Document Blackfoot_doc_985621a418

CITY OF BLACKFOOT, IDAHO BASIC FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION SEPTEMBER 30, 2022 ---PAGE BREAK--- ---PAGE BREAK--- CITY OF BLACKFOOT AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2022 TABLE OF CONTENTS Page Number FINANCIAL SECTION: Independent Auditor’s Opinion 6 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 9 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position 11 Statement of Activities 12 Fund Financial Statements: Balance Sheet – Governmental Funds 14 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 16 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 18 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 20 Proprietary Funds: Statement of Net Position 21 Statement of Revenues, Expenses, and Changes in Net Position 22 Statement of Cash Flows 23 Fiduciary Funds: Statement of Fiduciary Net Position 24 Statement of Changes in Fiduciary Net Position 25 Notes to Financial Statements 26 3 ---PAGE BREAK--- CITY OF BLACKFOOT AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2022 TABLE OF CONTENTS – (CONTINUED) Page Number Required Supplementary Information: Schedule of Employer’s Share of Net Pension Liability 56 Schedule of Employer’s Contributions 56 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – General Fund 58 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Street Fund 61 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Ambulance Fund 62 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Parks and Recreation Fund 63 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Blackfoot Urban Renewal District 65 Other Supplemental Information: Combining Balance Sheet - Non-major Governmental Funds 68 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Non-major Governmental Funds 70 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Airport Fund 72 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual – Cemetery Fund 73 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual – Library Fund 74 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual – Capital Improvements Fund 75 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual – Health Care Reserve Fund 76 4 ---PAGE BREAK--- CITY OF BLACKFOOT AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2022 TABLE OF CONTENTS – (CONTINUED) Page Number SINGLE AUDIT SECTION: Report on Compliance for Each Major Program and Internal Control over Compliance 78 Schedule of Expenditures of Federal Awards 80 Schedule of Findings and Questioned Costs 81 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 Audit of the Financial Statements Opinions I have audited the accompanying financial statements of the governmental activities, the business-type activities, The fiduciary 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, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the Table of Contents. In my opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the fiduciary activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City, as of September 30, 2022, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions I 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. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am required to be independent of the City, and to meet my other ethical responsibilities, in accordance with the relevant ethical requirements relating to my audit. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 6 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 2 Auditor’s Responsibilities for the Audit of the Financial Statements My objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, I:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit 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, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in my judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. I am required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that I identified during the audit. Required Supplementary Information The City has omitted the Management’s Discussion and Analysis, that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing 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. My opinions on the basic financial statements are not affected by this missing information. 7 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 3 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 – PERSI base plan, and major fund budgetary comparison information be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board. 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. Supplementary 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 accompanying combining and individual non-major fund financial statements and Schedule of Expenditures of Federal Awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The 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 nonmajor 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 2, 2023, on my consideration of the City’s internal control over financial reporting and on my tests of its compliance with certain provisions of laws, regulations, contracts, 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 City’s internal control over financial reporting and compliance. Pocatello, Idaho February 2, 2023 Morgan J Hatt CPA PC 8 ---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 fiduciary 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, 2022, and the related notes to the financial statements, which collectively comprise City’s basic financial statements, and have issued our report thereon dated February 2, 2023. Report on 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 (internal control) as a basis for designing 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 or significant deficiencies may exist that were not identified. 9 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 3 Report on 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 financial statements. 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 our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Pocatello, Idaho February 2, 2023 Morgan J Hatt CPA PC 10 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF NET POSITION SEPTEMBER 30, 2022 Total Component Unit: Governmental Business-type Primary Blackfoot Urban ASSETS: Activities Activities Government Renewal Agency Current Assets: Cash and investments $6,836,739 $14,746,492 $21,583,231 $2,796,181 Property taxes receivable 146,897 146,897 12,064 Other receivables 644,327 1,524,700 2,169,027 Utility accounts receivable, net 705,142 705,142 Golf inventory 52,443 52,443 Non-current Assets: 0 Operating lease right of use asset, net 381,598 381,598 Land 1,251,390 648,105 1,899,495 Capital assets, net 16,431,247 36,685,162 53,116,409 Restricted cash 258,256 258,256 182,362 Total Assets: 25,744,641 54,567,857 80,312,498 2,990,607 DEFERRED OUTFLOWS: Deferred PERSI outflow of resources 2,000,107 334,648 2,334,755 0 LIABILITIES: Current liabilities: Accounts payable 503,292 262,025 765,317 2,293 Accrued leave 439,439 75,981 515,420 Accrued interest 264,657 264,657 Customer deposits 90,962 90,962 Operating lease payable due within one year 127,563 127,563 Finance lease payable due within one year 40,126 40,126 DEQ loan DW 1001 195,533 195,533 DEQ loan WW 1501 168,063 168,063 2006 Revenue bonds due within one year 0 85,000 2021 Revenue bonds due within one year 0 168,513 Non-current liabilities: 0 OperatinglLease payable due beyond one year 259,410 259,410 Finance lease payable due beyond one year 41,363 41,363 DEQ loan DW 1001 1,920,920 1,920,920 DEQ Loan WW 1501 3,153,394 3,153,394 DEQ Loan WW 1703 14,541,062 14,541,062 2006 Revenue bonds due beyond one year 0 305,000 2021 Revenue bonds due beyond one year 0 1,293,697 City's share of unfunded PERSI 3,819,678 639,090 4,458,768 Total Liabilities: 5,230,871 21,311,687 26,542,558 1,854,503 DEFERRED OUTFLOWS: Deferred PERSI inflow of resources 103,725 17,353 121,078 0 NET POSITION: Net investment in capital assets 17,595,773 17,354,295 34,950,068 Restricted - for debt service 258,256 258,256 182,362 Unrestricted 4,814,379 15,960,914 20,775,293 953,742 Total Net Position: $22,410,152 $33,573,465 $55,983,617 $1,136,104 The accompanying notes are an integral part of these statements. 