Finance - Annual Audit - 09/30/2004 STATE OF IDAHO
CITY OF EAGLE
AUDITED FINANCIAL STATEMENTS
AS OF
SEPTEMBER 30, 2004
STATE OF IDAHO
CITY OF EAGLE
TABLE OF CONTENTS
1-2
Independent Auditor's Report
Basic Financial Statements:
Government-wide Financial Statements:
3
Statement of Net Assets
4-5
Statement of Activities
Fund Financial Statements:
6
Balance Sheet- Governmental Funds
Statement of Revenues, Expenditures and Changes in 7
Fund Balances - Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
8
Statement of Activities
Statement of Net Assets - Proprietary Fund
9
Statement of Revenues, Expenses and Changes in 10
Net Assets - Proprietary Fund
Statement of Cash Flows - Proprietary Fund
11
12-22
Notes to the Financial Statements
Required Supplementary Information:
Statement of Revenue, Expenditures and Changes in Fund 23-24
Balances - Budget and Actual - Major Governmental Funds
Supporting schedules:
Individual Fund Schedules:
Statement of Revenues - Budget and Actual General Fund
25-26
Statement of Expenditures - Budget and Actual - General Fund
27
Statement of Revenues and Expenditures - Budget and Actual - 28
Library Special Revenue Fund
STATE OF IDAHO
CITY OF EAGLE
TABLE OF CONTENTS
(Continued)
Supporting schedules (continued):
Statement of Revenues and Expenditures - Budget and Actual - 29
Library G.O. Bond Debt Service Fund
Statement of Revenues and Expenses- Budget (Non-GAAP 30
Budgetary Basis) and Actual -Water Enterprise Fund
31
Operation in Tax Rolls
Report on Compliance and on
cial Statements Control Performed Financial
Accordance
Based on an Audit of Fina 32
With Government Auditing Standards
Gibbon, Scott & Dean LLP
Certified Public Accountants
Professional Building (208)4594649
1803 Ellis Avenue FAX(208)4596
Terry P.Dean, CPA Caldwell,Idaho 83605
John P.Dean,CPA
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and Members
of the City Council
City of Eagle
Eagle, Idaho
the business-
type have audited the accompanying the aggregate taterremair°ng fund
information a activities,
City of Eagle as
type activities, each major fund, and gg 9
of and for the year ended September 30, 2004, which collectively comprise the City of Eagle's basic
financial statements as listed in the table of contents. IlThesetonexpresst stn are
these financial
of the City of Eagle's management. Our responsibility
statements based on our audit.
We conducted our audit in accordance with auditing fian standards
c aldaaduditgse contained accepted Gover 't Aud ting
of America and the standards applicable
s require that we
Standards, issued by the Comptroller General
fa hs arance about whether the finan�al statements are
plan and perform the audit to obtain reasonableasis,
the
free of material misstatement. An audit includes exa
An lapudit also test
nclbdes asse sing ce the acco supporting ling
amounts and disclosures in the financial statem ents.
principles used and significant estimates made by manageent, as
a reasolnable basis fogouh opinion__
financial statement presentation. We believe that our audit p ro , in
In our opinion, the financial statements referred to above present fairly i t es, each major fund ec s, the
financial position of the governmental activities, the business-typ e
aggregate remaining fund information of the City a then Eagle
ended in Sconformi y3with0accoundtingeprncples
in financial position and cash flows for the year
accepted in the United States of America.
In accordance with Government Auditing Standardave also issu financial our rep report dd to ar tests January is
2005 on our consideration of City of Eagle's internal control
compliance with certain provisions of laws, regulations, and d Standardshandephould be ready nl
part of an audit performed in accordance with Government
conjunction with this report in considering the results of our audit.
As described in Note 1, the City of Eagle has implemented a new financial reporting model, as required
by the provisions of GASB Statement No. 34, Basic Financial
September er is 2004. Management's
Discussion and Analysis -for State and Local Governments,
-1-
MEMBER OF
AMERICAN INSTITUTE OF CERTIFIED
IDAHO SOCIETY OF CERTIFIED PUBLIC L ACCOUNTANTS
City of Eagle has not presented management's discussion and supp supplement, principles
generally accepted in the United States has determined pages not
required to be part of, the basic financial
statements
b but is supplementary information formation reggred by
24 is not a required part of the basic fin applied certain
accounting principles generally accepted inaiheof inqu United
�iries of management regard ng thepmethods of
limited procedures, which consisted p p Y
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 on The financial accompanying statements
financ'al
collectively comprise City of Eagle's basic financia l statements
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 brie and t of thetbas c financial al stat information
and, in
been subjected to the auditing procedures applied 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
January 7, 2005
-2-
State of Idaho
City of Eagle
Statement of Net Assets
September 30, 2004
Governmental Business-type Total
Activities Activities
Assets $ 17,294 $ $ 17,294
Cash 1,946,129 124,228 2,070,357
Investments
Receivables (net of allowance 213,977 213,977
for uncollectibles) 305,457 305,457
Due from other governments
Prepaid expenses 32,436 32,436
Capital assets (net of 7,666,649 371,739 8,038,388
accumulated depreciation)
Total assets
10,181,942 495,967 10,677,909
Liabilities 9,583 19,827 29,410
Bank overdraft 188,949 16,943 205,892
Accounts payable 38,615 38,615
Accrued payroll 114,858 114,858
Deposits payable 7
2,97
Due to other governments 18,168 2,977 977 12,977
Accrued interest
Noncurrent liabilities: 182 990 182,990
Due within one year 2,117,469 2,117,469
Due in more than one year
Total liabilities
2,673,609 36,770 2,710,379
Net Assets
Invested in capital assets, 5,431,649 371,739 5,803,388
net of related debt
Restricted for:
19,499 19,499
Debt service 2,057 185 87,458 2,144,643
Unrestricted
Total net assets
$ 7,508,333 $ 459,197 $ 7,967,530
The accompanying notes are an integral part of this statement.
