Finance - Annual Audit - 09/30/2009 STATE OF IDAHO
CITY OF EAGLE
AUDITED FINANCIAL STATEMENTS
AS OF
SEPTEMBER 30, 2009
STATE OF IDAHO
CITY OF EAGLE
TABLE OF CONTENTS
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
Statement of Revenues, Expenditures and Changes in
Fund Balances- Governmental Funds 6
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities 7
Statement of Net Assets- Proprietary Fund 8
Statement of Revenues, Expenses and Changes in
Fund Net Assets - Proprietary Fund 9
Statement of Cash Flows- Proprietary Fund 10-11
Notes to the Financial Statements 12-25
Required Supplementary Information:
Statement of Revenue, Expenditures and Changes in Fund
Balances - Budget and Actual - Major Governmental Funds 26
Supporting schedules:
Individual Fund Schedules:
Statement of Revenues- Budget and Actual - General Fund 27
Statement of Expenditures- Budget and Actual - General Fund 28
Statement of Revenues and Expenditures- Budget and Actual -
Library Special Revenue Fund 29
STATE OF IDAHO
CITY OF EAGLE
TABLE OF CONTENTS
(Continued)
Supporting schedules (continued):
Statement of Revenues and Expenditures- Budget and Actual -
Library G.O. Bond Debt Service Fund 30
Statement of Revenues and Expenses- Budget (Non-GAAP
Budgetary Basis) and Actual - Water Enterprise Fund 31
Operation in Tax Rolls 32
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 33-34
Gibbons, Scott & Dean U P
Certified Public Accountants
Professional Building
Terry L.Scott,CPA 1803 Ellis Avenue 208-459-4649
John P.Dean,CPA Caldwell,Idaho 83605 Fax 208-459-4649
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and Members
of the City Council
City of Eagle
Eagle, Idaho
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information of the City of Eagle as of
and for the year ended September 30, 2009, 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
of Eagle'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 the Eagle Urban Renewal Agency discretely
presented component unit which represents 100 percent of the assets, net assets, and revenues of the
aggregate discretely presented component unit. Those financial statements were audited by other
auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the
amounts included for the aggregate 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 opinion.
In our opinion, based on our audit and the report of 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, each major fund, and the
aggregate remaining fund information of the City of Eagle as of September 30, 2009, and the respective
changes in financial position and, where applicable, cash flows 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 March 25,
2010 on our consideration of City of Eagle's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements and other
matters. The purpose of that report is to describe the scope of 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 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.
1
City of Eagle has not presented 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. Budgetary comparison information on page 26 is
not a required part of the basic financial statements but is supplementary information required by
accounting principles generally accepted in the United States of America. We have applied certain
limited procedures, which consisted principally of inquiries of management regarding the methods of
measurement and presentation of the supplementary information. However, we did not audit the
information and express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the City of Eagle basic financial statements. The accompanying financial
information listed as supporting schedules in the table of contents is presented for purposes of additional
analysis and is not a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a
whole.
GIBBONS, SCOTT& DEAN LLP
Certified Public Accountants
March 25, 2010
2
State of Idaho
City of Eagle
Statement of Net Assets
September 30, 2009
Primary Government Component Unit
Governmental Business-type Eagle Urban
Activities Activities Total Renewal Agency
Assets
Cash $ 15,657 $ 156,621 $ 172,278 $ 96,064
Investments 431,296 165,059 596,355
Receivables (net of allowance
for uncollectibles) 1,306,531 72,210 1,378,741 167,370
Prepaid expenses 16,888 111 16,999
Restricted assets:
Restricted cash 6,150 6,150
Deferred charges 28,141 28,141
Capital assets (net of
accumulated depreciation) 13,780,635 5,358,004 19,138,639
Total assets 15,579,148 5,758,155 21,337,303 263,434
Liabilities
Bank overdraft 79,858 79,858
Accounts payable 216,954 97,479 314,433 62,080
Accrued payroll 73,187 7,694 80,881
Deferred revenue 116,439 116,439 99,990
Deposits payable 357,459 357,459
Accrued interest 25,368 132,447 157,815
Liabilities payable from
restricted assets 6,150 6,150
Noncurrent liabilities:
Due within one year 263,621 5,170 268,791 30,000
Due in more than one year 3,845,623 2,326,140 6,171,763 69,950
Total liabilities 4,978,509 2,575,080 7,553,589 262,020
Net Assets
Invested in capital assets,
net of related debt 9,849,041 3,032,998 12,882,039
Restricted for:
Tree fund 21,101 21,101
Special revenue 442,373 442,373
Debt service 25,077 25,077
Unrestricted 263,047 150,077 413,124 1,414
Total net assets $ 10,600,639 $ 3,183,075 $ 13,783,714 $ 1,414
The accompanying notes are an integral part of this statement.
3
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State of Idaho
City of Eagle
Balance Sheet
Governmental Funds
September 30, 2009
Other
Governmental
Fund Total
Debt Governmental
General Library Service Funds
Assets
Cash $ 325 $ 13,592 $ 1,740 $ 15,657
Investments 41,421 378,700 11,175 431,296
Receivables (net of allowance for
uncollectibles) 1,179,337 109,237 17,957 1,306,531
Prepaid expenses 9,200 7,688 16,888
Total assets $ 1,230,283 $ 509,217 $ 30,872 $ 1,770,372
Liabilities and Fund Balances
Liabilities:
Bank overdraft $ 79,858 $ $ $ 79,858
Accounts payable 191,461 25,493 216,954
Accrued payroll 49,510 23,677 73,187
Deferred revenue 201,197 95,979 16,291 313,467
Deposits payable 357,459 357,459
Total liabilities 879,485 145,149 16,291 1,040,925
Fund balances:
Reserved for:
Prepaid expenses 9,200 7,688 16,888
Loan 69,950 69,950
Tree fund 21,101 21,101
Debt service 14,581 14,581
Unreserved, reported in:
General fund 250,547 250,547
Special revenue funds 356,380 356,380
Total fund balances 350,798 364,068 14,581 729,447
Total liabilities and fund balances $ 1,230,283 $ 509,217 $ 30,872
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. 13,780,635
Other long-term assets are not available to pay for current-period
expenditures and, therefore, are deferred in the funds. 197,028
Long-term liabilities, including bonds payable, are not due and payable
in the current period and therefore are not reported in the funds. (4,106,471)
Net assets of governmental funds $ 10,600,639
The accompanying notes are an integral part of this statement.
