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CITY OF BLACKFOOT, IDAHO BASIC FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION SEPTEMBER 30, 2016 ---PAGE BREAK--- ---PAGE BREAK--- CITY OF BLACKFOOT AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2016 TABLE OF CONTENTS Page Number INTRODUCTION SECTION Organizational Chart 6 List of Principal Officials 7 FINANCIAL SECTION Independent Auditor’s Opinion 8 Management’s Discussion and Analysis (Required Supplementary Information) 11 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position 20 Statement of Activities 22 Fund Financial Statements: Balance Sheet – Governmental Funds 24 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 26 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 28 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 30 Proprietary Funds: Statement of Net Position 31 Statement of Revenues, Expenses and Changes in Net Position 32 Statement of Cash Flows 33 Fiduciary Funds: Statement of Net Position – Clerk’s Trust Fund 34 Notes to Financial Statements 35 3 ---PAGE BREAK--- CITY OF BLACKFOOT AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2016 TABLE OF CONTENTS – (CONTINUED) Page Number Required Supplemental Information: Schedule of Employer’s Share of Net Pension Liability 61 Schedule of Employer’s Contributions 61 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – General Fund 62 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Street Fund 65 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Ambulance Fund 66 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Parks and Recreation Fund 67 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Water Capital Fund 69 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Wastewater Capital Fund 70 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Blackfoot Urban Renewal District 71 Other Supplemental Information: Combining Balance Sheet - Non-major Governmental Funds 74 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Non-major Governmental Funds 76 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Airport Fund 78 Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual – Cemetery Fund 79 Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual – Library Fund 80 Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual – Capital Improvements Fund 81 Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual – Fire and Ambulance Replacement Fund 82 Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual – Golf Course Capital Fund 83 Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual – Street Capital Fund 84 4 ---PAGE BREAK--- CITY OF BLACKFOOT AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2015 TABLE OF CONTENTS – (CONTINUED) Page Number Other Supplemental Information - Continued: Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual – Sanitation Capital Fund 85 Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual – Parks Capital Fund 86 Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual – Library Capital Fund 87 Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual – Health Care Reserve Fund 88 Single Audit Section: Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 90 Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance With OMB Circular A-133 92 Schedule of Expenditures of Federal Awards 94 Schedule of Findings and Questioned Costs 95 5 ---PAGE BREAK--- City of Blackfoot 6 ---PAGE BREAK--- City of Blackfoot List of Principal Officials Mayor – Council Form of Government Mayor Paul Loomis City Council Jan Simpson Council Member Christopher Jensen Council Member Bart Brown Council Member Skip Gardner Council Member City Administration Suzanne McNeel, City Clerk Garrett Sandow, City Attorney Lisa Tornabene, HR Director Holly Powell, City Treasurer Richard Mangum, Public Works Director Kurt Hibbert, Planning & Zoning Administrator Kurt Asmus, Police Chief Kevin R. Gray, Fire Chief R. Scott Hays, Parks Superintendent Lisa Harral, Library Director Phillip Meline, Cemetery Sexton 7 ---PAGE BREAK--- Morgan J Hatt CPA PC Certified Public Accountant 1855 Satterfield Drive [EMAIL REDACTED] Phone : (208) 317-6040 Pocatello, Idaho 83201 Fax: (208) 242-3782 Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Independent Auditor's Report Report on the Financial Statements I have audited the accompanying financial statements of the governmental activities, the business-type activities, the Blackfoot Urban Renewal District (a discretely presented component unit), each major fund, and the aggregate remaining fund information of the City of Blackfoot as of and for the year ended September 30, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the Table of Contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express opinions on these financial statements based on my audit. I conducted my audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, I express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 8 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 2 I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinions. Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business-type activities, the Blackfoot Urban Renewal District (a discretely presented component unit), each major fund, and the respective changes in financial position, for the year then ended in accordance with accounting principles generally accepted in the United States of America Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, the schedules of Net Pension Liability and Employer’s Contributions, and the major fund budgetary comparison information be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, which considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. I have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to my inquiries, the basic financial statements, and other knowledge I obtained during my audit of the basic financial statements. I do not express an opinion or provide any assurance on the information because the limited procedures do not provide me with sufficient evidence to express an opinion or provide any assurance. Other Information My audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual non- major fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. 9 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 3 The combining and individual non-major fund financial statements and the Schedule of Expenditures of Federal Awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In my opinion, the combining and individual non-major fund financial statements and the Schedule of Expenditures of Federal Awards are fairly stated in all material respects in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, I have also issued my report dated January 23, 2017, on my consideration of the City’s internal control over financial reporting and on my tests of compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of my testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on 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 January 23, 2017 Morgan J Hatt CPA PC 10 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO Management’s Discussion and Analysis As management of the City of Blackfoot (City), we offer readers of these financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended September 30, 2016. The narrative is designed to assist readers in focusing on the significant financial issues, identify changes in the City’s ability to meet future financial obligations, identify any material deviations from the approved budget, and list individual fund issues or concerns. We encourage readers to consider the information presented here in conjunction with the City’s financial statements, which follow this section. Financial Highlights The assets of the City exceeded its liabilities at the close of the fiscal year 2016 by $35.860 million. Of this amount, $8.726 million is considered unrestricted. The unrestricted net assets of the City’s governmental activities are $4.364 million and may be used to meet the government’s ongoing obligations. The City’s total net assets increased by $1.829 million in 2016 up 5.4% from 2015. Net assets of the governmental activities increased by $1.138 million which represents a 6.1% increase from 2015. Net assets of the business-type activities increased $980,714 or 6.5% over 2015. The net assets of the Blackfoot Urban Renewal Agency (BURA) decreased $289,968. The City’s total debt increased by $1.605 million (20%) during the current fiscal year; $348,298 was attributed to a debt increase in governmental activities and a $1.308 million increase in business-type activities due to the upgrades at the Wastewater Treatment Plant (WWTP). The net liabilities for the BURA decreased by $51,221. The total cost of the City’s primary government programs decreased by $273,530 or The cost of governmental activities decreased $525,994 or 4.9% as well as the cost of business-type activities decreased 79,524 or 17%. As of the close of the current fiscal year, the City’s governmental fund’s reported a combined ending fund balance of $7.104 million. The combined governmental fund’s ending fund balance increased $327,712 from the prior year’s ending fund balance. All of the total fund balance is considered unreserved at September 30, 2016. There was a $1,404 increase in the total general fund balance at the end of the current fiscal year. The general fund reported an unreserved fund balance of $690,567 or 12% of total general fund expenditures at September 30, 2016. City Highlights The Administration updated their Records Retention Policy and destroyed over 300 boxes of old records. The Administration installed fiber optic cable to several City buildings with to increase efficiency and encourage economic development. The Library upgraded the main floor of library, lobby entry, and Friends basement areas to energy efficient lighting with incentives from Idaho Power. The Fire Department was awarded three grants totaling over $25,000. They will be used to purchase two bariatric gurneys, training software, and an extractor for laundering turnouts. The Parks & Recreation Department constructed an RV Park with a grant from Idaho Parks and Recreation. The Police Department outfitted all the patrol officers and detectives with body-worn cameras. 11 ---PAGE BREAK--- The Wastewater Treatment Plant (WWTP) began Phase 1 Construction – New Secondary Clarifier. The WWTP installed storm water drainage system in Patriot Field parking lot to relieve pressure on system on W. Francis St. The WWTP replaced 650 feet of 10” concrete sewer line with 12” plastic sewer line and re-surfaced the roadway edge to edge the length of the project on S. Cleveland. The Street Department reconstructed .87 miles of roads on the north side the Fair Grounds. The Water Department completed a new 10” water main (1500’ to the interstate) with three new fire hydrants on Riverton road. Overview of the Financial Statements The financial section of this comprehensive annual report consists of three parts: Management’s Discussion and Analysis (MD&A), the Basic Financial Statements, and Required Supplementary Information. The MD&A is intended to serve as an introduction to the City’s basic financial statements. These basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. The third section titled Required Supplementary Information includes combining and individual fund statements and provides budget-compared-to-actual information for non major funds in addition to the basic financial statements themselves. City’s Basic Financial Statements Management’s Discussion and Analysis Governmental- Wide Financial Statements Statement of Net Assets Statement of Activities Governmental Funds Proprietary Funds Fiduciary Funds Fund Financial Statements Notes to Financial Statements Balance Sheet Statement of Revenues, Expenditures and changes in Fund -Major Funds- Statements of Budget to Actual Statement of Net Assets Statements of Revenues, Expenses and changes in Net Assets ` Required Supplementary Information ` Statements of Cash Flows 12 ---PAGE BREAK--- Government-wide financial statements. The first set of financial statements is the government-wide financial statements which are intended to provide readers with a broad overview of the City’s finances, designed in a manner similar to private-sector business. All of the current year’s assets, liabilities, revenues and expenses are accounted for in these statements regardless of when cash is received or paid. The government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees or charges (business-type activities.) The governmental activities of the City include General Government, Public Safety, Parks and Recreation, Library, Streets, and Airport. The business- type activities of the City include three proprietary funds (enterprise activities): a water system, a wastewater sewer system, and a sanitary garbage collection system. The government-wide financial statements include not only the City itself (known as the primary government), but also component units, which are other governmental units over which the City can exercise influence. BURA is considered a component unit of the City of Blackfoot and the financial information for the agency is presented as a separate column in the government-wide statements. The government-wide financial statements can be found on pages 33-39 of this report. The statement of net assets combines and consolidates the short-term spendable resources of the City’s governmental funds (current assets), the City’s infrastructure (capital assets), and the City’s long-term obligations (liabilities). The difference between those assets and liabilities represent net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the government’s net assets changed during the most recent fiscal year. It is intended to summarize and simplify the user’s analysis of cost of various governmental services, and subsidy to various business-type activities and component units. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the cash flows. Thus, revenue and expenses reported in this statement for some items may result in cash flows in future fiscal periods such as uncollected taxes and earned-but-unused, vacation leave. Fund financial statements. The second set of statements is the fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for a specific purpose. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The fund financial statements provide more detailed information about the City’s most significant funds-not the City as a whole. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. The fund financial statements can be found on pages 36-44 of this report. Governmental funds explain how general government services were financed in the short term, as well as what financial resources remain available for future spending to finance City programs. Because the focus is narrower than that of the government-wide statements, it is useful to compare the information presented for governmental funds in the Fund Financial Statements with similar information presented for governmental activities in the Government-wide Financial Statements. The City maintains 17 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, street fund, ambulance fund, parks & recreation fund, water and wastewater capital funds, and for BURA. Data from the other 11 governmental funds are separately stated in the form of combining statements in the Required Supplemental Information portion of this report. Proprietary funds are used to report short-term and long-term financial information about services for which the City charges customers. The City maintains three proprietary funds. These proprietary funds statements are used to report the same functions presented as business-type activities in the government-wide financial statements 13 ---PAGE BREAK--- but are presented in greater detail. The City uses proprietary funds to account for its water, waste-water sewer, and sanitary garbage collection operations. Fiduciary funds are used to report assets in the Clerk’s Trust Fund that the City administers for various community organizations. The City has the responsibility to ensure that the assets reported in these funds are used for their intended purposes. All of the City’s fiduciary activities are reported in a separate combined statement of fiduciary net assets. The activities in the Clerk’s Trust Fund are excluded from the City’s government-wide financial statements because the City cannot use these assets to finance its operations. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 45-59 of this report. Supplemental Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the financial condition of the City’s Non- Major Governmental Funds and the actual revenues and expenditures compared to the budgeted revenues and expenditures for those same funds. Required supplementary information can be found on page 63-68 of this report. Financial Analysis of the Government-wide Financial Statements City of Blackfoot Net Assets Governmental Activities Business-type Activities Total 2016 2015 2016 2015 2016 2015 Current and other assets $8,639,175 $8,106,912 $5,616,690 $4,670,840 $14,255,865 $12,777,752 Capital assets $15,426,261 $14,937,492 $16,726,396 $15,490,586 $32,152,657 $30,428,078 Total assets $24,065,436 $23,044,404 $22,343,086 $20,161,426 $46,408,522 $43,205,830 Long-term liabilities $2,532,236 $2,129,868 $5,052,876 $4,172,675 $7,585,112 $6,302,543 Other liabilities $1,596,255 $1,826,436 $1,220,631 $899,886 $2,816,886 $2,726,322 Total liabilities $4,128,491 $3,956,304 $6,273,507 $5,072,561 $10,401,998 $9,028,865 Net assets Invested in capital assets, net of related debt $15,426,261 $14,868,494 $11,535,218 $11,241,309 $26,961,479 $26,109,803 Restricted $0 $0 $172,000 $172,000 $172,000 $172,000 Unrestricted $4,510,684 $4,219,606 $4,362,361 $3,675,556 $8,873,045 $7,895,162 Total net assets $19,936,945 $19,088,100 $16,069,579 $15,088,865 $36,006,524 $34,176,965 As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. The City’s total governmental assets exceeded liabilities by over $35.860 million at the close of the most recent fiscal year. 14 ---PAGE BREAK--- The largest portion of the City’s total net assets (89.7%) reflects its investment in capital assets less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; therefore, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay debt must be provided from other sources, since capital assets themselves cannot be used to liquidate these liabilities. Less than 1% of the City’s net assets represent resources that are subject to restrictions as to how they may be used. The total balance of unrestricted net assets may be used to meet the government’s on-going obligations to citizens and creditors. It is important to note that, although the total unrestricted net assets is $8.726 million the net assets of the City’s business-type activities ($4.362 million) may not be used to fund governmental activities. At the end of the current fiscal year, the City is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. Restricted net assets of the City’s business-type activities remained unchanged for the year ended September 30, 2016 and were related to the financing activities of the waste water treatment plant and the water storage tank. Governmental Activities. Revenues for Governmental activities without regard to the activities of the BURA increased the City’s net assets by $1.138 million or 6.1%. Other highlights are as follows: Grant and contribution revenues were up by $137,435 or 29% State Highway User money was up by $134,451 of that $108,972 was HB 312 funds. General government expenses were up by $295,181 or 22.9% partly due to the addition of an HR Director. Public Safety expenses decreased by $134,152 or -2.25% due to implementation of a First Responder Medical Plan and other efficiencies recognized during the course of Firefighter Union Negotiations. 15 ---PAGE BREAK--- City of Blackfoot Change in Net Assets Governmental Activities Business-type Activities Total 2016 2015 2016 2015 2016 2015 Revenues Program revenues: Charges for services $3,722,029 $3,483,612 $6,058,519 $6,047,902 $9,780,548 $9,531,514 Grants and contributions $606,625 $560,380 $207,646 $275,516 $814,271 $835,896 General revenues: Property taxes $4,490,737 $4,389,982 $4,490,737 $4,389,982 Sales and use taxes $523,665 $501,257 $523,665 $501,257 County road and bridge $70,795 $38,639 $70,795 $38,639 State revenue sharing $416,561 $407,089 $416,561 $407,089 State liquor distributions $156,683 $146,425 $156,683 $146,425 State highway user collections $548,505 $414,054 $548,505 $414,054 Sale of assets $88,134 $9,457 $88,134 $9,457 Investment earnings $107,731 $75,098 $71,816 $67,133 $179,547 $142,231 Administrative charges $779,551 $645,518 ($779,551) ($645,518) Transfers $718,515 ($718,515) Total revenues $12,229,531 $10,671,511 $4,839,915 $5,745,033 $17,069,446 $16,416,544 Expenses General government $1,581,898 $1,286,717 $1,581,898 $1,286,717 Public safety (police, fire, ambulance) $5,816,293 $5,950,445 $5,816,293 $5,950,445 Parks and recreation $1,711,096 $1,456,466 $1,711,096 $1,456,466 Library $425,816 $409,537 $425,816 $409,537 Streets $1,460,917 $1,376,009 $1,460,917 $1,376,009 Airport $230,018 $225,553 $230,018 $225,553 BURA $86,206 $130,943 $86,206 $130,943 Interest on long-term debt $68,442 $65,561 $78,249 $85,111 $146,691 $150,672 Water $1,137,865 $1,181,316 $1,137,865 $1,181,316 Sewer $1,803,923 $1,914,170 $1,803,923 $1,914,170 Sanitation $839,164 $832,610 $839,164 $832,610 Total expenses $11,380,686 $10,901,231 $3,859,201 $4,013,207 $15,239,887 $14,914,438 Increase (decrease) in assets before transfers $848,845 ($229,720) $980,714 $1,731,826 $1,829,559 $1,502,106 Transfers between funds $1,000,000 ($1,000,000) Increase (decrease) in net assets $848,845 $770,280 $980,714 $731,826 $1,829,559 $1,502,106 Net assets – October 1, 2015 $19,088,100 $18,317,820 $15,088,865 $14,357,039 $34,176,965 $32,674,859 Net assets – September 30, 2016 $19,936,945 $19,088,100 $16,069,579 $15,088,865 $36,006,524 $34,176,965 16 ---PAGE BREAK--- Business-type Activities. Revenues for business-type activities decreased by $905,118 primarily due to increased efficiency measures installed by our industrial users. In 2016, total business- type expenses decreased by $154,006 over the expenses in 2015. Business-type activities underwent an audit by our Utility Billing Clerk. Discrepancies were rectified and efficiencies were found. Financial Analysis of the Government’s Fund Financial Statements As noted earlier, the City used fund accounting to ensure and demonstrate compliance with finance-related requirements. Governmental funds. The focus of the City’ governmental fund statements provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, the unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of September 30, 2016, the City’s governmental funds reported combined ending fund balances of $6.165 million, which was up by $670,485 (12.2%) from September 30, 2015. The entire amount constitutes the unreserved fund balance, which is available for spending at the government’s discretion. Additionally, BURA reported an ending fund balance of $939,165, all of which is unreserved and available for spending at the discretion of the appointed seven-member Board of Directors. The General Fund is the main operating fund of the City. At September 30, 2016, the unreserved fund balance of the General Fund was $690,567, an increase of $1,404 from the previous year. Major Fund Budgetary Highlights. The General Fund final budget for 2016 had total appropriations of $6,083,944 which was $154 more than in 2015. General Fund actual expenditures totaled $5,684,487 for the year ended September 30, 2016, a 47,477 increase over 2015. Additionally, there was a $505,457 fund balance allocation and transfer to the Parks and Recreation Fund from the General Fund which was $41,544 less than the same transfer in 2015; the majority of which was allocated to maintaining the swimming pool and parks and recreation programs. The Jensen’s Grove Water Recharge Project and the sale of two City-owned parks contributed to the decrease in the amount of funds that were needed to be transferred from the General Fund. 17 ---PAGE BREAK--- During fiscal year 2016, the City Council amended the budget to appropriate funds to cover additional costs at the airport and in recreation. The majority of these additional costs were paid for by grant money that was not in the original budget appropriations ordinance. According to state statute the budget must be amended to receive these funds and obtain the authority to spend them. Proprietary funds. The City’s proprietary fund statements provide much of the same information found in the government-wide financial statements, but in more detail. Unrestricted net assets at the end of the year amounted to $7.913 million for water, $12.791million for sewer, and $1.257 million for sanitation. Capital Assets and Debt Administration Capital assets. As of September 30, 2016, the City’s investment in capital assets for governmental and business-type activities was $32.152 million (net of accumulated depreciation). The investment in capital assets includes land, buildings, public service delivery systems and improvements, machinery and equipment, park facilities, roads, curbs and gutters, streets and