Net (Expense) Revenue and Changes in Net Assets
Governmental Business-type Total
Activities Activities
$ 95,798 $ $ 95,798
(690,406) (690,406)
(845,928)
(845,928) (114,672)
(114,672)
(1,572,208) (1,572,208)
(45,533) (45,533)
(1,572,208) (45,533) (1,617,741)
1,383,924 1,383,924
357,085 357,085
199,721 199,721
68,939 68,939
703,456
703,456 19,445
19,445 907
907 25,349
23,095 2,254 _
2,756,572 2,254 8,826
1,184,364 (43,279) 1,141,085
6,323,969 502,476 6,826,445
$ 7,508,333 $ 459,197 $ 7,967,530
-5-
State of Idaho
City of Eagle
Balance Sheet
Governmental Funds
September 30, 2004
Other
Governmental
Fund Total
Debt Governmental
General Library Service Funds
Assets $ 10,801 $ 6,493 $ $ 17,294
Cash
Investments 1,740,049 182,147 23,933 1,946,129
Receivables (net of allowance for
uncollectibles) 192,468 15,843 5,666 213,977
Due from other governments 305,457 05,457
Prepaid expenses 22,615 9,821
Total assets $ 2,271,390 $ 214,304 $ 29,599 $ 2,515,293
Liabilities and Fund Balances
Liabilities: $ $ $ 9,583 $ 9,583
Bank overdraft
Accounts payable 162,302 26,647 188,949
38,615
Accrued payroll 24,189 14,426 85
Deferred revenue 8,964 10,148 3,570 11422,6858
,
Deposits payable 114,858 1,373 517 1,087 1
0
, , 2 858
Due to other governments 1 377,664
Total liabilities 311,400 52,594 13,670
Fund balances:
Reserved for: 2,436
Prepaid expenses 22,615 9,821 3 32,436
Debt service 15,929
Unreserved, reported in:
1,937,375 1,937,375
General fund 151,889 151,889
Special revenue funds
Total fund balances 1,959,990 161,710 15,929 2,137,629
Total liabilities and fund balances $ 2,271,390 $ 214,304 $ 29,599
Amounts reported for governmental activities in the statement
of net assets are different because:
Capital assets used in governmental activities are not financial 7,666,649
resources and, therefore, are not reported in the funds.
Other long-term assets are not available to pay for current-period 22 682
expenditures and, therefore, are deferred in the funds.
Long-term liabilities, including bonds payable, are not due and payable (2,318,627)
in the current period and therefore are not reported in the funds.
Net assets of governmental funds
$ 7,508,333
The accompanying notes are an integral part of this statement.
-6-
State of Idaho
City of Eagle
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended September 30, 2004
Other
Governmental
Fund Total
Debt Governmental
General Library Service Funds
Revenues:
Taxes $ 911,983 $ 618,749 $ 215,251 $ 1,105,436
Licenses and permits 1,105,436
Intergovernmental 1,039,501 39,000 1,078,501
Charges for services 660,311 660,311
Fines 880 25,781 26,661
Special assessments 961 961
Miscellaneous 68,541 4,764 1,328 74,633
Total revenues 3,787,613 688,294 216,579 4,692,486
Expenditures:
Current: 1,472,004
General government 1,472,004
Public safety 786,299 786,299
Highways and streets 25,396 25,396
Culture and recreation 750,269 603,718 1,353,987
Debt service: 120,000 120,000
Principal
Interest and fiscal charges 115,602 115,602
Total expenditures 3,033,968 603,718 235,602 3,873,288
Excess (deficiency) of revenues 819,198
over(under) expenditures 753,645 84,576 (19,023)
Other financing sources (uses):
Transfers in (out) (40,000) 40,000
Net change in fund balances 713,645 124,576 (19,023) 819,198
Fund balances - beginning 1,246,345 37,134 34,952 1,318,431
Fund balances -ending $ 1,959,990 $ 161,710 $ 15,929 $ 2,137,629
The accompanying notes are an integral part of this statement.