11 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2022 Program Revenues Charges for Grants and Expenses Services Contributions Primary Government: Governmental Activities: General government $2,318,729 $624,172 Public safety 7,741,934 2,833,529 $471,798 Parks and recreation 610,445 803,470 21,500 Library 428,482 246,818 1,585 Highways and streets 1,614,162 122,971 17,306 Cemetery 270,910 71,200 Airport 469,420 145,316 249,936 Interest on long-term debt 23,871 Total Governmental Activities: 13,477,953 4,847,476 762,125 Component Units: Interest on long-term debt $79,695 Blackfoot Urban Renewal Agency 388,027 $275 $467,722 $275 $0 General Revenues: Property taxes 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, 2021: Net Position September 30, 2022 The accompanying notes are an integral part of these statements. 12 Business-type Activities: Water 1,614,037 2,161,625 Sewer 4,049,525 4,298,728 3,126,440 Sanitation 1,546,816 1,515,961 Interest on long-term debt 631,323 Total Business-type Activities: 7,841.701 7,976,314 3,126,440 Total Primary Government: $21,319,654 $12,823,790 $3,888,565 ---PAGE BREAK--- Net (Expense) Revenue and Changes in Net Position Component Unit: Primary Government Blackfoot Governmental Business-type Urban Renewal Activities Activities Total Agency ($1,694,557) ($1,694,557) (4,436,607) (4,436,607) 214,525 214,525 (180,079) (180,079) (1,473,885) (1,473,885) (199,710) (199,710) (74,168) (74,168) (23,871) (23,871) (7,868,352) (7,868,352) (4,607,299) ($79,695) (387,752) 5,427,692 5,427,692 1,126,527 50,654 50,654 1,368,795 1,368,795 208,739 208,739 866,498 866,498 (141,078) (141,078) 14,243 17,167 17,167 719,976 719,976 16,098 (16,098) 0 8,534,541 (16,098) 8,518,443 673,323 666,189 3,244,955 3,911,144 673,323 21,743,963 30,328,510 52,072,473 462,781 $22,410,152 $33,573,465 $55,983,617 $1,136,104 The accompanying notes are an integral part of these statements. 13 $547,588 547,588 3,375,643 3,375,643 (30,855) (30,855) (631,323) (631,323) 3,261,053 3,261,053 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2022 Parks and General Street Ambulance Recreation ASSETS: Fund Fund Fund Fund Cash and investments $3,220,923 $1,718,808 $252,789 $41,401 Receivables: Property taxes 111,314 14,343 5,911 State of Idaho 433,037 143,484 Other 41,567 26,239 Golf clubhouse inventory 52,443 Restricted Cash Total Assets: $3,806,841 $1,902,874 $252,789 $99,755 LIABILITIES: Accounts payable $311,369 $45,353 $22,244 $94,614 Total Liabilities: 311,369 45,353 22,244 94,614 DEFERRED INFLOW OF RECOURCES: Unavailable revenue - Property taxes 91,407 12,416 5,141 FUND BALANCE: Restricted for debt service Assigned - Capital improvements 600,000 Assigned - Golf fee increase reserve Unassigned 3,404,065 1,245,105 230,545 Total Fund Balance: 3,404,065 1,845,105 230,545 0 Total Liabilities, Deferred Resources, & Fund Balance $3,806,841 $1,902,874 $252,789 $99,755 The accompanying notes are an integral part of these statements. 14 ---PAGE BREAK--- Other Total Blackfoot Governmental Primary Urban Renewal Funds Governmental Agency $1,602,818 $6,836,739 $2,796,181 15,329 146,897 12,064 576,521 67,806 52,443 0 182,362 $1,618,147 $7,680,406 $2,990,607 $29,712 $503,292 $2,293 29,712 503,292 2,293 13,290 122,254 8,865 182,362 7,735 607,735 0 1,567,410 6,447,125 2,797,087 1,575,145 7,054,860 2,979,449 $1,618,147 $7,680,406 $2,990,607 The accompanying notes are an integral part of these statements. 15 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2022 Total Blackfoot Primary Urban Renewal Government Agency Total Fund Balance: $7,054,860 $2,979,449 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 operating lease right of use asset: 646,931 Operating lease right of use asset amortization to date: (265,333) Cost of capital assets: 47,262,025 Depreciation expense to date: (29,579,388) 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. 122,254 8,865 Deferred amounts are not current financial resources/uses. Therefore, they are not reported in the governmental funds. Deferred PERSI outflows: 2,000,107 Deferred PERSI inflows: (103,725) 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: (439,439) Operating lease payments payable: (386,973) Finance leases payable: (81,489) 2006 Revenue bonds payable: (390,000) 2021 Revenue bonds payable: (1,462,210) City's share of unfunded PERSI : (3,819,678) Net Position: $22,410,152 $1,136,104 The accompanying notes are an integral part of these statements. 16 ---PAGE BREAK--- THIS PAGE INTENTIONALLY LEFT BLANK 17 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2022 Parks and General Street Ambulance Recreation REVENUE: Fund Fund Fund Fund Property taxes $4,080,501 $531,892 $227,174 Franchise taxes 107,419 120,090 Licenses and fees 459,241 $822,886 791,373 Fines and forfeitures 62,711 State of Idaho 1,577,534 866,498 County shared 50,654 749,312 21,500 Blackfoot - Snake River Fire District 883,805 Blackfoot Rural Library District School District Resource Officer 275,853 Grants and contributions 179,798 17,306 292,000 Interest (148,375) 2,910 1,252 Administrative charges 894,276 Miscellaneous 108,646 2,881 4,995 12,097 Total Revenue: 8,481,409 1,592,231 1,869,193 1,053,396 EXPENDITURES: Current Operating: General government 2,226,757 Public safety 5,800,216 1,748,964 Parks and recreation 1,258,079 Library Highways and streets 1,064,142 Airport Capital Outlay Debt service - principal Debt service - interest Total Expenditures: 8,026,973 1,064,142 1,748,964 1,258,079 EXCESS REVENUE (EXPENDITURES): 454,436 528,089 120,229 (204,683) OTHER FINANCING SOURCES (USES): 2021 Revenue bonds Operating transfers (to) from other funds (130,414) 0 0 130,414 NET CHANGE IN FUND BALANCES: 324,022 528,089 120,229 (74,269) FUND BALANCE - BEGINNING: 3,080,043 1,317,016 110,316 74,269 FUND BALANCE - ENDING: $3,404,065 $1,845,105 $230,545 $0 The accompanying notes are an integral part of these statements. 18 ---PAGE BREAK--- Other Total Blackfoot Governmental Primary Urban Renewal Funds Government Agency $588,125 $5,427,692 $1,123,897 227,509 284,594 2,358,094 62,711 2,444,032 821,466 883,805 236,510 236,510 275,853 251,521 740,625 3,135 (141,078) 14,243 894,276 7,530 136,149 275 1,371,415 14,367,644 1,138,415 373,160 2,599,917 15,927 7,549,180 1,258,079 492,429 492,429 1,064,142 287,038 287,038 43,996 43,996 372,101 243,828 79,694 1,196,623 13,294,781 711,550 174,792 1,072,863 426,865 0 0 0 174,792 1,072,863 426,865 1,400,353 5,981,997 2,552,584 $1,575,145 $7,054,860 $2,979,449 The accompanying notes are an integral part of these statements. 19 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO 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, 2022 Total Blackfoot Primary Urban Renewal Government Agency Net Change in Fund Balance -Total Governmental Funds: $1,072,863 $426,865 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: 3,161 2,630 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: 1,180,281 This is the amount of current year depreciation: (1,210,677) Long-term liabilities are not recorded in governmental funds. This is the amount of finance lease payments: 38,803 This is the amount of new operating leases net of payments: (5,683) This is the amount of the 2006 Revenue Bond principal payment: 80,000 This is the amount of the 2021 Revenue Bond principal payment: 163,828 Liability for personal leave days are not recorded in governmental funds. This is the (increase) decrease in leave during the year: 78,650 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): (491,209) Change in Net Position: $666,189 $673,323 The accompanying notes are an integral part of these statements. 