HomeMy WebLinkAbout12-18-17 City Commission Packet Materials - A3. FY2017 CAFR
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Brian LaMeres, City Controller
Kristin Donald, Finance Director
(to be presented by Bill Mills, CPA, and Jessica Van Voast, CPA, of Anderson
ZurMuehlen & Co., P.C.)
SUBJECT: Comprehensive Annual Financial Report (CAFR) for Fiscal Year 2017
MEETING DATE: December 18, 2017
BACKGROUND: Section 2-7-503 MCA requires that a financial report be prepared for every fiscal
year. This statute also requires a biannual audit of this report – including the accounts, financial records,
and transactions of all administrative departments of the City – by independent certified public accountants
selected by the City Commission. The City Commission and City Administration have historically
believed that an annual audit provides a higher level of financial assurance and fiscal integrity than a
biannual audit, and this intention is expressed in Section 5.09 of the City Charter. This policy, along with
the State legal reporting requirement, has been followed for fiscal year 2017, and the clean unmodified
opinion expressed by the audit firm of Anderson ZurMuehlen & Co., P.C) has been included in the
accompanying CAFR report. At its meeting on December 11, 2017, the City’s Audit Committee reviewed
and voted unanimously to accept the CAFR and the accompanying Management Letter. Additionally, the
Audit Committee approved the General Fund Balance Assignments presented on page 28 of the CAFR.
RECOMMENDATION: The City Commission accepts the CAFR and accompanying reports.
FISCAL EFFECTS: A clean unmodified audit opinion on the City’s financial statements is viewed favorably by investment analysts and strengthens the City’s ability to issue bonds or other debt at a lower interest cost. ALTERNATIVES: The CAFR is being presented in DRAFT form in case the Commission
desires any changes to be made before the final printing.
Attachments: 1. CAFR Comprehensive Annual Financial Report
2. Auditor’s Letter to Governance (“Management Letter”)
Report compiled on December 12, 2017
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CITY OF BOZEMAN, MONTANA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2017
Prepared by the City of Bozeman Finance Department DRAFT289
CITY OF BOZEMAN, MONTANA
COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2017 TABLE OF CONTENTS
I. INTRODUCTORY SECTION
Letter of Transmittal ..................................................................................................................................................................................... 1-13 Government Financial Officers Association Certificate of Achievement ....................................................................................................... 14
Organizational Chart ....................................................................................................................................................................................... 15
City Elected Officials and Officers ............................................................................................................................................................ 16-17
II. FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT ................................................................................................................................................. 18-20
A. MANAGEMENT’S DISCUSSION AND ANALYSIS ............................................................................................................................. 21-35
B. BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements Statement of Net Position .................................................................................................................................................................... 36-37 Statement of Activities .............................................................................................................................................................................. 38
Fund Financial Statements
Governmental Fund Financial Statements Balance Sheet – Governmental Funds ............................................................................................................................................ 39-40 Reconciliation of the Balance Sheet to the Statement of Net Position – Governmental Funds .......................................................... 41 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ........................................................ 42
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to
The Statement of Activities – Governmental Funds ........................................................................................................................... 43
Proprietary Fund Financial Statements Statement of Net Position – Proprietary Funds .............................................................................................................................. 44-45 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds ....................................................................... 46
Statement of Cash Flows – Proprietary Funds ............................................................................................................................... 47-48
Fiduciary Fund Financial Statements Statement of Fiduciary Net Position – Fiduciary Funds ..................................................................................................................... 49
Notes to Financial Statements ............................................................................................................................................................ 50-125 DRAFT291
CITY OF BOZEMAN, MONTANA
COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2017 TABLE OF CONTENTS (CONTINUED)
C. REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT DISCUSSION AND ANALYSIS
Schedule of Funding Progress – Other Post-Employment Healthcare Benefits ........................................................................................... 126 Schedule of Proportionate Share of Net Pension Liability and Schedule of Contributions ................................................................... 127-129 Notes to Required Supplementary Information - Pension Plan Changes ............................................................................................... 130-132 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual – General Fund ................................................. 133
Schedule of Revenues, Expenditures, and Changes in fund Balances – Budget to Actual – Other Major Funds
Street Impact Fees Special Revenue ........................................................................................................................................................ 134 Street Maintenance Special Revenue ...................................................................................................................................................... 135 Building Inspection Special Revenue ...................................................................................................................................................... 136 Notes to Required Supplementary Information- Budgetary Information ................................................................................................ 137
D. SUPPLEMENTAL INFORMATION
Combining and Individual Fund Statements and Schedules – Nonmajor Funds Combining Balance Sheet – Nonmajor Governmental Funds ......................................................................................................... 138-144 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds .................. 145-151
Budget-to-Actual Schedules – Other Major Funds
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual - Other Major Funds SID Sinking Fund .............................................................................................................................................................................. 152 Note to Budget-to-Actual Statements – Other Major Funds ............................................................................................................. 153
Budget-to-Actual Statements- Nonmajor Funds Schedules of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual –
Nonmajor Governmental Funds ................................................................................................................................................... 154-169
Combining Nonmajor Proprietary Funds Combining Statement of Net Position .............................................................................................................................................. 170-171 Combining Statement of Revenues, Expenses, and Changes in Net Position ......................................................................................... 172 Combining Statement of Cash Flows ............................................................................................................................................... 173-174
Internal Service Funds Statements Combining Statement of Net Position ..................................................................................................................................................... 175 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ............................................................................... 176 Combining Statement of Cash Flows ............................................................................................................................................... 177-178 DRAFT292
CITY OF BOZEMAN, MONTANA
COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2017 TABLE OF CONTENTS (CONTINUED)
D. SUPPLEMENTAL INFORMATION (CONTINUED)
Agency Funds Combining Statements of Fiduciary Net Position ................................................................................................................................... 179 Combining Statement of Changes in Assets and Liabilities ................................................................................................................... 180
III. STATISTICAL SECTION
Financial Trends Section
Net Position by Component ..................................................................................................................................................................... 181
Changes in Net Position ................................................................................................................................................................... 182-183
Fund Balances – Governmental Funds .................................................................................................................................................... 184
Changes in Fund Balances – Governmental Funds ................................................................................................................................. 185
Revenue Capacity Section
Assessed value of Taxable Property ........................................................................................................................................................ 186
City Taxable Market and Taxable Values ............................................................................................................................................... 187
Tax Increment District Taxable Valuation Detail ................................................................................................................................... 188
Downtown Bozeman Improvement District & Comparison to City Taxable Value ............................................................................... 189
Property Tax Levies in the Downtown Bozeman Improvement District ................................................................................................ 190
Direct and Overlapping Property Tax Rates ........................................................................................................................................... 191
Principal Property Tax Payers ................................................................................................................................................................. 192
Principal Property Tax Payers in Downtown Bozeman Improvement District ...................................................................................... 193
Property Tax Levies and Collections ...................................................................................................................................................... 194
Water Sold by Type of Customer ............................................................................................................................................................ 195
Water and Sewer Rates ............................................................................................................................................................................ 196
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COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2017 TABLE OF CONTENTS (CONTINUED)
Debt Capacity Section
Ratios of Outstanding Debt by Type ....................................................................................................................................................... 197
Ratios of General Bonded Debt Outstanding .......................................................................................................................................... 198
Direct and Overlapping Governmental Activities Debt .......................................................................................................................... 199
Legal Debt Margin Information .............................................................................................................................................................. 200
Pledged Revenue Coverage ..................................................................................................................................................................... 201
Debt Service Requirements and Coverage for Downtown Tax Increment District ................................................................................ 202
Summary of Outstanding SIDs ................................................................................................................................................................ 203
Revolving Fund Balance and Bond Secured Thereby ............................................................................................................................. 204
Special Improvement District Assessment Billing and Collections ........................................................................................................ 205
Demographics and Economic Section
Demographic and Economic Statistics .................................................................................................................................................... 206
Principal Employers for Gallatin County ................................................................................................................................................ 207
Operating Information
Full-time Equivalent City Government Employees by Function/Program ............................................................................................. 208
Operating Indicators by Function/Program ............................................................................................................................................. 209
Capital Asset Statistics by Function/Program..........................................................................................................................................210
IV. REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS
Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based
On an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ......................................... 211-212 DRAFT294
PART I
INTRODUCTORY SECTION DRAFT295
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CITY OF BOZEMAN, MONTANA
December 18, 2017
To the Citizens of the
City of Bozeman, Montana
The Comprehensive Annual Financial Report of the CITY OF BOZEMAN, MONTANA for the fiscal year ended JUNE 30, 2017, is hereby submitted.
Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best
of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the financial position
and results of operations of the various funds of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities
have been included.
Management’s Discussion and Analysis (MD&A) is a narrative introduction, overview and analysis written to accompany the basic financial statements and
should be read in conjunction with the transmittal letter.
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CITY OF BOZEMAN, MONTANA
CITY OF BOZEMAN PROFILE
The City of Bozeman was incorporated in April of 1883 with a city council form of government, and later in January 1922 transitioned to its current city
manager/city commission form of government. Bozeman encompasses an area over 18 square miles and is located on the eastern slope of the Rocky Mountains.
The 2016 census estimate put Bozeman's population at 45,250 – which is a total increase of 61.3% from 2000 to 2016 – which continues Bozeman’s standing
as the fourth largest city in the state. Bozeman is the county seat of Gallatin County and is the home to Montana State University – Bozeman, and the Fighting
Bobcats.
The government provides a full range of services. These services include police and fire protection; sanitation services; water, waste water & storm water
utilities; the construction and maintenance of streets and infrastructure; recreational activities; cultural events; planning and zoning; and general administrative
services. The City, as a primary government, is supported or works closely with certain entities to provide these services to the citizens of the City of Bozeman.
The Bozeman Public Library Board of Trustees, Senior Advisory Council and the Parking Commission are excluded from presentation in these financial
statements, since their relationship with the City is strictly advisory in nature at this time.
BUDGET DEVELOPMENT PROCESS
The City of Bozeman budget serves several purposes. For the citizens of the City of Bozeman, it presents a picture of the city government operations and
intentions for the year. For the City Commission, it serves as a policy tool and as an expression of goals and objectives. For City Management, it is used as an
operating guide and a control mechanism.
The City Manager’s Recommended Budget is created and submitted to the City Commission. Public work sessions are then held by the Commissioners at
which time the City Manager, Administrative Services Director, and department staff explain the budget recommendations and underlying justification for the
requests. The Commission also reviews departmental requests which could not be funded, as an indication of unmet needs. During (or following) the work
sessions, the Commissioners may make adjustments to the proposed budget. Following any adjustments to the City Manager's budget recommendation, a
tentative appropriation ordinance is prepared and a public hearing is held. The Commission may again make adjustments to the budget following the public
hearing, after which time, the Commission passes the appropriation ordinance in final form.
Fiscal Year 2017 marked the fourth year in a row where the final budget was adopted before start of the year. It was completed in late April and presented in
early May with an adoption of a final budget before June 30th. This revised budget calendar was developed in Fiscal Year 2013 in an effort to improve DRAFT298
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CITY OF BOZEMAN, MONTANA
understandability of our financial plans and to improve staff and commission efficiency. The overall goal of the City’s financial policies is to establish and
maintain effective management of the City’s financial resources.
ECONOMIC CONDITION AND OUTLOOK
The charts contained on this page were developed from
information obtained by using the Economic Profile System
(EPS), for the City of Bozeman, made available from Headwaters
Economics, an independent, nonprofit research group. The
statistics are from multiple federal sources – Bureau of Economic
Analysis and Bureau of the Census, U.S. Department of
Commerce, and Bureau of Labor Statistics, as well as the U.S.
Department of Labor. The other source of this information is the
Bureau of Business and Economic Research (BBER) a research
and public service branch of the University of Montana’s School
of Business Administration. The Bureau is regularly involved in
a wide variety of activities, including economic analysis and
forecasting.
Regionally, Bozeman is located in southwestern MT in Gallatin County. This area is “one of the fastest growing economic areas in the northern Rocky
Mountains. It has a varied economic base, an educated workforce, thriving technology and manufacturing industries, a major research university, abundant
cultural and outdoor recreation opportunities and a scenic natural landscape at the doorstep of Yellowstone National Park” as cited by Prospera Business
Network, 2017 Economic Profile of Gallatin and Park Counties, Montana. Gallatin County continues to pace the state economically and remains the fastest
growing urban area in Montana.
0%5%10%15%20%25%30%
Bozeman Employment by Industry, 2015
Ag, forestry, fishing and hunting, mining
Construction
Manufacturing
Wholesale trade
Retail trade
Transportation, warehousing, and utilities
Information
Finance and insurance, and real estate
Prof, scientific, mgmt, admin, & waste mgmt
Education, health care, & social assistance
Arts, entertainment, recr, accomodations, & food
Other services, except public administration
Public administration
Bozeman Employment by Industry, 2015
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According to BBER, the growth in Gallatin County remains the strongest in the
state. As measured by inflation-corrected payroll wages of jobs covered by the
unemployment insurance system, which accounts for about two-thirds of economic
activity, Gallatin County’s total payroll was about $73 million higher during the first
half of 2016 than the same period of the preceding year. Not only did the growth
acceleration in Bozeman predate the improved economic performance of other western
counties by nearly a full year, it remains the strongest in the state. There are clear signs
of strain on the region’s housing and transportation infrastructure – median home prices
have pushed beyond $300,000, the highest of any of the state’s most populous counties.
Growth continues to be driven by strong home construction, software and technology
related professional services, and increases in visitor spending.
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
Population % change (2010 - 2015)
Percent Change in Population, 2010-2015
Headwaters Economics EPS
Bozeman US
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CITY OF BOZEMAN, MONTANA
FOR THE YEAR
Significant Developments during the year include:
Continued Growth:
Continued Growth – Bozeman’s most recent evidence of
continued growth includes the US Census data showing an
estimated population increase of 4.3% this year, on top of the
4.2% increase for last year. The City has experienced strong
building permit activity and increased traffic counts and
congestion on City streets. Much of this year’s budget was
adopted in response to the prolonged growth that Bozeman
continues to experience.
Arterial & Collector Assessment District: In August 2015,
the City Commission created a new assessment district to
fund reconstruction and maintenance of the City’s backbone
street network – the arterial and collector streets. The District issued its first assessment last year and this year the total assessment amount doubled to just
over $1 million in accordance with the plan to build the assessment up to $2 Million/year over a three-year period. This is a critical funding portion of our
Street Maintenance program and capital improvement plan.
Continued Implementation of Impervious Area charges and credits in the Stormwater Utility: Last year marked the last of numerous changes in the
structure of the City’s Stormwater Utility rates. Initially the structure was established with a flat rate based on the size of a property’s water meter. Now the
rate system includes system base charges, credits for properties that have on-site or related stormwater systems, and charges for the amount of impervious area
contained on a lot. This new rate structure is a better match between “cost-causer” and “cost-payer,” in recognition of the city’s long-standing fiscal policies.
Revenues under the new rate structure have increased by 324% from $305,000 under the old method to $1.3 million under the new structure.
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FOR THE FUTURE
New Fuel Tax Dollars: As a result of the legislature’s adoption of House Bill 273, the City will receive approximately $266,000 in additional state fuel
tax funding next fiscal year. This amount is expected to increase to nearly $700,000 in fiscal year 2019. City staff are recommending reducing the amount of
the scheduled Arterial & Collector District assessment increase because of this new funding source.
Marsy’s Law Implementation: In response to the requirements of the Marsy’s Law provisions for victims of crimes, City staff are recommending that
a half-time position in the City Attorney’s office be increased to full-time next year, that support be given for an increase in the County’s Victim’s Services
programs, and to proceed with software implementations within the City Attorney’s office.
Planning Processes: The City plans for the long-term needs of our community through a number of efforts and studies. These documents are usually
developed by consultants and staff, with numerous public hearings and advisory board meetings held prior to their formal adoption by the Commission. Once
adopted, City staff works diligently to implement the recommendations and changes outlined in the plans. The primary planning documents are:
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City Strategic Plan:
• Five-year Strategic Plan is currently being developed with
adoption planned in calendar year 2018.
Plans for Service Provision, Facility Expansion & Maintenance:
• Bozeman Community Plan—Adopted 2010. Proposed update in
fiscal year 2018.
• Bozeman Area Transportation Plan—Adopted 2017.
• Police Services Facility & Staffing Plan—Adopted 2007.
Currently
being updated.
• Fire Services Master Plan— Adopted 2006. Currently being
updated
• Wastewater Facility Plan—Adopted 2015.
• Water Facility Plan—Adopted 2006.
• Stormwater Facility Plan—Presented February 2008.
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• Parks, Recreation, Open Space, and Trails Plan—Adopted 2007.
• Municipal Climate Action Plan—Adopted 2008.
• Community Climate Action Plan – Adopted 2011.
• Economic Development Plan—Adopted 2017.
• Downtown Improvement Plan—Adopted 2010.
Plans for Facility Maintenance:
• Downtown Improvement Plan—Adopted 2010.
• Aquatics Facility Survey for Swim Center & Bogert Park Pool—July 2008.
• City-Owned Facility Assessments—2008, with updates ongoing.
Financial Plans:
• Downtown Improvement Plan—Adopted 2010.
• Annual Budget—Adopted each June.
• Capital Improvements Plan - Updated & adopted each year; recently for
FY18-FY22.
• Water Rate Study (5 Years) – Updated for FY16-FY20. Update in FY18.
• Wastewater Rate Study (5 Years) – Updated for FY16-FY20. Update in
FY18.
• Impact Fee Studies (Water, Sewer, Streets, Fire) – Adopted 2012-2013. Update in FY18.
Burke Park “Peets Hill” DRAFT304
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Transportation Master Plan Update:
The Bozeman Transportation Master Plan (TMP) serves as a guide for development of and investment in the community’s transportation systems in a
comprehensive manner. The TMP was developed through a collaborative approach with city and state staff, elected officials, and local residents and provides
the blueprint for a transportation system that will serve the community’s citizens well into the future. This comprehensive plan identifies community goals and
improvements to the transportation infrastructure and services within the city of Bozeman and that portion within Gallatin County that is likely to include future
urban area expansion. The Plan addresses regional transportation issues, overall travel convenience, traffic safety, sustainability, complete streets, funding,
transportation demand management (TDM), and multi-modal connections. The Plan includes recommendations for short-term improvements as well as
recommended modifications and capital improvements to major roadways. The Plan also includes policy suggestions to align with the community’s vison for
the Bozeman area.
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Unified Development Code Update:
The City’s Community Development Department is currently in the process of updating Bozeman's Development Code. The Development Code Update
is a comprehensive update that covers many topics, diverse geographic area, and
complex development-related issues. The Unified Development ordinance was last
adopted on November 24, 2003. The Ordinance adopted a new Unified Development
Code, which replaced existing zoning and subdivision regulations that govern the use
and development of land. The intent is that the Development Code clearly
communicate the community's expectations for development as expressed in the
Community Plan. The purposes of the 2015 Development Code Update are to:
1. Implement the recommendations of the City's adopted Comprehensive Plan
(2009) and its detailed neighborhood and special area plans by:
a. Encouraging the creation of vibrant mixed-use districts
b. Achieving high-quality infill and redevelopment
c. Integrating thoughtful greenfield development
2. Generate North 7th Corridor Plan (Midtown) implementation and design
provisions.
3. Include traditional neighborhood development zoning districts for the
Neighborhood Conservation Overlay District (NCOD)
4. Include additional provisions to promote and support sustainability including
best management practices (BMPs) for storm water, water use, and lighting,
and linking land use and transportation (auto, transit, biking and pedestrian).
5. Support the Comprehensive Plan to promote and support a safe, diverse,
healthy, and affordable housing stock.
6. Comply with changes to State Law.
7. Make the Development Code a more concise and use-able document.
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FINANCIAL POLICIES
The overall goal of the City's financial policies is to establish and maintain effective management of the city's financial resources. Formal policy statements and
major objectives provide the foundation for achieving this goal.
The City avoids budgetary practices that balance current expenditures at the expense of meeting future years' expenses and seeks to maintain a diversified and
stable revenue base that is estimated in a realistic and conservative manner. For one-time revenues, highest priority is given to the funding of capital assets or
other non-recurring expenditures.
On-going expenditures are limited to levels which can be supported by current revenues. Construction projects and capital purchases of $10,000 or more are
included in the Capital Improvement Plan (CIP). Minor capital outlays of less than $10,000 are included in the regular operating budget.
Spending of resources happen in the following order (they are categorized according to Generally Accepted Accounting Principles (GAAP) for state and local
governments, with the following general definitions):
• Restricted -- Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government) through
constitutional provisions or by enabling legislation.
• Committed -- Amounts constrained to specific purposes by the City Commission; to be reported as committed, amounts cannot be used for any other
purpose unless the City Commission takes action to remove or change the constraint.
• Assigned -- Amounts the City intends to use for a specific purpose; intent can be expressed by the Commission or by an official or body to which the
Commission delegates the authority. The City Commission delegates this authority to the City Manager.
• Unassigned -- Amounts that are available for any purpose; these amounts are reported only in the General Fund.
Long-term debt is limited to capital improvements which cannot be financed from current revenues and repays borrowed funds within a period that does not
exceed the expected useful life of the project. The City does not use long-term debt for financing current operations and adheres to a policy of full public
disclosure with regard to the issuance of debt.
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A minimum level of general fund reserve equal to 2 months of annual revenues, or 16.67%, is maintained. This reserve is committed to be used for: cash flow
purposes, accrued employee payroll benefits which are not shown as a liability, unanticipated equipment acquisition and replacement, and to enable the city to
meet unexpected expenditure demands or revenue shortfalls.
The City manages and accounts for its financial activity in accordance with Generally Accepted Accounting Principles (GAAP), as set forth by the Governmental
Accounting Standards Board (GASB).
The city maintains its accounting records for general governmental operations on a modified accrual basis, with revenues recorded when available and
measurable, and expenditures recorded when services or goods are received and liabilities incurred. Accounting records for proprietary fund types and similar
trust funds are maintained on an accrual basis, with all revenues recorded when earned and expenses recorded at the time liabilities are incurred, without regard
to receipt or payment of cash.