5
State of Idaho
City of Eagle
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended September 30, 2009
Other
Governmental
Fund Total
Debt Governmental
General Library Service Funds
Revenues:
Taxes $ 2,046,559 $ 985,715 $ 218,775 $ 3,251,049
Licenses and permits 312,451 312,451
Intergovernmental 1,680,588 104,450 1,785,038
Charges for services 525,830 525,830
Fines 325 38,401 38,726
Miscellaneous 21,941 10,504 960 33,405
Total revenues 4,587,694 1,139,070 219,735 5,946,499
Expenditures:
Current:
General government 2,507,035 2,507,035
Public safety 1,573,179 1,573,179
Highways and streets 261,872 261,872
Culture and recreation 489,778 1,013,319 1,503,097
Debt service:
Principal 150,000 150,000
Interest and fiscal charges 76,759 76,759
Total expenditures 4,831,864 1,013,319 226,759 6,071,942
Excess (deficiency) of revenues
over (under) expenditures (244,170) 125,751 (7,024) (125,443)
Other financing sources (uses):
Proceeds from tax anticipation note 500,000 500,000
Payment of tax anticipation note (500,000) (500,000)
Transfer in 100,000 100,000
Total other financing
sources (uses) 100,000 100,000
Net change in fund balances (144,170) 125,751 (7,024) (25,443)
Fund balances - beginning 494,968 238,317 21,605 754,890
Fund balances - ending $ 350,798 $ 364,068 $ 14,581 $ 729,447
The accompanying notes are an integral part of this statement.
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State of Idaho
City of Eagle
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, 2009
Amounts reported for governmental activities in the statement of activities
are different because:
Net change in fund balances - total governmental funds $ (25,443)
Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense. This is the
amount by which depreciation exceeded capital outlays in the current period. (527,981)
The net effect of various miscellaneous transactions involving capital assets
(i.e., sales, trade-ins, and donations) is to increase net assets. 62,337
Revenues in the statement of activities that do not provide current
financial resources are not reported as revenues in the funds. 98,792
The issuance of long-term debt (e.g., bonds) provides current financial
resources to governmental funds, while the repayment of the principal of
long-term debt consumes the current financial resources of governmental
funds. Neither transaction, however, has any effect on net assets. Also,
governmental funds report the effect of issuance costs, premiums, discounts,
and similar items when debt is first issued, whereas these amounts are
deferred and amortized in the statement of activities. This amount is the net
effect of these differences in the treatment of long-term debt and related items. 154,483
Some expenses reported in the statement of activities do not require the
use of current financial resources and, therefore, are not reported as
expenditures in the governmental funds. 6,557
Change in net assets of governmental activities $ (231,255)
The accompanying notes are an integral part of this statement.
7
State of Idaho
City of Eagle
Statement of Net Assets
Proprietary Fund
September 30, 2009
Business-type
Activities -
Enterprise
Assets Funds
Current assets:
Cash $ 156,621
Investments 165,059
Receivables (net of allowance
for uncollectibles) 72,210
Prepaid expenses 111
Total current assets 394,001
Noncurrent assets:
Restricted cash 6,150
Capital assets (net of accumulated depreciation) 5,358,004
Total noncurrent assets 5,364,154
Total assets 5,758,155
Liabilities:
Current liabilities:
Accounts payable 97,479
Accrued payroll 7,694
Compensated absences 5,170
Accrued interest 132,447
Total current liabilities 242,790
Current liabilities (payable from restricted assets):
Customer deposits 6,150
Noncurrent liabilities:
Compensated absences 1,134
Loan payable 2,325,006
Total noncurrent liabilities 2,326,140
Total liabilities 2,575,080
Net assets:
Invested in capital assets, net of related debt 3,032,998
Unrestricted 150,077
Total net assets $ 3,183,075
The accompanying notes are an integral part of this statement.
8
State of Idaho
City of Eagle
Statement of Revenues, Expenses and Changes in Fund Net Assets
Proprietary Fund
For the Year Ended September 30, 2009
Business-type
Activities -
Enterprise
Operating revenues:
Funds
Charges for services $ 445,196
Miscellaneous 2,841
Total operating revenues 448,037
Operating expenses:
Personal services 197,038
Supplies 186
Utilities 29,649
Other services and charges 118,547
Depreciation 157,256
Total operating expenses 502,676
Operating loss (54,639)
Nonoperating revenues (expenses):
Interest income 747
Intertie fees 70,853
Interest expense (72,615)
Total nonoperating revenues (expenses) (1,015)
Income (loss) before contributions (55,654)
Capital contributions 2,335,922
Transfer out (100,000)
Change in net assets 2,180,268
Total net assets - beginning 1,002,807
Total net assets - end $ 3,183,075
The accompanying notes are an integral part of this statement.
9
State of Idaho
City of Eagle
Statement of Cash Flows
Proprietary Fund
For the Year Ended September 30, 2009
Business-type
Activities -
Enterprise
Funds
Cash flows from operating activities:
Cash received from customers $ 410,088
Cash payments to employees for goods and services (190,752)
Cash payments to suppliers for goods and services (162,862)
Miscellaneous 2,841
Net cash provided by (used for) operating activities 59,315
Cash flows from noncapital financing activities:
Transfer out (100,000)
Intertie fees 80,000
Net cash provided by noncapital financing activities (20,000)
Cash flows from capital and related financing activities:
Acquisition of capital assets (69,836)
Proceeds from loan 54,623
Capital contributed by customers 13,670
Net cash provided by (used for) capital and related financing activities (1,543)
Cash flows from investing activities:
Interest received 691
Net increase (decrease) in cash and cash equivalents 38,463
Cash and cash equivalents - beginning of year 289,367
Cash and cash equivalents - end of year $ 327,830
The accompanying notes are an integral part of this statement.
