Finance - Annual Audit - 09/30/2011 CITY OF EAGLE
FINANCIAL STATEMENTS
Year Ended September 30, 2011
CITY OF EAGLE
Table of Contents
PAGE (S)
FINANCIAL SECTION
Independent Auditor's Report 1-2
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Assets 3
Statement of Activities 4
Fund Financial Statements
Balance Sheet—Governmental Funds 5-6
Statement of Revenues, Expenditures, and Changes in Fund Balances —
Governmental Funds 7-8
Statement of Net Assets—Proprietary Fund 9
Statement of Revenues, Expenses, and Changes in Net Assets —
Proprietary Fund 10
Statement of Cash Flows—Proprietary Fund 11
Notes to Financial Statements 12-21
REQUIRED SUPPLEMENTAL INFORMATION
Budgetary Comparison Schedule — General and Major Special Revenue 22-23
Funds
OTHER REPORTS AND SCHEDULES
Report on Internal Control Over Financial Reporting and on Compliance and
Other Matters Based on an Audit of the Financial Statements Performed in
Accordance with Government Auditing Standards 24-25
Schedule of Findings and Responses 26
FINANCIAL SECTION
Foe4a CPAs, P.C.
intaw S. rid&-Nita R. soifte
P.O.Box 100,Payette,Idaho 83661
www.folkecpas.com,folkecpas @srvinet.com
P:208-642-1417,F: 208-642-1582
Independent Auditor's Report
Honorable Mayor and City Council
City of Eagle
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, and each major fund of the City of Eagle (the City) as of and for the year
ended September 30, 2011, which collectively comprise the City's basic financial statements as
listed in the table of contents. These financial statements are the responsibility of the City's
management. Our responsibility is to express an opinion on these financial statements based on
our audit. We did not audit the financial statements of Eagle Urban Renewal Agency (the
discretely presented component unit), which represents 100 percent of the assets, net assets, and
revenues of the discretely presented component unit. Those financial statements were audited by
other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates
to the amounts included for the discretely presented component unit, is based on the report of the
other auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion, based on our audit and the report of the other auditors, 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 discretely presented component unit,
and each major fund of the City as of September 30, 2011 and the respective changes in financial
position, and cash flows, where applicable, thereof for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated
December 27, 2011 on our consideration of the City's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on the internal control over financial reporting or on compliance. That report
1
is an integral part of an audit performed in accordance with Government Auditing Standards and
should be considered in assessing the results of our audit.
Accounting principles generally accepted in the United States of America require that the
budgetary information listed as required supplemental information in the table of contents be
presented to supplement the basic financial statements. Such information, although not required
to be 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, and historical context. We
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 our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Management has omitted the management's discussion and analysis information that accounting
principles generally accepted in the United States of America require to be presented to
supplement the basic financial statements. Such missing information, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board, who
considers it to be an essential part of financial reporting for placing the basic financial statements
in an appropriate operational, economic, and historical context. Our opinion on the basic
financial statements is not affected by this missing information.
FoO4c CPAs, P.C.
December 27, 2011
2
BASIC FINANCIAL STATEMENTS
CITY OF EAGLE
Statement of Net Assets
September 30, 2011
Governmental Business-Type Total Primary Component
Activities Activities Government Unit
Assets
Current Assets
Cash $2,831,023 $348,257 $3,179,280 $189,131
Receivables:
Taxes 117,930 117,930 214,312
Intergovernmental 363,962 363,962
Accounts 405,981 72,315 478,296
Note Receivable,Current 30,000 30,000
Total Current Assets 3,748,896 420,572 4,169,468 403.443
Noncurrent Assets
Restricted Cash 429,926 429,926
Note Receivable,Noncurrent 9,950 9,950
Nondepreciable Capital Assets 1,851,207 93,250 1,944,457
Depreciable Net Capital Assets 8,287,513 4,771,859 13,059,372
Total Noncurrent Assets 10,148,670 5,295,035 15,443,705 0
Total Assets $13,897,566 $5,715.607 $19,613,173 $403.443
Liabilities
Current Liabilities
Accounts Payable&Accrued Expenses $140,269 $31,378 $171,647 $62,403
Deferred Revenue 0 142,740
Deposits Payable 184,835 16,050 200,885
Accrued Interest,Current 4,213 244,665 248,878
Long-Term Debt,Current 170,000 93,494 263,494 30,000
Total Current Liabilities 499,317 385,587 884,904 235,143
Noncurrent Liabilities
Accrued Interest,Noncurrent 45,512 45,512
