`7 n C� I`- -+ .-- erM p r'- CT rrf 116 d� fli Ile 06 r= !o u 00 G7 r*7 QAr,F} 6H 64I3 b�3 n r. ori Cr' C11 ll,�rn r= � CA + o ©© c� Q %0C4 0 r -i m M n as 00 r- to Ci n N w In 1rr to to .0 to 110 ^p + at C C � L" o w tr c►� .-. [� «..: � � ...• -r rn ON rn c� as o oa t- �' � !� n c� to 0\ [� t-� C3 cv v+00 Wn v) tG �G 0•a M G7 tn rn G3 csr r c� rn t d- [V oc CA- 00 o rn � [� � CT ••- ' -� -� to to rl rn rq © lqr +�+ �•! C,� F�°1 4f3 [moi foe ffj a a1 N Q 00.,P. o V" t p C3 � +� 00 ---F tr +b r- r• r- ' C3 ' o VZ 00 t-- r- ., ors x CN ao 00 kn rn cr v 00 rn `rr CT r- +n rn CA 00 00 0 cT C v7 to • + r- 00 n Q; rt to "1- z --• 110 rn r - +i C7 r,, © .❑ -^„ --+ N C7 rl- r+1 •--� "f tr1 ✓ .. a `r �4 fmF} 3 6H fo% R] � b G w c c.� as 0 9 C a i fl .. E 3. 7 ca .Q G > fn Q, " p, 'G t3 c '� •C O C pri w '�1 C Q� ,. ti ❑. 03 03 0 •r Ei .� C sn ❑ ❑ 'n .-❑ O. ^"" •.,. rr, C 'r7 n ' CLQ c►a [ `� C *'' ,`� C ."' '�"g' '«.�. cR! 01 v; 13 C�C7" ani n we C.) ami ❑ "� G. © ❑ O O Gp a C - f a G 'raj -5 r3 "7 > `s o asa� as v b .Ln im D "D u s G 9 bv ❑, = too - �i- 0 CL ] C - 0 Qn cis 2 „ci Z C %a� Z = 6. eD 1. o r V a Ix U 03 x 28 City of Kalispell, Flathead County, Montana Statement of Fiduciary Net Assets Fiduciary Funds June 34, 2007 Agency Funds ASSETS Cash and short-term investments $ 177,179 Total assets $ 177,179 LIABILITIES Other Liabilities 177,179 Total liabilities $ 177,179 See accompanying Notes to the Financial Statements W NOTES TO THE FINANCIAL STATEMENTS CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30,2-007 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City complies with generally accepted accounting principles (GAAP). GAAP includes all relevant Governmental Accounting Standards Board (GASB) pronouncements. In the government -wide financial statements and the fund financial statements for the proprietary funds, Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before November 30, 1989, have been applied unless those pronouncements conflict with or contradict GASB pronouncements, in which case GASB prevails. For enterprise funds GASB statement Nos. 20 and 34 provide the City the Option of electing to apply FASB pronouncements issued after November 30, 1959. The City has elected not to apply those pronouncements. Financial Reporting Entity In determining the financial reporting Entity, the city complies with the provisions for GASB statement No. 14, The Financial 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 it's will on the unit or a financial benefit or burden relationship exists. Priniary 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 grits Discretely presented component units are separate legal entities that meet the component unit criteria described above but do not meet the criteria for blending. The Cities' two discretely presented component units, the Kalispell Parking Commission, and the Downtown Business Improvement District are legally separate organizations of the City, but the City is financially accountable. The component units are reported in a separate column to emphasize that they are legally separate from the City. Kalispell Parking_ Commission The Kalispell City Council passed Resolution 4103, a Resolution of intention to create Special Parking District #2 on June 1, 1993. Also passed was Resolution 4104, a resolution of intention to provide for funding the cost of maintaining, operating, repairing, and improving Special Parking Maintenance District #2 and Resolution 4105, a Resolution declaring the need for a Parking Commission to function in the City of Kalispell and declaring a jurisdictional area wherein said Parking Commission is authorized to function. The Mayor and City Council appointed the Board of Directors composed of City residents who operate businesses within the district. The Parking Commission opened their doors on February I st 1994. The City transferred $53,000 in Fiscal 1994 to the district as start up money, no further City funds have been given to the district. It is intended that the Parking Commission be operated as a Proprietary type fund and has been classified as such in the City's financial statements. 30 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 12007 Downtown Business Improvement District On May 17, 2004, by resolution 4891A, the City created the Downtown Business Improvement District. The purpose of which appears to promote the health, safety, prosperity, security and general welfare of the inhabitants of the City of Kalispell and the proposed district, and appears to be of special benefit to the property within the District. The District boundaries are roughly ."d Avenue East to 2d Avenue west between Center Street and 41h Street South. Publicly owned property and owner occupied single family dwellings are exempt from the assessments related to the District. Basis of Presentation, Measurement Focus, and Basis of Accounting Government wide Financial Statenients The government -wide financial statements (i.e., the Statement of Net Assets and the Statement of Activities) report information on all of the nonfiduciary activities of the primary government and its component 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 are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The general government function of the City includes expenses which are, in essence, indirect expenses of other functions. These expenses are allocated to each related function. Program revenues include 1 ) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and ?) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Certain eliminations have been made as prescribed by GASB 34 in regards to inter -fund activities, payables and receivables. All internal balances in the Statement of Net Assets have been eliminated except those representing balances between the governmental activities and business -type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, 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 Assets 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. 31 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 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 bo days after year-end. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences and claims and judgements which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Real and personal property taxes, special assessments, charges for current services, and interest earnings are susceptible to accrual. Other receipts and taxes become 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. 11a jor 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. 32 CITY OF KALISPELL NOTES TO FINANCIAL. STATEMENTS JUNE 301P 2007 The Community Development Loan Revolving Fund was established to account for the lending and repayment of monies loaned to businesses and individuals for projects approved by the City's Community Development department. SID 343 is a debt service fund established to account for the resources accumulated and payments made for principal and interest on the ?0 year bonds sold to reconstruct Sunnyview Drive. SID 344 is a debt service fund established to account for the resources accumulated and payments made for principal and interest on the ?o year bonds sold to finance the construction of the Old School Station Industrial and Technology Park. The SID 344 capital project fund was established to account for the resources accumulated and expenditures incurred for the construction of infrastructure at 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 e-�, enses, 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. ,Vgjor Funds 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. The Ambulance Fund accounts for the activities of the City's ambulance service. Fiduciary funds account for assets held by the government in a trustee capacity or as an agent on behalf of others. The agency fund is custodial in nature and does not present results of operations or have a measurement focus. Agency funds are accounted for using the modified accrual basis of accounting. This fund is used to account for assets that the City holds for others in an agency capacity. As a general rule the effect of interfund activity has been eliminated from the government -wide financial statements, and the internal service funds have been absorbed pro -ratably into governmental -type and business -type activities on the government - wide financial statements. Exceptions to this general rule are charges for services between various functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. 33 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 7007 Budgets Budget Process An annual appropriated operating budget is adopted each fiscal year for the general fund, special revenue funds, debt service funds and capital projects funds on the modified accrual basis. In addition, a budget is 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. Budget appropriation transfers may be made between general classifications of salaries and wages, maintenance and operation and capital outlay. Reported budget amounts represent the originally adopted budget as amended by resolution of the City Council. It is management's responsibility to see that the budget is followed to the budgetary line item. The City Council may amend a final budget when shortfalls in budgeted revenues require reductions in approved appropriations to avert deficit spending; when savings result from unanticipated adjustments in projected expenditures; when unanticipated state or federal monies are received; or when. a public emergency occurs which could not have been foreseen at the time of adoption. The procedure to amend the budget in total can be made only after the City prepares a resolution, notice is published of a public hearing, and a public hearing is held in accordance with state law. All material budget amendments and transfers during FY 7007 are described below: Increased general fund appropriations by $116,500 to provide for severance pay in the police and fire departments, unanticipated overtime costs in the fire department, and rent/lease payments that were needed because the planning and parks departments could not move into the new city hall building (wells Fargo). Increased Street Maintenance fund appropriations by $74,000 to provide for severance pay. Increased Rome Investment Grant fund appropriations by $6,758 to account for expenditures carried over from fiscal year 7006. Increased SID Revolving fund appropriations by $10,000 to cover a transfer to the general fund. Increased Sewer fund appropriations by $9,757,644 to account for the increased cost of construction to increase the capacity of the waste water Treatment Plant. 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, bidders bonds, 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 111, A, except for investments in STIP and particular bonds, which are reported at fair value. 34 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, Zoo? 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 and Payables 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 fiends ( 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. 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. 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. A reserve for estimated uncollectible accounts receivable is maintained for the Water Fund, Sewer Fund and the Ambulance Fund. The reserve balances are as follows for June 30, 2007: Water $ 101800 Sewer $ 16,282 Ambulance $ 219,729 3. Inventories and Prepaid Mems Inventories for materials and supplies for governmental fund types are expended at the time of purchase. Enterprise Fund inventory of materials and supplies are valued at cost and the First -In First -Out (FIFO) method is utilized. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. 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. 35 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, ?007 5. Capital Assets Capital assets, which include property, plant, and equipment, are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of five years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. As required by GASB, the City of Kalispell has retroactively reported its streets as part of capital assets in the financial reports for fiscal year 2007. More detailed information on the City's streets and all capital assets can be found in Note D. Capital Assets. The costs of normal maintenance and repairs that do not add to the value of the assets or extend asset lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related assets. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of fixed assets is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Depreciation has been provided for the property, plant and equipment of the proprietary funds using the straight line method. The useful lives of these assets have been estimated as follows: Buildings 20-50 years Improvements Other than buildings 10-50 years Streets 20 years Machinery, vehicles and equipment 5-20 years Water and Sewer lines, pump stations 10--50 years 6. Compensated Absences It is the City's policy and state law to permit employees to accumulate a limited amount of earned but unused vacation benefits, which will be paid to employees upon separation from City service. Employees are allowed to accumulate and carry over a maximum of two times their annual accumulation of vacation. 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. The liability associated with governmental fund - type employees is reported in Governmental Activities column of the Statement of Net Assets, while the liability associated with proprietary fund -type employees is recorded in the respective fund and the Business -type Activities column of the Statement of Net Assets. 7. Long - Term obligations In the govem-ment-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, or proprietary fund type statement of net assets. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed when incurred. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance 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. 36 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Excess of expenditures over appropriations For the year ended June 30, 2007, all City funds expenditures were less than or equal to budgeted appropriations. B. Deficit Fund Balances The following Funds had deficit fund balances at June 30, 2007: Debt Service Funds 1999 Sidewalk & Curb $ 259 2000 Sidewalk & Curb $ 372 2002 Sidewalk & Curb $ 228 2005 Sidewalk & Curb $ 811 These deficits Will be eliminated as delinquent assessments are collected. NOTE 3. DETAILED NOTES ON ALL FUNDS AND ACCOUNT CROUPS A. Cash and Cash Equivalents Investment Income Income from pooled investments is allocated to the individual funds based on the fund's month end cash balance in relation to total pooled investments. Cash Composition Cash and investments may include cash and cash items; demand, time, savings, and fiscal agent deposits; investments in the State Short --Term Investment Pool (STIP); repurchase agreements; U.S. government treasury bills, notes bonds, and other treasury obligations such as state and local government series; general obligations of certain agencies of the United States such as Federal Home Loan Bank; and U.S. government security money market funds if the fund meets certain conditions. Total City's (primary governmental and component units) composition of cash, deposits and investments at fair value as of June 30, 2007, are as follows: Cash on hand $ 2,180 Cash in banks: Demand Deposits 753,213 Savings Deposits 43.630 Bonds/Warrants 59,844 STIP 18,598,907 Government Backed Securities 7,,370,503 Total $2_6_328.277 37 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 Credit Risk Section 7-6-202, MCA, limits investments of public money of a local government in the following eligible securities: (a) United States government treasury bills, notes and bonds and in the United States treasury obligations, such as state and local government series (SLGLS), separate trading of registered interest and principal of securities (STRIPS), or similar United States treasury obligations; (b) United States treasury receipts in a form evidencing the holder's ownership of future interest or principal payments on specific United States treasury obligations that, in the absence of payment default by the United States, are held in a special custody account by an independent trust company in a certificate or book entry form with the federal reserve bank of New York; or (c) Obligations of the following agencies of the United States, subject to the limitations in subsection 2 (not included): (i) federal home loan bank; (ii) federal national mortgage association; ( iii) federal home mortgage corporation; and ( iv) federal farm credit bank. With the exception of the assets of a local government group self-insurance program, investments may not have a maturity date exceeding 5 years except when the investment is used in an escrow account to refund an outstanding bond issue in advance. Section 7--6-205 and Section 7-6--206, MCA, state that demand deposits may be placed only in banks and Public money not necessary for immediate use by a county, city, or town that is not invested as authorize in Section 7-6-202 may be placed in time or savings deposits with a bank, savings and loan association, or credit union in the state or placed in repurchase agreements as authorized in Section 7-6-213. The City of Kalispell has no investment policy that would further limit its investment choices. The City of Kalispell has the following investments and their related credit risk as reported by Standard and Poor's or Moody's investment service: Short Term Investment Pool (STIP) Credit Quality ratings by the NRSRO as of June 30, 2007: Security Investment Type Credit Qualily Rating; Commercial Paper $1,854,755,464 A1+ Corporate Fixed $ 475,001,174 A1+ Corporate Variable -Rate $ 3791982,640 A l + Municipal Variable Rate (Unrated) $ 5,000,000 NR Money Market Funds $ 25,000,000 A 1 + U.S. Government Indirect -Backed $ 4929994 56 Al+ Total Investments $2,789738,734 A1+ Securities Lending collateral Investment Pool $ 0 NR Audited financial statements for the State of Montana's Board of Investments are available at 555 Fuller Avenue in Helena, Montana. 