-7-
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, 2004
Amounts reported for governmental activities in the statement of activities
are different because:
Net change in fund balances -total governmental funds $ 819,198
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 capital outlays exceeded depreciation in the current period. 269,525
The net effect of various miscellaneous transactions involving capital assets
(i.e., sales, trade-ins, and donations) is to decrease net assets. (25,261)
Revenues in the statement of activities that do not provide current
financial resources are not reported as revenues in the funds. (4,974)
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. 120,000
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. 5,876
Change in net assets of governmental activities $ 1,184,364
The accompanying notes are an integral part of this statement.
-8-
State of Idaho
City of Eagle
Statement of Net Assets
Proprietary Fund
September 30, 2004
Assets
Current assets: $ 124,228
Investments
Noncurrent assets: 371,739
Capital assets (net of accumulated depreciation)
495,967
Total assets
Liabilities:
Current liabilities:
Bank overdraft 19,19,827
Accounts p 943
19,827
ayable 36,770
Total current liabilities
Net assets: 371,739
Invested in capital assets, net of related debt 87,458
Unrestricted
$ 459,197
Total net assets
The accompanying notes are an integral part of this statement.
State of Idaho
City of Eagle
Statement of Revenues, Expenses and Changes in Net Assets
Proprietary Fund
For the Year Ended September 30, 2004
Business-type
Activities -
Enterprise
Funds
� 0
Operating revenues
Operating expenses:
Other services and charges 14,9 107,982 2
1
Depreciation 124,903
Total operating expenses
(122,883)
Operating loss
Nonoperating revenues (expenses): 2,254
Interest
(120,629)
Income (loss) before contributions
77,350
Capital contributions
(43,279)
Change in net assets
502,476
Total net assets - beginning
$ 459,197
Total net assets - end
The accompanying notes are an integral part of this statement.
State of Idaho
City of Eagle
Statement of Cash Flows
Proprietary Fund
For the Year Ended September 30, 2004
Cash flows from operating activities: (103,231)
Cash payments to suppliers for goods and services
Cash flows from capital and related financing activities: (30,309)
Acquisition of capital assets 30,300
Capital contributed by customers and developers
Net cash provided by capital and related financing 47,041
activities
Cash flows from investing activities: 2,724
Interest received
Net increase (decrease) in cash and cash equivalents
(53,466)
Cash and cash equivalents - cost- beginning of year
158,382
Cash and cash equivalents - cost- end of year
104,916
Net decrease in the fair value of investments
(515)
Cash and cash equivalents - carrying amount - end of year
$ 104,401
Reconciliation of operating loss to net cash provided by operating
activities
$ (122,883)
Operating loss
Adjustments to reconcile operating loss to net cash
provided by operating activities: 14,901
Depreciation
Change in assets and liabilities: 4,751
Increase (decrease) in accounts payable 1 44,752
Total adjustments
Net cash provided by (used for) operating activities
$ (103,231)
The accompanying notes are an integral part of this statement.
State of Idaho
City of Eagle
Notes to the Financial Statements
September 30, 2004
I. Summary of Significant Accounting Policies
The financial statements of the City of Eagle have
tbeen vernmaental' units.conformity Governmental
accepted accounting principles (GAAP) as applied goshing
vernmental
Standards Board (GASB) is the accepted For the reporting year, he City of bliEagle
governmental accounting and financial reporting principles.
has implemented GASB Statement 34, Basic Financial saccounting and
and Analysis — for State and Local Governments. g ican City polic es are described
below.
A. Reporting Entity
The City of Eagle is an incorporated city of the he following daserv'ces as a�phonzedubyet a charter:
Council form of government and provides tannin and zoning, and general administrative
public safety (police), culture - recreation, planning
services.
For financial reporting purposes, management has considered all potential component units
which are controlled or whose boards are appointed by the City Council. Control by the City was
determined on the basis of budget adoption, selection
matters and ages ent , the Based oo
significantly influence operations, accountability for
this criteria, there were no component units included in the City's report.
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the the ntonfiduc ary activities of City of Eagle.nFor
changes in net assets) report information on all of
most part, the effect of interfund activity supported been axes and indterg ernmentalstatements.
these revenues,Governmental
activities, which normally are supp Y
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
Direct which
expensesrare those that are c early
function or segment are offset by program re venues.
identifiable with a specific function or segment.irectP benefit from include
services, or prigileges
customers or applicants who purchase, use, or directly
provided by a given function or segment and 2) grants and contributions that are restricted to
meeting the operational or capital requirementsam revenues reported
aarare function egstead as general
other items not properly included among program
revenues.
jor
Separate financial statements are provided for governmental
enterprise e funds and
aproprietary funds.separate
individual governmental funds and major individual
columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting and Basis of Presentation
The government-wide financial statements bas
basis of accounting, as are the proprietary fund'and fiduciary
measurement focus and the accrual
ed
fund financial statements. Revenues are recorded f earned and
f owspeProperty taxesdare
when a liability is incurred, regardless of the timing
ar items are
recognized as revenues in the year for ch th ir meets imposed by the prov filer have been are levied. Grants and
recognized as revenue as soon as all eligibility re
q u
met.
urces
Governmental fund financial statements reported
accoungting e Revenues1 are recogn'�ed as
measurement focus and the modified ac crual
when
soon as they are both measurable and available. soon enough thereafter to to
I abilitieseof the
they are collectible within the current period or s
current period. For this purpose, the City considers revenues
b generally arehecorded wheey are
a
within 60 days of the end of the current fiscal period. Expenditures es, as
l as
liability is incurred, as under accrual accounting. However,
d debt service
judgmenps,nare rrecord d lonly
expenditures related to compensated absenc es and
when payment is due.