Long-Term Debt,Noncurrent 1,074,292 2,367,006 3,441,298 9,950
Total Noncurrent Liabilities 1,074,292 2,412,518 3,486,810 9,950
Total Liabilities 1,573,609 2,798,105 4,371,714 245,093
Net Assets
Invested in Capital Assets,Net of Related Debt 8,890,215 2,114,432 11,004,647
Restricted-Special Programs 299,019 299,019
Restricted-Debt Service 32,867 413,876 446,743
Restricted-Capital Projects 627,629 627,629
Unrestricted 2,474,227 389,194 2,863,421 158,350
Total Net Assets 12,323,957 2,917,502 15,241,459 158,350
Total Liabilities and Net Assets $13,897,566 $5,715,607 $19,613,173 $403,443
See Accompanying Notes 3
CITY OF EAGLE
Statement of Activities
Year Ended September 30, 2011
Program Revenues
Operating Capital
Charges For Grants And Grants And Net(Expense)
Functions/Programs Expenses Services Contributions Contributions Revenue
Primary Government
Governmental Activities
Current Expenditures
General Government $1,533,916 $366,086 ($1,167,830)
Public Safety 1,294,358 308,912 (985,446)
Parks&Streets 421,498 100,595 $129,586 (191,317)
Culture&Recreation 960,100 229,138 $8,144 (722,818)
Debt Service-Interest 62,101 14,821 (47,280)
Capital Assets 770,188 183,814 (586,374)
Total Governmental Activities 5,042,161 1,203,366 8,144 129,586 (3,701,065)
Business-Type Activities
Water Services 790,320 614,256 (176,064)
Total Business-Type Activities 790,320 614,256 0 0 (176,064)
Total Primary Government $5,832,481 $1,817,622 $8,144 $129,586 (53,877.129)
Component Unit
Eagle Urban Renewal Agency $92,379 ($92,379)
Total Component Unit $92,379 $0 $0 $0 ($92,379)
Governmental Business-Type Total Primary Component
Changes in Net Assets Activities Activities Government Unit
Net(Expense)Revenue ($3,701,065) ($176,064) ($3,877,129) ($92,379)
General Revenues
Taxes 1,948,354 1,948,354 177,433
Franchise Fees 740,056 740,056
Intergovernmental 1,557,280 1,557,280
Interest 9,951 3,620 13,571
Miscellaneous 38,190 675 38,865
Transfers 0
Total 4,293,831 4,295 4,298,126 177,433
Change in Net Assets 592,766 (171,769) 420,997 85,054
Net Assets-Beginning 11,731,191 3,089,271 14,820,462 73,296
Net Assets-Ending $12,323,957 $2,917,502 $15,241,459 $158,350
See Accompanying Notes 4
CITY OF EAGLE Page 1 of 2
Balance Sheet- Governmental Funds
September 30, 2011
Debt Total
General Library Service Governmental
Fund Fund Fund Funds
Assets
Cash $2,519,117 $279,699 $32,207 $2,831,023
Receivables:
Taxes 63,100 42,348 12,482 117,930
Intergovernmental 363,962 363,962
Accounts 376,782 29,199 405,981
Due From Other Funds 0
Note Receivable 30,000 30,000
Total Assets $3,352,961 $351,246 $44,689 $3,748,896
Liabilities
Accounts Payable&Accrued Expenses $100,896 $39,373 $140,269
Due To Other Funds 0
Deferred Revenue 59,993 61,950 $11,822 133,765
Deposits Payable 184,835 184,835
Total Liabilities 345,724 101,323 11,822 $458,869
Fund Balances
Restricted-Special Programs 49,096 249,923 299,019
Restricted-Debt Service 32,867 32,867
Restricted-Capital Projects 627,629 627,629
Unassigned 2,330,512 2,330,512
Total Fund Balances 3,007,237 249,923 32,867 3,290,027
Total Liabilities and Fund Balances $3,352,961 $351,246 $44,689 $3,748,896
See Accompanying Notes 5
CITY OF EAGLE Page 2 of 2
Balance Sheet- Governmental Funds
September 30, 2011
Reconciliation of Total Governmental Fund Balances to Net
Assets of Governmental Activities
Total Governmental Fund Balances $3,290,027
Amounts reported for governmental activities in the statement of net
assets are different because:
Capital assets used in governmental activities are not financial
resources and therefore are not reported in the funds. 10,138,720
Certain receivables are not available to pay for current period
expenditures and therefore are deferred in the funds. 133,765
The noncurrent portion of the note receivable is not available to
pay for current period expenditures and therefore is not reported in
the funds. 9,950
Certain liabilities, including accrued interest, are not due and
payable in the current period and therefore are not reported in the
funds. (1,248,505)
Net Assets of Governmental Activities $12,323,957
See Accompanying Notes 6
CITY OF EAGLE Page 1 of 2
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds
Year Ended September 30, 2011
Debt Total
General Library Service Governmental
Fund Fund Fund Funds
Revenues
Taxes $914,810 $857,103 $233,739 $2,005,652
Franchise Fees 740,056 740,056
Intergovernmental 1,522,823 34,457 1,557,280
Charges for Services 1,227 527 1,754
Licenses,Permits,&Fees 1,085,838 1,085,838
Fines&Court Fees 77,456 38,318 115,774
Interest 8,356 1,152 443 9,951
Miscellaneous 200,493 5,427 205,920
Total Revenues 4,551,059 936,984 234,182 5,722,225
Expenditures
Current Expenditures
General Government 1,523,686 1,523,686
Public Safety 1,294,358 1,294,358
Parks&Streets 628,694 628,694
Culture&Recreation 82,327 877,773 960,100
Debt Service-Principal 165,000 165,000
Debt Service-Interest 63,150 63,150
Total Expenditures 3,529,065 877,773 228,150 4,634,988
Excess(Deficiency)of Revenues
Over Expenditures 1,021,994 59,211 6,032 1,087,237
Other Financing Sources(Uses)
Transfers In 0 0 0 0
Transfers Out 0 0 0 0