20 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2022 Totals Water Sewer Sanitation (Memorandum ASSETS: Fund Fund Fund Only) Current Assets: Cash and investments $6,641,891 $6,553,068 $1,551,533 $14,746,492 Utility accounts receivable 219,086 339,342 146,714 705,142 Grants receivable 1,524,700 1,524,700 Non-current Assets: Land 234,569 413,536 648,105 Property and equipment - net of depreciation 5,337,746 30,946,134 401,282 36,685,162 Restricted Cash 258,256 258,256 Total Assets: 12,433,292 40,035,036 2,099,529 54,567,857 DEFERRED OUTFLOWS: Deferred PERSI outflow of resources 94,240 155,927 84,481 334,648 LIABILITIES: Current liabilities: Accrued leave 30,238 39,677 6,066 75,981 Accounts payable 69,408 141,731 50,886 262,025 Accrued interest 2,435 262,222 264,657 Customer deposits 90,962 90,962 DEQ loan DW 1001 195,533 195,533 DEQ loan WW 1501 168,063 168,063 Non-current liabilities: DEQ loan DW 1001 1,920,920 1,920,920 DEQ loan WW 1501 3,153,394 3,153,394 DEQ loan WW 1703 14,541,062 14,541,062 City's share of unfunded PERSI 179,973 297,781 161,336 639,090 Total Liabilities: 2,489,469 18,603,930 218,288 21,311,687 DEFERRED INFLOWS: Deferred PERSI inflow of resources 4,887 8,086 4,380 17,353 NET POSITION: Net investment in capital assets 3,455,862 13,497,151 401,282 17,354,295 Restricted - for debt service 258,256 258,256 Assigned - Capital improvements 2,097,965 1,197,225 500,000 3,795,190 Unrestricted 4,479,349 6,626,315 1,060,060 12,165,724 Total Net Position: $10,033,176 $21,578,947 $1,961,342 $33,573,465 The accompanying notes are an integral part of these statements. 21 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2022 Totals Water Sewer Sanitation (Memorandum Total Revenue: 2,161,625 4,298,728 1,515,961 7,976,314 Total Expenses: 1,570,937 4,447,531 1,550,925 7,569,393 INCOME (LOSS) BEFORE CONTRIBUTIONS & TRANSFERS 504,436 2,775,483 (34,964) 3,244,955 Transfers (to) from other funds 0 0 0 0 CHANGE IN NET POSITION: 504,436 2,775,483 (34,964) 3,244,955 NET POSITION - BEGINNING: 9,528,740 18,803,464 1,996,306 30,328,510 NET POSITION - ENDING: $10,033,176 $21,578,947 $1,961,342 $33,573,465 The accompanying notes are an integral part of these statements. 22 OPERATING EXPENSES: Salaries 310,597 507,048 292,735 1,110,380 Benefits 267,299 520,332 285,062 1,072,693 Clothing 3,350 6,206 4,031 13,587 Travel and training 1,576 6,287 7,863 Office supplies 26,965 41,967 4,760 73,692 Maintenance 8,839 81,552 81,514 171,905 Utilities and telephone 172,919 164,080 6,710 343,709 Fuel 14,421 34,317 68,904 117,642 Professional services 120,511 155,377 976 276,864 Department supplies and other 168,542 132,955 7,886 309,383 Depreciation 239,214 1,666,994 78,961 1,985,169 Administrative services 140,076 466,464 113,436 719,976 Lab and DEQ fees 50,310 63,745 114,055 Lift stations 64,896 64,896 County services 563,836 563,836 Constructional materials 46,318 145,483 42,114 233,915 OPERATING INCOME (LOSS): 590,688 241,025 (34,964) 796,749 NON-OPERATING REVENUES (EXPENSES): Federal and State grants (46,911) 3,126,440 3,079,529 Debt service-interest (39,341) (591,982) (631,323) OPERATING REVENUE: Fund Fund Fund Only) Service fees $2,031,049 $4,071,871 $1,515,915 $7,618,835 Other 130,576 226,857 46 357,479 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2022 Totals Water Sewer Sanitation (Memorandum Fund Fund Fund Only) CASH FLOWS FROM OPERATING ACTIVITIES: CASH FLOWS FROM INVESTING ACTIVITIES: Interest earned on investments 0 0 0 0 NET INCREASE (DECREASE) IN CASH 134,379 1,675,109 (219,039) 1,590,449 CASH AT BEGINNING OF YEAR: 6,507,512 4,877,959 1,770,572 13,156,043 CASH AT END OF YEAR: $6,641,891 $6,553,068 $1,551,533 $14,746,492 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET INCOME: Net income (loss) $504,436 $2,775,483 ($34,964) $3,244,955 Adjustments to Reconcile Net Income to Net The accompanying notes are an integral part of these statements. 23 Receipts from City patrons $2,004,788 $4,059,029 $1,492,888 $7,556,705 Payments to suppliers (920,209) (1,840,096) (1,006,171) (3,766,476) Payments to employees (316,783) (521,883) (309,716) (1,148,382) City administrative charges (140,076) (466,464) (113,436) (719,976) Net Cash Provided by Operating Activities: 627,720 1,230,586 63,565 1,921,871 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of fixed assets (392,198) (1,814,434) (282,650) (2,489,282) Rebates and insurance claims 130,576 226,857 46 Increase (decrease) in accrued interest (111) Grants 1,982,915 1,982,915 DEQ loan DW 1001 payments (231,608) (231,608) DEQ loan WW 1501 payments (258,256) (258,256) DEQ loan WW 1703 net advances 307,441 307,441 Restricted cash 0 Net Cash Applied to Financing Activities: (493,341) 444,523 (282,604) (688,790) Cash Provided by Operating Activities: Depreciation 239,214 1,666,994 78,961 1,985,169 Net PERSI plan expense (revenue) 23,318 37,785 24,480 85,583 Rebates and insurance claims (130,576) (226,857) (46) (357,479) Investment income 0 Debt service interest 39,340 591,982 631,322 Grants (3,126,440) (3,126,440) Transfers 0 (Increase) decrease in accounts receivable (24,389) (11,076) (21,789) (57,254) Increase (decrease) in accounts payable (23,623) (477,285) 16,923 (483,985) Net Cash Provided by Operating Activities: $627,720 $1,230,586 $63,565 $1,921,871 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF FIDUCIARY NET POSITION AT JUNE 30, 2022 Private Purpose Trust Funds Agency Fund ASSETS: Scholarship Accounts Total Cash and equivalents $25,992 $19,096 $45,088 LIABILITIES Accounts payable - vendors $671 $671 Due to the Blackfoot Youth Committee 6,364 6,364 Due to other 3,088 3,088 Due to Music in the Park 300 300 Due to the Round Up Program 109 109 Due from Ladie's Golf Association 1,960 1,960 Due from Mens' Golf Association 6,275 6,275 Due to Animal Shelter Vaccinations 50 50 Due from Animal Shelter Utilities 156 156 Due to Trunk or Treat 123 123 Total Liabilities: $0 19,096 19,096 NET POSITION: Restricted for scholarships 25,992 25,992 Total Liabilities and Net Position: $25,992 $19,096 $45,088 The accompanying notes are an integral part of these statements. 24 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED SEPTEMBER 30, 2022 Private Purpose Trust Funds Scholarship ADDITIONS: Contributions $25,925 Investment income 0 Total Additions: 25,925 DEDUCTIONS: Miscellenous 324 Scholarships 19,000 Total Deductions: 19,324 CHANGE IN NET POSITION 6,601 NET POSITION - BEGINNING 19,391 NET POSITION - ENDING $25,992 The Accompanying notes are an integral part of these statements. 25 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2022 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. 26 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 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. 27 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 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. 28 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 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 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. 29 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 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 Cash and Cash Equivalents are generally considered short-term, highly liquid investments with a maturity of three months or less from the purchase date. Investments are recorded at fair value in accordance with GASB Statement No. 72, Fair Value Measurement and Application. Accordingly, the change in fair value of investments is recognized as an increase or decrease to investment assets and investment income. 30 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 E. CASH AND INVESTMENTS – (CONTINUED) The City’s policy is to comply with Idaho State Statutes. 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. 31 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 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. The City pools idle cash from all funds for purpose of increasing income through investment activities. As of September 30, 2022, the City’s investments consisted of $2,672,712 (21%) in the State of Idaho Local Government Diversified Bond fund (DBF), $7,028,329 (55%) in the State of Idaho Local Government Investment Pool (LGIP), and $3,166,141 (24%) in Moreton Asset Management. Fair Value of Investments The City measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows: Level 1- Valuations based on quoted prices in active markets for identical assets or liabilities. Since valuations are based upon quoted prices that are readily and regularly available, the valuation of these securities does not entail any significant degree of judgement. Securities classified as Level 1 includes U.S Government securities and other U.S. Agency and sovereign government obligations. 