sidewalks, and drainage systems. City of Blackfoot Capital Assets (net of depreciation) Governmental activities Business-type activities Total 2016 2015 2016 2015 2016 2015 Land, buildings, & distribution systems $3,306,959 $2,603,279 $471,229 $471,229 $3,778,188 $3,074,508 Vehicles and rolling stock $700,513 $779,446 $541,296 $572,173 $1,241,809 $1,351,619 Furniture and equipment $902,978 $917,681 $466,679 $110,734 $1,369,657 $1,028,415 Infrastructure $10,515,811 $10,637,086 $15,247,192 $14,336,450 $25,763,003 $24,973,536 Total $15,426,261 $14,937,492 $16,726,396 $15,490,586 $32,152,657 $30,428,078 Long-term debt. As of September 30, 2016, the City Primary Government had $4.470 million of long-term bonds and loans outstanding. The City is within all of its legal debt limitations. Additional information regarding the City’s long-term debt can be found in notes 6-10 on pages 52-54 of this report. City of Blackfoot General Obligation and Revenue Bonds Outstanding Governmental activities Business-type activities Total 2016 2015 2016 2015 2016 2015 General obligation bonds, notes and capital leases $0 $0 $3,221,360 $3,394,277 $3,221,360 $3,394,277 Revenue bonds $0 $0 $650,000 $855,000 $650,000 $855,000 DEQ Loan $0 $0 $868,646 $0 $868,646 $0 Total $0 $0 $4,740,006 $4,249,277 $4,740,006 $4,249,277 18 ---PAGE BREAK--- Economic Factors and Next Year’s Budgets and Rates As 2016 continues to challenge small municipal governments like the City of Blackfoot, the City’s leadership, in collaboration with the Treasurer’s Office are taking action now to plan proactive strategies that will provide protection from market turbulence while positioning the City for possible growth potential and better times ahead. By taking advantage of the increased market value of taxable property within the City, in an effort to stabilize shrinking cash balances, the City leadership was able to increase cash flow without increasing the property tax levy rate for the 2015-2016 budget cycle. The City leadership will continue to look for ways to increase efficiency and create effective operating and capital budgets for the coming fiscal year. Request for information This financial report is designed to provide a general overview of the City’s finances to our taxpayers, customers, investors, and creditors and to show accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Holly Powell, City Treasurer, 157 North Broadway Street, Blackfoot, Idaho, 83221. 19 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF NET POSITION SEPTEMBER 30, 2016 Total Governmental Business-type Primary ASSETS: Activities Activities Government Current Assets: Cash and investments $6,127,944 $4,038,277 $10,166,221 Property taxes receivable 210,090 210,090 Other receivables 409,909 452,002 861,911 Utility accounts receivable, net 573,274 573,274 Golf Inventory 47,792 47,792 Non-current Assets: Restricted cash 172,000 172,000 Capital assets, net 15,426,261 16,726,396 32,152,657 Total assets 22,221,996 21,961,949 44,183,945 DEFERRED OUTFLOWS: Deferred PERSI outflow of resources 884,735 381,137 1,265,872 LIABILITIES: Current liabilities: Accounts payable 439,612 672,118 1,111,730 Accrued leave 354,693 70,642 425,335 Note payable EPA due within one year 176,121 176,121 Revenue bonds due within one year 215,000 215,000 Non-current liabilities: DEQ Loan WW 1501 868,646 868,646 Note payable EPA due beyond one year 3,045,239 3,045,239 Revenue bonds due beyond one year 435,000 435,000 City's share of unfunded PERSI liability 1,792,236 703,991 2,496,227 Total liabilities 2,586,541 6,186,757 8,773,298 DEFERRED OUTFLOWS: Deferred PERSI inflow of resources 729,669 86,750 816,419 Total net position $19,790,521 $16,069,579 $35,860,100 The accompanying notes are an integral part of these statements. NET POSITION: Net investment in capital assets 15,426,261 11,535,218 26,961,479 Restricted for debt service 172,000 172,000 Unrestricted 4,364,260 4,362,361 8,726,621 20 ---PAGE BREAK--- Totals Blackfoot Urban Reporting Renewal Agency Entity $951,260 $11,117,481 7,445 217,535 861,911 573,274 47,792 172,000 32,152,657 958,705 45,142,650 0 0 12,281 1,124,011 425,335 176,121 60,000 275,000 868,646 3,045,239 740,000 1,175,000 2,496,227 812,281 9,585,579 0 0 26,961,479 172,000 146,424 8,873,045 $146,424 $36,006,524 The accompanying notes are an integral part of these statements. 21 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2016 Program Revenues Charges for Grants and Expenses Services Contributions Primary Government: Governmental Activities: General government $1,581,898 $260,970 Public safety 5,816,293 2,280,711 $252,368 Parks and recreation 1,711,096 785,699 Library 425,816 244,270 720 Highways and streets 1,460,917 91,179 Airport 230,018 59,075 353,537 Interest - on long-term debt 6,444 Total governmental activities 11,232,482 3,721,904 606,625 Business-type Activities: Water 1,137,865 1,932,672 Sewer 1,803,923 2,897,772 207,646 Sanitation 839,164 1,228,075 Interest - on long-term debt 78,249 Total business-type activities 3,859,201 6,058,519 207,646 Total Primary Government $15,091,683 $9,780,423 $814,271 Component Units: Interest on long-term debt $61,998 Blackfoot Urban Renewal Agency 86,206 $125 $148,204 $125 $0 General Revenues: Property taxes Sales and use tax County road and bridge State of Idaho revenue sharing State of Idaho liquor receipts State highway user collections Investment earnings Sale of assets Admin charges Transfers Health deductible charges Property transfer - BURA Total general revenues and transfers Change in net position Net Position October 1, 2015 Net Position September 30, 2016 The accompanying notes are an integral part of these statements. 22 ---PAGE BREAK--- Net (Expense) Revenue and Changes in Net Position Primary Government Blackfoot Governmental Business-type Urban Renewal Activities Activities Total Agency ($1,320,928) ($1,320,928) (3,283,214) (3,283,214) (925,397) (925,397) (180,826) (180,826) (1,369,738) (1,369,738) 182,594 182,594 (6,444) (6,444) (6,903,953) (6,903,953) $794,807 794,807 1,301,495 1,301,495 388,911 388,911 (78,249) (78,249) 2,406,964 2,406,964 (4,496,989) ($61,998) (86,081) 3,931,309 3,931,309 559,428 523,665 523,665 70,795 70,795 416,561 416,561 156,683 156,683 548,505 548,505 105,122 71,816 176,938 2,609 88,134 88,134 779,551 (779,551) 0 700,000 (700,000) 0 18,515 (18,515) 0 703,926 703,926 (703,926) 8,042,766 (1,426,250) 6,616,516 (289,968) 1,138,813 980,714 2,119,527 (289,968) 18,651,708 15,088,865 33,740,573 436,392 $19,790,521 $16,069,579 $35,860,100 $146,424 The accompanying notes are an integral part of these statements. 23 ---PAGE BREAK--- CITY OF BLACKFOOT BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2016 Parks and General Street Ambulance Recreation ASSETS: Fund Fund Fund Fund Cash and investments $201,684 $463,903 $35,466 Receivables: Property taxes 169,324 9,025 11,440 Bingham County 120,455 11,513 7,728 State of Idaho 113,067 137,490 Other 969 2,019 Grants receivable Groveland Water and Sewer District 3,572 Golf clubhouse inventory 47,792 Due from other funds 473,317 Total assets $1,082,388 $621,931 $0 $104,445 LIABILITIES: Accounts payable $237,767 $26,670 $50,162 $76,397 Tournament credits 17,656 Due to other funds 407,742 Deferred revenue 154,054 7,701 10,392 Total liabilities 391,821 34,371 457,904 104,445 FUND BALANCE: Assigned - Capital Improvements Assigned - Connection Fees Committed 587,560 Unassigned 690,567 (457,904) Total fund balance 690,567 587,560 (457,904) 0 Total liabilities and fund balance $1,082,388 $621,931 $0 $104,445 The accompanying notes are an integral part of these statements. 24 ---PAGE BREAK--- Water Wastewater Other Total Blackfoot Capital Capital Governmental Primary Urban Renewal Fund Fund Funds Governmental Agency $2,097,965 $1,197,225 $2,131,701 $6,127,944 $951,260 20,301 210,090 7,445 13,096 152,792 250,557 2,988 0 3,572 47,792 473,317 $2,097,965 $1,197,225 $2,165,098 $7,269,052 $958,705 $30,960 $421,956 $12,281 $17,656 65,575 473,317 18,450 190,597 7,259 $0 $0 114,985 1,103,526 19,540 2,097,965 1,107,040 1,469,652 4,674,657 90,185 90,185 580,461 1,168,021 939,165 232,663 2,097,965 1,197,225 2,050,113 6,165,526 939,165 $2,097,965 $1,197,225 $2,165,098 $7,269,052 $958,705 The accompanying notes are an integral part of these statements. 25 ---PAGE BREAK--- CITY OF BLACKFOOT Total Blackfoot Primary Urban Renewal Government Agency Total Fund Balance $6,165,526 $939,165 Total net assets reported on the Statement of Net Position is different from fund balance reported on the Balance Sheet because: Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in the governmental funds. Cost of capital assets 38,721,025 Depreciation expense to date (23,294,764) 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. 190,597 7,259 Deferred amounts are not current financial resources/uses. Therefore, they are not reported in the governmental funds. Deferred PERSI outflows 884,735 Deferred PERSI inflows (729,669) 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 (354,693) Equipment leases payable Revenue bonds payable (800,000) City's share of unfunded PERSI liability (1,792,236) Change in Net Position $19,790,521 $146,424 RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION 26 ---PAGE BREAK--- 27 THIS PAGE INTENTIONALLY LEFT BLANK ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2016 Parks and General Street Ambulance Recreation REVENUE: Fund Fund Fund Fund Property taxes $3,119,113 $213,596 $210,558 Sales and use taxes 414,707 31,938 28,234 Franchise taxes 116,581 87,239 Licenses and fees 75,092 $701,696 752,558 County shared 70,795 546,769 20,000 State of Idaho 573,244 548,505 Blackfoot - Snake River Fire District 773,574 School District Resource Officer 168,756 Grants and contributions 4,463 55,017 172,888 Interest 69,868 13,736 Administrative charges 759,551 20,000 Miscellaneous 114,995 3,940 50,108 Total revenue 6,189,944 969,749 1,303,482 1,254,346 EXPENDITURES: Current operating General government 1,180,729 Public safety 4,503,758 1,322,258 Parks and recreation 1,758,399 Library Highways and streets 1,045,524 Airport Capital Outlay Debt service - principal Debt service - interest Total expenditures 5,684,487 1,045,524 1,322,258 1,758,399 EXCESS REVENUE (EXPENDITURES): 505,457 (75,775) (18,776) (504,053) OTHER FINANCING SOURCES (USES): Operating transfers (to) from other funds (504,053) (20,000) 504,053 NET CHANGE IN FUND BALANCES: 1,404 (75,775) (38,776) 0 FUND BALANCE - BEGINNING: 689,163 663,335 (419,128) 0 FUND BALANCE - ENDING: $690,567 $587,560 ($457,904) $0 The accompanying notes are an integral part of these statements. 28 ---PAGE BREAK--- Water Wastewater Other Total Blackfoot Capital Capital Governmental Primary Urban Renewal Fund Fund Funds Government Agency $366,654 $3,909,921 $561,623 48,786 523,665 203,820 453,212 1,982,558 637,564 1,121,749 773,574 168,756 354,257 586,625 21,518 105,122 2,609 779,551 62,343 231,386 125 $0 $0 1,306,770 11,024,291 564,357 2,035 2,775 356,822 1,542,361 15,661 5,826,016 1,758,399 426,853 426,853 1,045,524 454,653 454,653 774,471 55,000 61,998 2,035 2,775 1,238,328 11,053,806 907,130 (2,035) (2,775) 68,442 (29,515) (342,773) 300,000 200,000 220,000 700,000 0 297,965 197,225 288,442 670,485 (342,773) 1,800,000 1,000,000 1,761,671 5,495,041 1,281,938 $2,097,965 $1,197,225 $2,050,113 $6,165,526 $939,165 The accompanying notes are an integral part of these statements. 29 ---PAGE BREAK--- CITY OF BLACKFOOT RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2016 Total Blackfoot Primary Urban Renewal Government Agency Net Change in Fund Balance -Total Governmental Funds $670,485 ($342,773) 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: 21,388 (2,195) 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: 792,854 This is the amount of current year depreciation: (1,008,011) This is the amount of new assets transferred from BURA: 703,926 Long-term liabilities are not recorded in Governmental funds. This is the amount of current year capital lease payments: 68,998 This is the amount of current year bond payment payment: 55,000 Liability for personal leave days are not recorded in Governmental funds. This is the increase in leave during the year: (52,069) 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 expense: (58,758) Change in Net Position $1,138,813 ($289,968) The accompanying notes are an integral part of these statements. 