Total Other Financing Sources(Uses) 0 0 0 0
Net Change in Fund Balances 1,021,994 59,211 6,032 1,087,237
Fund Balances-Beginning 1,985,243 190,712 26,835 2,202,790
Fund Balances-Ending $3,007,237 $249,923 $32,867 $3,290,027
See Accompanying Notes 7
CITY OF EAGLE Page 2 of 2
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds
Year Ended September 30, 2011
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances - Governmental Funds to the
Statement of Activities
Net Change in Fund Balances - Total Governmental Funds $1,087,237
Amounts reported for governmental activities in the statement of
activities are different because:
Government funds report capital outlays as expenditures.
However, in the statement of activities the cost of those assets is
allocated over their estimated useful lives as depreciation expense.
This is the excess of capital outlays over(under) depreciation
expense in the current period. (562,992)
Revenues in the statement of activities that do not provide current
financial resources are deferred in the funds. (57,298)
Repayment of debt principal is an expenditure in the
governmental funds, but the repayment reduces long-term debt in
the statement of net assets. 165,000
In the statement of activities, interest is accrued on long-term
debt, but the expenditure is reported when due in the
governmental funds. 1,049
Repayment of note receivable principal is revenue in the
governmental funds, but the repayment reduces the note
receivable in the statement of net assets. (30,000)
In the statement of activities, compensated absences are accrued
when earned, but the expenditure is reported when due in the
governmental funds. (10,230)
Change in Net Assets of Governmental Activities $592,766
See Accompanying Notes 8
CITY OF EAGLE
Statement of Net Assets -Proprietary Fund
September 30, 2011
Water
Fund
Assets
Current Assets
Cash $348,257
Receivables:
Accounts 72,315
Total Current Assets 420,572
Noncurrent Assets
Restricted Cash 429,926
Nondepreciable Capital Assets 93,250
Depreciable Net Capital Assets 4,771,859
Total Noncurrent Assets 5,295,035
Total Assets $5,715,607
Liabilities
Current Liabilities
Accounts Payable & Accrued Expenses $31,378
Deposits Payable 16,050
Accrued Interest, Current 244,665
Long-Term Debt, Current 93,494
Total Current Liabilities 385,587
Noncurrent Liabilities
Accrued Interest,Noncurrent 45,512
Long-Term Debt,Noncurrent 2,367,006
Total Noncurrent Liabilities 2,412,518
Total Liabilities 2,798,105
Net Assets
Invested in Capital Assets,Net of Related Debt 2,114,432
Restricted-Debt Service 413,876
Unrestricted 389,194
Total Net Assets 2,917,502
Total Liabilities and Net Assets $5,715,607
See Accompanying Notes 9
CITY OF EAGLE
Statement of Revenues, Expenses, and Changes in Net Assets - Proprietary Fund
Year Ended September 30, 2011
Water
Fund
Operating Revenues
Charges for Services $614,256
Miscellaneous 675
Total Operating Revenues 614,931
Operating Expenses
Personnel 184,443
Operations & Maintenance 195,759
Depreciation 293,022
Total Operating Expenses 673,224
Operating Income (Loss) (58,293)
Nonoperating Revenues (Expenses)
Interest Income 3,620
Interest Expense (79,966)
Other Income (Expense) (37,130)
Total Nonoperating Revenue (Expenses) (113,476)
Income (Loss) Before Contributions & Transfers (171,769)
Capital Contributions
Transfers In
Transfers Out
Change in Net Assets (171,769)
Net Assets - Beginning 3,089,271
Net Assets - Ending $2,917,502
See Accompanying Notes 10
CITY OF EAGLE
Statement of Cash Flows - Proprietary Fund
Year Ended September 30, 2011
Water
Fund
Cash Flows From Operations
Receipts from Customers $596,579
Payments for Personnel (184,443)
Payments for Goods& Services (187,685)
Cash Provided (Used)By Operations 224,451
Cash Flows From Noncapital Financing
Receipts from Nonoperating Sources
Payments for Nonoperating Expenses (37,130)
Transfers to (From)Other Funds
Cash Provided (Used)By Noncapital Financing (37,130)
Cash Flows From Capital&Related Financing
Purchase of Capital Assets (30,824)
Issuance of Debt
Interest Paid on Debt
Principal Paid on Debt
Capital Asset Contributions
Capital Grants Received
Cash Provided (Used)By Capital & Related Financing (30,824)
Cash Flows From Investments
Interest Income 3,620
Cash Provided(Used)By Investments 3,620
Change in Cash 160,117
Cash-Beginning 618,066
Cash-Ending $778,183
Reconciliation of Operating Income(Loss)to Cash
Provided(Used)By Operations
Operating Income(Loss) ($58,293)
Adjustments to Reconcile Operating Income(Loss)to
Cash Provided(Used)by Operations:
Depreciation 293,022
Changes in Assets&Liabilities:
Receivables (18,352)
Accounts Payable&Accrued Expenses 8,074
Cash Provided (Used)By Operations $224A51
See Accompanying Notes 11
CITY OF EAGLE
Notes to Financial Statements
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity—The City of Eagle (the City) provides basic municipal services and operates
under a mayor-council form of government. These financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of America as
applied to cities. The significant accounting policies of the City are described below.