Internal Controls
Internal accounting controls are designed to provide reasonable (but not absolute) assurance of the safeguarding of assets against loss, theft or misuse. They
are also designed to aid in the reliability of financial records. The concept of reasonable assurance recognizes that the cost of a control should not exceed the
benefits likely to be derived and that the evaluation of costs and benefits requires estimates and judgments by management.
In developing and evaluating the City’s accounting system, great consideration is given to the adequacy of internal accounting controls. We
believe that the City of Bozeman’s internal accounting controls adequately safeguard assets and provide reasonable assurance of proper
recording of financial transactions.
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OTHER INFORMATION
Independent Audit
The State of Montana requires a biannual audit of the books of accounts, financial records, and transactions of all administrative departments of the City by
independent certified accountants selected by the City Commission. It is the belief of the City Commission and Executive staff that an annual audit assures a
higher level of financial management and fiscal responsibility. This policy, along with the legal requirements, has been complied with and the auditors' opinion
of Anderson, ZurMuehlen & Co. P.C., has been included in this report.
Awards
The Government Finance Officers' Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Bozeman
for its comprehensive annual financial report for the fiscal year ended June 30, 2016. This was the 33rd consecutive year that the City has received this prestigious
award. In order to be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized comprehensive annual financial
report. This report satisfied both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current comprehensive annual financial report continues to meet the
Certificate of Achievement Program's requirement and we are submitting it to the GFOA to determine its eligibility for another certificate.
Acknowledgements
The preparation of the Comprehensive Annual Financial Report on a timely basis was made possible by the dedicated service of the entire staff of the Finance
Department. Each member of the department has our sincere appreciation for the contributions made in the preparation of this report.
In closing, without the leadership and support of the governing body of the City, preparation of this report would not have been possible.
Sincerely,
Andrea Surratt Kristin Donald, MBA Brian LaMeres, CPA
City Manager Director of Finance City Controller
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CITY OF BOZEMAN, MONTANA
GOVERNMENT FINANCE OFFICERS ASSOCIATION CERTIFICATE
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CITY OF BOZEMAN, MONTANA
ORGANIZATIONAL CHART Fiscal Year 2017
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CITY OF BOZEMAN, MONTANA CITY ELECTED OFFICIALS AND OFFICERS
Fiscal Year 2017 ELECTED OFFICIALS
Legislative Carson Taylor Mayor Cynthia Andrus Deputy Mayor Jeffrey Krauss Commissioner Christopher Mehl Commissioner I-Ho Pomeroy Commissioner
Judicial Karl Seel
Colleen Herrington
Municipal Judge
Municipal Judge OFFICERS
Executive Andrea Surratt Chuck Winn Anna Rosenberry Robin Crough
City Manager Assistant City Manager Assistant City Manager City Clerk Department of Law Gregory Sullivan City Attorney Timothy A. Cooper Assistant City Attorney Kyla Murray Anna Saverud Karen Stambaugh Bekki Mclean
Ed Hirsch
Assistant City Attorney Assistant City Attorney Assistant City Attorney Assistant City Attorney
Assistant City Attorney Department of Finance
Kristin Donald, MBA Finance Director Brian LaMeres, CPA Controller Laurae Clark Treasurer
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CITY OF BOZEMAN, MONTANA CITY ELECTED OFFICIALS AND OFFICERS (CONTINUED)
Fiscal Year 2017
Department of Economic Development
Brit Fontenot Department of Information Technology Scott McMahan Department of Human Resources Bethany Jorgenson Department of Public Safety
Director of Economic Development Information Technology Director Human Resources Director
Steve Crawford Chief of Police Richard McLane Deputy Chief of Police
Josh Waldo Michael Maltaverne Fire Chief Deputy Fire Chief of Operations Trisha Wolford Deputy Fire Chief – Fire Marshal
Department of Public Service Craig Woolard Director of Public Service
Rick Hixson City Engineer John Alston Superintendent of Water and Waste Water Operations John Van Delinder Superintendent of Street Operations Kevin Handelin Superintendent of Sanitation Operations Eric Campbell Superintendent of Water Treatment Plant Herb Bartle Superintendent of Water Reclamation Facility Mike Gray Superintendent of Facilities Department of Public Welfare Mitch Overton Thomas White Jamie Saitta Elizabeth Hill
Director of Parks & Recreation Superintendent of Parks & Cemetery Recreation Program Manager Aquatics Manager Susan Gregory
Director of Bozeman Public Library
Department of Planning and Community Development Martin Matsen
Chris Saunders Brian Krueger
Director of Planning and Community Development
Community Development Manager Development Review Manager DRAFT313
PART II FINANCIAL SECTION
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18 1019 E MAIN ST • SUITE 201 • BOZEMAN, MONTANA 59715 TEL: 406.556.6160 • FAX: 406.586.8719 • WEB: www.azworld.com ANDERSON ZURMUEHLEN & CO., P.C. • CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS
MEMBER: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR’S REPORT
Honorable Mayor, City Commissioners, and City Manager of the City of Bozeman, Montana
Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Bozeman, Montana (the City), as of and for the year ended June 30, 2017, and related notes to
the financial statements which collectively comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility Our responsibility is to express opinions 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 from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. DRAFT316
ANDERSON ZURMUEHLEN & CO., P.C
CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS
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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, each major fund, and the aggregate remaining fund information of City of Bozeman, Montana, as of June 30, 2017, 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. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information – General Fund and Special Revenue Major Funds, Schedule of Funding Progress - Other Postemployment Benefits
(OPEB), and Schedule of Proportionate Share of Net Pension Liability and Schedule of Contributions be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. 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.
Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise City of Bozeman’s basic financial statements. The introductory section, supplemental information, and statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The other supplemental information, as listed in the table of contents, are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the
basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other supplemental information, as listed in the table of contents, are fairly stated in all material respects in relation to the basic financial statements as a whole. DRAFT317
ANDERSON ZURMUEHLEN & CO., P.C
CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS
20
The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial
statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated , 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, and grant agreements and
other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
Bozeman, Montana
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A. MANAGEMENT’S DISCUSSION AND ANALYSIS DRAFT320
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CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2017
Our discussion and analysis of the City of Bozeman’s financial performance provides an overview of the City’s financial activities for the fiscal year ended June 30, 2017. Please read it in conjunction with the transmittal letter on page 1 and the City’s financial statements, which begin on page 36. USING THIS ANNUAL REPORT This annual report consists of a series of financial statements. The Statement of Net Position and the Statement of Activities (on pages 36, 37, and 38) provide information about the activities of the City as a whole and present a longer-term view of the City’s finances. Fund financial statements start on page 39. For
governmental activities, these statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City’s operations in more detail than the government-wide statements by providing information about the City’s most significant funds. The remaining statements provide financial information about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the government. Reporting the City as a Whole The Statement of Net Position and the Statement of Activities Our analysis of the City as a whole begins on page 23. One of the most important questions asked about the City’s finances is, “Is the City as a whole better off or worse off as a result of the year’s activities?” The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the City’s net position and changes in net position. You can think of the City’s net position, the difference between assets, what the citizens own, and liabilities, what the citizens owe, as one way to measure the City’s financial health, or financial position. Over time, increases or decreases in
the City’s net position are one indicator of whether its financial health is improving or deteriorating. You will need to consider other nonfinancial factors, however, such as changes in the City’s property tax base, income tax base, and the condition of the City’s capital assets (roads, buildings, water and sewer lines) to assess the overall health of the City. In the Statement of Net Position and the Statement of Activities, we divide the City into two kinds of activities:
• Governmental activities—Most of the City’s basic services are reported here, including police, fire, public works, parks, and general administration. Property taxes, charges for services, state shared revenues, court fines, and recreation fees finance most of these activities.
• Business-type activities—The City charges a fee to customers to help it cover all or most of the cost of certain services it provides. The City’s water, waste water, storm water, solid waste, and parking systems are reported here. DRAFT322
22 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017
Reporting the City’s Most Significant Funds
Fund Financial Statements Our analysis of the City’s funds begins on page 28. The fund financial statements begin on page 39 and provide detailed information about the most significant
funds, not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, the City Commission establishes many other funds to help it control and manage money for particular purposes (like Street Maintenance District Funds) or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money (like grants received from the Office of Violence Against Women). The City’s two kinds of funds, governmental
and proprietary, use different accounting approaches. Governmental funds--Most of the City’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and
the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in reconciliation on pages 41 and 43 of the fund financial statements. Proprietary funds--When the City charges customers for the services it provides, whether to outside customers or to other units of the City, these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. In fact, the City’s enterprise funds (a component of the proprietary funds) are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information, such as cash flows, for proprietary funds. We use internal service funds (the
other component of proprietary funds) to report activities that provide supplies and services for the City’s other programs and activities, such as the Vehicle Maintenance Fund and Health Insurance Fund. Internal service fund activity is reported as governmental activity in the government-wide statements since this activity, the financing of goods and services for other funds of the government, is more governmental than business-type in nature.
The City as Trustee Reporting the City’s Fiduciary Responsibilities The City is the trustee, or fiduciary, for other funds, including the Municipal Court Fund, the Montana Arts Council Fund (Montana Ballet, Bozeman Symphony Orchestra, and Big Sky Association for the Arts), and the CMC Bozeman Asbestos Site Remediation Fund. It is also responsible for other assets that, because of a trust arrangement, can be used only for the trust beneficiaries. The guidelines for the administration of these funds are contained in applicable financial agreements and/or City ordinances. These documents contain the rules governing the receipt, expenditure, and management of the City’s fiduciary funds. All of the City’s fiduciary activities are reported in the Statement of Fiduciary Net Position on page 49 and in the Combining Statement of Changes in Assets and Liabilities-Agency Funds on page 180. As the statements reflect, the financial activity during the year for these funds is nominal. We exclude these activities from the City’s other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. DRAFT323
23 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017 THE CITY AS A WHOLE The City’s combined net position increased by $19.6 million this year as compared to a $27.2 million increase last year. The smaller increase this year was due to three factors: a $1.6 million decrease in total revenues, a $4 million increase in total expenses, and a $2 million loss on the disposal of City property, each of which will be described later in greater detail. The decrease in total revenues was mainly due to less Restricted Capital Grants & Contributions this year, which mainly consists of street, water, and, wastewater infrastructure provided by private developers. The specific contributing factors are outlined in the following discussion. Our analysis focuses on the net position (Table 1) and changes in net position (Table 2) of the City’s governmental and business-type activities. The net position of the City’s governmental activities increased by $9.2 million, or 6.4%, from $143.2 million last year compared to $152.4 million this year. Unrestricted net position for governmental activities, the part of net position that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation or other legal requirements decreased by $1.1 million, or 30%, from negative ($3.7) million to negative ($4.8) million. The reason for this unrestricted net position being negative is GASB Statement 68 “Accounting and Financial Reporting for Pensions”, which required the City to record its share of employee retirement for the first time in fiscal year 2015. The net position of the City’s business-type activities increased by $10.4 million, or 1.8%, from $237 million to $247.4 million due primarily to a continuing trend of revenues provided by charges for services exceeding total expenses. Unrestricted Net Position decreased by $1.4 million, or 13%, due to a decrease in Restricted Capital Grants & Contributions (mainly water, wastewater, and stormwater infrastructure provided by private developers) combined with the effects of GASB 68 mentioned above. This net position cannot be used to make up for deficits reported by governmental activities in the event any such deficits were reported. The City generally can only use the net position of business-type activities to finance the continuing operations of the water, wastewater, solid waste, stormwater, and parking operations. 201720162017201620172016Current and Other Assets62.6$ 63.7$ 33.4$ 29.8$ 96.0$ 93.5$ Capital Assets136.5 126.1 263.3 257.2 399.8 383.3 Total Assets 199.1$ 189.9$ 296.7$ 287.1$ 495.8$ 476.9$ Deferred Outlflows of Resources 5.4 2.2 1.4 0.6 6.8 2.8 Long-term Debt Outstanding (44.1) (41.8) (46.9) (47.7) (91.0) (89.5) Other Liabilities(7.8) (5.8) (3.8) (2.0) (11.6) (7.7) Total Liabilities (51.9)$ (47.6)$ (50.7)$ (49.7)$ (102.5)$ (97.2)$ Deferred Inflows of Resources (0.2) (1.2) (0.0) (0.4) (0.2) (1.6) Net Position:Net investment in capital assets 115.7$ 104.1$ 229.4$ 221.4$ 345.1$ 325.5 Restricted for parking capital projects- - 0.3 0.3 0.3 0.3 Restricted for general government1.7 1.4 - - 1.7 1.4 Restricted for Public Safety3.8 3.4 - - 3.8 3.4 Restricted for Public Service15.7 16.1 - - 15.7 16.1 Restricted for Public Welfare5.4 5.5 - - 5.4 5.5 Restricted for capital projects7.8 9.2 5.4 1.6 13.2 10.8 Restricted for debt service7.1 7.2 3.1 3.1 10.2 10.3 Unrestricted(4.8) (3.7) 9.2 10.6 4.4 6.9 Total Net Position 152.4$ 143.2$ 247.4$ 237.0$ 399.8$ 380.2$ Activities Activities Primary GovernmentTabl e 1Net Position(in Millions)Governmental Business-type TotalDRAFT324
24 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017 The City’s total revenues (excluding special items) decreased by 1.8%, or $1.6 million, from $92.7 million to $91.1 million, driven primarily by a $5.9 million decrease in Restricted Capital Grants & Contributions (which includes water, wastewater, stormwater, road, and park infrastructure provided by private developers) netted against a $4.2 million increase in all other revenues, including a $2 million increase in Charges for Services and a $1.9 million increase in general revenues, which will be discussed later in more detail. The total cost of all programs and services increased by $3.9 million, or 5.9%, from $65.5 million last year to $69.4 million this year. Most of this increase was in General Government ($1.3 million) with Public Safety non-personnel operating expenses (Police, Fire, Building Inspection), actually decreasing by $700,000. The rest of the increase was spread relatively evenly across the other various City programs including Public Service, Public Welfare, and the combined effect of Water, Wastewater, and the non-major activities of Solid Waste, Parking and Stormwater. Our analysis on the following pages separately considers the operations of governmental and business-type activities. 201720162017201620172016RevenuesProgram revenues:Charges for Services 17.6$ 16.4$ 26.6$ 25.8$ 44.2$ 42.2$ Restricted Operating Grants & Contributions 2.7 2.5 0.2 0.1 2.9 2.6 Restricted Capital Grants & Contributions 2.7 5.0 7.8 11.3 10.5 16.3 General Revenues- Property Taxes 21.7 21.2 - - 21.7 21.2 Unrestricted Operating Grants & Contributions 8.4 8.0 - - 8.4 8.0 Other General Revenues 1.9 1.1 1.6 1.3 3.4 2.4 Total Revenues 55.0 54.2 36.1 38.5 91.1 92.7 Program ExpensesGeneral Government 9.4 8.1 - - 9.4 8.1 Public Safety 17.7 18.4 - - 17.7 18.4 Public Service 7.9 6.9 - - 7.9 6.9 Public Welfare 9.2 8.0 - - 9.2 8.0 Interest and Fiscal Fees 0.8 0.9 - - 0.8 0.9 Water - - 9.7 9.3 9.7 9.3 Waste Water - - 8.6 8.2 8.6 8.2 Non-major activities- - 6.1 5.9 6.1 5.9 Total Expenses 44.9 42.2 24.4 23.3 69.4 65.5 Excess (deficiency) beforespecial items and transfers 10.0 12.0 11.7 15.2 21.7 27.2 Sale of Capital Assets (0.1) - (2.0) - (2.1) - Transfers (0.7) 1.2 0.7 (1.2) - - Increase (decrease) in net position9.2$ 13.2$ 10.4$ 14.0$ 19.6$ 27.2$ Net position - beginning 143.2 130.0 237.0 223.0 380.2 353.0 Net position - ending152.4$ 143.2$ 247.4$ 237.0$ 399.8$ 380.2$ Activities Activities Primary GovernmentTabl e 2Changes in Net Position(in Millions)Governmental Business-type TotalDRAFT325
25 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017
Governmental Activities Revenues for the year from governmental activities increased by 1.3%, or $700,000, from $54.2 million to $54.9 million, while total expenses increased by 6.5%, or $2.7 million, from $42.2 million to $44.9 million. Property Tax revenues increased by $500,000, or 2.2%, from $21.2 million to $21.7 million. Charges for services, which include Street Assessments and Fire and Street Impact Fees, realized a net increase of $1.2 million, or 7.4%, from $16.4 million to $17.6 million. Restricted Capital Grants and Contributions (developer-provided infrastructure reported under Program Revenues) decreased by $2.1 million, or 42%, from $5.0
million to $2.9 million. These and the other contributing factors listed below are primarily responsible for this year’s change in net position. Charges for services increased by $1.2 million, or 7.4%, from $16.4 million last year to $17.6 million this year. Street Impact Fees held steady at just under $4 million, but Street Maintenance District assessments and Arterial & Collector District assessments each increased significantly due to rate increases approved by the City Commission pursuant to policy adopted to address deferred street infrastructure maintenance and to build a reserve for curb and sidewalk replacement.
Arterial & Collector district revenues increased by $527,124, or 93.2%, from $565,286 to $1.1 million. Street Maintenance revenue increased by $637,377, or 16.3%, from $3.9 million to $4.5 million. Fire impact fee revenues actually decreased for the second straight year from $338,500 last year to $315,732 this year, a decrease of $22,728 or 6.7%.
Property Tax collections increased by nearly $500,000, or 2.2%, from $21.2 million last year to $21.7 million this year. The number of total property tax mills
levied actually decreased by 4.86 mills from 210.16 to 205.30, or 2.4%, so the increase in revenues was instead fueled by a 3.2% increase in the mill value from $86,564 to $89,325 along with continued growth in the number of taxpayers. Property Tax revenues actually decreased in some of the Tax Increment Financing (TIF) Districts, with revenues in the North 7th/Midtown District decreasing by 5%, or $34,000, from $686,000 to $652,000 and revenues in the Northeast Urban Renewal District decreasing by 12%, or $17,867, from $148,335 to $130,468 after the latest property reappraisal by the Montana Department of Revenue (which changed its appraisal cycle from every 6 years to every 2 years) and the resulting shift in tax burden from commercial to residential property owners. While property tax revenues did increase City-wide, it is important to note that this year’s tax levy was still 12.23 mills, or approximately $1,097,822, below the statutory maximum allowable tax rate. Restricted Capital Grants and Contributions (reported under Program Revenues) decreased by $2.1 million, or 42%, from $5.0 million to $2.9 million, mainly
due to general infrastructure provided by developers being significantly less this year than in the previous year. Contributed road/transportation infrastructure decreased by $2.5 million, or 59.6%, from $4.2 million last year to $1.7 million this year. However, developer-contributed park infrastructure increased by $59,564 from $523,095 to $582,659.
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26 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017 Program Expenses increased by 6.5%, or $2.7 million, from $42.2 million to $44.9 million. Significant contributors included personnel costs for Public Safety due to departments being closer to fully-staffed than in previous years, with Police increasing 4.6%, or $388,765, from $7.43 million to $7.78 million and Fire increasing 7.9%, or $409,468, from $5.16 million to $5.57 million. However, personnel costs in the Building Inspection Department held steady at $1.3 million. Non-personnel operating costs in Public Safety actually decreased significantly by 16.6%, or $427,213, from $2.5 million to $2.1 million, due primarily to a spike in spending last year with nearly $631,000 being spent on the design of a new joint City-Gallatin County Law & Justice Center. The cost of all governmental activities this year was $44.9 million compared to $42.2 million last year. However, as shown in the Statement of Activities on page 38 under Net (Expense) Revenue for Total governmental activities, the amount that our taxpayers ultimately financed for these activities through City taxes and other general revenues was only $21,565,229 because some of the cost was paid by those who directly benefited from the programs ($17,615,589 in Charges for Services) or by other governments and organizations that subsidized certain programs with operating and capital grants and contributions ($2,850,750 plus $2,913,033 = $5,763,783). Table 3 presents the cost of each of the City’s six largest programs—Police, Fire, Public Service, Library, Parks and Recreation—as well as each program’s net cost (total cost less revenues generated by the activities). The net cost shows the financial burden that was placed on the City’s taxpayers by each of these functions. Business-type Activities Total revenues of the City’s business-type activities (see Table 2) decreased by $2.3 million, or 1.6% ($36.2 million this year compared to $38.5 million last year) while expenses increased by $1.1 million, or 4.8% ($24.4 million compared to $23.3 million last year). The decrease in revenues was due to a $3.5 million decrease in Restricted Capital Grants & Contributions, which consisted primarily of privately constructed water, wastewater, and stormwater infrastructure that was contributed to the City by developers. This was partially offset by a $.9 million overall increase in charges for services revenue. The increase in expenses this year was due to overall increased personnel costs of $634,000 and a $300,000 expense recorded in Solid Waste (reported under Non-major activities) to account for the updated estimate of the Story Mill Landfill post-closure liability. Specific factors driving these and other regular operating results include: 2017201620172016Police9.1$ 9.4$ 7.5$ 7.8$ Fire6.5 6.0 5.5 5.0 Public Service9.5 8.7 (1.5) (1.9) Library2.5 2.3 1.6 1.5 Parks1.8 1.7 1.8 1.6 Recreation1.5 1.4 1.0 0.9 All Others14.0 12.9 5.5 3.4 Totals 44.9$ 42.4$ 21.4$ 18.3$ of Services of ServicesTabl e 3Governmental Activities(in Millions)Total Cost Net CostDRAFT327
27 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017
Water The City’s water system operating revenue (charges for services) have steadily increased over the past decade as a result of both an increase in the customer base and due to regular rate increases. However, the City Commission voted to hold water rates steady in fiscal years 2014 and 2015 followed by 2.5% rate increases in each of fiscal years 2016 and 2017. These rate increases have allowed the City to continue its water distribution pipe replacement program and replace or rehabilitate aging infrastructure every year instead of every two years. The City’s customer‐base growth grew by 378 customers, 3.2%, from 11,983 average active customer accounts to 12,361. This level of growth rate is trending more closely to the 5% growth experienced between 2005‐2008.
