Document Blackfoot_doc_54d2c3338f

CITY OF BLACKFOOT, IDAHO BASIC FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION SEPTEMBER 30, 2019 ---PAGE BREAK--- ---PAGE BREAK--- CITY OF BLACKFOOT AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2019 TABLE OF CONTENTS Page Number FINANCIAL SECTION: Independent Auditor’s Opinion 6 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position 9 Statement of Activities 10 Fund Financial Statements: Balance Sheet – Governmental Funds 12 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 14 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 16 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 18 Proprietary Funds: Statement of Net Position 19 Statement of Revenues, Expenses, and Changes in Net Position 20 Statement of Cash Flows 21 Fiduciary Funds: Statement of Net Position – Clerk’s Trust Fund 22 Notes to Financial Statements 23 3 ---PAGE BREAK--- CITY OF BLACKFOOT AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2019 TABLE OF CONTENTS – (CONTINUED) Page Number Required Supplementary Information: Schedule of Employer’s Share of Net Pension Liability 52 Schedule of Employer’s Contributions 52 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – General Fund 54 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Street Fund 57 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Ambulance Fund 58 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Parks and Recreation Fund 59 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Blackfoot Urban Renewal District 61 Other Supplemental Information: Combining Balance Sheet - Non-major Governmental Funds 64 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Non-major Governmental Funds 66 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Airport Fund 68 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual – Cemetery Fund 69 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual – Library Fund 70 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual – Capital Improvements Fund 71 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual – Health Care Reserve Fund 72 4 ---PAGE BREAK--- CITY OF BLACKFOOT AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2019 TABLE OF CONTENTS – (CONTINUED) Page Number SINGLE AUDIT SECTION: Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 74 Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133 76 Schedule of Expenditures of Federal Awards 78 Schedule of Findings and Questioned Costs 79 5 ---PAGE BREAK--- Morgan J Hatt CPA PC Certified Public Accountant 1855 Satterfield Drive [EMAIL REDACTED] Phone : (208) 317-6040 Pocatello, Idaho 83201 Fax: (208) 242-3782 Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Independent Auditor's Report Report on the Financial Statements I have audited the accompanying financial statements of the governmental activities, the business- type activities, the fiduciary activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Blackfoot, Idaho (the City), as of and for the year ended September 30, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the Table of Contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express opinions on these financial statements based on my audit. I have conducted my 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 I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, I express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinions. 6 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 2 Unmodified Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the fiduciary activities, each major fund, and the aggregate remaining fund information of the City as of September 30, 2019, and the respective changes in financial position, for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information The City has not presented the Management’s Discussion and Analysis that accounting principles generally accepted in the United States has determined is necessary to supplement, although not required to be part of the basic financial statements. Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, the schedules of Net Pension Liability & Employer’s Contributions, and the major fund budgetary comparison information be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. I have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to my inquiries, the basic financial statements, and other knowledge I obtained during my audit of the basic financial statements. I do not express an opinion or provide any assurance on the information because the limited procedures do not provide me with sufficient evidence to express an opinion or provide any assurance. Other Information My audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual non- major fund financial statements, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. 7 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 3 The combining and individual non-major fund financial statements and the Schedule of Expenditures of Federal Awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In my opinion, the combining and individual non-major fund financial statements and the Schedule of Expenditures of Federal Awards are fairly stated in all material respects in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, I have also issued my report dated February 7, 2020, on my consideration of the City’s internal control over financial reporting and my tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of my testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Pocatello, Idaho February 7, 2020 Morgan J Hatt CPA PC 8 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF NET POSITION SEPTEMBER 30, 2019 Total Component Unit Governmental Business-type Primary Blackfoot Urban ASSETS: Activities Activities Government Renewal Agency Current Assets: Cash and investments $2,499,986 $8,644,072 $11,144,058 $886,042 Property taxes receivable 184,699 184,699 9,917 Other receivables 867,529 680,195 1,547,724 Utility accounts receivable, net 606,402 606,402 Golf Inventory 38,996 38,996 Non-current Assets: Land 1,048,240 648,105 1,696,345 Capital assets, net 18,017,010 22,564,918 40,581,928 Restricted cash 25,826 25,826 51,652 Total Assets: 22,656,460 33,169,518 55,825,978 947,611 DEFERRED OUTFLOWS: Deferred PERSI outflow of resources 200,176 33,315 233,491 0 LIABILITIES: Current liabilities: Accounts payable 463,038 852,836 1,315,874 2,171 Accrued leave 417,544 72,393 489,937 Accrued interest 17,730 17,730 Customer deposits 88,825 88,825 Lease payable due within one year 55,948 145,202 201,150 DEQ loan DW 1001 185,442 185,442 DEQ loan WW 1501 154,497 154,497 Revenue bonds due within one year 0 70,000 Non-current liabilities: Lease payable due beyond one year 157,867 157,867 Revenue bonds due beyond one year 545,000 DEQ loan DW 1001 2,497,166 2,497,166 DEQ Loan WW 1501 3,643,683 3,643,683 DEQ Loan WW 1703 390,590 390,590 City's share of unfunded PERSI liability 1,149,729 191,351 1,341,080 Total Liabilities: 2,244,126 8,239,715 10,483,841 617,171 DEFERRED OUTFLOWS: Deferred PERSI inflow of resources 616,620 102,624 719,244 0 NET POSITION: Net investment in capital assets 18,851,435 16,196,443 35,047,878 Restricted - for debt service 25,826 25,826 Unrestricted 1,144,455 8,638,225 9,782,680 278,788 Total Net Position: $19,995,890 $24,860,494 $44,856,384 $278,788 The accompanying notes are an integral part of these statements. 9 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2019 Program Revenues Charges for Grants and Expenses Services Contributions Primary Government: Governmental Activities: General government $1,768,721 $297,980 Public safety 6,041,661 2,518,122 $43,414 Parks and recreation 1,530,953 697,226 25,482 Library 385,581 252,375 530 Highways and streets 1,514,895 89,039 896,666 Airport 247,675 39,539 301,278 Interest on long-term debt 5,814 Total Governmental Activities: 11,495,300 3,894,281 1,267,370 Business-type Activities: Water 1,236,993 1,950,664 11,125 Sewer 2,461,252 3,167,416 1,514,343 Sanitation 1,077,430 1,268,123 Interest on long-term debt 176,387 Total Business-type Activities: 4,952,062 6,386,203 1,525,468 Total Primary Government: $16,447,362 $10,280,484 $2,792,838 Component Units: Interest on long-term debt $46,942 Blackfoot Urban Renewal Agency 681,956 $300 $728,898 $300 $0 General Revenues: Property taxes Sales and use tax County road and bridge State of Idaho revenue sharing State of Idaho liquor receipts State highway user collections Investment earnings Sale of assets Administration charges Health deductible charges Total General Revenues and Transfers: Change in net position: Net Position October 1, 2018: Net Position September 30, 2019 The accompanying notes are an integral part of these statements. 10 ---PAGE BREAK--- Primary Government Blackfoot Governmental Business-type Urban Renewal Activities Activities Total Agency ($1,470,741) ($1,470,741) (3,480,125) (3,480,125) (808,245) (808,245) (132,676) (132,676) (529,190) (529,190) 93,142 93,142 (5,814) (5,814) (6,333,649) (6,333,649) $724,796 724,796 2,220,507 2,220,507 190,693 190,693 (176,387) (176,387) 2,959,609 2,959,609 (3,374,040) ($46,942) (681,656) 4,971,193 4,971,193 748,348 587,243 587,243 62,201 62,201 462,451 462,451 183,058 183,058 576,782 576,782 367,873 367,873 19,302 7,116 7,116 681,282 (681,282) 0 58,619 (58,619) 0 7,957,818 (739,901) 7,217,917 39,052 1,624,169 2,219,708 3,843,877 39,052 18,371,721 22,640,786 41,012,507 239,736 $19,995,890 $24,860,494 $44,856,384 $278,788 The accompanying notes are an integral part of these statements. Net (Expense) Revenue and Changes in Net Position Component Unit 11 ---PAGE BREAK--- CITY OF BLACKFOOT BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2019 Parks and General Street Ambulance Recreation ASSETS: Fund Fund Fund Fund Cash and investments $592,438 $375,952 $40,297 $139,396 Receivables: Property taxes 139,262 17,315 9,139 Bingham County 169,607 1,162 390 State of Idaho 163,676 144,741 Grants 292,422 Other 12,828 Golf clubhouse inventory 38,996 Total Assets: $1,077,811 $831,592 $40,297 $187,921 LIABILITIES: Accounts payable $223,977 $31,937 $40,297 $86,039 Total Liabilities: 223,977 31,937 40,297 86,039 DEFERRED INFLOW OF RECOURCES: Unavailable revenue - Property taxes 114,568 14,430 7,491 FUND BALANCE: Assigned - Capital Improvements 600,000 40,045 Assigned - Golf Fee Increase Reserve 28,346 Unassigned 739,266 185,225 0 26,000 Total Fund Balance: 739,266 785,225 0 94,391 Total Liabilities, Deferred Resources, & Fund Balance: $1,077,811 $831,592 $40,297 $187,921 The accompanying notes are an integral part of these statments. 12 ---PAGE BREAK--- Other Total Blackfoot Governmental Primary Urban Renewal Funds Governmental Agency $1,351,903 $2,499,986 $886,042 18,983 184,699 9,917 755 171,914 308,417 81,948 374,370 12,828 38,996 $1,453,589 $3,591,210 $895,959 $80,788 $463,038 $2,171 80,788 463,038 2,171 15,747 152,236 5,811 100,225 740,270 887,977 28,346 1,256,829 2,207,320 1,357,054 2,975,936 887,977 $1,453,589 $3,591,210 $895,959 The accompanying notes are an integral part of these statments. 13 ---PAGE BREAK--- CITY OF BLACKFOOT RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2019 Total Blackfoot Primary Urban Renewal Government Agency Total Fund Balance: $2,975,936 $887,977 Total net assets reported on the Statement of Net Position is different from the fund balance reported on the Balance Sheet because: Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in the governmental funds. Cost of capital assets: 45,766,785 Depreciation expense to date: (26,701,535) Some of the City's property taxes will be collected after year-end and are not available to pay current period expenditures. They are reported as deferred revenue in the governmental funds. 