Finance - Annual Audit - 09/30/2012
CITY OF EAGLE
FINANCIAL STATEMENTS
Year Ended September 30, 2012
CITY OF EAGLE
Table of Contents
PAGE (S)
FINANCIAL SECTION
Independent Auditor's Report……………………………………………………. 1-2
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Assets……………………………………………….….. 3
Statement of Activities……………………………………………………. 4
Fund Financial Statements
Balance Sheet – Governmental Funds……..……………………………... 5-6
Statement of Revenues, Expenditures, and Changes in Fund Balances –
Governmental Funds………………………………………………….. 7-8
Statement of Net Assets – Proprietary Fund.…………………………….. 9
Statement of Revenues, Expenses, and Changes in Net Assets –
Proprietary Fund.…………………….……………………………….. 10
Statement of Cash Flows – Proprietary Fund.………………..………….. 11
Notes to Financial Statements…………………………………………….. 12-21
REQUIRED SUPPLEMENTAL INFORMATION
Budgetary Comparison Schedule – General and Major Special Revenue 22-23
Funds………..........................................................................................………
OTHER REPORTS AND SCHEDULES
Report on Internal Control Over Financial Reporting and on Compliance and
Other Matters Based on an Audit of the Financial Statements Performed in
Accordance with Government Auditing Standards…………………………....24-25
Schedule of Findings and Responses……………….……………………...……... 26
i
FINANCIAL SECTION
Folke CPAs, P.C.
Timothy S. Folke ÏKurt R.Folke
P.O. Box 100, Payette, Idaho 83661
www.folkecpas.com, folkecpas@srvinet.com
P: 208-642-1417, F: 208-642-1582
Independent Auditor’s Report
Honorable Mayor and City Council
City of Eagle
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, the discretely presented component unit, and each major fund of the City
of Eagle (the City) as of and for the year ended September 30, 2012, which collectively comprise
the City’s basic financial statements as listed in the table of contents. These financial statements
are the responsibility of the City's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, the
discretely presented component unit, and each major fund of the City as of September 30, 2012
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
December 21, 2012 on our consideration of the City's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on the internal control over financial reporting or on compliance. That report
is an integral part of an audit performed in accordance with Government Auditing Standards and
should be considered in assessing the results of our audit.
Accounting principles generally accepted in the United States of America require that the
budgetary information listed as required supplemental information in the table of contents be
presented to supplement the basic financial statements. Such information, although not required
1
to be a part of the basic financial statements, is required by the Governmental Accounting
Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, and historical context. We
have applied certain limited procedures to the required supplementary information in accordance
with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Management has not presented the management’s discussion and analysis information that
governmental accounting principles generally accepted in the United States of America require
to be presented to supplement the basic financial statements. Such missing information, although
not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, and historical context. Our
opinion on the basic financial statements is not affected by this missing information.
Folke CPAs, P.C.
December 21, 2012
2
BASIC FINANCIAL STATEMENTS
CITY OF EAGLE
Statement of Net Assets
September 30, 2012
Governmental Business-TypeTotal PrimaryComponent
ActivitiesActivitiesGovernmentUnit
Assets
Current Assets
Cash$3,963,937$665,367$4,629,304$185,566
Receivables:
Taxes86,53086,53010,760
Intergovernmental398,689398,689
Accounts381,15152,998434,149
Total Current Assets4,830,307718,3655,548,672196,326
Noncurrent Assets
Restricted Cash204,835204,835
Nondepreciable Capital Assets1,851,20793,2501,944,457
Depreciable Net Capital Assets7,687,8084,540,29912,228,107
Total Noncurrent Assets9,539,0154,838,38414,377,3990
Total Assets
$14,369,322$5,556,749$19,926,071$196,326
Liabilities
Current Liabilities
Accounts Payable & Accrued Expenses$190,222$16,623$206,845$6,486
Deferred Revenue0
Deposits Payable248,88522,835271,720
Accrued Interest4,14652,65756,803
Long-Term Debt, Current247,54691,836339,382
Total Current Liabilities690,799183,951874,7506,486
Noncurrent Liabilities
Long-Term Debt, Noncurrent820,0002,512,8763,332,876
Total Noncurrent Liabilities820,0002,512,8763,332,8760
Total Liabilities
1,510,7992,696,8274,207,6266,486
Net Assets
Invested in Capital Assets, Net of Related Debt8,467,3231,976,18010,443,503
Restricted - Special Programs279,262279,262
Restricted - Debt Service28,494182,000210,494
Restricted - Capital Projects833,393833,393
Restricted - Services701,742701,742
Unrestricted3,250,0513,250,051189,840
