Document Blackfoot_doc_f146f6067d

CITY OF BLACKFOOT, IDAHO BASIC FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION SEPTEMBER 30, 2020 ---PAGE BREAK--- ---PAGE BREAK--- CITY OF BLACKFOOT AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2020 TABLE OF CONTENTS Page Number FINANCIAL SECTION: Independent Auditor’s Opinion 6 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 9 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position 11 Statement of Activities 12 Fund Financial Statements: Balance Sheet – Governmental Funds 13 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 16 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 18 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 20 Proprietary Funds: Statement of Net Position 21 Statement of Revenues, Expenses, and Changes in Net Position 22 Statement of Cash Flows 23 Fiduciary Funds: Statement of Fiduciary Net Position 24 Statement of Changes in Fiduciary Net Position 25 Notes to Financial Statements 26 3 ---PAGE BREAK--- CITY OF BLACKFOOT AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2020 TABLE OF CONTENTS – (CONTINUED) Page Number Required Supplementary Information: Schedule of Employer’s Share of Net Pension Liability 54 Schedule of Employer’s Contributions 54 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – General Fund 56 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Street Fund 59 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Ambulance Fund 60 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Parks and Recreation Fund 61 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Blackfoot Urban Renewal District 63 Other Supplemental Information: Combining Balance Sheet - Non-major Governmental Funds 66 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Non-major Governmental Funds 68 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – Airport Fund 70 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual – Cemetery Fund 71 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual – Library Fund 72 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual – Capital Improvements Fund 73 Schedule of Revenue, Expenditures, and Changes in Fund Balances Budget and Actual – Health Care Reserve Fund 74 4 ---PAGE BREAK--- CITY OF BLACKFOOT AUDITED FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2020 TABLE OF CONTENTS – (CONTINUED) Page Number SINGLE AUDIT SECTION: Report on Compliance for Each Major Program and Internal Control over Compliance 76 Schedule of Expenditures of Federal Awards 78 Schedule of Findings and Questioned Costs 79 5 ---PAGE BREAK--- Morgan J Hatt CPA PC Certified Public Accountant 1855 Satterfield Drive [EMAIL REDACTED] Phone : (208) 317-6040 Pocatello, Idaho 83201 Fax: (208) 242-3782 Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Independent Auditor's Report Report on the Financial Statements I have audited the accompanying financial statements of the governmental activities, the business-type activities, the fiduciary activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Blackfoot, Idaho (the City), as of and for the year ended September 30, 2020, 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 City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, I express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for our audit opinions. 6 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 2 Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the fiduciary activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City, as of September 30, 2020, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information The City has not presented the Management’s Discussion and Analysis that accounting principles generally accepted in the United States has determined is necessary to supplement, although not required to be part of the basic financial statements. Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, the Schedules of Net Pension Liability & Employer’s Contributions, and the major fund budgetary comparison information be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. I have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to my inquiries, the basic financial statements, and other knowledge I obtained during my audit of the basic financial statements. I do not express an opinion or provide any assurance on the information because the limited procedures do not provide me with sufficient evidence to express an opinion or provide any assurance. Other Information My audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual non-major fund financial statements, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. 7 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 3 The combining and individual non-major fund financial statements and the Schedule of Expenditures of Federal Awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In my opinion, the combining and individual non-major fund financial statements and the Schedule of Expenditures of Federal Awards are fairly stated in all material respects in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, I have also issued my report dated February 26, 2021, on my consideration of the City’s internal control over financial reporting and on my tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is solely to describe the scope of my testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Pocatello, Idaho February 26, 2021 Morgan J Hatt CPA PC 8 ---PAGE BREAK--- Morgan J Hatt CPA PC Certified Public Accountant 1855 Satterfield Drive [EMAIL REDACTED] Phone : (208) 317-6040 Pocatello, Idaho 83201 Fax: (208) 242-3782 Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards I have audited, in accordance with the auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the fiduciary activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Blackfoot, Idaho (the City), as of and for the year ended September 30, 2020, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued my report thereon dated February 26, 2021. Internal Control over Financial Reporting In planning and performing my audit of the financial statements, I considered the City’s internal control over financial reporting to determine the audit procedures that are appropriate, in the circumstances, for the purpose of expressing my opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, I do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency or a combination of deficiencies in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency or a combination of deficiencies in internal control that is less severe than a material weakness yet important enough to merit attention by those charged with governance. My consideration of internal control was for the limited purpose described in the first paragraph of this section, and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during my audit, I did not identify any deficiencies in internal control that I consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 9 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 2 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, I performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements; noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of my audit and accordingly, I do not express such an opinion. The results of my tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of my testing of internal control and compliance, and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Pocatello, Idaho February 26, 2021 Morgan J Hatt CPA PC 10 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF NET POSITION SEPTEMBER 30, 2020 Total Component Unit: Governmental Business-type Primary Blackfoot Urban ASSETS: Activities Activities Government Renewal Agency Current Assets: Cash and investments $4,052,207 $9,960,337 $14,012,544 $1,330,367 Property taxes receivable 158,245 158,245 9,664 Other receivables 845,374 769,022 1,614,396 Utility accounts receivable, net 676,359 676,359 Golf inventory 36,214 36,214 Non-current Assets: Land 1,251,390 648,105 1,899,495 Capital assets, net 17,288,847 29,696,196 46,985,043 Restricted cash 51,652 51,652 103,304 Total Assets: 23,632,277 41,801,671 65,433,948 1,443,335 DEFERRED OUTFLOWS: Deferred PERSI outflow of resources 463,546 77,358 540,904 0 LIABILITIES: Current liabilities: Accounts payable 576,578 1,283,534 1,860,112 7,843 Accrued leave 433,241 66,096 499,337 Accrued interest 74,281 74,281 Customer deposits 108,887 108,887 Lease payable due within one year 37,575 37,575 DEQ loan DW 1001 188,844 188,844 DEQ loan WW 1501 159,071 159,071 Revenue bonds due within one year 0 75,000 Non-current liabilities: Lease payable due beyond one year 120,292 120,292 Revenue bonds due beyond one year 470,000 DEQ loan DW 1001 2,308,207 2,308,207 DEQ Loan WW 1501 3,487,152 3,487,152 DEQ Loan WW 1703 6,810,833 6,810,833 City's share of unfunded PERSI liability 2,158,139 359,986 2,518,125 Total Liabilities: 3,325,825 14,846,891 18,172,716 552,843 DEFERRED OUTFLOWS: Deferred PERSI inflow of resources 224,846 37,108 261,954 0 NET POSITION: Net investment in capital assets 18,383,370 17,390,194 35,773,564 Restricted - for debt service 51,652 51,652 Unrestricted 2,161,782 9,553,184 11,714,966 890,492 Total Net Position: $20,545,152 $26,995,030 $47,540,182 $890,492 The accompanying notes are an integral part of these statements. 11 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2020 Program Revenues Charges for Grants and Expenses Services Contributions Primary Government: Governmental Activities: General government $1,971,720 $231,501 $12,202 Public safety 6,456,251 2,445,993 133,208 Parks and recreation 1,170,649 729,856 21,500 Library 423,418 246,373 1,700 Highways and streets 1,538,689 109,311 166,020 Cemetery 165,808 53,000 Airport 286,567 52,913 292,620 Interest on long-term debt 6,664 Total Governmental Activities: 12,019,766 3,868,947 627,250 Business-type Activities: Water 1,428,556 2,030,585 9,875 Sewer 2,647,977 3,691,459 1,207,634 Sanitation 1,108,771 1,279,586 Interest on long-term debt 213,198 Total Business-type Activities: 5,398,502 7,001,630 1,217,509 Total Primary Government: $17,418,268 $10,870,577 $1,844,759 Component Units: Interest on long-term debt $42,050 Blackfoot Urban Renewal Agency 124,125 $350 $166,175 $350 $0 General Revenues: Property taxes Sales and use tax County road and bridge State of Idaho revenue sharing State of Idaho liquor receipts State highway user collections Investment earnings Sale of assets Administration charges Health deductible charges Total General Revenues and Transfers: Change in net position: Net Position October 1, 2019: Net Position September 30, 2020 The accompanying notes are an integral part of these statements. 