These financial statements present the City (the primary government) and its component unit,
Eagle Urban Renewal Agency (EURA). As defined by GASBS No. 14, component units are
legally separate entities that are included in the City's reporting entity because of the significance
of their operating or financial relationships with the City. The City's mayor appoints and the City
council approves EURA's board of directors and accordingly, EURA is defined as a component
unit of the City. Separate financial statements for the component unit are issued and available
from EURA.
Basic Financial Statements - Government-Wide Statements — The City's basic financial
statements include both government-wide (reporting the City as a whole) and fund financial
statements (reporting the City's major funds). Both government-wide and fund financial
statements categorize primary activities as either governmental or business-type. The
government-wide financial statements follow both governmental accounting standards board
pronouncements and financial accounting standards board pronouncements issued through
November 30, 1989. The City's business-type activities and enterprise funds also follow
financial accounting standards board pronouncements issued subsequent to this date that do not
conflict with or contradict those of the government accounting standards board.
In the government-wide statement of net assets, both the governmental and business-type
activities columns (a) are presented on a consolidated basis by column, (b) and are reported on a
full accrual, economic resource basis, which recognizes all long-term assets and receivables as
well as long-term debt and obligations. The City's net assets may be reported in three parts -
invested in capital assets, net of related debt (when related debt exists), restricted net assets, and
unrestricted net assets. The City first utilizes restricted resources to finance qualifying activities.
The government-wide statement of activities reports both the gross and net cost of each of the
City's functions and business-type activities. The functions are also supported by general
government revenues as reported in the statement of activities. The statement of activities
reduces gross expenses (including depreciation when recorded) by related program revenues and
operating and capital grants. Program revenues must be directly associated with the function.
Internal activity between funds is eliminated in the government-wide statement of activities.
Operating grants include operating-specific and discretionary (either operating or capital) grants
while the capital grants column reports capital-specific grants.
The net costs (by function or business-type activity) are normally covered by general revenues.
The City's sole activity is providing basic municipal services, and substantially all expenses are
directly related to this activity. Accordingly,there is no allocation of indirect costs.
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CITY OF EAGLE
Notes to Financial Statements
The government-wide focus is more on the sustainability of the City as an entity and the change
in the City's net assets resulting from the current year's activities. Fiduciary funds, when present,
are not included in the government-wide statements.
Basic Financial Statements - Fund Financial Statements — The financial transactions of the
City are reported in individual funds in the fund financial statements. Each fund is accounted for
by providing a separate set of self-balancing accounts that comprises its assets, liabilities,
reserves, fund equity, revenues and expenditures/expenses.
The emphasis in fund financial statements is on the major funds. Nonmajor funds by category are
summarized into a single column. Generally accepted accounting principles set forth minimum
criteria (percentage of assets, liabilities, revenues, and expenditures/expenses of the funds) for
the determination of major funds.
The focus of governmental fund measurement (in the fund statements) is upon determination of
financial position and changes in financial position (sources, uses, and balances of financial
resources) rather than upon net income. The activities reported in governmental funds are
reported as governmental activities in the government-wide financial statements. Major
governmental funds of the City include:
General Fund— The general fund is the City's primary operating fund. It is used to account for
all financial resources except those required to be accounted for in another fund.
Special Revenue Funds— Special revenue funds are used to account for the proceeds of specific
revenue sources that are legally restricted to expenditures for specified purposes. Major special
revenue funds include the library fund, which accounts for the revenues earned and expenses
incurred in providing library services.
Debt Service Fund— The debt service fund is used to account for the accumulation of funds for
the periodic payment of principal and interest on long term debt.