152,236 5,811 Deferred amounts are not current financial resources/uses. Therefore, they are not reported in the governmental funds. Deferred PERSI outflows: 200,176 Deferred PERSI inflows: (616,620) Long-term liabilities are not due and payable in the current period. Therefore, they are not reported as liabilities in the governmental funds. Accrued leave: (417,544) Equipment leases payable: (213,815) Revenue bonds payable: (615,000) City's share of unfunded PERSI liability: (1,149,729) Change in Net Position: $19,995,890 $278,788 The accompanying notes are an integral part of these statements. 14 ---PAGE BREAK--- THIS PAGE INTENTIONALLY LEFT BLANK 15 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2019 Parks and General Street Ambulance Recreation REVENUE: Fund Fund Fund Fund Property taxes $3,560,845 $521,474 $225,833 Sales and use taxes 587,243 Franchise taxes 99,177 86,280 Licenses and fees 114,261 $735,106 656,309 County shared 183,058 62,201 599,470 21,500 State of Idaho 462,451 576,782 Blackfoot - Snake River Fire District 902,112 Blackfoot Rural Library District School District Resource Officer 223,804 Grants and contributions 8,935 896,666 34,479 25,482 Interest 358,324 3,223 2,045 Administrative charges 799,993 Miscellaneous 95,963 2,759 19,417 Total Revenue: 7,396,166 2,149,385 1,369,055 950,586 EXPENDITURES: Current Operating: General government 1,583,954 Public safety 4,644,317 1,366,988 Parks and recreation 1,529,439 Library Highways and streets 2,547,012 Airport Capital Outlay Debt service - principal Debt service - interest Total Expenditures: 6,228,271 2,547,012 1,366,988 1,529,439 EXCESS REVENUE (EXPENDITURES): 1,167,895 (397,627) 2,067 (578,853) OTHER FINANCING SOURCES (USES): Operating transfers (to) from other funds (1,244,271) 144,015 550,115 711,346 NET CHANGE IN FUND BALANCES: (76,376) (253,612) 552,182 132,493 FUND BALANCE - BEGINNING: 815,642 1,038,837 (552,182) (38,102) FUND BALANCE - ENDING: $739,266 $785,225 $0 $94,391 The accompanying notes are an integral part of these statements. 16 ---PAGE BREAK--- Other Total Blackfoot Governmental Primary Urban Renewal Funds Government Agency $675,825 $4,983,977 $751,626 587,243 185,457 314,345 1,820,021 866,229 1,039,233 902,112 236,510 236,510 223,804 301,808 1,267,370 4,281 367,873 19,302 799,993 137 118,276 300 1,532,906 13,398,098 771,228 253,112 1,837,066 17,881 6,011,305 1,529,439 396,191 396,191 2,547,012 260,589 260,589 3,756 3,756 664,075 65,000 46,942 913,648 12,585,358 793,898 619,258 812,740 (22,670) (161,205) 0 0 458,053 812,740 (22,670) 899,001 2,163,196 910,647 $1,357,054 $2,975,936 $887,977 The accompanying notes are an integral part of these statements. 17 ---PAGE BREAK--- CITY OF BLACKFOOT RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2019 Total Blackfoot Primary Urban Renewal Government Agency Net Change in Fund Balance -Total Governmental Funds: $812,740 ($22,670) Because some property taxes will not be collected for several months after the City's year-end, they are not considered current resources in the governmental funds. They are, however, considered as revenue in the Statement of Activities. This amount is the current year change in deferred taxes: (12,784) (3,278) Governmental funds report capital outlays as current year expenditures. In the Statement of Activities, the cost of these assets is allocated over their estimated useful lives as depreciation expense. This is the amount of current capital outlay for new equipment: 2,235,618 This is the amount of current year depreciation: (1,270,851) Long-term liabilities are not recorded in governmental funds. This is the amount of current year capital lease payments: 19,085 This is the amount of new capital leases: (194,203) This is the amount of current year bond payment payment: 65,000 Liability for personal leave days are not recorded in governmental funds. This is the decrease in leave during the year: 89,290 Revenues and expenses that do not require the use of current financial resources are not reported in the governmental funds. This is the current net PERSI Revenue/(Expense): (54,726) Change in Net Position: $1,624,169 $39,052 The accompanying notes are an integral part of these statements. 18 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2019 Totals Water Sewer Sanitation (Memorandum ASSETS: Fund Fund Fund Only) Current Assets: Cash and investments $4,561,387 $2,584,362 $1,498,323 $8,644,072 Utility accounts receivable 207,624 275,450 123,328 606,402 Grants receivable 680,195 680,195 Non-current Assets: Land 234,569 413,536 648,105 Property and equipment - net of depreciation 5,625,211 16,582,672 357,035 22,564,918 Restrictred Cash 25,826 25,826 Total Assets: 10,628,791 20,562,041 1,978,686 33,169,518 DEFERRED OUTFLOWS: Deferred PERSI outflow of resources 9,456 15,812 8,047 33,315 LIABILITIES: Current liabilities: Accrued leave 34,833 27,837 9,723 72,393 Accounts payable 23,354 814,493 14,989 852,836 Accrued interest 3,344 14,386 17,730 Customer deposits 88,825 88,825 Equipment lease purchase 145,202 145,202 Bonds payable 0 DEQ loan DW 1001 185,442 185,442 DEQ loan WW 1501 154,497 154,497 Non-current liabilities: DEQ loan WW 1703 390,590 390,590 DEQ loan DW 1001 2,497,166 2,497,166 DEQ loan WW 1501 3,643,683 3,643,683 Fund's share of unfunded PERSI liability 54,312 90,818 46,221 191,351 Total Liabilities: 2,887,276 5,281,506 70,933 8,239,715 DEFERRED INFLOWS: Deferred PERSI inflow of resources 29,128 48,707 24,789 102,624 NET POSITION: Net investment in capital assets 3,177,172 12,662,236 357,035 16,196,443 Restricted - for debt service 25,826 25,826 Assigned - Capital Improvements 2,097,965 1,197,225 500,000 3,795,190 Unrestricted 2,446,706 1,362,353 1,033,976 4,843,035 Total Net Position: $7,721,843 $15,247,640 $1,891,011 $24,860,494 The accompanying notes are an integral part of these statments. 19 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2019 Totals Water Sewer Sanitation (Memorandum OPERATING REVENUE: Fund Fund Fund Only) Service fees $1,920,970 $3,158,996 $1,268,102 $6,348,068 Other 29,694 8,420 21 38,135 Total Revenue: 1,950,664 3,167,416 1,268,123 6,386,203 OPERATING EXPENSES: Salaries 312,242 516,355 260,542 1,089,139 Benefits 301,139 396,696 236,127 933,962 Clothing 2,565 7,081 1,676 11,322 Travel and training 1,228 5,988 1,333 8,549 Office supplies 5,247 17,597 31 22,875 Maintenance 65,247 102,994 60,886 229,127 Utilities and telephone 165,484 182,304 3,471 351,259 Fuel 10,112 22,900 45,163 78,175 Professional services 63,313 95,109 158,422 Department supplies and other 62,847 141,259 4,816 208,922 Depreciation 236,231 889,506 79,722 1,205,459 Administrative services 186,567 386,166 108,549 681,282 Lab & DEQ fees 21,638 63,570 85,208 Lift stations 35,810 35,810 County services 389,972 389,972 Constructional materials 9,158 8,950 7,985 26,093 Total Expenses: 1,443,018 2,872,285 1,200,273 5,515,576 OPERATING INCOME (LOSS): 507,646 295,131 67,850 870,627 NON-OPERATING REVENUES (EXPENSES): Federal and State grants 11,125 1,514,343 1,525,468 Debt service-interest (49,104) (127,283) (176,387) INCOME (LOSS) BEFORE CONTRIBUTIONS & TRANSFERS 469,667 1,682,191 67,850 2,219,708 Transfers (to) from other funds 0 0 0 0 CHANGE IN NET POSITION: 469,667 1,682,191 67,850 2,219,708 NET POSITION - BEGINNING: 7,252,176 13,565,449 1,823,161 22,640,786 NET POSITION - ENDING: $7,721,843 $15,247,640 $1,891,011 $24,860,494 The accompanying notes are an integral part of these statements. 20 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2019 Totals Water Sewer Sanitation (Memorandum Fund Fund Fund Only) CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from City patrons $1,947,593 $3,161,252 $1,265,020 $6,373,865 Payments to suppliers (696,114) (323,927) (751,411) (1,771,452) Payments to employees (310,412) (512,088) (260,298) (1,082,798) City administrative charges (186,567) (386,166) (108,549) (681,282) Net Cash Provided by Operating Activities: 754,500 1,939,071 144,762 2,838,333 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of fixed assets (422,378) (3,035,470) (3,457,848) Grants 11,125 1,452,089 1,463,214 Lease purchase payments (149,599) (149,599) 2000 COPS bond payments (224,400) DEQ loan DW 1001 payments (230,259) (230,259) DEQ loan WW 1501 payments (258,256) (258,256) DEQ loan WW 1703 advances 390,590 390,590 Accrued interest (1,462) 104 (1,358) Net Cash Applied to Financing Activities: (642,974) (1,824,942) 0 (2,243,516) CASH FLOWS FROM INVESTING ACTIVITIES: Interest earned on investments 0 0 0 0 NET INCREASE (DECREASE) IN CASH 111,526 114,129 144,762 370,417 CASH AT BEGINNING OF YEAR: 4,449,861 2,496,059 1,353,561 8,299,481 CASH AT END OF YEAR: $4,561,387 $2,610,188 $1,498,323 $8,669,898 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET INCOME: Net income (loss) $469,667 $1,682,192 $67,850 $2,219,709 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation 236,231 889,506 79,722 1,205,459 Net PERSI plan expense (revenue) 7,029 (1,357) 5,065 10,737 Investment income 0 Debt service interest 49,104 127,282 176,386 Grants (11,125) (1,514,343) (1,525,468) Transfers 0 (Increase) decrease in accounts receivable (3,728) (3,984) (1,506) (9,218) Increase (decrease) in accounts payable 7,322 759,775 (6,369) 760,728 Net Cash Provided by Operating Activities: $754,500 $1,939,071 $144,762 $2,838,333 The accompanying notes are an integral part of these statements. 21 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF NET POSITION FIDUCIARY FUNDS - CLERK'S TRUST FUND SEPTEMBER 30, 2019 ASSETS: Cash and investments $36,198 LIABILITIES: Accounts payable 3,390 Blackfoot Youth Committee 3,295 Mayor's scholarship 27,511 Patriot Park statue donations 20 Friends of the Library 16 Trunk or Treat 1,966 Total Liabilities: 36,198 NET POSITION: $0 The accompanying notes are an integral part of these statements. 22 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Blackfoot, Idaho (the “City”) was incorporated on January 16, 1901, under the provision of the State of Idaho. The City operates under a Council-Mayor form of government. The financial statements of the City of Blackfoot have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for established governmental accounting and financial reporting principles. The more significant of the City of Blackfoot’s accounting policies are described below. A. FINANCIAL REPORTING ENTITY For financial reporting purposes, management has considered potential component units. The decision to include a potential component unit in the reporting entity is made by applying the criteria set forth in generally accepted accounting principles. The basic criterion for including a potential component unit within the reporting entity is the governing body's responsibility for financial accountability. Financial accountability is defined as the level of accountability that exists if a primary government appoints a voting majority of an organization’s governing board and is either able to impose its will on that organization or there is potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it. Discretely Presented Component Unit The Blackfoot Urban Renewal District was organized to make improvements to infrastructure in specific areas of the City. It derives its revenues from the incremental tax increases that all taxing districts forfeit from increase in value of the land and improvements in new construction areas. 23 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 B. BASIS OF ACCOUNTING/MEASUREMENT FOCUS The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance, revenues, and expenditures, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Government-wide Financial Statements The Statement of Net Position and the Statement of Changes in Net Position display information about the City. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities are included in the accompanying Statement of Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized when the liability is incurred. Property taxes are recognized as revenue in the year for which they are levied. Program service revenues include charges for services, as well as operating contracts with other units of government, such as the Snake River Fire District, the Rural Library District, and the County Ambulance. Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to inter-fund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. Proprietary funds distinguish operating revenues and expenses for non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with ongoing operations. The principal operating revenues of the Water, Sewer, and Sanitation Funds are charges to City residents. 24 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 B. BASIS OF ACCOUNTING/MEASUREMENT FOCUS – (CONTINUED) Operating expenses include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, the City’s policy is to use restricted resources first, and then unrestricted resources, as they are needed. Governmental Fund Financial Statements Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in fund equity as presented in these Statements to the net position presented in the Government-wide Financial Statements. Governmental funds are accounted for on a spending or “current financial resources” measurement focus and on the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheets. The Statement of Revenues, Expenditures, and Changes in Fund Balances present increases and decreases in net current assets. Under the modified accrual basis of accounting, revenues are recognized when they become both measurable and available as net current assets. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Revenue sources susceptible to accrual include property taxes and inter-governmental revenues. Expenditures are recognized when the related fund liability is incurred. Exceptions to this general rule include accumulated unpaid vacation, sick days, and other employee amounts, which are not accrued. Proprietary Fund Financial Statements Proprietary Funds are used to account for activities similar to those found in the private sector, where the determination of net income is necessary or useful for sound financial administration. Goods or services from such activities can be provided either to outside parties or other departments or agencies within the City. 25 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 B. BASIS OF ACCOUNTING/MEASUREMENT FOCUS – (CONTINUED) Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities are included on the Statement of Net Position. Revenues are recognized when they are earned and expenses are recognized when the liability is incurred. Fiduciary Fund Financial Statements Fiduciary fund financial statements include a Statement of Net Position. The City’s fiduciary funds represent agency funds, which are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The City reports the following major governmental funds: The General Fund is the City’s primary operating fund. It accounts for all financial activities of the City except those required to be accounted for in another fund. The Street Fund is used to account for the operation of the Street Department. Funding is provided by local property taxes and the City’s share of State highway taxes. The Ambulance Fund is used to account for the activities of the City’s paramedics. Funding is provided through user charges and cost sharing with Bingham County. The Parks and Recreation Fund include the City’s golf course, swimming pool, and City parks. Funding is provided by local property taxes and user charges. The City reports the following major proprietary funds: The Water Fund accounts for the City’s water production and distribution. The Sewer Fund accounts for the City’s sewer system operation. The Sanitation Fund accounts for the City’s refuse collection and disposal. 26 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 C. BUDGETING Budgets are adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets are adopted for the general, special revenue, and debt service funds. All annual appropriations lapse at fiscal year-end. Project-length financial plans are adopted for all capital project funds. In July and August of each year, the various department heads submit their budget requests to the Mayor and Council. Budget meetings are then held to determine what funds will be available for expenditure in the new fiscal year. The budget requests are reduced to match the available revenue and a proposed budget is approved by the Mayor and Council. The proposed budget is published in the local paper and taxpayers are invited to attend a public hearing to express their views concerning the proposed budget. After this public meeting, the budget is approved and is legally enacted through the passage of an ordinance. D. ENCUMBRANCES Encumbrances are not liabilities and they are not recorded as expenditures until receipt of material or services. For budgetary purposes, appropriations lapse at year-end and are re- budgeted the following year. The City does not reserve fund balance for outstanding encumbrances at year-end. E. CASH AND INVESTMENTS The City pools idle cash from all funds for the purpose of increasing income through investment activities. The City considers investments with an original maturity of three months or less to be cash equivalent. The City invests idle cash in the Idaho State Treasurer’s local government investment pool. The deposits are stated at cash which approximates market. The State Treasurer combines deposits from all government entities in Idaho who participate in the pool and purchases the following types of investments: Local Certificates of Deposit, Repurchase Agreements, and U.S. Government Securities. The Entities participating in the pool own a percentage of each investment held. This percentage is calculated by dividing the individual entity’s deposits by the total deposits held in the pool. The purpose of this is to: increase overall the rate of return, reduce risk of default, and place each entity under the FDIC and FSLIC limits of $250,000. 27 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 E. CASH AND INVESTMENTS – (CONTINUED) Under Idaho Code Section 67-1210, the City is authorized to invest surplus or idle monies in investments subject to the following standards, guidelines and restrictions: a. City monies shall not be made in any depository of a financial institution in an amount which exceeds 10% of said entity’s capital and surplus. Any investment to be made above Federal Deposit Insurance requires the depository to have a current “Moody’s Bank Credit Report Service” rating of or better. b. No demand deposits or investment in time deposits or certificates of deposit shall be made in financial institutions insured in whole or in part by the Federal Savings and Loan Insurance Corporation or in any State or Federal credit unions’ insurance programs in an amount in excess of the insurance available. Investments allowable under “Idaho Code Section 67-1210 are: a. Bonds, Treasury bills, interest bearing notes, or other obligations of the United States or those for which the faith and credit of the United States are pledged for the payment of principal and interest. b. General obligation or revenue bonds of this State or those for which the faith and credit of this State are pledged for the payment of principal and interest. c. General obligation or revenue bonds of any county, city, metropolitan water district, municipal utility district, school district, or other taxing district of this State. d. Notes, bonds, debentures, or other similar obligations issued by the Farm Credit System or institutions forming a part thereof under the Farm Credit Act of 1971. e. Bonds, notes, or other similar obligations issued by public corporations of the State of Idaho including, but not limited to, the Idaho State Building Authority, the Idaho Housing and Finance Association, and the Idaho Water Resource Board. f. Repurchase agreements covered by any legal investment for the State of Idaho. g. Tax anticipation notes and registered warrants of the State of Idaho. h. Tax anticipation bonds or notes and income and revenue anticipation bonds or notes of taxing districts of the State of Idaho. i. Time deposit accounts and savings accounts in state depositories including, but not limited to, accounts on which interest or dividends are paid and upon which negotiable orders of withdrawal may be drawn, and similar transactions accounts. 28 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 E. CASH AND INVESTMENTS – (CONTINUED) j. Time deposit accounts and savings accounts of Federal savings and loan associations located within the geographical boundaries of the State in amounts not to exceed the insurance provided by the Federal Deposit Insurance Corporation including, but not limited to, accounts on which interest or dividends are paid and upon which negotiable orders of withdrawal may be drawn, and similar transaction accounts. k. Revenue bonds of institutions of higher education of the State of Idaho. l. Share, savings, and deposit accounts of State and Federal credit unions located within the geographical boundaries of the State in amounts not to exceed the insurance provided by the National Credit Union Share Insurance Fund and/or any other authorized deposit guaranty corporation, including but not limited to, accounts on which interest or dividends are paid and upon which negotiable orders of withdrawal may be drawn, and similar transaction accounts. m. Money market funds whose portfolios consist of any allowed investment as specified in this section. The securities held in money market portfolios must be dollar-denominated, meaning that all principal and interest payments on such a security are payable to security holders in United States dollars. F. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. G. INVENTORY Inventory consists of golf clubhouse merchandise and apparel purchased for resale. Inventory is valued at cost on a first in/first out basis. H. CAPITAL ASSETS Capital assets, which include property, plant, equipment, and infrastructure (roadways), are defined by the City as any asset with an individual cost of more than $5,000 and an estimated useful life of at least one year. The City’s assets are capitalized at historical cost or estimated historical cost. Gifts or contributions of assets are recorded at fair market value when received. Depreciation is recorded on the straight-line basis over the estimated useful lives of the assets as follows: Buildings: 20-40 years, Equipment: 5-10 years, and Infrastructure: 40 years. 29 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 H. CAPITAL ASSETS – (CONTINUED) In June 1999, the Governmental Accounting Standards Board (GASB) issued Statement No. 34, which requires the inclusion of infrastructure in local government’s basic financial statements. Infrastructure includes the streets, the water purification and distribution system, the sewer collection and treatment system, and all land and buildings used by the City. The City has elected to use the basic approach as defined by Statement No. 34 for asset reporting. Historical cost records do not exist for all of the City’s assets dating back to 1901. For those assets where actual costs records could not be located, the City estimated costs using standard unit costs appropriate for acquisition date. Accumulated depreciation was computed based on the life of the assets. Book value is computed by deducting the accumulated depreciation from the original cost. I. ACCUMULATED COMPENSATED ABSENCES It is the City’s policy to permit employees to accumulate unused vacation and sick leave, some of which will be paid to employees upon their separation from service. This amount is included as a liability in the government-wide statements and on the proprietary fund statements. J. DEFERRED OUTFLOWS/INFLOWS OF RESOURCES In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and so it will not be recognized as an outflow of resources (expenditure) until then. The City does have items that qualify for reporting in this category. They are the deferred outflows of resources related to the PERSI pension base plan. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The City has one type of these items, which arises under the government-wide accrual basis of accounting that qualifies for reporting in this category and one item, which arises only under a modified accrual basis of accounting. Accordingly, the item, “unavailable revenue”, is reported only in the Governmental Funds Balance Sheet. The governmental funds report unavailable revenues from one source; property taxes. This amount is deferred and recognized as an inflow of resources in the period that the amounts become available. 30 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 J. DEFERRED OUTFLOWS/INFLOWS OF RESOURCES – (CONTINUED) The other item (reported in the government-wide statements) is an amount related to the pension base plan. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. K. FUND EQUITY Governmental fund equity is classified as fund balance. Fund balance is further classified as non-spendable, restricted, committed, assigned, or unassigned. Restrictions of the fund balance indicate portions that are legally or contractually segregated for a specific future use. Non-spendable fund balances are required to be maintained intact. Committed portions represent amounts that can only be used for specific purposes pursuant to formal action of the City Council. Assigned portions represent amounts set aside for specific purposes. Remaining fund balances are reported as unassigned. When both restricted and unrestricted fund balances are available for use, it is the City’s policy to use restricted fund balance first, then unrestricted fund balance. Furthermore, committed fund balances are reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of those restricted fund balance classifications can be used. L. FUND BALANCE FLOW ASSUMPTIONS Sometimes, the City will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. 31 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 M. NET POSITION FLOW ASSUMPTIONS Net position represents the difference between assets and liabilities. Net investment in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors, laws or regulations, or other governments. Sometimes, the City will fund outlays for a particular purpose from both restricted (e.g. restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the Government-wide and Proprietary Fund Financial Statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied. Pensions – For purposes of measuring the net pension liability and pension expense, information about the fiduciary net position of the Public Employee Retirement System of Idaho Base Plan (Base Plan) and additions to/deductions from the Base Plan’s fiduciary net position have been determined on the same basis as they are reported by the Base Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 2. PROPERTY TAX The City’s property taxes, levied by the second Monday of September on assessed valuation as of June 30, are payable in two equal installments for real property due December 20, and June 20. Personal taxes are payable on December 20. Assessed valuations are established by the County Assessor’s office except for utility property which is established by the State and is currently at 100% of market value. Delinquent payments bear simple interest of 1% per month plus a 2% penalty. Due to the small amount of taxes not collected no adjustment is made for delinquent taxes. Uncollected property taxes are recorded as receivable at year-end, with deferred revenue representing that portion which will not be collected within 60 days after year-end. 32 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO NOTES TO FINANCIAL STATEMENTS - (CONTINUED) SEPTEMBER 30, 2019 3. CASH AND INVESTMENTS Interest rate risk is the risk that changes in market interest rates will adversely impact the fair value of an investment. Investments that are fixed for longer periods are likely to experience greater variability in their fair values due to changes in interest rates. The City manages its exposure to declines in fair value by limiting the weighted average of its investment portfolio. Custodial risk for deposits is the risk that, in the event of the failure of a depository financial institution, the City would not be able to recover its deposits. The City does not have an investment policy for custodial risk. Credit risk is the risk that an insurer of debt securities or another counterparty to an investment will not fulfill its obligation. The City’s investment policy requires investments to be in conformity with Idaho Statue Title 50, Chapter 10, Section 13. Concentration of credit risk occurs when investments are concentrated in one issuer. The City has no investment policy limiting the amount it may invest in any one issuer. At September 30, 2019, 67% of the City’s investments were in the State of Idaho Local Governments Investment Pool & Diversified Bond Fund. The City invests in the LGIP through the Idaho State Treasurer. The State Treasurer provides oversight for investments by or through any department or institute of the State of Idaho. LGIP invests in: government agency notes, commercial paper, corporate bonds, money markets, U.S. Treasury notes, Idaho repurchase agreements, and purchased accrued interest. All investments for the LGIP are collateralized. LGIP investments are carried at cost, which is not materially different than fair value. These investments are subject to risk from market and interest rate fluctuations. The City also invests in the Diversified Bond Fund (DBF) through the Idaho State Treasurer. The DBF invests in: corporate securities, mortgage-backed securities, asset- backed securities, commercial mortgage-backed securities, U.S. Government agency securities, U.S. Treasury securities, money market funds, and purchased accrued interest. DBF investments are carried at fair value as determined by the Idaho State Treasurer’s office. 33 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 4. RECEIVABLES The following is a detail of accounts receivable: General Street Park Non-major Fund Fund Fund Funds Total Bingham County: Property tax penalty $5,467 $586 $372 $724 $7,149 Ag exemption 261 27 18 31 337 Sales tax 157,731 157,731 Motor vehicle fine 6,148 6,148 Road & bridge tax 549 549 169,607 1,162 390 755 171,914 State of Idaho: Revenue sharing 126,953 126,953 State liquor tax 36,723 36,723 Highway user tax 144,741 144,741 163,676 144,741 0 0 308,417 Other receivables: Groveland Water & Sewer District 3,572 3,572 Bingham Memorial Hospital 0 Accrued interest on investments 9,256 9,256 12,828 0 0 0 12,828 Total Receivables: $346,111 $145,903 $390 $755 $493,159 5. CAPITAL ASSETS In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the Government-wide Statement of Net Position. The City has maintained a record of fixed assets since 1993. During fiscal year 2000, the infrastructure assets were added to the equipment inventory records. Original estimated costs were developed in one of three ways: 1) Actual historical cost records; 2) Estimated historical costs where actual cost records were not available; and 3) for streets, curbs, and gutters, the City used present construction cost indexed by inflation factors provided by the Idaho Department of Transportation. Accumulated depreciation was computed on a straight- line basis using appropriate life expectancies. 34 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 5. CAPITAL ASSETS – (CONTINUED) Capital assets of the City for the year ended September 30, 2019 are as follows: Assets Accumulated Depreciation Balance Balance Balance Balance Governmental Activities: 10/1/2018 Change 9/30/2019 10/1/2018 Change 9/30/2019 Land $1,048,240 $1,048,240 Buildings 9,450,188 $343,740 9,793,928 $5,833,962 $312,814 $6,146,776 Infrastructure 25,849,270 1,644,485 27,493,755 14,212,906 645,623 14,858,529 Vehicles & Rolling Stock 4,776,965 236,099 5,013,064 3,968,312 208,542 4,176,854 Furniture & Equipment 2,406,503 11,295 2,417,798 1,415,503 103,873 1,519,376 $43,531,166 $862,506 $45,766,785 $25,430,683 $1,270,852 $26,701,535 Business - type Activities: Land $648,105 $648,105 Distributions System 34,756,597 $3,347,417 38,104,014 $16,026,770 $981,633 $17,008,403 Vehicles & Rolling Stock 3,230,765 3,230,765 2,243,463 159,004 2,402,467 Furniture & Equipment 1,412,330 110,432 1,522,762 816,930 64,820 881,750 $40,047,797 $3,457,849 $43,505,646 $19,087,163 $1,205,457 $20,292,620 For the fiscal year ended September 30, 2019, depreciation expense on capital assets was charged to the governmental functions in the City-wide statements as follows: General Government $37,138 Public Safety 168,131 Street 697,401 Airport 196,924 Library 1,529 Parks 169,729 $1,270,852 35 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 6. ACCOUNTS PAYABLE Accounts payable consists of the following: Parks and Other General Street Ambulance Recreation Non-major Fund Fund Fund Fund Funds Total Vendors payable $100,504 $19,404 $9,136 $32,920 $70,096 $232,060 Wages payable 126,423 12,533 31,161 17,138 10,692 197,947 Payroll tax payable 11,709 11,709 Customer deposits 20,674 20,674 Golf tournament Credits 35,981 35,981 Work Comp (35,333) (35,333) $223,977 $31,937 $40,297 $86,039 $80,788 $463,038 Water Sewer Sanitation Fund Fund Fund Total Vendors payable $11,488 $787,416 $4,659 $803,563 Wages payable 11,866 27,077 10,330 49,273 $23,354 $814,493 $14,989 $852,836 7. RISK MANAGEMENT The City is exposed to various risks of loss related to torts, theft of or damage to and destruction of assets, errors and omissions, and natural disasters. Significant losses are covered by commercial insurance. 