As of two years ago, the Public Works Administration budget is now charged to the Water Fund instead of to the General Fund, and the Water Fund’s administrative overhead in turn is then charged out to the various departments that benefit from Public Works Administration. This resulted in $1,021,460 of administration reimbursement revenue being recorded as part of the $1,126,262 reported under “Other income”.
Because of the increase in the water rates and in the number of utility customers, combined with a $177,670 increase in cash-in-lieu-of-water-rights, operating revenues increased by $866,951 or 10.3% from $8.47 million to $9.3 million. The $177,670 increase in cash-in-lieu of water rights revenue was a 40% increase to $623,820 from last year’s $446,150. Despite the increase in operating revenues, total revenues actually decreased for the year due to less infrastructure contributed by private developers. This amount, reported under Restricted Capital Grants and Contributions, decreased by $1.9 million, or 37.4%, from $5.1 million to $3.2 million. Water impact fee revenues also decreased by $377,232, or 16.7% due to less impact-fee qualifying construction during the year. Operating expenses increased by $491,354, or 5.6%, from $8,758,385 last year to $9,249,739 this year due mainly due to increased personnel costs or due to changes in how employee costs were allocated between different functions, for example, Water versus Wastewater.
Amounts spent on major projects undertaken during the year include: $1.9 million on the Sourdough Storage Reservoir; $477,857 towards continued annual renovations & pipe replacement; $325,000 as the water system’s share of the shops Facility Expansion (1804 N. Rouse MDT Property), $305,797 for the Graf Street Extension; and $182,755 for Kagy (Willson to 19th) Engineering. Wastewater Revenues in the Wastewater Fund have generally been increasing over the past 10 years and are estimated at $8.8 million for the upcoming year.
Six years ago the City borrowed significantly to construct the new Water Reclamation Facility. This debt is being repaid by system users over the subsequent 20 years. Accordingly, the City Commission adopted a two-year rate resolution of a 6% increase for fiscal years 2012 and 2013 and 3% for fiscal years 2014 through fiscal year 2017. As a result of the rate increase, combined with the same customer growth experienced in the water system of 378 customers, operating revenues for the year increased by $639,201, or 8.1%, from $7,927,692 last year to $8,566,893 this year. Wastewater operating expenses increased by $434,167, or 5.7%, from $7,611,043 last year to $8,045,210 driven mainly by an increase in contracted service expenses, including $344,060 in continued remediation of the Bozeman Solvent Site liability and $137,400 paid towards the East Gallatin Watershed Study. Spending on major projects during the year included $1.7 million on design and construction of the South University District wastewater project, $325,000 as the wastewater system’s share of the shops Facility Expansion (1804 N. Rouse MDT Property), $257,600 on the Bridger Canyon Drive project, and $215,500 on the East Olive Street project. DRAFT328
28 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017
THE CITY’S FUNDS As the City completed the year, its governmental funds (as presented in the balance sheet on pages 39-40) reported a combined fund balance of $51,740,011. Included in this year’s total change in fund balance is a positive General Fund balance of $6,490,156, down $30,943 or .5% from $6,521,099. The following five separate categories of fund balance are recognized, based on the extent to which the government is bound to honor constraints on the specific purposes for which amounts can be spent: nonspendable fund balance, restricted fund balance, committed fund balance, assigned fund balance, and unassigned fund balance. The total of the last three categories, which include only resources without a constraint on spending or for which the constraint on spending is imposed by the
government itself, is termed unrestricted fund balance. The Government Finance Officers Association’s recommends maintaining an unrestricted general fund
balance of no less than two months of regular general fund operating revenues, or $5,057,271 for the end of this year. The City’s ending general fund balance of $6,490,156 exceeds this recommendation by $1,432,885. However, there are other significant assignments detailed below, and these other assignments combined with the minimum reserve requirement leave an Unassigned General Fund Balance of $87,274. The contributing factors to this year’s ending General Fund balance are explained after the table below, followed by an analysis of each of the City’s other Major Funds.
The general fund balance of $6,490,156 has been assigned as shown:
FY17 ENDING GENERAL FUND BALANCE - TOTAL:6,490,156$
ASSIGNMENTS:
1 CIP / CAPITAL CARRY-OVER BUDGETED IN FY17 BUT NOT TO BE SPENT UNTIL FY18:
FACILITIES DEPT: CIP GF130 CITY HALL SITE IMPROVEMENTS 40,000$
FACILITIES DEPT: CIP GF103 ADA COMPLIANCE UPDATES/IMPROVEMENTS CITY-WIDE 19,622$
IT DEPT: CIP GF264 REDUNDANT INTERNET CONNECTIVITY 18,000$
TOTAL CIP / CAPITAL-CARRY OVER ITEMS:77,622$
2 16.67% MINIMUM RESERVE LEVEL REQUIRED BY CITY CHARTER (2 MONTHS OF REVENUES):5,057,271$
3 FY18 BUDGET: FY17 YEAR-END FUND BALANCE NEEDED TO BALANCE FY18 BUDGET:1,267,989$
TOTAL GENERAL FUND ASSIGNMENTS:6,402,882$
UNASSIGNED GENERAL FUND BALANCE - FY17:87,274$ DRAFT329
29 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017
General fund The City’s general fund balance decreased slightly by $30,943, or .5%, from $6,521,099 last year to $6,490,156 this year. The City had budgeted for fund balance to actually end up being lower, at $4.7 million, but actual revenues ended up exceeding budgeted expectations by $246,100, and actual spending was less than budgeted spending by $601,800, some of which is reflected in the TOTAL CIP / CAPITAL CARRY-OVER ITEMS listed in the preceding table. Other savings were realized through careful and conservative budgetary management practices implemented throughout all City departments. Property tax revenues increased in the General Fund by $364,382, or 2.4%, from $14,904,243 to $15,268,625, although the number of total property tax mills levied actually decreased by 4.86 mills from 210.16 to 205.30, or 2.4%. So the increase in property tax revenue was instead fueled instead by 3.2% increase in
the mill value from $86,564 to $89,325 (a figure provided by the Montana Department of Revenue, which recently accelerated its appraisal cycle from every 6 years to every 2 years) in addition to continued growth in the number of taxpayers. In the prior year, the City actually realized a 1.5% decrease in the property tax mill value (from $87,894 to $86,564) due to the timing and nature of the appraisal cycle change. Intergovernmental revenues increased by $337,236, or 4.8%, from $7,056,466 last year to $7,393,702. Montana State Entitlement Share revenue accounted for $166,714 of this increase. Entitlement Share began in 2001 as a replacement to the City’s dedicated revenue sources from personal property tax reimbursements
and taxes on motor vehicles, gaming, alcohol, and banking, among others. After several stagnant years of minimal or no change, Entitlement Share has increased over each of the past four years, this year increasing by 4%, from $4,133,038 to $4,299,752.
The State of Montana’s share of City employee retirement (recorded as a revenue) also increased this year by $120,100, or 5.3% from $2,280,269 to $2,400,348. This revenue amount is a non-cash book-entry only on the City’s general accounting ledger, and is offset by an expenditure in the exact same amount (most of which is reported under Public Safety for the police and fire employees), so it increases revenues and expenditures by the same amount, resulting in no change to ending fund balance. Total general fund expenditures increased by $1,089,189, or 4.1%, from $26,900,482 to $27,989,671. The largest general fund expenditures continued to be in Public safety, with $8.5 million (30.4%) spent on Police and $6.2 million (22.1%) spent on Fire. Payroll expenditures across all functions (General government, Public safety, Public service, Public welfare) increased by just over $1,350,670, or 6.8% from $19,950,607 to $21,301,276. This increase was due in part to
positions continuing to be filled pursuant to the public safety mill levy beginning in 2009. As the department moved closer to being fully staffed, police personnel costs (net of State Share of Retirement) increased by $273,326, or 4.6%, from $5,948,514 to $6,221,841. Fire Department personnel costs (net of State Share of Retirement) increased by $342,409, or 8.3%, from $4,121,341 last year to $4,463,750. However, this increase in personnel costs was partially offset by a decrease in other non-personnel operating expenditures, which decreased by $378,343, or 5.9%, from $6,394,788 last year to $6,016,445 this year. Much of this was due to $631,000 being spent on planning and design of a shared City-County Law &
Justice Center last year and only $159,540 being spent on that effort this year. Other notable expenditures in the general fund for the year included $153,500 spent on new police patrol cars and related equipment, $108,295 granted to the Streamline bus system, $70,045 spent on the Strategic Plan, $52,780 spent on the new City website, and $43,100 spent on the Fire Protection Master Plan. DRAFT330
30 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017
Also contributing to the strength and relative stability of the General Fund balance is the utilization of conservative budgetary practices. Conservative, yet realistic, revenue estimates, combined with departments operating within their original budgets, naturally has a favorable effect on the bottom line. Maintaining adequate reserves has several internal and external benefits. Internally, reserves can provide for cash flow needs until property tax revenues are received, reducing or eliminating the need for cash flow borrowing; provide funds to leverage state or federal grants; and provide for the unexpected. Externally, reserves tend to be viewed favorably by investors, rating agencies, and local banks with which we do business, thus benefiting rating and the potential need for lines of credit. The City’s General Fund balance was a primary focus of a recent upgrade in the City’s General Obligation Bond rating to Aa2 by Moody’s Investor Services.
Previously Moody’s had assigned a debt rating of Aa3 in November of 2013 and a rating of Aa3 “Positive Outlook” in November of 2015 for the two issuances of Trails, Open Space and Parks general obligation bonds. This affirmed Moody’s rating assigned in May, 2012 of Aa3 to the City’s General Obligation Refunding Bonds, Series 2012, issued in the amount of $3.1 million. At the same time, Moody's also affirmed the Aa3 rating on the city's rated outstanding general obligation debt not being refunded by this issue, which included $.6 million outstanding for the 2003 refinancing of the City’s General Obligation Transportation Bonds and the remaining bonds issued in 2003 for the new Library. In each instance bond analysts looked favorably on the amount and trend of the General Fund balance in determining the City’s bond rating. The more-recent Moody’s Credit Opinion and Annual Comment are discussed further in the Debt section on page 33.
As shown on page 133, variances in the General Fund between the original budget of $29,413,605 and the final budget of $29,673,605 netted to an overall amount of $260,000, with some functions reporting increases while others reported decreases to their original budget. Most of this was intentional and done in order to
avoid confusing the public safety departments during the year by giving the impression that they had excess budget to spend, and it relates to the State’s Share of Retirement entry that is booked annually at fiscal year-end. The $2.4 million increase to the Public safety budget (from $12,157,212 to $14,555,712) and the $2.34 million decrease to Other (from $2,759,508 to $419,508) both relate to opposite sides of the same budget amendment made for the State of Montana’s share of Police officer and Firefighter retirement. By design, the $2.34 million of appropriation authority was initially budgeted under Other to avoid confusion throughout the year, and at year-end this amount is shifted to the Public Safety budget to cover the increase in reported expenditures required by this book entry. An additional $60,000 was needed to cover the remaining difference, and this $60,000 along with $200,000 to cover transfers-out of the General Fund during the year together made up the overall $260,000 net budget amendment. It is important to note that the entire amount of the State Share of Retirement book entry only/non-cash expenditure is offset (“reimbursed”) by intergovernmental revenue booked in the same amount.
Street Impact Fees Special Revenue Fund balance decreased by $997,900 or 7.9%, from $12,647,518 last year to $11,649,617 this year due in part to decreased overall revenues but mainly due to a significant increase in total expenditures compared to last year. Total expenditures increased by $650,510, or 14.6%, from $4,452,729 to $5,130,239 this year. Notable expenditures this year included: $1.6 million spent on the extension of Graf Street; $981,200 spent on the segment of Oak Street from L Street to Cottonwood; $387,800 spent on Cottonwood from Fallon to Alpha; $322,620 spent on the reconstruction of North 27th, including right-of-way; $306,417 spent on the intersection of Baxter & Davis; and $253,427 spent on Oak Street from New Holland to Ferguson. Street Impact Fee revenues amounted to $3.96 million (which almost exactly matched last year’s figure) but there was a decrease in other revenues, including federal grant revenue passed-through the State of Montana to the City of Bozeman to partially reimburse the cost of the Transportation Plan Update. Last year nearly $112,900 in grant revenue was received but that amount decreased to $11,900 this year. Construction activity for the year which required the payment of impact fees collected by the City included: $275,313 for a new dorm on the campus of Montana State University; $97,125 for the Larkspur/Homeward Affordable Housing Apartments; $90,600 for work done by the School District at Sacajawea Middle School; and $67,932 for the Golden Gate Apartments. DRAFT331
31 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017
Street Maintenance Special Revenue Fund balance decreased by $335,227, or 43.3%, from $774,948 last year to $439,721 this year due to expenditures and transfers-out exceeding revenues for the year. Revenues did increase by $673,850, or 17%, from 3,968,756 last year to $4,642,606 this year, driven by a 15% increase in the street assessment rate targeted mostly at pavement maintenance. Another significant contributing factor driving the revenue increase was the continued expansion of the City’s Street Maintenance Assessment program to include major street reconstruction projects; the first being the reconstruction of South 8th Avenue two years ago, followed by Story Street and North Wallace Avenue last year, and East Olive Street this year. With the Commission’s focused goal of addressing deferred street and curb maintenance, Street Maintenance Assessment rates were increased six years ago by 18%, with the 18% allocated as follows: Continued increase to Curb Replacement Fund (2%); Debt Service Payments for the Reconstruction of South 8th Avenue (7%); Establishment of a Street Reconstruction Fund (6%); and Increase in Operating Budget (3%). Continuing the City Commission’s goal of addressing deferred street maintenance, this year rates were increased by 15% this year to fund operations and added pavement maintenance (chip seals, overlay, patching) with the overall goal of adding $1 million over three years for additional construction projects. As stated, the decrease in fund balance was driven primarily by expenditures and transfers-out, which combined together increased this year by $427,500, or 8.8%, from $4,847,651 to $5,275,151. Major expenditures during the year included $375,904 for street mill and overlay projects, $339,860 for street chip sealing, $150,000 for a new asphalt paving machine, $117,870 paid to provide street construction updates to the public, and $96,800 for a new snow blower. Building Inspection Special Revenue Fueled by continued growth in the construction sector, the City’s Building Inspection division again experienced steady permit issuance over the past year. While never completely stopping, building construction significantly slowed during the recession. During this fiscal year, the total value of building permits for new construction was 15% less than the same timeframe during the previous year, but still 24% higher than the 5-year average value, and three-fold what the value reported in 2010. However, revenues did decrease slightly by $61,069, or 3.3%, from $1,843,206 last year to $1,782,137 this year. Fund balance still increased by $25,515, or 1.5%, from $1,676,314 last year to $1,701,829 this year despite the decrease in revenues, because this year’s total revenues of $1,782,137 still exceeded the total amount spent of $1,756,622. Although expenditures were less than revenues, the amount spent this year did increase by $116,394, or 7.1%, from $1,640,228 last year to $1,756,622 this year. Personnel costs actually decreased by $3,400 but non-personnel operating expenditures and capital outlays increased by a combined $119,800. Significant expenditures during the year include $58,271 paid for third-party plan review and $51,840 for two new staff vehicles. SID Sinking Debt Service Fund balance increased by 36.9%, or $269,572, from $730,278 to $999,850 due to increased revenues and a decreased level of expenditures and transfers out. Revenues from Special Improvement District (SID) assessment collections, along with fund interest income and other income, amounted to $574,452, which was $141,743, or 19.8%, lower than last year’s revenues of $716,195. Revenues reported two years ago amounted to $595,510 so this year’s amount continues that trend after an unusual spike last year due to an early SID (Special Improvement District) payoff by a group of property owners in order to avoid paying interest over the 20-year life of the SID assessment. The Northeast Urban Renewal Tax Increment Financing (TIF) District board voted to pay the entire amount of $119,400 for their share of the North Wallace Avenue Reconstruction special improvement district (SID) assessments billed to property owners within that TIF District and this resulted in higher revenues being reported last year. DRAFT332
32 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017
Expenditures, however, decreased by $75,508, or 28.2%, from $267,343 to $191,835 mainly because fewer SID bond installments came due or were called and paid this year compared to last. For example, last year $70,000 worth of SID bonds for the Durston Road SID were called and paid while this year that amount was $0. These amounts can vary based on how much cash is accumulated within each district by the time the bond payments are due. Last year there had been an accumulation of cash in this district due to early payoffs of the entire SID amount owed, which can happen when a piece of property within the district changes ownership. Transfers out in the SID Sinking Debt Service fund continue to be related to the City’s policy of internally financing smaller street SID’s instead of issuing bonds. The amounts are borrowed from the SID Revolving Fund, reported on page 39, by the SID Sinking Debt Service fund, and then the amount is transferred to the appropriate SID construction fund. Going forward the SID Sinking Debt Service fund collects assessments from the property owners and subsequently repays the SID Revolving Fund instead of repaying external bondholders. This year’s Transfer out of $113,045 was for the Olive Street Reconstruction SID. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As shown in Table 4, at the end of 2017 the City had $399.7 million invested in a broad range of capital assets, including police and fire equipment, buildings, park facilities, roads, and water and sewer lines. This amount represents a net increase (including additions and deductions) of roughly $16.6 million, or 4.3% over last year. Refer to capital assets disclosure Note 7 beginning on page 64 for more information.
2017 2016 2017 2016 2017 2016
Land 19.5$ 17.6$ 2.2$ 4.9$ 21.7$ 22.5$ Water Rights - - 2.1 2.1 2.1 2.1
Buildings 32.7 32.6 113.2 113.0 145.9 145.6
Other Structures and Improvements 1.1 1.1 30.5 30.8 31.6 31.9
Machinery & Equipment 12.5 11.7 9.1 8.1 21.6 19.8
Property under Capital Lease 0.5 0.4 0.5 0.5 1.0 0.9
Vehicle 3.7 3.5 2.1 2.0 5.8 5.5
Infrastructure 170.4 158.9 293.6 280.4 464.0 439.3
Subtotal 240.4 225.8 453.3 441.7 693.7 667.6
Accumulated Depreciation (103.9) (99.9) (190.1) (184.6) (294.1) (284.5)
Total Capital Assets 136.5$ 125.9$ 263.2$ 257.1$ 399.7$ 383.1$
Activities Activities Totals
Tabl e 4
Capital Assets at Year-end
(in Millions)
Governmental Business-type
DRAFT333
33 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017
Major additions and capital projects underway include the following expenditures made during this year:
Debt At year-end, the City had $56 million in bonds and notes outstanding versus $59.2 million last year – a decrease of $3.2 million, or 5.4%, as shown in Table 5. This decrease was due to debt repayment ($3.46 million) exceeding new debt issued ($.3 million) during the year. Debt repayment included $1.1 million for the Water Reclamation Facility; $822,000 for the new Water Plant; $146,211 for the Stormwater-backed landfill mitigation system loan; $250,000 for the refinanced transportation General Obligation (GO) Bonds; $610,000 for the TOP GO Bonds; $205,000 for the Downtown TIF District Bonds to finance the Parking Facility; and $161,500 in SID debt. New debt included a $82,577 Caterpillar snow blower lease for the Street Department and $151,825 final drawdown from the MT Board of Investments for the McKinstry LED design/retrofit energy upgrades. General obligation debt still outstanding, which is reported under Governmental Activities, consists of $13.66 million for the TOP Bonds along with $1.05 million in Series 2012 Refunding Bonds issued to refinance both the Series 2003A Transportation Refunding bonds and the Series 2001A and Series 2003B Library DRAFT334
34 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017
Construction Project bonds. Debt reported under Business-Type Activities includes $15.75 million of water revenue bonds and $17.9 million of wastewater revenue bonds issued to finance construction of the new Water Treatment and Wastewater Reclamation Facilities.
2017 2016 2017 2016 2017 2016
General obligation
bonds (backed by the City)14.7$ 15.6$ -$ -$ 14.7$ 15.6$
Tax Increment Financing
District (TIFD) bonds 4.4 4.6 - - 4.4 4.6
Special Improvement
District Debt 0.5 0.7 - - 0.5 0.7
Notes Payable 0.9 0.9 - - 0.9 0.9
Lease Payable 0.3 0.2 - - 0.3 0.2
Water Revenue Bonds
(backed by specific fee revenues)- - 15.8 16.6 15.8 16.6
Wastewater Revenue Bonds
(backed by specific fee revenues)- - 17.9 18.9 17.9 18.9
Stormwater Revenue Bonds
(backed by specific fee revenues)- - 1.4 1.4 1.4 1.4
Stormwater Lease Payable
(backed by specific fee revenues)- - 0.3 0.4 0.3 0.4
Totals 20.8$ 22.0$ 35.3$ 37.3$ 56.1$ 59.2$
Activities Activities Total s
Tabl e 5
Outstanding Debt, at Year-end
(in Millions)
Governmental Business-type
Moody’s Investor Services assigned a debt rating of Aa3 in November of 2013 for the first issuance of TOP general obligation bonds. Moody’s views the city’s financial operations as sound, noting in their report that City officials have delivered operating surpluses in four of the last five audited financial years and that the City has a moderately-sized tax base that did not decline during the recession, in addition to a low debt burden. This affirmed the rating assigned by Moody’s in May, 2012
of Aa3 to the City’s General Obligation Refunding Bonds, Series 2012, issued in the amount of $3.1 million. Most recently Moody’s upgraded this rating to Aa2 from Aa3, stating in their Credit Opinion “The Aa2 rating reflects the city's fairly large, growing tax base anchored by Montana State University (Aa3/Stable), improved wealth measures, a trend of sound financial operations and healthy reserve levels, and a limited debt burden that is expected to remain at similar levels in the near-term”. Moody’s again affirmed this Aa2 rating in July of 2017. DRAFT335
35 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017
As expressed in the fiscal year 2018 Approved Budget, City officials expect to end next fiscal year with a general fund balance totaling $5.5 million, which exceeds the required minimum reserve of approximately $5,060,000. This budget exceeds the minimum level of 16 2/3% of operating revenues required by City Charter, which in May of 2011 was amended to include adoption of GFOA’s Best Practice for Unreserved General Fund Balance into the City’s Budget Administration Ordinance. Property taxes are the City's primary general revenue source (70.6%), followed by unrestricted grants and contributions (26.0%), and investment earnings (1.8%). Additionally, Moody's expects the City to maintain a moderate debt position given current limited debt burden, above average principal payout, and expected tax
base growth. More detailed information about the City’s long-term liabilities is presented in Note 9 to the financial statements. ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES The City’s elected and appointed officials considered many factors when adopting the 2017-2018 budget for next fiscal year’s tax rates and for fees that will be
charged for the business-type activities. Some of these factors include: capital improvements identified in the City’s Capital Improvement Program; inflation rates, the City’s collective bargaining units, the local economy, and the citizen’s ability to pay.