10
Reconciliation of operating loss to net cash provided by operating activities
Operating loss $ (54,639)
Adjustments to reconcile operating loss to net cash
provided by operating activities:
Depreciation 157,256
Capital assets in accounts payable (70,394)
Change in assets and liabilities:
(Increase) decrease in accounts receivable (41,258)
(Increase) decrease in prepaid expenses (111)
Increase (decrease) in accounts payable 56,025
Increase (decrease) in customer deposits payable 6,150
Increase (decrease) in accrued payroll 4,498
Increase (decrease) in compensated absences 1,788
Total adjustments 113,954
Net cash provided by (used for) operating activities $ 59,315
Noncash investing, capital, and financing activities:
Contributions of capital assets from customers/developers $ 2,322,252
The accompanying notes are an integral part of this statement.
11
State of Idaho
City of Eagle
Notes to the Financial Statements
September 30, 2009
I. Summary of Significant Accounting Policies
The financial statements of the City of Eagle have been prepared in conformity with generally
accepted accounting principles (GAAP) as applied to governmental units. The Governmental
Accounting Standards Board (GASB) is the accepted standard-setting body for establishing
governmental accounting and financial reporting principles. Significant City accounting policies are
described below.
A. Reporting Entity
The City of Eagle is an incorporated city of the State of Idaho. The City operates under a Mayor-
Council form of government and provides the following services as authorized by its charter: public
safety (police), culture- recreation, planning and zoning, and general administrative services.
The accompanying financial statements present the City and its component units, entities for which
the City is considered to be financially accountable. The component unit column in the
government-wide statements is the financial data of the Eagle Urban Renewal Agency. Eagle
Urban Renewal Agency is a separate and distinct legal entity created by state statute. The
directors are appointed by the Mayor and approved by the City Council. Eagle Urban Renewal
Agency provides urban development services for the citizens of the city. Complete financial
statements can be obtained from the Eagle Urban Renewal Agency.
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net assets and the statement of
changes in net assets) report information on all of the nonfiduciary activities of City of Eagle. For
the most part, the effect of interfund activity has been removed from these statements.
Governmental activities, which normally are supported by taxes and intergovernmental revenues,
are reported separately from business-type activities, which rely to a significant extent on fees and
charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function or segment and 2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as general
revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental funds and major individual enterprise funds are reported as separate
columns in the fund financial statements.
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C. Measurement Focus, Basis of Accounting and Basis of Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary
fund financial statements. Revenues are recorded when earned and expenses are recorded when
a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized
as revenues in the year for which they are levied. Grants and similar items are recognized as
revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. 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. Expenditures generally are recorded when a
liability is incurred, as under accrual accounting. However, debt service expenditures, as well as
expenditures related to compensated absences and claims and judgments, are recorded only
when payment is due.
Property taxes, franchise taxes, licenses, interest and intergovernmental revenues associated with
the current fiscal period are all considered to be susceptible to accrual and so have been
recognized as revenues of the current fiscal period. Only the portion of special assessments
receivable due within the current fiscal period is considered to be susceptible to accrual as
revenue of the current period. All other revenue items are considered to be measurable and
available only when cash is received by the City.
The City reports the following major governmental funds:
The general fund is the City's primary operating fund. It accounts for all financial resources of
the general government, except those required to be accounted for in another fund.
The library fund accounts for the resources accumulated for the operation of the library.
The City reports the following major proprietary fund:
The water fund accounts for the activities of the City's water distribution operations.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989,
generally are followed in both the 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 and enterprise funds, subject to this same
limitation. The City has elected to follow subsequent private-sector guidance.
As a general rule the effect of interfund activity has been eliminated from the government-wide
financial statements. Exceptions to this general rule are payments-in-lieu of taxes and other
charges between the City's water function and various other functions of the City. Elimination of
these charges would distort the direct costs and program revenues reported for the various
functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods,
services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and
contributions, including special assessments. Internally dedicated resources are reported as
13
general revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund's principal ongoing operations. The principal
operating revenues of the City's enterprise funds are charges to customers for sales and services.
Operating expenses for enterprise funds include the cost of sales and services, administrative
expenses and depreciation of capital assets. All revenues and expenses not meeting this
definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's policy to use
restricted resources first, then unrestricted resources as they are needed.
D. Assets, Liabilities and Net Assets or Equity
1. Deposits and Investments
The City's cash and cash equivalents are considered to be cash on hand, demand deposits
and short-term investments with original maturities of three months or less from the date of
acquisition.
State statutes authorize the city to invest in olbligations of the United States, state and local
governments; time deposit accounts; repurchase agreements; Local Government Investment
Pool; and the Diversified Bond Fund.
Investments for the City are reported at fair value. The Local Government Investment Pool and
Diversified Bond Fund operate in accordance with appropriate state laws and regulations.
2. Receivables
Property taxes are an enforceable lien on property. The lien date is January 1 for property
taxes levied on the third Monday of the following September. Taxes can be paid in two
installments with payments due by December 20 and June 20. Ada County bills and collects
the taxes and remits them to the City monthly. City property tax revenues are recognized when
entered on the tax rolls to the extent that they result in receivables.
Taxes receivable represent balances due as of August 31. Taxes collected by the Ada County
Tax Collector in September, are on deposit with the Ada County Treasurer. These collections
were turned over to the City of Eagle subsequent to September 30.
3. Restricted Assets
Certain proceeds and resources are set aside and classified as restricted assets on the
balance sheet because their use is limited by City ordinance and by the City Council. In the
water fund, the customer deposit account is used to report resources received from users of
the utility system to be returned to the customer when leaving the system provided all utility
bills are paid current.
4. Prepaid Expenses
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid expenses in both government-wide and fund financial statements.