Property taxes, franchise taxes, licenses, interest and intergovernmental revenues associated
o have been
with the current fiscal period are all considered tr ode Only susceptible(portion of slpec alsassessments
recognized as revenues of the current fiscal p e
as
receivable due within the current fiscal period is consid drops be deredsto bte (measurable land
revenue of the current period. All other revenue items are
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 accounted It accounts for r in alno non fund.esources of
the general government, except those required to
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 proprietary fpriorftoo December ber 1, 1989,to
generally are followed in both the government-wide P of the
vernmental
the extent that those standards do not conflict also or ofefollow ng °subsequent
Accounting Standards Board. Governments
private-sector guidance for their business-type activities tia nateterprise funds, subject to this
same limitation. The City has elected to follow subsequent p
As a general rule the effect of interfund activity has been eliminated from hefgover and financial statements. Exceptions to this general payments-in-lieu
charges between the City's water function and various other functions revenues reported for a °of
these charges would distort the direct costs and program
functions concerned.
Amounts reported as program revenues include 1 rand 3)plapital gicants
and
services, or privileges provided, 2) operating gra nts and contributions,
contributions, including special assessments. venueesall Likewise,sole gene al rrevenues repo ude all
general revenues rather than as program
as
taxes. from
items.
Proprietary funds distinguish operating revenues expenses
idingssery c s andpproduging and
Operating revenues and expenses generally esult from pro
-13-
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 obligations of the United States, state and local
governments; time deposit accounts; repurchase agreements; and the State Treasurer's
Investment Pool.
Investments for the City are reported at fair value. The State Treasurer's Investment Pool
operates in accordance with appropriate state laws and regulations. The reported value of
the pool is the same as the fair value of the pooled shares.
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 C un ybills and d collects
ts
the taxes and remits them to the City monthly. City property re
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. 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.
4. 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.
-14-
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 5-35
5. Compensated Absences
It is the City's policy to permit employees he accumulate nment-wide and proprietary fund finlanc al
Annual leave is accrued when incurred government-wide
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.
6. Long-Term Obligations
In the government-wide financial statements,o�dobl°pat obligations are reportednas liabilities fi
nancial the
statements, long-term debt and other long-term 9
applicable governmental activities, business-type activities, or proprietary fund type statement
, are of net assets. Bond premiums and discounts,e effectvleanterest method.tsBonds payable aare
amortized over the life of the bonds using
reported net of the applicable bond premium or discount.the rely d debtuance costs are reported
as deferred charges and amortized over the term of
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 while discounts on debtessuandces are reported are reported as other reported as
financing sour
other financing uses. Issuance costs, whether
or not withheld from the actual debt proceeds
received, are reported as debt service expenditures.
7. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance
for amounts that are not available for appropriation s )balance restricted
parties for use for a specific purpose. Designations of fund nce
management plans that are subject to change. Reserves have been established for the
amount of prepaid expenses and debt service.
Due to the implementation of GASB Statements 34 and 38, the fund balance and
government-wide beginning net assets have been restated.
270,932
4,750
Fund balances 9/30/03 $ 1,270,932
in recognition of receivables (27,656)0
Change in recognition of deferred revenue 77,655
Change in recognition of compensated absences 1,318,431
Fund balances as restated 9/30/03
422,385
Capital assets, net of depreciation 7,422,385
revenue (2 444,5 22,385
6
Long-term liabilities
Restated net assets 9/30/03
$ 6 323 969
-15--
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 $2,318,627 difference are as
follows:
Bonds payable $ 2,235,000
Accrued interest payable 18,168
Compensated absences 65,459
Net adjustment to reduce fund balance-total
governmental funds to arrive at net assets-
governmental activities $ 2.318.627
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 $269,525 difference are as follows:
Capital outlay $ 618,462
Depreciation expense (348,937)
Net adjustment to increase net changes in
fund balances-total governmental fund to
arrive at changes in net assets of
governmental activities $ 269.525
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 $5,876 difference are as
follows:
Compensated absences $ 4,946
Accrued interest 930
Net adjustment to increase net changes in fund
balances -total governmental funds to arrive at
changes in net assets of governmental activities $ 5.876
-16-
Ill. Stewardship, Compliance and Accountability
A. Budgetary Information
The City follows these procedures in establishing the budgetary data reflected in the financial
statements:
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 originally adopted for the fiscal year ended September 30,
2004.
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
At year end, the carrying amount of the City's deposits was ($12,416) and the bank balance
was $206,345. Of the bank balance, $100,000 was covered by federal depository insurance.