30 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2016 Totals Water Sewer Sanitation (Memorandum ASSETS: Fund Fund Fund Only) Current Assets: Cash and investments $1,959,734 $1,296,647 $781,896 $4,038,277 Utility accounts receivable 195,457 267,467 121,150 584,074 Less allowance for doubtful accounts (3,600) (3,600) (3,600) (10,800) Grants receivable 452,002 452,002 Non-current Assets: Property and equipment 10,911,582 21,196,393 1,638,948 33,746,923 Less accumulated depreciation (5,149,708) (10,589,615) (1,281,204) (17,020,527) Restricted cash 172,000 172,000 Total assets 7,913,465 12,791,294 1,257,190 21,961,949 DEFERRED OUTFLOWS: Deferred PERSI outflow of resources 113,798 177,926 89,413 381,137 LIABILITIES: Current liabilities: Accrued leave 25,481 31,988 13,173 70,642 Accounts payable 67,191 509,132 15,092 591,415 Customer deposits 80,703 80,703 Bonds payable 215,000 215,000 Notes payable 176,121 176,121 Capital leases payable 0 Non-current liabilities: Bonds payable 435,000 435,000 Notes payable 3,045,239 3,045,239 DEQ loan WW 1501 868,646 868,646 Fund's share of unfunded PERSI liability 212,662 327,222 164,107 703,991 Total liabilities 3,607,397 2,386,988 192,372 6,186,757 DEFERRED INFLOWS: Deferred PERSI inflow of resources 34,149 35,744 16,857 86,750 NET POSITION: Net investment in capital assets 2,540,514 8,636,960 357,744 11,535,218 Committed 1,845,203 1,737,528 779,630 4,362,361 Restricted for debt retirement 172,000 172,000 Net position $4,385,717 $10,546,488 $1,137,374 $16,069,579 The accompanying notes are an integral part of these statements. 31 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2016 Totals Water Sewer Sanitation (Memorandum OPERATING REVENUE: Fund Fund Fund Only) Service fees $1,904,234 $2,874,666 $1,227,969 $6,006,869 Other 28,438 23,106 106 51,650 Total revenue 1,932,672 2,897,772 1,228,075 6,058,519 OPERATING EXPENSES: Salaries 286,060 485,451 241,092 1,012,603 Benefits 217,643 280,335 143,249 641,227 Clothing 3,196 7,318 2,005 12,519 Travel and training 1,570 4,320 2,410 8,300 Office supplies 5,739 6,014 222 11,975 Maintenance 45,615 110,794 56,427 212,836 Utilities and telephone 189,662 188,684 4,053 382,399 Fuel 10,269 24,481 34,000 68,750 Professional services 46,973 24,301 71,274 Department supplies and other 45,203 96,064 3,259 144,526 Insurance 18,517 29,889 10,438 58,844 Depreciation 213,689 435,472 71,661 720,822 Administrative services 220,121 391,535 167,895 779,551 Lab & DEQ fees 24,273 48,010 72,283 Lift stations 41,214 41,214 County services 267,734 267,734 Constructional materials 31,019 23,440 54,459 Bad debt write-offs 5,492 5,748 6,462 17,702 Total expenses 1,365,041 2,203,070 1,010,907 4,579,018 OPERATING INCOME (LOSS): 567,631 694,702 217,168 1,479,501 NON-OPERATING REVENUES (EXPENSES): Interest on investments 25,598 30,607 15,611 71,816 Federal and State grants 207,646 207,646 Debt service-interest (58,802) (19,447) (78,249) INCOME (LOSS) BEFORE CONTRIBUTIONS & TRANSFERS: 534,427 913,508 232,779 1,680,714 Transfers (to) from other funds (300,000) (200,000) (200,000) (700,000) CHANGE IN NET POSITION: 234,427 713,508 32,779 980,714 NET POSITION - BEGINNING: 4,151,290 9,832,980 1,104,595 15,088,865 NET POSITION - ENDING: $4,385,717 $10,546,488 $1,137,374 $16,069,579 The accompanying notes are an integral part of these statements. 32 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2016 Totals Water Sewer Sanitation (Memorandum Fund Fund Fund Only) CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from City patrons $1,949,845 $2,897,375 $1,228,246 $6,075,466 Payments to suppliers (598,363) (490,262) (541,982) (1,630,607) Payments to employees (286,686) (470,487) (233,133) (990,306) City administrative charges (220,121) (391,535) (167,895) (779,551) Net cash provided by operating activities 844,675 1,545,091 285,236 2,675,002 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of fixed assets (272,910) (1,683,722) (1,956,632) Grants 207,646 207,646 Transfer to capital funds (300,000) (200,000) (200,000) (700,000) State revolving loan payments (231,719) (231,719) DEQ loan advance 430,024 430,024 Bond payments (224,447) (224,447) Net cash applied to financing activities (804,629) (1,470,499) (200,000) (2,475,128) CASH FLOWS FROM INVESTING ACTIVITIES: Interest earned on investments 25,598 30,607 15,611 71,816 NET INCREASE (DECREASE) IN CASH 65,644 105,199 100,847 271,690 CASH AT BEGINNING OF YEAR: 1,894,090 1,191,448 681,049 3,766,587 CASH AT END OF YEAR: $1,959,734 $1,296,647 $781,896 $4,038,277 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET INCOME: Net income (loss) $234,427 $713,508 $32,779 $980,714 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation 213,689 435,472 71,661 720,822 Net PERSI plan expense 14,198 24,161 12,265 50,624 Investment income (25,598) (30,607) (15,611) (71,816) Debt service interest 58,802 19,447 78,249 Grants (207,646) (207,646) Transfers 300,000 200,000 200,000 700,000 (Increase) decrease in accounts receivable (3,074) 5,351 6,633 8,910 Increase (decrease) in accounts payable 52,231 385,405 (22,491) 415,145 Net cash provided by operating activities $844,675 $1,545,091 $285,236 $2,675,002 The accompanying notes are an integral part of these statements. 33 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF NET POSITION FIDUCIARY FUNDS - CLERK'S TRUST FUND SEPTEMBER 30, 2016 ASSETS: Cash and investments $35,056 LIABILITIES: Customer deposits 3,798 Blackfoot Youth Committee (14,075) Blackfoot Youth - BMX 500 Pride Days 798 Blackfoot Cultural Diversity 408 Baseball fields 1,662 Clerk's Trust misc (45) Flag donations 56 We The People 100 Music In The Park (114) Mayor's scholarship 15,717 Elections 2,437 Ground water recharge 5,000 Round-up Program (2,973) Blackfoot Animal Shelter 2,414 Braden/Tracen Project 871 Animal Shelter vaccinations 300 Animal Shelter adoptions 16,669 Animal Shelter County 20 Patriot Park statue donations 20 Friends of the Library 1,493 Total liabilities 35,056 NET POSITION: $0 The accompanying notes are an integral part of these statements. 34 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2016 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 an improvements in the new construction areas. 35 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 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. 36 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 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 net assets as presented in these Statements to the Net Assets 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. 37 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 B. BASIS OF ACCOUNTING/MEASUREMENT FOCUS – (CONTINUED) Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities are included on the Statement of Net Position. Revenues are recognized when they are earned and expenses are recognized when the liability is incurred. Fiduciary Fund Financial Statements Fiduciary Fund Financial Statements include a Statement of Net Position. The City’s fiduciary funds represent Agency Funds, which are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The City reports the following major governmental funds: The General Fund is the City’s primary operating fund. It accounts for all financial activities of the City except those required to be accounted for in another fund. The Street Fund is used to account for the operation of the Street Department. Funding is provided by local property taxes and the City’s share of State highway taxes. The Ambulance fund is used to account for the activities of the City’s paramedics. Funding is provided through user charges and cost sharing with Bingham County. The Parks and Recreation Fund include the City’s golf course, swimming pool, and City parks. Funding is provided by local property taxes and user charges. The Water Capital Fund is used to account for money set aside for future construction projects. The Wastewater Capital Fund is used to account for money set aside for future construction projects. 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. 38 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 C. BUDGETING Budgets are adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets are adopted for the general, special revenue, and debt service funds. All annual appropriations lapse at fiscal year end. Project-length financial plans are adopted for all capital project funds. In July and August of each year the various department heads submit their budget requests to the Mayor and Council. Budget meetings are then held to determine what funds will be available for expenditure in the new fiscal year. The budget requests are reduced to match the available revenue and a proposed budget is approved by the Mayor and Council. The proposed budget is published in the local paper and taxpayers are invited to attend a public hearing to express their views concerning the proposed budget. After this public meeting, the budget is approved and is legally enacted through the passage of an ordinance. D. ENCUMBRANCES Encumbrances are not liabilities and they are not recorded as expenditures until receipt of material or services. For budgetary purposes, appropriations lapse at year-end and are re- budgeted the following year. The City does not reserve fund balance for outstanding encumbrances at year-end. E. CASH AND INVESTMENTS The City pools idle cash from all funds for the purpose of increasing income through investment activities. The City considers investments with an original maturity of three months or less to be cash equivalent. The City invests idle cash in the Idaho State Treasurer’s local government investment pool. The deposits are stated at cash which approximates market. The State Treasurer combines deposits from all government entities in Idaho, who participate in the pool, and purchases the following types of investments: Local Certificates of Deposit, Repurchase Agreements, and U.S. Government Securities. The Entities participating in the pool own a percentage of each investment held. This percentage is calculated by dividing the individual entity’s deposits by the total deposits held in the pool. The purpose of this is to: increase overall the rate of return, reduce risk of default, and place each entity under the FDIC and FSLIC limits of $250,000. 39 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 E. CASH AND INVESTMENTS – (CONTINUED) Under Idaho Code Section 67-1210, the City is authorized to invest surplus or idle moneys in investments subject to the following standards, guidelines and restrictions: a. City moneys shall not be made in any depository of financial institution in an amount, which exceeds ten (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 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 Authority and the Idaho Water Resource Board. These investments shall not extend beyond seven days. 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 District’s of the State of Idaho. i. Time deposits 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. 40 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS –(CONTINUED) SEPTEMBER 30, 2016 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 Savings and Loan 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. F. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. G. INVENTORY Inventory consists of Golf Clubhouse merchandise and apparel purchased for resale. Inventory is valued at cost on a first in first out basis. H. CAPITAL ASSETS Capital assets, which include property, plant, equipment, and infrastructure (roadways), are defined by the City as any asset with an individual cost of more than $5000, 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. 41 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 H. CAPITAL ASSETS – (CONTINUED) In June 1999, the Governmental Accounting Standards Board (GASB) issued Statement No. 34, which requires the inclusion of infrastructure in local government’s basic financial statements. Infrastructure includes the streets, the water purification and distribution system, the sewer collection and treatment system, and all land and buildings used by the City. The City has elected to use the Basic Approach as defined by Statement No. 34 for asset reporting. Historical cost records do not exist for all of the City’s assets dating back to 1901. For those assets where actual costs records could not be located, the City estimated costs using standard unit costs appropriate for acquisition date. Accumulated depreciation was computed based on the life of the assets. Book value is computed by deducting the accumulated depreciation from the original cost. I. ACCUMULATED COMPENSATED ABSENCES It is the City’s policy to permit employees to accumulate unused vacation and sick leave, some of which will be paid to employees upon their separation from service. This amount is included as a liability in the Government-wide Statements and on The Proprietary Fund Statements. J. DEFERRED OUTFLOWS/INFLOWS OF RESOURCES In addition to assets, the Statement of Financial Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and so it will not be recognized as an outflow of resources (expenditure) until then. The City does have items that qualify for reporting in this category. They are the deferred outflows of resources related to the PERSI pension base plan. In addition to liabilities, the Statement of Financial Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The City has one type of these items, which arise 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. 