The focus of proprietary fund measurement is upon determination of operating income, changes
in net assets, financial position, and cash flows. The generally accepted accounting principles
applicable are those similar to businesses in the private sector. Enterprise funds are required to be
used to account for operations for which a fee is charged to external users for goods or services
and the activity is financed with debt that is solely secured by a pledge of the net revenues. The
activities reported in enterprise funds are reported as business-type activities in the government-
wide financial statements. Major enterprise funds of the City include:
Water Fund — The water fund accounts for the revenues earned and expenses incurred in
providing water services.
Basis of Accounting — Basis of accounting refers to the point at which revenues or
expenditures/expenses are recognized in the accounts and reported in the financial statements. It
relates to the timing of the measurements made regardless of the measurement focus applied.
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CITY OF EAGLE
Notes to Financial Statements
Both governmental and business-type activities in the government-wide financial statements and
proprietary and fiduciary fund financial statements are reported on the accrual basis of
accounting. Revenues are recognized when earned and expenses are recognized when incurred.
The governmental funds financial statements are presented on the modified accrual basis of
accounting. Under the modified accrual basis of accounting, revenues are recorded when
susceptible to accrual (when they become both measurable and available). "Measurable" means
the amount of the transaction can be determined and "available" means collectible within the
current period or within thirty days after year end. Expenditures are recorded when the related
fund liability is incurred. Exceptions to this general rule include principal and interest on long-
term debt which, if any, are recognized when due and payable.
The City may report deferred revenue on its financial statements. For the fund financial
statements, deferred revenues arise when potential revenue does not meet both the "measurable"
and "available" criteria for recognition in the current period. In subsequent periods, when both
revenue recognition criteria are met, the revenue is recognized. For both the government-wide
and fund financial statements, certain grant revenues are only recognized to the extent they have
been used for qualifying expenditures; any excess revenues are reported as deferred revenue.
Cash—The cash balances of the City's funds are pooled for investment purposes. The individual
funds' portions of the pooled cash are reported in each fund as cash. Interest earned on pooled
cash is allocated to the various funds in proportion to each fund's respective investment balance.
For purposes of the statement of cash flows, the City considers all investments (including
restricted cash) available for immediate withdrawal or with maturities of three months or less to
be cash and cash equivalents (referred to as cash).
Receivables—Receivables are reported net of any estimated uncollectible amounts.
Inventories — Material supplies on hand at year end are stated at cost using the first-in, first-out
method.
Capital Assets and Depreciation— Significant capital asset acquisitions with an original cost of
$300 or more are recorded at cost if purchased or fair value if contributed. Minor repairs and
maintenance are expensed as incurred. Depreciation over the estimated useful lives of all
depreciable assets is recorded using the straight line method. The City is classified as a Phase III
government under GASB 34 and as such, had the option of not capitalizing infrastructure assets
acquired prior to October 1, 2003. The City did not exercise this option.
Compensated Absences and Post-Retirement Benefits — The City provides certain
compensated absences to its employees. The estimated amount of compensation for future
amounts is recorded as a liability in the accompanying financial statements. Government
accounting standards board statement 45 requires employers to accrue future estimated post-
retirement benefits on the employer's government-wide financial statements when such benefits
are deemed material to the employer. The future estimated post-retirement benefits are deemed
14
CITY OF EAGLE
Notes to Financial Statements
immaterial to the City, and accordingly, are not reflected on the government-wide financial
statements.
Net Assets — Net assets is the difference between assets and liabilities. Net assets invested in
capital assets - net of related debt, are capital assets net of accumulated depreciation and reduced
by any outstanding debt related to the financing of those assets. Restricted net assets are net
assets less related debt that are subject to constraints on their use by creditors, grantors,
contributors, legislation, and other parties. All other net assets are reported as unrestricted.
Fund Balance Classifications — Restrictions of the fund balance indicate portions that are
legally or contractually segregated for a specific future use. Nonspendable portions of the fund
balance are those amounts that are not expected to be converted into cash. Committed portions
represent amounts that can only be used for specific purposes pursuant to formal action (i.e.
board approval) of the reporting entity's governing body. Assigned portions represent amounts
that are constrained by the government's intent to be used for a specific purpose. Assigned fund
balance classifications are not actively used by the entity. Remaining fund balances are reported
as unassigned. When expenditures are incurred that qualify for either restricted or unrestricted
resources, the City first utilizes restricted resources. When expenditures are incurred that qualify
for either committed or assigned or unassigned resources, the City first utilizes committed
resources.
Property Taxes — The City is responsible for levying property taxes, but the taxes are collected
by the respective county. Taxes are levied by the second Monday in September for each calendar
year. Taxes are due in two installments — December 20th and June 20th. A lien is filed on real
property three years from the date of delinquency.
Contingent Liabilities — Amounts received or receivable from grantor agencies are subject to
audit and adjustment by grantor 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 by the grantor cannot be determined at this time although the City
expects such amounts, if any,to be immaterial.