The balance is uncollateralized and uninsured.
Investments are categorized into these three categories of credit risk:
(1) Insured or registered, or securities held by the City or its agent in the City's name.
(2) Uninsured and unregistered, with securities held by the counterparty's trust department
or agent in the City's name.
(3) Uninsured and unregistered, with securities held by the counterparty, or by its trust
department or agent but not in the City's name.
At year end, the City's investment balances were as follows:
-17-
Categories Carrying
1 2 3 Amount Cost
Investments not subject
to categorization:
Investment in local
government pool $ 2.070.357 $ 2.078.992
A reconciliation of cash and investments as shown on the Statement of Net Assets for the
City follows:
Cash on hand $ 300
Carrying amount of deposits (12,416)
Carrying amount of investments 2,070,357
Total $ 2.058241
Cash and cash equivalent $ 2.058,241
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:
Debt
General Library Service Total
Receivables:
Taxes $ 13,657 $ 15,843 $ 5,666 $ 35,166
Accounts 178,811 178,811
Gross receivables 192,468 15,843 5,666 213,977
Less allowance for
uncollectibles
Net total receivables $192,468 $ 15.843 $ 5.666 $213,977
The only receivables not expected to be collected within one year are $7,261 of taxes ($2,907
in general, $3,231 in library, $1,123 in debt service).
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) $ 8,964 $
Delinquent property taxes receivable (library fund) 10,148
Delinquent property taxes receivable (debt service fund) 3,570
Total deferred/unearned revenue for governmental funds $ 22,682 $ -0-
-18-
C. Capital Assets
Capital asset activity for the year ended September 30, 2004, was as follows:
Beginning Ending
Balance Additions Deletions Balance
Governmental activities:
Capital assets not
being depreciated: $ 1,534,721 $ 101,872 $ (500) $ 1,637,093
Land 325 (38,307) 38,632
Artwork/collectibles 283 072 117,597 33,081 367,588
Construction in progress
Total capital assets,
not being depreciated 1 817293 219,794 (5,726) __2_,R41,313
Capital assets
being depreciated: 2,348,601 6,035 500 2,354,136
Buildings
Improvements other 38,185 3,064,991
than buildings 2,824,590 278,586 38 385 __IDIOT_
64991
1 733,674 147,128
Equipment - -
Total capital assets
being 7.217,534
being depreciated 6 906,865 431,749
Less accumulated
depreciation for: 297,863 59,145 357,008
•Buildings
Improvements other 385 998 130,564 5,204 511,358
than buildings ,808 725,832
Equipment 618,41 28 512 159,2
Total accumulated 348,937 57,012 1 594,198
depreciation 1 302,273 -
Total capital assets, being 82 812 64,068 5 623,336
depreciated, net 5 604,592
Governmental activities 58 342 $ 7 666 49
capital assets, net 22 7 4 385 $ 302.606 --
Business-type activities:
Capital assets not
being depreciated: $ 50
17, 0 $ $ $ 17,500
Land
Capital assets
being depreciated: 4,040 4,040
Buildings
Improvements other 308,579 308,579
than buildings
Equipment 152,802 30,309 183,111
Total capital assets 30,309 45,730
being depreciated 465,421 -
-19-
Beginning Ending
Balance Additions Deletions Balance
Business-type activities
(continued):
Less accumulated
depreciation for: $ 1,119 $ 101 $ $ 1,220
Buildings
Improvements other 99,331 8,962 108,293
than buildings 26,140 5,838 31,978
Equipment
Total accumulated 14,901 141,491
depreciation 126,590
Total capital assets, being 15,408 354,239
depreciated, net 338,831
Business-type activities $ 371.739
capital assets, net $ 356.331 $ 15 408 $
Depreciation expense was charged to functions/programs of the City as follows:
Governmental activities: 860 2
1
28, 6
General government $
Public safety 31 g 822
Culture and recreation —
Total depreciation expense - $ 348.937
governmental activities
Business-type activities:
Water $ 14.901
D. Interfund Transfers
The composition of interfund transfer balances as of September 30, 2004, is as follows:
Transfer In
Library
Transfer out-general fund
$ 40,000
E. Operating Leases
The City leases office equipment and space under cancelable operating leases. Total
costs for such leases were $10,116 for the year ended September 30, 2004. The future
minimum lease payments for these leases are as follows:
Year Ending
September 30, Amount
2005 $ 10,116
2006 1,716
2007 429
$ 12.261
-20-
F. Long-term Debt
General Obligation Bonds. The City r g obligation
provide funds �
the acquisition and construction of major capital facilitesGeneral obligation bonds have
been issued for governmental activities. The original amount of general obligation bonds
issued in prior years was $2,850,000.