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5. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads,
bridges, sidewalks, and similar items), are reported in the applicable governmental or
business-type activities columns in the government-wide financial statements. Capital assets
are defined by the City as assets with an initial, individual cost of more than $300 and an
estimated useful life in excess of three years. Such assets are recorded at historical cost or
estimated historical cost if purchased or constructed. Donated capital assets are recorded at
estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend asset lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase of capital assets of business-type activities is
included as part of the capitalized value of the assets constructed, net of interest earned on the
invested proceeds over the same period.
Property, plant and equipment is depreciated using the straight-line method over the following
estimated useful lives:
Assets Years
Buildings 20-40
Improvements other than buildings 10-40
Equipment 5-40
6. Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused annual leave.
Annual leave is accrued when incurred in the government-wide and proprietary fund financial
statements. A liability for these amounts is reported in governmental funds only if they have
matured, for example, as a result of employee resignations and retirements.
7. Long-Term Obligations
In the government-wide financial statements, and proprietary fund types in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities, business-type activities, or proprietary fund type statement
of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and
amortized over the life of the bonds using the effective interest method. Bonds payable are
reported net of the applicable bond premium or discount. Bond issuance costs are reported as
deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of debt
issued is reported as other financing sources. Premiums received on debt issuances are
reported as other financing sources while discounts on debt issuances are reported as other
financing uses. Issuance costs, whether or not withheld from the actual debt proceeds
received, are reported as debt service expenditures.
8. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for
amounts that are not available for appropriation or are legally restricted by outside
15
parties for use for a specific purpose. Designations of fund balance represent tentative
management plans that are subject to change. Reserves have been established for the
amount of the loan that is not available to be appropriated for expenditures, prepaid
expenses, tree fund and debt service.
9. Net Assets
The government-wide statement of net assets reports $488,551 of restricted net assets, of
which $25,077 is restricted by enabling legislation.
II. Reconciliation of Government-wide and Fund Financial Statements
A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet
and the Government-wide Statement of Net Assets
The governmental fund balance sheet includes a reconciliation between fund balance — total
governmental funds and net assets — governmental activities as reported in the government-
wide statement of net assets. One element of that reconciliation explains that "long-term
liabilities, including bonds payable, are not due and payable in the current period and therefore
are not reported in the funds." The details of this $4,106,471 difference are as follows:
Bonds payable $ (1,565,112)
Deferred charges 28,141
Leases payable (2,446,594)
Accrued interest payable (25,368)
Compensated absences (97,538)
Net adjustment to reduce fund balance—total
governmental funds to arrive at net assets—
governmental activities $ (4,106,471)
B. Explanation of Certain Difference Between the Governmental Fund Statement of
Revenues, Expenditures, and Changes in Fund Balances and the Government-wide
Statement of Activities
The governmental fund statement of revenues, expenditures, and changes in fund balances
includes a reconciliation between net changes in fund balances- total governmental funds and
changes in net assets of governmental activities as reported in the government-wide statement
of activities. One element of that reconciliation explains that "Governmental funds report
capital outlay as expenditures. However, in the statement of activities the cost of those assets
is allocated over their estimated useful lives and reported as depreciation expense." The
details of this $527,981 difference are as follows:
Capital outlay $ 164,875
Depreciation expense (692,856)
Net adjustment to decrease net changes in
fund balances—total governmental fund to
arrive at changes in net assets of
governmental activities $ (527,981)
Another element of that reconciliation states that "The net effect of various miscellaneous
transactions involving capital assets (i.e., sales, trade-ins, and donations) is to increase net
16
assets." The details of this$62,337 difference are as follows:
In the statement of activities, only the loss on the
retirement of capital assets is reported. However,
in the governmental funds, the proceeds from
the sale increase financial resources. Thus, the
change in net assets differs from the change in
fund balance by the cost of the assets retired. $ (3,595)
Donations of capital assets increase net assets
in the statement of activities, but do not appear
in the governmental funds because they are not
financial resources. 65,932
Net adjustment to increase net changes in fund
balances—total governmental funds to arrive at
changes in net assets of governmental activities $ 62,337
Another element of that reconciliation states that "the issuance of long-term debt (e.g., bonds,
leases) provides current financial resources to governmental funds, while the repayment of the
principal of long-term debt consumes the current financial resources of governmental funds.
Neither transaction, however, has any effect on net assets. Also, governmental funds report
the effect of issuance costs, premiums, discounts, and similar items when debt is first issued,
whereas these amounts are deferred and amortized in the statement of activities." The details
of the $154,483 difference are as follows:
Principal repayments:
General obligation bond $ 150,000
Capital leases 4,483
Net adjustment to increase net changes in fund
balances—total governmental funds to arrive at
changes in net assets of governmental activities $ 154.483
Another element of that reconciliation states that "Some expenses reported in the statement of
activities do not require the use of current financial resources and therefore are not reported as
expenditures in governmental funds." The details of this $6,557 difference are as follows:
Compensated absences $ (607)
Amortization of deferred charges (3,555)
Amortization of bond premium 10,119
Accrued interest 600
Net adjustment to increase net changes in fund
balances-total governmental funds to arrive at
changes in net assets of governmental activities $ 6.557
III. Stewardship, Compliance and Accountability
A. Budgetary Information
The City follows these procedures in establishing the budgetary data reflected in the financial
statements:
17
1. Prior to September 1, the City Clerk/Treasurer, the Mayor and the City Council prepare a
proposed operating budget for the fiscal year commencing the following October 1. The
operating budget includes proposed expenditures and the means of financing them.
2. Public hearings are conducted at the City Hall to obtain taxpayer comments.
3. Prior to October 1, the budget is legally enacted through passage of an ordinance.
4. The City Council by following the same budgetary procedures used to adopt the original
budget may amend it to a greater amount if additional revenue will accrue to the city as a
result of increases in state or federal grants or allocations, as a result of an increase in
revenues from any source other than ad valorem tax revenues or as a result of an increase
in enterprise funds to finance the operation and maintenance of governmental facilities and
services which are entirely or predominantly self-supporting by user charges.