42 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 J. DEFERRED OUTFLOWS/INFLOWS OF RESOURCES – (CONTINUED) The other item (reported in the Government-wide Statements) is an amount related to the pension base plan. See note 19 for details on the pension plan. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. K. FUND EQUITY Governmental fund equity is classified as fund balance. Fund balance is further classified as non-spendable, restricted, committed, assigned, or unassigned. Restrictions of the fund balance indicate portions that are legally or contractually segregated for a specific future use. Non-spendable fund balances are required to be maintained intact. Committed portions represent amounts that can only be used for specific purposes pursuant to formal action of the City Council. .Assigned portions represent amounts set aside for specific purposes. Remaining fund balances are reported as unassigned. When both restricted and unrestricted fund balances are available for use, it is the City’s policy to use restricted fund balance first, then unrestricted fund balance. Furthermore, committed fund balances are reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of those restricted fund balance classifications can be used. L. FUND BALANCE FLOW ASSUMPTIONS Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. 43 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 M. NET POSITION FLOW ASSUMPTIONS Net position represents the difference between assets and liabilities. Net investment in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or 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 Base Plan’s fiduciary net position have been determined on the same basis as they are reported by the Base Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 2. PROPERTY TAX The City’s property taxes, levied by the second Monday of September on assessed valuation as of June 30, are payable in two equal installments for real property due December 20, and June 20. Personal taxes are payable on December 20. Assessed valuations are established by the County Assessor’s office except for utility property which is established by the State and is currently at 100% of market value. Delinquent payments bear simple interest of 1% per month plus a 2% penalty. Due to the small amount of taxes not collected no adjustment is made for delinquent taxes. Uncollected property taxes are recorded as receivable at year-end, with deferred revenue representing that portion which will not be collected within 60 days after year-end. 44 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO NOTES TO FINANCIAL STATEMENTS - (CONTINUED) SEPTEMBER 30, 2016 3. CASH AND INVESTMENTS Interest rate risk is the risk that changes in market interest rates will adversely impact the fair value of an investment. Investments that are fixed for longer periods are likely to experience greater variability in their fair values due to changes in interest rates. At September 30, 2016 the City is not subject to interest rate risk as all investments are held in FDIC insured bank deposits and the State investment pool, which has short maturities. Custodial risk for deposits is the risk that, in the event of the failure of a depository financial institution, the City would not be able to recover its deposits. The City does not have an investment policy for custodial risk. Credit risk is the risk that an insurer of debt securities or another counterparty to an investment will not fulfill its obligation. The City’s policy is to only invest in FDIC insured deposits and the State of Idaho Local Government Investment Pool. Concentration of credit risk occurs when investments are concentrated in one issuer. The City has no investment policy limiting the amount it may invest in any one issuer. At September 30, 2016, 64% of the City’s investments were in the State of Idaho Local Governments Investment Pool. Interest rate risk is the risk that changes in market interest rates will adversely impact the fair value of an investment. Investments that are fixed for longer periods are likely to experience greater variability in their fair values due to changes in interest rates. At September 30, 2016 the City is not subject to interest rate risk as all investments are held in FDIC insured bank deposits and the State investment pool, which has short maturities 4. RESTRICTED CASH As per terms of the Bond issues, the City has agreed to deposit in a separate account an amount equal to one-tenth of an annual payment of principal and interest every year for ten years. They will then maintain that amount in reserve until the Bonds are retired. As of September 30, 2016 the required reserve amount is $160,754. The City is in compliance with this Bond requirement. 45 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 5. RECEIVABLES The following is a detail of accounts receivable: General Street Park Non- major Fund Fund Fund Funds Total Bingham County: Property tax penalty $2,152 $235 $150 $266 $2,803 Ag exemption 261 26 18 31 336 Sales tax 108,338 10,992 7,560 12,799 139,689 Motor vehicle fine 9,704 9,704 Road & Bridge tax 260 260 120,455 11,513 7,728 13,096 152,792 State of Idaho: Revenue sharing 113,067 113,067 Highway user tax 137,490 137,490 113,067 137,490 0 0 250,557 Other receivables: Groveland Water & Sewer District 3,572 3,572 Golf and park fees 2,019 2,019 miscellaneous 969 969 4,541 0 2,019 0 6,560 Total Receivables $238,063 $149,003 $9,747 $13,096 $409,909 6. 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 Assets. 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. 46 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 6. CAPITAL ASSETS – (CONTINUED) Capital assets of the City for the year ended September 30, 2016 are as follows: Assets Accumulated Depreciation Balance Balance Balance Balance Governmental Activities: 10/1/2015 Change 9/30/2016 10/1/2015 Change 9/30/2016 Land $1,048,240 $1,048,240 Buildings 6,541,875 $948,310 7,490,185 $4,986,836 $244,630 $5,231,466 Infrastructure 23,269,039 361,245 23,630,284 12,631,953 482,520 13,114,473 Vehicles & Rolling Stock 4,248,749 118,150 4,366,899 3,469,303 197,083 3,666,386 Furniture & Equipment 2,116,342 69,075 2,185,417 1,198,661 83,778 1,282,439 $37,224,245 $862,506 $38,721,025 $22,286,753 $1,008,011 $23,294,764 Business - type Activities: Land $471,229 $471,229 Distributions System 28,125,953 $1,494,137 29,620,090 $13,789,500 $583,395 $14,372,895 Vehicles & Rolling Stock 2,398,240 77,268 2,475,508 1,826,067 108,145 1,934,212 Furniture & Equipment 794,871 385,227 1,180,098 684,137 29,282 713,419 $31,790,293 $1,956,632 $33,746,925 $16,299,704 $720,822 $17,020,526 For the fiscal year ended September 30, 2016, depreciation expense on capital assets was charged to the governmental functions in the City-wide Statements as follows: General government $38,966 Public safety 168,326 Street 510,794 Airport 142,690 Library 1,088 Parks 146,147 $1,008,011 47 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 7. 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 $116,526 $16,489 $24,088 $51,440 $17,995 $226,538 Wages payable 116,957 10,181 26,074 24,957 12,965 191,134 Sales tax payable 3,453 3,453 Customer deposits 20,674 20,674 Withholding 14,807 14,807 Golf tournament credits 17,656 17,656 Work comp (34,650) (34,650) $237,767 $26,670 $50,162 $94,053 $30,960 $439,612 Water Sewer Sanitation Fund Fund Fund Total Vendors payable $56,098 $489,388 $6,053 $551,539 Wages payable 11,093 19,744 9,039 39,876 $67,191 $509,132 $15,092 $591,415 8. 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. 9. INTERFUND RECEIVABLES AND PAYABLES Due to and due from other funds represent loans from one City fund to another to cover temporary cash shortages. Due From Due To General Fund $473,317 Ambulance Fund $407,742 Fire and Ambulance Replacement Fund 65,575 48 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 10. DEQ REVOLVING LOAN During 2012, the City completed a water facilities upgrade. The project will be funded by a loan from the US Department of Environmental Quality Idaho Revolving Loan Fund. As of September 30, 2016, the annual requirements to amortize the debt including interest are as follows: DEQ Loan Principal Interest Interest Total Debt Date Amount Rate Amount Service 3/11/2017 $87,904.46 1.75% $27,955.23 $115,859.69 9/11/2017 88,216.60 1.75% 27,643.09 115,859.69 3/11/2018 89,432.86 1.75% 26,426.83 115,859.69 9/11/2018 89,783.81 1.75% 26,075.88 115,859.69 3/11/2019 90,988.11 1.75% 24,871.58 115,859.69 9/11/2019 91,378.57 1.75% 24,481.12 115,859.69 3/11/2020 92,442.04 1.75% 23,417.65 115,859.69 9/11/2020 93,000.22 1.75% 22,859.47 115,859.69 3/11/2021 94,179.99 1.75% 21,679.70 115,859.69 9/11/2021 94,651.51 1.75% 21,208.18 115,859.69 3/11/2022 95,818.69 1.75% 20,041.00 115,859.69 9/11/2022 96,331.82 1.75% 19,527.87 115,859.69 3/11/2023 97,486.18 1.75% 18,373.51 115,859.69 9/11/2023 98,041.67 1.75% 17,818.02 115,859.69 3/11/2024 99,090.85 1.75% 16,768.84 115,859.69 9/11/2024 99,780.75 1.75% 16,078.94 115,859.69 3/11/2025 100,908.81 1.75% 14,950.88 115,859.69 9/11/2025 101,551.22 1.75% 14,308.47 115,859.69 3/11/2026 102,665.78 1.75% 13,193.91 115,859.69 9/11/2026 103,352.80 1.75% 12,506.89 115,859.69 3/11/2027 104,453.63 1.75% 11,406.06 115,859.69 9/11/2027 105,186.06 1.75% 10,673.63 115,859.69 3/11/2028 106,219.93 1.75% 9,639.76 115,859.69 9/11/2028 107,051.06 1.75% 8,808.63 115,859.69 3/11/2029 108,123.68 1.75% 7,736.01 115,859.69 9/11/2029 108,949.32 1.75% 6,910.37 115,859.69 3/11/2030 110,007.46 1.75% 5,852.23 115,859.69 9/11/2030 110,880.93 1.75% 4,978.76 115,859.69 3/11/2031 111,924.34 1.75% 3,935.35 115,859.69 9/11/2031 112,846.50 1.75% 3,013.19 115,859.69 3/11/2032 113,863.96 1.75% 1,995.73 115,859.69 9/11/2032 114,846.27 1.75% 1,013.16 115,859.69 $3,221,359.88 $486,149.94 $3,707,510.08 49 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 11. SEWER REFUNDING BONDS During 2012, the City of Blackfoot issued Sewer Revenue Refunding Bonds. Bond proceeds were used to pay off the 1993 DEQ loans and the 2000 COPS debt. These bonds are payable from pledged sewer revenues of the city. The bonds are not payable from any other revenues or assets of the City. The annual requirements to amortize the debt including interest are as follows: Refunding Series 2012 Principal Interest Interest Total Debt Date Amount Rate Amount Service 3/1/2017 $7,125 $7,125 9/1/2017 $215,000 2.00% 7,125 222,125 3/1/2018 4,350 4,350 9/1/2018 215,000 2.00% 4,350 219,350 3/1/2019 2,200 2,200 9/1/2019 220,000 2.00% 2,200 222,200 $650,000 $27,350 $677,350 12. DEQ WASTE WATER LOAN # WW1501 During 2015, the City began an estimated $3,579,000 dollar sewer system upgrade. The project is funded with an Idaho Community Development Block grant of $500,000 and a DEQ loan of $2,900,000. As of September 30, 2016, $868,646 has been advanced by DEQ. 13. LEGAL DEBT MARGIN The City is subject to a statutory limitation by the State of Idaho for indebtedness payable principally from property taxes. The limit is 2% of market value per the years tax roll. The City’s outstanding general obligation debt is under the legal limit. 14. EXCESS OF EXPENDITURES OVER APPROPRIATIONS The Water Capital Fund exceed budget by $2,035 The Wastewater Capital Fund exceeded budget by $2,775 The Cemetery Fund Exceeded budget by $2,035 The Health Care Reserve Fund exceeded budget by $154,660. 50 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 15. 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. 