General obligation bonds are direct obligations and pledge the full faith and credit Tofe h ere to
These bonds have been issued to provide funds for the construction of a library.
be repaid over the next 20 years with an interest rate of 3.9% - 6.25%. General obligation
bonds currently outstanding are in the amount of $2,235,000. Annual debt service
requirements to maturity for general obligation bonds are as follows:
Year ending Governmental Activities
September 30, Principal Int=
2005 $ 125,000 $ 109,010
2006 135,000 101,198
2007 140,000 92,760
2008 150,000 86,670
2009 155,000 80,070
2010-2014 885,000 287,790
2015-2017 6 64,425
$2235,01) $___B2-1
Changes in Long-Term Liabilities. Long-term liability activity for the year ended September
30, 2004 was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities:
General obligation bonds $2,355,000 $ $ 120,000 $2,235,000 $ 125,000
Compensated absences 70,405 64,712 69,658 652459 57,990
Governmental activity
Long-term liabilities $2 4 612 $ 189.658 $2$2 3
V. Other Information
A. Risk Management
The City is exposed to various risks of loss urall disasters theft
which the City carries aoraesd commercial
of assets; errors and omissions; and natural
B. Defined Benefit Pension Plan
Public Employee Retirement System of Idahoe� The retiremenplsystemetwas creased by the
Idaho (PERSI), a cost-sharing multiple-employer public and the
Idaho State Legislature. It is a defined benefit
based on requiring
m the
service, age age and
employer contribute. The plan provides
e
compensation. In addition, benefits are providedstablsh death,
survivors ft pro�sionglblis
members or beneficiaries. The authority to establish
-21-
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, 2004, 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. Prior to July 1, 2004 the required rates for general employees were
9.77% and 5.86%, respectively. The City of Eagle's contributions required and paid were
$77,738; $69,540; and $65,457 for the years ended September 30, 2004, 2003 and 2002
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.
-22-
Library Fund
Budgeted Variance with
Amounts - Final Budget -
Original Positive
and Final Actual (Negative)
$ 601,705 $ 618,749 $ 17,044
39,000 39,000
20,083 25,781 5,698
6,200 4,764 (1,436)
627,988 688,294 60,306
627,988 603,718 24,270
627,988 603,718 24,270
0 84,576 84,576
40,000 40,000
0 124,576 124,576
37,134 37,134
$ 37,134 $ 161,710 $ 124,576
-24-
State of Idaho
City of Eagle
Schedule of Revenues-Budget and Actual
General Fund
For the Year Ended September 30, 2004
Budgeted Variance with
Amounts - Final Budget-
Original Positive
and Final Actual (Negative)
Taxes:
Property taxes $ 539,745 $ 552,566 $ 12,821
Penalties and interest 3,000 2,332 (668)
Franchise 483,500 357,085 (126,415)
Total taxes 1,026,245 911,983 (114,262)
Licenses and permits:
Alcoholic beverages 14,000 16,186 2,186
Business 5,250 10,875 5,625
Building inspection 753,440 1,070,255 316,815
Miscellaneous 750 4,331 3,581
Animal 3,700 3,789 89
Total licenses and permits 777,140 1,105,436 328,296
Intergovernmental:
Grants 132,000 2,995 (129,005)
State revenue sharing 660,034 703,456 43,422
State liquor apportionment 135,000 199,721 64,721
Inventory phase-out 53,997 68,939 14,942
Court revenue 60,000 64,390 4,390
Total intergovernmental 1,041,031 1,039,501 (1,530)
Charges for services:
Annexation, planning and zoning,
design review, plan review 265,650 416,285 150,635
Street lights 1,000 1,200 200
Impact fees 150,000 195,435 45,435
Arborist fees 5,000 (5,000)
Impact processing fees 6,840 720 (6,120)
Energy standards 10,150 31,350 21,200
Saturday market fees 3,600 7,306 3,706
Park fees 3,500 8,015 4,515
Total charges for services 445,740 660,311 214,571
Fines:
Code enforcement 1,000 880 (120)
Special assessments:
Principal 907 907
Penalties and interest 55 54 (1)
Total special assessments 962 961 (1)
The accompanying notes are an integral part of this statement.
-25-
State of Idaho
City of Eagle
Schedule of Revenues - Budget and Actual
General Fund
For the Year Ended September 30, 2004
(Continued)
Budgeted Variance with
Amounts - Final Budget-
Original Positive
and Final Actual (Negative)
Miscellaneous:
Interest $ 77,500 $ 20,180 $ (57 320)
Proceeds from sale of bonds 2,600,000 (2,600,000)
Tree fund 5,000 9,382 4,382
Rent 3,000 3,282 282
Golf tournament 16,500 14,025 (2,475)
Donations 480,533 13,575 (466,958)
Miscellaneous 7,120 8,097 977
Total miscellaneous 3,189,653 68,541 (3,121,112)
Total general fund $ 6,481,771 $ 3,787,613 $ (2,694,158)
The accompanying notes are an integral part of this statement.