38 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2047 Custodial Credit Risk Custodial Credit risk is the risk that, in the event of a bank failure, the government's deposits may not be returned to it. The City of Kalispell does not have a deposit policy for custodial credit risk. All deposits are carried at cost plus accrued interest. As of June 30, 2007, $26,728,277 of the City of Kalispell's bank balance of $26,828,277 was exposed to custodial credit risk as follows: Depository Account Balance Insured Is 1009000 Collateralized -Collateral held by the pledging bank's trust department in the City's name $ 702,754 -Collateral held by the pledging bank's trust department, but not in the City's name $25,961,850 Total Deposits and Investments I 2.6.764.6Q4.__ De�posit_Security Section 7-6-207, MCA, states (1) The local governing body may require security only for that portion of the deposits which is not guaranteed or insured according to law and, as to such unguaranteed or uninsured portion, to the extent of: (a) 50% of such deposits if the institution in which the deposit is made has a net worth of total assets ratio of 6% or more; or (b) 100/© if the institution in which the deposit is made has a net worth of total assets ratio of less than 6%. The amount of collateral held for the City of Kalispell deposits at June 30, '1007, equaled or exceeded the amount required by State statues. Concentration of Credit Risk The City of Kalispell places no limit on the amount the entity may invest in any one issuer. The City of K.alispell's concentration of credit risk percentages follow for each investment issued that is not issued or explicitly guaranteed by the U.S. government, invested in mutual funds, external investment pools or other pooled investments: Bonds/Warrants % of credit risk <l% 39 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 Interest Rate Risk The City of Kalispell does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The fallowing is a list of individual investments as of June 30, 20Q7 along with their related interest rates and maturity dates. Investment Interest Rate Maturity Date Amount STIP NIA NIA $18, 598, 907 Savings Account NIA N/A $ 43,630 Savings Account NIA NIA $ 590,409 Federal Home Loan Bank 3%-4% 1217107 $ 998,130 Federal Home Loan Bank 5% 8128108 $ 110000630 Federal Horne Loan Bank 2.75%--4% 14/29107 $ 999,460 Federal Horne Loan Bank 4% 1215108 $ 996,880 Federal Home Loan Bank 4%-4.5% 4121109 $ 998,750 Federal Home Loan Bank 5.1% 6118109 $ 498,440 Federal Home Loan Bank 4%-5% 3122110 $ 861,053 Federal Home Loan Bank 5.50% 6/11110 $ 1,000,000 S&C Bonds NIA NIA $ 59,844 B. Interfund Receivables and Payables The composition of inter -fund balances as of June 30, 2007, were as follows: Due to/from other funds: Receivable Fund General - Major Governmental Airport TIF (1) CD Revolving - Major Governmental U DAG (1) Drug Grant (1) SID - Revolving (1) SID - Revolving ( 1 ) SID - Revolving (1) SID - Revolving (1) SID - Revolving (1) SID - Revolving (1) ( 1 )Non-maj or G overnrnental Funds Advances to/from other funds Payable Fund Amount Purpose Health ( 1) $ 33,000 SIT Loan Airport TIF Debt Service (1) $ 40,000 SIT Loan Street Maintenance (1) $ 19,880 S/T Loan Light Maintenance (1) $ 15,000 S1T Loan General - Major Governmental $ 5,884 SIT Loan 1999 S & C (1) $ 259 SIT Loan 2000 S & C ( 1 ) $ 372 SIT Loan 2002 S & C (1) $ 498 SIT Loan 2003 S & C (1) $ 458 SIT Loan 2004 S & C (1) $ 170 SIT Loan 2005 S & C (1 ) $ 848 SIT Loan Receivable Fund Payable Fund Amount Purpose CD Revolving - Major Governmental Street Maintenance (1) $ 60,120 LIT Loan UDAG (1) Light Maintenance (1) $ 29,000 LIT Loan ( 1 )Non -major Governmental Funds 40 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, `'007 C. operating Transfers The following is an analysis of transfers in and out during Fiscal Year 2007: From To Amount Purpose Health (1) General - Major Governmental $ 435,046 operating SID Revolving (1) General - Major Governmental $ 25,000 Excess Airport TIF - Debt Service (1) Airport TIF - Special Revenue (1) $ 140,000 operating Westside TIF -- Debt Service (1) Westside TIF - Special Revenue (1) $ 400,000 Operating General - Major Governmental Drug Enforcement Grant ('I) $ 367884 Match General - Major Governmental Law Enforcement block Grant (1) $ 7,693 Match 1997 S & C (1) SID Revolving (1) $ 245 Close ( 1) Non -major Governmental Fund D. Capital Assets Capital asset activity for the year ended June 30, 2007 was as follows: Transfers between fund types Effective August 15, 2005, the City Council, by resolution #5054, annexed 55 acres of property, to be known as Old School Station Addition No. 364, located just east of Highway 93 on Demersville road approximately 1.9 miles youth of Four Corners intersection and directly east of the Rocky cliff road intersection. By resolution No. 5063, on October 3, 2005, these 55 acres were specified a Special Improvement District. In fiscal year 2007, the Old School Station infrastructure was completed and a portion of the improvements were transferred to enterprise funds as follows: From To Amount Purpose Old School Station Construction Water Enterprise $ 893,019 Well/Mains/Hydrants Cold School Station Construction Sewer Enterprise $ 585,570 Mains (storm isanitary) Also, in fiscal year 2007, the General Fixed Asset Account Group transferred construction in progress valued at 535,570 to the Airport enterprise fund. This Airport TIF expenditure from fiscal year 2005 relates to the assessment and appraisal of a planned land acquisition. From To Amount Purpose G FAAG Airport Enterprise $ 35,570 Land Capital assets transferred from governmental funds to enterprise funds are not reported in the Statement Of Revenues, Expenditures, and Changes in Fund Balances, because there has been no flow of current financial resources. 'he enterprise funds report it as a capital contribution in the Statement of Revenues, Expenses and Changes in Net Assets. It is reported as a transfer for both sides in the Statement of Activities. City of Kalispell streets 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 2007. Streets with a value of $69.794,882, were added to the City's general fixed assets. On the (government -wide financial statements 54,576,115 is contributed capital for fiscal year 2007. Another 5851,468 was an expenditure in fiscal year 2007. The balance resulted in a restatement of prior years net assets. 41 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 The current value and remaining service life of the streets was determined by an outside appraiser based on square yardage and a replacement cost of $40 per square yard. To arrive at historical cost, the City used the information provided by the outside appraisers (current replacement cost and remaining service life), an assumed 20 year service life, and the Engineering News --Record's construction cost index. The 20 year service life is also being used for depreciation purposes. Governmental Activities: Capital assets not being depreciated: Land Construction in Progress Total capital assets not being depreciated Capital assets being depreciated: Buildings Improvements other than buildings Machinery and equipment Infrastructure Total capital assets being depreciated Less accumulated depreciation for: Buildings Improvements other than buildings Machinery and equipment Infrastructure Total accumulated depreciation Total capital assets being depreciated, net City capital assets, net Internal service funds: Data Processing Less accumulated depreciation Internal service funds assets, net Balance Balance July 1, 2006 Additions Restatements Deductions June 30, 2007 $ 2,502,765 $ 2,502,765 113221849 229,807 (1,306,68 2451973 3,825,614 229,807 - (1,306,683) 2)7481738 1517721960 $ 554,154 1613271114 1217631182 5071956 13, 271,138 4,198, 094 2471831 (21,567) 4,424, 358 - 4,581,532 65, 213, 350 69, 794, 882 321734,236 5,891,473 65,213,350 (21,567) 103,8171492 (4,298,287) $ (508,524) (4,806,811) (21219,457) (502,452) (2,721,909) (2,239,053) (290,202) 211567 (2,507,688) (2,236,344) (19,140,507) (21,376,851) (8,756,797)(3,537,522)_ (19,140, 507 } 21,567 ____431,413.259) 23;9771439 213531951 46, 072, 843 - 727404,233 $ 27,803,053 $ 2,583,758 $ 46,072,843 _$ 41,306,683} $ 75,152,971 Balance Balance July 1, 2006 Additions Deductions June 30, 2007 $ 121,488 $ 121,488 (106,263)_ (61136) 112, 399 $ 15,225 $ (6,136) $ - $ 9,089 42 CITY OF KA.LISPELL NOTES TO FINANCIAL STATEMENTS .JUNE 30, 2007 Balance Balance Business - e activities: July 1, 2006 Additions Deductions June 30, 2007 Capital assets not being depreciated: Land $ 1,6101492 $ $ 1,610,492 Construction in progress 893,888 118751309 (319, 090) 2,450, 107 Total capital assets not being depreciated 21504,380 118751309 (319, 090} 41060,599 Capital assets being depreciated: Buildings 3161731 - -- 316,731 Machinery and equipment 118251859 238,444 (71009) 210571294 Source of supply 767,838 Less accumulated depreciation (57v550) 767, 838 Pumping plant 27038,474 6431614 - $ (4, 253) 21682,088 Treatment plant 15,302,584 3157679 15,618,263 Transmission and distribution 3117291430 81652,534 (102,887) 40,279,077 General plant 318671104 131092 3, 880,196 Storm sewer system 71096,973 1, 558,264 81655;237 Total capital assets being depreciated 62, 944, 993 11,421, 627 (109, 896) 74, 256, 724 Less accumulated depreciation for: Buildings (144)176} (15,682) (1597858) Machinery and equipment (11110,322) 71009 (1547591) (1,257,904) Source of supply (362,850) (16,802) (379,652) Pumping plant (8137479) (83,670) (897,149) Treatment plant (10,813,754) (732, 925) (11, 546,679) Transmission and distribution €7,689,2313 75,628 (802,458) (87416,061) General plant (11416,850) (227,164) (11644,014) Storm sewer system (11918,023) (187,453) (2,105,476} Total accumulated depreciation (24,268,685) 827637 (21220,745) (26,406,793) Total capital assets being depreciated, net $ 381676X8 $ 11, 504, 264 $ (21330,641) $ 47, 849, 931 Business -type activities capital assets, net $ 4171807688 $ 13, 379, 573 $ (2,649, 73'1) $ 51, 910,530 43 Balance Balance Component Unit: July 2006 Additions Deductions June 30, 2007 Parking Commission assets $ 827748 $ - $ - $ 827748 Less accumulated depreciation (57v550) .. 41253}- (61,803 Component unit assets, net $ 25,198 $ - $ (4, 253) $ 20,945 43 CITY OF KALI S P E LL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 Depreciation was charged to functions/programs of the primary government as follows: Governmental Activities: General Government $31728,714 Public Safety 285,051 Public Works 1147784 Parks and Recreation 386,837 Community Development 31282 Total Governmental Activities $4,518,668 Business--tvoe Activities: Airport $ 951807 Water 5621917 Sewer 11422,707 Ambulance 26,997 Solid Waste 112,315 Total Business -type Activities $ 2,220,743 The depreciation on the capital assets held by the City's internal service fund is included in general government. E. Long -Term Debt During the year ended June 30, 2007, the following changes occurred in liabilities reported in long --term debt: Due within year $ 310,000 557,197 447,135 335,612 194,504 25.100 Total $ 2553 7 8, 923 $ 12 448, 762 $ ( 3, 251, 337) $ 23, 576, 348 $ 176697b4b. (1 )reported in long-term debt account group (2)reported in enterprise funds (3)reported in component units (4)reported in internal service fund In prior years, the general fund was used to liquidate compensated absences and claims and judgments. 44 Balance Balance July 1, 2006 Additions Reductions June 30, 2007 (1)G.G. Bonds $ 6,085,000 $ - $ (300,000) $ 5,7851000 (1,2)Revenue Bonds 7,072,773 (21138,905) $ 4,933,868 (2)SRF 2,986,000 1, 283,159 (277,000) $ 319921159 (1 )Assessments 51730,774 (340,928) $ 52389,846 (1)Contract Debt/Loan s 1,836,948 (194, 504) $ 1,6421444 (1)lntermediary Program 4771500 150,000 $ 627,500 ( 1, 2, 3,4)Com pen sated Absences 1,189,928 15,603 - $ 1,205, 531 Due within year $ 310,000 557,197 447,135 335,612 194,504 25.100 Total $ 2553 7 8, 923 $ 12 448, 762 $ ( 3, 251, 337) $ 23, 576, 348 $ 176697b4b. (1 )reported in long-term debt account group (2)reported in enterprise funds (3)reported in component units (4)reported in internal service fund In prior years, the general fund was used to liquidate compensated absences and claims and judgments. 44 CITY OF KALISPELL NOTES TO FINANCIAL. STATEMENTS JUNE 30, -.2007 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, 2_047 were as follows: Origination Interest Due Principal Annual Balance Purpose Date Rate Term Date Amount Pant 30--Jun-07 Aquatic Facility 4/15/2002 2%-4.9% 20 years 2022 $ 3,675,000 varies $ 3,070,600 Fire Station #62 4/1/2005 3%-6.5% 15 years 2020 3,004,000 varies 2,715,000 Total O.O. Bonds $ 100,000 $ 6,675,000 $ 5,785,000 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. Revenue Bonds --- Revenue bonds are directly related to and expected to be paid from the proprietary fund. The 2000 Westside Tax Increment bonds and the .21.005 Airport Tax Increment bonds are accounted for in the General Long -Term Debt Account Group. Purpose 2001 Water 2004 Water Refunding 2002 SewerlvVWTP 2000 Westside T I F 2005A - Airport T I F 20058 - Airport TIF Issue Origination Interest Date Due Principal Annual Balance Pur ose Date Rate Term Date Amount P�ment 30 -Jun -07 SID 341 9/1/1995 6.06% 15 years 2011 $ 100,000 varies $ 20,000 SID342 11/1/1995 6.34% 15 years 2011 2091000 varies 25,000 S ID343 6/1212001 3.6%--5.5% 20 years 2021 1 75811500 varies 990,000 SID344 6/15/2006 3.7%-5.1% 20 years 2026 475201000 varies 49295,000 1999 S&C 1/1/2000. 8.50% 8 years 2008 1,769 varies 221 2000 S&C 1/2/2001 9.50% 8 years 2009 21315 varies 579 2002 S&C 112/2003 4.25% 8 years 2011 13,364 varies 6,682 2003 S &C 1/112004 4.00% 8 years 2012 13,758 varies 8,600 2004 S&C 11312005 5.00% 8 years 2013 31,693 varies 23,770 2005 S&C 1/3/2006 7.25% 8 years 2014 $ 22,850 varies 19,994 Total Special Assessment Bonds $ 6,496,249 $ 5,389,846 Revenue Bonds --- Revenue bonds are directly related to and expected to be paid from the proprietary fund. The 2000 Westside Tax Increment bonds and the .21.005 Airport Tax Increment bonds are accounted for in the General Long -Term Debt Account Group. Purpose 2001 Water 2004 Water Refunding 2002 SewerlvVWTP 2000 Westside T I F 2005A - Airport T I F 20058 - Airport TIF Issue Interest Balance Date Rate Term Jun -01 4.00% 20 years May -04 2.5%-4.85% 20 years Apr -02 3.51% 9 years Mar -00 6.21% 10 years Sep -05 3.8%-4.40% 10 years Sep -05 3.55%-3.95°/ 5 years Total Revenue Bonds 9-456.000 45 Final Bonds Balance Maturi Issued 30 -Jun -07 2021 $ 761,000 $ 586,000 2424 1,8400000 1, A65,000 2011 21355,000 870,000 2010 21500,000 222,868 2420 114451000 11445,000 2010 555,000 3451000 9-456.000 S 4.933.368 CITY OF KALI SPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 Si nificant 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. Maximum amount of principal and interest due in any future fiscal year $1841,875 City's Reserve $1841875 Significant Provisions of the Series 2000 Westside Urban Renewal Tax increment Bond Reserve Account — The City shall keep in the reserve account an amount equal to the maximum amount of principal and interest due on all outstanding bonds of the Westside Tax Increment District in the Then current or any future fiscal year. OiS .Bond Max Principal and Debt Due in any future fiscal year $821569 City's Reserve $821569 Significant Provisions of the water System Revenue Bonds Debt Service Account - Monthly an amount equal to not less than 116 of the interest due within the next six months and 1112 of the principal to become due within the next twelve months shall be credited to the debt service account. The debt service account was zero as of .lune 301 20071, as all debt service payments were made as of the end of the fiscal year, leaving no accrued interest or principal balance. Reserve Account - The City shall keep in the reserve account an amount equal to the lesser of 10% of the original principal or the maximum amount of principal and interest required in the current or any subsequent fiscal year. For the Water fund the City complies with the 10% of the original principal of all bonds. Original bond issues $3,8842159 Total. Reserve Requirement (10%) 388, 16 Reserve balance 6/30107 3 88 4 l 6 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. 46 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 Cash Flow Coverage Dater Service Charges $2132081897 Misc. Revenue 1344150 Total Operating Revenue $2,3435047 Less: Operating Expense (before depreciation) 1,334,259 Available for Debt Service$.1.4008.1788 Maximum Debt Service $ 5451215 Coverage FY07 185°x© Sewer Revenue Bonds ordinances and Reauired tnformatiun Debt Service Account - Monthly an amount equal to not less than 116 of the interest due within the next six months and Ill 2 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, 2007, 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, the maximum amount of principal and interest required in the current or any subsequent fiscal year, or 125% of the average debt service payable in any fiscal year. The City is in compliance with the maximum amount of principal and interest required in the current or any subsequent year. As of June 30, 2007, the debt service reserve account contains $630,260. 