Interfund Activity — Interfund activity is reported either as loans, services provided,
reimbursements, or transfers. Loans are reported as interfund receivables and payables as
appropriate and are subject to elimination upon consolidation. Services provided, deemed to be
at market or near market rates, are treated as revenues and expenditures/expenses.
Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund, and
reduces its related cost as a reimbursement. All other interfund transactions are treated as
transfers.
Use of Estimates — The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
15
CITY OF EAGLE
Notes to Financial Statements
Concentrations of Credit Risk — The City maintains its cash at insured financial institutions.
Periodically, balances may exceed federally insured limits. Balances not covered by FDIC are
collateralized whenever possible.
Risk Management — The City is exposed to various risks related to its operations. Insurance is
utilized to the extent practical to minimize these risks.
Subsequent Events — Subsequent events were evaluated through the date of the auditor's report,
which is the date the financial statements were available to be issued.
B. CASH
Cash consists of the following at year end:
Primary Component
Government Unit
Cash - Deposits $3,609,206 $189,131
Total $3,609,206 $189,131
Deposits — At year end, the carrying amounts of the City's deposits were $3,609,206 and the
bank balances were $3,753,193. Of the bank balances, $547,623 was insured, $3,114,155 was
collateralized, and the balance was uninsured and uncollateralized. The component unit's cash
was insured.
Investments — State statutes authorize government entities to invest in certain bonds, notes,
accounts, investment pools, and other obligations of the state, U.S. Treasury, and U.S.
corporations pursuant to Idaho Code 67-1210 and 67-1210A. These statutes are designed to help
minimize the custodial risk that deposits may not be returned in the event of the failure of the
issuer or other counterparty, interest rate risk resulting from fair value losses arising from rising
interest rates, or credit risks that an issuer or other counterparty will not fulfill its obligations.
The City's investment policy complies with state statutes.
Restricted Cash — Restricted cash at year end consists of water customer deposits and monies
set aside for the water revenue loan reserve fund.
C. NOTE RECEIVABLE
The City has a note receivable from its component unit, Eagle Urban Renewal Agency (EURA)
with a balance of$39,950 at year end. The note calls for payments of 15% of the tax revenue
collected by EURA or at least $30,000 annually. Consequently, $30,000 of the note (the
minimum annual payment) is classified as current on the statement of net assets. No interest is
charged.
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CITY OF EAGLE
Notes to Financial Statements
D. CAPITAL ASSETS
A summary of capital assets for the year is as follows:
Beginning Ending
Governmental Activities Balance Increases Decreases Balance
Nondepreciable Capital Assets
Land $1,701,708 $1,701,708
Artwork/Collectibles 132,917 132,917
Construction in Progress 16,582 16,582
Total 1,851,207 $0 $0 1,851,207
Depreciable Capital Assets
Buildings 3,100,736 3,100,736
Improvements 6,697,515 166,628
6,864,143
Equipment 3,695,381 40,568 45,000 3,690,949
Subtotal 13,493,632 207,196 45,000 13,655,828
Accumulated Depreciation
Buildings 770,474 77,309 847,783
Improvements 1,831,689 338,668 2,170,357
Equipment 2,040,964 354,211 45,000 2,350,175
Subtotal 4,643,127 770,188 45,000 5,368,315
Total 8,850,505 (562,992) 0 8,287,513
Net Capital Assets $10,701,712 ($562,992) $0 $10,138,720
Depreciation expense of$770,188 was charged to the capital assets program.
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CITY OF EAGLE
Notes to Financial Statements
Beginning Ending
Business-Type Activities Balance _ Increases Decreases Balance
Nondepreciable Capital Assets
Land $93,250 $93,250
Construction in Progress 0 0
Total 93,250 $0 $0 93,250
Depreciable Capital Assets
Buildings 559,285 559,285
Water System 4,767,199 20,547 4,787,746
Equipment 391,808 10,277 402,085
Subtotal 5,718,292 30,824 0 5,749,116
Accumulated Depreciation
Buildings 32,630 13,982 46,612
Water System 526,366 239,387 765,753
Equipment 125,239 39,653 164,892
Subtotal 684,235 293,022 0 977,257
Total 5,034,057 (262,198) 0 4,771,859
Net Capital Assets $5,127,307 ($262,198) $0 $4,865,109
Depreciation expense of$293,022 was charged to the water services program.
E. DEFERRED REVENUE
Deferred revenue consists of the following at year end:
Fund
Financial
Description Statements
Delinquent Property Taxes $111,903
Delinquent Fines, Fees, Etc. 21,862
Total $133,765
F. OPERATING LEASE
The City leases a building under an operating lease agreement. The agreement is subject to
annual appropriation by the City council and therefore is defined as year-to-year for financial
statement purposes. Lease payments for the year amounted to $142,405.