12 ---PAGE BREAK--- Net (Expense) Revenue and Changes in Net Position Component Unit: Primary Government Blackfoot Governmental Business-type Urban Renewal Activities Activities Total Agency ($1,728,017) ($1,728,017) (3,877,050) (3,877,050) (419,293) (419,293) (175,345) (175,345) (1,263,358) (1,263,358) (112,808) (112,808) 58,966 58,966 (6,664) (6,664) (7,523,569) (7,523,569) $611,904 611,904 2,251,116 2,251,116 170,815 170,815 (213,198) (213,198) 2,820,637 2,820,637 (4,702,932) ($42,050) (123,775) 5,188,007 5,188,007 764,078 283,678 283,678 56,433 56,433 781,374 781,374 200,423 200,423 559,142 559,142 315,369 315,369 13,451 2,304 2,304 649,878 (649,878) 0 36,223 (36,223) 0 8,072,831 (686,101) 7,386,730 611,704 549,262 2,134,536 2,683,798 611,704 19,995,890 24,860,494 44,856,384 278,788 $20,545,152 $26,995,030 $47,540,182 $890,492 The accompanying notes are an integral part of these statements. 13 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2020 Parks and General Street Ambulance Recreation ASSETS: Fund Fund Fund Fund Cash and investments $1,379,477 $850,278 $135,925 $152,688 Receivables: Property taxes 118,046 14,622 6,861 State of Idaho 325,950 153,060 Other 344,401 21,963 Due from other funds 23,585 Golf clubhouse inventory 36,214 Total Assets: $2,191,459 $1,039,923 $135,925 $195,763 LIABILITIES: Due to other funds Accounts payable $312,129 $56,153 $45,907 $96,491 Total Liabilities: 312,129 56,153 45,907 96,491 DEFERRED INFLOW OF RECOURCES: Unavailable revenue - Property taxes 82,496 10,248 4,881 FUND BALANCE: Assigned - Capital improvements 600,000 40,045 Assigned - Golf fee increase reserve 28,346 Unassigned 1,796,834 373,522 90,018 26,000 Total Fund Balance: 1,796,834 973,522 90,018 94,391 Total Liabilities, Deferred Resources, & Fund Balance $2,191,459 $1,039,923 $135,925 $195,763 The accompanying notes are an integral part of these statements. 14 ---PAGE BREAK--- Other Total Blackfoot Governmental Primary Urban Renewal Funds Governmental Agency $1,533,839 $4,052,207 $1,433,671 18,716 158,245 9,664 479,010 366,364 23,585 36,214 $1,552,555 $5,115,625 $1,443,335 $23,585 $23,585 65,898 576,578 $7,843 89,483 600,163 7,843 13,660 111,285 5,846 65,231 705,276 1,429,646 28,346 1,384,181 3,670,555 1,449,412 4,404,177 1,429,646 $1,552,555 $5,115,625 $1,443,335 The accompanying notes are an integral part of these statements. 15 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2020 Total Blackfoot Primary Urban Renewal Government Agency Total Fund Balance: $4,404,177 $1,429,646 Total net assets reported on the Statement of Net Position is different from the fund balance reported on the Balance Sheet because: Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in the governmental funds. Cost of capital assets: 46,516,994 Depreciation expense to date: (27,976,757) 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. 111,285 5,846 Deferred amounts are not current financial resources/uses. Therefore, they are not reported in the governmental funds. Deferred PERSI outflows: 463,546 Deferred PERSI inflows: (224,846) 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: (433,241) Equipment leases payable: (157,867) Revenue bonds payable: (545,000) City's share of unfunded PERSI liability: (2,158,139) Net Position: $20,545,152 $890,492 The accompanying notes are an integral part of these statements. 16 ---PAGE BREAK--- THIS PAGE INTENTIONALLY LEFT BLANK 17 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2020 Parks and General Street Ambulance Recreation REVENUE: Fund Fund Fund Fund Property taxes $3,923,172 $460,114 $225,259 Sales and use taxes 283,678 Franchise taxes 90,641 107,363 Licenses and fees 130,315 $745,412 709,899 County shared 48,178 56,433 650,190 21,500 State of Idaho 981,797 559,142 Blackfoot - Snake River Fire District 884,663 Blackfoot Rural Library District School District Resource Officer 111,902 Grants and contributions 65,335 166,020 79,075 Interest 303,419 4,185 2,325 Administrative charges 783,055 Miscellaneous 11,835 1,948 2,333 19,956 Total Revenue: 7,617,990 1,355,205 1,477,010 978,939 EXPENDITURES: Current Operating: General government 1,754,440 Public safety 4,726,449 1,386,992 Parks and recreation 1,058,472 Library Highways and streets 1,166,908 Airport Capital Outlay Debt service - principal Debt service - interest Total Expenditures: 6,480,889 1,166,908 1,386,992 1,058,472 EXCESS REVENUE (EXPENDITURES): 1,137,101 188,297 90,018 (79,533) OTHER FINANCING SOURCES (USES): Operating transfers (to) from other funds (79,533) 79,533 NET CHANGE IN FUND BALANCES: 1,057,568 188,297 90,018 0 FUND BALANCE - BEGINNING: 739,266 785,225 0 94,391 FUND BALANCE - ENDING: $1,796,834 $973,522 $90,018 $94,391 The accompanying notes are an integral part of these statements. 18 ---PAGE BREAK--- Other Total Blackfoot Governmental Primary Urban Renewal Funds Government Agency $620,413 $5,228,958 $764,043 283,678 198,004 249,871 1,835,497 776,301 1,540,939 884,663 236,510 236,510 111,902 294,320 604,750 5,440 315,369 13,451 783,055 234 36,306 350 1,406,788 12,835,932 777,844 485,838 2,240,278 17,882 6,113,441 1,058,472 429,615 429,615 1,166,908 398,977 398,977 0 106,243 70,000 42,050 1,314,430 11,407,691 236,175 92,358 1,428,241 541,669 0 0 92,358 1,428,241 541,669 1,357,054 2,975,936 887,977 $1,449,412 $4,404,177 $1,429,646 The accompanying notes are an integral part of these statements. 19 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2020 Total Blackfoot Primary Urban Renewal Government Agency Net Change in Fund Balance -Total Governmental Funds: $1,428,241 $541,669 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: (40,951) 35 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: 666,953 This is the amount of current year depreciation: (1,190,966) Long-term liabilities are not recorded in governmental funds. This is the amount of current year capital lease payments: 55,948 This is the amount of current year bond payment payment: 70,000 Liability for personal leave days are not recorded in governmental funds. This is the increase in leave during the year: (15,697) Revenues and expenses that do not require the use of current financial resources are not reported in the governmental funds. This is the current net PERSI revenue/(expense): (353,266) Change in Net Position: $550,262 $611,704 The accompanying notes are an integral part of these statements. 20 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2020 Totals Water Sewer Sanitation (Memorandum ASSETS: Fund Fund Fund Only) Current Assets: Cash and investments $5,021,462 $3,306,730 $1,632,145 $9,960,337 Utility accounts receivable 245,770 307,901 122,688 676,359 Grants receivable 769,022 769,022 Non-current Assets: Land 234,569 413,536 648,105 Property and equipment - net of depreciation 5,455,249 23,963,634 277,313 29,696,196 Restricted Cash 51,652 51,652 Total Assets: 10,957,050 28,812,475 2,032,146 41,801,671 DEFERRED OUTFLOWS: Deferred PERSI outflow of resources 21,893 36,734 18,731 77,358 LIABILITIES: Current liabilities: Accrued leave 19,150 34,681 12,265 66,096 Accounts payable 128,370 1,134,079 21,085 1,283,534 Accrued interest 3,213 71,068 74,281 Customer deposits 108,887 108,887 DEQ loan DW 1001 188,844 188,844 DEQ loan WW 1501 159,071 159,071 Non-current liabilities: DEQ loan WW 1703 6,810,833 6,810,833 DEQ loan DW 1001 2,308,207 2,308,207 DEQ loan WW 1501 3,487,152 3,487,152 Fund's share of unfunded PERSI liability 101,933 170,925 87,128 359,986 Total Liabilities: 2,858,604 11,867,809 120,478 14,846,891 DEFERRED INFLOWS: Deferred PERSI inflow of resources 10,627 17,585 8,896 37,108 NET POSITION: Net investment in capital assets 3,192,767 13,920,114 277,313 17,390,194 Restricted - for debt service 51,652 51,652 Assigned - Capital improvements 2,097,965 1,197,225 500,000 3,795,190 Unrestricted 2,818,980 1,794,824 1,144,190 5,757,994 Total Net Position: $8,109,712 $16,963,815 $1,921,503 $26,995,030 The accompanying notes are an integral part of these statements. 21 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2020 Totals Water Sewer Sanitation (Memorandum OPERATING REVENUE: Fund Fund Fund Only) Service fees $1,985,026 $3,671,844 $1,279,520 $6,936,390 Other 45,559 19,615 66 65,240 Total Revenue: 2,030,585 3,691,459 1,279,586 7,001,630 OPERATING EXPENSES: Salaries 275,897 489,881 248,708 1,014,486 Benefits 284,755 425,742 261,802 972,299 Clothing 2,373 3,529 1,492 7,394 Travel and training 180 3,149 3,329 Office supplies 21,028 31,865 4,140 57,033 Maintenance 274,713 76,360 46,820 397,893 Utilities and telephone 158,271 170,051 4,262 332,584 Fuel 8,849 18,887 37,308 65,044 Professional services 37,279 125,714 162,993 Department supplies and other 87,873 303,327 5,025 396,225 Depreciation 236,463 908,337 79,722 1,224,522 Administrative services 167,185 352,231 130,462 649,878 Laband DEQ fees 24,931 24,931 Lift stations 24,379 24,379 County services 390,551 390,551 Constructional materials 26,763 82,299 38,802 147,864 Total Expenses: 1,606,560 3,015,751 1,249,094 5,871,405 OPERATING INCOME (LOSS): 424,025 675,708 30,492 1,130,225 NON-OPERATING REVENUES (EXPENSES): Federal and State grants 9,875 1,207,634 1,217,509 Debt service-interest (46,031) (167,167) (213,198) INCOME (LOSS) BEFORE CONTRIBUTIONS & TRANSFERS 387,869 1,716,175 30,492 2,134,536 Transfers (to) from other funds 0 0 0 0 CHANGE IN NET POSITION: 387,869 1,716,175 30,492 2,134,536 NET POSITION - BEGINNING: 7,721,843 15,247,640 1,891,011 24,860,494 NET POSITION - ENDING: $8,109,712 $16,963,815 $1,921,503 $26,995,030 The accompanying notes are an integral part of these statements. 22 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2020 Totals Water Sewer Sanitation (Memorandum Fund Fund Fund Only) CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from City patrons $2,009,588 $3,656,202 $1,278,825 $6,944,615 Payments to suppliers (801,334) (910,975) (770,676) (2,482,985) Payments to employees (292,649) (486,909) (243,865) (1,023,423) City administrative charges (167,185) (352,231) (130,462) (649,878) Net Cash Provided by Operating Activities: 748,420 1,906,087 133,822 2,788,329 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of fixed assets (66,500) (8,289,299) (8,355,799) Grants 9,875 1,883,962 1,893,837 Lease purchase payments (145,521) (145,521) DEQ loan DW 1001 payments (231,720) (231,720) DEQ loan WW 1501 payments (258,256) (258,256) DEQ loan WW 1703 advances 5,651,221 5,651,221 Restricted cash (25,826) (25,826) Net Cash Applied to Financing Activities: (288,345) (1,183,719) 0 (1,472,064) CASH FLOWS FROM INVESTING ACTIVITIES: Interest earned on investments 0 0 0 0 NET INCREASE (DECREASE) IN CASH 460,075 722,368 133,822 1,316,265 CASH AT BEGINNING OF YEAR: 4,561,387 2,584,362 1,498,323 8,644,072 CASH AT END OF YEAR: $5,021,462 $3,306,730 $1,632,145 $9,960,337 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET INCOME: Net income (loss) $387,869 $1,716,175 $30,492 $2,134,536 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation 236,463 908,337 79,722 1,224,522 Net PERSI plan expense (revenue) 16,683 28,063 14,330 59,076 Investment income 0 Debt service interest 46,031 167,167 213,198 Grants (9,875) (1,207,634) (1,217,509) Transfers 0 (Increase) decrease in accounts receivable (38,146) (32,451) 640 (69,957) Increase (decrease) in accounts payable 109,395 326,430 8,638 444,463 Net Cash Provided by Operating Activities: $748,420 $1,906,087 $133,822 $2,788,329 The accompanying notes are an integral part of these statements. 