32 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 E. CASH AND INVESTMENTS – (CONTINUED) Level 2- Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Securities classified as Level 2 includes corporate and municipal bonds, and “brokered” or securitized certificates of deposit. Level 3- Valuations based on inputs that are unobservable and significant to the overall fair value measurement. At September 30, 2022, 100% of DBF and LGIP investments are level 2 valuations. Moreton Asset Management had the following recurring fair value measurements: Security Type Level 1 Level 2 Level 3 Other Total Agency $98,033 $98,033 CD $2,435,074 2,435,074 Corporate 490,550 490,550 Currency 155 155 MM Fund 26,101 26,101 US Govt 98,844 98,844 $223,133 $2,925,624 $0 $0 $3,148,757 Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. As of September 30, 2022, Moreton Asset Management investments had the following maturities: Security Market Value + Accrued Type 0 to 1 Yr. 1 to 3 Yrs. 3 to 5 Yrs Other Total Agency $98,932 $98,932 CD 2,448,929 2,448,929 Corporate $492,716 492,716 Currency 0 MM Fund 26,101 26,101 Cash 156 156 US Govt 99,307 99,307 $618,124 $2,548,017 $0 $0 $3,166,141 33 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 E. CASH AND INVESTMENTS – (CONTINUED) Credit Risk Credit risk is the risk that an insurer or other counterparty to an investment will not fulfill its obligations. The City’s policy for reducing its exposure to credit risk is to comply with the previously noted State Statute guidelines as of September 30, 2022, Moreton Asset Management investments had the following credit ratings: Rating Mkt value Mkt Value + Accrued AAA $224,495 $226,834 AA AA- 572,500 596,869 A+ 1,048,690 1,074,345 A A- 545,047 559,983 BBB+ BBB- 180,819 200,236 NA 594,590 615,934 $3,166,141 $3,274,201 Concentration of Credit Risk 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. However, note that the DBF, the LGIP, and Moreton Asset Management are all diversified investment funds which are investing the City’s money numerous individual securities. This greatly reduces the City’s concentration of credit risk. Inventory consists of golf clubhouse merchandise and apparel purchased for resale. Inventory is valued at cost on a first in/first out basis. 34 F. INVENTORY ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 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 $15,000 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. 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. 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. 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. 35 G. CAPITAL ASSETS H. ACCUMULATED COMPENSATED ABSENCES I. DEFERRED OUTFLOWS/INFLOWS OF RESOURCES ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 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. 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. 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. 36 J. FUND EQUITY K. 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. ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 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. 37 L. 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. ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 3. RECEIVABLES The following is a detail of accounts receivable: General Street Fund Fund Total State of Idaho: Revenue sharing $391,142 $391,142 State liquor tax 41,895 41,895 Highway user tax $143,484 143,484 433,037 143,484 576,521 Other receivables: Grants 24,784 24,784 Franchise fees 26,239 26,239 Accrued interest on investments 16,783 16,783 41,567 26,239 67,806 Total Receivables $474,604 $169,723 $644,327 4. 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. 38 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 4. CAPITAL ASSETS – (CONTINUED) Capital assets of the City for the year ended September 30, 2022 are as follows: Assets Accumulated Depreciation Balance Balance Balance Balance Governmental Activities: 10/1/2021 Change 9/30/2022 10/1/2021 Change 9/30/2022 Land $1,251,390 $1,251,390 Buildings 10,053,237 $910,277 10,963,514 $6,770,458 $313,965 $7,084,423 Infrastructure 27,720,861 18,677 27,739,538 16,036,929 602,539 16,639,468 Vehicles & Rolling Stock 4,556,149 120,060 4,676,209 4,002,437 62,665 4,065,102 Furniture & Equipment 2,595,185 36,189 2,631,374 1,653,965 136,430 1,790,395 $46,176,822 $862,506 $47,262,025 $28,463,789 $1,115,599 $29,579,388 Business-type Activities Land $648,105 $648,105 Distributions System 53,833,238 $2,495,238 56,328,476 $19,279,551 $1,741,305 $21,020,856 Vehicles & Rolling Stock 3,129,341 (78,906) 3,050,435 2,552,898 (204,820) 2,348,078 Furniture & Equipment 1,745,596 39,062 1,784,658 1,022,345 87,128 1,109,473 $59,356,280 $2,455,394 $61,811,674 $22,854,794 $1,623,613 $24,478,407 For the fiscal year ended September 30, 2022, depreciation expense on capital assets was charged to the governmental functions in the City-wide statements as follows: General Government $36,773 Public Safety 156,400 Street 647,967 Cemetery 3,867 Airport 191,651 Library 10,539 Parks 163,480 $1,210,677 39 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 5. 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 $115,681 $40,026 $11,401 $51,457 $24,320 $242,885 Wages payable 77,032 5,327 10,843 11,259 5,392 109,853 Prepaid employee tax & benefits 97,982 97,982 Customer deposits 20,674 20,674 Golf tournament credits 31,898 31,898 $311,369 $45,353 $22,244 $94,614 $29,712 $503,292 Water Sewer Sanitation Fund Fund Fund Total Vendors payable $62,925 $133,257 $45,640 $241,822 Wages payable 6,483 8,474 5,246 20,203 $69,408 $141,731 $50,886 $262,025 6. FINANCE LEASE 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, 2022, the annual requirements to amortize the debt are as follows: Payment 3.38% Date Amount Interest Principal Balance $81,489 Mar 2023 $21,272 $1,377 $19,895 61,594 Sep 2023 21,272 1,041 20,231 41,363 Mar 2024 21,272 699 20,573 20,790 Sep 2024 21,272 482 20,790 0 $85,088 $3,599 $81,489 40 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 7. OPERATING LEASES The City leases it police vehicles instead of purchasing them. At the end of the vehicle’s 5-year lease term, the vehicle will be returned to the lessor. As of September 30, 2022, the City is leasing sixteen police vehicles. The annual lease obligation on those vehicles is as follows: Balance Incurred Satisfied Balance Annual Lease Debt obligations 9/30/21 or issued or matured 9/3/22 2023 2024 2025 2026 2020 police car operating leases: #1 $24,166 ($8,129) $16,037 $8,227 $7,810 #2 23,282 (7,912) 15,370 8,007 7,363 #3 23,281 (7,912) 15,369 8,007 7,362 #4 23,056 (7,986) 15,070 8,083 6,987 #5 23,093 (7,865) 15,228 7,960 7,268 #6 23,093 (7,865) 15,228 7,960 7,268 2021 police car operating leases: #7 33,878 (8,359) 25,519 8,461 8,563 $8,495 #8 33,878 (8,359) 25,519 8,461 8,563 8,495 #9 33,878 (8,359) 25,519 8,461 8,563 8,495 #10 33,878 (8,359) 25,519 8,461 8,563 8,495 #11 33,878 (8,359) 25,519 8,461 8,563 8,495 2022 police car operating leases: #12 0 $40,826 (6,834) 33,992 7,444 8,109 8,832 $9,607 #13 0 41,419 (7,009) 34,410 7,596 8,232 8,922 9,660 #14 0 41,313 (6,976) 34,337 7,568 8,209 8,906 9,654 #15 0 39,843 (7,058) 32,785 7,487 7,942 8,425 8,931 #16 0 37,914 (6,362) 31,552 6,923 7,532 8,194 8,903 $309,361 $201,315 ($123,703) $386,973 $127,567 $126,897 $85,754 $46,755 41 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 8. 