5. Formal budgetary integration is employed as a management control device during the year
for the general fund, special revenue, debt service and enterprise funds.
6. Budgets for the general, special revenue, and debt service funds are adopted on a basis
consistent with generally accepted accounting principles (GAAP). Budgets for enterprise
funds are adopted on a non-GAAP basis.
7. Budgeted amounts are as amended for the fiscal year ended September 30, 2009.
8. Expenditures may not legally exceed budgeted appropriations at the fund level.
The City of Eagle does not use the encumbrance method of accounting.
IV. Detailed Notes on All Funds
A. Deposits and Investments
As of September 30, 2009, City of Eagle had the following investments:
Weighted Average
Investment Type (Fair Value Maturity (Years)
Municipal money market $ 596,355 -
Custodial credit risk — deposits. In the case of deposits, this is the risk that in the event of a
bank failure, the City's deposits may not be returned to it. The City does not have a deposit
policy for custodial credit risk. As of September 30, 2009, $345,749 of the City's bank balance
of $790,167 was exposed to custodial credit risk because it was uninsured and
uncollateralized.
B. Receivables
Receivables as of year end for the City's individual major and nonmajor funds in the aggregate,
including the applicable allowances for uncollectible accounts, are as follows:
18
Debt
General Library Water Service Total
Receivables:
Taxes $ 93,343 $ 79,896 $ $ 17,957 $ 191,196
Accounts 599,238 36,641 72,210 708,089
Intergovernmental 386,806 386,806
Loan 99.950 99.950
Gross receivables 1,179,337 116,537 72,210 17,957 1,386,041
Less allowance for
uncollectibles 7,300 7,300
Net total receivables $1.179,337 $109,237 $ 72,210 $ 17,957 $1,378,741
The only receivables not expected to be collected within one year are $76,203 of taxes,
$14,685 of accounts and $69,950 of loan.
Governmental funds report deferred revenue in connection with receivables for revenues that
are not considered to be available to liquidate liabilities of the current period. Governmental
funds also defer revenue recognition in connection with resources that have been received, but
not yet earned. At the end of the current fiscal year, the various components of deferred
revenue and unearned revenue reported in the governmental funds were as follows:
Unavailable Unearned
Delinquent property taxes receivable (general fund) $ 84,758 $
Delinquent property taxes receivable (library fund) 72,506
Delinquent property taxes receivable (debt service fund) 16,291
Capital assets donation (general fund) 110,000
Grant revenues (general fund) 6,439
Delinquent fines, fees, etc. receivable (library fund) 23,473
Total deferred/unearned revenue for governmental funds $ 197,028 $ 116.439
C. Capital Assets
Capital asset activity for the year ended September 30, 2009, was as follows:
Beginning Ending
Balance Additions Deletions Balance
Governmental activities:
Capital assets not
being depreciated:
Land $ 1,701,708 $ $ $ 1,701,708
Artwork/collectibles 132,917 132,917
Construction in progress 1,618,578 40,170 984,328 674,420
Total capital assets,
not being depreciated 3,453,203 40,170 984,328 2,509,045
Capital assets
being depreciated:
Buildings 5,838,793 1,692 5,840,485
Improvements other
than buildings 4,820,772 1,051,864 5,872,636
Equipment 3,613,350 121,409 59,820 3,674,939
19
Beginning Ending
Balance Additions Deletions Balance
Governmental activities (continued):
Total capital assets
being depreciated $ 14,272,915 $ 1,174,965 $ 59,820 $ 15,388,060
Less accumulated
depreciation for:
Buildings 786,962 146,679 933,641
Improvements other
than buildings 1,260,447 240,364 1,500,811
Equipment 1,432,430 305,813 56,225 1,682,018
Total accumulated
depreciation 3,479,839 692,856 56,225 4,116,470
Total capital assets, being
depreciated, net 10,793,076 482,109 3,595 11,271,590
Governmental activities
capital assets, net $ 14.246.279 $ 522,279 $ 987,923 $ 13,780,635
Business-type activities:
Capital assets not
being depreciated:
Land $ 93,250 $ $ $ 93,250
Construction in progress 77,461 109,663 77,461 109,663
Total capital assets,
not being depreciated 170,711 109,663 77,461 202,913
Capital assets
being depreciated:
Buildings 212,354 286,660 499,014
Improvements other
than buildings 2,664,061 1,993,475 4,657,536
Equipment 239,482 152,326 391,808
Total capital assets
being depreciated 3,115,897 2,432,461 5,548,358
Less accumulated
depreciation for:
Buildings 6,173 12,475 18,648
Improvements other
than buildings 163,698 124,308 288,006
Equipment 66,140 20,473 86,613
Total accumulated
depreciation 236,011 157,256 393,267
Total capital assets, being
depreciated, net 2,879,886 2,275,205 5,155,091
Business-type activities
capital assets, net $ 3,050.597 $ 2,384,868 $ 77,461 $ 5.358,004
Depreciation expense was charged to functions/programs of the City as follows:
20
Governmental activities:
General government $ 153,377
Public safety 1,802
Culture and recreation 537,677
Total depreciation expense-
governmental activities $ 692.856
Business-type activities:
Water $ 157,256
Construction Commitments
The City has active construction projects for a chlorination system and parking lot as of
September 30, 2009. At year end the City's commitment with the contractor is as follows:
Remaining
Project Spent-to-Date Commitment
Senior citizen building parking lot $ 0 $ 95,073
Chlorination system 79,509 38,041
$ 79,509 $ 133,114
D. Interfund Receivables, Payables and Transfers
The composition of interfund balances as of September 30, 2009, is as follows:
Interfund transfers:
Transfer out Transfer in Amount
Water General $ 100.000
Transfers are used to move unrestricted revenues from the water fund to general for
reallocation of revenue sharing funds. This was a one-time transfer.