For the year, inflation rates continued to remain at relatively low yet increasing levels. The Bureau of Labor Statistics of the U.S. Department of Labor reported the Consumer Price Index-Unadjusted for All Items at 2.1% for the last calendar year and over the last 12 months the all items index rose 2.0% (as of this report date and before seasonal adjustment), with the energy index rising 6.4%. Inflation rates have historically had a significant impact on the cost of City capital projects. CONTACTING THE CITY’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to
show the City’s accountability for the money it receives. If you have questions about this report or need additional information, contact the City’s Controller, Assistant Controller, or Finance Director at the City of Bozeman, 121 North Rouse Avenue, Bozeman, Montana 59715. DRAFT336
B. BASIC FINANCIAL STATEMENTS DRAFT338
GOVERNMENT-WIDE FINANCIAL STATEMENTS
DRAFT340
36 CITY OF BOZEMAN, MONTANA STATEMENT OF NET POSITION June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Governmental Business-type
Activities Activities Total
ASSETS
Cash and investments 38,421,121$ 19,508,152$ 57,929,273$
Restricted cash and investments 17,023,823 11,671,783 28,695,606
Accrued interest 89,957 79,040 168,997
Receivables, net 6,210,411 2,136,203 8,346,614
Notes receivable 562,689 9,442 572,131
Prepaid expenses 331,500 - 331,500
62,639,501 33,404,620 96,044,121
Capital assets:
Non-depreciable land and water rights 19,513,699 4,314,133 23,827,832
Other capital assets, net of depreciation 116,992,609 258,958,226 375,950,835
Total capital assets 136,506,308 263,272,359 399,778,667
Total assets 199,145,809 296,676,979 495,822,788
Deferred outflows of resources:
Interlocal lease agreement 1,009,999 - 1,009,999
Pension plan contributions 4,385,298 1,399,555 5,784,853
Total deferred outflows of resources 5,395,297 1,399,555 6,794,852
Total assets and deferred outflows of resources 204,541,106$ 298,076,534$ 502,617,640$
DRAFT342
37 CITY OF BOZEMAN, MONTANA STATEMENT OF NET POSITION (CONTINUED) June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Governmental Business-type
Activities Activities Total LIABILITIES
Accounts payable and accrued expenses 6,749,585$ 3,785,531$ 10,535,116$
Unearned revenue 56,343 - 56,343
Current portion of long-term liabilities:
Compensated absences payable 1,341,900 345,854 1,687,754
Capital leases 35,343 81,460 116,803
Closure and post-closure care costs - 360,000 360,000
Bonds and notes 1,268,134 2,031,000 3,299,134
Long-term liabilities, due in more than one year:
Compensated absences 368,363 169,727 538,090
Capital leases 235,149 209,078 444,227
Closure and post-closure care costs - 2,269,164 2,269,164
Pollution remediation obligations 16,874 1,700,183 1,717,057
Other post-employment health benefits - implicit rate subsidy 1,904,250 480,780 2,385,030
Due to other governments and other liabilities 1,009,999 231 1,010,230
Bonds and notes 19,505,875 32,952,430 52,458,305
Net pension liability 19,386,470 6,277,072 25,663,542
Total liabilities 51,878,285 50,662,510 102,540,795
DEFERRED INFLOWS OF RESOURCES
Pension deferrals 221,340 20,778 242,118
Total deferred inflows of resources 221,340 20,778 242,118
NET POSITION
Net investment in capital assets 115,696,956 229,372,281 345,069,237
Restricted:
Restricted for parking capital projects - 344,465 344,465
Restricted for general government 1,705,652 - 1,705,652
Restricted for public safety 3,827,151 - 3,827,151
Restricted for public service 15,734,287 - 15,734,287
Restricted for public welfare 5,401,758 - 5,401,758
Restricted for capital projects 7,789,279 5,420,009 13,209,288
Restricted for debt service 7,125,865 3,102,477 10,228,342
Unrestricted (4,839,467) 9,154,014 4,314,547
Total net position 152,441,481$ 247,393,246$ 399,834,727$ DRAFT343
38 CITY OF BOZEMAN, MONTANA STATEMENT OF ACTIVITIES Year Ended June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Net (Expense) Revenue and Changes in Net Position
Operating Capital
Charges for Grants and Grants and Governmental Business-type
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total
Primary Government
Governmental activities:
General government 9,415,702$ 2,683,016$ 87,890$ -$ (6,644,796)$ (6,644,796)$
Public safety 17,689,004 3,175,257 2,342,899 - (12,170,848) (12,170,848)
Public service 7,857,917 10,342,921 42,104 2,667,352 5,194,460 5,194,460
Public welfare 9,210,264 1,414,395 243,093 - (7,552,776) (7,552,776)
Interest and fiscal fees 771,714 - - - (771,714) (771,714)
Total governmental activities 44,944,601 17,615,589 2,715,986 2,667,352 (21,945,674) (21,945,674)
Business-type activities:
Water 9,740,629 11,166,944 101,697 3,240,003 4,768,015 4,768,015
Waste water 8,590,477 9,668,524 35,967 3,985,608 5,099,622 5,099,622
Solid waste 4,262,650 3,613,721 20,852 - (628,077) (628,077)
Parking 897,278 878,458 4,813 - (14,007) (14,007)
Stormwater 930,444 1,293,941 6,180 549,096 918,773 918,773
Total business-type activities 24,421,478 26,621,588 169,509 7,774,707 10,144,326 10,144,326
Total primary government 69,366,079$ 44,237,177$ 2,885,495$ 10,442,059$ (21,945,674) 10,144,326 (11,801,348)
General revenues
Property taxes 21,708,812 - 21,708,812
Unrestricted grants and contributions 8,372,625 - 8,372,625
Investment earnings 554,870 304,231 859,101
Miscellaneous 1,317,137 1,256,284 2,573,421
Loss on sale of assets (71,335) (2,013,292) (2,084,627)
Transfers (742,999) 742,999 -
Total general revenues and transfers 31,139,110 290,222 31,429,332
Change in net position 9,193,436 10,434,548 19,627,984
Net position, beginning of the year 143,248,045 236,958,698 380,206,743
Net position, end of the year 152,441,481$ 247,393,246$ 399,834,727$
Primary Government
Program Revenues
DRAFT344
FUND FINANCIAL STATEMENTS DRAFT346
GOVERNMENTAL FUND FINANCIAL STATEMENTS DRAFT348
MAJOR GOVERNMENTAL FUNDS General Fund – This fund accounts for the financial operations of the City, which are not accounted for in any other Fund. Principal sources of revenue are property taxes, state and local shared revenues, licenses and permits, and charges for services provided to other Funds. Principal
expenditures in the general fund are made for police and fire protection, public works, and general government.
Street Impact Fees Special Revenue Fund – This special revenue fund accounts for the collection and expenditures associated with the street impact fees.
Street Maintenance – This special revenue fund accounts for special assessment revenues levied, received, and expended for street maintenance
provided to specific property owners. Building Inspection – This special revenue fund was established to account for all activity of enforcing the building regulation adopted by the City. It includes all the money and staff associated with executing any aspect of the code enforcement program. Section 50-60-101 MCA established
the code enforcement program requirement.
SID Sinking Debt Service Fund – This debt service fund accounts for the accumulation of resources and payment of special assessment bond principal and interest related to general improvement, sidewalk, and curb construction projects.
DRAFT349
39 CITY OF BOZEMAN, MONTANA BALANCE SHEET GOVERNMENTAL FUNDS
June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Street Street Building SID Other Total
General Impact Fees Maintenance Inspection Sinking Governmental Governmental
Fund Special Revenue Special Revenue Special Revenue Debt Service Funds Funds
ASSETS
Cash and investments 8,016,376$ -$ 535,040$ 1,832,032$ 1,530,919$ 26,167,087$ 38,081,454$
Receivables:
Property taxes 1,036,362 - - - - 334,254 1,370,616
Accrued interest 12,506 30,588 - - - 46,863 89,957
Customers, net 1,222,781 6,500 16,231 - - 401,368 1,646,880
Special assessments - - 150,179 - 2,621,895 58,324 2,830,398
Other governments - - - - - 292,173 292,173
Due from other city funds 12,623 - - - - - 12,623
Advances to other city funds - - - - - 539,533 539,533
Prepaid expenditures - - - - - 331,500 331,500
Notes receivable - - - - - 562,689 562,689
Restricted cash and investments - 12,781,222 - - - 4,242,601 17,023,823
Total assets 10,300,648$ 12,818,310$ 701,450$ 1,832,032$ 4,152,814$ 32,976,392$ 62,781,646$
(continued)
DRAFT350
40 CITY OF BOZEMAN, MONTANA BALANCE SHEET (CONTINUED) GOVERNMENTAL FUNDS
June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Street Street Building SID Other Total
General Impact Fees Maintenance Inspection Sinking Governmental Governmental
Fund Special Revenue Special Revenue Special Revenue Debt Service Funds Funds
LIABILITIES AND FUND BALANCES
Liabilities
Accounts payable 2,655,476$ 1,038,414$ 171,483$ 127,620$ -$ 2,281,493$ 6,274,486$
Escheat property payable 69,652 - - - - 20,052 89,704
Accrued employee benefits 11,775 - 1,469 2,583 - 1,220 17,047
Appearance bonds and other liabilities 130,279 181,598 311,877
Advanced from other city funds - - - - 539,533 - 539,533
Total liabilities 2,736,903 1,168,693 172,952 130,203 539,533 2,484,363 7,232,647
Deferred inflows of resources
Unavailable revenue-property taxes 65,768 - - - - 24,091 89,859
Unavailable revenue-special assessments - - 88,777 - 2,613,431 9,100 2,711,308
Unavailable revenue-court fines 1,007,821 - - - - - 1,007,821
Total deferred inflows of resources 1,073,589 - 88,777 - 2,613,431 33,191 3,808,988
Fund balances
Nonspendable - - - - - 1,533,338 1,533,338
Restricted - 11,649,617 439,721 1,701,829 999,850 24,147,110 38,938,127
Committed - - - - - 3,901,694 3,901,694
Assigned 6,402,882 - - - - 927,596 7,330,478
Unassigned 87,274 - - - - (50,900) 36,374
Total fund balances 6,490,156 11,649,617 439,721 1,701,829 999,850 30,458,838 51,740,011
Total liabilities, deferred inflows,
and fund balances 10,300,648$ 12,818,310$ 701,450$ 1,832,032$ 4,152,814$ 32,976,392$ 62,781,646$ DRAFT351
41 CITY OF BOZEMAN, MONTANA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Amounts reported for governmental activities in the statement of net position are different because:
Fund balances - total governmental funds 51,740,011$
Capital assets used in governmental activities are not financial resources, and
therefore, are not reported in the governmental funds.
Governmental capital assets 240,449,293$
Less: accumulated depreciation (103,942,985) 136,506,308
Internal service funds are used by management to charge the costs of certain activities to individual
funds. The assets and liabilities of the internal service funds are included in governmental activities
in the statement of net position.
Net position 1,110,481
Less: capital assets included in governmental activities (1,681,112)
Plus: accumulated depreciation included in governmental activities 547,902
Plus: compensated absences included in governmental activities 20,312
Plus: other post-employment health benefits included in governmental activities 29,837
Plus: net pension liability and related deferred outflows and inflows included in governmental activities 313,497 340,917
Deferred inflows of resources are not available to pay for current period expenditures and,
therefore, are deferred in the funds.3,808,988
Deferred outflows of resources relating to pensions and other liabilities are not payable in the current period and,
therefore, are not reported in the governmental funds.5,395,297
Pension plan deferrals are deferred inflows of resources on the Statement of Net Position.(221,340)
Bond premiums are other financing source revenue in the governmental funds. They are a liability
for the government-wide financial statements and amortized over the life of the issuance.
Bond premium (269,154)
Less: amortization 33,645 (235,509)
Impact fee credits do not affect current financial resources and therefore are not reported
in the governmental funds.(56,343)
Long-term liabilities are not due and payable in the current period and therefore are not reported
in the governmental funds.
Bonds and notes payable, net of bond premium (20,538,500)
Net pension liability (19,386,470)
Capital lease obligations (270,492)
Pollution remediation obligations (16,874)
Other liabilities (1,009,999)
Post-employment health benefits (1,904,250)
Compensated absences (1,710,263) (44,836,848)
Net position of governmental activities 152,441,481$ DRAFT352
42 CITY OF BOZEMAN, MONTANA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS
Year Ended June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Street Street Building SID Other Total
Impact Fees Maintenance Inspection Sinking Governmental Governmental
General Special Revenue Special Revenue Special Revenue Debt Service Funds Funds
REVENUES
Taxes 15,268,625$ -$ -$ -$ -$ 6,414,042$ 21,682,667$
Special assessments 62 - 54,404 - 558,988 549,821 1,163,275
Licenses and permits 356,361 - 18,466 1,717,846 - - 2,092,673
Intergovernmental 7,393,702 11,891 1,026 51,440 - 1,497,985 8,956,044
Charges for services 2,295,677 3,966,383 4,545,407 732 3,512 2,932,119 13,743,830
Fines and forfeitures 1,139,309 - - - 117,216 1,256,525
Interest on investments 51,635 126,257 3,892 12,117 11,693 315,096 520,690
Interest on loans receivable - - - - - 31,837 31,837
Other 37,394 807 19,411 2 259 1,249,795 1,307,668
Total revenues 26,542,765 4,105,338 4,642,606 1,782,137 574,452 13,107,911 50,755,209
EXPENDITURES
General government 6,623,546 - - - - 1,020,340 7,643,886
Public safety 14,555,066 - - 1,704,782 - 552,283 16,812,131
Public service 108,295 374,301 3,363,126 - - 577,049 4,422,771
Public welfare 5,612,254 - - - - 2,041,805 7,654,059
Other 418,559 - - - - 87,610 506,169
Capital outlay 668,191 4,728,938 1,101,123 51,840 - 5,917,928 12,468,020
Debt service
Principal payments 3,760 - 192,295 - 161,500 1,065,000 1,422,555
Interest and fiscal fees - - 20,603 - 30,335 720,776 771,714
Total expenditures 27,989,671 5,103,239 4,677,147 1,756,622 191,835 11,982,791 51,701,305
Revenues over (under) expenditures (1,446,906) (997,901) (34,541) 25,515 382,617 1,125,120 (946,096)
OTHER FINANCING SOURCES (USES)
Transfers in 2,214,190 - 43,227 - - 1,692,642 3,950,059
Transfers out (822,119) - (598,000) - (113,045) (3,159,894) (4,693,058)
Issuance of long term debt - - 234,702 - - - 234,702
Sale of capital assets 23,892 - 19,385 - - - 43,277
Total other financing sources (uses) 1,415,963 - (300,686) - (113,045) (1,467,252) (465,020)
Net change in fund balances (30,943) (997,901) (335,227) 25,515 269,572 (342,132) (1,411,116)
FUND BALANCE, beginning of year 6,521,099 12,647,518 774,948 1,676,314 730,278 30,800,970 53,151,127
FUND BALANCE, end of year 6,490,156$ 11,649,617$ 439,721$ 1,701,829$ 999,850$ 30,458,838$ 51,740,011$
DRAFT353
43 CITY OF BOZEMAN, MONTANA RECONCILIATION OF STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
Year Ended June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances - total governmental funds (1,411,116)$
Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost
of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is
the amount by which depreciation expense exceeded capital outlays in the current period.
Expenditures for capital assets 12,468,020$
Donated infrastructure 2,686,155
Less: current year depreciation (4,649,494) 10,504,681
Governmental funds report asset disposals as sale of capital assets for the cash received. In the statement of
activities, those gains and losses must be adjusted by the assets basis, net of any depreciation.(115,267)
The issuance of long-term debt (e.g. bonds, leases) provides current financial resources to governmental funds,
while the repayment of the principal of long-term debt consumes the current financial resources of
governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds
report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts
are deferred and amortized in the statement of activities, unless immaterial. This amount is the net effect of these
differences in the treatment of long-term debt and related items.1,201,311
Some revenues reported in the statement of activities do not require the use of current financial resources and,
therefore, are not reported as revenues in governmental funds. The change in deferred inflows of resources is presented
in the statement of activities.(614,569)
Governmental funds do not report a liability for compensated absences. The change in the liability is presented in
the statement of activities.43,466
Governmental funds do not report a liability for other post-employment health benefits.(121,734)
Contributions to the pension plans in the current fiscal year are deferred outflows in the Statement of Net Position (160,002)
Internal service funds are used by management to charge the costs of certain activities to individual funds.
The net revenue of the internal service funds is reported in the governmental activities.(133,334)
Change in net position of governmental activities 9,193,436$ DRAFT354
PROPRIETARY FUND FINANCIAL STATEMENTS
DRAFT356
MAJOR PROPRIETARY FUNDS These funds are used to account for the financing, acquisition, operation and maintenance of water, sewer, and solid waste facilities, which are
supported by user charges.
Major Enterprise Funds –
Water Fund – Accounts for the City’s water utility operations and to collect and administer water impact fees.
Waste Water Fund – Accounts for the City’s sewer utility operations and to collect and administer waste water impact fees. Solid Waste Fund - Accounts for the City’s garbage collection service and recycling operations.