23 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF FIDUCIARY NET POSITION AT JUNE 30, 2020 Private Purpose Trust Funds Agency Fund ASSETS: Scholarship Accounts Total Cash and equivalents $27,595 $9,815 $37,410 LIABILITIES Accounts payable - vendors $5,590 $5,590 Due to the Blackfoot Youth Committee 4,714 4,714 Due to the Round Up Program 38 38 Due from Ladie's Golf Association (60) (60) Due from Mens' Golf Association (190) (190) Due to Animal Shelter Vaccinations 50 50 Due from Animal Shelter Utilities (497) (497) Due to Trunk or Treat 170 170 Total Liabilities: $0 9,815 9,815 NET POSITION: Restricted for scholarships 27,595 27,595 Unrestricted 0 0 Total Liabilities and Net Position: $27,595 $0 $27,595 The accompanying notes are an integral part of these statements. 24 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED SEPTEMBER 30, 2020 Private Purpose Trust Funds Scholarship ADDITIONS: Contributions $16,828 Investment income 0 Total Additions: 16,828 DEDUCTIONS: Scholarships 16,744 Total Deductions: 16,744 CHANGE IN NET POSITION 84 NET POSITION - BEGINNING 27,511 NET POSITION - ENDING $27,595 The Accompanying notes are an integral part of these statements. 25 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Blackfoot, Idaho (the “City”) was incorporated on January 16, 1901, under the provision of the State of Idaho. The City operates under a Council-Mayor form of government. The financial statements of the City of Blackfoot have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for established governmental accounting and financial reporting principles. The more significant of the City of Blackfoot’s accounting policies are described below. A. FINANCIAL REPORTING ENTITY For financial reporting purposes, management has considered potential component units. The decision to include a potential component unit in the reporting entity is made by applying the criteria set forth in generally accepted accounting principles. The basic criterion for including a potential component unit within the reporting entity is the governing body's responsibility for financial accountability. Financial accountability is defined as the level of accountability that exists if a primary government appoints a voting majority of an organization’s governing board and is either able to impose its will on that organization or there is potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it. Discretely Presented Component Unit The Blackfoot Urban Renewal District was organized to make improvements to infrastructure in specific areas of the City. It derives its revenues from the incremental tax increases that all taxing districts forfeit from increase in value of the land and improvements in new construction areas. 26 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 B. BASIS OF ACCOUNTING/MEASUREMENT FOCUS The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance, revenues, and expenditures, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Government-wide Financial Statements The Statement of Net Position and the Statement of Changes in Net Position display information about the City. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities are included in the accompanying Statement of Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized when the liability is incurred. Property taxes are recognized as revenue in the year for which they are levied. Program service revenues include charges for services, as well as operating contracts with other units of government, such as the Snake River Fire District, the Rural Library District, and the County Ambulance. Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to inter-fund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. Proprietary funds distinguish operating revenues and expenses for non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with ongoing operations. The principal operating revenues of the Water, Sewer, and Sanitation Funds are charges to City residents. 27 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 B. BASIS OF ACCOUNTING/MEASUREMENT FOCUS – (CONTINUED) Operating expenses include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, the City’s policy is to use restricted resources first and then unrestricted resources, as they are needed. Governmental Fund Financial Statements Governmental Fund Financial Statements include a balance sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in fund equity as presented in these statements to the net position presented in the Government-wide Financial Statements. Governmental funds are accounted for on a spending or “current financial resources” measurement focus and on the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the balance sheets. The Statement of Revenues, Expenditures, and Changes in Fund Balances present increases and decreases in net current assets. Under the modified accrual basis of accounting, revenues are recognized when they become both measurable and available as net current assets. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Revenue sources susceptible to accrual include property taxes and inter-governmental revenues. Expenditures are recognized when the related fund liability is incurred. Exceptions to this general rule include accumulated unpaid vacation, sick days, and other employee amounts which are not accrued. Proprietary Fund Financial Statements Proprietary Funds are used to account for activities similar to those found in the private sector, where the determination of net income is necessary or useful for sound financial administration. Goods or services from such activities can be provided either to outside parties or other departments or agencies within the City. 28 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 B. BASIS OF ACCOUNTING/MEASUREMENT FOCUS – (CONTINUED) Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities are included on the Statement of Net Position. Revenues are recognized when they are earned and expenses are recognized when the liability is incurred. Fiduciary Fund Financial Statements Fiduciary fund financial statements include a Statement of Net Position. The City’s fiduciary funds represent agency funds, which are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The City reports the following major governmental funds: The General Fund is the City’s primary operating fund. It accounts for all financial activities of the City except those required to be accounted for in another fund. The Street Fund is used to account for the operation of the Street Department. Funding is provided by local property taxes and the City’s share of State highway taxes. The Ambulance Fund is used to account for the activities of the City’s paramedics. Funding is provided through user charges and cost sharing with Bingham County. The Parks and Recreation Fund include the City’s golf course, swimming pool, and City parks. Funding is provided by local property taxes and user charges. The City reports the following major proprietary funds: The Water Fund accounts for the City’s water production and distribution. The Sewer Fund accounts for the City’s sewer system operation. The Sanitation Fund accounts for the City’s refuse collection and disposal. 29 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 C. BUDGETING Budgets are adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets are adopted for the general, special revenue, and debt service funds. All annual appropriations lapse at fiscal year-end. Project-length financial plans are adopted for all capital project funds. In July and August of each year, the various department heads submit their budget requests to the Mayor and Council. Budget meetings are then held to determine what funds will be available for expenditure in the new fiscal year. The budget requests are reduced to match the available revenue and a proposed budget is approved by the Mayor and Council. The proposed budget is published in the local paper and taxpayers are invited to attend a public hearing to express their views concerning the proposed budget. After this public meeting, the budget is approved and is legally enacted through the passage of an ordinance. D. ENCUMBRANCES Encumbrances are not liabilities and they are not recorded as expenditures until receipt of material or services. For budgetary purposes, appropriations lapse at year-end and are re- budgeted the following year. The City does not reserve fund balance for outstanding encumbrances at year-end. E. CASH AND INVESTMENTS Cash and Cash Equivalents are generally considered short-term, highly liquid investments with a maturity of three months or less from the purchase date. Investments are recorded at fair value in accordance with GASB Statement No. 72, Fair Value Measurement and Application. Accordingly, the change in fair value of investments is recognized as an increase or decrease to investment assets and investment income. 30 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 E. CASH AND INVESTMENTS – (CONTINUED) The City’s policy is to comply with Idaho State Statutes. Under Idaho Code Section 67- 1210, the City is authorized to invest surplus or idle monies in investments subject to the following standards, guidelines and restrictions: a. City monies shall not be made in any depository of a financial institution in an amount which exceeds 10% of said entity’s capital and surplus. Any investment to be made above Federal Deposit Insurance requires the depository to have a current “Moody’s Bank Credit Report Service” rating of or better. b. No demand deposits or investment in time deposits or certificates of deposit shall be made in financial institutions insured in whole or in part by the Federal Savings and Loan Insurance Corporation or in any State or Federal credit unions’ insurance programs in an amount in excess of the insurance available. Investments allowable under “Idaho Code Section 67-1210 are: a. Bonds, Treasury bills, interest bearing notes, or other obligations of the United States or those for which the faith and credit of the United States are pledged for the payment of principal and interest. b. General obligation or revenue bonds of this State or those for which the faith and credit of this State are pledged for the payment of principal and interest. c. General obligation or revenue bonds of any county, city, metropolitan water district, municipal utility district, school district, or other taxing district of this State. d. Notes, bonds, debentures, or other similar obligations issued by the Farm Credit System or institutions forming a part thereof under the Farm Credit Act of 1971. e. Bonds, notes, or other similar obligations issued by public corporations of the State of Idaho including, but not limited to, the Idaho State Building Authority, the Idaho Housing and Finance Association, and the Idaho Water Resource Board. f. Repurchase agreements covered by any legal investment for the State of Idaho. g. Tax anticipation notes and registered warrants of the State of Idaho. h. Tax anticipation bonds or notes and income and revenue anticipation bonds or notes of taxing districts of the State of Idaho. i. Time deposit accounts and savings accounts in state depositories including, but not limited to, accounts on which interest or dividends are paid and upon which negotiable orders of withdrawal may be drawn, and similar transactions accounts. 