8. CAPITAL LEASES During 2017, the City entered into a lease agreement with Zion’s Bank to finance a golf course mower. It is being repaid over 3 years with interest at 2.74%. As of September 30, 2019, the annual requirements to amortize the debt are as follows: Payment 2.74% Date Amount Interest Principal Balance $19,612 Oct 2019 $10,008 $269 $9,739 9,873 Apr 2020 10,008 135 9,873 0 $20,016 $404 $19,612 36 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 8. CAPITAL LEASES – (CONTINUED) During 2018, the City entered into a lease agreement with Mountain West Bank to finance a Vactor Sewer Cleaner. It is being repaid over 3 years with interest at 2.93%. As of September 30, 2019, the annual requirements to amortize the Debt are as follows: Payment 2.74% Date Amount Interest Principal Balance $435,938.00 May 2018 $149,528.76 $0.00 $149,528.76 286,409.24 May 2019 149,528.76 8,391.79 141,136.97 145,272.27 May 2020 149,528.76 4,256.49 145,272.27 0 $448,586.28 $12,648.28 $435,938.00 During 2019, the City entered into a lease agreement with Zion’s Bank to finance a Fire Truck. It is being repaid over 6 years with interest at 3.38%. As of September 30, 2019, the annual requirements to amortize the debt are as follows: Payment 3.38% Date Amount Interest Principal Balance $194,203 Mar 2020 $21,298 $3,287 $18,011 176,192 Sep 2020 21,298 2,982 18,316 157,876 Mar 2021 21,298 2,672 18,626 139,250 Sep 2021 21,298 2,358 18,940 120,310 Mar 2022 21,298 2,038 19,260 101,050 Sep 2022 21,298 1,712 19,586 81,464 Mar 2023 21,298 1,381 19,917 61,547 Sep 2023 21,298 1,044 20,254 41,293 Mar 2024 21,298 702 20,596 20,697 Sep 2024 21,298 601 20,697 0 $212,980 $18,777 $194,203 37 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 9. DEQ REVOLVING LOAN #WW 1501 During 2018, the City completed a waste water facilities upgrade. The project was funded by a loan from the US Department of Environmental Quality Idaho Revolving Loan Fund. As of September 30, 2019, the annual requirements to amortize the debt including interest are as follows: Sewer Revenue Bond Series 2018 2.75% Payment Interest Principal Balance $3,798,180 3/17/20 $129,128 $52,225 $76,903 3,721,277 9/17/20 129,128 51,168 77,960 3,643,317 3/17/21 129,128 50,096 79,032 3,564,284 9/17/21 129,128 49,009 80,119 3,484,165 3/17/22 129,128 47,907 81,221 3,402,944 9/17/22 129,128 46,790 82,337 3,320,607 3/17/23 129,128 45,658 83,470 3,237,137 9/17/23 129,128 44,511 84,617 3,152,520 3/17/24 129,128 43,347 85,781 3,066,739 9/17/24 129,128 42,168 86,960 2,979,779 3/17/25 129,128 40,972 88,156 2,891,623 9/17/25 129,128 39,760 89,368 2,802,255 3/17/26 129,128 38,531 90,597 2,711,658 9/17/26 129,128 37,285 91,843 2,619,815 3/17/27 129,128 36,022 93,106 2,526,709 9/17/27 129,128 34,742 94,386 2,432,324 3/17/28 129,128 33,444 95,684 2,336,640 9/17/28 129,128 32,129 96,999 2,239,641 3/17/29 129,128 30,795 98,333 2,141,308 9/17/29 129,128 29,443 99,685 2,041,623 3/17/30 129,128 28,072 101,056 1,940,567 9/17/30 129,128 26,683 102,445 1,838,122 3/17/31 129,128 25,274 103,854 1,734,268 9/17/31 129,128 23,846 105,282 1,628,987 3/17/32 129,128 22,399 106,729 1,522,257 9/17/32 129,128 20,931 108,197 1,414,060 3/17/33 129,128 19,443 109,685 1,304,376 9/17/33 129,128 17,935 111,193 1,193,183 3/17/34 129,128 16,406 112,722 1,080,461 9/17/34 129,128 14,856 114,272 966,189 3/17/35 129,128 13,285 115,843 850,347 9/17/35 129,128 11,692 117,436 732,911 3/17/36 129,128 10,078 119,050 613,860 9/17/36 129,128 8,441 120,687 493,173 3/17/37 129,128 6,781 122,347 370,826 9/17/37 129,128 5,099 124,029 246,797 3/17/38 129,128 3,393 125,735 121,063 9/17/38 122,727 1,665 121,062 0 38 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 10. DEQ REVOLVING LOAN #DW 1001 During 2012, the City completed a water facilities upgrade. The project was funded by a loan from the US Department of Environmental Quality Idaho Revolving Loan Fund. As of September 30, 2019, the annual requirements to amortize the debt including interest are as follows: Water Bond Series 2015 Payment 1.75% Date Amount Interest Principal Balance $2,682,608 3/11/20 $115,860 $23,473 $92,387 2,590,221 9/11/20 115,860 22,664 93,195 2,497,026 3/11/21 115,860 21,849 94,011 2,403,015 9/11/21 115,860 21,026 94,833 2,308,182 3/11/22 115,860 20,197 95,663 2,212,519 9/11/22 115,860 19,360 96,500 2,116,019 3/11/23 115,860 18,515 97,345 2,018,674 9/11/23 115,860 17,663 98,196 1,920,478 3/11/24 115,860 16,804 99,056 1,821,422 9/11/24 115,860 15,937 99,922 1,721,500 3/11/25 115,860 15,063 100,797 1,620,703 9/11/25 115,860 14,181 101,679 1,519,025 3/11/26 115,860 13,291 102,568 1,416,457 9/11/26 115,860 12,394 103,466 1,312,991 3/11/27 115,860 11,489 104,371 1,208,620 9/11/27 115,860 10,575 105,284 1,103,336 3/11/28 115,860 9,654 106,205 997,130 9/11/28 115,860 8,725 107,135 889,995 3/11/29 115,860 7,787 108,072 781,923 9/11/29 115,860 6,842 109,018 672,905 3/11/30 115,860 5,888 109,972 562,934 9/11/30 115,860 4,926 110,934 452,000 3/11/31 115,860 3,955 111,905 340,095 9/11/31 115,860 2,976 112,884 227,211 3/11/32 115,860 1,988 113,872 113,339 9/11/32 114,331 992 113,340 0 39 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 11. BLACKFOOT URBAN RENEWAL TAX INCREMENT BONDS During fiscal year 2006, BURA sold $1,100,000 in tax increment bonds to fund construction costs associated with the Riverview Technology Park. These bonds will be repaid from future property tax revenues. As of September 30, 2019, the annual requirements to amortize this debt including interest are as follows: Series 2006 Principal Interest Interest Total Debt Date Amount Rate Amount Service March 1, 2020 $70,000.00 7.250% $22,293.75 $92,293.75 September 1, 2020 19,756.25 19,756.25 March 1, 2021 75,000.00 7.250% 19,756.25 94,756.25 September 1, 2021 17,037.50 17,037.50 March 1, 2022 80,000.00 7.250% 17,037.50 97,037.50 September 1, 2022 14,137.50 14,137.50 March 1, 2023 85,000.00 7.250% 14,137.50 99,137.50 September 1, 2023 11,056.25 11,056.25 March 1, 2024 95,000.00 7.250% 11,056.25 106,056.25 September 1, 2024 7,612.50 7,612.50 March 1, 2025 100,000.00 7.250% 7,612.50 107,612.50 September 1, 2025 3,987.50 3,987.50 March 1, 2026 110,000.00 7.250% 3,987.50 113,987.50 $615,000.00 $169,468.75 $784,468.75 12. DEQ WASTE WATER LOAN # 1703. 13. LEGAL DEBT MARGIN The City is subject to a statutory limitation by the State of Idaho for indebtedness payable principally from property taxes. The limit is 2% of market value per the year’s tax roll. The City’s outstanding general obligation debt is under the legal limit. During fiscal year 2019, the City began drawing down on the DEQ Waste Water Loan #1703. As of September 30,2019, the City had drawn down $390,590. 40 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 14. LONG-TERM DEBT The following is a summary of the City’s long-term debt transactions for the year ended September 30, 2019: Balance Incurred Satisfied Balance Amounts Due 10/1/2018 or issued or matured 9/30/2019 within one year Governmental Activities: Compensated absences $506,834 ($89,290) $417,544 Lease purchase contracts 38,697 $231,914 (56,796) 213,815 $55,948 City's share of unfunded PERSI 1,544,880 (95,151) 1,149,729 $2,090,411 $231,914 ($541,237) $1,781,088 $55,948 Business-type Activities: Compensated absences $75,417 ($3,024) $72,393 Lease purchase contracts 286,409 (141,137) 145,272 $145,272 DEQ WWTP loan #1001 2,863,763 (181,155) 2,682,608 185,442 DEQ WWTP loan #1501 3,952,059 (153,879) 3,798,180 154,497 Refunding Series 2012 220,000 (220,000) 0 DEQ WWTP loan #1703 0 $390,590 390,590 City's share of unfunded PERSI 255,451 (64,100) 191,351 $7,653,099 $390,590 ($763,295) $7,280,394 $339,939 Blackfoot Urban Renewal District: Tax increment bonds $680,000 ($65,000) $615,000 70,000 $680,000 $0 ($65,000) $615,000 $70,000 15. TRANSFERS BETWEEN FUNDS Deficit Transfers: Ambulance Fund $550,115 Parks and Recreation Fund: $711,346 General Fund $1,261,461 Administrative Charges: To From General Fund $799,993 Street Fund $59,282 Ambulance Fund $18,798 Airport Fund $21,288 Cemetery Fund $9,086 Library Fund $10,257 Water Fund $186,567 Sewer Fund $386,166 Sanitation fund $108,549 41 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) 15. TRANSFERS BETWEEN FUNDS – (CONTINUED) General Transfers: General Fund $694,156 Street Fund $144,015 Ambulance Fund Airport Fund $16,000 Cemetery Fund $5,205 Library Fund Park Fund $711,346 Capital Improvements Fund $140,000 16. CONTINGENT LIABILITIES To save on health insurance costs, the City has purchased a policy with large individual deductibles. Rather than pass that cost to the employees, the City has agreed to pay up to $1,000 for individuals and $2,000 for families. The City’s maximum risk at any time is approximately $170,000. The City has set up a Health Care Reserve Fund to account for this activity. The City has chosen to participate in the Idaho Independent Inter-governmental Authority Insurance, which is a self-funded insurance policy that Idaho municipalities are eligible to participate in. If in the future there are a high number of claims which depletes the reserve, the City could possibly be required to re-fund this reserve. This potential additional expense has not been determined at this time, but based upon past experience, there is sufficient money in the Health Care Reserve Fund to meet the City’s current needs. Amounts received or receivable from grantor agencies are subject to audit and adjustment by those agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed cannot be determined at this time. The City expects such amounts, if any, to be immaterial. SEPTEMBER 30, 2019 42 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 17. PRIOR PERIOD ADJUSTMENT In past years, the City has transferred equity in excess of current operating needs to separate capital projects funds. In future years, the City will report that equity as designated equities within the fund itself. As of October 1, 2018, the City transferred the equity from those various capital project funds back into the funds where the money originated. Beginning net position has been restated as follows: Fund Fund Equity Equity 9/30/2018 Transfer 10/1/2018 Street Fund $438,837 $600,000 $1,038,837 Street Capital Fund 600,000 (600,000) 0 Library Fund 238,280 65,231 303,511 Library Capital Fund 65,231 (65,231) 0 Park Fund (104,176) 66,074 (38,102) Golf Course Capital Fund 28,346 (28,346) 0 Parks Capital fund 37,728 (37,728) 0 Water Fund 5,154,211 2,097,965 7,252,176 Water Capital fund 2,097,965 (2,097,965) 0 Sewer Fund 12,368,224 1,197,225 13,565,449 Wastewater Capital Fund 1,197,225 (1,197,225) 0 Sanitation Fund 1,323,161 500,000 1,823,161 Sanitation Capital Fund 500,000 (500,000) 0 $23,945,032 $0 $23,945,032 18. RESTRICTED CASH As per the terms of Sewer Revenue Bond Series 2018, identified in the financial statements as DEQ loan WW 1501, the City agreed to deposit in a separate account an amount equal to one-tenth of an annual payment every year until the reserve equals the annual payment. As of September 30, 2019, the required reserve is $25,826. The City is in compliance with these bond requirements. 43 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO NOTES TO FINANCIAL STATEMENTS – (CONTINUED) YEAR ENDED SEPTEMBER 30, 2019 Plan Description The City of Blackfoot contributes to the Public Employee Retirement System of Idaho Base Plan (Base Plan) which is a cost-sharing, multiple-employer defined benefit pension plan administered by Public Employee Retirement System of Idaho (PERSI) that covers substantially all employees of the State of Idaho, its agencies, and various participating political subdivisions. The cost to administer the plan is financed through the contributions and investment earnings of the plan. PERSI issues a publicly available financial report that includes financial statements and the required supplementary information for PERSI. That report may be obtained on the PERSI website at www.persi.idaho.gov. Responsibility for administration of the Base Plan is assigned to the Board comprised of five members appointed by the Governor and confirmed by the Idaho Senate. State law requires that two members of the Board be active Base Plan members with at least ten years of service and three members who are Idaho citizens, not members of the Base Plan except by reason of having served on the Board. Pension Benefits The Base Plan provides retirement, disability, death, and survivor benefits of eligible members or beneficiaries. Benefits are based on members’ years of service, age, and highest average salary. Members become fully vested in their retirement benefits with five years of credited service (5 months for elected or appointed officials). Members are eligible for retirement benefits upon attainment of the ages specified for their employment classification. The annual service retirement allowance for each month of credited service is 2.0% (2.3% for police/firefighters) of the average salary for the highest consecutive 42 months. The benefit payments for the Base Plan are calculated using a benefit formula adopted by the Idaho Legislature. The Base Plan is required to provide a 1% minimum cost of living increase per year provided the Consumer Price Index increases 1% or more. The PERSI Board has the authority to provide higher cost of living increases to a maximum of the Consumer Price Index movement or whichever is less; however, any amount above the 1% minimum is subject to review by the Idaho Legislature. 