Total Net Assets
12,858,5232,859,92215,718,445189,840
Total Liabilities and Net Assets
$14,369,322$5,556,749$19,926,071$196,326
See Accompanying Notes3
CITY OF EAGLE
Statement of Activities
Year Ended September 30, 2012
Program Revenues
OperatingCapital
Charges ForGrants AndGrants And Net (Expense)
Functions/ProgramsExpensesServicesContributionsContributionsRevenue
Primary Government
Governmental Activities
Current Expenditures
General Government$1,533,241$524,028($1,009,213)
Public Safety1,351,037461,755(889,282)
Parks & Streets746,999255,308(491,691)
Culture & Recreation914,440312,535$8,456(593,449)
Debt Service - Interest56,48319,305(37,178)
Capital Assets780,153266,639(513,514)
Total Governmental Activities
5,382,3531,839,5698,456$0(3,534,328)
Business-Type Activities
Water Services822,058601,958(220,100)
Total Business-Type Activities
822,058601,95800(220,100)
Total Primary Government
$6,204,411$2,441,527$8,456$0($3,754,428)
Component Unit
Eagle Urban Renewal Agency$173,702($173,702)
Total Component Unit
$173,702$0$0$0($173,702)
Governmental Business-TypeTotal PrimaryComponent
Changes in Net AssetsActivitiesActivitiesGovernmentUnit
Net (Expense) Revenue
($3,534,328)($220,100)($3,754,428)($173,702)
General Revenues
Taxes1,869,7701,869,770205,192
Franchise Fees626,856626,856
Intergovernmental1,480,5331,480,533
Interest7,2801,6378,917
Miscellaneous84,455160,883245,338
Transfers0
Total
4,068,894162,5204,231,414205,192
Change in Net Assets
534,566(57,580)476,98631,490
Net Assets - Beginning
12,323,9572,917,50215,241,459158,350
Net Assets - Ending
$12,858,523$2,859,922$15,718,445$189,840
See Accompanying Notes4
CITY OF EAGLE
Page 1 of 2
Balance Sheet - Governmental Funds
September 30, 2012
DebtTotal
l
GeneralLibraryServiceGovernmenta
FundFundFundFunds
Assets
Cash$3,673,731$262,177$28,029$3,963,937
Receivables:
Taxes43,46633,4879,57786,530
Intergovernmental398,689398,689
Accounts356,48924,662381,151
Due From Other Funds0
Total Assets
$4,472,375$320,326$37,606$4,830,307
Liabilities
Accounts Payable & Accrued Expenses$153,738$36,484$190,222
Due To Other Funds0
Deferred Revenue41,15650,182$9,112100,450
Deposits Payable248,885248,885
Total Liabilities
443,77986,6669,112$539,557
Fund Balances
Restricted - Special Programs45,602233,660279,262
Restricted - Debt Service28,49428,494
Restricted - Capital Projects833,393833,393
Unassigned3,149,6013,149,601
Total Fund Balances
4,028,596233,66028,4944,290,750
Total Liabilities and Fund Balances
$4,472,375$320,326$37,606$4,830,307
See Accompanying Notes5
CITY OF EAGLE
Page 2 of 2
Balance Sheet - Governmental Funds
September 30, 2012
ReconciliationofTotalGovernmentaFundBalancestoNet
l
Assets of Governmental Activities
Total Governmental Fund Balances
$4,290,750
Amountsreportedforgovernmentalactivitiesinthestatementofnet
assets are different because:
Capital assets used in governmental activities are not financial
resources and therefore are not reported in the funds.
9,539,015
Certain receivables are not available to pay for current period
expenditures and therefore are deferred in the funds.
100,450
Certain liabilities, including accrued interest, are not due and
payable in the current period and therefore are not reported in the
funds.
(1,071,692)
Net Assets of Governmental Activitie
$12,858,523
s
See Accompanying Notes6
CITY OF EAGLE
Page 1 of 2
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds
Year Ended September 30, 2012
DebtTotal
GeneralLibraryServiceGovernmental
FundFundFundFunds
Revenues
Taxes$892,337$788,751$221,997$1,903,085
Franchise Fees626,856626,856
Intergovernmental1,477,49112,9921,490,483
Charges for Services1,4586032,061
Licenses, Permits, & Fees1,727,1491,727,149
Fines & Court Fees75,81534,544110,359
Interest6,3857151807,280
Miscellaneous83,5349,37792,911
Total Revenues4,891,025846,982222,1775,960,184
Expenditures
Current Expenditures
General Government1,669,2021,669,202
Public Safety1,351,0371,351,037
Parks & Streets746,999746,999
Culture & Recreation102,428863,245965,673
Debt Service - Principal170,000170,000
Debt Service - Interest56,55056,550
Total Expenditures3,869,666863,245226,5504,959,461
Excess (Deficiency) of Revenues
Over Expenditures1,021,359(16,263)(4,373)1,000,723
Other Financing Sources (Uses)
Transfers In0000
Transfers Out0000
Total Other Financing Sources (Uses)0000
Net Change in Fund Balances1,021,359(16,263)(4,373)1,000,723
ginning3,007,237249,92332,8673,290,027
Fund Balances - Be
Fund Balances - Endin$4,028,596$233,660$28,494$4,290,750
g
See Accompanying Notes7
CITY OF EAGLE
Page 2 of 2
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds
Year Ended September 30, 2012
ReconciliationoftheStatementofRevenues,Expenditures,and
ChangesinFundBalances-GovernmentalFundstothe
Statement of Activities
Net Change in Fund Balances - Total Governmental Funds
$1,000,723
Amountsreportedforgovernmentalactivitiesinthestatementof
activities are different because:
Government funds report capital outlays as expenditures.