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, 2022, the annual requirements to amortize the debt including interest are as follows: Sewer Revenue Bond Series 2018 2.75% Payment Interest Principal Balance $3,321,457 3/17/23 $129,128 $45,670 $83,458 3,237,999 9/17/23 129,128 44,522 84,605 3,153,394 3/17/24 129,128 43,359 85,769 3,067,625 9/17/24 129,128 42,180 86,948 2,980,677 3/17/25 129,128 40,984 88,144 2,892,533 9/17/25 129,128 39,772 89,356 2,803,177 3/17/26 129,128 38,544 90,584 2,712,593 9/17/26 129,128 37,298 91,830 2,620,763 3/17/27 129,128 36,035 93,092 2,527,671 9/17/27 129,128 34,755 94,373 2,433,298 3/17/28 129,128 33,458 95,670 2,337,628 9/17/28 129,128 32,142 96,986 2,240,642 3/17/29 129,128 30,809 98,319 2,142,323 9/17/29 129,128 29,457 99,671 2,042,652 3/17/30 129,128 28,086 101,042 1,941,611 9/17/30 129,128 26,697 102,431 1,839,180 3/17/31 129,128 25,289 103,839 1,735,341 9/17/31 129,128 23,861 105,267 1,630,074 3/17/32 129,128 22,414 106,714 1,523,359 9/17/32 129,128 20,946 108,182 1,415,177 3/17/33 129,128 19,459 109,669 1,305,508 9/17/33 129,128 17,951 111,177 1,194,331 3/17/34 129,128 16,422 112,706 1,081,625 9/17/34 129,128 14,872 114,256 967,369 3/17/35 129,128 13,301 115,827 851,543 9/17/35 129,128 11,709 117,419 734,123 3/17/36 129,128 10,094 119,034 615,090 9/17/36 129,128 8,457 120,670 494,419 3/17/37 129,128 6,798 122,330 372,089 9/17/37 129,128 5,116 124,012 248,078 3/17/38 129,128 3,411 125,717 122,361 9/17/38 124,043 1,682 122,361 0 42 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 9. 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, 2022, the annual requirements to amortize the debt including interest are as follows: Water Bond Series 2015 Payment 1.75% Date Amount Interest Principal Balance $2,116,453 3/11/23 $115,860 $18,518 $97,342 2,019,111 9/11/23 115,860 17,667 98,193 1,920,919 3/11/24 115,860 16,808 99,052 1,821,867 9/11/24 115,860 15,941 99,919 1,721,948 3/11/25 115,860 15,067 100,793 1,621,156 9/11/25 115,860 14,185 101,675 1,519,481 3/11/26 115,860 13,295 102,565 1,416,916 9/11/26 115,860 12,398 103,462 1,313,454 3/11/27 115,860 11,493 104,367 1,209,088 9/11/27 115,860 10,580 105,280 1,103,808 3/11/28 115,860 9,658 106,202 997,606 9/11/28 115,860 8,729 107,131 890,476 3/11/29 115,860 7,792 108,068 782,408 9/11/29 115,860 6,846 109,014 673,394 3/11/30 115,860 5,892 109,968 563,427 9/11/30 115,860 4,930 110,930 452,497 3/11/31 115,860 3,959 111,901 340,596 9/11/31 115,860 2,980 112,880 227,717 3/11/32 115,860 1,993 113,867 113,850 9/11/32 114,846 996 113,850 0 10. DEQ WASTE WATER LOAN # 1703. During fiscal year 2019, the City began drawing down on the DEQ Waste Water Loan #1703. As of September 30,2022, the City had drawn down $14,541,062. 43 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 11. BLACKFOOT URBAN RENEWAL TAX INCREMENT BONDS During fiscal year 2021, BURA sold $1,814,887 in tax increment bonds to fund construction costs associated with the Downtown Districts Projects. These bonds will be repaid from future property tax revenues. As of September 30, 2022, the annual requirements to amortize this debt including interest are as follows: Series 2021 Payment 2.86% Total Debt Date Amount Interest Principal Service 3/1/23 $20,909.60 $20,909.60 9/1/23 $189,422.97 20,909.60 $168,513.37 189,422.97 3/1/24 18,499.86 18,499.86 9/1/24 191,832.71 18,499.86 173,332.85 191,832.71 3/1/25 16,021.20 16,021.20 9/1/25 194,311.37 16,021.20 178,290.17 194,311.37 3/1/26 13,471.65 13,471.65 9/1/26 196,860.92 13,471.65 183,389.27 196,860.92 3/1/27 18,849.18 18,849.18 9/1/27 199,483.39 10,849.18 188,634.21 199,483.39 3/1/28 8,151.71 8,151.71 9/1/28 202,180.86 8,151.71 194,029.15 202,180.86 3/1/29 5,377.10 5,377.10 9/1/29 204,955.47 5,377.10 199,578.37 204,955.47 3/1/30 2,523.13 2,523.13 9/1/30 178,965.50 2,523.13 176,442.37 178,965.50 $1,558,013.19 $199,606.86 $1,462,209.76 $1,661,816.62 44 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 12. 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, 2022, 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, 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 $390,000.00 $59,450.00 $449,450.00 13. RESTRICTED CASH BURA - As per the terms of Tax Increment Bond Series 2021, BURA agreed to deposit $181,489 in a separate account, to remain on deposit until the Bonds are paid off. As of September 30, 2022, BURA is in compliance with this bond requirements. CITY - 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, 2022, the City has segregated $258,256 as restricted cash on d financial statements. 45 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 14. LONG-TERM DEBT The following is a summary of the City’s long-term debt transactions for the year ended September 30, 2022: Balance Incurred Satisfied Balance Amounts Due 10/1/2021 or issued or matured 9/30/2022 within one year Governmental Activities: Compensated absences $518,089 ($78,650) $439,439 Operating lease payable 309,361 $201,315 (123,703) 386,973 Finance lease contracts 120,292 (38,803) 81,489 $40,126 City's share of unfunded PERSI (62,343) 3,882,021 3,819,678 $885,399 $4,083,336 ($241,156) $4,727,579 $40,126 Business-type Activities: Compensated absences $77,753 ($1,772) $75,981 DEQ WWTP loan #1001 2,308,721 (192,268) 2,116,453 $195,533 DEQ WWTP loan #1501 3,485,256 (163,799) 3,321,457 168,063 DEQ WWTP loan #1703 13,843,793 $697,269 14,541,062 City's share of unfunded PERSI (20,569) 659,659 639,090 $19,694,954 $1,356,928 ($357,839) $20,694,043 $363,596 Blackfoot Urban Renewal District: 2021 tax revenue bonds $1,626,038 ($163,828) $1,462,210 $168,513 2006 tax revenue bonds 470,000 (80,000) 390,000 85,000 $2,096,038 $0 ($243,828) $1,852,210 $253,513 15. 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. 46 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 16. TRANSFERS BETWEEN FUNDS Administrative Charges: To From General Fund $894,276 Street Fund $76,584 Ambulance Fund $65,484 Airport Fund $10,368 Cemetery Fund $10,068 Library Fund $11,796 Water Fund $140,076 Sewer Fund $466,464 Sanitation fund $113,436 Fund Subsidy: Parks and Recreation Fund $130,414 General Fund $130,414 17. 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. 47 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 18. EXCESS OF EXPENDITURES OVER APPROPRIATIONS The General Fund spent $90,687 more than was budgeted. General Fund revenues exceeded budget amounts by $354,596. The Ambulance Fund spent $184,617 more than was budgeted. Ambulance Fund revenues exceeded budget amounts by $374,300. The Airport Fund spent $161,587 more than was budgeted. Airport Fund revenues exceeded budget amounts by $265,164. 19. 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. 48 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 20. PUBLIC EMPLOYEE RETIREMENT SYSTEM Plan Description The City of Blackfoot, Idaho (The City), contributes to the Base Plan which is a cost sharing multiple-employer defined benefit pension plan administered by Public Employee Retirement System of Idaho (PERSI or System) that covers substantially all employers 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. 49 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 20. PUBLIC EMPLOYEE RETIREMENT SYSTEM - (CONTINUED) 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 74% for police and firefighters. As of June 30, 2022, it was 7.16% for general employees and 9.13% for police and firefighters. The employer contribution rate as a percent of covered payroll is set by the Retirement Board and was 11.94% for general employees and 12.28% for police and firefighters. The City’s contributions were $533,010 for the PERSI year ended June 30, 2022. Pension Liabilities, Pension Expense (Revenue), and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At September 30, 2022, the City reported a liability for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2022, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’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, 2022, the City’s proportion was .1132023 percent. 50 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 20. PUBLIC EMPLOYEE RETIREMENT SYSTEM - (CONTINUED) For the year ended September 30, 2022 the City recognized pension expense of $1,155,831. At September 30, 2022, the City 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 $368,139 ($28,294) Changes in assumptions or other inputs ($224,832) $0 Net difference between projected and actual earnings on pension plan investments $0 (2,604,264) Changes in the employer's proportion and differences between the employer's contributions and the employer's proportionate contributions $1,981,665 $2,753,638 Contributions subsequent to the measurement date $209,783 $0 Total $2,334,755 $121,080 $209,783 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, 2022. 