31 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 E. CASH AND INVESTMENTS – (CONTINUED) j. Time deposit accounts and savings accounts of Federal savings and loan associations located within the geographical boundaries of the State in amounts not to exceed the insurance provided by the Federal Deposit Insurance Corporation including, but not limited to, accounts on which interest or dividends are paid and upon which negotiable orders of withdrawal may be drawn, and similar transaction accounts. k. Revenue bonds of institutions of higher education of the State of Idaho. l. Share, savings, and deposit accounts of State and Federal credit unions located within the geographical boundaries of the State in amounts not to exceed the insurance provided by the National Credit Union Share Insurance Fund and/or any other authorized deposit guaranty corporation, including but not limited to, accounts on which interest or dividends are paid and upon which negotiable orders of withdrawal may be drawn, and similar transaction accounts. m. Money market funds whose portfolios consist of any allowed investment as specified in this section. The securities held in money market portfolios must be dollar-denominated, meaning that all principal and interest payments on such a security are payable to security holders in United States dollars. The City pools idle cash from all funds for purpose of increasing income through investment activities. As of September 30, 2020, the City’s investments consisted of $2,861,798 (33%) in the State of Idaho Local Government Diversified Bond fund (DBF), $3,790,765 (44%) in the State of Idaho Local Government Investment Pool (LGIP), and $1,953,545 (23%) in Moreton Asset Management. Fair Value of Investments The City measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows: Level 1- Valuations based on quoted prices in active markets for identical assets or liabilities. Since valuations are based upon quoted prices that are readily and regularly available, the valuation of these securities does not entail any significant degree of judgement. Securities classified as Level 1 inputs include U.S Government securities and other U.S. Agency and sovereign government obligations. 32 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 E. CASH AND INVESTMENTS – (CONTINUED) Level 2- Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Securities classified as Level 2 include corporate and municipal bonds, and “brokered” or securitized certificates of deposit. Level 3- Valuations based on inputs that are unobservable and significant to the overall fair value measurement. At September 30, 2020, 100% of DBF and LGIP investments are Level 2 valuations. Moreton Asset Management had the following recurring fair value measurements: Security Type Level 1 Level 2 Level 3 Other Total CD $1,399,970 $1,399,970 Corporate 516,102 516,102 Currency 0 MM Fund $32,648 32,648 $32,648 $1,916,072 $0 $0 $1,948,720 Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. DBF investment maturities are as follows: 17% less than one year, 70% one to 5 years, and 13% six to 10 years. 95% of LGIP investment maturities are less than one year. The remaining 5% are one to 5 years. As of September 30, 2020, Moreton Asset Management investments had the following maturities: Security Market Value + Accrued Type 0 to 1 Yr. 1 to 3 Yrs. 3 to 5 Yrs Other Total CD $1,344,023 $60,034 $1,404,057 Corporate $275,822 241,019 516,841 Currency 0 MM Fund $32,646 32,646 $308,468 $1,585,042 $60,034 $0 $1,953,544 33 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 E. CASH AND INVESTMENTS – (CONTINUED) Credit Risk Credit risk is the risk that an insurer or other counterparty to an investment will not fulfill its obligations. The City’s policy for reducing its exposure to credit risk is to comply with the previously noted State Statute guidelines. DBF investment ratings are as follows: AAA 64%, AA A 26%, Unrated LGIP investment rating are as follows: AAA 16%, AA A 10%, P-1 68%, and unrated As of September 30, 2020, Moreton Asset Management investments had the following credit ratings: Rating Book Value Mkt Value + Accrued AAA $32,646 $32,646 AA 25,028 25,401 AA- 134,974 140,741 A+ 938,451 961,342 A 199,796 200,448 A- 50,214 50,231 BBB+ 252,740 258,646 BBB 50,030 50,174 NA 225,849 233,916 $1,909,728 $1,953,545 Concentration of Credit Risk Concentration of credit risk occurs when investments are concentrated in one issuer. The City has no investment policy limiting the amount it may invest in any one issuer. However, note that the DBF, the LGIP, and Moreton Asset Management are all diversified investment funds which are investing the City’s money numerous individual securities. This greatly reduces the City’s concentration of credit risk. 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. 34 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 H. CAPITAL ASSETS Capital assets, which include property, plant, equipment, and infrastructure (roadways), are defined by the City as any asset with an individual cost of more than $5,000 and an estimated useful life of at least one year. The City’s assets are capitalized at historical cost or estimated historical cost. Gifts or contributions of assets are recorded at fair market value when received. Depreciation is recorded on the straight-line basis over the estimated useful lives of the assets as follows: Buildings: 20-40 years, Equipment: 5-10 years, and Infrastructure: 40 years. 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. 35 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The City has one type of these items, which arises under the government-wide accrual basis of accounting that qualifies for reporting in this category and one item, which arises only under a modified accrual basis of accounting. Accordingly, the item, “unavailable revenue”, is reported only in the Governmental Funds Balance Sheet. The governmental funds report unavailable revenues from one source: property taxes. This amount is deferred and recognized as an inflow of resources in the period that the amounts become available. The other item (reported in the government-wide statements) is an amount related to the pension base plan. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 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. 36 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 M. NET POSITION FLOW ASSUMPTIONS Net position represents the difference between assets and liabilities. Net investment in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction, or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors, laws or regulations, or other governments. Sometimes, the City will fund outlays for a particular purpose from both restricted (e.g. restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the Government-wide and Proprietary Fund Financial Statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied. Pensions – For purposes of measuring the net pension liability and pension expense, information about the fiduciary net position of the Public Employee Retirement System of Idaho Base Plan (Base Plan) and additions to/deductions from the Base Plan’s fiduciary net position have been determined on the same basis as they are reported by the Base Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 2. PROPERTY TAX The City’s property taxes, levied by the second Monday of September on assessed valuation as of June 30, are payable in two equal installments for real property due December 20, and June 20. Personal taxes are payable on December 20. Assessed valuations are established by the County Assessor’s office except for utility property which is established by the State and is currently at 100% of market value. Delinquent payments bear simple interest of 1% per month plus a 2% penalty. Due to the small amount of taxes not collected no adjustment is made for delinquent taxes. Uncollected property taxes are recorded as receivable at year-end, with deferred revenue representing that portion which will not be collected within 60 days after year-end. 37 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 The following is a detail of accounts receivable: General Street Fund Fund Total State of Idaho: Revenue sharing $284,982 $284,982 State liquor tax 40,968 $153,060 194,028 Highway user tax 0 325,950 153,060 479,010 Other receivables: Groveland Water & Sewer District 3,572 3,572 Prepaid Employee tax & benefits 334,803 334,803 Franchise Fees 21,963 21,963 Accrued interest on investments 6,026 6,026 344,401 21,963 366,364 Total Receivables $670,351 $175,023 $845,374 In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the Government-wide Statement of Net Position. The City has maintained a record of fixed assets since 1993. During fiscal year 2000, the infrastructure assets were added to the equipment inventory records. Original estimated costs were developed in one of three ways: 1) Actual historical cost records; 2) Estimated historical costs where actual cost records were not available; and 3) for streets, curbs, and gutters; the City used present construction cost indexed by inflation factors provided by the Idaho Department of Transportation. Accumulated depreciation was computed on a straight- line basis using appropriate life expectancies. 