However, in the statement of activities the cost of those assets is
allocated over their estimated useful lives as depreciation expense.
This is the excess of capital outlays over (under) depreciation
expense in the current period.
(599,705)
Revenues in the statement of activities that do not provide current
financial resources are deferred in the funds.
(33,315)
Repayment of debt principal is an expenditure in the
governmental funds, but the repayment reduces long-term debt in
the statement of net assets.
170,000
In the statement of activities, interest is accrued on long-term
debt, but the expenditure is reported when due in the
governmental funds.
67
Repayment of note receivable principal is revenue in the
governmental funds, but the repayment reduces the note
receivable in the statement of net assets.
(9,950)
In the statement of activities, compensated absences are accrued
when earned, but the expenditure is reported when due in the
governmental funds.
6,746
Change in Net Assets of Governmental Activities
$534,566
See Accompanying Notes8
CITY OF EAGLE
Statement of Net Assets - Proprietary Fund
September 30, 2012
Water
Fund
Assets
Current Assets
Cash$665,367
Receivables:
Accounts52,998
Total Current Assets718,365
Noncurrent Assets
Restricted Cash204,835
Nondepreciable Capital Assets93,250
Depreciable Net Capital Assets4,540,299
Total Noncurrent Assets4,838,384
Total Assets
$5,556,749
Liabilities
Current Liabilities
Accounts Payable & Accrued Expenses$16,623
Deposits Payable22,835
Accrued Interest52,657
Long-Term Debt, Current91,836
Total Current Liabilities183,951
Noncurrent Liabilities
Long-Term Debt, Noncurrent2,512,876
Total Noncurrent Liabilities2,512,876
Total Liabilities
2,696,827
Net Assets
Invested in Capital Assets, Net of Related Debt1,976,180
Restricted - Debt Service182,000
Restricted - Services701,742
Total Net Assets
2,859,922
Total Liabilities and Net Assets
$5,556,749
See Accompanying Notes9
CITY OF EAGLE
Statement of Revenues, Expenses, and Changes in Net Assets - Proprietary Fund
Year Ended September 30, 2012
Water
Fund
Operating Revenues
Charges for Services$601,958
Miscellaneous687
Total Operating Revenues
602,645
Operating Expenses
Personnel196,863
Operations & Maintenance219,274
Depreciation299,853
Total Operating Expenses
715,990
Operating Income (Loss)
(113,345)
Nonoperating Revenues (Expenses)
Interest Income1,637
Interest Expense(106,068)
Other Income (Expense)160,196
Total Nonoperating Revenue (Expenses)
55,765
Income (Loss) Before Contributions & Transfers
(57,580)
Capital Contributions0
Transfers In0
Transfers Out0
Change in Net Assets
(57,580)
Net Assets - Beginning
2,917,502
Net Assets - Ending
$2,859,922
See Accompanying Notes10
CITY OF EAGLE
Statement of Cash Flows - Proprietary Fund
Year Ended September 30, 2012
Water
Fund
Cash Flows From Operations
Receipts from Customers$628,747
Payments for Personnel(182,151)
Payments for Goods & Services(234,029)
Cash Provided (Used) By Operations
212,567
Cash Flows From Noncapital Financing
Receipts from Nonoperating Sources160,196
Payments for Nonoperating Expenses0
Transfers to (From) Other Funds0
Cash Provided (Used) By Noncapital Financing
160,196
Cash Flows From Capital & Related Financing
Purchase of Capital Assets(68,293)
Issuance of Debt0
Interest Paid on Debt(214,088)
Principal Paid on Debt0
Cash Provided (Used) By Capital & Related Financing
(282,381)
Cash Flows From Investments
Interest Income1,637
Cash Provided (Used) By Investments
1,637
Change in Cash
92,019
Cash - Beginning
778,183
Cash - Ending
$870,202
Reconciliation of Operating Income (Loss) to Cash
Provided (Used) By Operations
Operating Income (Loss)($113,345)
Adjustments to Reconcile Operating Income (Loss) to
Cash Provided (Used) by Operations:
Depreciation299,853
Changes in Assets & Liabilities:
Receivables19,317
Accounts Payable & Accrued Expenses(43)
Deposits Payable6,785
Cash Provided (Used) By Operations
$212,567
See Accompanying Notes11
CITY OF EAGLE
Notes to Financial Statements
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
– The City of Eagle (the City) provides basic municipal services and operates
under a mayor-council form of government. These financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of America as
applied to cities. The significant accounting policies of the City are described below.