-26-
State of Idaho
City of Eagle
Schedule of Expenditures - Budget and Actual
General Fund
For the Year Ended September 30, 2004
Budgeted Variance with
Amounts - Final Budget-
Original Positive
and Final Actual (Negative)
General government:
Personal services $ 666,516 $ 733,662 $ (67,146)
Supplies 19,000 23,098 (4,098)
Other services and charges 454,061 421,167 32,894
Capital outlay 3,119,206 85,738 3,033,468
Total 4,258,783 1,263,665 2,995,118
Election 5,000 4,015 985
Legal 123,000 204,324 (81,324)
Total general government 4,386,783 1,472,004 2,914,779
Public safety:
Law enforcement 687,785 687,785
Capital outlay 5,505 (5,505)
Inspection
48,000 76,480 (28,480)
Animal control 16,529 16,529
Total public safety 752,314 786,299 (33,985)
Highways and streets:
Street lighting 20,000 16,116 3,884
Other services and charges 5,000 2,084 2,916
Capital outlay 20,000 7,196 12,804
Total highways and streets 45,000 25,396 19,604
Culture and recreation:
Cultural and arts:
Other services and charges 60,000 24,902 35,098
Capital outlay 5,000 11,213 (6,213)
Total cultural and arts 65,000 36,115 28,885
Parks/recreation:
Other services and charges 295,760 290,984 4,776
Capital outlay 1,076,584 405,584 671,000
Total parks 1,372,344 696,568 675,776
Historical commission:
Supplies 200 126 74
Other services and charges 3,200 3,165 35
Capital outlay 7,979 2,485 5,494
Total historical commission 11,379 5,776 5,603
Library: 790
Other services and charges 12,600 11,810
Total culture and recreation 1,461,323 750,269 711,054
Total general fund $ 6,645,420 $ 3,033,968 $ 3,611,452
The accompanying notes are an integral part of this statement.
-27-
State of Idaho
City of Eagle
Schedule of Revenues and Expenditures-Budget and Actual
Library Special Revenue Fund
For the Year Ended September 30, 2004
Budgeted Variance with
Amounts- Final Budget-
Original Positive
and Final Actual (Negative)
Revenues:
Taxes:
Property taxes $ 599,955 $ 616,026 $ 16,071
Penalties and interest 1,750 2,723 973
Total taxes 601,705 618,749 17,044
Intergovernmental:
City of Boise 39,000 39,000
Fines: 5,698
Fines 20,083 25,781
Miscellaneous:
Miscellaneous 1,500 3,066 1,566
Interest 2,700 1,533 (1,167)
Donations 2,000 165 (1,835)
Total miscellaneous 6,200 4,764 (1,436)
Total library $ 627,988 $ 688,294 $ 60,306
Expenditures:
Culture and recreation: 10,637
Personal service $ 403,691 $ 393,054 $
Supplies
14,825 16,007 (1,182)
Other services and charges 131,394 118,197 13,197
Capital outlay 78,078 76,460 1,618
Total culture and recreation $ 627,988 $ 603,718 $ 24,270
The accompanying notes are an integral part of this statement.
_28_
State of Idaho
City of Eagle
Schedule of Revenues and Expenditures - Budget and Actual
Library G.O. Bond Debt Service Fund
For the Year Ended September 30, 2004
Budgeted Variance with
Amounts - Final Budget-
Original Positive
and Final Actual (Negative)
Revenues:
Taxes: 5,739
Property taxes $ 208,522 $ 214,261 $
Penalties and interest 600 990 390
Total taxes 209,122 215,251 6,129
Miscellaneous:
Interest 2,200 1,328 (872)
Total revenues $ 211,322 $ 216,579 $ 5,257
Expenditures:
Principal $ 120,000 $ 120,000 $
Interest 114,590 114,678 (88)
Payment reserve 19,500 19,500
Fiscal charges 928 924 4
Total expenditures $ 255,018 $ 235,602 $ 19,416
The accompanying notes are an integral part of this statement.
-29-
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, 2004
Budgeted Variance with
Amounts - Final Budget-
Original Positive
and Final Actual (Negative)
Revenues:
Water hookups $ 85,000 $ 77,350 $ (7,650)
Interest 5,000 2,254 (2,746)
Total revenues $ 90,000 $ 79,604 $ (10,396)
Expenses:
Other services and charges $ 44,500 $ 107,982 $ (63,482)
Capital outlay 225,614 30,309 195,305
Total expenses $ 270,114 $ 138,291 $ 131,823
The accompanying notes are an integral part of this statement.
-30-
State of Idaho
City of Eagle
Operation in Tax Rolls
September 30, 2004
Total 2003 2002 2001 2000 1999
Balance - beginning of
year $ 35,690 $ $ 24,584 $ 9,425 $ 1,655 $ 26
Roll charge 1,384,358 1,384,358
Penalties 1,452 1,452
1,421,500 1,385,810 24,584 9,425 1,655 26
Collections 1,385,681 1,358,411 18,608 6,992 1,646 24
Adjustments 4,679 4,061 556 60 2
1,390,360 1,362,472 19,164 7,052 1,646 26
Balance - end of year $ 31,140 $ 23,338 $ 5,420 $ 2,373 $ 9 $ -
-31-
Gibbons, Scott & Dean LLP
Certified Public Accountants
Professional Building
Terry L.Scott,CPA 1803 Ellis Avenue (208)459-4649
John P.Dean,CPA Caldwell,Idaho 83605 FAX(208)454-9091
Report on Compliance and on Internal Control Over Financial Reporting 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, 2004, which collectively comprise the City of Eagle's basic financial
statements and have issued our report thereon dated January 7, 2005. 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.