18
CITY OF EAGLE
Notes to Financial Statements
G. LONG-TERM DEBT
Bonded Debt—At year end, the City's bonded debt was as follows:
Outstanding
2006 - $1,935,000 - general obligation bonds for capital improvements
due in annual principal installments and semiannual interest payments
with interest at 4.00% - 5.00% through 2016/17, secured by future taxes,
paid through the debt service fund $1,165,000
Total $1,165,000
Maturities on the bonds are estimated as follows:
Year Ended Principal Interest
9/30/12 $170,000 $56,550
9/30/13 175,000 49,750
9/30/14 190,000 41,000
9/30/15 200,000 31,500
9/30/16 210,000 21,500
9/30/17 220,000 11,000
Total $1,165,000 $211,300
Water Revenue Loan — The City has entered into a $2,590,000 water revenue loan with DEQ
for improvements to its water system. The balance on the loan at year end excluding accrued
interest was $2,460,500. The loan's terms are in the process of being finalized; however, based
on preliminary estimates, the City believes the loan will be paid in semiannual payments over a
20 year term at an interest rate of 3.25%. Consequently, approximately $93,494 of the loan's
principal is classified as current on the statement of net assets with the balance classified as
noncurrent. Accrued interest at year end on the loan is estimated as $290,177 with $244,665
classified as current on the statement of activities with the balance classified as noncurrent. The
loan will be paid through the water fund.
19
CITY OF EAGLE
Notes to Financial Statements
Changes in long-term debt are as follows:
Beginning Ending Due Within
Description Balance Increases Decreases Balance One Year
Primary Government
Governmental Act.
2006 G.O. Bonds $1,330,000 $165,000 $1,165,000 $170,000
Comp. Absences 69,062 $10,230 79,292
Subtotal -
1,399,062 10,230 165,000 1,244,292 170,000
Business-Type Act.
Water Revenue Loan 2,460,500 2,460,500 93,494
Subtotal 2,460,500 0 0 2,460,500 93,494
Total $3,859,562 10,230 $165,000 $3,704,792 $263,494
Component Unit $69,950 $0 $30,000 $39,950 $30,000
Interest and related costs during the year amounted to $62,101 and $79,966 and were charged to
the debt service—interest and water services programs, respectively.
H. RETIREMENT PLAN
Public Employee Retirement System of Idaho (PERSI) - The PERSI Base Plan, a cost sharing
multiple-employer public retirement system, was created by the Idaho State Legislature. It is a
defined benefit plan requiring that both the member and the employer contribute. The Plan
provides benefits based on members' years of service, age, and compensation. In addition,
benefits are provided for disability, death, and survivors of eligible members or beneficiaries.
The authority to establish and amend benefit provisions is established in Idaho Code. Designed
as a mandatory system for eligible state and school district employees, the legislation provided
for other political subdivisions to participate by contractual agreement with PERSI. After 5 years
of credited service, members become fully vested in retirement benefits earned to date.
Members are eligible for retirement benefits upon attainment of the ages specified for their
employment classification. For each month of credited service, the annual service retirement
allowance is 2.0% (2.3% police/firefighter) of the average monthly salary for the highest
consecutive 42 months.
PERSI issues publicly available standalone financial reports that include audited financial
statements and required supplementary information. These reports may be obtained from
PERSI's website www.persi.idaho.gov.
The actuarially determined contribution requirements of the City and its employees are
established and may be amended by the PERSI Board of Trustees. At September 30, 2011, the
required contribution rate as a percentage of covered payrolls for members was 6.23% for
general members and 7.69% for police/firefighters. The employer rate as a percentage of covered
20
CITY OF EAGLE
Notes to Financial Statements
payroll was 10.39% for general members and 10.73% for police/firefighter members. The City's
employer contributions required and paid were $130,444, $142,336, and $170,203, for the three
years ended September 30, 2011, 2010, and 2009 respectively.