These financial statements present the City (the primary government) and its component unit,
Eagle Urban Renewal Agency (EURA). As defined by GASBS No. 14, component units are
legally separate entities that are included in the City’s reporting entity because of the significance
of their operating or financial relationships with the City. The City’s mayor appoints and the City
council approves EURA’s board of commissioners and accordingly, EURA is defined as a
component unit of the City. Separate financial statements for the component unit are issued and
available from EURA.
Basic Financial Statements - Government-Wide Statements
– The City’s basic financial
statements include both government-wide (reporting the City as a whole) and fund financial
statements (reporting the City’s major funds). Both government-wide and fund financial
statements categorize primary activities as either governmental or business-type. The
government-wide financial statements follow both governmental accounting standards board
pronouncements and financial accounting standards board pronouncements issued through
November 30, 1989. The City’s business-type activities and enterprise funds also follow
financial accounting standards board pronouncements issued subsequent to this date that do not
conflict with or contradict those of the government accounting standards board.
In the government-wide statement of net assets, both the governmental and business-type
activities columns (a) are presented on a consolidated basis by column, (b) and are reported on a
full accrual, economic resource basis, which recognizes all long-term assets and receivables as
well as long-term debt and obligations. The City’s net assets may be reported in three parts -
invested in capital assets, net of related debt (when related debt exists), restricted net assets, and
unrestricted net assets. The City first utilizes restricted resources to finance qualifying activities.
The government-wide statement of activities reports both the gross and net cost of each of the
City’s functions and business-type activities. The functions are also supported by general
government revenues as reported in the statement of activities. The statement of activities
reduces gross expenses (including depreciation when recorded) by related program revenues and
operating and capital grants. Program revenues must be directly associated with the function.
Internal activity between funds is eliminated in the government-wide statement of activities.
Operating grants include operating-specific and discretionary (either operating or capital) grants
while the capital grants column reports capital-specific grants.
The net costs (by function or business-type activity) are normally covered by general revenues.
The City’s sole activity is providing basic municipal services, and substantially all expenses are
directly related to this activity. Accordingly, there is no allocation of indirect costs.
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CITY OF EAGLE
Notes to Financial Statements
The government-wide focus is more on the sustainability of the City as an entity and the change
in the City’s net assets resulting from the current year’s activities. Fiduciary funds, when present,
are not included in the government-wide statements.
Basic Financial Statements - Fund Financial Statements –
The financial transactions of the
City are reported in individual funds in the fund financial statements. Each fund is accounted for
by providing a separate set of self-balancing accounts that comprises its assets, liabilities,
reserves, fund equity, revenues and expenditures/expenses.
The emphasis in fund financial statements is on the major funds. Nonmajor funds by category are
summarized into a single column. Generally accepted accounting principles set forth minimum
criteria (percentage of assets, liabilities, revenues, and expenditures/expenses of the funds) for
the determination of major funds.
The focus of governmental fund measurement (in the fund statements) is upon determination of
financial position and changes in financial position (sources, uses, and balances of financial
resources) rather than upon net income. The activities reported in governmental funds are
reported as governmental activities in the government-wide financial statements. Major
governmental funds of the City include:
General Fund – The general fund is the City’s primary operating fund. It is used to account for
all financial resources except those required to be accounted for in another fund.
Special Revenue Funds – Special revenue funds are used to account for the proceeds of specific
revenue sources that are legally restricted to expenditures for specified purposes. Major special
revenue funds include the library fund, which accounts for the revenues earned and expenses
incurred in providing library services.
Debt Service Fund – The debt service fund is used to account for the accumulation of funds for
the periodic payment of principal and interest on long term debt.
The focus of proprietary fund measurement is upon determination of operating income, changes
in net assets, financial position, and cash flows. The generally accepted accounting principles
applicable are those similar to businesses in the private sector. Enterprise funds are required to be
used to account for operations for which a fee is charged to external users for goods or services
and the activity is financed with debt that is solely secured by a pledge of the net revenues. The
activities reported in enterprise funds are reported as business-type activities in the government-
wide financial statements. Major enterprise funds of the City include:
Water Fund – The water fund accounts for the revenues earned and expenses incurred in
providing water services.