Compliance
As part of obtaining reasonable assurance about whether the 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 grants, 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 that are required to be reported under
Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City of Eagle's internal control over financial
reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the
financial statements and not to provide assurance on the internal control over financial reporting. Our
consideration of the internal control over financial reporting would not necessarily disclose all matters in
the internal control over financial reporting that might be material weaknesses. A material weakness is
a condition in which the design or operation of one or more of the internal control components does not
reduce to a relatively low level the risk that misstatements in amounts that would be material in relation
to the financial statements being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. We noted no matters involving
the internal control over financial reporting and its operation that we consider to be material
weaknesses.
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 those specific parties.
GIBBONS, SCOTT & DEAN LLP
-32- Certified Public Accountants
January 7, 2005 MEMBER OF
AMERICAN INSTITUTE OF CER LED PUBLIC ACCOUNTANTS
IDAHO SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
Gibbons, Scott & Dean LLP
Certified Public Accountants
Professional Building
Terry L.Scott,CPA 1803 Ellis Avenue (208)459-4649
John P.Dean,CPA Caldwell,Idaho 83605 FAX(208)454-9091
RECEIVED& FILED
CITY OF EAGLE
MAY 2 8 2008
File:
Honorable Mayor and Members Route to:
of the City Council
City of Eagle
Eagle, Idaho
We have audited the financial statements of the City of Eagle for the year ended September 30, 2004,
and have issued our report thereon dated January 7, 2005.
As a part of our audit we made a study and evaluation of the internal control to the extent we
considered necessary to evaluate the system as required by generally accepted auditing standards.
The purpose of our study and evaluation was to determine the nature, timing and extent of the auditing
procedures necessary for expressing an opinion on the City's financial statements.
However, our study and evaluation was more limited than would be necessary to express an opinion on
the internal control taken as a whole.
The management of the City is responsible for establishing and maintaining internal control. In fulfilling
this responsibility, estimates and judgments by management are required to assess the expected
benefits and related cost of control procedures. The objectives of a system are to provide management
with reasonable, but not absolute, assurance that assets are safeguarded against loss from
unauthorized use or disposition and that transactions are executed in accordance with management's
authorization and recorded properly to permit the preparation of financial statements in accordance with
generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless
occur and not be detected. Also, projection of any evaluation of the system to future periods is subject
to the risk that procedures may become inadequate because of changes in conditions or that the
degree of compliance with the procedures may deteriorate.
Our study and evaluation made for the limited purpose described in the second paragraph would not
necessarily disclose all material weaknesses in the system. Accordingly, we do not express an opinion
on the internal control of the City of Eagle taken as a whole. However, our study and evaluation
disclosed no condition that we believe to be a material weakness.
As the result of our audit of the accounting records of the City of Eagle for the year ended September
30, 2004,we submit the following comments.
It appears that you are complying with the Idaho Code as it relates to the budgeting process and you
are maintaining your accounting records in compliance with the uniform system of accounting in all
material respects. We again wish to compliment your Clerk for the manner in which the records are
being maintained.
1
MEMBER OF
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
IDAHO SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
The following represents a schedule of working capital available as of September 30, 2004 and 2003.
Working capital is described as current assets minus current liabilities and generally equates to
unreserved, undesignated fund balance. Also included below is the percent of working capital to total
expenditures.
September 30, 2004 September 30, 2003
Working Percent to Working Percent to
Fund Capital Expenditures Capital Expenditures
General $ 1,937,375 63.9% $ 1,194,861 33.2%
Library 151,889 25.2% 20,287 3.5%
We generally recommend working capital at September 30 should be between at least 25 to 30% of
expenditures to maintain a positive cash flow position. Working capital ranges from fair to strong.
The following is a condensed comparative statement of revenues and expenses for the water fund:
Variance-
September 30, Favorable
$ 2004 $ 2003 $ (Unfavorable)
Operating revenues
Operating expenses:
Other expenses 107,982 89,468 (18,514)
Depreciation 14.901 14,193 (708)
Total 122,883 103,661 (19,222)
Operating loss (122,883) (103,661) (19,222)
Nonoperating revenues 2,254 4,149 (1,895)
Net loss $(120.629) $ (99,512) $ (21,117)
As you will note the net loss increased $21,117 over the prior year. This is due to the increase in
expenses (legal and engineering) and a decrease in interest income. As the loss continues and
increases, the city will need to pursue ways of raising monies for operating expenses as well as future
repairs and replacements.
We wish to thank your staff for the assistance and cooperation extended to our staff during the course
of the audit. We are pleased to have served you in an auditing capacity and hope that we can be of
service to you in the future. If you have any questions concerning our comments, we would appreciate
the opportunity to discuss them with you.
GIBBONS, SCOTT& DEAN LLP
Certified Public Accountants
January 7, 2005
-2-