3. RECEIVABLES 4. CAPITAL ASSETS 38 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2019 Capital assets of the City for the year ended September 30, 2020 are as follows: Assets Accumulated Depreciation Balance Balance Balance Balance Governmental Activities: 10/1/2019 Change 9/30/2020 10/1/2019 Change 9/30/2020 Land $1,048,240 $203,150 $1,251,390 Buildings 9,793,928 92,741 9,886,669 $6,146,776 $312,553 $6,459,329 Infrastructure 27,493,755 210,058 27,703,813 14,858,529 596,114 15,454,643 Vehicles/ Rolling Stock 5,013,064 195,675 5,208,739 4,176,854 333,268 4,510,122 Furniture/ Equipment 2,417,798 48,585 2,466,383 1,519,376 33,287 1,552,663 $45,766,785 $862,506 $46,516,994 $26,701,535 $1,275,222 $27,976,757 Business - type Activities Land $648,105 $648,105 Distributions System 38,104,014 $8,231,006 46,335,020 $17,008,403 $1,000,975 $18,009,378 Vehicles/ Rolling Stock 3,230,765 (14,711) 3,216,054 2,402,467 74,959 2,477,426 Furniture/ Equipment 1,522,762 56,247 1,579,009 881,750 65,332 947,082 $43,505,646 $8,272,542 $51,778,188 $20,292,620 $1,141,266 $21,433,886 For the fiscal year ended September 30, 2020, depreciation expense on capital assets was charged to the governmental functions in the City-wide statements as follows: General Government $31,937 Public Safety 135,810 Street 650,179 Cemetery 3,868 Airport 197,163 Library 1,919 Parks 171,090 $1,191,966 4. CAPITAL ASSETS – (CONTINUED) 39 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 Accounts payable consists of the following: Parks and Other General Street Ambulance Recreation Non- major Fund Fund Fund Fund Funds Total Vendors payable $135,889 $40,643 $8,402 $33,912 $52,509 $271,355 Wages payable 155,566 15,510 37,505 25,446 13,389 247,416 Customer deposits 20,674 20,674 Golf tournament Credits 37,133 37,133 $312,129 $56,153 $45,907 $96,491 $65,898 $576,578 Water Sewer Sanitation Fund Fund Fund Total Vendors payable $117,573 $1,110,873 $8,454 $1,236,900 Wages payable 10,797 23,206 12,631 46,634 $128,370 $1,134,079 $21,085 $1,283,534 During 2019, the City entered into a lease agreement with Zion’s Bank to finance a Fire Truck. It is being repaid over 6 years with interest at 3.38%. As of September 30, 2020, the annual requirements to amortize the debt are as follows: Payment 3.38% Date Amount Interest Principal Balance $157,867 Mar 2021 $21,298 $2,668 $18,630 139,237 Sep 2021 21,298 2,353 18,945 120,292 Mar 2022 21,298 2,033 19,265 101,027 Sep 2022 21,298 1,708 19,590 81,437 Mar 2023 21,298 1,377 19,921 61,516 Sep 2023 21,298 1,040 20,258 41,258 Mar 2024 21,298 697 20,601 20,657 Sep 2024 21,298 641 20,657 0 $170,384 $12,517 $157,867 5. ACCOUNTS PAYABLE 6. CAPITAL LEASES 40 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 During 2018, the City completed a waste water facilities upgrade. The project was funded by a loan from the US Department of Environmental Quality Idaho Revolving Loan Fund. As of September 30, 2020, the annual requirements to amortize the debt including interest are as follows: Sewer Revenue Bond Series 2018 2.75% Payment Interest Principal Balance $3,646,223 3/17/21 $129,128 $50,136 $78,992 3,567,231 9/17/21 129,128 49,049 80,079 3,487,152 3/17/22 129,128 47,948 81,180 3,405,972 9/17/22 129,128 46,832 82,296 3,323,677 3/17/23 129,128 45,701 83,427 3,240,249 9/17/23 129,128 44,553 84,575 3,155,675 3/17/24 129,128 43,391 85,737 3,069,937 9/17/24 129,128 42,212 86,916 2,983,021 3/17/25 129,128 41,017 88,111 2,894,909 9/17/25 129,128 39,805 89,323 2,805,586 3/17/26 129,128 38,577 90,551 2,715,035 9/17/26 129,128 37,332 91,796 2,623,239 3/17/27 129,128 36,070 93,058 2,530,180 9/17/27 129,128 34,790 94,338 2,435,842 3/17/28 129,128 33,493 95,635 2,340,207 9/17/28 129,128 32,178 96,950 2,243,257 3/17/29 129,128 30,845 98,283 2,144,974 9/17/29 129,128 29,493 99,635 2,045,339 3/17/30 129,128 28,123 101,005 1,944,335 9/17/30 129,128 26,735 102,393 1,841,941 3/17/31 129,128 25,327 103,801 1,738,140 9/17/31 129,128 23,899 105,229 1,632,912 3/17/32 129,128 22,453 106,675 1,526,236 9/17/32 129,128 20,986 108,142 1,418,094 3/17/33 129,128 19,499 109,629 1,308,465 9/17/33 129,128 17,991 111,137 1,197,328 3/17/34 129,128 16,463 112,665 1,084,663 9/17/34 129,128 14,914 114,214 970,450 3/17/35 129,128 13,344 115,784 854,665 9/17/35 129,128 11,752 117,376 737,289 3/17/36 129,128 10,138 118,990 618,299 9/17/36 129,128 8,502 120,626 497,672 3/17/37 129,128 6,843 122,285 375,387 9/17/37 129,128 5,162 123,966 251,421 3/17/38 129,128 3,457 125,671 125,750 9/17/38 127,479 1,729 125,750 0 7. DEQ REVOLVING LOAN #WW 1501 41 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 During 2012, the City completed a water facilities upgrade. The project was funded by a loan from the US Department of Environmental Quality Idaho Revolving Loan Fund. As of September 30, 2020, the annual requirements to amortize the debt including interest are as follows: Water Bond Series 2015 Payment 1.75% Date Amount Interest Principal Balance $2,497,051 3/11/21 $115,860 $21,850 $94,010 2,403,041 9/11/21 115,860 21,027 94,833 2,308,208 3/11/22 115,860 20,197 95,663 2,212,545 9/11/22 115,860 19,360 96,500 2,116,045 3/11/23 115,860 18,515 97,344 2,018,701 9/11/23 115,860 17,663 98,196 1,920,505 3/11/24 115,860 16,804 99,055 1,821,450 9/11/24 115,860 15,937 99,922 1,721,528 3/11/25 115,860 15,063 100,796 1,620,732 9/11/25 115,860 14,181 101,678 1,519,054 3/11/26 115,860 13,291 102,568 1,416,486 9/11/26 115,860 12,394 103,466 1,313,020 3/11/27 115,860 11,489 104,371 1,208,649 9/11/27 115,860 10,575 105,284 1,103,365 3/11/28 115,860 9,654 106,205 997,159 9/11/28 115,860 8,725 107,135 890,025 3/11/29 115,860 7,787 108,072 781,952 9/11/29 115,860 6,842 109,018 672,934 3/11/30 115,860 5,888 109,972 562,963 9/11/30 115,860 4,926 110,934 452,029 3/11/31 115,860 3,955 111,905 340,124 9/11/31 115,860 2,976 112,884 227,240 3/11/32 115,860 1,988 113,872 113,369 9/11/32 114,331 992 113,369 8. DEQ REVOLVING LOAN #DW 1001 42 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 During fiscal year 2006, BURA sold $1,100,000 in tax increment bonds to fund construction costs associated with the Riverview Technology Park. These bonds will be repaid from future property tax revenues. As of September 30, 2020, 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, 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 $545,000.00 $127,418.75 $672,418.75 During fiscal year 2019, the City began drawing down on the DEQ Waste Water Loan #1703. As of September 30,2020, the City had drawn down $6,810,833. As per the terms of Sewer Revenue Bond Series 2018, identified in the financial statements as DEQ loan WW 1501, the City agreed to deposit in a separate account an amount equal to one-tenth of an annual payment every year until the reserve equals the annual payment. As of September 30, 2019, the required reserve is $25,826. The City is in compliance with these bond requirements. 9. BLACKFOOT URBAN RENEWAL TAX INCREMENT BONDS 10. DEQ WASTE WATER LOAN # 1703. 11. RESTRICTED CASH 43 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 The following is a summary of the City’s long-term debt transactions for the year ended September 30, 2020: Balance Incurred Satisfied Balance Amounts Due 10/1/2019 or issued or matured 9/30/2020 within one year Governmental Activities: Compensated absences $417,544 $15,697 $433,241 Lease purchase contracts 213,815 ($55,948) 157,867 $37,575 City's share of unfunded PERSI 1,149,729 1,008,410 2,158,139 $1,781,088 $1,024,107 ($55,948) $2,749,247 $37,575 Business-type Activities: Compensated absences $72,393 ($6,297) $66,096 Lease purchase contracts 145,272 (145,272) 0 DEQ WWTP loan #1001 2,682,608 (185,557) 2,497,051 $188,844 DEQ WWTP loan #1501 3,798,180 (151,957) 3,646,223 159,071 DEQ WWTP loan #1703 390,590 $6,420,243 6,810,833 City's share of unfunded PERSI 191,351 168,635 359,986 $7,280,394 $6,588,878 ($489,083) $13,380,189 $347,915 Blackfoot Urban Renewal District: Tax Increment Bonds $615,000 ($70,000) $545,000 $75,000 $615,000 $0 ($70,000) $545,000 $75,000 The City is subject to a statutory limitation by the State of Idaho for indebtedness payable principally from property taxes. The limit is 2% of market value per the year’s tax roll. The City’s outstanding general obligation debt is under the legal limit. 12. LONG-TERM DEBT 13. LEGAL DEBT MARGIN 44 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 Administrative Charges: To From General Fund $783,055 Street Fund $68,947 Ambulance Fund $18,332 Airport Fund $27,746 Cemetery Fund $8,420 Library Fund $9,732 Water Fund $167,185 Sewer Fund $352,231 Sanitation fund $130,462 Deficit Transfers: Parks and Recreation Fund: $79,533 General Fund $79,533 Storm Water Maintenance Reimbursement: Park Fund $28,000 Water Fund $8,000 Sewer Fund $20,000 To save on health insurance costs, the City has purchased a policy with large individual deductibles. Rather than pass that cost to the employees, the City has agreed to pay up to $1,000 for individuals and $2,000 for families. The City’s maximum risk at any time is approximately $170,000. The City has set up a Health Care Reserve Fund to account for this activity. The City has chosen to participate in the Idaho Independent Inter-governmental Authority Insurance, which is a self-funded insurance policy that Idaho municipalities are eligible to participate in. If in the future there are a high number of claims which depletes the reserve, the City could possibly be required to re-fund this reserve. This potential additional expense has not been determined at this time, but based upon past experience, there is sufficient money in the Health Care Reserve Fund to meet the City’s current needs. Amounts received or receivable from grantor agencies are subject to audit and adjustment by those agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed cannot be determined at this time. The City expects such amounts, if any, to be immaterial. 14. TRANSFERS BETWEEN FUNDS 15. CONTINGENT LIABILITIES 45 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 The Airport Fund spent $236,181 more than was budgeted. Airport fund revenues exceeded budget amounts by $265,816. The Capital Improvements fund spent $60,417 more than budgeted. Capital Improvement fund revenues exceed budget by $2,769. As of September 30, 2020, the Capital Improvements Fund had a deficit cash balance of $23,585. That amount is reported as a liability “Due to other Funds” on the Capital Improvements Fund Balance Sheet. That same amount is reported as an asset “Due From Other Funds” on the General Funds Balance Sheet. 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. 16. EXCESS OF EXPENDITURES OVER APPROPRIATIONS 17. DUE TO DUE FROM OTHER FUNDS 18. RISK MANAGEMENT 46 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 Plan Description The City of Blackfoot, Idaho (The City) contributes to the Base Plan which is a cost sharing multiple-employer defined benefit pension plan administered by Public Employee Retirement System of Idaho (PERSI or System) that covers substantially all employers of the State of Idaho, its agencies and various participating political subdivisions. The cost to administer the plan is financed through the contributions and investment earnings of the plan. PERSI issues a publicly available financial report that includes financial statements and the required supplementary information for PERSI. That report may be obtained on the PERSI website at www.persi.idaho.gov. Responsibility for administration of the Base Plan is assigned to the Board comprised of five members appointed by the Governor and confirmed by the Idaho Senate. State law requires that two members of the Board be active Base Plan members with at least ten years of service and three members who are Idaho citizens, not members of the Base Plan except by reason of having served on the Board. Pension Benefits The Base Plan provides retirement, disability, death, and survivor benefits of eligible members or beneficiaries. Benefits are based on members’ years of service, age, and highest average salary. Members become fully vested in their retirement benefits with five years of credited service (5 months for elected or appointed officials). Members are eligible for retirement benefits upon attainment of the ages specified for their employment classification. The annual service retirement allowance for each month of credited service is 2.0% (2.3% for police/firefighters) of the average salary for the highest consecutive 42 months. The benefit payments for the Base Plan are calculated using a benefit formula adopted by the Idaho Legislature. The Base Plan is required to provide a 1% minimum cost of living increase per year provided the Consumer Price Index increases 1% or more. The PERSI Board has the authority to provide higher cost of living increases to a maximum of the Consumer Price Index movement or whichever is less; however, any amount above the 1% minimum is subject to review by the Idaho Legislature. 