Basis of Accounting –
Basis of accounting refers to the point at which revenues or
expenditures/expenses are recognized in the accounts and reported in the financial statements. It
relates to the timing of the measurements made regardless of the measurement focus applied.
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CITY OF EAGLE
Notes to Financial Statements
Both governmental and business-type activities in the government-wide financial statements and
proprietary and fiduciary fund financial statements are reported on the accrual basis of
accounting. Revenues are recognized when earned and expenses are recognized when incurred.
The governmental funds financial statements are presented on the modified accrual basis of
accounting. Under the modified accrual basis of accounting, revenues are recorded when
susceptible to accrual (when they become both measurable and available). "Measurable" means
the amount of the transaction can be determined and "available" means collectible within the
current period or within thirty days after year end. Expenditures are recorded when the related
fund liability is incurred. Exceptions to this general rule include principal and interest on long-
term debt which, if any, are recognized when due and payable.
The City may report deferred revenue on its financial statements. For the fund financial
statements, deferred revenues arise when potential revenue does not meet both the "measurable"
and "available" criteria for recognition in the current period. In subsequent periods, when both
revenue recognition criteria are met, the revenue is recognized. For both the government-wide
and fund financial statements, certain grant revenues are only recognized to the extent they have
been used for qualifying expenditures; any excess revenues are reported as deferred revenue.
Cash
– The cash balances of the City’s funds are pooled for investment purposes. The individual
funds’ portions of the pooled cash are reported in each fund as cash. Interest earned on pooled
cash is allocated to the various funds in proportion to each fund’s respective investment balance.
For purposes of the statement of cash flows, the City considers all investments (including
restricted cash) available for immediate withdrawal or with maturities of three months or less to
be cash and cash equivalents (referred to as cash).
Receivables
– Receivables are reported net of any estimated uncollectible amounts.
Inventories
– Material supplies on hand at year end are stated at cost using the first-in, first-out
method.
Capital Assets and Depreciation
– Significant capital asset acquisitions with an original cost of
$5,000 or more are recorded at cost if purchased or fair value if contributed. Minor repairs and
maintenance are expensed as incurred. Depreciation over the estimated useful lives of all
depreciable assets is recorded using the straight line method. The City is classified as a Phase III
government under GASB 34 and as such, had the option of not capitalizing infrastructure assets
acquired prior to October 1, 2003. The City did not exercise this option.
Compensated Absences and Post-Retirement Benefits
– The City provides certain
compensated absences to its employees. The estimated amount of compensation for future
amounts is recorded as a liability in the accompanying financial statements. Government
accounting standards board statement 45 requires employers to accrue future estimated post-
retirement benefits on the employer’s government-wide financial statements when such benefits
are deemed material to the employer. The future estimated post-retirement benefits are deemed
14
CITY OF EAGLE
Notes to Financial Statements
immaterial to the City, and accordingly, are not reflected on the government-wide financial
statements.
Net Assets
– Net assets is the difference between assets and liabilities. Net assets invested in
capital assets - net of related debt, are capital assets net of accumulated depreciation and reduced
by any outstanding debt related to the financing of those assets. Restricted net assets are net
assets less related debt that are subject to constraints on their use by creditors, grantors,
contributors, legislation, and other parties. All other net assets are reported as unrestricted.
Fund Balance Classifications
– Restrictions of the fund balance indicate portions that are
legally or contractually segregated for a specific future use. Nonspendable portions of the fund
balance are those amounts that are not expected to be converted into cash. Committed portions
represent amounts that can only be used for specific purposes pursuant to formal action (i.e.
board approval) of the reporting entity’s governing body. Assigned portions represent amounts
that are constrained by the government’s intent to be used for a specific purpose. Assigned fund
balance classifications are not actively used by the entity. Remaining fund balances are reported
as unassigned. When expenditures are incurred that qualify for either restricted or unrestricted
resources, the City first utilizes restricted resources. When expenditures are incurred that qualify
for either committed or assigned or unassigned resources, the City first utilizes committed
resources.
Property Taxes
– The City is responsible for levying property taxes, but the taxes are collected
by the respective county. Taxes are levied by the second Monday in September for each calendar
thth
year. Taxes are due in two installments – December 20 and June 20. A lien is filed on real
property three years from the date of delinquency.
Contingent Liabilities
– Amounts received or receivable from grantor agencies are subject to
audit and adjustment by grantor agencies. Any disallowed claims, including amounts already
collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures
which may be disallowed by the grantor cannot be determined at this time although the City
expects such amounts, if any, to be immaterial.
Interfund Activity
– Interfund activity is reported either as loans, services provided,
reimbursements, or transfers. Loans are reported as interfund receivables and payables as
appropriate and are subject to elimination upon consolidation. Services provided, deemed to be
at market or near market rates, are treated as revenues and expenditures/expenses.
Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund, and
reduces its related cost as a reimbursement. All other interfund transactions are treated as
transfers.
Use of Estimates
– The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
15
CITY OF EAGLE
Notes to Financial Statements
Concentrations of Credit Risk
– The City maintains its cash at insured financial institutions.
Periodically, balances may exceed federally insured limits. Balances not covered by FDIC are
collateralized whenever possible.
Risk Management
– The City is exposed to various risks related to its operations. Insurance is
utilized to the extent practical to minimize these risks.
Subsequent Events –
Subsequent events were evaluated through the date of the auditor’s report,
which is the date the financial statements were available to be issued.
B. CASH
Cash consists of the following at year end:
PrimaryComponent
GovernmentUnit
Cash - Deposits$4,834,139$185,566
Total
$4,834,139$185,566
Deposits
– At year end, the carrying amounts of the City's deposits were $4,834,139 and the
bank balances were $4,970,249. Of the bank balances, $1,504,474 was insured and the balance
was collateralized. The component unit’s cash was insured.
Investments
– State statutes authorize government entities to invest in certain bonds, notes,
accounts, investment pools, and other obligations of the state, U.S. Treasury, and U.S.
corporations pursuant to Idaho Code 67-1210 and 67-1210A. These statutes are designed to help
minimize the custodial risk that deposits may not be returned in the event of the failure of the
issuer or other counterparty, interest rate risk resulting from fair value losses arising from rising
interest rates, or credit risks that an issuer or other counterparty will not fulfill its obligations.
The City's investment policy complies with state statutes.
Restricted Cash
– Restricted cash at year end consists of water customer deposits and monies
restricted for one year’s worth of loan payments on the water revenue loan.
C. NOTE RECEIVABLE
The City originally provided its component unit, Eagle Urban Renewal Agency (EURA) with
$129,950 of startup funds which EURA has paid back over the course of several years. The
EURA paid the final installment of $39,950 to the City in the 2011/12 fiscal year.
16
CITY OF EAGLE
Notes to Financial Statements
D. CAPITAL ASSETS
A summary of capital assets for the year is as follows:
BeinninEndin
ggg
Governmental ActivitiesBalanceIncreasesDecreasesBalance
Nondepreciable Capital Assets
Land$1,701,708$1,701,708
Artwork/Collectibles132,917132,917
Construction in Progress16,58216,582
Total
1,851,207$0$01,851,207
Depreciable Capital Assets
Buildings3,100,7363,100,736
Improvements6,864,143102,9046,967,047
Equipment3,690,94977,54429,0003,739,493
Subtotal13,655,828180,44829,00013,807,276
Accumulated Depreciation
Buildings847,78377,308925,091
Improvements2,170,357343,8102,514,167
Equipment2,350,175359,03529,0002,680,210
Subtotal5,368,315780,15329,0006,119,468
Total
8,287,513(599,705)07,687,808
Net Capital Assets
$10,138,720($599,705)$0$9,539,015
Depreciation expense of $780,153 was charged to the capital assets program.
17
CITY OF EAGLE
Notes to Financial Statements
BeginningEnding
Business-Type ActivitiesBalanceIncreasesDecreasesBalance
NondepreciableCapital Assets
Land$93,250$93,250
Construction in Progress00
Total
93,250$0$093,250
Depreciable Capital Assets
Buildings559,285559,285
Water System4,787,7464,787,746
Equipment402,08568,293470,378
Subtotal5,749,11668,29305,817,409
Accumulated Depreciation
Buildings46,61213,98260,594
Water System765,753239,3881,005,141
Equipment164,89246,483211,375
Subtotal977,257299,85301,277,110
Total
4,771,859(231,560)04,540,299
Net Capital Assets
$4,865,109($231,560)$0$4,633,549
Depreciation expense of $299,853 was charged to the water services program.
E. DEFERRED REVENUE
Deferred revenue consists of the following at year end:
Fund
Financial
DescriptionStatements
Delinquent Property Taxes$82,218
Delinquent Fines, Fees, Etc.18,232
Total
$100,450
F. OPERATING LEASE
The City leases a building under an operating lease agreement. The agreement is subject to
annual appropriation by the City council and therefore is defined as year-to-year for financial
statement purposes. Lease payments for the year amounted to $142,405.