Internal Service Funds – used to account for the goods and services provided by one department to other departments of the City on a cost-reimbursement basis. DRAFT357
44 CITY OF BOZEMAN, MONTANA STATEMENT OF NET POSITION PROPRIETARY FUNDS
June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Governmental
Activities
Waste Solid Nonmajor Internal
Water Fund Water Fund Waste Fund Enterprise Funds Total Service Funds
ASSETS
Current assets
Cash and investments 13,897,448$ 3,657,953$ 637,547$ 1,315,204$ 19,508,152$ 339,667$
Receivables:
Accrued interest 46,660 26,989 5,391 - 79,040 -
Customers, net 789,353 756,075 345,591 242,731 2,133,750 70,344
Special assessments 235 96 1,901 221 2,453
Prepaid expenses - - - - - -
Total current assets 14,733,696 4,441,113 990,430 1,558,156 21,723,395 410,011
Non-current assets
Other assets:
Notes receivable - - - 9,442 9,442 -
Restricted cash and investments 6,656,665 4,165,407 449,915 399,796 11,671,783 -
Total other assets 6,656,665 4,165,407 449,915 409,238 11,681,225 -
Property, plant and equipment
Nondepreciable:
Land 568,891 1,092,991 228,673 303,436 2,193,991 -
Water rights 2,120,142 - - - 2,120,142 -
Depreciable:
Buildings 40,573,387 60,059,117 746,509 11,803,086 113,182,099 1,424,215
Other structures and improvements 13,646,910 14,745,402 2,155,300 - 30,547,612 -
Machinery and equipment 1,583,000 2,850,919 519,436 193,493 5,146,848 186,585
Vehicles 604,246 755,997 4,478,813 261,661 6,100,717 70,312
Infrastructure 176,802,306 115,694,072 78,531 1,010,524 293,585,433 -
Property under capital lease - - - 519,943 519,943 -
Accumulated depreciation and amortization (104,630,059) (75,280,398) (5,982,623) (4,231,346) (190,124,426) (547,902)
Net property, plant and equipment 131,268,823 119,918,100 2,224,639 9,860,797 263,272,359 1,133,210
Total non-current assets 137,925,488 124,083,507 2,674,554 10,270,035 274,953,584 1,133,210
Deferred outflows of resources
Pension plan contributions 618,517 414,226 240,150 126,662 1,399,555 87,828
Total assets and deferred outflows of resources 153,277,701$ 128,938,846$ 3,905,134$ 11,954,853$ 298,076,534$ 1,631,049$
continued
Enterprise Funds
Business-type Activities
DRAFT358
45 CITY OF BOZEMAN, MONTANA STATEMENT OF NET POSITION (CONTINUED) PROPRIETARY FUNDS
June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Governmental
Activities
Waste Solid Nonmajor Internal
Water Fund Water Fund Waste Fund Enterprise Funds Total Service Funds
LIABILITIES
Current liabilities
Accounts payable and accrued expenses 1,958,971$ 1,219,756$ 361,483$ 245,321$ 3,785,531$ 57,393$
Compensated absences payable 237,398 33,092 55,832 19,532 345,854 20,312
Due to other city funds - - - - 11,701
Capital lease obligations due in one year - - - 81,460 81,460 -
Closure and post-closure care costs, current portion - - 360,000 - 360,000 -
Bonds, notes, and loans payable 847,000 1,109,000 - 75,000 2,031,000 -
Total current liabilities 3,043,369 2,361,848 777,315 421,313 6,603,845 89,406
Noncurrent liabilities
Closure and post-closure care costs - - 2,269,164 - 2,269,164 -
Revenue bonds due after one year 14,913,000 16,747,000 - 1,292,430 32,952,430 -
Compensated absences payable 75,768 59,467 34,492 - 169,727 -
Capital lease obligations - - - 209,078 209,078 -
Other post-employment health benefits 203,392 137,875 99,700 39,813 480,780 29,837
Appearance bond and other liabilities - - - 231 231 -
Solvent site remediation liability - 1,700,183 - - 1,700,183 -
Net pension liability 2,774,079 1,857,824 1,077,085 568,084 6,277,072 397,732
Total noncurrent liabilities 17,966,239 20,502,349 3,480,441 2,109,636 44,058,665 427,569
Total liabilities 21,009,608 22,864,197 4,257,756 2,530,949 50,662,510 516,975
Deferred inflows of resources
Pension deferrals 9,182 6,149 3,565 1,882 20,778 3,593
NET POSITION
Net investment in capital assets 115,508,823 102,062,100 2,224,639 9,576,719 229,372,281 1,133,210
Restricted for impact capital projects 3,168,326 2,251,683 - - 5,420,009 -
Restricted for parking capital projects - - - 344,465 344,465 -
Restricted for debt service 1,313,885 1,788,592 - - 3,102,477 -
Unrestricted 12,267,877 (33,875) (2,580,826) (499,162) 9,154,014 (22,729)
Total net position 132,258,911 106,068,500 (356,187) 9,422,022 247,393,246 1,110,481
Total liabilities, deferred inflows of resources, and net position 153,277,701$ 128,938,846$ 3,905,134$ 11,954,853$ 298,076,534$ 1,631,049$
Enterprise Funds
Business-type Activities
DRAFT359
46 CITY OF BOZEMAN, MONTANA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS
Year Ended June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Governmental
Activities
Waste Solid Nonmajor Internal
Water Fund Water Fund Waste Fund Enterprise Funds Totals Service Funds
OPERATING REVENUES 9,281,821$ 8,566,893$ 3,613,721$ 2,172,399$ 23,634,834$ 5,818,223$
OPERATING EXPENSES
Salaries and benefits 3,418,374 1,869,410 1,058,078 853,485 7,199,347 418,300
Materials and supplies 802,940 509,325 427,161 50,857 1,790,283 567,900
Repairs and maintenance 78,946 431,420 195,555 23,024 728,945 14,941
Utilities 262,094 650,534 511,462 30,932 1,455,022 3,564
Administrative charges 575,496 884,838 606,026 99,656 2,166,016 164,486
Insurance claims - - - - - 4,626,480
Other expenses 1,451,546 1,150,637 869,346 340,590 3,812,119 118,732
Depreciation and amortization 2,660,343 2,549,046 295,214 381,483 5,886,086 57,120
Changes in estimated closure and
post-closure care costs - - 299,808 - 299,808 -
Total operating expenses 9,249,739 8,045,210 4,262,650 1,780,027 23,337,626 5,971,523
Operating income (loss)32,082 521,683 (648,929) 392,372 297,208 (153,300)
NON-OPERATING REVENUES (EXPENSES)
Interest income 197,899 83,741 8,607 13,984 304,231 2,343
Interest expense (490,890) (545,267) - (47,695) (1,083,852) -
Other income 1,126,262 44,737 19,804 65,481 1,256,284 9,469
Intergovernmental income 101,697 35,967 20,852 10,993 169,509 7,499
Impact fees 1,885,123 1,101,631 - - 2,986,754 -
Gain (loss) on disposal of assets 33,599 - (2,042,391) (4,500) (2,013,292) 655
Total non-operating revenues (expenses)2,853,690 720,809 (1,993,128) 38,263 1,619,634 19,966
Income (loss) before contributions and transfers 2,885,772 1,242,492 (2,642,057) 430,635 1,916,842 (133,334)
Contributions of infrastructure - developers 3,240,003 3,985,608 - 549,096 7,774,707 -
Transfers in 500 - 806,999 390,000 1,197,499 -
Transfers out (500) - - (454,000) (454,500) -
Change in net position 6,125,775 5,228,100 (1,835,058) 915,731 10,434,548 (133,334)
NET POSITION, beginning of year 126,133,136 100,840,400 1,478,871 8,506,291 236,958,698 1,243,815
NET POSITION, end of year 132,258,911$ 106,068,500$ (356,187)$ 9,422,022$ 247,393,246$ 1,110,481$
Enterprise Funds
Business-type Activities
DRAFT360
47 CITY OF BOZEMAN, MONTANA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS
Year Ended June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Governmental
Activities
Waste Solid Nonmajor Internal
Water Fund Water Fund Waste Fund Funds Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 9,133,768$ 8,450,806$ 3,583,401$ 2,178,526$ 23,346,501$ 6,177,701$
Receipts from others 1,126,262 44,737 19,804 65,481 1,256,284 16,968
Operating loans from other City funds - - - - - 427
Payments to suppliers (1,126,113) (1,999,526) (2,983,309) (368,608) (6,477,556) (674,453)
Payments to employees (2,991,922) (2,151,100) (1,202,312) (675,802) (7,021,136) (5,045,154)
Payments to internal service funds and administrative fees (575,496) (884,838) (606,026) (99,656) (2,166,016) (164,486)
Net cash flows from operating activities 5,566,499 3,460,079 (1,188,442) 1,099,941 8,938,077 311,003
CASH FLOWS FROM NON-CAPITAL
FINANCING ACTIVITIES
Transfers in 500 - 806,999 390,000 1,197,499 -
Transfers out (500) - - (454,000) (454,500) -
Receipts from grants and intergovernmental sources 135,296 35,967 20,852 10,993 203,108 -
Net cash flows from non-capital financing activities 135,296 35,967 827,851 (53,007) 946,107 -
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition of capital assets (3,615,900) (2,970,077) (859,419) (313,018) (7,758,414) (41,209)
Principal paid on bonds, interfund loans, loans and leases (807,000) (1,074,565) - (73,211) (1,954,776) -
Interest paid on bonds, interfund loans, loans and leases (490,890) (545,267) - (47,695) (1,083,852) -
Proceeds from issuance of long-term debt - - - (73,000) (73,000) -
Impact fees received 1,885,123 1,101,631 - - 2,986,754 -
Proceeds from sale of property, plant and equipment - - 1,568,318 - 1,568,318 655
Net cash flows from capital and
related financing activities (3,028,667) (3,488,278) 708,899 (506,924) (6,314,970) (40,554)
CASH FLOWS FROM INVESTING ACTIVITIES
Collections on notes - - - 1,388 1,388 -
Interest on investments 173,630 67,468 3,216 13,984 258,298 2,343
Net cash flows from investing activities 173,630 67,468 3,216 15,372 259,686 2,343
Net change in cash and investments 2,846,758 75,236 351,524 555,382 3,828,900 272,792
Cash and investments, beginning of year 17,707,355 7,748,124 735,938 1,159,618 27,351,035 66,875
Cash and investments, end of year 20,554,113$ 7,823,360$ 1,087,462$ 1,715,000$ 31,179,935$ 339,667$
Classified as:
Cash and investments 13,897,448$ 3,657,953$ 637,547$ 1,315,204$ 19,508,152$ 339,667$
Restricted cash and investments 6,656,665 4,165,407 449,915 399,796 11,671,783 -
Totals 20,554,113$ 7,823,360$ 1,087,462$ 1,715,000$ 31,179,935$ 339,667$
continued
Business-type Activities
Enterprise Funds
DRAFT361
48 CITY OF BOZEMAN, MONTANA STATEMENT OF CASH FLOWS (CONTINUED) PROPRIETARY FUNDS
Year Ended June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Governmental
Activities
Waste Solid Nonmajor Internal
Water Fund Water Fund Waste Fund Funds Total Service Funds
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH FROM OPERATING ACTIVITIES
Operating income (loss)32,082$ 521,683$ (648,929)$ 392,372$ 297,208$ (153,300)$
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities
Depreciation and amortization 2,660,343 2,549,046 295,214 381,483 5,886,086 57,120
Change in estimated closure and
post-closure care costs - - (410,507) - (410,507) -
Change in solvent site remediation obligation - 169,080 - - 169,080 -
Other income 1,126,262 44,737 19,804 65,481 1,256,284 16,968
Change in assets and liabilities:
(Increase) Decrease in:
Accounts receivable (148,053) (116,085) (30,320) 6,127 (288,331) (23,063)
Prepaid expenses - - - - - 382,541
Increase (Decrease) in:
Accounts payable 1,469,413 573,308 (269,470) 76,795 1,850,046 18,675
Due from other city funds - - - - - 427
Accrued employee benefits payable 62,822 (112,520) (572) (3,393) (53,663) (374)
Net pension 363,630 (169,170) (143,662) 181,076 231,874 12,009
Total adjustments 5,534,417 2,938,396 (539,513) 707,569 8,640,869 464,303
Net cash flows from operating activities 5,566,499$ 3,460,079$ (1,188,442)$ 1,099,941$ 8,938,077$ 311,003$
SUPPLEMENTAL CASH FLOW INFORMATION
Noncash transactions:
Donated infrastructure 3,240,003$ 3,985,608$ -$ 549,096$ 7,774,707$ -$
Enterprise Funds
Business-type Activities
DRAFT362
FIDUCIARY FUND FINANCIAL STATEMENTS
DRAFT364
FIDUCIARY FUNDS AGENCY FUNDS
Agency Funds are used to account for assets held by the City as an agent for individuals, private organizations, other governments, and/or other funds. Municipal Court – Accounts for monies held for appearance bonds and restitution.
CMC Bozeman Site Remediation – Accounts for pass-through monies provided by the State of Montana Department of Environmental Quality to Olive & Wallace, LLC, to reimburse the cost of work performed as part of the Voluntary Cleanup Plan of the CMC Asbestos Bozeman Facility.
Tourism Business Improvement District – Accounts for amounts collected from hotels on behalf of the District, a special-purpose
government, whose purpose is to enhance the economic vitality of Bozeman by promoting tourism through sales and marketing strategies. DRAFT365
49 CITY OF BOZEMAN, MONTANA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS
June 30, 2017
The Notes to Financial Statements are an integral part of this statement.
Agency
Funds
ASSETS
Cash and cash equivalents 771,290$
Customer receivables 1,949
Total assets 773,239$
LIABILITIES
Accounts payable 826,011$
Total liabilities 826,011$ DRAFT366
NOTES TO FINANCIAL STATEMENTS
DRAFT368
50 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS June 30, 2017
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES The City of Bozeman of Gallatin County, Montana (the City) was incorporated as a municipal corporation in 1883. The present City Code of Ordinances was adopted October 3, 2011. Under the charter, the City is governed by a mayor and commission members who comprise the City Commission. The day-to-day affairs of the City are conducted under the supervision of the City Manager, who is appointed by and serves at the pleasure of a majority of the City Commission.
The accompanying financial statements of the City have been prepared in conformity with generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB), the accepted standard-setting body for establishing governmental accounting and financial reporting principles. In June 1999 the GASB issued Statement 34 Basic Financial Statements-and Management’s Discussion and Analysis-for State and Local Governments (GASB 34). This Statement establishes new financial reporting requirements for state
and local governments throughout the United States. It requires new information and restructures much of the information that governments have presented in the past. Comparability with reports issued in prior years is affected. The accompanying financial statements present the financial position of the City and the various funds and fund types, the results of operations of the City and the various funds and fund types, and the cash flows of the proprietary funds. The financial statements are presented as of June 30,
2017, and for the year then ended. The more significant accounting policies of the City are described below. New Accounting Pronouncements The City implemented the provisions of the following GASB pronouncements for the year ended June 30, 2017:
• Statement No. 77, Tax Abatement Disclosures. This Statement addresses the disclosure of tax abatements within the notes to the financial statements. The Statement provides guidance for the reporting of (1) the total tax abated in the current fiscal year, (2) the general description of each tax abatement program, and (3) any obligations the City incurred with respect to the approved abatement program. This Statement is effective for fiscal years beginning after December 15, 2015. For the year ended June 30, 2017, the City had no tax abatements.DRAFT370
51 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Reporting Entity The City has considered all potential component units for which it is financially accountable and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City’s financial statements to be misleading or incomplete. The Governmental Accounting Standards Board has set forth criteria to be considered in determining financial accountability in Statement 14 The
Financial Reporting Entity and Statement 61, The Financial Reporting Entity: Omnibus – an Amendment of GASB Statements No. 14 and No. 34.
These criteria include appointing a voting majority of an organization's governing body and (1) the ability of the City to impose its will on that organization or (2) the potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the City. Although the following entities meet the requirements of Statement 61, they are strictly advisory in nature. Therefore, the government-wide financial
statements do not include the financial information of the following entities and their omission does not cause the City’s financial statements to be
misleading or incomplete. Should there develop a financial element at some point in the future, the City shall include these entities on its government-wide financial statements.
Senior Center Advisory Council – This council is advisory in nature on senior issues and on how to run the City-owned Senior Center building. The City is responsible for the maintenance and operation of the building.
Parking Commission – The City Commission appoints the governing board of the Parking Commission, which was created by ordinance. The
City owns the parking lots, collects the rents, and assigns the lots to the individuals.
City Planning Board – The agreement forming the City Planning Board holds that it will submit its budget to the City Commission for approval, and the City provides all accounting functions and is responsible for the issuance of debt. It is presented with the Special Revenue Funds. DRAFT371
52 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basis of Accounting/Measurement Focus The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures, or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they
are to be spent and the means by which spending activities are controlled.
Government-Wide Financial Statements The Government-Wide Financial Statements (the Statement of Net Position and the Statement of Activities) present information of all the non-fiduciary activities of the primary government and its component units. These statements present summaries of Governmental and Business-Type Activities for the City accompanied by a total column.
These statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s
assets and liabilities, including capital assets and long-term liabilities, are included in the accompanying Statement of Net Position. The City has retroactively included infrastructure in its assets.
The Statement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. The types of transactions reported as program revenues
for the City are reported in three categories: 1) charges for services, 2) operating grants and contributions, and 3) capital grants and contributions.
Certain eliminations have been made as prescribed by GASB 34 in regards to inter-fund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated, except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities,
internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not
been eliminated. The City applies all applicable GASB pronouncements (including all National Council on Governmental Accounting Statements and Interpretations currently in effect) as well as the following pronouncements issued on or before November 30, 1989, unless those pronouncements conflict with or
contradict GASB pronouncements: Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board
(APB) Opinions, and Accounting Research Bulletins (ARB) of the Committee on Accounting Procedure.
DRAFT372
53 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basis of Accounting/Measurement Focus (Continued)
Governmental Fund Financial Statements Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major governmental funds and nonmajor funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in fund balances and changes in fund balances as presented in these statements to the net position and changes in net position presented in the
Government-Wide Financial Statements. The City has presented all major funds that met those qualifications.
All governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheets. The Statement of Revenues, Expenditures, and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current position. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both
measurable and available to finance expenditures of the current period. Accordingly, revenues are recorded when received in cash, except that
revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources which have been treated as susceptible to accrual by the City are property taxes, intergovernmental revenues, and other taxes.
Expenditures are recorded in the accounting period in which the related fund liability is incurred. The City has elected to apply the early recognition option of recognizing debt services expenditures provided by GASB Interpretation No. 6, Recognition and Measurement of Certain Liabilities and
Expenditures in Governmental Fund Financial Statements. Under this option, an expenditure and a liability are recorded in debt service funds in
the current year for amounts due early in the following year, for which resources have been provided during the current year.
Proprietary Fund Financial Statements Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Net Position, and a Statement of Cash Flows for each major proprietary fund. A column representing internal service funds is also presented with the Proprietary
Fund Financial Statements. Internal service balances and activities, however, have been combined with the governmental activities in the
Government-Wide Financial Statements.
Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets
and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses, and Changes in Net Position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-
operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported
as non-operating expenses. DRAFT373
54 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Accounting/Measurement Focus (Continued)
Fiduciary Fund Financial Statements
Fiduciary Fund Financial Statements include a Statement of Net Position. The City’s Fiduciary Funds represent Agency Funds, which are custodial
in nature (assets equal liabilities) and do not involve measurement of results of operations. Therefore, Agency Funds do not have a measurement focus. These funds are accounted for using the accrual basis of accounting. The following Agency Funds are included in the Fiduciary Fund financial statements:
Municipal Court – Accounts for monies held for appearance bonds and restitution related to criminal arrests and reimbursement for damage
caused.
CMC Bozeman Site Remediation Fund – Accounts for pass-through monies provided by the State of Montana Department of Environmental Quality to Olive & Wallace, LLC, to reimburse the cost of work performed as part of the Voluntary Cleanup Plan of the CMC Asbestos Bozeman Facility.
Tourism Business Improvement District – Accounts for amounts collected from hotels on behalf of the District, a special-purpose government,
whose purpose is to enhance the economic vitality of Bozeman by promoting tourism through sales and marketing strategies.
Internal Service Funds Internal Service Funds are used to account for goods and services provided by one department to other departments of the City on a cost-reimbursement basis. These direct costs and certain indirect costs are included as part of the program expense reported for the individual functions
and activities of these other departments. The following Internal Service Funds are included in the Proprietary Fund Financial Statements:
Vehicle Maintenance Shop – Accounts for the maintenance and repair of vehicles used in the operation of City services.
Medical Health Insurance – Accounts for insurance premium revenues received from the various City departments and retirees, and the related costs of health, vision, and dental insurance premiums incurred by City employees and retirees. DRAFT374
55 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Funds As mentioned, the Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major governmental funds and nonmajor funds aggregated. The following major funds are presented in separate columns on the Governmental Funds Financial Statements, and the Proprietary Funds Financial Statements, respectively:
Governmental Funds
General Fund – this fund accounts for the financial operations of the City, which are not accounted for in any other fund. Principal sources of revenue are property taxes, state and local shared revenues, licenses and permits, and charges for services provided to other funds. Principal expenditures in the General Fund are made for police and fire protection, public welfare, and general government.
Street Impact Fees Special Revenue Fund – on January 22, 1996, the City Commission adopted fire, street, water, and waste impact fees in
Ordinance Number 1414. This fund accounts for the collection and expenditures associated with the street impact fees.
Street Maintenance Special Revenue Fund – Accounts for special assessment revenues levied, received, and expended for street maintenance provided to specific property owners.
Building Inspection Special Revenue Fund – This fund was established to account for all activity of enforcing the building regulations adopted by the City. It includes all the money and staff associated with executing any aspect of the code enforcement program. Section 50-60-101
MCA established the code enforcement program requirement.
SID Sinking Debt Service Fund – Accounts for the accumulation of resources and payment of special assessment debt principal and interest related to general improvement, sidewalk, and curb construction projects.
Proprietary Funds
Water Fund – Accounts for the City's water utility operations and to collect and administer water impact fees.
Waste Water Fund – Accounts for the City's sewer utility operations and to collect and administer waste water impact fees.
Solid Waste Fund – Accounts for the City’s garbage collection service and recycling operations. Use of Restricted/Unrestricted Net Position When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the City’s policy is to apply restricted
net position first.
DRAFT375
56 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash and Investments Cash and investments are under the management of the City's Treasurer and consist primarily of demand deposits and investments in U.S. Government Bonds. Interest income earned as a result of pooling of City deposits is distributed to the appropriate funds utilizing a formula based on the average balance of cash and investments of each fund.
Montana State statutes authorize the City to invest in interest-bearing savings accounts, certificates of deposits, and time deposits insured up to $250,000 by the Federal Deposit Insurance Corporation or fully collateralized, U.S. government and U.S. agency obligations and repurchase agreements where there is a master repurchase agreement and collateral held by a third party. Restricted Cash and Investments Certain proceeds of enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the Balance Sheet because their use is limited by applicable bond covenants. Impact fees collected and line-oversizing fees are restricted for applicable use. Payments in lieu of parking are restricted by code for future parking related capital projects. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Investments Fair Value The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The
hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets (these investments are valued using prices quoted in active markets); Level 2 inputs are significant other observable inputs (these investments are valued using matrix pricing); Level 3 inputs are significant unobservable inputs (these investments are valued using consensus pricing). Eliminations and Reclassifications In the process of aggregating data for the Statement of Net Position and the Statement of Activities, some amounts reported as inter-fund activity and balances in the funds have been eliminated or reclassified. Internal service fund activity has also been eliminated in the Statement of Activities to remove the “doubling-up” effect. DRAFT376
57 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Capital Assets The City’s assets are capitalized at historical cost or estimated historical cost. City policy has set the capitalization threshold for reporting capital assets at $10,000. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value. Depreciable capital assets are reported on the Statement of Net Position, net of applicable accumulated
depreciation. Capital assets, which are not depreciable such as land, and construction in progress are reported separately. Depreciation expense is
reported in the Statement of Activities and is calculated using the straight-line method based on the assets estimated useful life. Depreciation is recorded on a straight-line basis over the useful lives of the assets as follows:
Vehicles 5 to 10 years
Machinery and equipment 5 to 30 years
Buildings 20 to 80 years
Other structures and improvements 10 to 100 years
Infrastructure 25 to 100 years
In accordance with GASB 34, the City has recorded infrastructure assets prospectively from 2005, the date of implementation, and has included infrastructure acquired prior to implementation within the four-year required period. The City defines infrastructure as the basic physical assets that allow the City to function. These assets include the street system, comprised of roads, sidewalks, curbs, and street lights; the water purification and distribution system; the sewer collection and treatment system; park and recreation lands and related improvements; stormwater conveyance system;
and buildings and site amenities, including parking and landscaped areas.
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. Improvements are capitalized and depreciated over the remaining useful lives of the related capital assets, as applicable.
Compensated Absences Payable
Earned but unpaid vacation and sick pay is included as a liability in the proprietary fund types and Government-Wide Financial Statements. The portion relating to the governmental fund types not expected to be paid with expendable, and available resources is not reported in the governmental fund statements unless the liability has matured (i.e., unused reimbursable leave still outstanding following an employee's resignation or retirement). DRAFT377
58 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Inter-fund Receivables and Payables During the course of operations, numerous transactions occur between individual funds that may result in amounts owed between funds. Those short-term loans related to goods- and services-type transactions are classified as “due to and from other funds”. Long-term inter-fund loans (noncurrent portion) are reported as “advances to and from other funds”. Inter-fund receivables and payables between funds are eliminated in the
Statement of Net Position.
On-Behalf Payments for Fringe Benefits On-behalf payments for fringe benefits are direct payments made by one entity to a third-party recipient for the employees of another legally separate entity. On-behalf payments include pension plan contributions. The State's pension contribution is recorded as intergovernmental revenue with an
offsetting public safety or general government expenditure in the Pension Special Revenue Fund. (See Note 14)
Budgets Each year, the City Manager must submit to the City Commission a proposed operating budget for all budget units within the City for the fiscal year commencing July 1. This operating budget includes proposed expenditures and the means of financing them. Public hearings are conducted to
obtain citizen comments on the proposed budget. The budget is then legally adopted through passage of the appropriation resolution by the City
Commission. The City adopts a final budget each June and amends the budget in August if the initial taxable value estimates were significantly different from the final Certified Values received from the State.