E. Leases
Operating Leases
The City leases office equipment under cancelable operating leases. Total costs for such
leases were $26,768 for the year ended September 30, 2009. The future minimum lease
payments for these leases are as follows:
Year Ending
September 30, Amount
2010 $ 29,276
2011 24,604
2012 19,321
2013 13,043
2014 6,404
$ 92.648
21
Capital Lease
The City has entered into a lease agreement to finance the acquisition of a building. This
lease agreement qualifies as a capital lease for accounting purposes. The City owns the
land the building is on. The building lease payment has been reduced by the income
received for leasing the ground to the owners of the building. The city receives $1,000
annually for 20 years. The asset acquired through the capital lease is as follows:
Governmental
Activities
Asset:
Building $ 2,726,887
Less accumulated
depreciation (238,602)
Total $ 2.488.285
The future minimum lease obligations and the net present value of these minimum lease
payments as of September 30, 2009, were as follows:
Year Ending Governmental
September 30, Activities
2010 $ 239,593
2011 239,593
2012 239,593
2013 239,593
2014 239,593
2015-2019 1,197,963
2020-2024 1,197,963
2025-2029 1,164,963
2030-2034 1,142,963
2035-2039 1,142,963
2040-2044 1,142,963
2045-2049 1,142,963
2050-2054 1,142,963
2055-2056 457,185
Total minimum lease payments 10,930,854
Less amount representing interest (8,484,260)
Present value of minimum
lease payments $ 2,446.594
F. Long-term Debt
General Obligation Bonds. The City issues general obligation bonds to provide funds for the
acquisition and construction of major capital facilities. General obligation bonds have been
issued for governmental activities.
General obligation bonds are direct obligations and pledge the full faith and credit of the city.
These bonds have been issued to provide funds for the construction of a library. In November
2006 the original general obligation bonds were refinanced with the Idaho Bond Bank Authority
in the amount of$1,485,000. They are to be repaid over the next 10 years with an interest rate
of 4.0% -5.0%. General obligation bonds currently outstanding are in
22
the amount of$1,485,000. Annual debt service requirements to maturity for general obligation
bonds are as follows:
Year ending Governmental Activities
September 30, Principal Interest
2010 $ 155,000 $ 69,544
2011 165,000 63,150
2012 170,000 56,550
2013 175,000 49,750
2014 190,000 41,000
2015-2017 630.000 64,000
$1.485,000$ 343.994
Revenue Loan. The City has entered into a loan agreement with the Idaho Department of
Environmental Quality for improvements to the water system in the amount of $2,590,000.
Interest rate is 3.25%. The loan is to be repaid in biannual payments over 20 years.
Amounts are received as the expenses are incurred. At September 30, 2009, the City had
received $2,325,006.
For the fiscal year ended September 30, 2009, the following transactions involving interest
expense were incurred in the governmental and business-type activities:
Governmental Business-type
Total interest incurred $ 312,749 $ 74,797
Total interest expensed 312,749 72,615
Total interest capitalized -0- 2,182
Changes in Long-Term Liabilities. Long-term liability activity for the year ended September
30, 2009 was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities:
General obligation bonds $1,635,000 $ $ 150,000 $1,485,000 $ 155,000
G.O. bond premium 90,231 10,119 80,112 10,119
Leases 2,451,077 4,483 2,446,594 4,933
Compensated absences 96,931 143,170 142,563 97,538 93,569
Governmental activity
long-term liabilities $4,273,239 $ 143,170 $ 307.165 $4,109,244 $ 263,621
Business-type activities:
Loan $2,270,383 $ 54,623 $ $2,325,006 $ 0
Compensated absences 4,516 6,280 4,492 6,304 5,170
Business-type activity
long-term liabilities $2,274,899 $ 60,903 $ 4,492 $2.331,310$ 5,170
Component Unit. As of September 30, 2009, the City has loaned the Eagle Urban Renewal
Agency $99,950 for operational expenses. They are to repay the City either 15% of tax
revenue collected or at least $30,000 annually. It is to be repaid in four years. There is no
interest being charged.
23
G. Restricted Assets
The balance of the restricted asset accounts in the enterprise funds are as follows:
Customer deposits-water fund $ 6,150
V. Other Information
A. Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction
of assets; errors and omissions; and natural disasters for which the City carries commercial
insurance.
B. Defined Benefit Pension Plan
Public Employee Retirement System of Idaho — The Public Employee Retirement System of
Idaho (PERSI), 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. Financial reports for the plan are available from PERSI
upon request.
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.
The contribution requirements of the City of Eagle and its employees are established and may
be amended by the PERSI Board of Trustees. At September 30, 2009, the required
contribution rate for general employees was 10.39% and 6.23% of covered payroll for the City
of Eagle and its employees, respectively. The City of Eagle's contributions required and paid
were $170,203; $170,235; and $151,643 for the years ended September 30, 2009, 2008 and
2007 respectively.
C. Contingencies
The City is currently involved in several cases. Although the outcome of these proceedings is
not presently determinable, in the opinion of management the resolution of these matters will
not have a material adverse effect on the financial condition of the City.
Amounts received or receivable from grantor agencies are subject to audit and adjustment by
grantor agencies, principally the federal government. 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.
24
D. Commitments
In September, the city council passed the necessary documentation to issue a tax
anticipation note for $375,000 for fiscal year 2010 when needed.
E. Component Unit
The Eagle Urban Renewal Agency is created by and exists under the Idaho Urban Renewal
Law of 1965, as amended, and is a separate legal entity.
As of September 30, 2009, Eagle Urban Renewal Agency had a loan payable to the City of
Eagle for$99,950.