18
CITY OF EAGLE
Notes to Financial Statements
G. LONG-TERM DEBT
Bonded Debt
– At year end, the City’s bonded debt was as follows:
Governmental Activities:
Outstanding
2006-$1,935,000-generalobligationbondsforcapitalimprovements
dueinannualprincipalinstallmentsandsemiannualinterestpayments
withinterestat4.00%-5.00%through2016/17,securedbyfuturetaxes,
$995,000
paid through the debt service fund
Total
$995,000
Maturities on the bonds – governmental activities – are estimated as follows:
Year EndedPrincipalInterest
9/30/13$175,000$49,750
9/30/14190,00041,000
9/30/15200,00031,500
9/30/16210,00021,500
9/30/17220,00011,000
Total
$995,000$154,750
Business-Type Activities:
Water Revenue Loan
- At year end, the City’s water revenue loan was as follows:
Waterrevenueloan-DEQ,dueinsemiannualpaymentsof$90,918with
interestat3.25%through2031/32,securedbyfutureuserfees,paid
through the water fund
$2,590,000
Total
$2,590,000
As part of the water revenue loan, DEQ requires that the City has sufficient monies in reserve to
pay for one year’s worth of loan payments. The City has such funds restricted in its water fund.
19
CITY OF EAGLE
Notes to Financial Statements
Maturities on the water revenue loan – business-type activities – are estimated as follows:
Year EndedPrincipalInterest
9/30/13$77,124$104,712
9/30/14100,97880,858
9/30/15104,28677,550
9/30/16107,50274,334
9/30/17111,22570,611
9/30/18-22613,065296,115
9/30/23-27720,343188,837
9/30/28-32755,47762,785
Total
$2,590,000$955,802
Changes in long-term debt are as follows:
BeinninEndin Due Within
ggg
DescriptionBalanceIncreases*DecreasesBalanceOne Year
Primar Government
y
Governmental Act.
2006 G.O. Bonds$1,165,000$170,000$995,000$175,000
Comp. Absences79,2926,74672,54672,546
Subtotal
1,244,292$0176,7461,067,546247,546
Business-Type Act.
Water Revenue Loan2,460,500129,5002,590,00077,124
Comp. Absences014,71214,71214,712
Subtotal
2,460,500144,21202,604,71291,836
Total
$3,704,792144,212$176,746$3,672,258$339,382
Component Unit
$39,950$0$39,950$0
Interest and related costs during the year amounted to $56,483 and $106,068 and were charged to
the debt service – interest and water services programs, respectively.
*
The increase of $129,500 to the water revenue loan’s balance was due to accrued interest on the
loan being added to the loan’s principal balance in the 2011/12 fiscal year as part of the loan’s
finalization process.
H. RETIREMENT PLAN
Public Employee Retirement System of Idaho (PERSI) - The PERSI Base Plan, a cost sharing
multiple-employer public retirement system, was created by the Idaho State Legislature. It is a
defined benefit plan requiring that both the member and the employer contribute. The Plan
20
CITY OF EAGLE
Notes to Financial Statements
provides benefits based on members’ years of service, age, and compensation. In addition,
benefits are provided for disability, death, and survivors of eligible members or beneficiaries.
The authority to establish and amend benefit provisions is established in Idaho Code. Designed
as a mandatory system for eligible state and school district employees, the legislation provided
for other political subdivisions to participate by contractual agreement with PERSI. After 5 years
of credited service, members become fully vested in retirement benefits earned to date.
Members are eligible for retirement benefits upon attainment of the ages specified for their
employment classification. For each month of credited service, the annual service retirement
allowance is 2.0% (2.3% police/firefighter) of the average monthly salary for the highest
consecutive 42 months.
PERSI issues publicly available standalone financial reports that include audited financial
statements and required supplementary information. These reports may be obtained from
PERSI’s website www.persi.idaho.gov.
The actuarially determined contribution requirements of the City and its employees are
established and may be amended by the PERSI Board of Trustees. At September 30, 2012, the
required contribution rate as a percentage of covered payrolls for members was 6.23% for
general members and 7.69% for police/firefighters. The employer rate as a percentage of covered
payroll was 10.39% for general members and 10.73% for police/firefighter members. The City's
employer contributions required and paid were $132,889, $130,444, and $142,336, for the three
years ended September 30, 2012, 2011, and 2010 respectively.