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, 2022, the beginning of the measurement period ended June 30, 2021 is 4.6 and 4.6 for the measurement period June 30, 2022. 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, 2022: 2023 $531,654 2024 $577,161 2025 $266,936 2026 $847,471 51 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 20. PUBLIC EMPLOYEE RETIREMENT SYSTEM - (CONTINUED) 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, 2022 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.30% Salary increases 3.05% Salary inflation 3.05% Investment rate of return 6.35%, net of investment expenses Cost-of-living adjustments 1% Contributing Members, Service Retirement Members, and Beneficiaries General Employees and all Beneficiaries - Male Pub-2010 General Tables increased 11% General Employees and all Beneficiaries - Female Pub-2010 General Tables increased 21% Teachers – Males Pub-2010 Teacher Tables, increased 12% Teachers – Females Pub-2010 Teacher Tables, increased 21% 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 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. 52 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 20. PUBLIC EMPLOYEE RETIREMENT SYSTEM - (CONTINUED) 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 2022. 2022 Asset Class DB Plans Sick Leave Fixed Income 30.0% 50.0% US/Global Equity 55.0% 39.3% International Equity 15.0% 10.7% Cash 0.0% 0.0% Total 100.0% 100.0% 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. 53 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2022 20. PUBLIC EMPLOYEE RETIREMENT SYSTEM - (CONTINUED) 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 6.35 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 (5.35 percent) or 1 percentage point higher (7.35 percent) than the current rate: Current 1% Decrease Discount Rate 1% Increase (5.35%) (6.35%) (7.35%) Employer's proportionate share of the net pension liability (asset) $7,869,285 $4,458,766 ($1,667,344) 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. 54 ---PAGE BREAK--- REQUIRED SUPPLEMENTARY INFORMATION 55 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED SEPTEMBER 30, 2022 Schedule of Employer's Share of Net Pension Liability PERSI - Base Plan Last 10 - Fiscal Years * 2022 2021 2020 Employer's portion of the net pension liability 0.113202% 0.104984% 0.108440% Employer's proportionate share of the net pension liability (Asset) $4,458,766 ($82,914) $2,518,123 Employer's covered-employee payroll $6,381,819 $5,754,425 $5,336,476 Employer's proportionate share of the net pension liability as a percentage of its covered-employee payroll 69.87% -1.44% 47.19% Plan fiduciary net pension as a percentage of the total pension liability 83.09% 100.36% 88.22% Schedule of Employer's Contributions PERSI - Base Plan Last 10 - Fiscal Years * 2022 2021 2020 Statutorialy required contribution $524,202 $414,506 $425,455 Contributions in relation to the statutorily required contribution $539,315 $473,425 $466,984 Contribution (deficiency) excess $15,113 $58,920 $41,529 Employer's covered-employee payroll $6,381,819 $5,754,425 $5,336,476 Contributions as a percentage of covered-employee payroll 8.21% 7.20% 7.97% *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, 2022 56 ---PAGE BREAK--- 2019 2018 2017 2016 2015 0.117487% 0.122055% 0.127392% 0.123140% 0.123492% $1,341,079 $1,800,331 $2,002,377 $2,496,227 $1,626,186 $5,628,355 $5,696,820 $5,506,167 $5,166,140 $5,027,213 23.83% 31.60% 36.37% 48.32% 32.35% 93.79% 91.69% 90.68% 87.26% 91.38% 2019 2018 2017 2016 2015 $449,552 $473,990 $429,580 $366,047 $403,944 $458,294 $450,552 $453,982 $413,269 $396,706 $8,742 ($23,437) $24,402 $47,221 ($7,238) $5,628,355 $5,696,820 $5,506,167 $5,166,140 $5,027,213 7.99% 8.32% 7.80% 7.09% 8.04% 57 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND YEAR ENDED SEPTEMBER 30, 2022 Original Variance & Final Favorable Budget Actual (Unfavorable) REVENUE: Taxes: Property taxes $3,948,071 $4,080,501 $132,430 Franchise taxes 92,131 107,419 15,288 Subtotal Taxes: 4,040,202 4,187,920 147,718 Licenses and Permits: Business licenses 17,001 22,519 5,518 Building permits 190,250 334,371 144,121 Plan review - State contract 77,250 102,306 25,056 Bicycle licenses 45 45 Subtotal Licenses and Permits: 284,501 459,241 174,740 Inter-governmental: Liquor apportionment 205,000 208,739 3,739 State revenue sharing 1,241,215 1,368,795 127,580 Blackfoot - Snake River Fire District 847,819 883,805 35,986 School resource officer 175,853 275,853 100,000 State, Federal, and local grants 241,282 179,798 (61,484) Subtotal Intergovernmental: 2,711,169 2,916,990 205,821 Miscellaneous: Administrative charges 894,287 894,276 (11) Fines and forfeitures 50,827 62,711 11,884 Interest 135,737 (148,375) (284,112) Other 10,090 108,646 98,556 Subtotal Miscellaneous: 1,090,941 917,258 (173,683) Total Revenue: 8,126,813 8,481,409 354,596 EXPENDITURES: Administrative: Salaries 469,055 448,901 20,154 Benefits 544,036 423,979 120,057 Travel and meeting 21,000 13,269 7,731 Office supplies and expense 181,549 138,239 43,310 The accompanying notes are an integral part of these statements. 58 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - (CONTINUED) GENERAL FUND YEAR ENDED SEPTEMBER 30, 2022 Original Variance EXPENDITURES: and Final Favorable Administrative - Continued: Budget Actual (Unfavorable) Maintenance $39,143 $20,893 $18,250 Utilities and telephone 19,460 15,111 4,349 Professional services 135,050 137,894 (2,844) Department supplies and other 20,700 23,022 (2,322) Insurance 214,172 212,691 1,481 Covid 19 308,035 (308,035) Contingency 138,776 63,636 75,140 Subtotal Administrative: 1,782,941 1,805,670 (22,729) Police: Salaries 2,103,628 2,036,502 67,126 Benefits 1,071,584 983,692 87,892 Clothing allowance 18,000 14,248 3,752 Travel and training 28,000 24,528 3,472 Office supplies 34,283 28,812 5,471 Maintenance 43,000 37,420 5,580 Utilities and telephone 10,000 4,631 5,369 Fuel 57,000 84,804 (27,804) Professional services 2,500 3,831 (1,331) Department supplies and other 81,500 61,478 20,022 Bingham County 301,482 296,929 4,553 Grants 5,000 5,000 Capital outlay 97,115 151,754 (54,639) Subtotal Police: 3,853,092 3,728,629 124,463 Fire: Salaries 1,136,380 1,317,895 (181,515) Benefits 626,954 612,706 14,248 Protective clothing 23,000 18,220 4,780 Travel and training 9,500 8,019 1,481 Office supplies 19,987 17,848 2,139 Maintenance 32,800 36,574 (3,774) The accompanying notes are an integral part of these statements. 59 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - (CONTINUED) GENERAL FUND YEAR ENDED SEPTEMBER 30, 2022 Original Variance EXPENDITURES: and Final Favorable Fire - Continued: Budget Actual (Unfavorable) Utilities and telephone $36,200 $28,901 $7,299 Fuel 10,000 14,570 (4,570) Professional services 7,300 6,963 337 Department supplies and other 25,000 9,891 15,109 Subtotal Fire: 1,927,121 2,071,587 (144,466) Building and Zoning: Salaries 102,048 106,444 (4,396) Benefits 94,025 89,647 4,378 Travel and training 5,900 5,900 Office supplies 16,539 20,720 (4,181) Utilities and telephone 1,920 1,878 42 Professional services 11,700 4,847 6,853 State building contract 120,000 197,551 (77,551) Grants 21,000 21,000 Subtotal Building and Zoning: 373,132 421,087 (47,955) Total Expenditures: 7,936,286 8,026,973 (90,687) EXCESS REVENUE (EXPENDITURES): 190,527 454,436 263,909 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds (335,000) (130,414) 204,586 EXCESS REVENUE/SOURCES (EXPENDITURES/USES): ($144,473) 324,022 $468,495 FUND BALANCE - BEGINNING: 3,080,043 FUND BALANCE - ENDING: $3,404,065 The accompanying notes are an integral part of these statements. 