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM 44 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO NOTES TO FINANCIAL STATEMENTS – (CONTINUED) YEAR ENDED SEPTEMBER 30, 2019 Member and Employer Contributions Member and employer contributions paid to the Base Plan are set by statute and established as a percent of covered compensation. Contribution rates are determined by the PERSI Board within limitations, as defined by State law. The Board may make periodic changes to employer and employee contribution rates (expressed as percentages of annual covered payroll) that are adequate to accumulate sufficient assets to pay benefits when due. The contribution rates for employees are set by statute at 60% of the employer rate for general employees and 72% for police and firefighters. As of June 30, 2019, it was 6.79% for general employees and 8.36% for police and firefighters. The employer contribution rate as a percent of covered payroll is set by the Retirement Board and was 11.32% for general employees and 11.66% for police and firefighters. The City’s contributions were $451,705 for the PERSI year ended June 30, 2019. Pension Liabilities, Pension Expense (Revenue), and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2019, the City reported a liability for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The District’s proportion of the net pension liability was based on the District’s share of contributions in the Base Plan pension plan relative to the total contributions of all participation PERSI Base Plan employers. At June 30, 2019, the District’s proportion was .1174868 percent. 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM - (CONTINUED) 45 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO NOTES TO FINANCIAL STATEMENTS – (CONTINUED) YEAR ENDED SEPTEMBER 30, 2019 For the year ended September 30, 2019, the City recognized pension expense of $455,093. At June 30, 2019, the District reported deferred outflows of resources related to pension from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience ($72,992) $22,084 Changes in assumptions or other inputs ($42,549) $0 Net difference between projected and actual earnings on pension plan investments $0 $256,840 Changes in the employer's proportion and differences between the employer's contributions and the employer's proportionate contributions $151,242 $440,321 Contributions subsequent to the measurement date $197,790 $0 Total $233,491 $719,245 $197,790 reported as deferred outflows of resources related to pensions resulting from employer contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the year ending September 30, 2019. The average of the expected remaining service lives of all employees that are provided with pensions through the System (active and inactive employees) determined at July 1, 2018, the beginning of the measurement period ended June 30, 2018 is 4.9 and 5.5 for the measurement period June 30, 2019. Other amounts, reported as deferred outflows of resources and deferred inflows of resources related to pensions, will be recognized in pension expense (revenue) as follows: Year ended September 30, 2019: 2018 ($48,291) 2019 ($206,892) 2020 $100,780) 2021 ($59,726) 2022 $0 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM - (CONTINUED) 46 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO NOTES TO FINANCIAL STATEMENTS – (CONTINUED) YEAR ENDED SEPTEMBER 30, 2019 Actuarial Assumptions Valuations are based on actuarial assumptions, the benefit formulas, and employee groups. Level percentages of payroll normal costs are determined using the Entry Age Normal Cost Method. Under the Entry Age Normal Cost Method, the actuarial present value of the projected benefits of each individual included in the actuarial valuation is allocated as a level percentage of each year’s earnings of the individual between entry age and assumed exit age. The Base Plan amortizes any unfunded actuarial accrued liability based on a level percentage of payroll. The maximum amortization period for the Base Plan permitted under Section 59-1322, Idaho Code, is 25 years. The total pension liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.25% Salary increases 4.25-10.00% Salary inflation 3.75% Investment rate of return 7.10%, net of investment expenses Cost-of-living adjustments 1% Mortality rates were based on the RP-2000 combined table for healthy males or females as appropriate with the following offsets:  Set back 3 years for teachers  No offset for male fire and police  Forward one year for female fire and police  Set back one year for all general employees and all beneficiaries An experience study was performed for the period July 1, 2013 through June 30, 2017 which reviewed all economic and demographic assumptions other than mortality. The Total Pension Liability as of June 30, 2019 is based on the results of an actuarial valuation date of July 1, 2019. The long-term expected rate of return on pension plan investments was determined using the building block approach and a forward-looking model in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM - (CONTINUED) 47 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO NOTES TO FINANCIAL STATEMENTS – (CONTINUED) YEAR ENDED SEPTEMBER 30, 2019 combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Even though history provides a valuable perspective for setting the investment return assumption, the System relies primarily on an approach which builds upon the latest capital market assumptions. Specifically, the System uses consultants, investment managers, and trustees to develop capital market assumptions in analyzing the System’s asset allocation. The assumptions and the System’s formal policy for asset allocation are shown below. The formal asset allocation policy is somewhat more conservative than the current allocation of the System’s assets. The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. The capital market assumptions are as of January 1, 2017. Capital Market Assumptions Expected Expected Strategic Strategic Asset Class Return Risk Normal Ranges Equities 70.00% 66% - 77% Broad Domestic Equity 9.15% 19.00% 55.00% 50% - 65% International 9.25% 20.20% 15.00% 10% - 20% Fixed Income 3.05% 3.75% 30.00% 23% - 33% Cash 2.25% 0.90% 0.00% 0% - 5% Expected Expected Expected Strategic Total Fund Return Inflation Real Return Ranges Actuary 7.00% 3.25% 3.75% N/A Portfolio 6.58% 2.25% 4.33% 12.67% * Expected arithmetic return net of fees and expenses Actuarial Assumptions Assumed inflation - Mean 3.25% Assumed Inflation - Standard Deviation 2.00% Portfolio Arithmetic Mean Return 8.42% Portfolio Long-term Expected Geometric Rate of Return 7.50% Assumed Investment Expenses 0.40% Long-term Expected Geometric Rate of Return, Net of Investment Expenses 7.10% 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM - (CONTINUED) 48 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO NOTES TO FINANCIAL STATEMENTS – (CONTINUED) YEAR ENDED SEPTEMBER 30, 2019 Discount Rate The discount rate used to measure the total pension liability was 7.05%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rate. Based on these assumptions, the pension plan’s net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The long-term expected rate of return was determined net of pension plan investment expense but without reduction for pension plan administrative expense. Sensitivity of the Employer’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate. The following presents the employer’s proportionate share of the net pension liability calculated using the discount rate of 7.05 percent, as well as what the employer’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (6.05 percent) or 1 percentage point higher (8.05 percent) than the current rate: Current 1% Decrease Discount Rate 1% Increase (6.10%) (7.10%) (8.10%) Employer's proportionate share of the net pension liability (asset) $4,050,576 $1,341,079 ($899,588) Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued PERSI financial report. PERSI issues a publicly available financial report that includes financial statements and the required supplementary information for PERSI. That report may be obtained on the PERSI website at www.persi.gov. 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM - (CONTINUED) 49 ---PAGE BREAK--- THIS PAGE INTENTIONALLY LEFT BLANK 50 ---PAGE BREAK--- REQUIRED SUPPLEMENTARY INFORMATION 51 ---PAGE BREAK--- CITY OF BLACKFOOT REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED SEPTEMBER 30, 2019 Schedule of Employer's Share of Net Pension Liability PERSI - Base Plan Last 10 - Fiscal Years * 2019 2018 2017 Employers' portion of the net pension liability 0.117487% 0.122055% 0.127392% Employer's proportionate share of the net pension liability $1,341,079 $1,800,331 $2,002,377 Employer's covered-employee payroll $5,628,355 $5,696,820 $5,506,167 Employer's proportionate share of the net pension liability as a percentage of its covered-employee payroll 23.83% 31.60% 36.37% Plan fiduciary net pension as a percentage of the total pension liability 93.79% 91.69% 90.68% Schedule of Employer's Contributions PERSI - Base Plan Last 10 - Fiscal Years * 2019 2018 2017 Statutorialy required contribution $449,552 $473,990 $429,580 Contributions in relation to the statutorily required contribution $458,294 $450,552 $453,982 Contribution (deficiency) excess $8,742 ($23,437) $24,402 Employer's covered-employee payroll $5,628,355 $5,696,820 $5,506,167 Contributions as a percentage of covered-employee payroll 7.99% 8.32% 7.80% *GASB Statement No 68 requires ten years of information to be presented in this table. However, until a full 10-year trend is compiled, the City will present information for those years for which this information is available. Data reported is measured as of June 30, 2019 52 ---PAGE BREAK--- 2016 2015 0.123140% 0.123492% $2,496,227 $1,626,186 $5,166,140 $5,027,213 48.32% 32.35% 87.26% 91.38% 2016 2015 $366,047 $403,944 $413,269 $396,706 $47,221 ($7,238) $5,166,140 $5,027,213 7.09% 8.04% 53 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND YEAR ENDED SEPTEMBER 30, 2019 Original Variance & Final Favorable Budget Actual (Unfavorable) REVENUE: Taxes: Property taxes $3,569,482 $3,560,845 ($8,637) Sales and use taxes 563,379 587,243 23,864 Franchise taxes 131,892 99,177 (32,715) Subtotal Taxes: 4,264,753 4,247,265 (17,488) Licenses and Permits: Business licenses 22,802 18,699 (4,103) Building permits 56,966 95,367 38,401 Dog and bicycle licenses 1,520 195 (1,325) Subtotal Licenses and Permits: 81,288 114,261 32,973 Inter-governmental: Liquor apportionment 169,458 183,058 13,600 State revenue sharing 447,216 462,451 15,235 Blackfoot - Snake River Fire District 902,110 902,112 2 School resource officer 164,775 223,804 59,029 State, Federal & local grants 31,000 8,935 (22,065) Subtotal Intergovernmental: 1,714,559 1,780,360 65,801 Miscellaneous: Administrative charges 800,000 799,993 Fines and forfeitures 84,008 53,184 (30,824) Interest 165,000 358,324 193,324 Other 5,000 42,779 37,779 Subtotal Miscellaneous: 1,054,008 1,254,280 200,272 Total Revenue: 7,114,608 7,396,166 281,558 EXPENDITURES: Administrative: Salaries 420,315 406,945 13,370 Benefits 429,713 365,634 64,079 Travel and meeting 19,000 13,109 5,891 Office supplies & expense 67,981 43,286 24,695 The accompanying notes are an integral part of these statements. 