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REQUIRED SUPPLEMENTAL INFORMATION
CITY OF EAGLE Page 1 of 2
Budgetary Comparison Schedule - General and Major Special Revenue Funds
Year Ended September 30, 2011
Final Budget
Budgeted Amounts Variance
(GAAP Basis) Actual Positive
General Fund Original Final
Revenues Amounts (Negative)
Taxes $907,469 $907,469
Franchise Fees $914,810 $7,341
814,200 814,200 740,056 (74,144)
Intergovernmental 1,363,520 1,363,520 1,522,823
Charges for Services 159,2,000 1,000 1,227 2227
1,000 7
Licenses,Permits,&Fees 428,120 428,120 1,085,838
Fines&Court Fees 627, 6
Interest 50,100 50,100 77,456 27,35356
2,338 2,338 8,356 6,018
Miscellaneous 163,738 163,738 200,493
Total Revenues 3,730,485 3,730,485 4,551,059 20, 74
820,5574
Expenditures
Current Expenditures
General Government 2,929,237 2,929,237 1,523,686 1,405,551
Public Safety 1,302,814 1,302,814 1,294,358
Parks&Streets 705,326 6,632
Culture&Recreation 705,326 628,694 76,632
82,532 82,532 82,327 205
Debt Service-Principal 0 0
Debt Service-Interest 0 0
0 0 0 0
Total Expenditures 5,019,909 5,019,909 3,529,065 1,490,844 *
Excess(Deficiency)of Revenues
Over Expenditures (1,289,424) (1,289,424) 1,021,994
Other Financing Sources(Uses) 2,311,418
Transfers In 0 0
Transfers Out 0 0
0 0 0 0
Total Other Financing Sources(Uses) 0 0
0 0
Net Change in Fund Balances (1,289,424) (1,289,424) 1,021,994
2,311,418
Fund Balances-Beginning 1,289,424 1,289,424 1,985,243 695,819
Fund Balances-Ending $0 $0
$3,007,237 $3,007,237
*Total expenditures(over)under appropriations.
See Auditor's Report
22
CITY OF EAGLE Page 2 of 2
Budgetary Comparison Schedule - General and Major Special Revenue Funds
Year Ended September 30, 2011
Final Budget
Budgeted Amounts Variance
(GAAP Basis) Actual Positive
Library Fund Original Final
Revenues Amounts (Negative)
Taxes $845,292 $845,292 $857,103 $11,811
0
Franchise Fees
0 0 0 0
Intergovernmental 34,500 34,500 34,457 (27)
Charges for Services
500 500 527 27
Licenses,Permits,&Fees 0 0
Fines&Court Fees 0 0
30,800 30, 38 318
Interest
1,500 � 7,518
Miscellaneous 1,500 1,152 (348)
2,500 2,500 5,427 2,927
Total Revenues 915,092 915,092
936,984 21,892
Expenditures
Current Expenditures
General Government 0 0
Public Safety 0 0
0 0 0 0
Parks&Streets 0 0
Culture&Recreation 0 0
1,075,092 1,075,092 877,773 197,319
Debt Service-Principal 0 0
Debt Service-Interest 0 0
0 0 0 0
Total Expenditures 1,075,092 1,075,092
877,773 197,319
Excess(Deficiency)of Revenues
Over Expenditures (160,000) (160,000) 59,211
Other Financing Sources(Uses) 219,211
Transfers In 0 0
Transfers Out 0 0
0 0 0 0
Total Other Financing Sources(Uses) 0 0
0 0
Net Change in Fund Balances 160,000
( ) (160,000) 59,211 219,211
Fund Balances-Beginning 160,000 160,000
Fund Balances-Ending 190,712 30,712
$0 $0 $249,923 $249,923
*Total expenditures(over)under appropriations.
See Auditor's Report
23
OTHER REPORTS AND SCHEDULES
Foe*? epAs, p.e.
gunang S. sat&—,punt✓2. gwil e
P.O.Box 100,Payette,Idaho 83661
www.folkecpas.com,folkecpas @srvinet.com
P:208-642-1417,F:208-642-1582
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
Honorable Mayor and City Council
City of Eagle
We have audited the financial statements of the governmental activities, the business-type
activities, and each major fund of City of Eagle (the City) as of and for the year ended September
30, 2011, which collectively comprise the City's basic financial statements and have issued our
report thereon dated December 27, 2011. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America and the standards applicable to
financial audits contained in Government Auditing Standards, issued by the Comptroller General
of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our
opinion on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control over financial reporting. Accordingly, we do not
express an opinion on the effectiveness of the City's internal control over financial reporting.
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 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.
Our consideration of internal control over financial reporting 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 financial reporting that might be deficiencies, significant deficiencies or
material weaknesses. We did not identify any deficiencies in internal control over financial
reporting that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free
of material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
24
material effect on the determination of financial statement amounts. However, providing an
opinion on compliance with those provisions was not an objective of our audit, and accordingly,
we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing
Standards.
This report is intended solely for the information and use of the management, those charged with
governance, others within the entity, federal awarding agencies, and pass-through entities and is
not intended to be and should not be used by anyone other than these specified parties.
FoBla CPAs,P.C.
December 27, 2011
25
CITY OF EAGLE
Schedule of Findings and Responses
Year Ended September 30, 2011
A. SUMMARY OF AUDITOR'S RESULTS
1. The auditor's report expresses an unqualified opinion on the financial statements of the
City.
2. No significant deficiencies relating to the audit of the financial statements are reported in
the Report on Internal Control Over Financial Reporting and on Compliance and Other
Matters Based on an Audit of the Basic Financial Statements Performed in Accordance
with Government Auditing Standards.
3. No instances of noncompliance material to the financial statements of the City were
disclosed during the audit.
B. FINDINGS -FINANCIAL STATEMENT AUDIT
None.
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