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 maintauung the system and to produce in each fiscal year net revenues in excess of such current expenses, equal to 125% of the maximum amount of principal and interest payable from the Revenue Bond Account in any subsequent fiscal year. Cash Flow Coverage Operating Revenue $3,7975977 Less: Operating Expense (before depreciation) _ 2,459,842 Available for Debt Service $103.383135 Maximum Debt Service $ 6305260 Coverage FY07 212% Audited Financial Statements - The City shall, within 120 days after the close of each fiscal year, cause to be prepared and supply to the original purchaser or purchasers of bonds issued hereunder and the bank or banks designated as agent for the payment of principal of and interest thereon a financial report with respect to the system of such fiscal year as prepared by an independent certified public accountant. The City is not in compliance with this requirement. 47 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 3012007 State Revolving Fund -- In November 1991, the City entered into an agreement with the State Revolving Fund (SRF) to borrow funds to partially finance the construction of a wastewater treatment plant facility. This obligation is to be repaid from the operating income of the sewer fund. In. FY04, the City entered into another SRF agreement to borrow funds to finance the extension of sewer lines south of the City on Highway 93. In FY071, the City borrowed from the State Revolving Fund as a means to pay off water system bonds issued in fiscal years 2004 and 2005. Purpose Sewe r Sewe r Water Interest Origination Rate FY92 4.00% FY04 3.75% FY 07 3.75% Total SRF Loans Loans/Contracted Debt Governmental Funds Amount Outstanding Te rrn Borrowed 30-J un -07 20 years $3,913,425 $1,395,000 20 years 1,475,860 1,314,000 8 years 1,283 ,159 1,28 3,159 BOI .. Board of Investments lntercap Loan Program *The board of housing loan is paid from the proceeds of the rents on the Courtyard Apartments per the agreement with Northwest Human Resources. 48 Origination Interest Due Principal Balance Purpose Date Rate* Term Date Amount 30 -Jun -07 *Board of Housing 3!111995 6.00% 30 years 2/1/2025 $ 271,000 $ 212,076 1301:Pick Up/Aerator 5/16/2003 4.85% 5 years 811512008 40,888 127883 BOI: Building/Plow Trucks 511612003 4.85% 5 years 8/1512008 991390 319316 BOI:City Hall HVAC 7/16/2004 4.85% 10 years 2/15/2014 1511836 1177250 BOI:Streets Building 5/16/2003 4.85% 5 years 8/15/2008 521000 17,879 BOI: Fire Truck 4122/2005 4.85% 10 years 8/15/2015 279,900 244$371 BOI:Tractor//bower 12/23/2004 4.85% 5 years 2/1512010 771425 501094 BO1:Wells Fargo Bldg 9/1612005 4.85% 10 years 8/1512015 13100,000 9561585 Total 1301 loans/contracted debt 21072,439 136421444 USDA: Intermediary Relending Program 10/12/2004 1.00% 30 years 10/12/2034 6271500 6271500 Total loans/contracted debt $216991939 $2,269,944 BOI .. Board of Investments lntercap Loan Program *The board of housing loan is paid from the proceeds of the rents on the Courtyard Apartments per the agreement with Northwest Human Resources. 48 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 Compensated Absences Payable - compensated absences payable, which represent vacation, sick leave and compensatory time earned by employees, and is payable upon termination., were as follows: General Long -Term Debt Account Group $ 92311558 Enterprise Funds 2741582 Data Processing Fund 11843 Parking Commission �,� Total 1.205,531 Rtguirements to amortize debt The annual. requirements to amortize all. long -terns debt outstanding, excluding compensated absences payable, as of June 30, 2007, were as follows: F. State --wide Retirement Plans Substantially all full-time City employees are eligible for one of three retirement pians: Montana Public Employees' Retirement System (PERS); Municipal Police Officer's Retirement System (M.PORS): and the Firefighters' Unified Retirement System(FL.URS). The plans are established by State law and administered by the State of Montana. The plans are cost-sharing multiple -employer defined benefit and/or defned contribution. plans that provide retirement, disability and death benefits to plan members and beneficiaries. The City had a total payroll of $9,038,048 for FY07, of which $8,147,139 is covered by PERS, MPOR.S, or FURS. Component Unit payroll covered by PERS was $48,877 for the Parking Commission... Contribution rates for the plans are required and determined by State law. The contribution rates, expressed as a percentage of covered payroll for the fiscal year ended June 30, 2007, were: PERS MPORS FURS SPECIAL 9% 10.7% Employer 6.94% 14.41% 14.36% State 0.1% 29.37% C.Q. ASSESSMENT CONTRACTED REVENUE FOR FISCAL BONDS BONDS LOANS/DEBT BONDS YEAR ENDED PRINCIPAL INTEREST PRINCIPAL INTEREST PRINCIPAL. INTEREST PRINCIPAL INTEREST TOTAL 2008 $310,000 $249,945 $335,612 $247,651 $641,639 $235,826 $557,197 $198,642 $2,776,512 2009 330,000 233,520 320,391 233,549 646,700 207,707 582,876 1761965 2,731,708 2010 340,000 216,045 3201101 219,973 649,907 1821969 585,795 158,330 21673,121 2011 355,000 203,645 320,101 206,200 662,919 155,882 532,000 134,758 2,570,505 2012 3651000 190,288 313,432 192,314 688,332 128,990 218,000 1 13, 830 2,210,187 2013-2017 2,075,000 723,393 1,534,567 7531789 1,764,732 328,510 1223,000 4281863 8,831,854 2018-2.022 2,010,000 251,185 1,335,000 415,063 625,695 130,061 1,060,000 155,765 519821769 2023-2027 910,642 117,300 366,753 27,846 175,000 12,653 1,610,394 2028-2032 124,876 8,297 133,173 2033-2037 90,550 2,128 92,678 TOTAL $5,785,000 $2,068,021 $5,3891846 $2,385,839 $6,262,103 $1,397,791 $4,933,868 $1,380,006 $29,612,900 F. State --wide Retirement Plans Substantially all full-time City employees are eligible for one of three retirement pians: Montana Public Employees' Retirement System (PERS); Municipal Police Officer's Retirement System (M.PORS): and the Firefighters' Unified Retirement System(FL.URS). The plans are established by State law and administered by the State of Montana. The plans are cost-sharing multiple -employer defined benefit and/or defned contribution. plans that provide retirement, disability and death benefits to plan members and beneficiaries. The City had a total payroll of $9,038,048 for FY07, of which $8,147,139 is covered by PERS, MPOR.S, or FURS. Component Unit payroll covered by PERS was $48,877 for the Parking Commission... Contribution rates for the plans are required and determined by State law. The contribution rates, expressed as a percentage of covered payroll for the fiscal year ended June 30, 2007, were: PERS MPORS FURS Employee 6.9% 9% 10.7% Employer 6.94% 14.41% 14.36% State 0.1% 29.37% 32.61% The State contribution qualifies as an on behalf payment. These amounts have been recorded in the City's financial statements. 49 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 The Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for all three plans. That report may be obtained by writing to Public Employees Retirement Division, P. O. Box 200131, Helena, MT 58620--0131 or by calling 1-406444-3154. The City's contributions for the years ending June 30, 2005, 2006 and 2007, as listed below, were equal to the required contributions for each year. PERS MPORS FURS PARKING COMM TRI CITY ?005 $ 245,330 $ 2025,507 $ 19311135 $ 37406 $ 17,612 2006 $ 280,547 $ 2111227 $ 232,396 $ 39174 2007 $ 313,175 $ 221,686 $ 266,289 $ 3,324 G. Post Employment Health Insurance ]benefits Terminated employees may remain on the City's health. insurance plan for up to 18 months if they pay the monthly premiums. This benefit is required under federal C.O.B.R.A. law. Retirees may remain on the City's health plan as long as they wish, provided they pay the monthly premiums. State law requires the City to provide this benefit. No cost can be estimated for the above benefits, although there is the probability that there are higher medical costs for retirees which would result in additional costs to the insurance program. There are no other post -employment benefits provided by the City. H. Amounts Due From and Due To other Governments On June 30, 2007, the amounts due from and due to other governments consisted of the following: General Fund Due from: Amount State of Montana $ 10,598 Flathead County 479,668 Total $ 4901266 Special Revenue Funds Due from: Amount Flathead County $ 214,711 Other Governments 181283 Department of Justice 81,389 Total $ 3141383 Debt Service Funds Due from: Amount Flathead County $ 4181220 Enterprise Funds Due from: Amount Flathead County $ 1301953 Total $173532822 50 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 3015 2007 I. Restricted Cash/Investments The following restricted cash/investments were held as of June 30, 2007. These amounts are reported within the cash/investment account on the Combined Balance Sheet. Business -type Activities Amount Water Bond Reserve (includes SRF & BOI) $ 388,418 Plant Investment 21853,988 Seger operating Reserve 2137000 Bond Contingency 530,250 Plant Investment (sanitary) 11899, 340 Plant Investment (treatment plant) 41522,510 Plant Investment (storm) 186,551 Treatment Plant Replacement 277141345 Total business --type activities restricted cash/investments $ 13,2081419 Governmental Activities Impact Fees Capital 99,822 Urban Forestry Developers 195,094 Westside TIF Bond Reserve 821588 Airport TIF Bond Reserve 184,875 Total governmental activities restricted cash investments Total restricted cash investments 502,359 $ 13, 770, 778 Plant investment/impact fee cash is from new services and is restricted to be used only for capital(expansion). Operating reserve cash is .restricted according to bond agreement (third party). Treatment plant replacement cash is restricted by an agreement with Evergreen (third party). Urban forestry receives cash from developers to be used to plant trees in new city developments. J. Restatements During the current fiscal year, ,the following adjustments relating to prior years' transactions were made to fund balance and retained earnings accounts. Fund Amount Reason General $ 481738 Building Department $ (48,738) Parks in Lieu $ (35,903) U roan Forestry $ 35,903 Water Enterprise $ (27,250) Sewer Enterprise $ (24;550) Statement of Activities $ 401072,843 Prior Fiscal Year Expense Correction Prior Fiscal Year Expense Correction Prior Fiscal Year Revenue Correction Prior Fiscal Year Revenue Correction Change in estimate Prior Fiscal Year Expense Correction Recording infrastructure capital assets 51 CITY OF KALISPELL NOTES To FINANCIAL STATEMENTS JUNE 30, 2007 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 consist of seven members, six of whore are appointed by the Board of County Commissioners. The Department is financed, in addition to revenue generated by providing health services, by the City and the County levying an identical mill levy, up to 5 mills, in order that all property within the City of Kalispell and all property in Flathead County outside the City limits are taxed equally. The operation is accounted for in the City Health Fund and is included in the general purpose financial statements of Flathead County within the Special Revenue Fund. 2. Courtyard Apartments/Northwest Montana Human Resources The City entered into an agreement with Northwest Montana Human Resources for a joint venture construction project of the Courtyard Apartments. The City owns 16 units of the apartment complex built with Horne Grant and CDGB funds. NWMHR has built 16 units also. The agreement provides for the management of the housing complex for low income housing. All operations and maintenance of the housing complex are managed by Northwest Montana Human Resources. NWMHR maintains a trust fund in the City's name to record the revenues and expenses of the housing complex. As of June 30, 2007 the equity in the fund was $45,279. The debt payments on the mortgage are paid from the proceeds of the rents by NWMHR. The principal balance is recorded on the City's books in the Long -Term Debt Group of Accounts. The original amount of the loan was $271,000. The balance as of June 30, 2007 is $212,076. 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. 52 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 Effective July 1, 1987 The City of Kalispell joined with other Montana cities to form the Montana Municipal Insurance Authority, a self-insurance pool offering worker's Compensation and Liability Coverage. Both public entity risk pools currently operate as common risk management and insurance programs for the member governments. The liability limits for damages in tort action are $750,000 per claim and $1.5 million per occurrence with a $11,250 deductible per occurrence. State tort law limits the City's liability to $1.5 million. The city pays an annual premium for its employee injury insurance coverage, which is allocated to the employer funds based on total salaries and wages. The agreements for formation of the pools provide that they will be self-sustaining through member premiums. The tort liability plan and workers' compensation program issued bonds in the amount of $4.41 million and $7.610 million, respectively, to immediately finance the necessary insurance reserves. All members signed a contingent note for a pro 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. The City of Kalispell ceased its self funded employee health insurance plan on June 30, 2004. From July 1 through September 30, 2004, the City provided employees with a fully funded plan through Blue Cross/Blue Shield. On October 1, 2004, Kalispell signed a 5 year agreement with many other Montana Cities, and through the Montana Municipal Insurance Authority, to create a state wide health insurance pool. The City pays the total monthly premium for employees who only choose to cover themselves. For employees who choose to cover additional dependents, the City pays a percentage of the extra costs. N. Pending Litigation The following is a list of litigation pending against the City and the amount of damages claimed by the Plaintiff. The City Attorney has made no evaluation as to the outcome of each case. The City has liability insurance that may cover all or part of the damages. Accordingly, no provision has been made in the financial statements for these contingent liabilities. 0. Loans Receivable Loss Damages Liti ant Requested Dison $ 1,000 Kruckenberg <10,000 West North <10,000 Talmadge >1 0, 000 Lucas >10,000 Worth X10,000 Anderson E10,000 0. Loans Receivable Loss Potential Status possible Justice Court none District Court nominal District Court remote District Court possible District Court possible Human Rights Bureau possible Human Rights Bureau 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. 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. 53 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 In addition, when an owner -occupant is unable to afford a private lender loan at the pre -determined interest rate agreed to by the City and lender, he or she may qualify for City financing. The City may provide a direct loan of up to $25,000 with a varying interest rate (as low as zero percent) or with a longer amortization period (maximum of fifteen years) or a deferred loan to be repaid simultaneously, at a later date, with a balloon payment, or to be released at the end of ten years. The City has $76,050 recorded as housing rehab loans receivable as of June 30, 2007 in the Community Development Loan Revolving Fund. The above mentioned loans are offset with deferred revenue accounts. Uncollected receivables in governmental funds are offset with deferred revenue accounts as explained in the "basis of accounting". Other loans receivable of the Community Development Loan Revolving Fund: A 15 year loan at 3% to Center Street Plaza in April of 1999. Original Loan amount $ 70,529 June 30, 2007 balance $ 35,620 A 5 year loan at 3% to the Hockaday Museum of Art in August 2002. Original Loan amount $ 10,000 June 30, 2007 balance $ 178 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 loan has 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 S 288,619 June 30, 2007 balance $ 288,619 (principle payments begin in October of 2007) Rural Development Loan Revolving On May 5, 2003, the City Council passed Resolution No. 4780 establishing an Economic Development Revolving Loan Fund (ED RLF) for Small business retention and expansion. The resolution also created an Economic Development Loan Review Committee to process all applications for assistance. Additionally, on August 16, 2004 and again on November 6, 2006, the City Council, by Resolution No. 4929 and 5158, respectively, authorized the City Manager to enter into loan agreements with the United States Department of Agriculture, Rural Development office, in the amount of $520,000 and $750,000. These monies will be used to assist in the retention and expansion of small business, which may stimulate economic development activity by assisting the private sector where a funding gap exists and alternative sources of public and private financing are not adequate. The following loans have been made by the City using the Rural Development funds: A 15 year loan at 5% to Flathead Health and Fitness in November 2-004. Original Loan amount $ 165,000 June 30, 2007 balance S 145,476 A 10 year loan at 7% to Valley Linen in January 2006. Original Loan amount $ 150,000 June 30, 2007 balance S 133,603 54 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 A 7 year loan at 6.25% to Little Caesar's in March 2006. [:original Loan amount $ 37,500 June 30. 