Budgets are legally required for all governmental fund types. These budgets are prepared on the same basis and using the same accounting practices as are used to account and prepare financial reports for the funds. Budgets presented in this report for comparison to actual amounts are presented in accordance with GAAP. Annual appropriated budgets are adopted for all funds and all appropriations lapse at year-end. The level of budgetary control (that is the level at which expenditures cannot legally exceed the appropriated amount) is established at the fund level.
The City Commission may amend the budget during the course of the fiscal year. Montana state statute provides a number of different ways to amend the budget. The first involves a reallocation of existing appropriations among the line items within a specific fund. The second defines a
series of scenarios where the governing body has authority to amend the budget without a hearing for donations, land sales, and fee‐based budgets. All other increases in appropriation authority that are not specifically permitted by statute must be approved through a public hearing process. DRAFT378
59 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Budgets (Continued) Any accruing revenue of the municipality not appropriated and any balance at any time remaining after the purpose of an appropriation has been satisfied or abandoned, may from time to time be appropriated to other uses that do not conflict with any uses for which specifically the revenue was accrued. A public hearing is required for an overall increase in appropriation authority, except in the case of an emergency.
In its annual appropriation resolution, the City Commission delegated budget amendment authority to the City Manager for the expenditure of funds from any or all of the following: debt service funds, enterprise funds, internal service funds, trust funds, federal and state grants accepted and approved by the governing body, special assessments, and donations. In all other funds, the City Manager may, without approval from the City Commission, make budget amendments as long as the total appropriation for the department is not exceeded.
Spending control is established by the total amount of expenditures budgeted for the fund, but management may exercise control at budgetary line items. Fund Balance In accordance with GASB Statement 54, the City reports fund balance for governmental funds in two general classifications, nonspendable and
spendable. Nonspendable represents the portion of fund balance that is not in spendable form, such as inventories, and, in the general fund, long-term notes and loans receivable. Spendable fund balance is further categorized as restricted, committed, assigned, and unassigned.
The restricted fund balance category contains balances that can be spent only for the specific purposes stipulated by external parties or through enabling legislation. External parties include grantors, debt covenants, votes, and laws and regulations of other governments. The committed fund balance category includes amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority, the City Commission. The City Commission needs to formally adopt a Resolution in
order to establish, modify, or rescind a fund balance commitment. Amounts in the assigned fund balance classification are intended to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or committed. The City’s policy to authorize the assignment of fund balance is as follows: Assigned Fund Balance can be expressed and authorized directly by the City Commission or by an official to whom the Commission delegates the authority. The City
Commission delegates this authority to the City Manager. DRAFT379
60 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Fund Balance (Continued) On December 11, 2017, the Audit Committee accepted and approved the City Manager’s recommendation for the amount of General Fund balance presented on page 28 to be assigned this fiscal year for the specific purposes listed on page 23. Included in the assigned fund balance for the general fund are assignments for the portion of the current general fund balance that is projected to be used to fund expenditures and other cash outflows in
excess of the expected revenues and other cash inflows projected for the next fiscal year.
Similarly the City Manager exercised her delegated authority to assign the major Capital Projects Fund balances presented on pages 33 and 144 for the specific purposes listed on page 125.
Unassigned fund balance is the residual classification for the government’s general fund and includes all spendable amounts not contained in the
other classifications. In other funds, the unassigned classification should be used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned. When both restricted and unrestricted resources are available, spending will occur in the following order, for the identified fund types:
General Fund: Restricted, Committed, Assigned, Unassigned
Special Revenue Funds: Restricted, Committed, Assigned Debt Service Funds: Assigned, Committed, Restricted Capital Projects Funds: Restricted, Committed, Assigned
Minimum General Fund – Fund Balance The City does not maintain a stabilization fund. However, the City’s Charter requires an established minimum level of “General Fund Unreserved Fund Balance,” in accordance with the Government Finance Officers’ Association (GFOA) Best Practices. The GFOA significantly changed their Best Practice Recommendation in October 2009. As a result, in May 2010, the Commission increased the required minimum from 12% to 16 2/3%, or 2 months’ worth of revenues.
Net Position In funds other than governmental, net position represent the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction, or improvement of those assets. Net position is reported as restricted when there are limitations imposed on its use either through enabling legislation
or through external restrictions imposed by creditors, grantors, or laws and regulations of other governments.
DRAFT380
61 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 2. CASH AND INVESTMENTS
At June 30, 2017, the carrying amount of the City's deposits in local banks and investments is $87,396,169. Interest bearing account balances are covered by the Federal Depository Insurance Corporation (FDIC) up to $250,000 per bank, per depositor. In additional, all noninterest bearing transaction account balances are fully insured by FDIC coverage. The remaining balances are covered by collateral held by the pledging bank's agent in the City's name.
The City’s cash and investments are reported as follows:
Unrestricted Restricted Total
Governmental activities 38,421,121$ 17,023,823$ 55,444,944$
Business-type activities 19,508,152 11,671,783 31,179,935
Fiduciary funds 771,290 - 771,290
58,700,563$ 28,695,606$ 87,396,169$
Custodial credit risk for deposits is the risk that in the event of a financial institution failure, the City’s deposits may not be returned or the City will
not be able to recover the collateral securities in the possession of the outside party. The City minimizes custodial credit risk by restrictions set forth in City policy and state law. The City’s policy requires deposits to be 104 percent secured by collateral valued at market value. The City Treasurer maintains a listing of financial institutions, which are approved for investment purposes. Types of securities that may be pledged as collateral are detailed in Section 17-6-103 of the Montana Code Annotated (MCA). City policy requires that specific safeguards against risk of loss be evidenced
when the City does not physically hold the securities.
On June 30, 2017, the following interest rate risks and valuation inputs were associated with the City’s deposits and investments.
Credit Risk
Investment Maturities Rating Fair Value Valuation Inputs
Certificates of deposit
August 2016-April
2018 NA 8,926,021$ Level 2
U.S. Government bonds November 2016-June
2021 S&P AA+59,700,000 Level 2
U.S. Bank Municipal Investor Account N/A N/A 216,687 Level 2
State of Montana Short Term Investment Pool Account N/A N/A 16,000,000
Demand deposits N/A N/A 2,548,234
Petty cash N/A N/A 5,227
87,396,169$ DRAFT381
62 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 2. CASH AND INVESTMENTS (CONTINUED)
Credit risk is defined as the risk that an issuer or other counterpart to an investments will not fulfill its obligation. The above credit risk rating indicates the probability that the issuer may default in making timely principal and interest payments. The credit ratings presented in the previous tables are provided by Standard and Poor’s Corporation (S&P). The City’s investment policy is to hold investments to maturity with the contractual understanding that these investments are low risk, locked in to a guaranteed rate of return, and are, therefore, not impacted significantly by changes
in short term interest rates. The City has no formal policy relating to interest risk and no formal policy relating to credit risk.
The City voluntarily participates in the STIP (Short Term Investment Pool) administered by the Montana Board of Investments (MBOI). A local government’s STIP ownership is represented by shares, the prices of which are fixed at $1.00 per share, and participants may buy or sell shares with one business days’ notice. STIP administrative expenses are charged daily against the STIP income, which is distributed on the first calendar day of
each month. Shareholders have the option to automatically reinvest their distribution income in additional shares. STIP is not registered with the
Securities and Exchange Commission. STIP is not FDIC insured or otherwise insured or guaranteed by the federal government, the State of Montana, the Montana Board of Investments or any other entity against investment losses and there is no guaranteed rate of return on funds invested in STIP shares. The Montana Board of Investments maintains a reserve fund to offset possible losses and limit fluctuations in STIP’s valuation. The STIP investment portfolio consists of securities with maximum maturity of 2 years. Information on investments held in the STIP can be found in the
Annual Report on the Montana Board of Investments website at http://investment.com/AnnualReportsAudits.
NOTE 3. PROPERTY TAX AND SPECIAL ASSESSMENTS REVENUE AND RECEIVABLES
Property Taxes
Real property taxes are assessed and collected each fiscal year according to the following property tax calendar:
Lien Date: December 1 for the 1st installment and June 1 for the 2nd installment
Levy Date: November 1
Due Dates: November 30th for the 1st installment and May 31 for the 2nd installment
Personal property taxes are assessed on January 1 of each year and billed in May, with payment due within thirty days.
Gallatin County collects all property taxes on behalf of the City and remits collections, including penalties and interest, on a monthly basis. The County assesses a delinquency penalty of 2%. If taxes become delinquent, the County tax collector may sell the property to collect taxes due plus 0.83% per month interest.
DRAFT382
63 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 3. PROPERTY TAX AND SPECIAL ASSESSMENTS REVENUE AND RECEIVABLES (CONTINUED)
Property Taxes (continued)
In the fund financial statements, the City accrues as receivable all property taxes received during the first sixty (60) days of the new fiscal year from Gallatin County, in accordance with the modified accrual basis. In the government-wide financial statements, all taxes billed, but not yet collected are accrued in accordance with the full accrual basis of accounting, as described in Note 1. Special Assessments
Special assessments receivable represent the uncollected amounts levied against benefited property for the cost of local improvements. Assessments are payable over a period of 18 to 20 years and bear interest of 2.5% to 5.75% per annum. Recognition of the revenues from these assessments has been deferred until both measurable and available in governmental funds. In the Government-Wide Financial Statements, however, these amounts are reported as revenues in the period they are levied. Once received, the monies will be used to meet the annual debt service requirements on related bonds and notes payable.
NOTE 4. DEFERRED INFLOWS AND OUTFLOWS OF RESOURCES Deferred inflows of resources in the General Fund represent outstanding general property taxes at June 30, 2017. These amounts are reported as revenue in the Government-Wide Financial Statements in the period in which they are levied. Deferred inflows in Special Revenue Funds represent
either revenues received but not considered earned or amounts to be received in the future that are recorded as receivables but not yet earned. The deferred inflows in Debt Service Funds represent future assessments to be received to meet the related debt obligation. Deferred inflows and outflows in the Government-Wide Financial Statements relate to payments made on pension plans after the measurement date for the calculated pension obligations. Deferred outflows in the Government-Wide Financial Statements also relate to payments that are to be made in the future for an interlocal agreement with Gallatin County for the purchase of radios.
NOTE 5. PREPAID RENT (OPERATING LEASE)
On October 22, 1992, the City signed a memorandum of understanding with Gallatin County, Montana, in which the City agreed to lease space from
the County's Law and Justice Center for the City Police Department and Municipal Court. The City paid to the County $765,000 during the renovation of the building, which started 1993. The $765,000 constitutes rent for four rental terms of ten years each. During the term of the lease and renewal of the lease, the principal balance of $765,000 will be decreased by equal annual rental payments in the amount of $19,125. If the City and County mutually agree to terminate the lease after the second ten-year term, the County will refund $369,750, to the City for the unused portion
of the rent. The lease began when renovations were complete on November 1, 1994. For the year ended June 30, 2017, rent expenditure was
$19,125 regarding this lease. DRAFT383
64 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 6. NOTES RECEIVABLE The City had the following notes receivable:
Special Revenue Funds
Economic Development Loan Fund 491,531$
Community Housing Fund 69,065
Housing Revolving Loan Fund 2,093
Enterprise Funds
Parking Fund 9,442 NOTE 7. CAPITAL ASSETS
In accordance with GASB 34, the City has reported all capital assets, with the exception of pre-July 1, 2001, infrastructure in the Government-Wide Statement of Net Position. For the year ended June 30, 2017, depreciation expense on capital assets was charged to the functions and programs as follows:
Governmental Activities:
General Government 280,930$
Public Safety 551,125
Public Services 3,024,971
Public Welfare 792,468
Total depreciation expense - governmental activities 4,649,494$
Business-type Activities:
Parking 291,152$
Storm Water 90,331
Water 2,660,343
Waste Water 2,549,046
Solid Waste 295,214
Total depreciation expense - business-type activities 5,886,086$
DRAFT384
65 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 7. CAPITAL ASSETS (CONTINUED)
All capital assets of the City are depreciable with the exception of land, and construction in process, when applicable. Capital assets activity of the City for the year ended June 30, 2017, consisted of the following:
June 30, 2016 Additions Disposals Transfers June 30, 2017
GOVERNMENTAL ACTIVITIES
Non-depreciable:
Land 17,632,907$ 1,880,792$ -$ -$ 19,513,699$
Depreciable:
Buildings 32,568,658 165,075 - - 32,733,733
Other structures and improvements 1,148,427 - (3,212) - 1,145,215
Machinery and equipment 11,745,794 1,040,480 (278,222) - 12,508,052
Property under capital lease 435,737 82,877 - - 518,614
Vehicles 3,538,373 342,266 (217,061) (8,021) 3,655,557
Infrastructure 158,948,020 11,615,139 (188,736) - 170,374,423
Total 226,017,916 15,126,629 (687,231) (8,021) 240,449,293
Accumulated depreciation (99,873,476) (4,649,494) 571,964 8,021 (103,942,985)
Total governmental activities 126,144,440$ 10,477,135$ (115,267)$ -$ 136,506,308$
BUSINESS-TYPE ACTIVITIES
Non-depreciable:
Land 4,942,539$ 806,338$ (3,554,885)$ -$ 2,193,992$
Water rights 2,120,142 - - - 2,120,142
Depreciable:
Buildings 112,991,696 321,608 (131,202) - 113,182,102
Other structures and improvements 30,808,133 - (260,522) - 30,547,611
Machinery and equipment 8,125,499 983,633 (5,000) - 9,104,132
Property under capital lease 519,943 - - - 519,943
Vehicles 1,992,472 189,669 (48,822) 8,021 2,141,340
Infrastructure 280,353,557 13,231,876 - - 293,585,433
Total 441,853,981 15,533,124 (4,000,431) 8,021 453,394,695
Accumulated depreciation (184,613,450) (5,886,086) 385,221 (8,021) (190,122,336)
Total business-type activities 257,240,531$ 9,647,038$ (3,615,210)$ -$ 263,272,359$
Total capital assets 383,384,971$ 20,124,173$ (3,730,477)$ -$ 399,778,667$
DRAFT385
66 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 7. CAPITAL ASSETS (CONTINUED) Changes in accumulated depreciation are as follows for the year ended June 30, 2017:
June 30, 2016 Additions Disposals Transfers June 30, 2017
GOVERNMENTAL ACTIVITIES
Buildings (15,134,223)$ (840,090)$ -$ -$ (15,974,313)$
Other structures and improvements (1,045,503) (22,238) 3,212 - (1,064,529)
Machinery and equipment (8,276,090) (570,647) 273,730 - (8,573,007)
Property under capital lease (83,766) (36,286) - - (120,052)
Vehicles (2,728,384) (244,522) 217,061 8,021 (2,747,824)
Infrastructure (72,605,510) (2,935,711) 77,961 - (75,463,260)
Total governmental activities (99,873,476)$ (4,649,494)$ 571,964$ 8,021$ (103,942,985)$
BUSINESS-TYPE ACTIVITIES
Buildings (14,176,917)$ (2,369,331)$ 75,377$ -$ (16,470,871)$
Other structures and improvements (27,773,059) (451,909) 260,522 - (27,964,446)
Machinery and equipment (6,125,190) (486,741) 500 - (6,611,431)
Property under capital lease (4,103) (35,858) 48,822 - 8,861
Vehicles (1,874,975) (51,994) - (8,021) (1,934,990)
Infrastructure (134,659,206) (2,490,253) - - (137,149,459)
Total business-type activities (184,613,450) (5,886,086) 385,221 (8,021) (190,122,336)
Total accumulated depreciation (284,486,926)$ (10,535,580)$ 957,185$ -$ (294,065,321)$ NOTE 8. COMPENSATED ABSENCES The City’s policy relating to compensated absences is described in Note 1. The current portion is that which is expected to be paid within one year. This amount is estimated based on past trends and expected upcoming events. Actual amounts could differ. Historically, compensated absences and pension liabilities have been liquidated primarily by the general fund and the proprietary funds. DRAFT386
67 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 8. COMPENSATED ABSENCES (CONTINUED)
Balance Balance
June 30, 2016 Incurred Satisfied June 30, 2017
Compensated absences:
Governmental activities 1,753,729$ 1,298,463$ (1,341,929)$ 1,710,263$
Business-type activities 599,960 265,905 (350,284) 515,581
Total compensated absences 2,353,689$ 1,564,368$ (1,692,213)$ 2,225,844$
Due within Due after
one year one year Total
Compensated absences:
Governmental activities 1,341,900$ 368,363$ 1,710,263$
Business-type activities 345,854 169,727 515,581
Total compensated absences 1,687,754$ 538,090$ 2,225,844$ NOTE 9. LONG-TERM DEBT
Governmental Activities Long-Term Debt The following is a summary of long-term debt transactions of the City’s governmental activities for the year ended June 30, 2017:
Balance Issuances and Repayments Balance
June 30, 2016 Additions and Deletions June 30, 2017
General obligation bonds 15,570,000$ -$ (860,000)$ 14,710,000$
Tax increment financing bonds 4,630,000 - (205,000) 4,425,000
Special assessment debt 662,500 - (161,500) 501,000
Intercap notes payable 884,844 151,825 (134,169) 902,500
Subtotal bonds and notes 21,747,344 151,825 (1,360,669) 20,538,500
Bond premiums 248,967 (13,458) 235,509
Compensated absences 1,753,729 1,298,463 (1,341,929) 1,710,263
Other post employment benefits liability 1,782,516 121,734 - 1,904,250
Net pension liability 15,993,057 3,393,413 - 19,386,470
Totals 41,525,613$ 4,965,435$ (2,716,056)$ 43,774,992$ DRAFT387
68 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 9. LONG-TERM DEBT (CONTINUED)
Governmental Activities Long-Term Debt (Continued) The above long-term debt of the City’s governmental activities is presented in the accompanying Statement of Net Position as follows:
Long-term
Current Portion Portion
(due within (due after Total
one year) one year)Long-Term Debt
General obligation bonds 875,000$ 13,835,000$ 14,710,000$
Tax increment financing bonds 210,000 4,215,000 4,425,000
Special assessment debt 30,000 471,000 501,000
Intercap notes payable 139,676 762,824 902,500
Bond premiums 13,458 222,051 235,509
Subtotal bonds and notes 1,268,134 19,505,875 20,774,009
Compensated absences 1,341,900 368,363 1,710,263
Other post employment benefits liability - 1,904,250 1,904,250
Net pension liability - 19,386,470 19,386,470
Totals 2,610,034$ 41,164,958$ 43,774,992$ General Obligation Bonds - The City issues general obligation bonds to provide funds for the acquisition and construction of major capital assets. General obligation bonds are direct obligations of the City and are backed by the full faith and credit of the City. General obligation bonds currently outstanding are as follows:
Due within
Interest Rate Amount one year
General Obligation Refunding Bonds, series 2012
serial maturities through 2021 1.50% 1,050,000$ 255,000$
General Obligation TOP Bonds, Series 2013
serial maturities through 2034 2.00% 8,875,000 410,000
General Obligation TOP Bonds, Series 2014
serial maturities through 2035 1.00% 4,785,000 210,000
Total general obligations bonds 14,710,000$ 875,000$ DRAFT388
69 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 9. LONG-TERM DEBT (CONTINUED)
Governmental Activities Long-Term Debt (Continued) Annual debt service requirements to maturity for general obligation bonds are as follows:
Principal Interest Total
Year ending June 30,
2018 875,000$ 481,538$ 1,356,538$
2019 895,000 464,038 1,359,038
2020 910,000 446,138 1,356,138
2021 925,000 426,863 1,351,863
2022 675,000 406,188 1,081,188
2023-2027 3,670,000 1,736,250 5,406,250
2028-2032 4,395,000 1,014,400 5,409,400
2033-2035 2,365,000 164,000 2,529,000
14,710,000$ 5,139,415$ 19,849,415$
Tax Increment Financing Bonds - Tax Increment Financing (TIF) Bonds are not general obligations, but are special limited obligations of the City.