21
REQUIRED SUPPLEMENTAL INFORMATION
CITY OF EAGLE
Page 1 of 2
Budgetary Comparison Schedule - General and Major Special Revenue Funds
Year Ended September 30, 2012
Final Budget
Budgeted AmountsVariance
(GAAP Basis)Actual Positive
General FundOriginalFinalAmounts(Negative)
Revenues
Taxes$883,238$883,238$892,337$9,099
Franchise Fees681,200681,200626,856(54,344)
Intergovernmental1,423,7051,423,7051,477,49153,786
Charges for Services6506501,458808
Licenses, Permits, & Fees776,217776,2171,727,149950,932
Fines & Court Fees76,10076,10075,815(285)
Interest4,0004,0006,3852,385
Miscellaneous27,65027,65083,53455,884
Total Revenues3,872,7603,872,7604,891,0251,018,265
penditures
Ex
Current Expenditures
General Government3,290,7693,290,7691,669,2021,621,567
Public Safety1,351,0381,351,0381,351,0371
Parks & Streets820,708820,708746,99973,709
Culture & Recreation108,433108,433102,4286,005
Debt Service - Principal0000
Debt Service - Interest0000
penditures5,570,9485,570,9483,869,6661,701,282*
Total Ex
Excess (Deficiency) of Revenues
Over Expenditures(1,698,188)(1,698,188)1,021,3592,719,547
Other Financing Sources (Uses)
Transfers In0000
Transfers Out0000
Total Other Financing Sources (Uses)0000
Net Change in Fund Balances(1,698,188)(1,698,188)1,021,3592,719,547
Fund Balances - Beginning1,698,1881,698,1883,007,2371,309,049
Fund Balances - Endin$0$0$4,028,596$4,028,596
g
*Total expenditures (over) under appropriations.
See Auditor's Report22
CITY OF EAGLE
Page 2 of 2
Budgetary Comparison Schedule - General and Major Special Revenue Funds
Year Ended September 30, 2012
Final Budget
Budgeted AmountsVariance
(GAAP Basis)Actual Positive
Library FundOriginalFinalAmounts(Negative)
Revenues
Taxes$783,037$783,037$788,751$5,714
Franchise Fees0000
Intergovernmental12,99212,99212,9920
Charges for Services500500603103
Licenses, Permits, & Fees0000
Fines & Court Fees40,80040,80034,544(6,256)
Interest1,5001,500715(785)
Miscellaneous6,5006,5009,3772,877
Total Revenues845,329845,329846,9821,653
penditures
Ex
Current Expenditures
General Government0000
Public Safety0000
Parks & Streets0000
Culture & Recreation1,131,2701,131,270863,245268,025
Debt Service - Principal0000
Debt Service - Interest0000
penditures1,131,2701,131,270863,245268,025*
Total Ex
Excess (Deficiency) of Revenues
Over Expenditures(285,941)(285,941)(16,263)269,678
Other Financing Sources (Uses)
Transfers In0000
Transfers Out0000
Total Other Financing Sources (Uses)0000
Net Change in Fund Balances(285,941)(285,941)(16,263)269,678
Fund Balances - Beginning285,941285,941249,923(36,018)
Fund Balances - Endin$0$0$233,660$233,660
g
*Total expenditures (over) under appropriations.
See Auditor's Report23
OTHER REPORTS AND SCHEDULES
Folke CPAs, P.C.
Timothy S. Folke ÏKurt R.Folke
P.O. Box 100, Payette, Idaho 83661
www.folkecpas.com, folkecpas@srvinet.com
P: 208-642-1417, F: 208-642-1582
Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance With Government Auditing Standards
Honorable Mayor and City Council
City of Eagle
We have audited the financial statements of the governmental activities, the business-type
activities, the discretely presented component unit, and each major fund of City of Eagle (the
City) as of and for the year ended September 30, 2012, which collectively comprise the City’s
basic financial statements and have issued our report thereon dated December 21, 2012. 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
Management of the City is responsible for establishing and maintaining effective internal control
over financial reporting. In planning and performing our audit, we considered the City's internal
control over financial reporting as a basis for designing our auditing procedures for the purpose
of expressing our opinion on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the City’s internal control over financial reporting. Accordingly,
we do not express an opinion on the effectiveness of the City’s internal control over financial
reporting.
Adeficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity’s financial statements will not be prevented,
or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and was not designed to identify all deficiencies in
internal control over financial reporting that might be deficiencies, significant deficiencies or
material weaknesses. We did not identify any deficiencies in internal control over financial
reporting that we consider to be material weaknesses, as defined above.
24
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free
of material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an
opinion on compliance with those provisions was not an objective of our audit, and accordingly,
we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing
Standards.
This report is intended solely for the information and use of the management, those charged with
governance, others within the entity, federal awarding agencies, and pass-through entities and is
not intended to be and should not be used by anyone other than these specified parties.
Folke CPAs, P.C.
December 21, 2012
25
CITY OF EAGLE
Schedule of Findings and Responses
Year Ended September 30, 2012
A. SUMMARY OF AUDITOR’S RESULTS
1.The auditor's report expresses an unqualified opinion on the financial statements of the
City.
2.No significant deficiencies relating to the audit of the financial statements are reported in
the Report on Internal Control Over Financial Reporting and on Compliance and Other
Matters Based on an Audit of the Basic Financial Statements Performed in Accordance
withGovernment Auditing Standards.
3.No instances of noncompliance material to the financial statements of the City were
disclosed during the audit.
B. FINDINGS - FINANCIAL STATEMENT AUDIT
None.
26