2007 balance $ 31,559 A 7 year loan at 7% to Unfinished Furniture Creations in April 2006. Original Loan amount $ 50,000 June 30, 2007 balance $ 45,?47 A 15 year loan at 6.5% to Distinctive Countertops in July 2006. Original Loan amount $ 175,000 June 30, 2007 balance $ 174,324 A 14 year loan at 7% to Crossroads Realty in June 2007. Original Loan amount $ 150,004 June 30, 2007 balance $ 150,000 U'DAG The following loans were made by the City using Urban Development Assistance Grant (LJDAG) funds: A 20 year redevelopment loan at 5% with Big Sky Manor in August 1999. Original Loan amount $ 124,004 June 30, 2007 balance $ 89,878 A 20 year redevelopment loan at 6% with United way in January 2000. Original Loan amount. $ 133,500 June 301, 2007 balance $ 101,210 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, 2007, amounted to $1,116,233. Q. wastewater Treatment Plant agreement with Evergreen The City of Kalispell entered into an Interlocal Agreement with the Evergreen Sewer District # 1 for treatment of sewage from the district at the City's plant. The Evergreen district sewer went into :operation in July 1994. The City bills Evergreen monthly for debt service at 212% of the principle and interest due for the plant. The City also bills for maintenance and operation and replacement costs per the agreement based on metered flows. Evergreen Sewer District has an equity interest in the replacement account carried on the City's books. The balance of the account as of June 30, 2407 is $2,714,345 of which Evergreen's interest is $552,178. R. Gateway west Mall Flathead County Economic Development Authority, Flathead County and the City of Kalispell entered into an inter -local agreement to purchase 59,000 square feet of the Gateway Wiest Mall for $2.5 million and sign a ten-year lease with Stream International, Ltd. The City of Kalispell agreed to acquire the property by issuing a $2.5 million tax increment ui,- renewal bond. The City then conveyed the property to the Authority as "tenants in common". The County through the Authority became vested with an undivided 37% interest in the property with the City vested with the remaining 63% interest. As a result of this conveyance, the Authority recognized its portion of the building and the related debt on their books. 55 CITY 4F KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30.,'12007 The Authority is responsible for the operation maintenance of the property during the term of the initial ten-year lease. The Authority is also responsible for the carrying of property insurance against the property. The City has agreed to reimburse the Authority for its proportionate share of these costs. The Authority has agreed to levy up to two mills or $156,000 for the term of the bond, and has pledged $30,567 of the revenue generated each year to be remitted to the City of Kalispell in two equal installments of $15,254 that will be used toward the retirement of the tax increment bond. The authority shall also set up and contribute $3,000 to a building reserve fund each year of the lease. The reserve will be used for any repair or construction work deemed necessary in maintaining the property. The City issued the tax increment bonds in its name and agrees to be punctual in all debt payments, and will keep all proper records and meet all necessary requirements of the bond resolution. The City shall also set up and contribute $5,000 to a building reserve fund for each year of the lease. The reserve will be used for any repair or construction work deemed necessary in maintaining the property. The Authority shall manage this building reserve. The City has pledged the following revenues towards the repayment of the $2.5 million bond: 1. Tax increment money generated from the Westside Tax Increment District until the City reaches their share of the debt payment or $52,000. 2. The Authority's annual contribution of $30,567. The County has agreed that it will approve the Authority's levy for an ad valorem property tax of up to two mills on all taxable property in the County, until the tax increment bond is paid. Within 180 days of the payment in full of the Bond, either the authority or the City may give notice to each other of intent to purchase the property. The purchase price to be paid will be equal to the total debt service paid by the other party. The Authority has the first option of buying the property from the City. If neither the Authority nor the City want to purchase the property outright. then the City has granted American Capital a right of first refusal to purchase the property. The proceeds from the sale of the property shall be distributed based on the equity interest each entity holds. In August of 2003, Stream International closed their computer support call center in the Gateway West Mall building, and subsequently bought out the remaining portion of their 10 year contract with the City. In February of 2004 the City entered into an agreement with TeleTech Holdings, Inc. TeleTech, which will operate a call-in center, similar to Stream's operation, entered into a lease structured similar to Stream's. Rent abatement is tied to jobs created and maintained and pay. TeleTech will also pay the guaranteed minimum tax payment of $140,0001year. This ensures that the City will be able to meet its portion of the debt obligation related to the Gateway West Mall building. S. Long Term Loans Receivable Hampstead Partners In August of 2002, the City of Kalispell entered into two (2) notes receivable agreements with 2nd Avenue West Partners, L.P. (Hampstead Partners) for property on 2"d Avenue West in Kalispell. The property consists of a 40 -unit low-income apartment complex known as ?"d Avenue West Independent Living Center. As stipulated in the agreement, this property is restricted as low income housing, and shall remain as such for a period of thirty --five years. One of these notes is for $450,000, 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 56 CITY OF KALISPELL NOTES To FINANCIAL STATEMENTS JUNE 30, 2007 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, ?007, is $231655, and $84,968, respectively. WestCoast Hospitality Limited Partnership Barbieri A reement On November 41, 1996, the Kalispell City Council, exercising the powers of an urban renewal agency, adopted ordinance No. 1248, approving the Kalispell Center (Mall) Expansion as an urban renewal project, and authorizing the use of tax increment revenues (Downtown TIF) to finance certain acquisition and demolition necessary to the Kalispell Center (Mall) Expansion. This ordinance also authorized the entering into of a development agreement with Kalispell Center Limited Partnership (developer) in order to accomplish the Kalispell Center (Mall) Expansion. In accordance with ordinance No. 1248, on July 21, 1997, the City of Kalispell entered into a note receivable agreement with Barbieri Investment Company, Inc., in the amount of $890,900, for the acquisition, demolition and redevelopment of land owned by Equity Supply Company. This note has since been assigned to WestCoast Hospitality Limited Partnership as the beneficial owner of the Kalispell Center Property. Terms of this agreement stipulated that if the borrower invested $6.6 million toward the Kalispell Center Expansion within thirty (30) months from the closing of the sale of the Equity Property (April 1, 1998), all the debt would be forgiven. Also, any investment in the expansion, prior to or after the thirty (30) months, would reduce the principal on a pro rata. basis. If the $6.6 investment was not made in this time frame, interest at 9% annually on the remaining principal was to begin to accrue and repayment of the principal and accrued interest would commence in 144 installments. Principal outstanding as of June 30, 2006, was $646,158. On August 2, 2005, the City received a tetter from WestCoast Hospitality Limited Partnership which conveyed their plans of an initial investment of $5 million by the summer of 2006 in the Kalispell Center. This investment in the project would reduce their repayment obligation by approximately $675,302, which is more than the principal balance of $640,866. Repayments of this loan have been suspended. On December 4, 2006, the City Council, by resolution agreed that WestCoast Hospitality Limited Partnership (see section S. Long Term Loans Receivable) had made sufficient investment in the Kalispell Center Mall property to adequately fulfill the intent of the loan agreement with the City of Kalispell. All of the remaining debt is forgiven. The Downtown Tax Increment District sunset in fiscal year 2002. Any tax funds left at the sunset of this district were to be split on a pro rata basis between the taxing bodies (City, County, School District). Because this loan was made with tax increment funds, the County and School District argued that the principal payments on this loan should also be split and distributed. An agreement was reached between the three (3) taxing bodies regarding these funds. T. Subsequent Events Water supply and storage proje_ ct The recently completed facility plan identified a City of Kalispell water storage deficiency. Recent explosive growth in the City's upper zone magnified the need for additional supply and storage to meet domestic, commercial and fire demands. Early in fiscal year 2008, the City began installation of a 2 million gallon in ground storage tank on Sheepherder's Hill, which, in conjunction with the City's new West View Well, will provide a long-term solution to the current deficiency. The cost of these projects is expected to be approximately $5,000,000. Funding will be approximately 70% plant investment dollars (impact fees) and 30% revenue bonds. 57 CITY OF KALISPELL NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 I Tninn rnntrnrt In early fiscal year 2008, an agreement was reached between the City of Kalispell and Local Union No. 256. This union, which includes 67 city employees from public works.' police (dispatchers), parks, building, and miscellaneous other departments, had been working without a contract since July 1, 2006. This new contract was ratified retroactively for the period beginning July 1, 1-006 and expiring June 30, 2009. New Ci�y Hall ( Wells Fargo) In fiscal year 2006, the City of Kalispell purchased the Fells Fargo Bank building at 201 F` Avenue East in Kalispell. At that time, $1,100,000 was borrowed from the Montana Board of Investments, with plans to borrow $500,000 more for remodeling. On October 25, 2007, the City, through a $1,420,165 Lease -Purchase agreement with All Points Public Funding, LLC, completed the refinancing of this original loan and secured additional funds needed for remodeling. Origination Interest Due Principal Semi --annual Purpose Date Rate Term Gate Amount Payment Wells Fargo Capital Lease 10/2512007 4.85% 12 years 2019 $ 1,420, $ 78,376 Wastewater Treatment Plant Expansion Preliminary work was started in fiscal years 2.006 and 2007 on a project to expand the capacity of the waste water treatment plant to 5.5 million gallons per day. This expansion is needed to keep pace with the rapid growth of the community. The majority of this $22,040,000 project should be completed in fiscal year 2008. Planned funding of this project will be a combination of sewer replacement cash, plant investment (impact fees) cash, and a 20 year SRF loan for $14,470,000. 58 -REQUIRED SUPPLEMENTARY INFORIVATION F5 C] +n vi �• a pp .. p G" z C s °a �.i Z ❑ a rL 2 u u.. =3 rA" w V L 00 fI�1 617 Vr 66 r�1 ,1 to) w r.. 46 5pq Tj C ''D o {My W) N e/} i13 rh ^Y +A Qa N 6+3 CQ 3k � Tt GD N 613 GS "! Y1 '7 n3 Co 'A 'T !ll N VQ u N -t -• n +n •-» •c L.�j iA +ort 6R i15 e7 H cl,./ -r- -r r► v4 vlS ar 7 Y7 +rlJ Q 'O 0 v pR C � C] m '� rV nL M O d CR c ri r• a N vi 6I9 I io 69 I vf� n r a+ r,,g � ca ca •n cA oo c11 crt v+ r is n •«- r G� er 00 N 0% -r o M . . Q Lr! rrs cn r*i Lss rrs vR vt Z 60t n ,r; ti � C � C7 � Ca M c CD r- Q y� r•; ry s°4i i 05A a � ° t -Z .r �ia y�G�./[� Yui_.'. y ikrz wMi a4 NOz � ,0 � f . . . N rV eV N i~.7 ¢, 4 �?.1 ❑ LY, j � � r+�. r4 r- r fY vi rZ U V U Q � v ❑ ❑ r� U -a ry,,, � o {► � O � ti � C � C7 � sem, s°4i i 05A a � ° t -Z .r �ia y�G�./[� Yui_.'. y ikrz wMi G � 4r � � i~.7 ¢, 4 �?.1 ❑ LY, j � � r+�. tn '�J � r� LTi w rI7 CII 59 CITY OI= ALISPELL FLATHEAD COUNTY, MONTANA NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Fiscal Year Ended June 30, 2007 Basis ofPresentation The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of City of Kalispell, Flathead County, Montana, and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A--133, Audits of States, Local governments, and Non --Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in preparation of, the basic financial statements. �� E E a U .Rt �r 9 v o Uto n r as 0 ❑ � D E Z " aS m 0 y, �+ n n CL E EW era CS — �a >i e uj v ❑ 0 lz C 0 vJ C w m 9, v a 0 c rb C� CS � c C C Q L] .0 v �c �// �► ! 1 i r ! In In in w W9:1 .-- i 1 { i 1 1 1 i � i 1 1�s 1 7 C q r. 0+ � 171®�� ❑ to � p � cfr � E C q�� G C U o� � 1-iss�(o1°��v >Sp t2 0 � m C @ � � U C � m to to 4* A6 V$ MM � YI rM C] C] p ! 1 i L ! t C itQ 4fl cD N co to tli ! 1 1 1 � k 1 1 1 0 co'co 0 Q �y W W us G9 v Cl CD cA Vol �a 0) m CM ix (19 C:o cm Co rte. WD co r. 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Wffi M N tri to to m Cil tc r Y 0 49 EFF Ul)- 6A W 4rk !q r- lw Q� Cl Cl) nU)-1r. vCS (omcg00C)0t� to W W 0) N CS to C7 co w M Cl) ea MG r-oev r mLO mm ai-M �•tCav4r C]CDCO m Ep "@ r r, N iia 6 CD C] co Ca w ulS tD C] = M�tNW) NC) -47 cV Y' 4S Ge$ V9 s-- tai t17 6 r OCTN m r Ci 406 r" 0 t7 0 O cn ill Cl Ln cq r - it Id 2 Mt @ �W tai to e^ r r d9 49 C a 0 ❑ � D E iii _. " aS m 0 y, �+ n n CL E EW era CS — �a o � � c D a F- i7 m CL } C Cc Q II. P �} CL 0 m E c a e uj v ❑ 0 lz C 0 vJ C w m 9, v a 0 c rb C� CS � c C C Q L] .0 v �c 0 ' IM Y " o Q 9� 4, `' z i7 7 c V y C q r. 0+ � 171®�� ❑ to � p � cfr � E C q�� G C U o� � 1-iss�(o1°��v >Sp t2 0 � m C @ � � U �� C] Q 2 m m � 0 C® C R m mE� as � 'm � an X CCS ` L3 q St 25a s N � 13 v c c ► � ULLI IL Q g0a.IL0T-0D 12 _� z U-XLLU. LU v 0 61 City of Kalispell, Flathead County, Montana Budgetary Comparison Schedule Budget -to -GAAP Reconciliation Note A - Explanation of differences between budgetary inflows and outflows and GAAP Revenues and Expenditures Sources/Inflows of resources Actual amounts (budgetary basis) "available for appropriations' from the budgetary comparison schedule Total revenues as reported on the statement of revenues, expenditures and changes in fund balances -governmental funds. Actual amounts (Budgetary basis) "total charges to appropriations" from the budgetary comparison schedule Total expenditures as reported on the statement of revenues, expenditures, and changes in fund balances - governmental funds 62 Community Development Loan General Fund Revolving $ 10,290,862 $ 135,568 $ 10,290,852 $ 135,568 $ 10,799,297 $ 3.2,935 $ i 0,799=297 $ 342,935 Denning, Downey & Associates, P.C. CERTIFIED PUBLIC ACCOUNTANTS 1740 U.S. Hwy 93 South - Suite 141 Kalispell, .SIT 59901 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING ANIS ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Mayor and City Council City of Kalispell Flathead County Kalispell, Montana We have audited the financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of City of Kalispell, Flathead County, Montana, as of and for the year ended June 30, 2007, which collectively comprise the City of Kalispell's basic financial statements and have issued our report thereon dated February 15, 2008. We conducted our audit in accordance with auditing standards generally accepted in the united States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered the City of Kalispell internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of Kalispell's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Kalispell's internal control over financial reporting. A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the City of Kalispell's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control. -63- Robert K Denning, CPA • Kim M. Downey, CPA Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Com fiance and other Matters As part of obtaining reasonable assurance about whether the City of Kalispell'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. This report is intended solely for the information and use of the Mayor and City Council, management, the Montana Department of Administration, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. amui PFl s, PC . February 15, 2008 m Denning, Downey & Associates, P.C. CERTIFIED PUBLIC ACCOUNTANTS 1740 U.S. Hwy 93 South - Suite 101 Kalispell, MT 59901 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Mayor and City Council City of Kalispell Flathead County Kalispell, Montana Compliance We have audited the compliance of City of Kalispell, Flathead County, Montana, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2007. The City's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the City's management. Our responsibility is to express an opinion of the City's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and DMB Circular A-133, Audits of States, Local Governments and Non -Profit Organizations. Those standards and DMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether. noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City's compliance with those requirements. In our opinion, City of Kalispell complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2007. -65- Robert R Denning, CPA • Kim M. Downey, CPA Internal Control over Compliance The management of the City is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing an opinion on compliance but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. A control deficiency in an entity's internal control over compliance 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 noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity's internal control. We consider the deficiency in internal control over compliance described in the accompanying schedule of findings and questioned costs as iteral 07-1 to be a significant deficiency. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the entity's internal control. We did not consider any of the deficiency described in the accompanying schedule of findings and questioned costs to be a material weakness. This report is intended for the information of the audit committee, management, the Mayor and City Council, the Montana Department of Administration, and federal awarding agencies and passthrough entities and is not intended to be and should not be used by anyone other than these specified parties. 