The Series 2007 Bonds, the premium, and the interest thereon are not a charge against the general credit or taxing powers of the City. The bonds are payable solely, and equally and ratably from the tax increment revenues received by the City from its Downtown Bozeman Improvement District. If the incremental revenues are insufficient to pay the principal and interest due on the TIF bonds when due, such payment shortfall shall not constitute a default under the TIF agreement. If and when the incremental revenues are sufficient, the City shall pay the amount of any shortfall to
the paying agent and registrar without any penalty interest or premium thereon. Due to the uncertainty of the future tax increment receipts, future
payments on the TIF bonds may vary from the summary of debt service requirements. Annual debt services requirements to maturity for the TIF bonds are as follows:
Principal Interest Total
Year ending June 30,
2018 210,000$ 212,288$ 422,288$
2019 220,000 203,573 423,573
2020 230,000 194,222 424,222
2021 240,000 184,103 424,103
2022 250,000 173,303 423,303
2023-2027 1,440,000 676,973 2,116,973
2028-2032 1,835,000 284,335 2,119,335
4,425,000$ 1,928,797$ 6,353,797$ DRAFT389
70 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 9. LONG-TERM DEBT (CONTINUED)
Governmental Activities Long-Term Debt (Continued) Special Assessment Debt - Special assessment bonds are payable from the collection of special assessments levied against benefited property owners within each special improvement district. To the extent that such special assessment collections are not sufficient to make the required debt service payments, the City is obligated to levy and collect a general property tax on all taxable property in the City to provide additional funding for the debt service payments. The cash balance in the SID Revolving Fund must equal at least 5% of the principal amount of bonds outstanding. If the
cash balance is less than 5%, a levy is required to bring the cash balance to the required minimum. The City has issued various special assessment bonds with various maturities through 2025 at interest rates ranging from 2.5% to 5.75%. In addition, the City has issued two notes payable to finance special assessment projects. The following is a schedule of changes in special assessment debt:
Balance Balance
June 30, 2016 Issuances Repayments June 30, 2017
Special assessment bonds 405,000$ -$ (135,000)$ 270,000$
Note Payable to Department of Natural
Resources and Conservation, #WRF-05067 54,500 - - 54,500
Note Payable to Department of Natural
Resources and Conservation, #SRF-05132 203,000 - (26,500) 176,500
662,500$ -$ (161,500)$ 501,000$ Annual debt service requirements to maturity for special assessment notes payable are as follows:
Notes Payable
Principal Interest Total
Year ending June 30,
2018 30,000$ 4,470$ 34,470$
2019 29,500 3,875 33,375
2020 32,000 3,270 35,270
2021 32,000 2,630 34,630
2022 34,000 1,980 35,980
2023-2024 73,500 1,885 75,385
231,000$ 18,110$ 249,110$ DRAFT390
71 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 9. LONG-TERM DEBT (CONTINUED)
Governmental Activities Long-Term Debt (Continued) Annual debt service requirements to maturity for special assessment bonds are as follows:
Special
Assessment
Bonds
Year ending June 30,
2018 -$
2019 65,000
2020 65,000
2021 -
2022 -
2023-2024 140,000
270,000$ Substantially all special assessment bonds mature 18 to 20 years after the date of issuance but are redeemable at the option of the City whenever
cash is available in the respective funds for each issue. The City follows the policy of early redemption on these bonds. Accordingly, a schedule
of future interest payments through maturity of the bonds is deemed to be not meaningful and has been excluded. The net revenues of the water fund have been pledged as collateral to secure the debt service related to SID 665. This collateral is subordinate to commitments made prior to July 12, 1993, to pledge this collateral as a guarantee of the payment of other debt. In the event that the resources
available to service debt related to SID 665 are insufficient, the City shall transfer amounts from the water fund to satisfy this obligation. The
District will be under no obligation to reimburse the water fund for any such transfer. At this time, the City does not anticipate the need to make any such transfers. Intercap Loans – The City entered in a loan agreement with the Montana Board of Investments to partially finance the reconstruction of South Eight
Avenue. This intercap loan payable had a balance outstanding at June 30, 2017, as follows:
Due within Due after
one year one year Total
Note payable to Montana Board of Investments in uneven semi-annual
installments including interest at variable rates, as set by MBOI, up to 1.5% through August 2022 139,676$ 762,824$ 902,500$ DRAFT391
72 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 9. LONG-TERM DEBT (CONTINUED)
Governmental Activities Long-Term Debt (Continued) The debt service requirements for the intercap loan at June 30, 2017, are as follows:
Principal Interest Total
Year ending June 30,
2018 139,676$ 25,118$ 164,794$
2019 141,138 16,635 157,773
2020 142,616 12,781 155,397
2021 144,109 8,889 152,998
2022 145,619 4,958 150,577
2022-2027 137,221 992 138,213
2028-2031 52,121 - 52,121
902,500$ 69,373$ 971,873$ Business-type Activities Long-Term Debt Revenue Bonds - The City also issues bonds where the City pledges income derived from the acquired or constructed assets to pay debt service.
Water Revenue Bonds Water revenue bonds outstanding at June 30, 2017, are as follows:
Balance Repayments Balance Long-Term
June 30, 2016 Issuances and Settlements June 30, 2017 Due in One Year Portion
State Revolving Fund Revenue Bond - 12247
Series 2011A, serial maturities through 2032, 3% interest rate $ 8,283,000 $ - $ (427,000) $ 7,856,000 $ 440,000 7,416,000$
State Revolving Fund Revenue Bond - 13291
Series 2011B, serial maturities through 2032, 3% interest rate 8,284,000 - (380,000) 7,904,000 407,000 7,497,000
16,567,000$ -$ (807,000)$ 15,760,000$ 847,000$ 14,913,000$ The revenue bond ordinances specifies that the City shall establish various restricted asset accounts and distribute the net revenues for the water
fund to the restricted asset accounts and set user rates at levels which will generate minimum net revenues, as defined. The revenue bond ordinances
specify that City management and/or the City Commission shall take corrective actions to bring the City into compliance with the revenue bond ordinances, if necessary, and that bondholders shall have the right to institute proceedings, judicial or otherwise, to enforce the covenants of the revenue bond ordinances. The City is in compliance with applicable covenants as of June 30, 2017. DRAFT392
73 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 9. LONG-TERM DEBT (CONTINUED)
Business-type Activities Long-Term Debt (Continued) Water revenue bond debt service requirements to maturity are as follows:
Principal Interest Total
Year ending June 30,
2018 847,000$ 310,700$ 1,157,700$
2019 872,000 293,630 1,165,630
2020 898,000 276,060 1,174,060
2021 926,000 257,960 1,183,960
2022 954,000 239,310 1,193,310
2023-2027 5,218,000 896,430 6,114,430
2028-2032 6,045,000 341,140 6,386,140
15,760,000$ 2,615,230$ 18,375,230$
Due within one year $ 847,000
Due after one year 14,913,000
15,760,000$
The revenue bond ordinance specifies that the City shall establish various restricted asset accounts and distribute the net revenues for the water fund
to the restricted asset accounts and set user rates at levels that will generate minimum net revenues, as defined. The revenue bond ordinances specify that City management and/or the City Commission shall take corrective actions to bring the City into compliance with the revenue bond ordinances, if necessary, and that bondholder shall have the right to institute proceedings, judicial or otherwise, to enforce the covenants of the revenue bond ordinances. The City is in compliance with applicable covenants as of June 30, 2017.
DRAFT393
74 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 9. LONG-TERM DEBT (CONTINUED)
Business-type Activities Long-Term Debt (Continued)
Waste Water Revenue Bonds Waste Water revenue bonds outstanding at June 30, 2017, are as follows:
Balance Repayments Balance Long-Term
Interest Rate June 30, 2016 and Settlements June 30, 2017 Due in One Year Portion
Waste Water State Revolving -10252
Series 2010B, serial maturities through 2030 1.75% $ 256,000 $ (17,000) $ 239,000 18,000$ 221,000$
Waste Water Reclamation Facility Revenue Bonds - 10230,
Series 2010D, serial maturities through 2030 3.00% 7,086,000 (433,000) 6,653,000 446,000 6,207,000
Waste Water Reclamation Facility Revenue Bonds - 10262,
Series 2010F, serial maturities through 2030 3.00% 625,000 (36,000) 589,000 38,000 551,000
Waste Water Reclamation Facility Revenue Bonds ARRA A- 10261,
Series 2010E, serial maturities through 2030 0.00% 384,000 - 384,000 - 384,000
Waste Water Reclamation Facility Revenue Bonds - 11291,
Series 2010C, serial maturities through 2031 3.00% 765,000 (43,000) 722,000 44,000 678,000
Waste Water Reclamation Facility Revenue Bonds - 11292,
Series 2010G, serial maturities through 2031 3.00% 2,309,565 (125,565) 2,184,000 130,000 2,054,000
Waste Water Reclamation Facility Revenue Bonds - 11281
Series 2010H, serial maturities through 2031 3.00%7,505,000 (420,000) 7,085,000 433,000 6,652,000
18,930,565$ (1,074,565)$ 17,856,000$ 1,109,000$ 16,747,000$ DRAFT394
75 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 9. LONG-TERM DEBT (CONTINUED)
Business-type Activities Long-Term Debt (Continued)
Waste Water Revenue Bonds (Continued) Waste water revenue bond debt service requirements to maturity are as follows:
Principal Interest Total
Year ending June 30,
2018 1,109,000$ 358,184$ 1,467,184$
2019 1,141,000 335,059 1,476,059
2020 1,175,000 311,224 1,486,224
2021 1,211,000 286,669 1,497,669
2022 1,249,000 261,354 1,510,354
2023-2027 6,854,000 897,889 7,751,889
2028-2031 5,117,000 157,016 5,274,016
17,856,000$ 2,607,395$ 20,463,395$
Due within one year $ 1,109,000
Due after one year 16,747,000
17,856,000$
Stormwater Revenue Bonds Waste Water revenue bonds outstanding at June 30, 2017, are as follows. No debt service schedule has been established, as there has only been one draw-down from the total approved amount of $1,815,000.
Balance Repayments Balance Long-Term
Interest Rate June 30, 2016 Issuances and Settlements June 30, 2016 Due in One Year Portion
Stormwater System Revenue Bond, Series 2015 2.00% $ 1,440,430 $ - $ (73,000) $ 1,367,430 75,000$ 1,292,430$
DRAFT395
76 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 9. LONG-TERM DEBT (CONTINUED)
Industrial Revenue and Private Activity Bonds The City issues tax exempt industrial revenue and private activity bonds to finance construction of facilities within the City, which it sells on installment contracts to the facilities' users. The bonds and the interest payable thereon are not obligations of the City and do not constitute or give rise to a pecuniary liability or contingent liability of the City or a charge against the general credit or taxing power of the City. The bonds are issued
under and collateralized by the indentures and are payable solely from the payments to be made pursuant to the loan agreements between the City
and the facilities users. The bonds are not a lien on any of the City’s properties or revenues, other than the facilities for which they were issued. To provide financial assistance for the acquisition and improvements of the building occupied by a private elementary school, the City has issued a Private Activity Revenue Bond. This bond is secured by the property financed and is payable solely from payments received on the underlying
mortgage loan. Upon repayment of the bond, ownership of the acquired facility transfers to the private-sector entity served by the bond issuance.
Neither the City nor any political subdivision thereof is obligated in any manner for repayment of the bond. Accordingly, the bond is not reported as a liability in the accompanying financial statements. As of June 30, 2017, the Revenue Bond outstanding had an aggregate principal amount payable of $250,941.
NOTE 10. CAPITAL LEASE OBLIGATIONS On April 30, 2012, the City entered into a lease for an Elgin street sweeper. The lease term is five years payable in annual installments of $33,495 at 3.3%. The total amount capitalized of $185,530 represents the present value of the future lease payments. The payments for this obligation are
being recorded in the street maintenance fund.
In 2014, the City entered into a lease for a motor grader with Caterpillar. The lease term is 6 years payable in annual installments of $27,500 at 3.25%. The total amount capitalized of $234,300 represents the present value of the future lease payments. The payments for this obligation are being recorded in the street maintenance fund.
In 2015, the City entered into a lease for a copier. The lease term is 5 years payable in monthly installments of $300. The total amount capitalized of $15,907 represents the present value of the future lease payments. The payments for this obligation are being recorded in the general fund. DRAFT396
77 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 10. CAPITAL LEASE OBLIGATIONS (CONTINUED)
In 2015, the City entered into a lease for an Elgin street sweeper. The lease term is five years payable in annual installments of $27,525 at 3.25%. The total amount capitalized of $152,570 represents the present value of the future lease payments. The payments for this obligation are being recorded in the stormwater fund.
In 2015, the City entered into a lease for a Vactor vacuum truck. The lease term is six years payable in annual installments of $57,810 at 3.30%.
The total amount capitalized of $367,373 represents the present value of the future lease payments. The payments for this obligation are being recorded in the stormwater fund. In 2016, City entered into a lease for a RPMTECH Snow Blower with Caterpillar. The lease term is six years payable in six annual installments of
$13,933 and one payment of $6,640 at 3.20%. The total amount capitalized of $82,877 represents the present value of the future lease payments.
The payments for this obligation are being recorded in the street maintenance fund. The capital lease balance outstanding at June 30, 2017, is as follows:
Balance Balance
June 30, 2016 Issuances Repayments June 30, 2017
Governmental Activities:
2012 Street Sweeper $ 32,421 $ - $ (32,421) $ -
Caterpillar 2014 204,418 - (12,539) 191,879
Savin Copier 2015 12,662 - (2,993) 9,669
Snow Blower 2016 - 82,877 (13,933) 68,944
$ 249,501 $ 82,877 $ (61,886) $ 270,492
Business-Type Activities:
2015 Street Sweeper $ 101,624 -$ $ (24,183) $ 77,441
2015 Vactor Vacuum Truck 262,125 - (49,028) 213,097
$ 363,749 -$ $ (73,211) $ 290,538
DRAFT397
78 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 10. CAPITAL LEASE OBLIGATIONS (CONTINUED)
The following is a schedule, by year, of future minimum lease payments under capital leases, together with the present value of minimum lease payments at June 30, 2017:
Governmental Business-Type
Activities Activities
Year ending June 30,
2018 $ 35,343 $ 85,345
2019 35,344 85,345
2020 187,065 85,345
2021 13,933 57,812
2022 13,933 -
2023 6,640 -
Less amount representing interest (21,766) (23,309)
Present value of future minimum lease payments 270,492$ 290,538$ The property under capital lease and the corresponding accumulated depreciation at June 30, 2017, is as follows:
Governmental Business-Type
Activities Activities
Machinery and equipment 518,613$ 519,943$
Less: accumulated depreciation (120,051) (129,986)
398,562$ 389,957$
DRAFT398
79 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 11. CLASSIFICATION OF NET POSITION
In the Government-Wide Financial Statements, net position are classified in the following categories:
Net Investment in Capital Assets – This category groups all capital assets, including infrastructure in future years, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of these assets reduce this category.
Restricted Net Position – This category represents external restrictions imposed by creditors, grantors, contributors, or laws or
regulations of other governments, and restrictions imposed by law through constitutional provision or enabling legislation. Net Position is presented as restricted by major purpose.
Unrestricted Net Position – This category represents the net position of the City that are not restricted for any project or other purpose.
In the Fund Financial Statements, commitments and assignments segregate portions of fund balance that are either not available or have been
earmarked for specific purposes. The various commitments and assignments are established by actions of the City Commission and Management and can be increased, reduced, or eliminated by similar actions. Refer to Note 25 for a further disclosure related to net position classifications.
NOTE 12. DEFICIT FUND BALANCES At June 30, 2017, the following fund had a deficit fund balance: Solid Waste fund ($356,187).
The deficit fund balance in the Solid Waste fund is due to the sale of city-owned property known as the Mandeville Farm for a $2,042,391 loss.
NOTE 13. DEFERRED COMPENSATION PLAN
The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available
to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. In accordance with GASB Statement No. 32, the City does not report any balances related to the deferred compensation plan, as these amounts
represent neither assets nor liabilities to the City, and the plan is administered by an independent third party. DRAFT399
80 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS
Plan Description and Provisions All City of Bozeman full-time employees participate in one of three statewide, cost-sharing, multiple-employer, retirement benefit plans administered
by the Public Employees Retirement Division (PERD). Contributions to the three plans are as required by State statute. Fiscal years 2017 and 2016 total payroll and covered payroll for all retirement plans were $22,299,750 and $21,125,419, respectively. Financial information for all three plans is reported in the Public Employees' Retirement Board's published Comprehensive Annual Financial Report for the fiscal year-end. It is available from the PERD at 100 North Park Avenue, Suite 220, P.O. Box 200131, Helena, MT 59620-0131. The authority to establish, amend, and provide
cost of living adjustments to all three plans is assigned to the State legislature. The authority to establish and amend contribution rates to all three
plans is also assigned to the State legislature. Public Employees' Retirement System (PERS) Plan Description
The PERS-Defined Benefit Retirement Plan (DBRP), administered by the Montana Public Employee Retirement Administration (MPERA), is a multiple-employer, cost-sharing plan established July 1, 1945, and governed by Title 19, chapters 2 & 3, Montana Code Annotated (MCA). This plan covers the State, local governments, certain employees of the Montana University System, and school districts.
All new members are initially members of the PERS-DBRP and have a 12-month window during which they may choose to remain in the PERS-
DBRP or join the PERS-DCRP by filing an irrevocable election. Members may not be members of both the defined contribution and defined benefit retirement plans. All new members from the universities also have a third option to join the university system’s Montana University System Retirement Program (MUS-RP).
The PERS-DBRP provides retirement, disability, and death benefits to plan members and their beneficiaries. Benefits are established by state law
and can only be amended by the Legislature.
DRAFT400
81 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS)
Summary of Benefits
Eligibility for benefit Service retirement: Hired prior to July 1, 2011: Age 60, 5 years of membership service; Age 65, regardless of membership service; or
Any age, 30 years of membership service.
Hired on or after July 1, 2011: Age 65, 5 years of membership services; Age 70, regardless of membership service. Early Retirement Early retirement, actuarially reduced:
Hired prior to July 1, 2011: Age 50, 5 years of membership service; or Any age, 25 years of membership service.
Hired on or after July 1, 2011: Age 55, 5 years of membership service. Vesting 5 years of membership service
Member’s highest average compensation (HAC) Hired prior to July 1, 2011 – highest average compensation during any consecutive 36 months; Hired on or after July 1, 2011 – highest average compensation during any consecutive 60 months; Compensation Cap Hired on or after July 1, 2013 – 110% annual cap on compensation considered as a part of member’s highest average compensation.
Monthly benefit formula Members hired prior to July 1, 2011:
• Less than 25 years of membership service: 1.785% of HAC per year of service credit;
• 25 years of membership service or more: 2% of HAC per year of service credit. DRAFT401
82 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
Summary of Benefits (Continued)
Members hired on or after July 1, 2011:
• Less than 10 years of membership service: 1.5% of HAC per year of service credit;
• 10 years or more, but less than 30 years of membership service: 1.785% of HAC per year of service credit; 30 years or more of membership service: 2% of HAC per year of service credit. Guaranteed Annual Benefit Adjustment (GABA)* After the member has completed 12 full months of retirement, the member's benefit increases by the applicable percentage (provided below) each January, inclusive of other adjustments to the member's benefit.
• 3% for members hired prior to July 1, 2007
• 1.5% for members hired on or after July 1, 2007
• Members hired on or after July 1, 2013: (a) 1.5 for each year PERS is funded at or above 90%; (b) 1.5% is reduced by 0.1% for each 2% PERS is funded below 90%; and (c) 0% whenever the amortization period for PERS is 40 years or more.
DRAFT402
83 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Public Employees' Retirement System (PERS) (Continued)
Overview of Contributions Member and employer contribution rates are specified by state law and are a percentage of the member’s compensation. Contributions are deducted from each member’s salary and remitted by participating employers. The Montana legislature has the authority to establish and amend contribution
rates to the plan. Member and employer contribution rates are shown in the table below.
1. Member contributions to the system of 7.9% of member’s compensation are temporary and will be decreased to 6.9% on January 1 following actuary valuation results that show the amortization period has dropped below 25 years and would remain below 25 years following the reduction of both the additional employer and additional member contribution rates.
2. Employer contributions to the system:
a. Effective July 1, 2014, following the 2013 Legislative Session, PERS-employer contributions increase an additional 0.1% a year and
will continue over 10 years through 2024. The additional employer contributions including the 0.27% added in 2007 and 2009, will terminate on January 1 following an actuary valuation that shows the amortization period of the PERS-DBRP has dropped below 25 years and remains below the 25 years following the reduction of both the additional employer and member contributions rates. DRAFT403
84 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Public Employees' Retirement System (PERS) (Continued)
Overview of Contributions (Continued) b. Effective July 1, 2013, employers are required to make contributions on working retirees’ compensation. Member contributions for
working retirees are not required.
c. The Plan Choice Rate (PCR), that directed a portion of employer contributions for DC member to the PERS defined benefit plan, are
included in the employers reporting. The PCR was paid off effective March 2016 and the contributions previously directed to the PCR
are now directed to member accounts.
3. Non Employer Contributions
a. Special Funding
i. The State contributes 0.1% of members’ compensation on behalf of local government entities.
ii. The State contributes 0.37% of members’ compensation on behalf of school district entities. b. Not Special Funding i. The State contributes a portion of Coal Severance Tax income and earnings from the Coal Trust Permanent Trust Fund
Stand-Alone Statements
The financial statements of the Montana Public Employees Retirement Board (PERB) Comprehensive Annual Financial Report (CAFR) and the GASB 68 Report disclose the Plan’s fiduciary net position. The reports are available from the PERB at PO Box 200131, Helena, MT 59620-0131, (406) 444-3154 or the MPERA website at http://mpera.mt.gov/index.shtml.
DRAFT404
85 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
Actuarial Assumptions The total pension liability (TPL) used to calculate the net pension liability (NPL) was determined by taking the results of the June 30, 2015, actuarial valuation and applying standard roll forward procedures to update the TPL to June 30, 2016. There were several significant assumptions and other inputs used to measure the total pension liability. The actuarial assumptions used in the June 30, 2016, valuation were based on the results of the last actuarial experience study, dated June 2010, for the six-year period July 1, 2003 to June 30, 2009. Among those assumptions were the following:
• Investment Return (net of admin expense) 7.75%
• Admin expense as a % of payroll 0.27%
• General Wage Growth* 4.00%
• *includes Inflation at 3.00%
• Merit Increases 0% to 6%
• Postretirement Benefit Increases
Guaranteed annual Benefit Adjustment (GABA). After the member has completed 12 full months of retirement, the member’s benefit increases by the applicable percentage each January, inclusive of other adjustments to the members’ benefit.
° 3% for members hired prior to July 1, 2007
° 1.5% for members hired between July 1, 2007 and June 30, 2013
° Members hired on or after July 1, 2013: a) 1.5% for each year PERS is funded at or above 90%;
b) 1.5% is reduced by 0.1% for each 2% PERS is funded below 90%; and
c) 0% whenever the amortization period for PERS is 40 years or more.
• Mortality assumptions among contributing members, terminated vested members, service retired members and beneficiaries are based on
RP 2000 Combined Employee and Annuitant Mortality Tables projected to 2015 with scale AA.
• Mortality assumptions among Disabled Retirees are based on RP 2000 Combined Employee and Annuitant Mortality Tables with no
projections. No future mortality improvements were assumed.
DRAFT405
86 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
Actuarial Assumptions (Continued)
Discount Rate The discount rate used to measure the Total Pension Liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that contributions from participating plan members, employers, and non- employer contributing entities would be made based on the Board’s funding
policy, which establishes the contractually required rates under Montana Code Annotated. The State contributes 0.1% of salaries for local governments and 0.37% for school districts. In addition, the State contributes coal severance tax and interest money from the general fund. The interest was contributed monthly and the severance tax was contributed quarterly. Based on those assumptions, the Plan's fiduciary net position was projected to be adequate to make all the projected future benefit payments of current plan members through the year 2117. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability.
A municipal bond rate was not incorporated in the discount rate.