25
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State of Idaho
City of Eagle
Schedule of Revenues- Budget and Actual
General Fund
For the Year Ended September 30, 2009
Budgeted Amounts- Variance with
Original Final Actual Final Budget-
Taxes:
Property taxes $ 1,155,006 $ 1,155,006 $ 1,119,938 $ (35,068)
Penalties and interest 2,500 2,500 10,499 7,999
Franchise 906,500 906,500 916,122 9,622
Total taxes 2,064,006 2,064,006 _ 2,046,559 (17,447)
Licenses and permits:
Alcoholic beverages 20,000 20,000 18,348 (1,652)
Business 16,500 16,500 16,025 (475)
Building inspection 1,148,500 1,148,500 267,345 (881,155)
Miscellaneous 3,000 3,000 4,165 1,165
Animal 7,000 7,000 6,568 (432)
Total licenses and permits 1,195,000 1,195,000 312,451 (882,549)
Intergovernmental:
Grants 251,675 251,675 11,222 (240,453)
State revenue sharing 1,188,514 1,188,514 1,021,571 (166,943)
State liquor apportionment 250,000 250,000 373,916 123,916
Inventory phase-out 201,416 201,416 111,746 (89,670)
Urban renewal 70,243 70,243 (70,243)
Building inspection 120,000 120,000 78,913 (41,087)
Court revenue 80,000 80,000 83,220 3,220
Total intergovernmental 2,161,848 2,161,848 1,680,588 (481,260)
Charges for services:
Annexation, planning and zoning;
design review, plan review 618,700 618,700 428,572 (190,128)
Street lights 1,500 1,500 645 (855)
Impact fees 188,552 188,552 39,172 (149,380)
Impact processing fees 2,700 2,700 460 (2,240)
Energy standards 15,800 15,800 5,000 (10,800)
Saturday market/last Thursday fees 29,000 29,000 35,128 6,128
Drainage fees 2,500 2,500 3,200 700
Park/recreation fees 14,100 14,100 13,653 (447)
Total charges for services 872,852 872,852 525,830 (347,022)
Fines:
Code enforcement 8,500 8,500 325 (8,175)
Miscellaneous:
Interest 77,300 77,300 4,706 (72,594)
Tree fund 1,000 1,000 (1,000)
Rent 1,620 1,620 2,764 1,144
Fundraising 1,000 1,000 425 (575)
Donations 6,100 6,100 5,490 (610)
Miscellaneous 15,125 15,125 8,556 (6,569)
Total miscellaneous 102,145 102,145 21,941 (80,204)
Proceed from tax anticipation note 500,000 500,000
Total general fund $ 6,404,351 $ 6,904,351 $ 5,087,694 $ (1,816,657)
27
State of Idaho
City of Eagle
Schedule of Expenditures- Budget and Actual
General Fund
For the Year Ended September 30, 2009
Budgeted Amounts- Variance with
Original Final Actual Final Budget-
General government:
Personal services $ 1,948,651 $ 1,948,651 $ 1,561,889 $ 386,762
Supplies 36,800 36,800 25,708 11,092
Other services and charges 1,415,507 1,915,507 734,988 1,180,519
Tax anticipation note payment 500,000 (500,000)
Interest/fees-tax anticipation note 17,350 (17,350)
Capital outlay 324,500 324,500 19,243 305,257
Total 3,725,458 4,225,458 2,859,178 1,366,280
Election 1,500 1,500 1,281 219
Legal 228,195 228,195 146,576 81,619
Total general government 3,955,153 4,455,153 3,007,035 1,448,118
Public safety:
Law enforcement 1,828,508 1,828,508 1,501,225 327,283
Inspection 48,000 48,000 38,677 9,323
Animal control 66,366 66,366 33,277 33,089
Total public safety 1,942,874 1,942,874 1,573,179 369,695
Highways and streets:
Street lighting 15,000 15,000 20,367 (5,367)
Other services and charges 190,000 190,000 241,505 (51,505)
Capital outlay 25,000 25,000 25,000
Total highways and streets 230,000 230,000 261,872 (31,872)
Culture and recreation:
Cultural and arts:
Personal services 52,295 52,295 23,858 28,437
Supplies 700 700 307 393
Other services and charges 87,605 87,605 40,586 47,019
Total cultural and arts 140,600 140,600 64,751 75,849
Parks/recreation:
Other services and charges 515,175 515,175 258,225 256,950
Capital outlay 446,049 446,049 76,435 369,614
Total parks 961,224 961,224 334,660 626,564
Historical commission:
Personal services 58,736 58,736 56,642 2,094
Supplies 4,952 4,952 3,021 1,931
Other services and charges 42,030 42,030 10,588 31,442
Capital outlay 13,900 13,900 2,086 11,814
Total historical commission 119,618 119,618 72,337 47,281
Library:
Other services and charges 50,600 50,600 18,030 32,570
Capital outlay 14,000 14,000 14,000
Total library 64,600 64,600 18,030 46,570
Total culture and recreation 1,286,042 1,286,042 489,778 796,264
Total general fund $ 7,414,069 $ 7,914,069 $ 5,331,864 $ 2,582,205
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State of Idaho
City of Eagle
Schedule of Revenues and Expenditures- Budget and Actua
Library Special Revenue Fund
For the Year Ended September 30, 2009
Budgeted Amounts- Variance with
Original Final Actual Final Budget-
Revenues:
Taxes:
Property taxes $ 1,009,901 $ 1,009,901 $ 976,782 $ (33,119)
Penalties and interest 1,500 1,500 8,933 7,433
Total taxes 1,011,401 1,011,401 985,715 (25,686)
Intergovernmental:
City of Boise/Ada
Community Library 103,450 103,450 103,450
Grant 1,000 1,000
Total intergovernmental 103,450 103,450 104,450 1,000
Fines:
Fines 44,600 44,600 38,401 (6,199)
Miscellaneous:
Miscellaneous 1,400 1,400 2,014 614
Interest 6,000 6,000 3,495 (2,505)
Donations 2,000 2,000 4,995 2,995
Total miscellaneous 9,400 9,400 10,504 1,104
Total library $ 1,168,851 $ 1,168,851 $ 1,139,070 $ (29,781)
Expenditures:
Culture and recreation:
Personal service $ 893,695 $ 893,695 $ 825,776 $ 67,919
Supplies 21,076 21,076 20,228 848
Other services and charges 320,921 320,921 116,259 204,662
Capital outlay 98,909 98,909 51,056 47,853
Total culture and recreation $ 1,334,601 $ 1,334,601 $ 1,013,319 $ 321,282
29
State of Idaho
City of Eagle
Schedule of Revenues and Expenditures - Budget and Actua
Library G.O. Bond Debt Service Fund
For the Year Ended September 30, 2009
Budgeted Amounts- Variance with
Original Final Actual Final Budget-
Revenues:
Taxes:
Property taxes $ 223,915 $ 223,915 $ 216,764 $ (7,151)
Penalties and interest 500 500 2,011 1,511
Total taxes 224,415 224,415 218,775 (5,640)
Miscellaneous:
Interest 2,000 2,000 960 (1,040)
Total revenues $ 226,415 $ 226,415 $ 219,735 $ (6,680)
Expenditures:
Principal $ 150,000 $ 150,000 $ 150,000 $