60 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL STREET FUND YEAR ENDED SEPTEMBER 30, 2022 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $600,884 $531,892 ($68,992) Highway users' tax 582,589 866,498 283,909 County road and street 60,000 50,654 (9,346) Franchise fees 110,584 120,090 9,506 Federal and State grants 17,306 17,306 Miscellaneous 2,881 2,881 Interest on investments 2,910 2,910 Total Revenue: 1,354,057 1,592,231 238,174 EXPENDITURES: Salaries 336,277 324,809 11,468 Benefits 328,024 266,808 61,216 Clothing 5,600 5,835 (235) Travel and training 1,500 1,500 Office supplies 7,861 8,586 (725) Maintenance 58,500 76,835 (18,335) Utilities and telephone 172,150 146,726 25,424 Fuel 35,000 27,960 7,040 Professional services 5,625 1,159 4,466 Department supplies and other 120,650 95,539 25,111 Indirect cost reimbursement 76,584 76,584 0 Grant expense 0 Construction materials 91,150 12,532 78,618 Capital outlay 37,596 20,769 16,827 Total Expenditures: 1,276,517 1,064,142 212,375 EXCESS REVENUE (EXPENDITURES): 77,540 528,089 450,549 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $77,540 528,089 $450,549 FUND BALANCE - BEGINNING: 1,317,016 FUND BALANCE - ENDING: $1,845,105 The accompanying notes are an integral part of these statements. 61 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL AMBULANCE FUND YEAR ENDED SEPTEMBER 30, 2022 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Hospital collections - ambulance $767,774 $753,707 ($14,067) County ambulance 692,119 749,312 57,193 Bingham memorial 35,000 70,000 35,000 Wildland Fire/Ambulance 69,179 69,179 Grants 222,000 222,000 Miscellaneous 4,995 4,995 Total Revenue: 1,494,893 1,869,193 374,300 EXPENDITURES: Salaries 813,181 793,693 19,488 Benefits 495,643 430,550 65,093 Protective clothing 3,000 3,110 (110) Travel and training 11,360 4,802 6,558 Office supplies 8,175 12,731 (4,556) Maintenance 29,000 42,379 (13,379) Utilities and telephone 11,000 4,892 6,108 Fuel 25,000 36,341 (11,341) Professional services 6,500 12,715 (6,215) Department supplies and other 96,000 108,603 (12,603) Grant expense 0 Indirect cost reimbursement 65,488 65,484 4 Collection expense and refunds 0 Capital outlay 233,664 (233,664) Total Expenditures: 1,564,347 1,748,964 (184,617) EXCESS REVENUE (EXPENDITURES): (69,454) 120,229 189,683 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): ($69,454) 120,229 $189,683 FUND BALANCE - BEGINNING: 110,316 FUND BALANCE - ENDING: $230,545 The accompanying notes are an integral part of these statements. 62 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL PARKS AND RECREATION FUND YEAR ENDED SEPTEMBER 30, 2022 Original & Variance Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $227,445 $227,174 ($271) County participation 20,000 21,500 1,500 Golf course 628,102 732,146 104,044 Park reservation fees and donations 18,761 33,197 14,436 Recreation fees and donations 27,877 26,030 (1,847) Storm water maintenance fee 28,000 (28,000) Interest on investments 1,252 1,252 Other 309 12,097 11,788 Total Revenue: 950,494 1,053,396 102,902 EXPENDITURES (Parks): Salaries 169,498 158,682 10,816 Benefits 71,865 64,028 7,837 Clothing allowance 1,550 496 1,054 Travel and training 2,000 2,000 Office supplies 10,161 8,627 1,534 Maintenance 146,700 61,054 85,646 Utilities and telephone 26,000 17,166 8,834 Fuel 25,000 19,163 5,837 Professional services 1,000 3,248 (2,248) Department supplies and other 43,150 34,242 8,908 Capital outlay 0 11,170 (11,170) Total Expenditures (Parks): 496,924 377,876 119,048 EXPENDITURES (Recreation): Salaries 11,848 (11,848) Benefits 1,411 Department supplies and other 7,946 (7,946) Total Expenditures (Recreation): 0 21,205 (19,794) The accompanying notes are an integral part of these statements. 63 ---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, 2022 Variance Final Favorable Budget Actual (Unfavorable) EXPENDITURES (Pool): Maintenance $3,000 $119 $2,881 Utilities and telephone 7,000 3,296 3,704 Total Expenditures (Pool): 10,000 3,415 6,585 EXPENDITURES (Golf): Salaries 281,694 311,155 (29,461) Benefits 184,929 171,331 13,598 Clothing allowance 1,250 1,250 Travel and training 3,000 3,000 Office supplies 20,571 6,599 13,972 Maintenance 109,500 86,364 23,136 Utilities and telephone 29,500 38,837 (9,337) Fuel 6,500 28,776 (22,276) Professional services 750 540 210 Resale items 95,000 162,170 (67,170) Department supplies and other 34,600 42,811 (8,211) Capital outlay 7,000 7,000 0 Total Expenditures (Golf): 774,294 855,583 (81,289) Total Fund Expenditures: 1,281,218 1,258,079 24,550 EXCESS REVENUE (EXPENDITURES): (330,724) (204,683) 126,041 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 335,000 130,414 (204,586) EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $4,276 (74,269) ($78,545) FUND BALANCE - BEGINNING: 74,269 FUND BALANCE - ENDING: $0 The accompanying notes are an integral part of these statements. 64 ---PAGE BREAK--- BLACKFOOT URBAN RENEWAL AGENCY SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2022 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $1,100,000 $1,123,897 $23,897 Investment income 4,500 14,243 9,743 Grant application fees [PHONE REDACTED] Revenue Bond proceeds 0 Total Revenue: 1,104,500 1,138,415 33,915 EXPENDITURES: Administration 4,000 2,896 1,104 Professional fees 18,000 15,045 2,955 Projects: Downtown District: Blight & Development projects 1,598,051 1,598,051 Façade improvements 78,600 67,495 11,105 Maple Street - Mickelsen Bldg 40,000 (40,000) Michael Johnson - Perfect Point 10,000 (10,000) Oleson Convention Center 24,336 (24,336) Teton House 207,308 (207,308) 2021 Revenue Bond payment 210,333 (210,333) Riverview District: Blight & Development projects 1,400,000 1,400,000 Façade improvements 100,000 100,000 Technology Park Project 20,000 20,000 0 Twin Bridges Park Project 2,962 (2,962) Tax anticipation note 645,664 645,664 2006 Revenue Bond payment 111,175 (111,175) Total Expenditures: 3,864,315 711,550 3,152,765 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): ($2,759,815) 426,865 $3,186,680 FUND BALANCE - BEGINNING: 2,552,584 FUND BALANCE - ENDING: $2,979,449 The accompanying notes are an integral part of these statements. 65 ---PAGE BREAK--- THIS PAGE INTENTIONALLY LEFT BLANK 66 ---PAGE BREAK--- OTHER SUPPLEMENTAL INFORMATION 67 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2022 Capital Airport Cemetery Library Improvements Fund Fund Fund Fund ASSETS: Cash and investments $444,653 $208,517 $478,858 $7,325 Receivables: Property taxes 1,473 4,300 6,760 $2,796 Total Assets: $446,126 $212,817 $485,618 $10,121 LIABILITIES: Accounts payable $10,526 $5,342 $13,844 Total Liabilities: 10,526 5,342 13,844 $0 DEFERRED INFLOW OF RESOURCES Unavailable revenue - Property taxes 1,268 3,748 5,888 2,386 FUND BALANCE: Assigned - Capital Improvements 7,735 Unassigned 434,332 203,727 465,886 Total Fund Balance: 434,332 203,727 465,886 7,735 Total Liabilities and Fund Balance: $446,126 $212,817 $485,618 $10,121 68 ---PAGE BREAK--- Health Total Care Non-major Reserve Governmental Fund Funds $463,465 $1,602,818 15,329 $463,465 $1,618,147 $29,712 $0 29,712 0 13,290 7,735 463,465 1,567,410 463,465 1,575,145 $463,465 $1,618,147 69 ---PAGE BREAK--- Capital Airport Cemetery Library Improvements REVENUES: Fund Fund Fund Fund Property taxes $45,023 $171,369 $266,788 $104,945 Fees 137,936 71,050 10,308 Grants and contributions 249,936 1,585 Blackfoot Rural Library District 236,510 Interest 380 879 1,395 481 Miscellaneous 7,380 150 Total Revenues: 440,655 243,448 516,586 105,426 EXPENDITURES: General government 271,787 Airport 287,038 Library 492,429 Capital outlay 43,996 Total Expenditures: 287,038 271,787 492,429 43,996 EXCESS REVENUE (EXPENDITURES): 153,617 (28,339) 24,157 61,430 OTHER FINANCING SOURCES (USES): Operating transfers (to) from other funds 0 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): 153,617 (28,339) 24,157 61,430 FUND BALANCE - BEGINNING: 280,715 232,066 441,729 (53,695) FUND BALANCE - ENDING: $434,332 $203,727 $465,886 $7,735 CITY OF BLACKFOOT, IDAHO COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2022 70 ---PAGE BREAK--- Health Total Care Non-major Reserve Governmental Fund Funds $588,125 $65,300 284,594 251,521 236,510 3,135 7,530 65,300 1,371,415 101,373 373,160 287,038 492,429 43,996 101,373 1,196,623 (36,073) 174,792 0 0 (36,073) 174,792 499,538 1,400,353 $463,465 $1,575,145 71 