10.6. February 15, 2008 CITY OF KALISPELL FLATHEAD COUNTY, MONTANA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Fiscal Year Ended June 30, 2047 Section I — Summary of Auditor's Results Financial Statements Type of auditor's report issued Unqualified Internal control over financial reporting: Material weakness(es) identified? No Significant deficiency(s) identified not considered to be material weaknesses None Reported Noncompliance material to financial statements noted? No Federal Awards Internal control over major programs: Material weakness(es) identified? No Significant deficiency(s) identified not considered to be material weaknesses Yes Type of auditor's report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section .5 l0(a)? Yes Identification of major programs: CFDA Number Name of Federal Program or Cluster 20.205 Highway Planning and Construction 16.590 DVERT Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee? Yes -67- SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Section II — Financial Statement Findin s No Financial Statement Findings were reported. Section III —Federal Award Findings and Questioned Costs 07-1 Domestic Violence Action Team CFDA Title: Domestic Violence Action Team CFDA Number: 16.590 Federal Award Number: Zoo? Federal Agency: U.S. Department of Justice Passthrough Entity: Direct Condition: The City charged the salary of the wrong police officer to DVAT grant. Criteria: The federal compliance supplement requires governments to limit grant expenditures to those that are allowed by the grant program. Effect: The City reported the wrong police officers salary in their quarterly report to the U.S. Department of Justice. Cause: This was an error in reporting. Recommendation: We recommend that the city review all requests for reimbursement. Denning, Downey & Associates, P.C. CERTIFIED PUBLIC ACCOUNTANTS 1740 U.S. Hwy 93 South - Suite 101 Kalispell, .1 T 59901 REPORT ON OTHER COMPLIANCE, FINANCIAL, AND INTERNAL ACCOUNTING CONTROL MATTERS Mayor and City Council City of Kalispell Flathead County Kalispell, Montana There were no other compliance, financial, or internal accounting matters. 14"Scatu , C PIs, t2C . February 15, 2008 _69_ Robert K Denning, CPA - .dim M. Downey, CPA Denning, Downey & Associates, P.C. CERTIFIED PUBLIC ACCOUNTANTS 1744 U.S. Hwy 93 South - Suite 141 Kalispell, MT 59941 REPORT ON PRIOR. AUDIT REPORT RECOMMENDATIONS Mayor and City Council City of Kalispell Flathead County Kalispell, Montana The prior audit report contained no recommendations. r i February 15, 2008 _70 - Robert K. Denning, CPA • Kim M Downey, CPA. City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, zoo? 71 Old School Tech Old School Air rt 'TIF Westside TIF Parks -in -Lieu TIF industrial TIF Ilealth Lev ,ASSETS ('urrent assets: ('ash and investments 58,186 1,31-1028 40.341 81 81 484 Taxes and assessments receivable, net (488) - - 1.047 - A 115 Notes and loans receivable - - - - - Due from other funds 4€3,000 - - - - Due from other ilovernments 12 - - 80 80 46.453 Total current assets 09,933 1.311029 40,341 1.2€38 161 85.05? Noncurrent assets: Restricted cash and investments - - Advances to other funds - - - - - Delerred assessments receivable - - - Lono, term portion of loans receivable - - - - - Total noncurrent assets - - - - - - Total assets 99.933 1,312.028 28 40,341 1.108 161 85.057 LIABILITIES ('urrent liabilities: Matured bonds payable - - - - Accounts payable 799 10,453 73,647 - - Accrued payroll 444 - - - _ Due to other hinds - - - _ 33,€ 00 Due to other governments - - - - - Deferred revenue (488) - - 1,€347 - 38.115 Other current liabilities _ - - Deferred revenue -loans receivable - - - - - 'rotal current liabilities 755 10.453 '3,647 1,047 _ 71.1 15 Noncurrent liabilities: !advances payable - - - - - Deferred revenue - loans receivable - - - - - Deferred revenue -deterred assessments receivable _ Total noncurrent liabilities - - - - - - Total liabilities 755 10,453 _23,647 1.047 - 71.115 FUND BALANCES Reserved for debt service - - - - - Reserved for capital projects - - - - - Unreserved reported in special revenue funds 99,178 1301,575 16,644 161 161 13.937 Total fund balance 99.178 1.301,575 16,694 161 161 13,937 Total liabilities and fund balance 99.933 1,312,028 40 341 1,208 161 85,052 See accompanying; notes to the financial statements 71 City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, 2007 72 Building Light Decorative Light Street Department Impact Fees Maintenance Maintenance Cas Tax Maintenance .ASSETS Current assets: Cash and investments 601.233 - ioR,172 3,879 432,203 645.211 Taxes and .t4tiessments receivable. net - - 9,261 499 - 37.233 Notes and loans receivable - - - - _ - Due t'rom other funds - - - - - Due from ether governments - - 21.406 1.086 - 127,559 Total current assets 601,233 - 138.839 5.454 432.203 U0,002 Noncurrent assets: Restricted crash and investments - 99.822 - - - - Advances to ether funds - -- DOerred assessments receivable Long term portion of loans receivable - - Total noncurrent assets - 99,822 - - - _ Cotal assets 601.?33 99,8?' 138.839 5.454 432,203 830,002 LI:A,BILITIES Current liabilities: Matured bonds payable - - - - - Accounts payable 149,436 1,728 12,045 428 33.401 ?8.940 Accrued payroll 13,032 - 96 - - 30.876 Due to other funds - - 15,{100 - - 19'ft) Due to other governments - - - - - - Deferred revenue - - 9,261 489 - 57,233 Other current liabilities 7,221 2,233 5,622 Deterred revenue -loans receivable - - - - - - Total current liabilities 109.739 1,728 36.402 () 17 34,634 142,551 Noncurrent liabilities: Advances payable - - 29,000 - - 60,120 Deferred revenue - loans receivable - - - - _ - Deterred revenue -deterred assessments receivable - - - - - I"oral noncurrent liabilities - - 29.000 - - 60,120 Total liabilities 169,739 1,728 65.402 917 34.634 -102.671 FUND BAL XNCES Rcserved for debt service - - - - - - Reserved for capital pRIects - - _ - - - Unreserved reported in special revenue funds 431,494 98.094 73,437 4,537 397,569 637.331 Total fund balance 431.494 Q8,094 73.437 4,537 397,569 627.331 Total liabilities and fund balance W1,233 99,822 138,839 5.454 432.203 330,002 See accompanying nates to the financial statements 72 ASSE'FS Current :assets: Cash and investments Taxes and assessments receivable, net Notes and loans receivable Due from ether funds Due from other governments 'Total current assets Noncurrent assets: Restricted cash ,and investments Advances to other funds Deferred assessments receivable Long term portion of loans receivable Total noncurrent Bassets 'Total assets LIABILITIES ('urrent liabilities: Matured bands payable Accounts payable Accrued payroll Due to Cather funds Due to other governments Deterred revenue Other current liabilities Deferred revenue -loans receivable 'Total current liabilities Noncurrent liabilities: Advances payable Deferred revenue - loans receivable Deterred revenue -deferred assessments receivable Total noncurrent liabilities Total liabilities FUND BALANCES Deserved for debt service Reserved for capital projects Unreserved reported in special revenue funds Total Fund balance Total liabilities and fund balance See accompanying notes to the financial statements City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, 2007 73 Rural Development Domestic Violence Urban Forestry Courtvard UDAG Loan Revolving Drug Grant [.rant 55.042 45,279 694.847 127,857 (9,331) 143.910) 7.394 - - - - - 11,000 00 46.765 - - - - 15.000 - 5,884 - 15.813 - - - 4,892 54.135 0 ,�.?49 45,??c3 720.847 174.62-7 1.-145 1(3.335 195.094 - - - - - - - 29.€ 00 - - - - - 180,088 633.444 - 195,094 - 209,088 633,444 - - ? 73.343 45.379 929,935 308.066 1.415 10.225 1,915 - 5.899 37 - 8,717 3.991 - 1.618 - 1,445 1.5€18 7.394 - - - - - 13.300 - 18.517 -16,802 1,445 10.225 180,088 633,444 - - - - 180.088 633.444 - - 13.300 - 199,605 680.246 1,445 10,225 260,043 45,279 731,330 127.820 - - 260.043 45.279 ?31.330 127,820 "173.343 45,279 1)29.935 308,€ 66 1,-1.45 10,21215 73 City of Kalispell, Fontana Nonmajor Governmental Funis Combining Balance Sheet June 30, 2€307 74 CDBG - Law Enforcement '.Nurturing Center Cultural Arts Economical 1st Time Grants Lrrant (grants CDBG Head Start Development Homeowner ASSETS Current assets: Casih and investments 12,964 Taxes and assessments reecivable. net - Notes and leans receivable - - - - - - Due from other funds - - - - - - Due from other governments - 27,254 Total current assets 12.964 27,254 Noncurrent assets: Restricted cash and investments - - Advances to other funds - - - - - - Deferred assessments receivable Long term portion o loans receivable Fotall noncurrent assets - otal as.wts 7 F♦1- 11.964 217.254 •• •• LIABILITIES Current liabilities: Matured bonds payable - - - - - - Accounts payable - 27.254 Accrued payroll _ _ Due to other funds Due to other governments - - - - - - Deferred revenue Other current liabilities Deferred revenue -loans receivable - - - - - - 'rotal current liabilities - '7.254 - - - - Noncurrent liabilities: ;advances payable _ - Deferred revenue - loans receivable - - - - - - De-ferred revenue -deferred assessments receivable Total noncurrent liabilities - - - - - - Total liabilities - 27,254 FUND BALANCES Reserved for debt service _ - Reserved for capital projects - - - - - - Unreserved reported in special revenue funds 12,964 - - - - - 'rotal fund balance 12,964 - Total liabilities and fund balance 12,90 27.254 - - - - See accompanying nates to the financial statements 74 City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, 2007 75 Total Special Airport'TIF Fema Grants ISTEA Revenue Funds 2002 G.O. Bund 2004 G.O. Bond Debt ASSETS Current assets: Cash and investments 34,044 19,620 4. l 38,311 15514 (11,915) 961 'razes and assessments receivable. net - - 113,051 25,765 26,838 i1221 Nates and loans receivable - - 57.765 - - - Due from other funds - - 60,884 - - - Due firorn ether governments - - 300.992 31.004 32.661 88.137 l7otal current assets 34,044 19.620 4,671,003 72,283 47,584 141.319 Noncurrent assets: Restricted cash and investments - - 294.916 - - 184,875 Advances to o(her funds - - 29,000 - - - Dekerred assessments receivable - Long term portion of loans receivable - - 813,532 _ - - Total noncurrent assets - - 1,137,448 - - 184,875 Total assets 34.044 19.620 5.808.451 72.283 47.584 326,194 LIABILITIES Current liabilities: Matured bands payable - - - - - Accounts payable - - 303,699 - Accrued payroll - - 53.060 - - - Due to other funds - - 67.880 - - 41,000 Due to ether governments - - - - - - Deferred revenue - - 113,051 25.765 26,839 52,271 Other current inabilities 15,076 Deferred revenue -Moans receivable - - 57,765 - - - Total current liabilities - - 610,531 25.765 26.839 92,221 Noncurrent liabilities: Advances payable - - 99,120 - - - Deferred revenue - loans receivable - - 811532 _ _ - Deferred revenue -deferred assessments receivable - - - - - Total noncurrent liabilities - - 902.652 - - - Total liabilities - - 1.513,183 '5.765 25,839 92,221 FUND BALANCES Reserved for debt service - _ - 46,518 201745 233,973 Reserved for capital projects - - - - - - Unreserved reported in special revenue funds 34,044 19,620 4.295,268 - - - TotaI fund balance 34,044 19.620 4,295?68 46,518 0,745 233,973 -Total liabilities and fund balance 34,044 19,620 5.808.451 72,283 47,584 326,194 See accompanying; notes to the financial statements 75 City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, 2007 76 Westside 'TIF Debt SID Revolving 1997 S & C 1998 S & C 1999 S & C 2000 S & C ASSETS Current assets: ('ash And investments 76,644 374.648 - - - - Taxes and assessments receivable. net 121083 - _ _ 240 345 Notes :and loans receivable - - - _ _ - Due from other funds - 2,605 Due from other governments 31,346 - - - - - Total current assets 230,073 __1 7 7.2153 - - 2`40 345 Noncurrent ,assets: Restricted cash and investments 52,568 - Advances to other funds - _ _ _ _ _ Deferred assessments receivable 24o 606 L.ono, term p)rtion of loans receivable - - _ _ - - I'otal noncurrent assets 82,568 _ '40 606 Total assets 312.041 277.?53 _ - 480 951 LIABILITIES [.'urrent liabilities: Matured bonds payable _ _ - _ - _ .Accounts payable Accrued payroll - - _ _ _ - Due to other funds - - - - 259 372 Due to other governments - - - - - - Deferred revenue 122,083 - - - 140 345 Other current liabilities Deferred revenue -loans receivable - - _ _ - _ Total current liabilities 122,093 - - - 499 717 Noncurrent liabilities: Advances payable _ _ _ _ - - Deferred revenue - loans receivable _ _ _ _ _ _ Deferred revenue -deterred assessments receivable - - - - '40 606 Total noncurrent liabilities - - - - 140 606 Total liabilities 122.083 - _ - 739 1,323 FUND BALANCES Reserved for debt service 190,558 277.253 - - (259) (372) Reserved for capital projects - - - _ _ - Unreserved reported in special revenue funds - - - - - - Total fund balance 190,558 t259f 1372 Total liabilities and fund balance 312.641 277.253 - - 480 1)51 See accompanying notes to the financial statements 76 City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, 2007 77 21002S&C 2003S&C 20045&C 20055&C SID 341 SID 342 :ASSETS Current assets: ('ash and investments - - - - 8,609 7,006 Taxes and assessments receivable. net 1,955 2.064 5,151 4?88 6.065 5,182 Notes and loans receivable - - - - - - Due Firom ether Funds - - - - - _ Due from ether governments 269 647 092 37 591 - Total current assets 2.224 ?.711 i,843 4,325 15.2-65 11788 Noncurrent assets: Restricted cash and investments ,\dvances to ether funds - - - - - - Delbrred assessments receivable 5.049 6,616 21.375 16,718 7,938 12339 Long term portion of loans receivable - - - - - _ Total noncurrent assets 5,049 6,616 21,375 16.718 7.908 12,339 Total assets 7.273 9.327 ?7.218 21.043 23.173 25,127 LIABILITIES Current liabilities: Matured bonds payable - - - - - Accounts payable Accrued payroll - - - - Due to other funds 497 459 170 848 - - Due to other governments - - - - - - Deferred revenue 1,955 2,064 5,151 4,288 6,065 5,182 Other current liabilities - - Deferred revenue -leans receivable - - - - - - Total current liabilities 2.452 2,523 5,321 5.136 6.065 5,182 Noncurrent liabilities: Advances payable - - - - - _ Deferred revenue - loans receivable - - - _ _ - Deferred revenue -defi=ed assessments receivable 5,049 6,616 1,375 16,718 7.908 12339 Total noncurrent liabilities 5.€149 6,616 21,375 16,718 7.908 12,339 Total liabilities 7,501 9,139 26,696 -11,854 13.973 17.52 1 FUND BALANCES Reserved for debt service (228) 188 522 (81 1) 9.200 7.606 Reserved for capital projects - - - - - - Unreserved reported in special revenue funds - - - - - - Total fund balance 188 522 (811) 9.200 '7,606 Total liabilities and fund balance 7,273 9.327 '7.? 18 ' 1.043 3.173 25.127 See accompanying motes to the Financial statements 77 City of Kalispell, Montana Nonmajor Governmental Funds Combining Balance Sheet June 30, 2007 78 'Total Nonmajor 'Total Debt Wells Fargo 'Tota[ Capital Covernmental Service Funds Construction Pruject_Funds Funds ASSETS Current assets: ("ash and investments 372,067 1,201,506 1.201,506 S 5,711, 384 Taxes and assessments receivable, net 'S?.197 - - 36.).24M Notes and loans receivable - - - 57,765 Due from other funds 2.605 - - 63,489 Due from other governments 185.334 - - 486,376 Total current assets 812.253 1,201,506 1.201.506 6,684,762 Noncurrent assets: Restricted cash and investments 267.443 - - 562,359 Advances to other funds - - - _19,000 l]eferred assessments receivable 70.851 - - 70,851 Lang term portion of loans receivable - - 813,53? Total noncurrent assets 338,_ r4 - - 1.475,742 Total assets 1.150.547 1, 01,506 1.201.506 S 1.160,504 LIABII.ITIES Current liabilities: Matured bonds payable - - - � - Accounts payable - 323.845 223.845 5? ;x.544 Accrued payroll - - - 53,060 Due to other funds 42.605 - - 110.485 Due to other governments - - - - Deferred revenue 252,198 - - 365,249 Other current liabilities - 11,781 11,781 25.857 Deferred revenue -loans receivable - - -- 57.765 Totai current liabilities 294,803 235,626 `'35.6?6 S 1,140.960 Noncurrent liabilities: Advances payable - - - 89.120 Deferred revenue - loans receivable - - - 813.532 Deterred revenue -deferred assessments receivable 70,851 - - 70.851 Total noncurrent liabilities 70,851 - - 1)73.503 Total liabilities 365,554 '35.626 -135.626 2.1 14,463 FUND BALANCES Reserved for debt service 784,893 - - 7134,393 Reserved for capital projects - 965,380 965,380 965,880 Unreserved reported in special revenue funds - - - 4,295,268 Total fund balance 784,893 965,880 965.880 S 6.046,041 'Total liabilities and fund balance 1,150,54? 1 ?01.506 1201,506 S 8,160.504 See accompanying nates to the financial statements 78 City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2006 79 Old Schram Tech Old School REVENUES .fir ort 'Fff Westside TIF Parks -in -Lieu 'i'IF Industrial TIF llealth Levy Taxes and assessments .3,722 - - 1 G 1 161 424.648 Licenses and permits - - - - - - Intergoveminental 5.153 138379 - - - Charges for services 55.032 - 1 00)2 - - - 11 iscellaneous - - 897 - - - Investment earnings - - 4,7415 - _ - I*otal revenues~ 03.907 1:18.379 '2?94 161 ill 424.648 EXPENDITURES Current: Public safety - Public works 37.043 - - - - - Culture and recreation - - 3.881) - - - Housing and community development 784,512 35.244 - - - - Debt service - principal - - - - - - Debt service - interest - - - - - - Capital outlay 55,070 4133.235 103.994 - - Total expenditures 876.575 668.479 107.883 - - - Excess (deficiency) of revenues over expenditures (812,668) (530,100) (85J90) 161 161 42'4.148 O`T'HER FINANCING SOURCES (USES) 'transfers in 140.000 400,000 _ - _ ''i'ransfers (out) - - - - - 1435.046) Proceeds of general long term debt - - - - - - Proceeds froin the sale of general capital asset disposition - - - - - - rotal other financing sources and uses 140,000 4()4),434 - - - (435,()46) Net change in fund balance (4772.609) 4130,100) (85,599) 161 161 i 1(), 198) Fund balances - beginning 771.846 1.431.675 138.186 - - 24,335 Restatements - - (35-903) - - Fund balances - beginning restated 771,440 1.431,u75 102.283 -- - '4.335 Fund balances - ending 1)(),178 1.301,575 16.694 161 161 13.037 See accompanying notes to the financial statements 79 City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2006 w Building tight Decorative Light Street REVENUES Department Impact Fees 'Maintenance Maintenance Gus Tax Maintenance xes and assesisments - - - - Licenses and pennits 381.886 - - _ - - Inter-overtimental - - - - 124,774 60.000 C'hari~es for services 334.157 96.750 200,115 0,159 750 1.190.612 Miscellaneous - - - - - 8.308 Investment earnings 11,741 1.344 - - 10.682 24.619 Total revenues 747.784 98.094 '(3(3, 115 6. 