54 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - (CONTINUED) GENERAL FUND YEAR ENDED SEPTEMBER 30, 2019 Original Variance EXPENDITURES: and Final Favorable Administrative - Continued: Budget Actual (Unfavorable) Maintenance $130,845 $109,903 $20,942 Utilities and telephone 19,460 13,995 5,465 Professional services 125,050 121,560 3,490 Department supplies & other 28,500 31,894 (3,394) Insurance 178,395 178,395 0 Capital outlay 176,399 176,399 Contingency 50,000 42,950 7,050 Subtotal Administrative: 1,645,658 1,327,671 317,987 Police: Salaries 1,744,787 1,628,541 116,246 Benefits 910,666 786,283 124,383 Clothing allowance 18,000 19,281 (1,281) Travel and training 28,000 32,711 (4,711) Office supplies 15,600 8,103 7,497 Maintenance 57,242 53,641 3,601 Utilities and telephone 10,000 7,939 2,061 Fuel 52,000 48,218 3,782 Professional services 12,500 12,391 109 Department supplies & other 67,500 56,999 10,501 Bingham County 229,016 232,527 (3,511) Grants 10,852 (10,852) Capital outlay 13,600 8,400 5,200 Subtotal Police: 3,158,911 2,905,886 253,025 Fire: Salaries 1,136,696 1,049,182 87,514 Benefits 706,621 553,098 153,523 Protective clothing 11,000 4,554 6,446 Travel and training 9,500 883 8,617 Office supplies 6,400 3,564 2,836 Maintenance 39,642 35,712 3,930 The accompanying notes are an integral part of these statements. 55 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - (CONTINUED) GENERAL FUND YEAR ENDED SEPTEMBER 30, 2019 Original Variance EXPENDITURES: and Final Favorable Fire - Continued: Budget Actual (Unfavorable) Utilities and telephone $36,200 $25,933 $10,267 Fuel 10,000 7,685 2,315 Professional services 7,300 3,653 3,647 Department supplies & other 28,000 11,374 16,626 Debt Service interest 1,512 (1,512) Capital outlay 45,000 41,281 3,719 Subtotal Fire: 2,036,359 1,738,431 297,928 Building and Zoning: Salaries 90,059 88,835 1,224 Benefits 79,194 80,184 (990) Travel and training 1,500 1,500 Office supplies 6,715 3,098 3,617 Maintenance 9,292 7,296 1,996 Utilities and telephone 1,920 1,975 (55) Professional services 70,000 63,137 6,863 Department supplies & other 2,000 2,000 Grants 3,053 (3,053) Capital outlay 13,000 8,705 4,295 Subtotal Building and Zoning: 273,680 256,283 17,397 Total Expenditure:s 7,114,608 6,228,271 886,337 EXCESS REVENUE (EXPENDITURES): 0 1,167,895 1,167,895 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 (1,244,271) (1,244,271) EXCESS REVENUE/SOURCES (EXPENDITURES/USES): $0 (76,376) ($76,376) FUND BALANCE - BEGINNING: 815,642 FUND BALANCE - ENDING: $739,266 The accompanying notes are an integral part of these statements. 56 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL STREET FUND YEAR ENDED SEPTEMBER 30, 2019 Variance Original Final Favorable Budget Budget Actual (Unfavorable) REVENUE: Property taxes $518,338 $518,338 $521,474 $3,136 Highway users' tax 555,542 555,542 576,782 21,240 County road and street 70,000 70,000 62,201 (7,799) Franchise fees 93,806 93,806 86,280 (7,526) Federal & State grants 896,666 896,666 Miscellaneous 2,759 2,759 Interest on investments 3,223 3,223 Total Revenue: 1,237,686 1,237,686 2,149,385 911,699 EXPENDITURES: Salaries 337,863 337,863 308,595 29,268 Benefits 323,027 323,027 239,344 83,683 Clothing 5,600 5,600 2,788 2,812 Travel and training 1,750 1,750 1,750 Office supplies 650 650 190 460 Maintenance 56,592 56,592 37,209 19,383 Utilities and telephone 172,150 172,150 146,893 25,257 Fuel 43,000 43,000 16,928 26,072 Professional services 5,625 5,625 904 4,721 Department supplies and other 59,650 59,650 39,286 20,364 Indirect Cost Reimbursement 59,282 59,282 59,282 0 Grant expense 0 1,500,000 1,609,042 (109,042) Construction materials 109,997 109,997 75,256 34,741 Capital outlay 62,500 62,500 11,295 51,205 Total Expenditures: 1,237,686 2,737,686 2,547,012 190,674 EXCESS REVENUE (EXPENDITURES): 0 (1,500,000) (397,627) 1,102,373 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 144,015 144,015 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 ($1,500,000) (253,612) $1,246,388 FUND BALANCE - BEGINNING: 1,038,837 FUND BALANCE - ENDING: $785,225 The accompanying notes are an integral part of these statements. 57 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL AMBULANCE FUND YEAR ENDED SEPTEMBER 30, 2019 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Hospital collections - ambulance $746,404 $735,106 ($11,298) County ambulance 588,745 599,470 10,725 Bingham Memorial - Contribution 44,640 34,479 (10,161) Miscellaneous 500 (500) Total Revenue: 1,380,289 1,369,055 (11,234) EXPENDITURES: Salaries 710,058 751,975 (41,917) Benefits 480,686 440,378 40,308 Protective clothing 3,000 1,318 1,682 Travel and training 7,360 6,015 1,345 Office supplies 3,100 1,884 1,216 Maintenance 30,767 32,366 (1,599) Utilities and telephone 5,000 5,011 (11) Fuel 25,000 20,850 4,150 Professional services 500 346 154 Department supplies & other 35,000 23,682 11,318 Indirect Cost Reimbursement 18,818 18,798 20 Collection expense & refunds 61,000 64,365 (3,365) Total Expenditures: 1,380,289 1,366,988 13,301 EXCESS REVENUE (EXPENDITURES): 0 2,067 2,067 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 550,115 550,115 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 552,182 $552,182 FUND BALANCE - BEGINNING: (552,182) FUND BALANCE - ENDING: $0 The accompanying notes are an integral part of these statements. 58 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL PARKS AND RECREATION FUND YEAR ENDED SEPTEMBER 30, 2019 Original & Variance Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $220,820 $225,833 $5,013 County participation 20,000 21,500 1,500 Golf course 608,024 583,910 (24,114) Park reservation fees & donations 14,421 20,229 5,808 Recreation fees & donations 41,649 17,616 (24,033) Swimming pool fees & donations 102,240 6,554 (95,686) Storm water maintenance fee 28,000 28,000 0 Grants & contributions 746 25,482 24,736 Interest on investments 2,045 2,045 Other 19,417 19,417 Total Revenue: 1,035,900 950,586 (85,314) EXPENDITURES (Parks): Salaries 169,355 152,007 17,348 Benefits 94,622 60,530 34,092 Clothing allowance 800 246 554 Travel and training 2,000 1,474 526 Office supplies 1,950 922 1,028 Maintenance 99,267 82,821 16,446 Utilities and telephone 18,500 14,771 3,729 Fuel 25,000 16,416 8,584 Professional services 500 684 (184) Department supplies and other 27,150 23,027 4,123 Grant expense 37,413 (37,413) Capital outlay 10,010 10,008 2 Total Expenditures (Parks): 449,154 400,319 48,835 EXPENDITURES (Recreation): Salaries 57,685 65,104 (7,419) Benefits 21,846 18,017 3,829 Clothing allowance 750 319 431 Office supplies 400 (400) Maintenance 36,242 45,322 (9,080) Utilities and telephone 7,500 5,731 1,769 Professional services 500 30 470 Department supplies and other 22,000 17,973 4,027 Capital outlay 10,010 10,008 2 Total Expenditures (Recreation): 156,533 162,904 (6,371) The accompanying notes are an integral part of these statements. 59 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL PARKS AND RECREATION FUND - (CONTINUED) YEAR ENDED SEPTEMBER 30, 2019 Variance Final Favorable Budget Actual (Unfavorable) EXPENDITURES (Pool): Salaries $85,630 $45,706 $39,924 Benefits 37,487 23,403 14,084 Clothing allowance 0 Travel and training 36 (36) Office supplies 50 58 Maintenance 7,865 2,490 5,375 Utilities and telephone 54,200 12,980 41,220 Professional services 500 1,682 (1,182) Department supplies and other 9,254 (9,254) Total Expenditures (Pool): 185,732 95,609 90,123 EXPENDITURES (Golf): Salaries 326,357 303,849 22,508 Benefits 208,838 187,871 20,967 Clothing allowance 1,250 797 453 Travel and training 1,000 1,443 (443) Office supplies 12,575 4,594 7,981 Maintenance 84,742 85,459 (717) Utilities and telephone 29,000 30,609 (1,609) Fuel 6,500 16,405 (9,905) Professional services 750 649 101 Resale items 95,000 120,883 (25,883) Department supplies and other 34,600 36,980 (2,380) Insurance 0 Capital outlay 31,000 81,068 (50,068) Total Expenditures (Golf): 831,612 870,607 (38,995) Total Fund Expenditures: 1,623,031 1,529,439 93,592 EXCESS REVENUE (EXPENDITURES): (587,131) (578,853) 8,278 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 796,524 711,346 (85,178) EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $209,393 132,493 ($76,900) FUND BALANCE - BEGINNING: (38,102) FUND BALANCE - ENDING: $94,391 The accompanying notes are an integral part of these statements. 60 ---PAGE BREAK--- BLACKFOOT URBAN RENEWAL AGENCY SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2019 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $649,000 $751,626 $102,626 Investment income 1,055 19,302 18,247 Grant application fees 300 300 Total Revenue: 650,055 771,228 121,173 EXPENDITURES: Administration 4,000 941 3,059 Professional fees 16,000 16,940 (940) Projects: Downtown District: Economic Development 800,000 800,000 Loomis - blight 30,000 (30,000) Movie Mill - blight 73,339 (73,339) Nuart 453,080 (453,080) Oleson Convention Center 35,308 (35,308) Façade Improvement grants 100,000 32,348 67,652 0 Riverview District: Economic development 175,000 175,000 Façade improvements 40,000 40,000 Technology Park 40,000 (40,000) Tax note payments 133,305 111,942 21,363 Total Expenditures: 1,268,305 793,898 474,407 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): ($618,250) (22,670) $595,580 FUND BALANCE - BEGINNING: 910,647 FUND BALANCE - ENDING: $887,977 The accompanying notes are an integral part of these statements. 61 ---PAGE BREAK--- THIS PAGE INTENTIONALLY LEFT BLANK 62 ---PAGE BREAK--- OTHER SUPPLEMENTAL INFORMATION 63 ---PAGE BREAK--- CITY OF BLACKFOOT COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2019 Capital Airport Cemetery Library Improvements Fund Fund Fund Fund ASSETS: Cash and investments $200,140 $142,887 $452,266 $34,951 Receivables: Property taxes 3,084 6,013 9,886 Bingham County 41 251 420 43 Grants receivable 81,948 Total Assets: $285,213 $149,151 $462,572 $34,994 LIABILITIES: Accounts payable $27,200 $3,529 $50,059 Total Liabilities: 27,200 3,529 50,059 $0 DEFERRED INFLOW OF RESOURCES Unavailable revenue - Property taxes 2,699 4,940 8,108 FUND BALANCE: Assigned - Capital Improvements 65,231 34,994 Unassigned 255,314 140,682 339,174 Total Fund Balance: 255,314 140,682 404,405 34,994 Total Liabilities and Fund Balance: $285,213 $149,151 $462,572 $34,994 64 ---PAGE BREAK--- Health Total Care Non-major Reserve Governmental Fund Funds $521,659 $1,351,903 18,983 755 81,948 $521,659 $1,453,589 $80,788 $0 80,788 15,747 100,225 521,659 1,256,829 521,659 1,357,054 $521,659 $1,453,589 65 ---PAGE BREAK--- Capital Airport Cemetery Library Improvements REVENUES: Fund Fund Fund Fund Property taxes $138,405 $150,460 $241,974 $144,986 Fees 39,402 53,325 15,865 Grants and contributions 301,278 530 Blackfoot Rural Library District 236,510 Interest 359 1,339 2,206 377 Miscellaneous 137 Total Revenues: 479,581 205,124 497,085 145,363 EXPENDITURES: General government 175,911 3,756 Public Safety Parks Airport 260,589 Library 396,191 Total Expenditures: 260,589 175,911 396,191 3,756 EXCESS REVENUE (EXPENDITURES): 218,992 29,213 100,894 141,607 OTHER FINANCING SOURCES (USES): Operating transfers (to) from other funds (16,000) (5,205) (140,000) EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): 202,992 24,008 100,894 1,607 FUND BALANCE - BEGINNING: 52,322 116,674 303,511 33,387 FUND BALANCE - ENDING: $255,314 $140,682 $404,405 $34,994 CITY OF BLACKFOOT COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2019 66 ---PAGE BREAK--- Health Total Care Non-major Reserve Governmental Fund Funds $675,825 $205,753 314,345 301,808 236,510 4,281 137 205,753 1,532,906 77,201 256,868 0 0 260,589 396,191 77,201 913,648 128,552 619,258 (161,205) 128,552 458,053 393,107 899,001 $521,659 $1,357,054 67 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL AIRPORT FUND YEAR ENDED SEPTEMBER 30, 2019 Variance Original Final Favorable Budget Budget Actual (Unfavorable) REVENUE: Property taxes $140,141 $140,141 $138,405 ($1,736) Charges for services 25,000 25,000 