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL AIRPORT FUND YEAR ENDED SEPTEMBER 30, 2022 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $82,400 $45,023 ($37,377) Charges for services 41,591 41,980 389 Fuel 50,000 95,956 45,956 Miscellaneous 7,380 7,380 Grants and contributions 1,500 249,936 248,436 Interest on investments 380 380 Total Revenue: 175,491 440,655 265,164 EXPENDITURES: Salaries 7,836 5,769 2,067 Benefits 8,846 6,591 2,255 Office supplies 1,217 2,990 (1,773) Maintenance 23,100 19,674 3,426 Utilities and telephone 11,200 7,049 4,151 Fuel 50,250 35,077 15,173 Professional services 10,136 13,334 (3,198) Department supplies and other 2,500 149 2,351 Indirect cost reimbursement 10,366 10,368 Grant expense 186,037 (186,037) Total Expenditures: 125,451 287,038 (161,587) EXCESS REVENUE (EXPENDITURES): 50,040 153,617 103,577 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $50,040 153,617 $103,577 FUND BALANCE - BEGINNING: 280,715 FUND BALANCE - ENDING: $434,332 72 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL CEMETERY FUND YEAR ENDED SEPTEMBER 30, 2022 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $151,083 $171,369 $20,286 Charges for services 54,436 71,050 16,614 Miscellaneous 150 150 Interest on investments 879 879 Total Revenue: 205,519 243,448 37,929 EXPENDITURES: Salaries 92,570 110,577 (18,007) Benefits 67,550 56,630 10,920 Clothing 500 156 344 Office supplies 3,785 3,469 316 Travel and training 800 800 Maintenance 15,500 73,887 (58,387) Utilities and telephone 6,950 4,419 2,531 Fuel 5,500 4,376 1,124 Professional services 5,000 5,234 (234) Department supplies and other 5,200 2,971 2,229 Indirect cost reimbursement 10,067 10,068 Capital outlay 100,000 100,000 Total Expenditures: 313,422 271,787 41,635 EXCESS REVENUE (EXPENDITURES): (107,903) (28,339) 79,564 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): ($107,903) (28,339) $79,564 FUND BALANCE - BEGINNING: 232,066 FUND BALANCE - ENDING: $203,727 73 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL LIBRARY FUND YEAR ENDED SEPTEMBER 30, 2022 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $243,605 $266,788 $23,183 Charges for services 10,159 10,308 149 Blackfoot Rural Library District 243,606 236,510 (7,096) Interest on investments 1,395 1,395 Grants and contributions 1,585 1,585 Total Revenue: 497,370 516,586 19,216 EXPENDITURES: Salaries 244,453 197,412 47,041 Benefits 89,522 73,239 16,283 Books and subscriptions 73,496 58,358 15,138 Travel and training 1,500 831 669 Office supplies 22,582 17,276 5,306 Maintenance 26,600 31,183 (4,583) Utilities and telephone 13,220 10,570 2,650 Professional services 7,000 5,635 1,365 Department supplies and other 16,250 12,024 4,226 Indirect cost reimbursement 11,799 11,796 3 Capial outlay 74,105 (74,105) Total Expenditures: 506,422 492,429 13,993 EXCESS REVENUE (EXPENDITURES): (9,052) 24,157 33,209 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): ($9,052) 24,157 $33,209 FUND BALANCE - BEGINNING: 441,729 FUND BALANCE - ENDING: $465,886 74 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL CAPITAL IMPROVEMENTS FUND YEAR ENDED SEPTEMBER 30, 2022 Original & Variance Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $103,000 $104,945 $1,945 Interest on investments 481 481 Total Revenue: $103,000 105,426 2,426 EXPENDITURES: Professional services 1,452 (1,452) Capital outlay 103,000 42,544 60,456 Total Expenditures: 103,000 43,996 59,004 EXCESS REVENUE (EXPENDITURES): 0 61,430 61,430 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 61,430 $61,430 FUND BALANCE - BEGINNING: (53,695) FUND BALANCE - ENDING: $7,735 75 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL HEALTH CARE RESERVE FUND YEAR ENDED SEPTEMBER 30, 2022 Original & Variance Final Favorable Budget Actual (Unfavorable) REVENUE: Reserve receipts $140,000 $65,300 ($74,700) Total Revenue: 140,000 65,300 (74,700) EXPENDITURES: Healthcare expense 100,000 87,276 12,724 Flex spending expense 20,000 (1,707) 21,707 Benefits administration 20,000 15,804 4,196 Total Expenditures: 140,000 101,373 38,627 EXCESS REVENUE (EXPENDITURES): 0 (36,073) (36,073) OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 (36,073) ($36,073) FUND BALANCE - BEGINNING: 499,538 FUND BALANCE - ENDING: $463,465 76 ---PAGE BREAK--- SINGLE AUDIT SECTION 77 ---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 Required by the Uniform Guidance. Report on Compliance for Each Major Federal Program Opinion on Each Major Federal Program I have audited the City of Blackfoot’s (the City) compliance with the types of compliance requirements identified as subject to audit 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, 2022. 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. In my opinion, the City 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, 2022. Basis for Opinion on Each Major Federal Program 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). My responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of my report. I am required to be independent of the City, and to meet other ethical responsibilities, in accordance with relevant ethical requirements relating to my audit. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion on compliance for each major Federal program. My audit does not provide a legal determination of District’s compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to Federal programs. Auditor’s Responsibilities for the Audit of Compliance My objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on my audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from 78 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 2 fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major Federal program as a whole. In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, I:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.  Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances 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 the City’s internal control over compliance. Accordingly, no such opinion is expressed. I am required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that I identified during the audit. Report on 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 Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during my audit I did not identify any deficiencies in internal control over compliance that I consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. My audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our 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 2, 2023 Morgan J Hatt CPA PC 79 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO BLACKFOOT, IDAHO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED SEPTEMBER 30, 2022 Catalogue of Federal Domestic Title Assistance Number Expenditures Department of Defense: Army Corp of Engineers - Waste Water Treatment facilities (Direct Funding) 12.000 $313,908 Department of Housing and Urban Development: Community Development Block Grant -Waste Water Improvement (State of Idaho pass-through funding) 14.228 $26,000 Department of Transportation : Airport Improvement - (Direct funding) 20.106 $186,037 Highway Planning & Construction (State of Idaho pass-through funding) 20.205 $58,732 State Community Highway Safety (State of Idaho pass-through funding) 20.600 $29,469 Subtotal of Department of Transportation: $274,238 Department of the Treasury: Cares Act (State of Idaho pass-through funding) 21.019 $716,746 Environmental Protection Agency: Capitalization grants and revolving loans WW 1703 (State of Idaho pass-through funding) 66.468 $699,480 Department of Health and Human Services: Substance Abuse and Mental Health Services (State of Idaho pass-through funding) 93.243 $15,213 Total Federal Expenditures: $2,045,585 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, 2022. 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 April 2022 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 recognized 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. 80 ---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 21.019 Cares Act 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, 2022 81