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, 2017 $60,000.00 7.250% $29,000.00 $89,000.00 September 1, 2017 26,825.00 26,825.00 March 1, 2018 60,000.00 7.250% 26,825.00 86,825.00 September 1, 2018 24,650.00 24,650.00 March 1, 2019 65,000.00 7.250% 24,650.00 89,650.00 September 1, 2019 22,293.75 22,293.75 March 1, 2020 70,000.00 7.250% 22,293.75 92,293.75 September 1, 2020 19,756.25 19,756.25 March 1, 2021 75,000.00 7.250% 19,756.25 94,756.25 September 1, 2021 17,037.50 17,037.50 March 1, 2022 80,000.00 7.250% 17,037.50 97,037.50 September 1, 2022 14,137.50 14,137.50 March 1, 2023 85,000.00 7.250% 14,137.50 99,137.50 September 1, 2023 11,056.25 11,056.25 March 1, 2024 95,000.00 7.250% 11,056.25 106,056.25 September 1, 2024 7,612.50 7,612.50 March 1, 2025 100,000.00 7.250% 7,612.50 107,612.50 September 1, 2025 3,987.50 3,987.50 March 1, 2026 110,000.00 7.250% 3,987.50 113,987.50 $800,000.00 $323,712.50 $1,123,712.50 51 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 16. LONG-TERM DEBT The following is a summary of the City’s long-term debt transactions for the year ended September 30, 2016: Balance Incurred Satisfied Balance Amounts Due 10/1/2015 or issued or matured 9/30/2016 within one year Governmental Activities: Compensated absences $302,624 $52,069 $354,693 Lease purchase contracts 68,997 ($68,997) 0 $371,621 $52,069 ($68,997) $354,693 $0 Business-type Activities: State of Idaho Revolving Loan $3,394,278 ($172,918) $3,221,360 $176,121 DEQ WWTP loan 239,474 $629,172 868,646 Compensated Absences 58,484 12,158 70,642 Refunding Series 2012 855,000 (205,000) 650,000 215,000 $4,547,236 $641,330 ($377,918) $4,810,648 $391,121 Blackfoot Urban Renewal District: Tax Increment Bonds $855,000 ($55,000) $800,000 $60,000 $855,000 $0 ($55,000) $800,000 $60,000 17. TRANSFERS BETWEEN FUNDS During the fiscal year ended September 30, 2015, the following transfers were made between funds: Administrative Charges: To From General Fund $759,551 Water Fund $220,121 Sewer Fund 371,535 Sanitation Fund 167,895 Park Fund 20,000 Sewer Fund 20,000 Deficit Transfers: Parks and Recreation Fund: 504,053 General Fund 504,053 Capital Project Reserves: Fire and Ambulance Replacement Fund 20,000 Ambulance Fund 20,000 Water Capital Fund 300,000 Water Fund 300,000 Wastewater Capital Fund 200,000 Wastewater Fund 200,000 Sanitation Capital Fund 200,000 Sanitation Fund 200,000 52 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 18. 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. In 2014, there have been a high number of claims which depleted the reserve. If this trend continues, the City could possibly be required to re-fund this reserve. This expense has not been determined at this time, but there is money in the Health Care Reserve Fund, should the City need to fund the reserve. The City expects such amounts, if any to be immaterial. 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. 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM Plan Description The City of American Falls 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) that covers substantially all employees of the State of Idaho, its agencies and various participating political subdivisions. The cost to administer the plan is financed through the contributions and investment earnings of the plan. PERSI issues a publicly available financial report that includes financial statements and the required supplementary information for PERSI. That report may be obtained on the PERSI website at www.persi.idaho.gov. Responsibility for administration of the Base Plan is assigned to the Board comprised of five members appointed by the Governor and confirmed by the Idaho Senate. State law requires that two members of the Board be active Base Plan members with at least ten years of service and three members who are Idaho citizens, not members of the Base Plan except by reason of having served on the Board. 53 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM – (CONTINUED) 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. Amounts in parenthesis represent police/firefighters. 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. 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 as 60% of employer rate for general employees and 72% for police and firefighters. As of June 30, 2016 it was 6.79% for general employees and 8.36% for police and firefighters. The employer contribution rate as a percent of covered payroll is set by the Retirement Board and was 11.32% general employees and 11.66% for police & firefighters. The employer’s contributions were $407,685 for the year ended September 30, 2016. Pension Liabilities, Pension Expense (Revenue), and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions 54 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM – (CONTINUED) At September 30, 2016, the City reported a liability for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2016, 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, 2016, the City’s proportion was .1231395 percent. For the year ended September 30, 2016, the City recognized pension expense of $109,382. At September 30, 2016, 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 $1,034,247 $248,731 Changes in assumptions or other inputs 55,489 0 Net difference between projected and actual earnings on pension plan investments 0 567,688 Changes in the employer's proportion and differences between the employer's contributions and the employer's proportionate contributions (4,581) 0 City of Blackfoot contributions subsequent to the measurement date 180,717 0 Total $1,265,872 $816,419 $180,717, 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, 2016. 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, 2015 the beginning of the measurement period ended June 30, 2016 is 4.9 and 5.5 for the measurement period June 30, 2015. 55 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM – (CONTINUED) 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, 2016: 2017 $ 2,537 2018 $ 2,537 2019 $ 289,604 2020 $ 159,357 Thereafter $ 0 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, 2016 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.25% Salary increases 4.25-10.00% Salary inflation 3.75% Investment rate of return 7.10%, net of investment expenses Cost-of-living adjustments 1% Mortality rates were based on the RP-2000 combined table for healthy males or females as appropriate with the following offsets: Set back 3 years for teachers No offset for male fire and police Forward one year for female fire and police Set back one year for all general employees and all beneficiaries 56 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM – (CONTINUED) An experience study was performed for the period July 1, 2007 through June 30, 2013 which reviewed all economic and demographic assumptions other than mortality. Mortality and all economic assumptions were studied in 2014 for the period from July 1, 2009 through June 30, 2013. The Total Pension Liability as of June 30, 2016 is based on the results of an actuarial valuation date of July 1, 2016. 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. 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 System’s assets. The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. The capital market assumptions are as of January 1, 2016. 57 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 Capital Market Assumptions Expected Expected Strategic Strategic Asset Class Return Risk Normal Ranges Equities 70% 66% - 77% Broad Domestic Equity 9.15% 19.00% 55% 50% - 65% International 9.25% 20.20% 15% 10% - 20% Fixed Income 3.05% 3.75% 30% 23% - 33% Cash 2.25% 0.90% 0% 0% - 5% Expected Expected Expected Real Expected Total Fund Return Inflation Return Risk Actuary 7.00% 3.25% 3.75% N/A Portfolio 6.58% 2.25% 4.33% 12.67% * Expected arithmetic return net of fees and expenses Actuarial Assumptions Assumed Inflation - Standard 3.25% Deviation Portfolio Arithmetic Mean 2.00% Return 8.42% Portfolio Long-term Expected Geometric Rate of Return Assumed Expenses 7.50% 0.40% Long-term Expected Geometric Rate of Return, Net of Investment Expenses 7.10% 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM – (CONTINUED) 58 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2016 Discount Rate The discount rate used to measure the total pension liability was 7.10%. 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 met of pension plan investment expense but without reduction for pension plan administrative expense. Sensitivity of the Employer’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate. The following presents the employer’s proportionate share of the net pension liability calculated using the discount rate of 7.10 percent, as well as what the employer’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (6.10 percent) or 1 percentage point higher (8.10 percent) than the current rate: Current 1% Decrease Discount Rate 1% Increase (6.10%) (7.10%) (8.10%) Employer's proportionate share of the net pension liability (asset) $4,896,711 $2,496,227 $499,959 Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued PERSI financial report. PERSI issues a publicly available financial report that includes financial statements and the required supplementary information for PERSI. That report may be obtained on the PERSI website at www.persi.gov. 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM – (CONTINUED) 59 ---PAGE BREAK--- REQUIRED SUPPLEMENTAL INFORMATION 60 ---PAGE BREAK--- Schedule of Employer’s Share of Net Pension Liability PERSI – Base Plan Last 10 – Fiscal Years * 2016 2015 Employer's portion of the net pension liability 0.1231395% 0.1234918% Employer's proportionate share of the net pension liability $2,496,227 $1,626,186 Employer's covered employee payroll $5,166,140 $5,027,213 Employer's proportional share of the net pension liability 48.32% 32.35% as a percentage of its covered employee payroll Plan fiduciary net position as a percentage of the total pension liability 87.26% 91.38% *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 information is available. Data reported is measured as of June 30, 2016. Schedule of Employer Contributions PERSI – Base Plan Last 10 – Fiscal Years* 2016 2015 Statutorily required contribution $366,047 $403,944 Contributions in relation to the statutorily required contribution $413,269 $396,706 Contribution (deficiency) excess $47,221 ($7,238) Employer's covered employee payroll $5,166,140 $5,027,213 Contributions as a percentage of covered employee payroll 7.09% 8.04% *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 information is available. Data reported is measured as of September 30, 2016. CITY OF BLACKFOOT REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2016 61 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance & Final Favorable Budget Actual (Unfavorable) REVENUE: Taxes: Property taxes $3,063,655 $3,119,113 $55,458 Sales and use taxes 387,670 414,707 27,037 Franchise taxes 180,000 116,581 (63,419) Subtotal taxes 3,631,325 3,650,401 19,076 Licenses and permits: Business licenses 22,000 20,926 (1,074) Building permits 30,000 52,247 22,247 Dog and bicycle licenses 850 1,919 1,069 Subtotal licenses and permits 52,850 75,092 22,242 Inter-governmental: Liquor apportionment 143,335 156,683 13,348 State revenue sharing 420,164 416,561 (3,603) Blackfoot - Snake River Fire District 773,574 773,574 0 School resource officer 170,746 168,756 (1,990) State and Federal grants 4,000 4,463 463 Subtotal intergovernmental 1,511,819 1,520,037 8,218 Miscellaneous: Administrative charges 759,550 759,551 1 Fines and forfeitures 91,500 89,431 (2,069) Interest 31,900 69,868 37,968 Miscellaneous 5,000 25,564 20,564 Subtotal miscellaneous 887,950 944,414 56,464 Total revenue 6,083,944 6,189,944 106,000 EXPENDITURES: Administrative: Salaries 303,553 329,527 (25,974) Benefits 237,115 245,671 (8,556) Travel and meeting 18,600 13,111 5,489 Office supplies 82,045 68,076 13,969 The accompanying notes are an integral part of these statements. 62 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - (CONTINUED) GENERAL FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance EXPENDITURES: and Final Favorable Administrative - Continued: Budget Actual (Unfavorable) Maintenance $79,600 $80,574 ($974) Utilities and telephone 22,100 14,440 7,660 Professional services 145,700 143,122 2,578 Department supplies & other 22,350 20,516 1,834 Insurance 8,963 8,963 0 Contingency 50,000 33,769 16,231 Subtotal administrative 970,026 957,769 12,257 Police: Salaries 1,442,796 1,431,867 10,929 Benefits 929,587 790,955 138,632 Clothing allowance 20,000 13,599 6,401 Travel and training 28,000 28,299 (299) Office supplies 16,100 8,451 7,649 Maintenance 62,000 57,919 4,081 Utilities and telephone 15,200 9,899 5,301 Fuel 65,000 37,312 27,688 Professional services 2,500 3,561 (1,061) Department supplies & other 64,850 54,918 9,932 Insurance 27,595 27,595 0 Bingham County 256,813 254,385 2,428 Capital outlay 85,800 81,096 4,704 Subtotal police 3,016,241 2,799,856 216,385 Fire: Salaries 912,991 929,153 (16,162) Benefits 642,727 581,242 61,485 Protective clothing 5,000 3,372 1,628 Travel and training 10,000 3,387 6,613 Office supplies 6,100 4,258 1,842 Maintenance 25,200 37,333 (12,133) The accompanying notes are an integral part of these statements. 