32,991 7,991 Fuel 50,000 50,000 6,411 (43,589) Miscellaneous 529 529 137 (392) Grants and contributions 1,500 1,500 301,278 299,778 Interest on investments 359 359 Total Revenue: 217,170 217,170 479,581 262,411 EXPENDITURES: Salaries 7,341 7,341 6,776 565 Benefits 8,253 8,253 7,952 301 Office supplies 250 250 92 158 Travel and training 0 Maintenance 24,067 24,067 13,959 10,108 Utilities and telephone 11,200 11,200 6,099 5,101 Fuel 50,250 50,250 50,250 Professional services 7,337 7,337 10,188 (2,851) Department supplies and other 2,550 2,550 3,759 (1,209) Indirect cost reimbursement 21,288 21,288 21,288 0 Grant expense 84,634 174,634 185,576 (10,942) Capital outlay 4,900 (4,900) Total Expenditures: 217,170 307,170 260,589 46,581 EXCESS REVENUE (EXPENDITURES): 0 (90,000) 218,992 308,992 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds (16,000) 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 ($90,000) 202,992 $308,992 FUND BALANCE - BEGINNING: 52,322 FUND BALANCE - ENDING: $255,314 68 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL CEMETERY FUND YEAR ENDED SEPTEMBER 30, 2019 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $147,213 $150,460 $3,247 Charges for services 68,248 53,325 (14,923) Interest on investments 1,339 1,339 Total Revenue: 215,461 205,124 (10,337) EXPENDITURES: Salaries 84,513 83,606 907 Benefits 66,729 56,389 10,340 Clothing 500 102 398 Office supplies 400 117 283 Travel and training 800 490 310 Maintenance 22,287 11,152 11,135 Utilities and telephone 5,700 4,421 1,279 Fuel 2,500 1,844 656 Professional services 5,000 5,099 (99) Department supplies and other 5,200 3,605 1,595 Indirect cost reimbursement 9,072 9,086 (14) Capital outlay 12,760 12,760 Total Expenditures: 215,461 175,911 39,550 EXCESS REVENUE (EXPENDITURES): 0 29,213 29,213 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 (5,205) (5,205) EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 24,008 $24,008 FUND BALANCE - BEGINNING: 116,674 FUND BALANCE - ENDING: $140,682 69 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL LIBRARY FUND YEAR ENDED SEPTEMBER 30, 2019 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $236,510 $241,974 $5,464 Charges for services 16,611 15,865 (746) Blackfoot Rural Library District 236,510 236,510 0 Interest on investments 2,206 2,206 Private contributions 530 530 Total Revenue: 489,631 497,085 7,454 EXPENDITURES: Salaries 228,653 161,873 66,780 Benefits 82,582 57,562 25,020 Books and subscriptions 94,400 97,293 (2,893) Travel and training 2,000 907 1,093 Office supplies 7,300 8,208 (908) Maintenance 28,160 32,630 (4,470) Utilities and telephone 17,000 9,053 7,947 Professional services 3,500 3,514 (14) Department supplies and other 15,779 14,894 885 Indirect cost reimbursement 10,257 10,257 0 Total Expenditures: 489,631 396,191 93,440 EXCESS REVENUE (EXPENDITURES): 0 100,894 100,894 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 100,894 $100,894 FUND BALANCE - BEGINNING: 303,511 FUND BALANCE - ENDING: $404,405 70 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL CAPITAL IMPROVEMENTS FUND YEAR ENDED SEPTEMBER 30, 2019 Original & Variance Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $147,213 $144,986 ($2,227) Interest on investments 377 377 Total Revenue: $147,213 145,363 (1,850) EXPENDITURES: Capital outlay 147,213 3,756 143,457 Total Expenditures: 147,213 3,756 143,457 EXCESS REVENUE (EXPENDITURES): 0 141,607 141,607 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds (140,000) (140,000) EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 1,607 $1,607 FUND BALANCE - BEGINNING: 33,387 FUND BALANCE - ENDING: $34,994 71 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL HEALTH CARE RESERVE FUND YEAR ENDED SEPTEMBER 30, 2019 Variance Original Final Favorable Budget Budget Actual (Unfavorable) REVENUE: Reserve receipts $205,753 $205,753 Total Revenue: $0 $0 205,753 205,753 EXPENDITURES: Healthcare expense 40,000 27,656 12,344 Flex spending expense 70,000 34,386 35,614 Benefits administration 25,000 15,159 9,841 Total Expenditures: 0 135,000 77,201 57,799 EXCESS REVENUE (EXPENDITURES): 0 (135,000) 128,552 263,552 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 ($135,000) 128,552 $263,552 FUND BALANCE - BEGINNING: 393,107 FUND BALANCE - ENDING: $521,659 72 ---PAGE BREAK--- SINGLE AUDIT SECTION 73 ---PAGE BREAK--- Morgan J Hatt CPA PC Certified Public Accountant 1855 Satterfield Drive [EMAIL REDACTED] Phone : (208) 317-6040 Pocatello, Idaho 83201 Fax: (208) 242-3782 Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of financial Statements Performed in Accordance with Government Auditing Standards I have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Blackfoot, Idaho (the City), as of and for the year ended September 30, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued my report thereon dated February 7, 2020. Internal Control over Financial Reporting In planning and performing my audit of the financial statements, I considered the City’s internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing my opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, I do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. My consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during my audit, I did not identify any deficiencies in internal control that I consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 74 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 2 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, I 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 my audit, and accordingly, I do not express such an opinion. The results of my tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of my testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Pocatello, Idaho February 7, 2020 Morgan J Hatt CPA PC 75 ---PAGE BREAK--- Morgan J Hatt CPA PC Certified Public Accountant 1855 Satterfield Drive [EMAIL REDACTED] Phone : (208) 317-6040 Pocatello, Idaho 83201 Fax: (208) 242-3782 Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control over Compliance. Report on Compliance for Each Major Federal Program I have audited the City of Blackfoot, Idaho (The City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major Federal programs for the year ended September 30, 2019. 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. Management’s Responsibility Management is responsible for compliance with Federal statutes, regulations, and the terms and conditions of its Federal awards applicable to its Federal programs. Auditor’s Responsibility My responsibility is to express an opinion on compliance for each of the City’s major Federal programs based on my audit of the types of compliance requirements referred to above. I conducted my 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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that I 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 I considered necessary in the circumstances. I believe that my audit provides a reasonable basis for my opinion on compliance for each major Federal program. However, my audit does not provide a legal determination of the City’s compliance. Opinion on Each Major Federal Program In my opinion, the City of Blackfoot, Idaho, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended September 30, 2019. 76 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 2 Report on Internal Control over Compliance Management is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing my audit of compliance, I considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on each major Federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major Federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, I do not express an opinion on the effectiveness of the City’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a Federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a Federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a Federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. My consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. I did not identify any deficiencies in internal control over compliance that I consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of my testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Pocatello, Idaho February 7, 2020 Morgan J Hatt CPA PC 77 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO BLACKFOOT, IDAHO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED SEPTEMBER 30, 2019 Catalogue of Federal Title Domestic Assistance NumberExpenditures Department of Housing & Urban Development: (State of Idaho pass-through funding) Community Development Block Grant -Waste Water Improvement 14.228 $56,274 Community Development Block Grant - Court House Square Park Improvement 14.228 25,825 Subtotal of Block Grant Cluster: 82,099 Department of Transportation : Airport Improvement - 2017 (Direct funding) 20.106 7,914 Airport Improvement - 2018 (Direct funding) 20.106 122,925 Airport Improvement - 2019 (Direct funding) 20.106 38,429 Subtotal Airport Improvement: 169,268 Subtotal of Department of Transportation: 470,961 US Department of Homeland Security (Direct funding): FEMA Hazard Mitigation 97.039 1,450,762 Total Federal Expenditures: $2,087,864 Note 1: Basis of Presentation - The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the Federal award activity of the City of Blackfoot, Idaho for the year ended September 30, 2019. The information in this schedule is presented in accordance with the requirements of Title 2 U.S., Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The August 2019 Compliance Supplement was used to audit major programs. Because the Schedule presents only a selected portion of the City's operations, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City of Blackfoot, Idaho. Note 2: Summary of Significant Accounting Policies - Expenditures reported on the Schedule are on the accrual basis of accounting. Such expenditures are regognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Note 3: Indirect Cost Rate - The City of Blackfoot, Idaho has elected not to use the 10% de minimus cost rate allowed under the Uniform Guidance. Environmental Protection Agency (State of Idaho pass-through funding): Capitalization grants & revolving loans WW 1703 66.458 82,771 78 Highway safety (State of Idaho pass-through funding) 20.600 3,439 ITD Street improvement (State of Idaho pass-through funding) 20.205 2,436 Highway Planning & Construction SR2S (Direct funding) 20.205 295,818 US Department of Health & Human Services (State of Idaho pass-through funding): Drug - Highway Safety 93.243 1,271 ---PAGE BREAK--- Section I - Summary of Auditor's Results: Financial Statements: Type of auditor's report issued: Unqualified Internal control over financial reporting: Material weaknesses identified? No Reportable conditions identified that are not considered to be material weaknesses? No Noncompliance material to financial statements noted? No Federal Awards: Internal control over major programs: Material weaknesses identified? No Reportable conditions identified that are not considered to be material weaknesses? No Type of auditor's report issued on compliance for major programs? Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR Section 200.516(a)? No Identification of Major programs: CFDA Number(s) Name of Federal Program '97.039 Department of Homeland Security Dollar threshold used to distinguish between Type A and Type B programs: $750,000 Auditee qualified as low-risk auditee? Yes Section II - Summary of Auditor's Results: None Section III - Federal Award Findings and Questioned Costs: None CITY OF BLACKFOOT, IDAHO SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED SEPTEMBER 30, 2019 The accompanying notes are an integral part of these statments. 79