159 342-206 1-283,739 EXPENDITURES Current: Public safety 507.341 - - - _ Public works - - 150M6 5.050 141,038 076,805 Culture and recreation - - - - - - Housing and community development - - - - - - Debt service - principal 75,803 - - - - 35.923 Debt service - interest 18.541 - 787 - - 3,922 Capital outlay 279.086 - - - 54.492 2156,670 Total expenditures 840] 771 - 156,873 5.050 105.520 1.273.120 Excess (deficiency) of revenues over expenditures (92,987) 98.094 4 3,2 421 1.109 146,686 10.419 OTHER FINANCING SOURCES (USES) F'ransfers in - - _ Transfers (out) - Proceeds of General long teen debt - Proceeds from the sate of general capital asset disposition - - - - - - Total gather financing sources and uses - - - - - Net change in fund balance (92,987) 98.094 43.242 1.109 146.686 10.419 Fund balances - beginning; 573.219 - 30,195 3,428 250.883 616,912 Restatements Fund balances - beginning restated 5214.481 - 30,195 3,428 '50,883 616.912 Fund balances - ending 431,494 )9,094 73.437 4.537 397.569 627.331 See accompanying notes to the financial statements w City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 200£ 81 Rural Development Loan Domestic 'violence REVENUES Urban Forest Courtyard UDAG Revolving Drug Grant Grant ['axes and assessments - Licenses and perinits - _ _ _ - Intergovcrnmental 400 - - - 34.458 1135.444 Uhan,es for services 280,220 70.365 X 1.797 02.981 - - N41scellaneous - - - - - - Investtnent earnings 11,015 293 V).647 - - - l'otal revenues 191.635 76,659 =')0.944 o2,081 14.458 10.444 EXPENDITURES Current: Public safety - - - - 71489 165.444 Public Works - - - - - - C'ulture and recreation 167309 - - - - - Homing and community development - 46.309 206.710 150.037 - - Debt service - principal - - - _ Debt service - interest - 24.468 - 3.519 - - Capital outlay - - - - _ _ ,Fatal expenditures 167-309 7.309 70,777 '100.710 153.556 7-.489 165.444 Excess (deficiency) of revenues over expenditures 124.320 5.381 1145.76€3) (90,575) (38.031) - U'I'NER FINANCING SOURCES (USES) Transfers in - - - - 36,884 - Transfers Taut) - - - _ _ - Proceeds of general long term debt - - - 150,000 Proceeds from the sale of general capital asset disposition _ _ _ - _ _ fatal other financing sources and uses - - - 150.€300 36.884 Net change in fund balance 124.326 5.881 (145.766) 59.425 (1.147) - Fund balances - beginning; 99.814 39.368 $77.090 68.305 1.147 - Restatements 35.903 - - - - _ Fund balances - beginning restated 135,717 30.398 577.006 68.395 1.147 - Fund balances - ending ?00.043 45."79 731.330 127,820 - - See accompanying notes to the financial statements 81 City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2006 82 CD BG - Law Enforcement Nurturing Center Cultural Arts Economical I st Time REVENUES Grants Grant Crants CDRG Head Start Development Homeowner Taxes and assessinents- 1 icenses and pennits - - - _ - _ Intergovernmental 0,976 104.441 1125 ?5,950 373.619 93.758 Charges for services - - - - - - Miscellaneous 654- lnve.,,tinent earnings - - - - Fotal revenues 70.630 104.441 ?.125 25.1)50 373.[319 173.758 EXPENDITURES C'urrtn€: Public safety 26.214 104. 41 - - - - Public warps - - - _ - - Culture and recreation 115 - - Housin►t, and community development - - - 29.208 373.0I9 93,754 Debt service - principal - - - - - - Debt service - interest - - - - - Capital outlay 41,079 - - _ _ _ Total expenditures 07?93 104,441 '.125 29 208 373.619 m f�3.758 Excess (deficiency) of revenues over expenditures 3.337 - - (3.258) - - OTHER FINANCING SOURCES (USES) Cransfers in 7.093 Transfers (cwt) - Proceeds of general long tenn debt Proceeds from the sale of general capital asset disposition - Total other financing sources and uses 7.693 - - - -^ _ Net change in fund balance 11.030 30 - - 13?58) Fund balances - beginning 1.034 - - 3.258 - - Resiatements - - - - Fund balances - beginning restated i •934 - - 3,258 Fund balances - ending '_'? 964 - - - - - See accompanying notes to the financial statements 82 City of Kalispell, Montana Nonmajor Covemmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2006 Total Special REVENUES Fema Grants ISITEA Revenue Funds 2002 G.D. Bond 2004 (;.U. Br)nd Airport TIF Debt 'Taxes and assessinents - - 428.692 287,543 301.259 343,1340 Licenses and permits - - 19L886 - - - lntergovernmental - 21, 2291 ,41 9.70G - - - Charges for services 71-883 - 2,413.013 - - - Miscellaneous 2,510 - 12.569 - - - Investment earnings - - 130.046 4.642 3.481 13.504 Total revenues 74.393 21.229 4,795,912 `01185 104.74() ;57,344 EXPENDITURES Current: Public safety 67,896 _ 943,825 - - - Public works - - 1.316,022 - - - Culture and recreation - - 173.323 - - - Housing and community development - - 1.719,397 - - - Debt service - principal - - 71,726 140,000 160.000 105 MO Debt service - interest - - 51,237 148.688 118,558 ?7,500 Capital outlay - 24,520 1.448,086 - - - Tcotai expenditures 67.806 24.520 5,723.616 288.688 275,558 182,560 Excess (deficiency) of revenues over expenditures 0,497 (3.291) (937.704) 3.497 26.182 174,784 o'THER FINANCING SOURCES (USES) Transfers M' - - 584,577 - - Transfers (out) _ - (435,1)46) - - (140,000) Proceeds of ;general long teen debt - - ! 50.[1i3(� _ - - Proceeds from the sale of general capital asset disposition Total other financing sources and uses - - 209,531 - - 1140.000) Net change in fund balance (097 [3,2912 (638.173) 3.497 26,192 34.784 Fund balances - beginning 27,547 22.911 4,992.179 41.021 ( 5,437) 199.189 Re"'tatements - - (48,738) _ - Fund balances - beginning restated 27.547 22.911 4.933,441 43,021 (5.437) 199,189 Fund balances - ending 34.[]44 19.620 4.295,268 46.518 20.745 '33,97 i See accompanying notes to the fuaancial statements City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2006 84 Westside TIF REVENUES Debt SID Revolving 1"7 S & C 1998 S & C 1939 S & C 24011 S & C Taxes and assessments 179.538 - 1 227 - - Licenses and pennits - - - - Intergovernmental 71.918 - - - - ['harges for services 37.379 - _ Miscellaneous - - _ Investment earnings 16.399 14.62 - - - Total revenues 104,184 14 625 l M'?7 EXPENDITURES ('urrent: Public satety - _ _ _ Public works [ 'ulture and recreation - - - - - Housing and community development - - _ - - - Debt service - principal 65,655 - - 211 221 289 Debt service - interest 16.914 - _ 16 38 83 Capital outlay - - _ _ - _ rotal expenditures 82.569 - - -227 259 372 Excess (deficiency) of revenues over expenditures 221.615 14.61-5 1 - ( 359) (372 ) OTITER FINANCING SOURCES (USES) Transfers in - 245 - - - - Transfers (out) (400MO) (25,000) (245) - - - Proceeds of general long term debt - - - - - - Proceeds from the sale of general capital asset disposition Total other financing; sources and uses (400.000) t "24, 75 5) ( ? 45) - - - Net change in fund balancc (178.385) (10,130) (244) - (259) (372) Fund balances - beginning .36&943 287.383 244 - - - Restatements - - - - - Fund valances - beginning restated 368.943 287.383 244 - - - F and balances - ending 190.558 ?77.?53 - - ( 359) ( 37?) See accompanying notes to the financial statements 84 City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2006 REVENUES 2002 S & C: 2003 S & C 2004 S & C 2005 S & C SID 341 SID 342 Faxes and assessments 1.879 2.431 0,937 4,501 8,405 ,.i)33 Licenses and pennits - - - - - . intergoveminental - - - - - - Charges lar -services - - - - - - k1 ince llaneous - - - - - - Investment t'amings - - - - - - Total revenues 1,979 2,431 € ,937 4,501 9.405 7.033 EXPENDI'rURES Current: Public safety - - - - - - Public works ('ulture and recreation Housing and community development - - - - - _ Debt service - principal 1.670 1,720 3.962 2.856 5,000 - Debt service - interest 355 413 1.386 2,456 1,830 2.175 Capital outlay - - - _ _ - Total expenditures 2.025 2.133 5.349 5.312 6.830 2.175 Excess (deficiency) of revenues over expenditures (146) 198 1,550 (81 1) 1.575 4.858 O'1'NER FINANCING SOURCES (USES) Transfers in - - - - - - Transfers (out) - - - - - - Proceeds o#' general long tenn debt Proceeds from the sale of general capital asset disposition Total other financing sources and uses - - - - - _ Net change in fund balance ( 146) 1.599 (81 1) 1.575 4.959 Fund balances - beginning 48') ( 1 10) (1.067) - 7,025 2.748 Restatements - - - - - - Fund balances - beginning restated (82) ( 1 lel) €1,067) - 7.625 ?.748 fund balances - ending 1228) 188 522 (81 1) i),2oo 7.006 See accompanying motes to the financial statements 85 City of Kalispell, Montana Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 200£ 0R Other Total Debt Service Wells Fara Total Capital Governmental REVENUES Funds Construction Pru'ect bunds Funds 1 -axes .end assesstnents 1.142.594 - - $ 1,571,286 l.ice:ises and permits - _ - ?81.886 Intergovernmental 71,918 - - 1.491.024 t'harges for services 37.: 29 - - 2,450.342 'Ntscellancous - - - 12.5oo Inve,,tinent earnings 52.651 - - 182,697 'I otal revenues l .304,4°32 _ - $ 0.090.404 EXPENDITURES ('ur-rent: Public safety - - - 1)43.825 Public: works - - 1.316.022 Culture and recreation - - - 173.323 Housing and community developtnent - _ - 1,719-397 Debt service - principal 486.584 - - 558.310 Debt service - interest 370.472 - - 421.709 Capital outlay - 244.988 244,998 1.693,074 Total expenditures 857.050 244.988 244.9$8 S 6.925,000 Excess (deficiency) of revenues over expenditures 447,436 (244, 388) (244.788) S 1735.256) OTHER FINANCING SOURCES (USES) fransters in 245 - - 5 584,822 transfers (out) (565-245) - - (1,000,291) Proceeds of general long tern debt - - - 150.000 Proceeds frorn the sale of general capital asset disposition t.210,868 1.210.8613 1.210.868 'I'otal other financing; sources and uses ( 50.5.000) 1.210,868 1._•' 10,868 S 945.399 Net change in fund balance r 117.304) 065.880 965,980 S ' 103.143 Fund balances - beginning 902.457 - - S 5.884.636 Restatements - - - 1.48.738) Fund balances - beginning restated 902.457 - - S 5.835,898 Fund balances _ ending; 784.893 065.880 965.880 S 6.040,041 See accompanying nates to the financial statements 0R City of Kalispell, Montana Major Debt Service and Capital Project Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2006 87 SID 343 SID 344 BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAL) (BUDGETARY WITH FINAL ORIGINALJ (BUDGETARY WITH FINAL FINAL BASIg See Note A BUDGET FINAL BASIS} See dote A BUDGET RESOURCES (INFLOWS): Taxes innd assessments S 131629 S 148,929 S 17,300 S 452,590 S 4(4,516 S 11,92;6 Charges for services - 25,614 25,614 - - - 1nvestment earnings _ - _ - - - Amounts available for appropriation $ 1:31,629 $ 174 543 S 42,914 S 452,590 S 464,516 S 11.926 CHARGES To -APPROPRIATIONS (OUTFLOWS) Public works _ - - - - - Debt service - principal 100,000 100,000 _ "5,058 225k00 58 Debt service - Interest 37,500 56,150 (18,650) 196,000 2113,453 (17,453) ('apital outlay - - Total charges to appropriations S 137500 S 156,150 S � (18,050) $ 421.058 S 438,453 S (17,395) OTHER FINANCING SOURCES (USES): "Transfers in S - $ - s - S - Tutsi Other Financing, Sources (I TSes) S - S - Net change in fund balance S 18,393 S 26,G63 Fund balances - beginning of the year 105,040 1-33.937 Restatements Fund balances - bevrining of the year - restated S 105,040 S 233,937 Frond balance end of the year S 123,433 $ 264,004 See accompanying notes to the financial statements 87 City of Kalispell, Montana Major Debt Service and Capital Project Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended .lune 30, 2006 RESOI)RCES (INFLOWS): Taxes and assessments Charges for wrvices Investment earnings Amounts available for appropriation CHARGESTO APPROPRIATIONS (OUTFLOW Public works Debt service - principal Debt se:r, ice - interest C:apitai outlay 'Total charges to appropriations OTHER FINANCING SOURCES (USES): Transfers in Total Other Financing Sources (Uses) Net change in fund balance Fund balances - beginning of the year ResWements Fused Mances - beginning of the year - restated Fund balance end of the year See accompanying nates to the financial statements SID 344 Construction BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE ORIGINAL] (BUDGETARY WITH FINAL FINAL BASIST Sft (Note 4 BUDGET 25,000 5,088 50,088 S 25,OW S 75,088 S 50,088 2,593,884 ?.494,209 99,675 S 2,593,884 S 2,494,2`09 S '-)9,675 $ ■• 2,642,734 S 2,642,734 S 22)3,613 City of KalispeR, Montana Nonmajor Governmental Funds Schedule crf Revenues. Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2006 AI rt TIF WrabWe TIF BUDGETED AC -MAL BUDGETED ACTUAL BUDGETED AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS ORIGINALJ (BUDC-ETARY WfTH FINAL ORiGINAIJ (BUDGETARY WITH FINAL ORIGINAL/ FIN -A BA4ffi5n N--4- 1:1NAL RASIn-S—mNoft A SET FJ. NAL Pmrkx-k;-Lion ACTUAL AMOUNTS VARIANCE mimurARY WITH FINAL BA§Is) � sck HVI)CE RESOURCES (INFLOWS)- I'Atw% wid rim--%STwnu1 S htxnsc-, and pmtuts - 151 5.153 2 139,379 Char .m 10t "C'Mcm 54.(A)0 55,032 1.032 - "7,267 110,575) 397 InvLS111wnt AmoRU16 avallable fix armofftation S S 11337") S 22,294 S 6.01) 17,04.1 17,W3 Callum 11TA ravrehilm - - - - 'X99 (2,99)) 1 Imi3ing arul cutinnunity &wrlinmumit 8 S0,(XX) 65,489 ','l 3,20 35,244 108,023 1)e1x-'ervice mmipal - D )i wmve 111(crup - - ti3ptal tHUIRIV I 13,7(X) >9,41*) 631235 2497,05 11.7 625 1.01 1,0ta i chwV4�3 to In mk)f)no 110m, S (X1,54-33, S K76,575 S 12-M,68 S I.S16,26? 5 t4�%.479 S 1 147,798 S 11-4,6215 S 1t7 S. $ 110.742 OTHER FINANCING SOURCES (USES): 1,mmrem in 5 2[k).+- k) S S 464l,tAX)) S -1o0jx)o M 5 S S - Pnw,-e& of)wvwral 14mg term &41 - 11'r(w,emis rpwn the s"k of gCwTal camm I Asiv dL-trosaum J'Otal 4W.000 8 3 Ne 4hajige in furki Mance S (072,4(C�1ij S i J 3(k I (k)) 1'wui 1m)mwAm - btVmnLz4; 4 Lhe.vear 771,846 t,43 1A75 138,186 435 1�uiuf ImIumen - twgmning of dwycar - irestuted S 77 1,,Mt, 8 102,293 r tau] b"by" Tki Of the vear S r),179 S 1,101 573 S jir.(,94 Sm a -Axxnpmyi% iAu&4 to the finwictaktaimwnLi S - L City of Kalispell, Montana Nonmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2DO6 E..n[ntal o11ti s� '1'��t�rl .�►�,ca in a�-[�lxtnluulx S . - 5 - S OW Scb*oA Tvch TIF �F..+.iisftixs ir1 S Oid Scall toduma `hd TIF ruTifm (out) - - Hej&h Lcv _ Y.... . Pnk COL.. tlt7tii dx- -"1L- i3l ViwrA .;2piL%1 Axse chimx[tic BUDGETED A[.-nJAL S I3flDCETE© A(.1'UAL S • muf huluncaes - begi Tun}i, 4 the near Si F)CE'iE1]R" AC I L`AL ' € 3srul i*Luscxs - Ivl3. wirlg of the yw . remwtrai AMOUNTS AMOUNTS VARIANCE AM0IINTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE QRIGINAU (BUDGETARY WITH FINAL GRIGINAIJ tRUDGETARY WITH FINAL DRIGINAEJ (BUDGETARY WITH FINAL FINAL RAjS Sser ,N!ft A pup' VINA K:%'Ij S) 5re N to A BSL FFUNAL 81 S S N A HU04GT RE.�f3RCFS IINI; LaWS)t i'.cxe"4 ;:w a s'ws sn knits 3 S 161 S 161 S S it'] S 11;1 S :i s[3,jfy) S 124,(A 3 S 0,852) � Si:u.'itRc::s t!I][f F1[dIlltL� _ _ t_.1u3r 1[:� t[7T wrvic:C3 ;1wer111wm u&mugv, .fin suits available for aj)x nwiutl[1n S i 161 S [61 S - S !fit S 161 S -136, 'm S _ 4:,4 .�h S � 5 } TQwsh public. -'tfCty - - - - - 'N1I1d1C- cultum 3311[3 t[x:m*w*?n- 11ousing. Arid cxro uijumtV &%t:lujntl -nt - - - - - Dc.•lid uxvs[x - mru:ipa1 _ _ _ - - - 17e`F�l nterml - - - - - E..n[ntal o11ti s� '1'��t�rl .�►�,ca in a�-[�lxtnluulx S . - 5 - S OTHER FINATNCI,NC SOURCES (USES): �F..+.iisftixs ir1 S S S ruTifm (out) - - PIi.1c:i-AAS ibt FGL'LICi1i 1 khP4 1=111 dCN ' Pnk COL.. tlt7tii dx- -"1L- i3l ViwrA .;2piL%1 Axse chimx[tic - - Tot.31 l }tlu.•r 1'tn:sncmg St][iTla[.:. tlN") S S Net .:lwnge its fitted W- lance S • muf huluncaes - begi Tun}i, 4 the near - RcttiytL"{ wnt.5 ' € 3srul i*Luscxs - Ivl3. wirlg of the yw . remwtrai S - FLuid Imlam--c aid [+t the yc Lr S 161 lke naxwn arwingt mAm to the tirlaamu[l 'sinal-mcnts - S - S S 161 City of Kalispell, Montana Nonmajex Govenunentral Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended .lune 30, 2006 OTHER FINANCING SOURCES (USES): ?'rmsfm in BwwkmrftnrV# t am'1ftx'4 (out) Iles Ike" - - - 11AXuleds riom aw xale til'Acrleral capital Esse i diyrx'siti[ LWMakftsmace 'I"Ital t filter I'mming sotmZC4 (t 3 --cm) S S - S - S Bl)Df:ETED ACTUAL 1 -tout wanurs - lrett:rutin* of tlx: vers BUDGETED ACTUAL 4 48;71R} BUDGETFD ACTUAL Fund balmier. entf ofthc r+,uir S 431,494.... AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAL/ (BUDGETARY WITH FINAL ORIGINAL/ (BUDGETARY WITH FINAL ORIGINALJ (BUDGETARY WITH FINAL FINAL RA$1S) S" N& A t3 1 AL HASI51_ _Noir^A Rym--'Fa FINAL RAMS) Sm Nett A Bill RESOURCES 1INF LOWS-): ]'.ms and woum-nwnvi i 3L'MIC1'9 Mul Pamits 122,300 3Hl,riliti� `•kJ,� T _ _ _ " 114(ergilVc-Crlf kgItul - - - 01 arges for �ncx% :5ti,(}t3f1 334.157 X4,1579).750 -10L(RX) -100.115 (885) Invc,onwilt 1,144 - rlrnextnl: nvutl:rltile t a <rptm>€ iritstm $ �it73Q) $ J37, M S !e�.i,k3� S $ rfi,ii'i4 > +f4,i?�i ?[11,3(f(f S '(m),i 15 5 (895) Cwt Att; a -Z© P UIONS (QUTF Ul1VSl; Public xlsfs•Fy 479,570yi7.,-i1 -29771) - _ _ _ - 1' il3lie wtm'Iis - - - - - 17' 4.9 1 A 15("08(y -- - Cullum and mx-mlion I lotimag itl wmrrlurlrty dtwlotm -nt IX4A'.wTVKw ' Immitm1 iii;H►f3 15.403 .14, €[97 15,fis1U 15,000 1*.hf .%rrvi. 18.541 f0i") - - - «"mo 787 2,113 i ;iiiiusl [lulruS' €8.5W «s`?,i'ii[7 - ;`?,414 - - - - - _ 1 otal chngc.s to 12m ri11} allons S S72.57f t S X)" . € S + 1799 S - $ - $ $ €'h4 ?i 17t S 1 W) R'73 $ 19,1045 OTHER FINANCING SOURCES (USES): ?'rmsfm in t am'1ftx'4 (out) lIngv ti tsi�t rK rtil latig teen [fwfit - - - 11AXuleds riom aw xale til'Acrleral capital Esse i diyrx'siti[ - - 'I"Ital t filter I'mming sotmZC4 (t 3 --cm) S S - S - S Net change in titux! 