63 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - (CONTINUED) GENERAL FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance EXPENDITURES: and Final Favorable Fire - Continued: Budget Actual (Unfavorable) Utilities and telephone $42,200 $24,314 $17,886 Fuel 10,000 4,211 5,789 Professional services 6,500 615 5,885 Department supplies & other 19,350 16,108 3,242 Insurance 15,059 15,059 0 Capital outlay 107,537 84,850 22,687 Subtotal fire 1,802,664 1,703,902 98,762 Building and zoning: Salaries 152,544 140,417 12,127 Benefits 102,064 61,075 40,989 Travel and training 6,000 790 5,210 Office supplies 12,185 5,472 6,713 Maintenance 10,415 3,679 6,736 Utilities and telephone 2,300 2,386 (86) Fuel 2,500 767 1,733 Professional services 5,000 6,664 (1,664) Department supplies & other 350 55 295 Insurance 1,655 1,655 0 Subtotal building and zoning 295,013 222,960 72,053 Total expenditures 6,083,944 5,684,487 399,457 EXCESS REVENUE (EXPENDITURES): 0 505,457 505,457 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 759,550 (504,053) (1,263,603) EXCESS REVENUE/SOURCES (EXPENDITURES/USES): $759,550 1,404 ($758,146) FUND BALANCE - BEGINNING: 689,163 FUND BALANCE - ENDING: $690,567 The accompanying notes are an integral part of these statements. 64 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL STREET FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $210,011 $213,596 $3,585 Highway users tax 502,566 548,505 45,939 State sales tax 77,770 31,938 (45,832) County road and street 110,000 70,795 (39,205) Franchise fees 55,000 87,239 32,239 Miscellaneous 3,940 3,940 Interest on investments 21,750 13,736 (8,014) Total revenue 977,097 969,749 (7,348) EXPENDITURES: Salaries 278,495 257,610 20,885 Benefits 205,025 161,219 43,806 Clothing 5,600 3,252 2,348 Travel and training 4,000 2,485 1,515 Office supplies 600 304 296 Maintenance 51,900 41,485 10,415 Utilities and telephone 172,500 149,017 23,483 Fuel 40,000 24,956 15,044 Professional services 10,500 12,958 (2,458) Department supplies and other 123,200 112,417 10,783 Insurance 16,370 16,370 0 Grant expense 65,107 (65,107) Construction materials 200,000 150,568 49,432 Capital outlay 60,000 47,776 12,224 Total expenditures 1,168,190 1,045,524 122,666 EXCESS REVENUE (EXPENDITURES): (191,093) (75,775) 115,318 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): ($191,093) (75,775) $115,318 FUND BALANCE - BEGINNING: 663,335 FUND BALANCE - ENDING: $587,560 The accompanying notes are an integral part of these statements. 65 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL AMBULANCE FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Hospital collections - ambulance $630,000 $701,696 $71,696 County ambulance 562,754 546,769 (15,985) Bingham Memorial - Contribution 60,000 45,017 (14,983) Miscellaneous 0 10,000 10,000 Total revenue 1,252,754 1,303,482 50,728 EXPENDITURES: Salaries 722,630 679,939 42,691 Benefits 640,899 454,263 186,636 Protective clothing 3,000 1,774 1,226 Travel and training 6,000 7,856 (1,856) Office supplies 3,100 2,314 786 Maintenance 22,000 23,902 (1,902) Utilities and telephone 5,000 4,129 871 Fuel 25,000 17,406 7,594 Professional services 500 0 500 Department supplies & other 30,350 36,882 (6,532) Collection expense & refunds 58,500 61,125 (2,625) Insurance 100,094 10,094 90,000 Capital outlay 34,100 22,574 11,526 Total expenditures 1,651,173 1,322,258 328,915 EXCESS REVENUE (EXPENDITURES): (398,419) (18,776) 379,643 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 (20,000) (20,000) EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): ($398,419) (38,776) $359,643 FUND BALANCE - BEGINNING: (419,128) FUND BALANCE - ENDING: ($457,904) The accompanying notes are an integral part of these statements. 66 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL PARKS AND RECREATION FUND YEAR ENDED SEPTEMBER 30, 2016 Variance Original Final Favorable Budget Budget Actual (Unfavorable) REVENUE: Property taxes $209,281 $209,281 $210,558 $1,277 State sales tax 26,000 26,000 28,234 2,234 County participation 20,000 20,000 20,000 0 Golf course 625,718 625,718 558,353 (67,365) Park reservation fees & donations 16,800 16,800 13,567 (3,233) Recreation fees & donations 19,000 19,000 31,895 12,895 Swimming pool fees & donations 147,600 147,600 148,743 1,143 Storm water maintenance fee 20,000 20,000 20,000 0 Grants 0 182,888 172,888 (10,000) Other 500 500 50,108 49,608 Total revenue 1,084,899 1,267,787 1,254,346 (13,441) EXPENDITURES (parks): Salaries 121,852 121,852 113,269 8,583 Benefits 66,696 66,696 44,045 22,651 Clothing allowance 600 600 824 (224) Travel and training 2,000 2,000 666 1,334 Office supplies 1,450 1,450 3,334 (1,884) Maintenance 72,600 72,600 73,308 (708) Utilities and telephone 16,000 16,000 14,734 1,266 Fuel 20,000 20,000 6,419 13,581 Professional services 500 500 1,575 (1,075) Department supplies and other 26,500 26,500 17,967 8,533 Insurance 4,064 4,064 4,064 0 Jensen Grove water 6,250 6,250 576 5,674 Capital outlay 41,000 41,000 65,679 (24,679) Total expenditures (parks) 379,512 379,512 346,460 33,052 EXPENDITURES (recreation): Salaries 53,000 53,000 53,634 (634) Benefits 14,375 14,375 16,512 (2,137) Clothing allowance 500 500 578 (78) Travel and training 378 (378) Office supplies 1,184 (1,184) Maintenance 29,400 29,400 52,134 (22,734) Utilities and telephone 7,200 7,200 6,617 583 Fuel 8,500 8,500 10,188 (1,688) Professional services 500 500 203 297 Department supplies and other 25,350 25,350 17,304 8,046 Insurance 2,245 2,245 2,245 0 Grants 0 182,888 175,395 7,493 Capital outlay 28,000 28,000 18,349 9,651 Total expenditures (recreation) 169,070 351,958 354,721 (2,763) 67 ---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, 2016 Budget Budget Actual (Unfavorable) EXPENDITURES (pool): Salaries $230,816 $230,816 $193,062 $37,754 Benefits 59,294 59,294 42,128 17,166 Clothing allowance 750 750 701 49 Travel and training 4,500 4,500 5,956 (1,456) Office supplies 3,775 3,775 2,343 1,432 Maintenance 27,050 27,050 45,086 (18,036) Utilities and telephone 62,800 62,800 60,383 2,417 Professional services 21,000 21,000 21,375 (375) Department supplies and other 21,500 21,500 19,484 2,016 Insurance 3,343 3,343 4,768 (1,425) Capital outlay 0 Total expenditures (pool) 434,828 434,828 395,286 39,542 EXPENDITURES (golf): Salaries 269,405 269,405 254,936 14,469 Benefits 100,530 100,530 103,256 (2,726) Clothing allowance 750 750 855 (105) Travel and training 2,500 2,500 386 2,114 Office supplies 13,100 13,100 12,443 657 Maintenance 67,750 67,750 63,407 4,343 Utilities and telephone 29,000 29,000 34,220 (5,220) Fuel 15,500 15,500 16,290 (790) Professional services 1,000 1,000 255 745 Resale items 90,000 90,000 106,069 (16,069) Department supplies and other 16,950 16,950 34,223 (17,273) Insurance 4,768 4,768 3,343 1,425 Capital outlay 33,000 33,000 32,249 751 Total expenditures (golf) 644,253 644,253 661,932 (17,679) Total expenditures 1,627,663 1,810,551 1,758,399 52,152 EXCESS REVENUE (EXPENDITURES): (542,764) (542,764) (504,053) 38,711 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 504,053 504,053 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): ($542,764) ($542,764) $542,764 FUND BALANCE - BEGINNING: 0 FUND BALANCE - ENDING: Variance Original Final Favorable 68 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL WATER CAPITAL FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Interest on investments $0 $0 Miscellaneous 0 Total revenue 0 $0 0 EXPENDITURES: Availibility fees 0 2,035 (2,035) Total expenditures 0 2,035 (2,035) EXCESS REVENUE (EXPENDITURES): 0 (2,035) (2,035) OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 300,000 300,000 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 297,965 $297,965 FUND BALANCE - BEGINNING: 1,800,000 FUND BALANCE - ENDING: $2,097,965 69 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL WASTEWATER CAPITAL FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Interest on investments $0 $0 Miscellaneous 0 Total revenue 0 $0 0 EXPENDITURES: Availability fees 0 2,775 (2,775) Total expenditures 0 2,775 (2,775) EXCESS REVENUE (EXPENDITURES): 0 (2,775) (2,775) OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 200,000 200,000 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 197,225 $197,225 FUND BALANCE - BEGINNING: 1,000,000 FUND BALANCE - ENDING: $1,197,225 70 ---PAGE BREAK--- BLACKFOOT URBAN RENEWAL AGENCY SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $555,000 $561,623 $6,623 Investment income 655 2,609 1,954 Grant application fees 125 125 Total revenue 555,655 564,357 8,702 EXPENDITURES: Administration 8,000 886 7,114 Profession fees 16,000 14,775 1,225 Projects: Downtown District: AD ramps 5,850 (5,850) Downtown redevelopment 8,088 (8,088) Economic Development 900,000 900,000 Fibre project 284,250 (284,250) Façade improvements 60,000 40,545 19,455 Patriot Field 228,728 (228,728) Potato Museum 110,000 177,010 (67,010) VEMBF Blight Project 10,000 (10,000) Riverview District: Technology Park 20,000 (20,000) Façade improvements 40,000 40,000 Economic Development 100,000 100,000 Bond refinancing costs 100,000 100,000 Tax note payments 133,305 116,998 16,307 Total expenditures 1,467,305 907,130 560,175 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): ($911,650) (342,773) $568,877 FUND BALANCE - BEGINNING: 1,281,938 FUND BALANCE - ENDING: $939,165 The accompanying notes are an integral part of these statements. 71 ---PAGE BREAK--- 72 THIS PAGE INTENTIONALLY LEFT BLANK ---PAGE BREAK--- SUPPLEMENTAL INFORMATION 73 ---PAGE BREAK--- CITY OF BLACKFOOT COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2016 Capital Airport Cemetery Library Improvements Fund Fund Fund Fund ASSETS: Cash and investments $383,804 $30,087 $140,483 $305,872 Receivables: Property taxes 388 6,657 12,176 1,080 Bingham County 22 4,842 8,202 30 Grants receivable $384,214 $41,586 $160,861 $306,982 Total assets LIABILITIES: Accounts payable $2,746 $4,413 $23,801 Due to other funds Deferred revenue 299 6,138 11,065 $948 Total liabilities 3,045 10,551 34,866 948 FUND BALANCE: Assigned - Capital improvements 306,034 Committed 381,169 31,035 125,995 381,169 31,035 125,995 306,034 Total fund balance Total liabilities and fund balance $384,214 $41,586 $160,861 $306,982 74 ---PAGE BREAK--- Fire and Golf Health Total Ambulance Course Street Sanitation Parks Library Care Non-major Replacement Capital Capital Capital Capital Capital Reserve Governmental Fund Fund Fund Fund Fund Fund Fund Funds $20,861 $600,000 $500,000 $43,101 $65,231 $42,262 $2,131,701 20,301 13,096 0 $0 $20,861 $600,000 $500,000 $43,101 $65,231 $42,262 $2,165,098 $30,960 $65,575 65,575 18,450 65,575 $0 $0 $0 $0 $0 $0 114,985 (65,575) 20,861 600,000 500,000 43,101 65,231 1,469,652 42,262 580,461 (65,575) 20,861 600,000 500,000 43,101 65,231 42,262 2,050,113 $0 $20,861 $600,000 $500,000 $43,101 $65,231 $42,262 $2,165,098 75 ---PAGE BREAK--- Capital Airport Cemetery Library Improvements REVENUES: Fund Fund Fund Fund Property taxes $543 $139,271 $225,850 $990 Sales and use taxes 18,563 30,209 14 Licenses and fees 58,867 53,250 16,940 Grants and contributions 353,537 720 Blackfoot Rural Library District 227,330 Interest 4,966 1,197 4,942 5,328 Miscellaneous 208 Total revenues 418,121 212,281 505,991 6,332 EXPENDITURES: General government 202,162 Public Safety Airport 454,653 Library 426,853 Total expenditures 454,653 202,162 426,853 0 EXCESS REVENUE (EXPENDITURES): (36,532) 10,119 79,138 6,332 OTHER FINANCING SOURCES (USES): Operating transfers (to) from other funds EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): (36,532) 10,119 79,138 6,332 FUND BALANCE - BEGINNING: 417,701 20,916 46,857 299,702 FUND BALANCE - ENDING: $381,169 $31,035 $125,995 $306,034 CITY OF BLACKFOOT COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2016 76 ---PAGE BREAK--- Fire and Golf Health Total Ambulance Course Street Sanitation Parks Library Care Non-major Replacement Capital Capital Capital Capital Capital Reserve Governmental Fund Fund Fund Fund Fund Fund Fund Funds $366,654 48,786 $96,825 225,882 354,257 227,330 $68 $630 4,387 21,518 19,034 $43,101 62,343 $0 19,102 $0 $0 43,101 630 101,212 1,306,770 154,660 356,822 0 454,653 426,853 0 0 0 0 0 0 154,660 1,238,328 0 19,102 0 0 43,101 630 (53,448) 68,442 20,000 200,000 220,000 20,000 19,102 0 200,000 43,101 630 (53,448) 288,442 (85,575) 1,759 600,000 300,000 0 64,601 95,710 1,761,671 ($65,575) $20,861 $600,000 $500,000 $43,101 $65,231 $42,262 $2,050,113 77 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL AIRPORT FUND YEAR ENDED SEPTEMBER 30, 2016 Variance Original Final Favorable Budget Budget Actual (Unfavorable) REVENUE: Property taxes $543 $543 Charges for services $35,000 $35,000 30,527 (4,473) Fuel 50,000 50,000 28,340 (21,660) State sales tax 7,175 7,175 (7,175) Miscellaneous 750 750 208 (542) Grants and contributions 0 464,216 353,537 (110,679) Interest on investments 5,075 5,075 4,966 (109) Total revenue 98,000 562,216 418,121 (144,095) EXPENDITURES: Salaries 26,200 26,200 16,167 10,033 Benefits 2,004 2,004 1,449 555 Office supplies 750 750 1 749 Travel and training 2,000 2,000 661 1,339 Maintenance 10,250 10,250 9,988 262 Utilities and telephone 10,440 10,440 8,334 2,106 Fuel 51,200 51,200 20,460 30,740 Professional services 27,200 27,200 10,231 16,969 Department supplies and other 1,000 1,000 1,000 Insurance 4,736 4,736 4,736 0 Grant expense 0 464,216 328,111 136,105 Capital outlay 237,000 237,000 54,515 182,485 Total expenditures 372,780 836,996 454,653 382,343 EXCESS REVENUE (EXPENDITURES): (274,780) (274,780) (36,532) 238,248 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): ($274,780) ($274,780) (36,532) $238,248 FUND BALANCE - BEGINNING: 417,701 FUND BALANCE - ENDING: $381,169 78 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL CEMETERY FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $139,479 $139,271 ($208) Charges for services 50,000 53,250 3,250 State sales tax 10,649 18,563 7,914 Interest on investments 1,197 1,197 Total revenue 200,128 212,281 12,153 EXPENDITURES: Salaries 96,415 102,355 (5,940) Benefits 48,854 55,261 (6,407) Clothing 100 319 (219) Office supplies 510 535 (25) Travel and training 500 579 (79) Maintenance 13,520 11,261 2,259 Utilities and telephone 5,450 2,996 2,454 Fuel 5,500 2,881 2,619 Professional services 7,500 6,065 1,435 Department supplies and other 4,550 2,994 1,556 Insurance 1,229 1,229 0 Capital outlay 16,000 15,687 313 Total expenditures 200,128 202,162 (2,034) EXCESS REVENUE (EXPENDITURES): 0 10,119 10,119 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 10,119 $10,119 FUND BALANCE - BEGINNING: 20,916 FUND BALANCE - ENDING: $31,035 79 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL LIBRARY FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $227,330 $225,850 ($1,480) Charges for services 16,500 16,940 440 State sales tax 30,209 30,209 Blackfoot Rural Library District 227,330 227,330 0 Interest on investments 3,770 4,942 1,172 Private contributions 1,000 720 (280) Total revenue 475,930 505,991 30,061 EXPENDITURES: Salaries 201,183 188,334 12,849 Benefits 60,957 56,177 4,780 Books and subscriptions 83,700 94,203 (10,503) Travel and training 2,250 625 1,625 Office supplies 8,000 4,742 3,258 Maintenance 31,950 32,038 (88) Utilities and telephone 15,320 12,151 3,169 Professional services 5,500 2,818 2,682 Department supplies and other 16,650 17,319 (669) Insurance 4,900 4,900 0 Capital outlay 45,520 13,546 31,974 Total expenditures 475,930 426,853 49,077 EXCESS REVENUE (EXPENDITURES): 0 79,138 79,138 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 79,138 $79,138 FUND BALANCE - BEGINNING: 46,857 FUND BALANCE - ENDING: $125,995 80 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL CAPITAL IMPROVEMENTS FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $990 $990 Sales tax 14 14 Interest on investments 5,328 5,328 Total revenue $0 6,332 6,332 EXPENDITURES: Capital outlay 0 0 0 Total expenditures 0 0 0 EXCESS REVENUE (EXPENDITURES): 0 6,332 6,332 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 6,332 $6,332 FUND BALANCE - BEGINNING: 299,702 FUND BALANCE - ENDING: $306,034 81 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL FIRE AND AMBULANCE REPLACEMENT FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Interest on investments $0 $0 $0 Total revenue 0 0 0 EXPENDITURES: Capital outlay 0 0 Total expenditures 0 0 0 EXCESS REVENUE (EXPENDITURES): 0 0 0 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 20,000 20,000 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 20,000 $20,000 FUND BALANCE - BEGINNING: (85,575) FUND BALANCE - ENDING: ($65,575) 82 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GOLF COURSE CAPITAL FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Interest on investments $0 $68 $68 Miscellaneous 19,034 19,034 Total revenue 0 19,102 19,102 EXPENDITURES: Capital outlay 0 Total expenditures 0 0 0 EXCESS REVENUE (EXPENDITURES): 0 19,102 19,102 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES:) $0 19,102 $19,102 FUND BALANCE - BEGINNING: 1,759 FUND BALANCE - ENDING: $20,861 83 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL STREET CAPITAL FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable REVENUE: Interest on investments $0 $0 $0 Miscellaneous 0 Total revenue 0 0 0 EXPENDITURES: Capital outlay 0 Total expenditures 0 0 0 EXCESS REVENUE (EXPENDITURES): 0 0 0 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 0 $0 FUND BALANCE - BEGINNING: 600,000 FUND BALANCE - ENDING: $600,000 84 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL SANITATION CAPITAL FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Interest on investments $0 $0 Miscellaneous 0 Total revenue 0 $0 0 EXPENDITURES: Capital outlay 0 Total expenditures 0 0 0 EXCESS REVENUE (EXPENDITURES): 0 0 0 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 250,000 250,000 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 250,000 $250,000 FUND BALANCE - BEGINNING: 300,000 FUND BALANCE - ENDING: $550,000 85 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL PARKS CAPITAL FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Interest on investments $0 $0 Miscellaneous $43,101 43,101 Total revenue 0 43,101 43,101 EXPENDITURES: Capital outlay 0 0 0 Total expenditures 0 0 0 EXCESS REVENUE (EXPENDITURES): 0 43,101 43,101 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 43,101 $43,101 FUND BALANCE - BEGINNING: 0 FUND BALANCE - ENDING: $43,101 86 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL LIBRARY CAPITAL FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Interest on investments $0 $630 $630 Miscellaneous 0 Total revenue 0 630 630 EXPENDITURES: Loss on investments 0 Total expenditures 0 0 0 EXCESS REVENUE (EXPENDITURES): 0 630 630 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 630 $630 FUND BALANCE - BEGINNING: 64,601 FUND BALANCE - ENDING: $65,231 87 ---PAGE BREAK--- CITY OF BLACKFOOT SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL HEALTH CARE RESERVE FUND YEAR ENDED SEPTEMBER 30, 2016 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Reserve receipts $96,825 $96,825 Interest on investments 4,387 4,387 Total revenue $0 101,212 101,212 EXPENDITURES: Health care expenses 140,727 (140,727) Benefits administration 13,933 (13,933) Total expenditures 0 154,660 (154,660) EXCESS REVENUE (EXPENDITURES): 0 (53,448) (53,448) OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 (53,448) ($53,448) FUND BALANCE - BEGINNING: 95,710 FUND BALANCE - ENDING: $42,262 88 ---PAGE BREAK--- Single Audit Section 89 ---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 Blackfoot Urban Renewal District (a discretely presented component unit) each major fund, and the aggregate remaining fund information of the City of Blackfoot, Idaho, as of and for the year ended September 30, 2016, and the related notes to the financial statements, which collectively comprise City’s basic financial statements, and have issued our report thereon dated January 23, 2017. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, I considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, 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. 90 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 2 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 the audit I did not identify any deficiencies in internal control that I consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, I performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of my audit, and accordingly, I do not express such an opinion. The results of my tests disclosed no instances of non- compliance 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 January 23,2017 Morgan J Hatt CPA PC 91 ---PAGE BREAK--- Morgan J Hatt CPA PC Certified Public Accountant 1855 Satterfield Drive [EMAIL REDACTED] Phone : (208) 317-6040 Pocatello, Idaho 83201 Fax: (208) 242-3782 Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control over Compliance. Report on Compliance for Each Major Federal Program I have audited the City of Blackfoot, Idaho’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of City’s major Federal programs for the year ended September 30, 2016. Major Federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its Federal programs. Auditor’s Responsibility My responsibility is to express an opinion on compliance for each of the City’s major Federal programs based on my audit of the types of compliance requirements referred to above. I conducted my audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that I plan and perform the audit to obtain reasonable assurance about whether non-compliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as I considered necessary in the circumstances. I believe that my audit provides a reasonable basis for my opinion on compliance for each major Federal program. However, my audit does not provide a legal determination of the City’s compliance. 92 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 2 Opinion on Each Major Federal Program In my opinion, the City of Blackfoot, Idaho, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended September 30, 2016. Report on Internal Control Over Compliance Management is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing my audit of compliance, I considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on each major Federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major Federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, I do not express an opinion on the effectiveness of the City’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, non-compliance 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 combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material non-compliance with a type of compliance requirement of a Federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a Federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. My consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. I did not identify any deficiencies in internal control over compliance that I consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Pocatello, Idaho January 23, 2017 Morgan J Hatt CPA PC 93 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO BLACKFOOT, IDAHO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED SEPTEMBER 30, 2016 Catalogue of Federal Title Domestic Assistance Number Expenditures Department of Justice: Environmental Protection Agency (Direct funding): Capitalization grants & revolving loans 66.468 629,172 Department of Housing & Urban Development (Direct funding): Community Development Block Grant 14.228 358,991 Department of Transportation : Airport improvement - Land acquisition (Direct funding) 20.106 271,659 Airpor timprovement - Runway protection (Direct funding) 20.106 48,611 Subtotal Airport improvement 320,270 Total Federal Expenditures $1,312,896 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, 2016. 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). 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 assets, or cash flows of the City of Blackfoot, Idaho. Note 2: Summary of Significant Accounting Policies - Expenditures reported on the Schedule are on the accrual basis of accounting. Such expenditures are regognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Note 3: Indirect Cost Rate - The City of Blackfoot, Idaho as elected not to use the 10% de minimus cost rate allowed under the Uniform Guidance. Body Armor (St of Id. Pass-thru funding) 16.607 $4,463 94 ---PAGE BREAK--- FINANCIAL STATEMENTS The auditor's report is qualified. Internal control over financial reporting: There are no material weaknesses identified. There are no reportable conditions identified that are not considered to be a material weakness There are no instances of noncompliance material to financial statements identified. FEDERAL AWARDS There are no material weaknesses identified. There are no reportable conditions identified that are not considered to be material weaknesses. The auditor's report on compliance with requirements applicable to each major program and internal control over compliance in accordance with OMB Circular A-133 is unqualified. There are no audit findings required to be reported in accordance with section 510(a) of Circular A-133. IDENTIFICATION OF MAJOR PROGRAMS The programs tested as major programs include: Department of Transportation 66.468 CITY OF BLACKFOOT, IDAHO SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED SEPTEMBER 30, 2016 The threshold for distinguishing Types A and B programs was $750,000. City of Blackfoot qualifies as a low-risk auditee. 95