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM 47 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 Member and Employer Contributions Member and employer contributions paid to the Base Plan are set by statute and established as a percent of covered compensation. Contribution rates are determined by the PERSI Board within limitations, as defined by State law. The Board may make periodic changes to employer and employee contribution rates (expressed as percentages of annual covered payroll) that are adequate to accumulate sufficient assets to pay benefits when due. The contribution rates for employees are set by statute at 60% of the employer rate for general employees and 72% for police and firefighters. As of June 30, 2019, it was 6.79% for general employees and 8.36% for police and firefighters. The employer contribution rate as a percent of covered payroll is set by the Retirement Board and was 11.32% for general employees and 11.66% for police and firefighters. The City’s contributions were $461,054 for the PERSI year ended June 30, 2020. Pension Liabilities, Pension Expense (Revenue), and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At September 30, 2020, the City reported a liability for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The 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, 2019, the City’s proportion was .1084401 percent. 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM - (CONTINUED) 48 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 For the year ended September 30, 2020, the City recognized pension expense of $911,952. At September 30, 2020, the District reported deferred outflows of resources related to pension from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $72,110 ($75,831) Changes in assumptions or other inputs ($32,012) $0 Net difference between projected and actual earnings on pension plan investments $0 ($456,867) Changes in the employer's proportion and differences between the employer's contributions and the employer's proportionate contributions $348,141 $794,652 Contributions subsequent to the measurement date $152,665 $0 Total $540,904 $261,955 $152,665 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 June 30, 2020. The average of the expected remaining service lives of all employees that are provided with pensions through the System (active and inactive employees) determined at July 1, 2018, the beginning of the measurement period ended June 30, 2018 is 4.8 and 4.8 for the measurement period June 30, 2019. Other amounts, reported as deferred outflows of resources and deferred inflows of resources related to pensions, will be recognized in pension expense (revenue) as follows: Year ended September 30, 2020: 2021 $8,132 2022 $10,613 2023 $143,967 2024 $187,559 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM - (CONTINUED) 49 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 Actuarial Assumptions Valuations are based on actuarial assumptions, the benefit formulas, and employee groups. Level percentages of payroll normal costs are determined using the Entry Age Normal Cost Method. Under the Entry Age Normal Cost Method, the actuarial present value of the projected benefits of each individual included in the actuarial valuation is allocated as a level percentage of each year’s earnings of the individual between entry age and assumed exit age. The Base Plan amortizes any unfunded actuarial accrued liability based on a level percentage of payroll. The maximum amortization period for the Base Plan permitted under Section 59-1322, Idaho Code, is 25 years. The total pension liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3.00% Salary increases 3.75% Salary inflation 3.75% Investment rate of return 7.05%, net of investment expenses Cost-of-living adjustments 1% Mortality rates were based on the RP-2000 combined table for healthy males or females as appropriate with the following offsets:  Set back 3 years for teachers  No offset for male fire and police  Forward one year for female fire and police  Set back one year for all general employees and all beneficiaries An experience study was performed for the period July 1, 2013 through June 30, 2017 which reviewed all economic and demographic assumptions other than mortality. The Total Pension Liability as of June 30, 2019 is based on the results of an actuarial valuation date of July 1, 2019. The long-term expected rate of return on pension plan investments was determined using the building block approach and a forward-looking model in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are 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. 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM - (CONTINUED) 50 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 Even though history provides a valuable perspective for setting the investment return assumption, the System relies primarily on an approach which builds upon the latest capital market assumptions. Specifically, the System uses consultants, investment managers, and trustees to develop capital market assumptions in analyzing the System’s asset allocation. The assumptions and the System’s formal policy for asset allocation are shown below. The formal asset allocation policy is somewhat more conservative than the current allocation of the System’s assets. The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. The capital market assumptions are as of January 1, 2017. Long-term Long-term Expected Nominal Expected real Target Rate of Return Rate of Return Asset Class Allocation (Arithmetic) (Arithmetic) Core Fixed Income Barclays Aggregate 30.00% 3.05% 0.80% Broad US Equities Wilshire 5000/Russel 3000 55.00% 8.30% 6.05% Developed Foreign Equities MSCI EAFE/World ex US 15.00% 8.45% 6.20% Assumed Inflation - Mean 2.25% 2.25% Assumed Inflation - Standard Deviation 1.50% 1.50% Portfolio Arithmetic Mean Return 6.75% 4.50% Portfolio Standard Deviation 12.54% 12.54% Portfolio Long-term (Geometric) Expected Rate of Return 6.13% 3.77% Assumed Investment Expenses 0.40% 0.40% Portfolio Long-term (Geometric) Expected Rate of Return, Net of Investment Expenses 5.73% 3.37% Portfolio Long-term Expected Real Rate of Return, Net of Investment Expenses 4.19% Portfolio Standard Deviation 14.16% Valuation Assumptions Chosen by PERSI Board: Long-term Expected Real Rate of Return, Net of Investment Expenses 4.05% Assumed Inflation 3.00% Long-term Expected Nominal Rate of Return, Net of Investment Expenses 7.05% 19. PUBLIC EMPLOYEES RETIREMENT SYSTEM - (CONTINUED) 51 ---PAGE BREAK--- CITY OF BLACKFOOT NOTES TO FINANCIAL STATEMENTS – (CONTINUED) SEPTEMBER 30, 2020 Discount Rate The discount rate used to measure the total pension liability was 7.05%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rate. Based on these assumptions, the pension plan’s net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The long-term expected rate of return was determined net of pension plan investment expense but without reduction for pension plan administrative expense. Sensitivity of the Employer’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate. The following presents the employer’s proportionate share of the net pension liability calculated using the discount rate of 7.05 percent, as well as what the employer’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (6.05 percent) or 1 percentage point higher (8.05 percent) than the current rate: Current 1% Decrease Discount Rate 1% Increase (6.05%) (7.05%) (8.05%) Employer's proportionate share of the net pension liability (asset) $5,163,979 $2,518,123 $330,430 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) 52 ---PAGE BREAK--- REQUIRED SUPPLEMENTARY INFORMATION 53 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED SEPTEMBER 30, 2020 Schedule of Employer's Share of Net Pension Liability PERSI - Base Plan Last 10 - Fiscal Years * 2020 2019 2018 Employer's portion of the net pension liability 0.108440% 0.117487% 0.122055% Employer's proportionate share of the net pension liability $2,518,123 $1,341,079 $1,800,331 Employer's covered-employee payroll $5,336,476 $5,628,355 $5,696,820 Employer's proportionate share of the net pension liability as a percentage of its covered-employee payroll 47.19% 23.83% 31.60% Plan fiduciary net pension as a percentage of the total pension liability 88.22% 93.79% 91.69% Schedule of Employer's Contributions PERSI - Base Plan Last 10 - Fiscal Years * 2020 2019 2018 Statutorialy required contribution $425,455 $449,552 $473,990 Contributions in relation to the statutorily required contribution $466,984 $458,294 $450,552 Contribution (deficiency) excess $41,529 $8,742 ($23,437) Employer's covered-employee payroll $5,336,476 $5,628,355 $5,696,820 Contributions as a percentage of covered-employee payroll 7.97% 7.99% 8.32% *GASB Statement No 68 requires ten years of information to be presented in this table. However, until a full 10-year trend is compiled, the City will present information for those years for which this information is available. Data reported is measured as of June 30, 2020 54 ---PAGE BREAK--- 2017 2016 2015 0.127392% 0.123140% 0.123492% $2,002,377 $2,496,227 $1,626,186 $5,506,167 $5,166,140 $5,027,213 36.37% 48.32% 32.35% 90.68% 87.26% 91.38% 2017 2016 2015 $429,580 $366,047 $403,944 $453,982 $413,269 $396,706 $24,402 $47,221 ($7,238) $5,506,167 $5,166,140 $5,027,213 7.80% 7.09% 8.04% 55 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND YEAR ENDED SEPTEMBER 30, 2020 Original Variance & Final Favorable Budget Actual (Unfavorable) REVENUE: Taxes: Property taxes $3,899,625 $3,923,172 $23,547 Sales and use taxes 593,218 283,678 (309,540) Franchise taxes 114,016 90,641 (23,375) Subtotal Taxes: 4,606,859 4,297,491 (309,368) Licenses and Permits: Business licenses 21,092 16,925 (4,167) Building permits 40,000 84,866 44,866 Plan review State contract 7,000 28,093 21,093 Dog licenses 430 430 Subtotal Licenses and Permits: 68,092 130,314 62,222 Inter-governmental: Liquor apportionment 178,945 200,423 21,478 State revenue sharing 467,397 781,374 313,977 Blackfoot - Snake River Fire District 884,663 884,663 0 School resource officer 167,852 111,902 (55,950) State, Federal, and local grants 131,000 65,336 (65,664) Subtotal Intergovernmental: 1,829,857 2,043,698 213,841 Miscellaneous: Administrative charges 800,000 783,055 (16,945) Fines and forfeitures 69,780 48,178 (21,602) Interest 75,738 303,419 227,681 Other 5,000 11,835 6,835 Subtotal Miscellaneous: 950,518 1,146,487 195,969 Total Revenue: 7,455,326 7,617,990 162,664 EXPENDITURES: Administrative: Salaries 435,365 432,693 2,672 Benefits 439,933 365,561 74,372 Travel and meeting 21,000 1,711 19,289 Office supplies and expense 171,477 122,476 49,001 The accompanying notes are an integral part of these statements. 