1-mlanoc S (92,AD 1 -tout wanurs - lrett:rutin* of tlx: vers 573.219 RegiA&.'3Pa€-nis 4 48;71R} 1° ub[t IraIatraes - bqura ng o t, w Y=Lr - r"fatal $ S24,441 Fund balmier. entf ofthc r+,uir S 431,494.... 'sue m4cx to the tinaiu l ztnt 91 City orb Kalispell, Montana Nonmapr Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2005 92 ihxamdw List iVI>ssWmmm Gast Tax Strce! BUDGETED ACTUAL �- BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAIJ (BUDGETARY WITH FINAL ❑RIGINAIJ (BUDGETARY WITH FINAL URIGINALJ (BUDGETARY WITH FINAL UN -Ail 8BSIS1-5`5..M.Ift A, at;mzl FINAL M S N"e A P—LIME1FINAje. RAS[ Ser N2ft AA BUDC RESOURCES (INFLOWS)e i axes andtsstiu%vcmnLs $ Q r .L - •� S S g - 9 r - S - p J E .iL:imw%;+ttd ]x.l"ts - - - - - - j[7!6'l�tt)L"I_'!T]iri4`ili3l� - 31.4,$)22 224,774 h,152 75•t]()t7 r�)'(yj] ll ,rxxx)i Clsarwsstnr-'emccs 379 fr,i.9 1219} 750 7 50 1,1 1,1'H).61Z 30,112 m1•iL't:33us:t+<xx1S1 - - 9509 8.508 1s5V! t111r�lt tilSnln r (�J00 16.682 try 192 0.14)o 24 6P) A.[)19 Airmunu sivaibizle forxn{ur-�atiOn 5 s}. 7e S s, 159 S2193 S 25_i22 S 411206 S '.uM 5 l -"A 5,5kX) S 2ii?.739 S 18,239 (11ADGPL TO APPR0 PR T-L0LUQMJA0-W-!R'- Oibllc : orkN [l,Si)[) 5.00 1,4% 325,3(X) 141,038 --,262 1.074,747 97f+.1 5 `)7A22 Culture Arml %-!.- mfion - - - - - - - 11lxsrrsnu asxi c4 mununitr Ek:vl:1EVn n1 - - - - - lJl•hi �ertiilx - Crnr►c.iCa1 - - - - - Sf),[3 k 35.923 1-4,077 lk1�t �c n icc - stttCrCRt - - - - - - 12.574 1,922 8,652 t:Ilntni nsil - 18,000 X4,482 11.518 _ 181-537 256,670 126,807 l'«tui c:3uuge� to xrlx-es�arraissxzx 5 d, 5 ,.1]13 S y t,:�7 S 1 a �i) � 1[ii. rk7 S 194.5'!7 S � _437,7.% S j20 338 S z 1,:.7;.320 S '47,�1i9 OTHER FINANCING SOURCES (USM- 1.�tw' "i.i`.i In S S - S - - .S - S - S - $ S IIrxnsfix3 timt) - - - - - - - _ Pnx:=Js oi-gcnc--nd Imm term &+t - - - - - - Prtxmv l� from the saic of gLnerul crspttuI asf�ct di-wositic Tatal i thur Finaming �Ammcs S • _ - - Ne change in fund haLu= S 1,109 S i if�.!ytib S _ 102419 1 and lwt)iancAm - hugutnsng 4 the .mir h i li�•;stsst�z>Cn1� - Vurwi Ixsiut=s - tregmmg k'kl'the year - resi.Yim S 11.E S 250,88.3 SS 616. 12 Pwid1,'1a11aKv mki ofthc 5'txr 4-;.;7 S •1f#1..x[79 J F>> I.j31 5nt accmnpa S mg mwa it) die financial sttutt-rnerass 92 City of Kalispell, Montana Nonma;or Governmental Funds Schedule of Revenues, Expenditures, and Charges to Fuad Balances - Budget and Actual For the Year Ended June 30, 2006 93 Urban Farcy 2n=!1 UDAG BUDGETED ACTUAL. BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE ANIOUN' S AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAL/ (BUDGETARY WITH FINAL ORIGINALI (BUDGETARY WITH FINAL ORIGINAL/ 4BUDGETARY WITH FINAL !TINA SIB Ste N!ft A B FINAL 93 SI5 IVB A RLIDG _1NAL RASIS) Sot_Nek BuDgEl RE$4OUR[.'FS (INFLOWS): Faxes azul as -v s tr mtsLim and 1xi traits - - - - fttts��,ctv►-tllttuxllul - 4{74} t 13+argt lisi ,crvt 18; .(Y)O 2X0,220 99.160 7il [X)47 76.365 6.365 20,400 ? 1,297 Sail '451ycclG,tuxxta,a - - - - - in4Lxitix-rii rsrrxin - 11,015 i 1,015 -191 <93 39,647 i 4 A7 Artxxattts xv�:I tl�kr i�K,tst�ttyxt=t4insr T I8 -scan S 2'.)LU35 S 10.575 S ;41,4i1J4J S "61.659 S ck,b5 i S 61..).1U4} S W,944 S y4i AGE iDAPPRDIa'1'i.l€ATt-rQN_s_i0=�W-a:" ;'tcl�lta ,uiGty - - - Public w m-ks - - - - - - - culture rind rtxn witm 250,516 107,309 '19,227 - - - - - I1011,ing and uxnantlmaty developn ettt - - - 54,11(N) 463W 7,691 29,234 :06 710 12.1,52.4 Dd-A ;Vic e - ptrnnpal - - - - - DeN -cmtw 30.0fx7 24,469 ],532 - - - Capital owlay - - - - - "I'(xal charges to flri"4Mai9u41S S 56 53,6 S 16-1,309 S x9,227 S 114 {1N) S 7[),77" S 13,22: S 11-8234 S, 206,710 S 121.524 O`i'H1 R FINANCING SOURCES (USES): 1'ranllert an S - S rr:sw4exx ((Vut) - - - - - - - - IN -(x LtxI of �Li1cnfl hmig term doN P' mwtkfs fmm the %afe of iztnml uwpitul axsct LhsVxhax - - - - - - - 'f oAal ( they Firr Ing Soumcs (I bee) S S _ S S - S - S - S - S - S - ,Nt-t dean rc in 1'ttrui NaLnce S 124,326 S 5,891 S T 1.145,766) 1'Flrxi 1}:1111Yuma - begutnang 4the war ')`),R € 4 3si,39tS t377.41�iG R"tatementsc 35,903 - Fin -Ki haimwtz - twginnittg of the ye dr - rmaW S 1 15, 717 S '477,€196 Ftt A hralak x tmd of tht, yctr S ar]4], M 3 S 15.279 S 731.330 S wA m4mnytng rKwes to the fttanetal staterne Its 93 City of Kahspsil, Montana Nonrnajw Govemmental f=unds Schedule a# Revenues, Expenditures, and Changes in Fund Baiaaw4s - Budget and Actual For the Year Ended ,tune 30, 2006 CHAR E DAEEKW-9J�IQLkLQkTF- PUL41c -uti--ty - - 72,491 72,389 2 420,244 105,444 ?(A Xy) I'tfhlsc w•cxLy - - - - - - - C'ultive and nx'traluxt - - - - - - 1 ftaw:sm asu.l ccxmminav &v,:hoperst 649,213 150,037 398,176 Debt -XvAtx - tnt;xaat 150)0 3,519 11,491 - - - - - t"erj t"I cxttlav - - - - - - - rotia}:tturge to4pr" iattcxss S tdrs,213 3 15? 556 S 7[)'ffi5; S �7.4y} S -72'.1K9 S ti S �t2f�,?d4$ 165.414 $ 2W.lii1[) (YrHER FINANCING SOURCES (USES): I'rat]�Fc x to S - - I - $ 5.SM S $ - S - Transfine {(A4 f'tr wmb, ot'gamwal kxtg tam ckbt Provo& from tl= gale orgrm-VAI cscpclttl asset dispe4itic '1'4ttal other Financing �wxrrms tClsx:x) S ;yid chwW in links balance I41W hal4ncm - lwginnmg of the ycat' ,R"tatmwntst Fiitul Ni lawm -*irmn . of tlr year - rczts mf Fw-&d lsaiurs.x ctui of the year SM UC.M panytng wtr% to Ilse. ftnawal'txtrrsxawe 792,5(1{) 15[1:li 0 t642,500 - - - 7'sZ-5tN3 S 1517-tX-K1 S i642.50U3 S 11'(11]1) $ 3W, ?A S 5,:184 S - S - S S t'x V)s 1.147 94 R" Dry meat Lori Rrroiv D!m Crum Dtraseatle V k4mm Grow BUDGETED ACTUAL BI.:"DGETF-D ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAid (HUDGYTARY WITH FINAL ORIGINAL! tHUDGETARY WITH FINAL ORIGINAI! tBUDUTARY 114'1'1( FINALS FINAL 9-�ISIS} Sam N t ETTFI. OVAL, S.AM §pc Nek A SUPEK1 FINAL l3A:i !i6 HuDg.T RF -SOURCES (INFLOWS): axes find wxkesst =ts- I.iLmscs stsd- Irttcx vacYxttr>;�stal - 19.0(}[) 34.45$ {35421 410,244 10 SA44 260,&)0) f i usrgt f iH �•tt Ce i I OK.608 62,991 � 45,6''8 - - - - - W1i»cx it- }tlVt St171C11t ansutsrx i%mcxmts available fix aptxc'n-,natuxi - $ 1{fA'64 3 -- - f,2.981 S (45 1,97) S 14,458 S !?.542) 5 426,244 S 10,444 S (260,10)) CHAR E DAEEKW-9J�IQLkLQkTF- PUL41c -uti--ty - - 72,491 72,389 2 420,244 105,444 ?(A Xy) I'tfhlsc w•cxLy - - - - - - - C'ultive and nx'traluxt - - - - - - 1 ftaw:sm asu.l ccxmminav &v,:hoperst 649,213 150,037 398,176 Debt -XvAtx - tnt;xaat 150)0 3,519 11,491 - - - - - t"erj t"I cxttlav - - - - - - - rotia}:tturge to4pr" iattcxss S tdrs,213 3 15? 556 S 7[)'ffi5; S �7.4y} S -72'.1K9 S ti S �t2f�,?d4$ 165.414 $ 2W.lii1[) (YrHER FINANCING SOURCES (USES): I'rat]�Fc x to S - - I - $ 5.SM S $ - S - Transfine {(A4 f'tr wmb, ot'gamwal kxtg tam ckbt Provo& from tl= gale orgrm-VAI cscpclttl asset dispe4itic '1'4ttal other Financing �wxrrms tClsx:x) S ;yid chwW in links balance I41W hal4ncm - lwginnmg of the ycat' ,R"tatmwntst Fiitul Ni lawm -*irmn . of tlr year - rczts mf Fw-&d lsaiurs.x ctui of the year SM UC.M panytng wtr% to Ilse. ftnawal'txtrrsxawe 792,5(1{) 15[1:li 0 t642,500 - - - 7'sZ-5tN3 S 1517-tX-K1 S i642.50U3 S 11'(11]1) $ 3W, ?A S 5,:184 S - S - S S t'x V)s 1.147 94 RESOURCES IINFLOWS): i•difitl at S!-cs!1 rrw nN S ]n of •r governrhes t tri1 ClzPsr�tix fiH' rc-t'VaU.�t lr:vr:alrtx�ru «arYs�ngs :�atu,urata sc:trirtlt[e fcx s��rtetUtxt S v City of Kalispell, Montana Nonmajor Governmental Funds Schedule of Revenues. Expenditures, and Changes in Fund Balames - Budget and Actual For the Year Ended June 30, 2006 Law Enfor+rrmw G rAmx BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE ORIGINAL! (BUDGETARY WITH FINAL FINAL RAW';) pec No* :& BUDGET VARIANCE AMOUNTS AMOUNTS ORIGINAIJ (BUDGETARY WITH FINAL 'ix ailIA 6S4 ,i7.4121 VARIANCE WITH FINAL BUDGE (187i) Nurta! js Center Gromt C ukural Arts Grrm#s BUDGETED ACTUAL 00 - - 14,595 207,741 104,44I 10,000 BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS ORIGINAIJ (BUDGETARY WITH FINAL ORIGiNALI (BUDGETARY FINFINA HASIM Sec Nqft A $ - E FINAL BASIS) Sash No& -A ca1gual ckailay !41(XXI 2(]7.741 104,441 1103,300) 5 {}t}il :.125 VARIANCE WITH FINAL BUDGE (187i) 'dlct c1 f fra W igc a n u aenc c } Errx) tx119r A. -S - ]x g1tMM# Of the yt=r Result: nerrts i ut-ki ttilances - IvWnimig. 4 thL ychr - mstatW rwut balu v t. -i att' ahc year Vic- acwagvinrra{g ruks to the fi 1.914 S 1,914 S 11,464 1't]HIC s eii tv �;11,3�M1 26,214 00 - - 14,595 207,741 104,44I 10,000 l'A111: ��►xk - - - - - Cultatre- and r, emillirrt - _ - 5 IX)O :. i:5 2.:475 1 lowianyr and cconnitmaly c&-wiatmttc-nt - - - - - 13t+t Ati-mu - trrar cn-ml - - I km 44-mee - II11r vim ca1gual ckailay !41(XXI 41,o79 1(91,921 - - - - - "mal eltar�r to ael�rrgsrtsttxm" S -Io'17'r) 5 t,7,2'!3 S 115,506 S :tr7 741 S 1114, 1 S lr.i3,31y4} S (X)t) S 2.125 S '.x?5 OTHER FINANCING SOURCES (USES): l rwL%tL-" lit S � F r.{1Lkj � 4 � �9f73 S i 7 e e (4,3071 S S - S - S � - �"r:3nsfix� l'rexc+cei� (z g.-rtcml I.nrtt term Ck+4 i'rtu. ed% fr. wn the �4,-tle of 9caieral ranrtal asset ji-f xrzatir - - - - - l'�,tyl [ Hhc-r 1 iraauuxrag 3(xrrtxr: ii ] S i _,Lx}[] 3 ,693 S 4,307) S - S ^ 5 - 5 - S - S i ltal S 11 030 S 'dlct c1 f fra W igc a n u aenc c } Errx) tx119r A. -S - ]x g1tMM# Of the yt=r Result: nerrts i ut-ki ttilances - IvWnimig. 4 thL ychr - mstatW rwut balu v t. -i att' ahc year Vic- acwagvinrra{g ruks to the fi 1.914 S 1,914 S 11,464 Cit} of Kalispell, Montana Nonmalnr Govemmental Funds Schedule of Revenues, Expenditures, and Chars in Fund Balances - Budget and Actual For the Year Ended .Jure 30, 2006 CDBG Head Start COIF- Ecn Simi Dcv! s imi Titrae Honkvwncr BUDGETED A(--rUAL BUDGETED ACTUAL BUDGETED .ACTUAL AMOUNTS AMOUNTS VARIANCE AM€ 4JNTS AN40UNTS VARIANCE AMOUNTS :tMOUN" VARIANCE ORIGINAL( iRUDGETARY WrrH FINAL ORIGINAL/ (BUDGETARY WITH FINAL ORIGINAIJ (BUDGETARY WITH FINAL F'uNAL YASW -5m N"e A 11UPE F'I- A AS N i3 lG 'i- N .ASIS) Syt N& A RESOURCES i1NFL0VVS)- i m'c :-M $ - S $ - $ - $ - S - S - S ^ S - i=.t tl�•i"rtirtx�ltxi 25,950 5;)50 - .3(1[),(X)0 171,619 •33-7513 6,158 €_ lwr1.`yC!i lir serviers - -- 'lJti Anumms available iix aro xumatisxt 5.944) - S }4l€1.t}[1[} S +? =,f.,1'1 S k26.380 5 K7,()(X) S ; 'i 5`.j S tCM.LN W - C 11111uu 310 t'm-rc liluit - - - I l0kiStnA ruxf uxnntunaV &VOOPPIU-11t -29,137 29,209 q7 3) 44m),000 373,619 :6.381 i'000 91 " t6,7%) 1 Tc 3tt smut. - intmst - - - - _ _ _ CaIntal outlay - - Yol:%lvhmrga-stoapp 1mutit S "),137 S :`� t.iti 5 (71) T t=3t1,[iUl1 S s�iE=19 S '26.381 $ s7.i3^:i�} S 3375 g OTHER FINANCING SOURCES (USES)-. D-anylex; m $ - % S- I'nelnsfam k.xtt) Pr(xxo& 4A' gtL'aml 1mg ta-m i'nX"X1!4 fn -4n the gale of mx=l c4pitul woad &1pastrttc - - - - ,I.Othl 4 Ahrr 1• ina -Ing S lkirrcx (1 sts) S - $ Net (:lame,( in fund bal:tltrc i imd 1i3t1k1 omi - tx-smnuig. of the war �.•}.�� ^ ;�c+�fistLxT�attS _ . i'llr3F3 ia.tlutx:�s - begituong of !}K. 4'exts' - mitufcxl 3,�$S S - i-und Irairtrxx end W the vert[ `:m- auurrnj*rlytng rtntc-i to the #-inanual Ntaimm-ntx RFSOURCE.S (INFLOWS): itxYi and permits I iit en'ttivernmcnia l t. hurpxv lilt• Ae,7' at'xm t�1u:eIl:irxxwa 111vesttlu7ti t'-ImIngs r'137IDtSLt b ivailrlbix: ftsr 3l'tt]r(]t]Y'(i1t1tlC1 S shk&CASj-TQ-,Aff RQ 'vs aJY-LUw5h 1iSiillic � detv "iibhc ,mA-s C tlit un. :inil 1=fvotitlll Iicssl-I11A 19 ad CA1111 turllty tk%,c1%nmretlt 13c�A urvlcx: - PmIcif*1 I )0A smicc • ;silt mm � `np}tal .sw1mv 1,01111 cluirm Iti appm>)natlo ns S OTKER FINANCING SOURCES (USES)- 1 t7ttis(sx in S I'nx;--xxN tri gem-nll king tuan ik qx 1'nic;mx1s fran dic �:dc or wiv rai u-loW asst distxrl w 'fowl l dvz Firluming Stleu.x-s Jb4z) S Net dunge in foul Wrrux I-uml Imbncvx - Ivpnn ag o dw Nvur IZ c.-dutc-nwnts 1' wid balatwes - beprining of the year - ii."1t:itexJ i tald halwmx elul of il>G yCar Ax "C"im1milymu luges to ttw Ismulc'lal 5talufi'IC'nls City of Kalispell, Montana Nonmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Mantes - Budget and Actual For the Year Ended June 30, 2006 ISTEA zl2 G.O. saw BUDCETED ACTUAL ------------ ---- - BUDGETED ACTUAL BUDGETED A(-rUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAL/ (BUDGETARY WITH FINAL ORIGINAU (BUDGETARY W rm FINAL ORIGINAL/ (BUDGETARY W f FH FINAL FIN ASIS] Ser Ngft :& $Ill iF NAL BASIST Ser Noft A R€ DGET FIN BASIS) Ste_Nets-A BE_ ,pfzE� $ Mf11.1 iii S 'X7,543 S 26.407 7'+ i,dlii] - t 433,4(X)) 17,637 x[] �Fxi 7l,titi.7 Ig.117) - - - - - - '.(1L)(1 1.642 2j"12 ,413,41>t1 S A'01 S 1,49,00) S ' [�;? T � 1 ,� }'� S t ]tr,4()3) S 'r,3 136 $ -192 135 S - s t;4'e 1(,7 ,tk)O 67,3% 49.104 - - - - - - - - 1411,00() 140.(N -X) 148,688 148,osg 695,U(10 •1,•t9$ 2.1,520 [20,032) - - xfi1�.4 "'?4,!€}4 S 4,489 S 'a.awli S (20.032) S _r3K �,iiR S Mr(x,6iiK S - I •f m S S 5 E�,.3tJ7 27.547 S 7547 S +4,})44 97 6 «ty{ l S ;,497 43021 S t�,511� City of Kalispell, Montana Narlmajar Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 20W � K .Net change In ftusd bn]=lee S 26,182 1� lsnrl tsegprstulg 4 the YLUu (5.437) k "t"Wirientz I,urai baba z-, - iv-zmartg -if the war - rc:.srslteci $ _ _ (:`,417) `;+x ix-c4mipinying ru to dw financial ,Wtclwrrr..s S '4,784 1 `1{) 1 fig S IT). S 23:+.`;:3 2M G.O. Bead Airport TIS' DtW BUDGETED ACTUAL BUDGETED AC-17UAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAIJ (BUDGETARY WITH FINAL ORIGINALI (BUDGETARY WITH FINAL RESOURCES (INFLOWS)t 1'41wL i alui iuoweisllwmy S 290.2W S 301,259 S 11.059 S 311`).3(X) S 141,840 S 34,340 1 .ticcn*!i aW jxsinits - - - 1t3tL'T}�[I�tiI:]il�fltlf� IOr xervx.� i � lA [�'i ! Sir ]C[]lrS' - � - - •• hryr txt Kli c rttul `•[!1) 1,48 1 '.`1ii 1 1() 000 13 SO4 +, �(A .itnu2nts ay.l bbic for nt"nx awitt S _11X) 7W S +(14.740 S 14.040 S '1100X) S 157,144 S ;7,544 - l�i1111l4 �40L�CR l k1ltlirC mul rLS rection - I ifl isms .)tui comnitinity &-ve hnmient - - - ; ] 600)0 w5,000 i 0-5,M) 1,k+4 wyvioe - sntefeat 118,558 118.559 - :7.8(k 77,." ifu,1 't3a] V-h"ages to HPINC4 "11" S 78. 55 S - $ 182.960 S i 8�.5frLl S ;CAI (YtHF R FINANCING SOURCES (USES): 1'r:.:nf� ttr i - 5 S - S - S - S - Trrswfr.fs €cw* - - - t1•i[i,[7(k)} 114�],fi(xl3 - E'Ycxtxxh, of t t al knig trim debt - - Pvxtxxi9 fnmrt die-ak of gaw `al L't piul aslStt tUsjxK%ty - _ I" alxl 4hhcx 1' 1T3911SCrt3� 7eH.Rrsx� (l ice) S - S - S - - S 140. ](.14]1 S 141]_000) S - � K .Net change In ftusd bn]=lee S 26,182 1� lsnrl tsegprstulg 4 the YLUu (5.437) k "t"Wirientz I,urai baba z-, - iv-zmartg -if the war - rc:.srslteci $ _ _ (:`,417) `;+x ix-c4mipinying ru to dw financial ,Wtclwrrr..s S '4,784 1 `1{) 1 fig S IT). S 23:+.`;:3 City of Kalispell, Montana Nonmajor Govemmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended June 30, 2008 WesrtsI& TIF Debt BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE ORIGINAIJ (BUDGETARY WITH FINAL FINAL BA W31 Sty � A $tri SID Rewahts BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE ORIGINAL/ (BUDGETARY W(THFINAL FINAL B.A S N R 90URCES IINFLOWS): laxer': aod as"Cls1wilts S Itdl0y) S 179.538 S 12.539 S 1ntcrstllLt:rf3Mcntal chattgas fix wr ''11lw'l 33,00 +7,329 1,191) . - 1w,k.nonle-nt runlings ....., - _ "",It ) [i;, 99 11,309 (0) 14,625 ("(125 ,%arrlmiN r1vF11{i bk- Or 4M)rt q-gia uon _174,34x S ef14, i K4 S -").936 S i.to,25 S cCHAF ,' Tn API�IIUI�RI [ �o tt 'ITI,Qws k,t:tit- lhlhltC LtIIturc aM1 rmreatinn i ikA-i,i1litt and tATd:iri3 duty &;L'L 4nwntmt - - - - - ?k131 air• icc - Principil- tac ht :crnlce - iirt it l c x.=314 16,914 - - - c4pttial outlav - - - Tmai dwr ZiN to �r sxxa�tlrnl� $ _ -- x2-%9 S H 4f:'3 5 OTHER FINANCING SOURCES (USES): t•raI lfa$ to S S - S - S 10 ❑)() S 245 S 19,755) Trunxfers (wit)SS 1400,(X)O) (400.00U) - t25:3 1) (25,(*0) Pyt'..&VjX of gt rii ltlaP q tern] jou I'fi ZW6 Miura aW ",a't.tt: Uf PM=W fu1(3 w dA'[.' o dll rNwtx - Yaal t nhcr l'itkaxlcmg Styr= tii ) S { f5.47 )) S ?4,: ti5t S 1.9,155} -N,q chaugc ser fluid balawc i•und balance-,( - tx."�.lfUutig f?fthe year (i C'S ii4 tE.'37PL'ilt«i Furuf baLuxc end of the ytur scow a xxinrpAm+snu rusles to the rinsrtscs�t xtat�xslcatx wo City of Kalispell, Montana Nonmapr Governmental Rads Schedule of Revenues, Expenditures, and Changes to =unci Balances - Budget and Act! For the Year Ended June 30, 2006 1"7S&C 19'ls3&C BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AM01INTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGZNAU (BUDGETARY Wfrti FINAL ORWIN U IBUDGETAF.RY WITH FINAL Ff N 81�C,Ej F 1N.A %NSM„§m s''?s A U RESOURCES ONFLUWS); lmd assc:ititiims S 6 S 1 $ i 51 S 227 S 227 S i CtmScw 4m, ]xxmltx (nti'rpxez�tirrirrx.�rltitl - - - - - - - - - - t..ltnr t.,i aw wuNw-u-S - - - witxex:lf::tl�xls - - - - - 111►+uA11wttt uLTtlE1t}i3 - - Amounts w mlable for al1'(3ropnation 6 S S ti? 3 S 227 S - Public smi'vtl Culturr atxi mzrr-.etim - - Hoi1Ylm arul vaHRltnnniw &-vei[4yrm-m - - Dch scrvw L'- - tn'in;ipai 211- 'Jel7t KcrVux - intclest Cimilul out LAY i'.r:xl cluarge. u-- 41T Mt]]]fiittli�l 1 - $ 5 S _ _ 22'& _— -- 227S OTHER FINANCING SOURCES (i;SES): - T7-- ).xr '; 6"10 (7150) (245•)- 11rcuxm%U of gali.ml 1mg ternn &bt - - - - 11ftixv a L- fnxin tl1C nle of ixtu ml chrnti,! asset dinposttion - - - - 1 Aul [ )thex S ' 7145 i S +5} S $ -- 5 NA -t cluingr in rutul ilafunm S (244) S Fti of hllxr=% - be-4mming of rix year 241 12e:stiitcYtl�7ilY - - i itrul 1c),A6ru;c-. - b gznnnig of IN: year - mn-lewd S 7144 S 1-imtrf halanm- end of the vtr S - ..,... Sm iwownpanpng rA)4o it) dw firzul al stntt:imots City of KafispeR, Montana Nonmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended .lune 30, 2006 F uisd li4l6nms - bef � of the yc ar Fund t>tilzcr}-cs - N_`gir nmg o(the yr: w - rcmAWd S i• iuw bu lance land Of the 5wr S 2 59.) Sm acxxarnpanyrng ts[Acz* tut the rinanciral'iwwwnti 101 19"S&C I.