Interest 75,919 75,919 75,919
Payment reserve 18,827 18,827 18,827
Fiscal charges 840 840 840
Total expenditures $ 245,586 $ 245,586 $ 226,759 $ 18,827
30
State of Idaho
City of Eagle
Schedule of Revenues and Expenses -
Budget (Non-GAAP Budgetary Basis) and Actual
Water Enterprise Fund
For the Year Ended September 30, 2009
Budgeted Amounts- Variance with
Original Final Actual Final Budget-
Revenues:
Sales $ 542,400 $ 542,400 $ 445,196 $ (97,204)
Water hookups 127,500 127,500 12,920 (114,580)
Supply trunk line fee 157,500 157,500 750 (156,750)
Construction equivalency fees 60,000 60,000 (60,000)
Intertie fee 120,000 120,000 70,853 (49,147)
Latecomer fees 40,000 40,000 (40,000)
Loan proceeds 250,000 250,000 54,623 (195,377)
Water system inspection 30,000 30,000 (30,000)
Plan reviews 30,000 30,000 (30,000)
Miscellaneous - 2,841 2,841
Interest 9,000 9,000 747 (8,253)
Total revenues $ 1,366,400 $ 1,366,400 $ 587,930 $ (778,470)
Expenses:
Personal service $ 252,082 $ 252,082 $ 197,038 $ 55,044
Supplies 2,400 2,400 186 2,214
Utilities 17,000 17,000 29,649 (12,649)
Other services and charges 552,418 552,418 118,547 433,871
Debt payment 250,000 250,000 72,615 177,385
Capital outlay 292,500 292,500 142,412 150,088
Total expenses $ 1,366,400 $ 1,366,400 $ 560,447 $ 805,953
31
State of Idaho
City of Eagle
Operation in Tax Rolls
September 30, 2009
Total 2008 2007 2006 2005
Balance - beginning of
year $ 71,041 $ $ 61,231 $ 9,108 $ 702
Roll charge 2,407,276 2,407,276
Penalties 20,103 20,103
Adjustments 49 49
2,498,469 2,427,379 61,231 9,157 702
Collections 2,312,028 2,269,301 38,499 3,576 652
Adjustments 14,701 14,238 264 149 50
2,326,729 2,283,539 38,763 3,725 702
Balance - end of year $ 171,740 $ 143,840 $ 22,468 $ 5,432 $ -
32
Gibbons, Scott & Dean LT P
Certified Public Accountants
Professional Building
Terry L.Scott,CPA 1803 Ellis Avenue 208-459-4649
John P.Dean.CPA Caldwell.Idaho 83605 Fax 208-459-4649
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 Members
of the City Council
City of Eagle
Eagle, Idaho
We have audited the financial statements of the governmental activities, the business-type activities,
each major fund, and the aggregate remaining fund information of the City of Eagle as of and for the year
ended September 30, 2009, which collectively comprise the City of Eagle's basic financial statements
and have issued our report thereon dated March 25, 2010. 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 City of Eagle's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions
on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of
City of Eagle's internal control over financial reporting. Accordingly, we do not express an opinion on
the effectiveness of City of Eagle's internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose described in
the preceding paragraph and would not necessarily identify all deficiencies in internal control over
financial reporting that might be significant deficiencies or material weaknesses. However, as
discussed below, we identified certain deficiencies in internal control over financial reporting that we
consider to be significant deficiencies.
A control deficiency 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
misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects City of Eagle's ability to initiate, authorize, record, process,
or report financial data reliably in accordance with generally accepted accounting principles such that
there is more than a remote likelihood that a misstatement of City of Eagle's financial statements that
is more than inconsequential will not be prevented or detected by City of Eagle's internal control. We
consider the deficiencies described below to be significant deficiencies in internal control over
financial reporting.
1-As is common for small governmental units in Idaho, the accounting staff of City of Eagle do not
possess the knowledge and skills to prepare the annual financial statements in accordance with
governmental accounting principles nor do they have the expertise to prepare the year-end accrual
and closing entries nor maintain the depreciation schedule.
33
2-Due to its relatively small size, City of Eagle has inadequate segregation of duties.
Based on the size of City of Eagle, management believes the cost of correcting the first two items
listed above will exceed the benefits to be derived from doing so.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that a material misstatement of the financial statements will not be
prevented or detected by City of Eagle's internal control.
Our consideration of the internal control over financial reporting was for the limited purpose described
in the first paragraph of this section and would not necessarily identify all deficiencies in the internal
control that might be significant deficiencies and, accordingly, would not necessarily disclose all
significant deficiencies that are also considered to be material weaknesses. However, of the
significant deficiencies described above, we consider both items to be material weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Eagle'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 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 matters that are required to be
reported under Government Auditing Standards.
City of Eagle's response to the findings identified in our audit is described above. We did not audit the
City's response and, accordingly, we express no opinion on it.
This report is intended solely for the information and use of the City Council, management and any
applicable governmental agencies and is not intended to be and should not be used by anyone other than
these specified parties.
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GIBBONS, SCOTT & DEAN LLP
Certified Public Accountants
March 25, 2010
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