56 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - (CONTINUED) GENERAL FUND YEAR ENDED SEPTEMBER 30, 2020 Original Variance EXPENDITURES: and Final Favorable Administrative - Continued: Budget Actual (Unfavorable) Maintenance $39,140 $27,688 $11,452 Utilities and telephone 20,460 16,374 4,086 Professional services 125,050 121,735 3,315 Department supplies and other 31,225 84,663 (53,438) Insurance 190,844 293,007 (102,163) Contingency 102,075 18,036 84,039 Subtotal Administrative: 1,576,569 1,483,944 92,625 Police: Salaries 1,763,631 1,573,098 190,533 Benefits 931,765 814,917 116,848 Clothing allowance 18,000 13,473 4,527 Travel and training 28,000 20,572 7,428 Office supplies 30,842 22,413 8,429 Maintenance 44,000 38,081 5,919 Utilities and telephone 10,000 6,628 3,372 Fuel 57,000 47,537 9,463 Professional services 2,500 1,535 965 Department supplies and other 62,500 76,561 (14,061) Bingham County 275,266 274,715 551 Grants 4,000 4,000 Capital outlay 24,600 67,233 (42,633) Subtotal Police: 3,252,104 2,956,763 295,341 Fire: Salaries 1,075,461 1,047,443 28,018 Benefits 645,294 596,970 48,324 Protective clothing 11,000 5,649 5,351 Travel and training 9,500 1,808 7,692 Office supplies 15,442 10,886 4,556 Maintenance 32,800 65,343 (32,543) The accompanying notes are an integral part of these statements. 57 ---PAGE BREAK--- CITY OF BLACKFOOT STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - (CONTINUED) GENERAL FUND YEAR ENDED SEPTEMBER 30, 2020 Original Variance EXPENDITURES: and Final Favorable Fire - Continued: Budget Actual (Unfavorable) Utilities and telephone $36,200 $23,915 $12,285 Fuel 10,000 6,120 3,880 Professional services 7,300 1,730 5,570 Department supplies and other 24,354 7,747 16,607 Debt Service interest 0 Capital outlay 45,000 2,074 42,926 Subtotal Fire: 1,912,351 1,769,685 142,666 Building and Zoning: Salaries 93,983 94,643 (660) Benefits 90,992 85,463 5,529 Travel and training 3,500 1,013 2,487 Office supplies 23,907 8,103 15,804 Utilities and telephone 1,920 1,913 7 Professional services 5,000 8,506 (3,506) State building contract 60,000 70,856 (10,856) Grants 100,000 100,000 Subtotal Building and Zoning: 379,302 270,497 108,805 Total Expenditures: 7,120,326 6,480,889 639,437 EXCESS REVENUE (EXPENDITURES): 335,000 1,137,101 802,101 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds (335,000) (79,533) 255,467 EXCESS REVENUE/SOURCES (EXPENDITURES/USES): $0 1,057,568 $1,057,568 FUND BALANCE - BEGINNING: 739,266 FUND BALANCE - ENDING: $1,796,834 The accompanying notes are an integral part of these statements. 58 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL STREET FUND YEAR ENDED SEPTEMBER 30, 2020 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $452,233 $460,114 $7,881 Highway users' tax 561,255 559,142 (2,113) County road and street 62,801 56,433 (6,368) Franchise fees 100,064 107,363 7,299 Federal and State grants 166,020 166,020 Miscellaneous 1,948 1,948 Interest on investments 4,185 4,185 Total Revenue: 1,176,353 1,355,205 178,852 EXPENDITURES: Salaries 321,760 302,204 19,556 Benefits 276,594 242,461 34,133 Clothing 5,600 1,192 4,408 Travel and training 1,500 1,500 Office supplies 5,692 6,647 (955) Maintenance 51,500 50,019 1,481 Utilities and telephone 172,150 143,784 28,366 Fuel 35,000 16,742 18,258 Professional services 5,625 3,230 2,395 Department supplies and other 119,650 75,131 44,519 Indirect cost reimbursement 68,947 68,947 0 Grant expense 40,335 226,456 (186,121) Construction materials 65,000 23,570 41,430 Capital outlay 7,000 6,525 475 Total Expenditures: 1,176,353 1,166,908 9,445 EXCESS REVENUE (EXPENDITURES): 0 188,297 188,297 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 188,297 $188,297 FUND BALANCE - BEGINNING: 785,225 FUND BALANCE - ENDING: $973,522 The accompanying notes are an integral part of these statements. 59 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL AMBULANCE FUND YEAR ENDED SEPTEMBER 30, 2020 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Hospital collections - ambulance $732,710 $745,412 $12,702 County ambulance 652,387 650,190 (2,197) Bingham Memorial - contribution 45,880 30,000 (15,880) Grants 49,075 49,075 Miscellaneous 15,500 2,333 (13,167) Total Revenue: 1,446,477 1,477,010 30,533 EXPENDITURES: Salaries 719,740 730,771 (11,031) Benefits 475,339 419,871 55,468 Protective clothing 3,000 2,365 635 Travel and training 11,360 11,629 (269) Office supplies 5,367 8,342 (2,975) Maintenance 29,000 20,213 8,787 Utilities and telephone 5,000 2,809 2,191 Fuel 25,000 18,701 6,299 Professional services 6,500 9,385 (2,885) Department supplies and other 30,110 20,225 9,885 Grant expense 39,783 60,419 Indirect cosreimbursement 35,278 18,332 16,946 Collection expense and refunds 61,000 63,930 (2,930) Total Expenditures: 1,446,477 1,386,992 80,121 EXCESS REVENUE (EXPENDITURES): 0 90,018 90,018 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 90,018 $90,018 FUND BALANCE - BEGINNING: 0 FUND BALANCE - ENDING: $90,018 The accompanying notes are an integral part of these statements. 60 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL PARKS AND RECREATION FUND YEAR ENDED SEPTEMBER 30, 2020 Original & Variance Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $220,820 $225,259 $4,439 County participation 20,000 21,500 1,500 Golf course 732,626 636,319 (96,307) Park reservation fees and donations 32,782 18,515 (14,267) Recreation fees and donations 34,110 27,065 (7,045) Storm water maintenance fee 28,000 28,000 0 Grants and contributions 0 Interest on investments 2,325 2,325 Other 19,956 19,956 Total Revenue: 1,068,338 978,939 (89,399) EXPENDITURES (Parks): Salaries 214,289 107,788 106,501 Benefits 102,597 43,448 59,149 Clothing allowance 1,550 181 1,369 Travel and training 2,000 2,000 Office supplies 5,759 9,560 (3,801) Maintenance 146,700 44,355 102,345 Utilities and telephone 26,000 17,219 8,781 Fuel 25,000 8,154 16,846 Professional services 1,000 765 235 Department supplies and other 48,150 8,682 39,468 Capital outlay 20,020 38,899 (18,879) Total Expenditures (Parks): 593,065 279,051 314,014 EXPENDITURES (Recreation): Salaries 22,011 (22,011) Benefits 2,435 (2,435) Total Expenditures (Recreation): 0 24,446 (24,446) The accompanying notes are an integral part of these statements. 61 ---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, 2020 Variance Final Favorable Budget Actual (Unfavorable) EXPENDITURES (Pool): Maintenance $3,000 $3,000 Utilities and telephone 12,000 $4,394 7,606 Total Expenditures (Pool): 15,000 4,394 10,606 EXPENDITURES (Golf): Salaries 292,558 256,953 35,605 Benefits 195,555 161,069 34,486 Clothing allowance 1,250 604 646 Travel and training 3,000 2,103 897 Office supplies 19,059 6,978 12,081 Maintenance 86,500 76,610 9,890 Utilities and telephone 29,500 33,780 (4,280) Fuel 6,500 9,870 (3,370) Professional services 750 505 245 Resale items 95,000 125,768 (30,768) Department supplies and other 34,600 33,184 1,416 Capital outlay 31,000 43,157 (12,157) Total Expenditures (Golf): 795,272 750,581 44,691 Total Fund Expenditures: 1,403,337 1,058,472 344,865 EXCESS REVENUE (EXPENDITURES): (334,999) (79,533) 255,466 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 335,000 79,533 (255,467) EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $1 0 FUND BALANCE - BEGINNING: 0 FUND BALANCE - ENDING: $0 The accompanying notes are an integral part of these statements. 62 ---PAGE BREAK--- BLACKFOOT URBAN RENEWAL AGENCY SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2020 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $725,000 $764,043 $39,043 Investment income 11,000 13,451 2,451 Grant application fees 350 350 Total Revenue: 736,000 777,844 41,844 EXPENDITURES: Administration 4,000 2,824 1,176 Professional fees 16,000 15,058 942 Projects: Downtown District: Economic development projects 770,000 Façade improvements 105,000 Donnie Wixom Bridge Street Bldg 26,687 (26,687) Maple Street - Mickelsen Bldg 18,000 (18,000) Movie Mill -blight 6,343 (6,343) Nuart 947 (947) Plesner - blight 14,000 (14,000) Teton House 10,000 (10,000) Riverview District: Economic development 500,000 500,000 Façade improvements 100,000 10,266 89,734 Technology Park 20,000 (20,000) Tax note payments 133,305 112,050 21,255 Total Expenditures: 1,628,305 236,175 517,130 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): ($892,305) 541,669 $1,433,974 FUND BALANCE - BEGINNING: 887,977 FUND BALANCE - ENDING: $1,429,646 The accompanying notes are an integral part of these statements. 63 ---PAGE BREAK--- THIS PAGE INTENTIONALLY LEFT BLANK 64 ---PAGE BREAK--- OTHER SUPPLEMENTAL INFORMATION 65 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2020 Capital Airport Cemetery Library Improvements Fund Fund Fund Fund ASSETS: Cash and investments $304,165 $186,681 $501,538 Receivables: Property taxes 2,714 4,556 7,375 $4,071 Total Assets: $306,879 $191,237 $508,913 $4,071 LIABILITIES: Accounts payable $19,886 $7,627 $37,094 Due to other funds $23,585 Total Liabilities: 19,886 7,627 37,094 23,585 DEFERRED INFLOW OF RESOURCES Unavailable revenue - Property taxes 2,044 3,244 5,232 3,140 FUND BALANCE: Assigned - Capital Improvements 65,231 Unassigned 284,949 180,366 401,356 (22,654) Total Fund Balance: 284,949 180,366 466,587 (22,654) Total Liabilities and Fund Balance: $306,879 $191,237 $508,913 $4,071 66 ---PAGE BREAK--- Health Total Care Non-major Reserve Governmental Fund Funds $541,455 $1,533,839 18,716 $541,455 $1,552,555 $1,291 $65,898 23,585 1,291 89,483 13,660 65,231 540,164 1,384,181 540,164 1,449,412 $541,455 $1,552,555 67 ---PAGE BREAK--- Capital Airport Cemetery Library Improvements REVENUES: Fund Fund Fund Fund Property taxes $82,484 $149,619 $241,340 $146,970 Fees 52,829 52,850 9,863 Grants and contributions 292,620 1,700 Blackfoot Rural Library District 236,510 Interest 595 1,662 2,384 799 Miscellaneous 84 150 Total Revenues: 428,612 204,281 491,797 147,769 EXPENDITURES: General government 164,597 205,417 Airport 398,977 Library 429,615 Total Expenditures: 398,977 164,597 429,615 205,417 EXCESS REVENUE (EXPENDITURES): 29,635 39,684 62,182 (57,648) OTHER FINANCING SOURCES (USES): Operating transfers (to) from other funds EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): 29,635 39,684 62,182 (57,648) FUND BALANCE - BEGINNING: 255,314 140,682 404,405 34,994 FUND BALANCE - ENDING: $284,949 $180,366 $466,587 ($22,654) CITY OF BLACKFOOT, IDAHO COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2020 68 ---PAGE BREAK--- Health Total Care Non-major Reserve Governmental Fund Funds $620,413 $134,329 249,871 294,320 236,510 5,440 234 134,329 1,406,788 115,824 485,838 398,977 429,615 115,824 1,314,430 18,505 92,358 0 18,505 92,358 521,659 1,357,054 $540,164 $1,449,412 69 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL AIRPORT FUND YEAR ENDED SEPTEMBER 30, 2020 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $80,912 $82,484 $1,572 Charges for services 30,384 40,330 9,946 Fuel 50,000 12,499 (37,501) Miscellaneous 84 84 Grants and contributions 1,500 292,620 291,120 Interest on investments 595 595 Total Revenue: 162,796 428,612 265,816 EXPENDITURES: Salaries 7,221 7,210 11 Benefits 8,535 8,151 384 Office supplies 1,217 7,415 (6,198) Travel and training 0 Maintenance 23,100 9,986 13,114 Utilities and telephone 11,200 5,808 5,392 Fuel 50,250 1,492 48,758 Professional services 7,484 10,196 (2,712) Department supplies and other 2,500 2,500 Indirect cost reimbursement 27,746 27,746 0 Grant expense 23,543 320,973 (297,430) Total Expenditures: 162,796 398,977 (236,181) EXCESS REVENUE (EXPENDITURES): 0 29,635 29,635 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 29,635 $29,635 FUND BALANCE - BEGINNING: 255,314 FUND BALANCE - ENDING: $284,949 70 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL CEMETERY FUND YEAR ENDED SEPTEMBER 30, 2020 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $146,683 $149,619 $2,936 Charges for services 64,691 53,000 (11,691) Interest on investments 1,662 1,662 Total Revenue: 211,374 204,281 (7,093) EXPENDITURES: Salaries 87,596 77,570 10,026 Benefits 66,069 56,480 9,589 Office supplies 2,687 3,378 (691) Travel and training 800 1,335 (535) Maintenance 20,000 9,074 10,926 Utilities and telephone 6,950 4,089 2,861 Fuel 1,000 1,454 (454) Professional services 5,000 55 4,945 Department supplies and other 5,200 2,742 2,458 Indirect cost reimbursement 8,420 8,420 0 Capital outlay 7,652 7,652 Total Expenditures: 211,374 164,597 46,777 EXCESS REVENUE (EXPENDITURES): 0 39,684 39,684 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 39,684 $39,684 FUND BALANCE - BEGINNING: 140,682 FUND BALANCE - ENDING: $180,366 71 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL LIBRARY FUND YEAR ENDED SEPTEMBER 30, 2020 Original Variance and Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $236,510 $241,340 $4,830 Charges for services 16,837 9,863 (6,974) Blackfoot Rural Library District 236,510 236,510 0 Interest on investments 0 2,384 2,384 Grants and contributions 0 1,700 1,700 Total Revenue: 489,857 491,797 1,940 EXPENDITURES: Salaries 199,169 173,431 25,738 Benefits 77,456 73,113 4,343 Books and subscriptions 95,125 87,111 8,014 Travel and training 2,000 698 1,302 Office supplies 16,410 14,890 1,520 Maintenance 19,550 11,298 8,252 Utilities and telephone 17,000 8,389 8,611 Professional services 3,500 3,970 (470) Department supplies and other 16,280 10,821 5,459 Indirect cost reimbursement 9,732 9,732 0 Capial outlay 77,500 36,162 41,338 Total Expenditures: 533,722 429,615 104,107 EXCESS REVENUE (EXPENDITURES): (43,865) 62,182 106,047 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 43,865 0 (43,865) EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 62,182 $62,182 FUND BALANCE - BEGINNING: 404,405 FUND BALANCE - ENDING: $466,587 72 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL CAPITAL IMPROVEMENTS FUND YEAR ENDED SEPTEMBER 30, 2020 Original & Variance Final Favorable Budget Actual (Unfavorable) REVENUE: Property taxes $145,000 $146,970 $1,970 Interest on investments 799 799 Total Revenue: $145,000 147,769 2,769 EXPENDITURES: Capital outlay 145,000 205,417 (60,417) Total Expenditures: 145,000 205,417 (60,417) EXCESS REVENUE (EXPENDITURES): 0 (57,648) (57,648) OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 (57,648) ($57,648) FUND BALANCE - BEGINNING: 34,994 FUND BALANCE - ENDING: ($22,654) 73 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL HEALTH CARE RESERVE FUND YEAR ENDED SEPTEMBER 30, 2020 Original & Variance Final Favorable Budget Actual (Unfavorable) REVENUE: Reserve receipts $136,379 $134,329 ($2,050) Total Revenue: $136,379 134,329 (2,050) EXPENDITURES: Healthcare expense 21,379 81,220 (59,841) Flex spending expense 100,000 16,554 83,446 Benefits administration 15,000 18,050 (3,050) Total Expenditures: 136,379 115,824 20,555 EXCESS REVENUE (EXPENDITURES): 0 18,505 18,505 OTHER FINANCING SOURCES (USES): Transfers (to) from other funds 0 0 0 EXCESS REVENUE/SOURCES OR (EXPENDITURES/USES): $0 18,505 $18,505 FUND BALANCE - BEGINNING: 521,659 FUND BALANCE - ENDING: $540,164 74 ---PAGE BREAK--- SINGLE AUDIT SECTION 75 ---PAGE BREAK--- Morgan J Hatt CPA PC Certified Public Accountant 1855 Satterfield Drive [EMAIL REDACTED] Phone : (208) 317-6040 Pocatello, Idaho 83201 Fax: (208) 242-3782 Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control over Compliance. Report on Compliance for Each Major Federal Program I have audited the City of Blackfoot, Idaho’s (The City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major Federal programs for the year ended September 30, 2020. The City’s major Federal programs are identified in the summary of auditor’s results section of the accompanying Schedule of Findings and Questioned costs. Management’s Responsibility Management is responsible for compliance with Federal statutes, regulations, and the terms and conditions of its Federal awards applicable to its Federal programs. Auditor’s Responsibility My responsibility is to express an opinion on compliance for each of the City’s major Federal programs based on my audit of the types of compliance requirements referred to above. I conducted my audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that I plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as I considered necessary in the circumstances. I believe that my audit provides a reasonable basis for my opinion on compliance for each major Federal program. However, my audit does not provide a legal determination of the City’s compliance. Opinion on Each Major Federal Program In my opinion, the City of Blackfoot, Idaho, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended September 30, 2020. 76 ---PAGE BREAK--- Honorable Mayor and Members of the City Council City of Blackfoot, Idaho Page 2 Report on Internal Control over Compliance Management is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, I considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on each major Federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major Federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, I do not express an opinion on the effectiveness of the City’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct noncompliance with a type of compliance requirement of a Federal program on a timely basis. A material weakness in internal control over compliance is a deficiency or a combination of deficiencies in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a Federal program will not be prevented or detected and corrected on a timely basis. A significant deficiency in internal control over compliance is a deficiency or a combination of deficiencies in internal control over compliance with a type of compliance requirement of a Federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. My consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. I did not identify any deficiencies in internal control over compliance that I consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of my testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Pocatello, Idaho February 26, 2021 Morgan J Hatt CPA PC 77 ---PAGE BREAK--- CITY OF BLACKFOOT, IDAHO BLACKFOOT, IDAHO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED SEPTEMBER 30, 2020 Catalogue of Federal Title Domestic Assistance NumberExpenditures Department of Defense: (Direct funding)) Army Corp of Engineers - Waste Water Treatment facilities 12.000 $276,379 Department of Housing and Urban Development: (State of Idaho pass-through funding) Community Development Block Grant -Waste Water Improvement 14.228 4,000 Department of Transportation : Airport Improvement - 2018 (Direct funding) 20.106 61,435 Airport Improvement - Land Acquisition - (Direct funding) 20.106 217,714 Highway Planning and Construction SR2S - (Direct funding) 20.205 851 State and Community Highway Safety 20.600 7,381 National Priority Safety Programs 20.616 5,077 Subtotal of Department of Transportation: 292,458 Department of the Treasury (State of Idaho pass-through funding) Cares Act 21.020 97,474 National Endowment for the Humanities (State of Idaho pass-through funding) Cares Act 45.310 1,000 Environmental Protection Agency (State of Idaho pass-through funding): Capitalization grants and revolving loans WW 1703 66.468 6,474,896 Total Federal Expenditures: $7,146,207 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, 2020. The information in this schedule is presented in accordance with the requirements of Title 2 U.S., Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The August 2020 Compliance Supplement was used to audit major programs. Because the Schedule presents only a selected portion of the City's operations, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City of Blackfoot, Idaho. Note 2: Summary of Significant Accounting Policies - Expenditures reported on the Schedule are on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Note 3: Indirect Cost Rate - The City of Blackfoot, Idaho has elected not to use the 10% de minimus cost rate allowed under the Uniform Guidance. 78 ---PAGE BREAK--- Section I - Summary of Auditor's Results: Financial Statements: Type of auditor's report issued: Unqualified Internal control over financial reporting: Material weaknesses identified? No Reportable conditions identified that are not considered to be material weaknesses? No Noncompliance material to financial statements noted? No Federal Awards: Internal control over major programs: Material weaknesses identified? No Reportable conditions identified that are not considered to be material weaknesses? No Type of auditor's report issued on compliance for major programs? Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR Section 200.516(a)? No Identification of Major programs: CFDA Number(s) Name of Federal Program 66.458 Capitalization Grants & Revolving Loans Dollar threshold used to distinguish between Type A and Type B programs: $750,000 Auditee qualified as low-risk auditee? Yes Section II - Summary of Auditor's Results: None Section III - Federal Award Findings and Questioned Costs: None CITY OF BLACKFOOT, IDAHO SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED SEPTEMBER 30, 2020 79