*eS&C BUDGE'I'M ACTUAL BUDGETED ACTUAL AMOUNT'S AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAII (BUDGETARY WrrH FINAL ORIGINAL/ (BUDGETARY WITH FINAL P-Uli LI EINAL RAS15.1 Scar Neft A R LC RF50IJRCES JINFI,OWSI: Iilxu•5 and j,,mc!smr m tti S 259 S - S 374 $ - $ (i i4) i j fly' i and Pc'"[ir[il - - - - Intc�s)tuvraaarnc-rasa€ Ch,ulzc lnVCDlFtir.7at Cssi71fi7#ra - - - _ _ _ Anwtuit:[ a4mlaNe for +1!' atwlatwn S _2 59 S !259) S 17 4 5 - S t 3 7 4 ) � Acim d ftovslnnient fhiblic- C1111twu afui tti ►e 3tltlrl - - - - - _ i h1it+tng imi ccnntrsurrlty- 1 m. A :=em c - ptinLlrtal 221- Ur:tn scr4Tx - slaiCrCst 3R 3d - 45 Capital outlay 1'WAI1 ttarw to jppn4malumvY S S 172 S OTHER FINANCING SOURCES (USIVS): ! : allAi-- s in i larsiCecds of gctual hmg tura &N - - - - - Prmr,och; Isom tlie. salc 0'pdt.T=1 crifmal asst dis;x-Attic - - - - - - i'tital (..)du. -V Firwru:lrlg, 54xurx.m (€ J ) s No c:hanp4 In fLuul baiarrce S (21 5 9) F uisd li4l6nms - bef � of the yc ar Fund t>tilzcr}-cs - N_`gir nmg o(the yr: w - rcmAWd S i• iuw bu lance land Of the 5wr S 2 59.) Sm acxxarnpanyrng ts[Acz* tut the rinanciral'iwwwnti 101 City of Kalispell, Montana Nonmajor Governmental'Funds Schedule of Revenues, Expenditures, and Chang" in Fund Balances - Budget and Actual For the Year Ended June 30, 20W 102 20025&C 2003s&C BUDGETED ArTUAL BUDGETED AMAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE CORIGINAIF..f (BUDGETARY WITH FINAL ORIGINAiJ i BUDG€TARY WITH FINAL El AWO) &d" Nek A B 'ice R S! '_4Eft AWPUT RESOURCES IINFLOWSy: -1,0%vs arul ill'' LC3sriwhts S 2,113 S 1 A1119 S 1234? S 2—A5 S 2.431 S 196 1,ici,-nux-sand pcmmts _ - - ("j1ksPr:.' fix xwrvic= - - - - i�iisLc:lluiinixi� lii►t:sLfrrCtit C.�litttT93 - - " - - A1rxEUnLq at UlUble 11M 113 S 1.87") S 1234, S ?45 S :..� 31 S ! 916 C,HAR�%ES TO APEROfPR.IA-U©N-1i IMOW5Y. (itm-tal govenunmt S - S - S - 'S - S $ - t' lh ic: -�h fcly - - - - Public works - - - - Culltux: and mcwhtxm - - - - I lcsil.4mg and awnsmirniv de:ve1,(nxrxm1 - - - I x -ix .. tenwx ^ o irwival I A-1 0 1.670 1.720 1 _ : 20 - Dcl-A wrvwe: - interest 355 5 415 413 ? (: APttu1 Otitluv I u'A dmr'gt's Lel '3€717ri71iI1.Pit3iHi`s $ - 2.{p EE} S - 2 0215 S 5 i - 2.135 S 2 113 S OTHER FINANCING SOURCES (USEIS): Cn�tl;fexi to S q S ( S - S p -- mm-,fi" {elm} - - PtrEt.:mfit of gerwmI knig wnn debt - - 11rtxux3L licmf the sale of iwi=ul utplui ltswt disjXMI IC- aExnl (Mer i rriarx:iiig '-AwT -s Jisms) S - S - Net Ouiew Eli fund hilame � i 146) Ftmd Mal s - lc,iiuimg of the ymr E 110) 1�uwi�tr~nexrt� Fund ba htymm - f'9L'{.f wining of the ytmir - iC italcd I1 10) Fund NdLmw . esul of the ytxsr S 12 M $ 188 `ivc awxnpanying rKArs to the litumciaf rtaten wets 102 City of Kalispell, Montana Nonmajor Govemmental Funis Schedule of Revenues, Expenditures, and Changes to Fund Balances - Budget and Actual For the Year Ended June 30, 2006 2005 S & C 103 BUDGETED ACTUAL BUDGETED ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS VARIANCE ORIGINAL! (BUDGETARY WITH FINAL ORIGINAL/ (BUDGETARY WITH FINAL F!� BA5M-Sm . ek A Humg—T FINA 8MIS)_See-Note A S D k T RF—SOURCES (INFI.0W8): 'Iaxes :111L1 as, -c -i sm•rlts 6,,w7 S 6,937 S 4:+r3 S 5,514 S 4,501 S (1,013.] 1,wetis4 alld rx' mtr. - - - - - ! >; i! er)wwm aw-11tal liw rel - M InwMawnt Anxmtnis avallahic fr)r appm wtion S i' .A07 'S 1 .'±37 S 53[] S 5 514 S CH RGt'.S .I.y�AP_!'R_ OPRjATIO 15 (QVTF'I.UWs1: Public sat4ty- Ptlblw WEwks (,til It" and It7i millon - - - - 1 horsing and ,xranntmty .ii:wli4rlimt- 13eN -n-10C - prawirml 1.962 3; y'n M6 - iJc1�4 rvsgc-1ntarNt 1.376 1,3l3fi ts) �,fti5$ 2,456 202 callitsal o-mlay - - - - - fowl dutrpLs to aj))A-4mlations 5.340 S 5,348 S i }i) S ?.a 14 S 312 S OTHER FINANCING SOURCES (USES). 'lien:fe" in S - T - S - S S - S - Tr.=SfM'.1 (010 - - - - - ikf XANi 'i ;ft'tti- Wn111of1p. Sums debt- 1'rucu(xh fmin the sale of swru al cArmtal imm-i d Tx) --ow, I'cxal i thcr Frsl lncing &AwLes 4t 1 7 Net 1:luingo In ituld balarisx 1' 111x3 to ncu:I - Ivgulning of am ymr (1.007) ftFRSixtrinenl4G - 1• ajui lxalmrfevs-1xWnnmg of the year - restat d $ c. l , ±. 7L 5 _ F tuxl Isaildme em of* the ycrar S 522 "x' a[:Gorrip aAying rap n w the flrlttmud stutaxrlmu 103 City of Kalispell, Montana Nonmajor Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Year Ended Jude 30, 2006 Sm. ,aw) nip:tnvaig wtm to ilk'. f''=rwal statemmti; SID 3# 1 W ellb Fam Cmstr+t clot BUDGETED ACTUAL RUW;ETFD ACTUAL AMOUNTS AMOUNTS VARIANCE AMOUNTS AMOUNTS. VARIANCE ORICINAL1 tOUDC.FTARY WITH FINAL ORIGINALJ (BUDGETARY WITH FINAL FIrIAL B.'k8js)s!!T Nie A BUKE_ T FINAL I3 iS18} Set Nvtc A BUDGET RESOURCES 0NFLOWS]: l i xe's €rnd Fii37•'.V"'M--nts S 7,120 S 9,405 s 1, 85 S- €.11:L'ftti4'4 d1ut- irlu:r�i3�x�- Chargi,-i fix ri mcim Inve itrnml i:atitli7 AmoluitS avallallle for a}')m-,fmatton i , [ zo S :,.10 S i 285 'S " S - S - Public wo4ks - - Cullutro ofi l rtx-nation 1 fousFnit arul ioMmnunlly &-Avl44wnait - - €)LH :.'mqw - lltiiY:IPAI i,5(X) 5'(w 2,YXf - - - 1 lh xerIMC - 01= 31 .1.600 !'830 1.7?0 - - - c',Ipitaloutluv - - - 5r1f)f:.70 i>3u1 a;€tHi}le'S to altl7ttsSA tati[HiY '0 S d.56 :1 `4Y1 rx ;) S 244 998 S 1 5, 1 M (YiHER FINANCING SOURCES (USES): in S - T i - S - S 5 - 1';anosas Omt) - - - 111me xk Of lz inial long Wrm debt €3nX4:e s frim the ".1 le of Acute-ral CAptal. as 3d iirslxI-WIc - - - - l.'_ 3[3 k6S 1.-- 30 968 l'ful f kher Vainming Soto &- C1;%cs j x - S - S - S 500 (l(1) S 1,w 1 tl.M8 S 71(1,3()8 N'sm changL to to nd lra€atm S ')(6,980 F reit{ lxAane--; - lx.ginnmg of the vwr 7.625 - l zmd ba191t1CY.'Rw - 1>E ginning r.r1'the ycalr - restated S 'J,25 S - FmW balance u'sw oft#ic year S Sm. ,aw) nip:tnvaig wtm to ilk'. f''=rwal statemmti; City of Kalispell, Flathead County, Montana Combining Balance Sheet Nonmajor Proprietary Funds June 30, 2007 See accompanying notes to the financial statements 105 :Airport Enterprise Solid Waste Totals 1��, + :SSL` TS Current assets: Cash and investments $ 308,991 $ 238,906 $ 547,897 Taxes and assessments receivable, net - 39,992 39,992 Accounts receivable - net 2,134 - 2,134 Due from other governments - 71,947 71,947 Inventories - - - Tota1 current assets $ 311,125 $ 350,845 661,970 Noncurrent assets: Restricted cash and investments - $ - $ - Capital assets - land 1,347,568 - 1,347,868 Capital assets - construction in progress 35,570 - 35,570 Capital assets - depreciable, net 1,786,966 684,611 2,471,577 Total noncurrent assets 3,170,404 $ 684,611 $ 3,855,015 Total assets $ 3,481,529 $ 1,035,456 $ 4,516,985 LIABILITIES Current liabilities: .Accounts payable $ 51464 $ 7,172 $ 12,636 Accrued payroll 444 15,179 15,623 Current portion of long-term capital liabilities - - - Current portion of compensated absences payable - - - Other current liabilities - - - 'rotal current liabilities $ 5,908 $ 22,351 $ 28.259 Noncurrent liabilities: Noncurrent portion of long-term capital liabilities $ - $ - $ - Noncurrent portion of compensated absences 2,755 48,520 51.275 'Total noncurrent liabilities $ 2,755 $ 48,520 $ 51,275 Total liabilities $ 8,663 $ 70,871 $ 79,534 NET ASSETS Invested in capital assets, net of related debt $ 3,170,404 $ 684,611 $ 31.1855,415 Restricted for other purposes - - - Unrestricted 302,462 279,974 582436 Total net assets $ 3,472,566 $ 964,585 $ 4,437,451 Total liabilities and net assets $ 3,481,529 $ 1,035,456 $ 4,516,985 See accompanying notes to the financial statements 105 City of Kalispell, Flathead County, Montana Combining Statement of Revenues, Expenses, and Changes in Net Assets Nonmajor Proprietary Funds For the Fiscal Year Ended .dune 30, 2007 Airport Solid Enterprise Waste Totals OPERATING REVENUES Charges for services $ 69.297 $ 623,132 $ 692,429 Miscellaneous revenues - - Special assessments - - Total operating revenues $ 69,297 $ 623,132 $ _ 692,429 - OPERATING EXPENSES Personal services $ 28,950 $ 378,716 $ 417.666 Supplies 2,383 71,904 74,?87 Purchased services 38333 24,170 62,303 Building materials - - - FO -A charges 9,592 6 7,734 77,326 Loss/bad debt expense -- - - Depreciation 95,807 112,315 208.1'22 Total operating expenses $ 174,865 $ 654.839 $ 829,704 Operating income ( loss) $ (105,568) $ ( 31,707) $ (137,775) NONOPERA TING REVENUES (EXPENSES) Taxes/assessments revenue- Licenseslpennits revenue - - Intergovernmental revenue - - Interest revenue 33,334 17,773 51,107 Debt service interest expense - - - Gain ( loss) sale of capital asset - - - Total non-operating revenues (expenses) $ 33,334 $ 17,773 $ 51,107 Income (loss) before contributions and transfe $(72,234) $ _ _(13,934) $ (86,168) . ..... ------- - Capital contributions 35,570 - 35,570 Transfers in Change in net assets Net assets - beginning Restatements Net assets - beginning restated Net assets - ending See accompanying notes to the financial statements $ (36,664) $ ( 13,934) $ (50,59 $ 3,509,530 $ 978,519 $ 4,488,.049 $ 3,5095530 $ 978,519 $ 4,488,049 $ 3,471366 $ 9 64,5 85 $ 4.437,451 City of Kalispell, Flathead County, Montana Combining Statement of Cash Flows Nonmajor Proprietary Funds For the Fiscal Year Ended June 30, 2007 See accompanying notes to the financial statements 107 Airport Solid Waste Enterprise "rotals Cash flows from operating activities: Cash received ftom customers $ 67,163 617,345 $ 684,508 Cash received from assessments - - _ Cush received from miscellaneous Sources - - - Cash payments for claims (45,794) (163,603) (209,397) Cash payments to employees _ (27,624) .. _.._._ (367,327) (394,951) Net cash provided (used) by operating activities $ 6,255) 86,415 $ 80,160 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 — - (13,093) ..._(231,045) (244.138) Net cash provided (used) by capital and related financing activities $ (13,093) (231.[ 45) $ J244,138) Cash flows from non -capital financing activities: Transfers between funds - - - Intergovernmental revenue .- 4,266 4,256 Proceeds of licenses and permits for non operating - - - Net cash provided (used) from non -capital financing activities - 4,.266 $ 411266 Cash flows from investing activities: Interest on investments 33,334 17,773 51,107 Net cash provided (used) by investing activities 33,334 17,773 $ 51,107 Net increase (decrease) in cash and cash equivalents $ 13,986 (122,591) $ (1081)505} Cash and cash equivalents at beginning 295M4 361,497 656,501 Cash and cash equivalents at end $ 308,990 238,906 $ 547,896 Reconciliation of operating income (toss) to net cash provided (used) by operating activities: Operating income (loss) { l 05,568} (31,707) $ (137,275) Adjustments to reconcile operating income to net Cash provided (used) by operating activities: - Depreciation 95,807 112315 208,122 Changes in assets and liabilities: Accounts receivable - net (2,134) (5,787) ( 7,921) Taxes and assessments receivable, net - - - Prepaid expenses Inventories - - - Accounts payable 4,314 205 4,519 Accrued payroll 1,326 11,389 12=715 Net cash provided (used) by operating activities $ (6;255) 86,415 $ 80,160 See accompanying notes to the financial statements 107 M is. CF,,LLANEOUS STATISTICS CITY OF KALISPELL, MONTANA Miscellaneous Statistics (unaudited) Class of City 1 st Date of Organization 1892 County Flathead Form of Government Council/ Manager Number of employees (non -elected) 190.7 Seasonal employees 100+ Elected Mayor, 8 Council persons, Municipal Judge 10 Population of the City -- estimated 20,000 Land area 7178 acres Registered Voters: active 9,935 inactive 789 City Services: Police protection Fire Department, Ambulance Service and Building Inspection Parks & Recreation Community Development Public, Works --Streets, Water, Sewer, Wastwater Treatment, Storm Sewer General Administration -City Manager, Attorney, Finance, City Clerk, Municipal Court Planning Airport Number of building permits issued Miles of Streets & Alleys Municipal Water/Sewer: Number of consumers Average daily water consumption (millions) Miles of water main Miles of sewer main Miles of storm main Water rate per 1,000 gallons $ 2.21 Sewer rate per 1,000 gallons $ 3.99 Irrigation per 1,000 gallons $ 1.41 Customer service costs $3.00 each per billing period. 108 486 130 5,134 2.1 104 108 40 (increase to $2.43 July 1, 2007) ( increase to $4.19 July 1. 2007) (increase to $1.55 July 1, 2007) CITY OF KALISPELL, MONTANA General Revenues by Source Last Ten Fiscal Years (unaudited) Fiscal licenses Intergovern- Charges Fines and Investment year `faxes and fees mental for services Forfeitures Earnings Miscellaneous 'rotal 1998 $ 51)2411,1477 $ 393,785 $ 2,056,588 $ 790,766 $ 412,694 $ 3,122,635 $ 96,048 $ 12,113,993 1999 $ 54)267,252 $ 3621190 $ 3,315,493 $ 901,911 $ 3511973 $ 407,284 $ 102,494 $ 10,708,597 2000 $ 5,0501429 $ 459,656 $ 3,071,032 $ 863,632 $ 379,517 $ 393,118 $ 1.09,289 $ 10,326,673 2001 $ 4,429,943 $ 5221917 $ 3,732,442 $ 989,851 $ 391,665 $ 713,357 $ 1575551 $ 10,937,726 2002 $ 4,9211,674 $ 3407099 $ 4,294,120 $ 17106,812 $ 399101 $ 672,551 $ 134,291 $ 11,868,408 21003 $ 479361,1790 $ 610,299 $ 4,150,234 $ 80215377 $ 453,892 $ 909,145 $ 549,155 $ 12,411,892 2004 $ 5,509,021 $ 426,713 $ 4,135,311 $ 1,003,640 $ 443,646 $ 1,162,252 $ 695,778 $ 13,376,361 2005 $ 4,9295980 $ 4637152 $ 31.)9221052 $ 218981718 $ 53513,875 $ 33R-746 $ 1321327 $ 13,212,850 2016 $ 5,7621480 $ 712,654 $ 4,302,142 $ 3,307,364 $ 519,391 $ 358,754 $ 113,855 $ 15,0761540 2007 $ 614431167 $ 11374,244 $ 416161415 $ 3,6381633 $ 5791287 $ 496,992 $ 82,243 $ 17,230,981 Component units were excluded to comply with GASB reporting requirements. 1998 investment earnings included repayment of the U DAG loan from Kalispell Center Malt. Sources: FYI 998-2007 data from the City's Annual Financial Report, Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 109 CITY OF KALISPELL, MONTANA. General Governmental Expenditures by Function Last Ten Fiscal Years (:unaudited) Component units were excluded to comply with GASB reporting requirements. Sources: F Y 1998-2007 data from the City's Annual Financial Report, Statement of Revenues, Expenditures, and Changes in Fund Balances - Govenuuental Funds 110 Legislative, Administrative Public Parks Housing & Fiscal and support Safety Public Works Recreation & Community Capital Debt year services Culture Develo ment Out12 Service Total 1998 $ 1,194,016 $ 2,940,163 $ 157235852 $ 589,984 $ 8701)940 $ 3,682,896 $ 372,950 $ 11,374,841 1999 $ 1,2081880 $ 3,116,875 $ 1,501,822 $ 660,359 $ 1,795,463 $ 2,829,146 $ 406,509 $ 11,519,054 2044 $ 1,223,943 $ 313421327 $ 1,398,926 $ 723,360 $ 2,019,148 $ 4,3741624 $ 499,844 $ 13,578,132 2401 $ 1,253,352 $ 3,422,810 $ 1,699,238 $ 8621953 $ 1,583,421 $ 773,633 $ 718,962 $ 14,314,369 2002 $ 1,521,457 $ 3,739,192 $ 21)639,936 $ 1,073,442 $ 1,539,580 $ 1,195,946 $ 930,689 $ 12,640,242 2403 $ 1,51911186 $ 4,780,182 $ 1,443,451 $ 988,015 $ 1,123,497 $ 3,394,947 $ 986,612 $ 14,235,890 2-004 $ 1,658,495 $ 5,150,657 $ 1,515,246 $ 1,471,506 $ 768,038 $ 4,342,922 $ 2,213,388 $ 16,720,252 2 005 $ 1,525,640 $ 5,604,169 $ 1,791,913 $ 1,236,972 $ 1,109,542 $ 2,051,190 $ 700,182 $ 14,019,608 2006 $ 2,127,825 $ 6,650,069 $ 2,085,890 $ 1,350,474 $ 1,478,928 $ 7,66707 $ 1,207,499 $ 22,567,772 2007 $ 2,124,714 $ 7,399,753 $ 1,864,465 $ 1,508,943 $ 2,062,332 $ 4,353,483 $ 1,743,014 $ 21,056,704 Component units were excluded to comply with GASB reporting requirements. Sources: F Y 1998-2007 data from the City's Annual Financial Report, Statement of Revenues, Expenditures, and Changes in Fund Balances - Govenuuental Funds 110 CITY OF KALISPELL, MONTANA Consolidated Tax Rates -Milt Levies Last Ten years (unaudited) 111 5175 State School Flathead Valley Consolidated City Fiscal City of High School Elementary Equaliztion Community County County TOTAL ear Kalispell Lev Le Levies College Levy Health MILLS 1998 116.160 54.600 120.020 133.33 10.040 74.978 3.862 512.990 1999 111.164 61.720 126.33 133.95 10.410 78.793 1.5t i 523.924 2000 114.250 66.430 133.74 137.62 11.010 80.922 4.402 548.374 2001 122.004 67.500 124.760 138.530 11.920 84.224 4.652 553.686 2002 129.420 713.040 149.340 140.880 12.030 89.973 4.652 604-835 2003 152.600 80.350 152.040 142.890 11.760 94.115 4.930 638.685 2004 144.654 80.000 153.120 148.420 11.570 96.120 5.090 638-970 2005 155.000 77.810 147.310 146.760 11.140 103.040 5.000 646.060 21006 170.000 99.400 160.770 147.030 14.310 107.328 5.300 704.138 2007 166.900 94.670 144.000 151..060 17.500 110.760 5.100 689.990 Source: Montana Tax Foundation Generdt Fund 134.9 G.O. Bond - 2002 9 G.G. Bond - 2004 9.5 Permissive Health Levy13.5 --------- . . . 111 Notes: FY2003 includes 12 mills for Health insurance premium increases authorized by the legislature. An additional 12 mills was approved by the voters for the construction of an aquatics facility. The Downtown Urban Renewal District ended in FY2002. The two remaining districts are the Westside and the Airport Districts. 112 CITY OF KALI SPELL, MONTANA Assessed Value of Taxable Property Last Ten Fiscal Years (unaudited) Urban Renewal Fiscal districts City taxable value # mills dollars year Market Value % chg CPI Taxable Value Tax Increment without increment 1 mill levied generated 1998 $ 576,856,663 4.5% 1.60% $ 25,376,049 $ 3,902,752 $ 21,473,297 $ 21,473 116.16 $ 2,494,304 1999 $ 588,649,254 2.0% 2.20% $ 25,500,927 $ 4,330,212 $ 21,170,715 $ 21,170 111.16 $ 2,353,257 2000 $ 574,721,869 -2.4% 3.40% $ 24,932,008 $ 3,593,853 $ 21,338,155 $ 21,338 114.25 $ 2,437,867 2001 $ 592,339,335 3.0% 2.80° $ 23,087,996 $ 1,934,202 $ 21,153,794 $ 21,153 122.00 $ 2,580,666 2002 $ 622,610,786 4.9% 1.60° $ 23,411,193 $ 2,059,458 $ 21,351,734 $ 21,351 129.42 $ 2,763,246 2003 $ 678,031,534 8.2% 2.30% $ 24,412,901 $ 754,554 $ 23,658,347 $ 23,654 152.6 $ 3,609,600 2004 $ 743,576,508 8.8% 2.70% $ 25,270,432 $ 817,184 $ 24,453,248 $ 24,453 144.65 $ 3,537,126 2005 $ 818,605,572 9.2% 3.40% $ 27,839, 549 $ 925,426 $ 26,914,123 $ 26,914 155 $4,171,689 2006 $ 893,657,570 8.4°Ire 3.30% $ 29,770,487 $ 1,119,387 $ 28,651,100 $ 28,651 170 $ 4,870,687 2007 $ 1,013,012,511 11.8% 5.00% $ 32,494,223 $ 701,179 $ 31,793,044 $ 31,793 166.9 $5,306,259 Notes: FY2003 includes 12 mills for Health insurance premium increases authorized by the legislature. An additional 12 mills was approved by the voters for the construction of an aquatics facility. The Downtown Urban Renewal District ended in FY2002. The two remaining districts are the Westside and the Airport Districts. 112