Target Allocations The long-term expected return on pension plan assets was reviewed as part of the regular experience study prepared for the Plan. The experience study, performed for the period of fiscal years 2003 through 2009, was outlined in a report dated June 2010 and can be located on the MPERA
website. The long-term expected rate of return on pension plan investments was determined by considering information from various sources, including historical rates of return, rate of return assumptions adopted by similar public sector systems, and by using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges were combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for
each major asset class included in the target asset allocation as of June 30, 2016, are summarized below.
DRAFT406
87 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
Actuarial Assumptions (Continued)
Target Asset Real Rate of Return Long-Term Expected
Asset Class Allocation Arithmetic Basis Real Rate of Return
(a)(b)(a) x (b)
Cash Equivalents 2.60%4.00%0.10%
Domestic Equity 36.00%4.55%1.64%
Foreign Equity 18.00%6.35%1.14%
Fixed Income 23.40%1.00%0.23%
Private Equity 12.00%7.75%0.93%
Real Estate 8.00%4.00%0.32%
Total 100.00%4.37%
Inflation 3.00%
Portfolio Return
Expectation 7.37%
Sensitivity Analysis
As of 1.0% Decrease Current Discount 1.0% Increase
Reporting Date at 6.75%Rate at 8.75%
City of Bozeman Net Pension Liability $25,254,694 $17,404,143 $10,641,661
The sensitivity of the NPL to the discount rate is shown in the table above. A small change in the discount rate can create a significant change in the liability. The NPL was calculated using the discount rate of 7.75%, as well as what the NPL would be if it were calculated using a discount rate 1.00% lower or 1.00% higher than the current rate. DRAFT407
88 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
June 30, 2016 Measurement Date/ June 30, 2017 Reporting Date
Summary of Significant Accounting Policies
The Montana Public Employee Retirement Administration (MPERA) prepares its financial statements using the accrual basis of accounting. The same accrual basis was used by MPERA for the purposes of determining the NPL; deferred inflows of resources and deferred outflows of resources related to pensions; pension expense; the fiduciary net position; and additions to or deductions from fiduciary net position. Member contributions are recognized in the period in which contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the accounting period they are earned and become measurable. Benefit
payments and refunds are recognized in the accounting period when due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred. Investments are reported at fair value. MPERA adheres to all applicable Governmental Accounting Standards Board (GASB).
In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non-employer contributing entity
are required to recognize and report certain amounts associated with their participation in the Public Employees’ Retirement System (PERS). Employers are required to record and report their proportionate share of the collective Net Pension Liability (NPL), pension expense, and deferred inflows and deferred outflows of resources associated with pensions. These disclosures provide information using a June 30, 2016 measurement date for the 2017 reporting.
Pension Amounts Employers are provided guidance in GASB Statement 68, paragraph 74, that pension amounts must be combined as a total or aggregate for reporting. This is true when employees are provided benefits through more than one pension, whether cost-sharing, single-employer, or agent plans. Net Pension Liability The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). As GASB Statement 68 allows, a measurement date of up to 12 months before the employer’s fiscal year-end can be utilized to determine the Plan’s TPL. The basis for the TPL as
of June 30, 2016 was determined by taking the results of the June 30, 2015 actuarial valuation and applying standard roll forward procedures. The
roll forward procedure uses a calculation that adds the annual normal cost (also called the service cost), subtracts the actual benefit payments and refunds for the plan year, and then applies the expected investment rate of return for the year. The update procedures are in conformity with Actuarial Standards of Practice issued by the Actuarial Standards Board. DRAFT408
89 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
Net Pension Liability (Continued) Special Funding The state of Montana, as the non-employer contributing entity, paid to the Plan additional contributions that qualify as special funding. Those
employers who received special funding are counties, cities & towns, school districts and high schools, and other governmental agencies. Due to
the existence of this special funding situation, the State is required to report a proportionate share of a local government or school district’s collective NPL that is associated with the non-State employer. Not Special Funding
Per Montana law, state agencies and universities paid their own additional contributions. These employer paid contributions are not accounted for
as special funding for state agencies and universities but are reported as employer contributions. The state of Montana, as the non-employer contributing entity, also paid to the Plan coal tax contributions that are not accounted for as special funding for all participating employers.
The proportionate shares of the employer’s and the state of Montana’s NPL for June 30, 2017 and 2016, are displayed below. The employer’s
proportionate share equals the ratio of the employer’s contributions to the sum of all employer and non-employer contributions during the measurement period. The state’s proportionate share for a particular employer equals the ratio of the contributions for a particular employer to the total state contributions paid. The employer recorded a liability of $17,404,143 and the employer’s proportionate share was 1.0218 percent.
As of Reporting Date Net Pension Liability as of
6/30/17
Net Pension Liability as of
6/30/16
Percent of Collective NPL
as of 6/30/17
Percent of Collective NPL
as of 6/30/16
Change in Percent of
Collective NPL
City of Bozeman Proportionate Share $ 17,404,143 $ 13,403,285 1.0218%0.9588%0.0630%
State of Montana Proportionate Share associated 212,659$ 164,637$ 0.0125%0.0118%0.0007%
Total 17,616,802$ 13,567,922$ 1.0342%0.9706%0.0636%
Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the measurement of the TPL.
Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date. Changes in proportionate share: Between the measurement date of the collective NPL and the employer’s reporting date, there were no significant
changes in proportion that had an effect on the employer’s proportionate share of the collective NPL since the previous measurement date. DRAFT409
90 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
Pension Expense
As of reporting date Pension Expense as of
6/30/17
Pension Expense as of
6/30/16
City’s Proportionate Share 1,623,925$ 731,976$
Employer Grant Revenue - State of Montana 17,821$ 10,230$
State of Montana Coal Tax for employer 304,925$ 321,664$
Total 1,946,671$ 1,063,870$ At June 30, 2017 (reporting date), the employer recognized a pension expense of $1,623,925 for its proportionate share of the PERS’ pension expense and recognized grant revenue of $17,821 for the state of Montana proportionate share of the pension expense associated with the employer.
Additionally, the employer recognized grant revenue of $304,925 from the Coal Severance Tax fund.
Recognition of Deferred Inflows and Outflows
At June 30, 2017, the employer reported its proportionate share of PERS’ deferred outflows of resources and deferred inflows of resources related to PERS from the following sources:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Expected v. actual experience 93,907$ 57,608$
Projected investment earnings v. actual
investment earnings 1,637,383$ -$
Changes in assumptions -$ -$
Changes in proportion and differences between
employer contributions and proportionate share
of contributions 1,067,534$ -$
Employer contributions subsequent to the
measurement date 1,081,810$ -$
Total 3,880,634$ 57,608$
DRAFT410
91 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
Recognition of Deferred Inflows and Outflows
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension Expense as follows:
Year ended June 30:
Recognition of deferred
outflows and deferred
inflows in future years as
an increase or (decrease)
to pension expense
2018 79,273$
2019 79,273$
2020 930,464$
2021 584,672$
2022 -$
Thereafter -$
PERS disclosure for the defined contribution plan The City contributed to the state of Montanan Public Employee Retirement System Defined Contribution Retirement Plan (PERS-DCRP) for
employees that have elected the DCRP. The PERS-DCRP is administered by the PERB and is reported as a multiple-employer plan established July 1, 2002, and governed by Title 19, chapters 2 & 3, MCA. All new PERS members are initially members of the PERS-DBRP and have a 12-month window during which they may choose to remain in the PERS-DBRP or join the PERS-DCRP by filing an irrevocable election. Members may not be participants of both the defined benefit and
defined contribution retirement plans. Member and employer contribution rates are specified by state law and are a percentage of the member’s compensation. Contributions are deducted from each member’s salary and remitted by participating employers. The Montana Legislature has the authority to establish and amend contribution rates.
DRAFT411
92 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
PERS disclosure for the defined contribution plan (Continued) Benefits are dependent upon eligibility and individual account balances. Participants are vested immediately in their own contributions and attributable income. Participants are vested after 5 years of membership service for the employer’s contributions to individual accounts and the attributable income. Non-vested contributions are forfeited upon termination of employment per 19-3-2117(5), MCA. Such forfeitures are
used to cover administrative expenses of the PERS-DCRP. At the plan level for the measurement period ended June 30, 2016, the PERS-DCRP employer did not recognize any net pension liability or pension expense for the defined contribution plan. Plan level non-vested forfeitures for the 289 employers that have participants in the PERS-DCRP totaled $382,656.
Firefighters’ Unified Retirement System (FURS) Plan Description The Firefighters’ Unified Retirement System (FURS), administered by the Montana Public Employee Retirement Administration (MPERA), is
a multiple-employer, cost-sharing defined benefit plan established in 1981, and governed by Title 19, chapters 2 & 13, MCA. This plan provides retirement benefits to firefighters employed by first- and second-class cities, other cities and rural fire district departments that adopt the plan, and to firefighters hired by the Montana Air National Guard on or after October 1, 2001. Benefits are established by state law and can only be amended by the Legislature. The FURS provides retirement, disability, and death benefits to plan members and their beneficiaries.
Summary of Benefits
Eligibility for benefit 20 years of membership service, regardless of age. At Age 50, 5 years of membership service. Vesting Death and disability rights are vested immediately 5 years of membership service for all other rights DRAFT412
93 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters’ Unified Retirement System (FURS) (Continued) Member’s compensation is defined as Hired prior to July 1, 1981 and not electing GABA - highest monthly compensation (HMC)
Hired after June 30, 1981 and those electing GABA – highest average compensation (HAC) during any consecutive 36 months.
Compensation Cap Hired on or after July 1, 2013 – 110% annual cap on compensation considered as part of a member’s highest average compensation.
Monthly benefit formula 1. Members hired prior to July 1, 1981 and not electing GABA are entitled to the greater of: 2.5% of HMC per year of service, or a. If less than 20 years of service: 2% of HMC for each year of service; b. If more than 20 years of service: 50% of the member’s HMC plus 2% of the member’s HMC for each year of service over
20 years
2. Members hired on or after July 1, 1981 and those electing GABA: 2.5% of HAC per year of membership service
Guaranteed Annual Benefit Adjustment (GABA) Hired on or after July 1, 1997, or those electing GABA - after the member has completed 12 full months of retirement, the member’s benefit increases by a maximum of 3% each January, inclusive of all other adjustments to the member’s benefit.
Minimum Benefit Adjustment (non-GABA) If hired before July 1, 1997 and member did not elect GABA - the monthly retirement, disability or survivor’s benefit may not be less than ½ the compensation of a newly confirmed firefighter employed by the city that last employed the member (provided the member has at least 10 years of membership service).
DRAFT413
94 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters’ Unified Retirement System (FURS) (Continued)
Overview of Contributions Member and employer rates are specified by state law and are a percentage of the member’s compensation. Contributions are deducted from each member’s salary and remitted by participating employers. The Montana Legislature has the authority to establish and amend contribution
rates to the plan. Member and employer contribution rates are shown in the table below.
Stand-Alone Statements The financial statements of the Montana Public Employees Retirement Board (PERB) Comprehensive Annual Financial Report (CAFR) and the GASB 68 Report disclose the Plan’s fiduciary net position. The reports are available from the PERB at PO Box 200131, Helena, MT 59620-0131, (406) 444-3154 or the MPERA website at http://mpera.mt.gov/index.shtml.
Actuarial Assumptions
The TPL used to calculate the NPL was determined by taking the results of the June 30, 2015, actuarial valuation and applying standard roll forward procedures to update the TPL to June 30, 2016. There were several significant assumptions and other inputs used to measure the TPL. The actuarial assumptions used in the June 30, 2016, valuation were based on the results of the last actuarial experience study, dated June 2010,
for the six- year period July 1, 2003 to June 30, 2009. Among those assumptions were the following:
• Investment Return 7.75%
• Admin expense as a % of payroll 0.19%
• General Wage Growth* 4.00%
*includes Inflation at 3.00%
• Merit Increases 0% to 7.3% DRAFT414
95 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters' Unified Retirement System (FURS) (Continued)
• Postretirement Benefit Increases o Guaranteed Annual Benefit Adjustment (GABA) Members hired on or after July 1, 1997, or those electing GABA - after the member has completed 12 full months of retirement, the member’s benefit increases by a maximum of 3% each January, inclusive of all other adjustments to the member’s benefit.
o Minimum Benefit Adjustment (non-GABA) Members hired before July 1, 1997 and member did not elect GABA - the monthly retirement, disability or survivor’s benefit
may not be less than ½ the compensation of a newly confirmed firefighter employed by the city that last employed the member (provided the member has at least 10 years of membership service).
• Mortality assumptions among contributing members, terminated vested members, service retired members and beneficiaries are based on RP 2000 Combined Employee and Annuitant Mortality Tables projected to 2015 with scale AA.
• Mortality assumptions among Disabled Retirees are based on RP 2000 Combined Employee and Annuitant Mortality Tables with no projections. No future mortality improvement is assumed.
Discount Rate
The discount rate used to measure the TPL was 7.75%. The projection of cash flows used to determine the discount rate assumed that contributions from participating plan members, employers, and non-employer contributing entities will be made based on the Board’s funding policy, which establishes the contractually required rates under the Montana Code Annotated. The State contributes 32.61% of salaries paid by employers. Based on those assumptions, the Plan’s fiduciary net position was projected to be adequate to make all the projected future benefit
payments of current plan members through the year 2117. Therefore, the long-term expected rate of return on pension plan investments was
applied to all periods of projected benefit payments to determine the TPL. A municipal bond rate was not incorporated in the discount rate.
DRAFT415
96 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters' Unified Retirement System (FURS) (Continued)
Target Allocations
The long-term expected return on pension plan assets is reviewed as part of the regular experience study prepared for the Plan. The experience study, performed for the period of fiscal years 2003 through 2009, was outlined in a report dated June 2010 and is located on the MPERA
website. The long-term expected rate of return on pension plan investments was determined by considering information from various sources, including historical rates of return, rate of return assumptions adopted by similar public sector systems, and by using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges were combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of
return for each major asset class as of June 30, 2016, are summarized below.
Target Asset Real Rate of Return Long-Term Expected
Asset Class Allocation Arithmetic Basis Real Rate of Return
(a)(b)(a) x (b)
Cash Equivalents 2.60%4.00%0.10%
Domestic Equity 36.00%4.55%1.64%
Foreign Equity 18.00%6.35%1.14%
Fixed Income 23.40%1.00%0.23%
Private Equity 12.00%7.75%0.93%
Real Estate 8.00%4.00%0.32%
Total 100.00%4.37%
Inflation 3.00%
Portfolio Return
Expectation 7.37% DRAFT416
97 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Firefighters' Unified Retirement System (FURS) (Continued)
Sensitivity Analysis
The sensitivity of the NPL to the discount rate is shown in the table below. A small change in the discount rate can create a significant change the liability. The NPL was calculated using the discount rate of 7.75%, as well as what the NPL would be if it were calculated using a discount
rate 1.00% lower or 1.00% higher than the current rate.
As of 1.0% Decrease Current 1.0% Increase
Reporting Date (6.75%)Discount Rate (8.75%)
City of Bozeman's Net Pension
Liability $4,263,017 $2,707,390 $1,428,319 June 30, 2016 Measurement Date/ June 30, 2017 Reporting Date
Summary of Significant Accounting Policies MPERA prepared financial statements using the accrual basis of accounting. The same accrual basis was used by MPERA for the purposes of determining the NPL; Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions; Pension Expense; the Fiduciary Net Position; and Additions to or Deductions from Fiduciary Net Position. Member contributions are recognized in the period in which
contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the
contributions. Revenues are recognized in the accounting period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting period in which they are due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred. Investments are reported at fair value. MPERA adhered to all accounting principles generally accepted by the United States of America. MPERA applied all applicable pronouncements of the Governmental Accounting Standards Board (GASB).
In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non-employer contributing entity are required to recognize and report certain amounts associated with their participation in the Firefighters’ Unified Retirement System (the Plan). Employers are required to record and report their proportionate share of the collective Net Pension Liability (NPL), pension expense, and deferred inflows and deferred outflows of resources associated with pensions. These disclosures provide information using a June 30, 2016 measurement
date for the 2017 reporting.
DRAFT417
98 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Firefighters' Unified Retirement System (FURS) (Continued)
Pension Amount Totals Employers are provided guidance in GASB Statement 68, paragraph 74, that pension amounts must be combined as a total or aggregate for
reporting. This is true when employees are provided benefits through more than one pension, whether cost-sharing, single-employer, or agent
plans.
Net Pension Liability The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). As GASB Statement 68 allows, a
measurement date of up to 12 months before the employer’s fiscal year-end can be utilized to determine the Plan’s TPL. The basis for the TPL
as of June 30, 2016 was determined by taking the results of the June 30, 2015 actuarial valuation and applying standard roll forward procedures. The roll forward procedure uses a calculation that adds the annual normal cost (also called the service cost), subtracts the actual benefit payments and refunds for the plan year, and then applies the expected investment rate of return for the year. The update procedures are in conformity with Actuarial Standards of Practice issued by the Actuarial Standards Board.
Special Funding The Plan has a special funding situation in which the state of Montana is legally responsible for making contributions directly to the Plan on behalf of the employers. Due to the existence of this special funding situation, the State is required to report a proportionate share of a local government or school district’s collective NPL that is associated with the non-state employer.
The proportionate shares of the employer’s and the state of Montana’s NPL for June 30, 2017 and 2016 are displayed below. The employer’s proportionate share equals the ratio of the employer’s contributions to the sum of all employer and non-employer contributions during the measurement period. The state’s proportionate share for a particular employer equals the ratio of the contributions for a particular employer to the total state contributions paid. The employer recorded a liability of $2,707,390 and the employer’s proportionate share was 2.3705 percent.
DRAFT418
99 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters' Unified Retirement System (FURS) (Continued) Net Pension Liability (Continued) As of Reporting DateNPL as of 6/30/17 NPL as of 6/30/16Percent of Collective NPL as of 6/30/17Percent of Collective NPL as of 6/30/16Change in Percent of Collective NPLCity Proportionate Share $ 2,707,390 $ 2,489,054 2.3705%2.4336%-0.0631%State of Montana Proportionate Share associated with Employer6,134,093$ 5,543,784$ 5.3707%5.4204%-0.0497%Total8,841,483$ 8,032,838$ 7.7412%7.8540%-0.1128% Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the measurement of the TPL. Changes in benefit terms: There were changes in benefit terms since the previous measurement date. Changes in proportionate share: Between the measurement date of the collective NPL and the employer’s reporting date there were no significant changes in proportion that had an effect on the employer’s proportionate share of the collective NPL since the previous measurement date. Pension Expense As of reporting datePension Expense as of 6/30/17 Pension Expense as of 6/30/16City’s Proportionate Share343,924$ 276,847$ Employer Grant Revenue - State of Montana Proportionate Share for Employer795,231$ 600,192$ Total1,139,155$ 877,039$ At June 30, 2017, the employer recognized its proportionate share of the FURS’ pension expense of $343,924. The employer also recognized grant revenue of $795,231 for the support provided by the State of Montana for the proportionate share of the pension expense that is associated with the employer. DRAFT419
100 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Firefighters' Unified Retirement System (FURS) (Continued)
Recognition of Deferred Inflows and Outflows At June 30, 2017, the employer reported its proportionate share of FURS' deferred outflows of resources and deferred inflows of resources related to FURS from the following sources:
Deferred Outflows of Resources Deferred Inflows of Resources
Expected v. actual experience -$ 25,487$
Projected investment earnings v. actual investment earnings 283,436$ -$
Changes in assumptions -$ -$
Changes in proportion and differences between employer
contributions and proportionate share of contributions -$ 45,913$
Employer contributions subsequent to the measurement date 504,303$ -$
Total 787,739$ 71,400$
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension Expense as follows:
For the Reporting Year ended
June 30:
Recognition of deferred outflows and deferred
inflows in future years as an increase or
(decrease) to pension expense
2018 20,569$
2019 20,569$
2020 135,471$
2021 85,932$
2022 (4,592)$
Thereafter -$ DRAFT420
101 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Municipal Police Officers’ Retirement System (MPORS)
Plan Description The Municipal Police Officers’ Retirement System (MPORS), administered by the Montana Public Employee Retirement Administration (MPERA), is a multiple-employer, cost-sharing defined benefit plan established in 1974 and governed by Title 19, chapters 2 & 9, MCA. This plan provides retirement benefits to all municipal police officers employed by first- and second-class cities and other cities that adopt the plan.
Benefits are established by state law and can only be amended by the Legislature. The MPORS provides retirement, disability, and death benefits to plan members and their beneficiaries. Deferred Retirement Option Plan (DROP): Beginning July 2002, eligible members of MPORS can participate in the DROP by filing a one-time irrevocable election with the Board. The DROP is governed by Title 19, Chapter 9, Part 12, MCA. A member must have completed at least twenty
years of membership service to be eligible. They may elect to participate in the DROP for a minimum of one month and a maximum of 60 months and may only participate in the DROP once. A participant remains a member of the MPORS, but will not receive membership service or service credit in the system for the duration of the member’s DROP period. During participation in the DROP, all mandatory contributions continue to the retirement system. A monthly benefit is calculated based on salary and years of service to date as of the beginning of the DROP period. The monthly benefit is paid into the member’s DROP account until the end of the DROP period. At the end of the DROP period, the participant may
receive the balance of the DROP account in a lump-sum payment or in a direct rollover to another eligible plan, as allowed by the IRS. If the participant continues employment after the DROP period ends, they will again accrue membership service and service credit. The DROP account cannot be distributed until employment is formally terminated. Summary of Benefits
Eligibility for benefit 20 years of membership service, regardless of age Age 50, 5 years of membership service.
Vesting Death and disability rights are vested immediately
5 years of membership service for all other rights
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102 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Municipal Police Officers' Retirement System (MPORS) (Continued)
Member’s final average compensation (FAC) Hired prior to July 1, 1977 - average monthly compensation of final year of service; Hired on or after July 1, 1977 – final average compensation (FAC) for last consecutive 36 months.
Compensation Cap Hired on or after July 1, 2013 – 110% annual cap on compensation considered as part of a member’s highest average compensation.
Monthly benefit formula 2.5% of FAC per year of service credit.
Guaranteed Annual Benefit Adjustment (GABA) Hired on or after July 1, 1997, or those electing GABA - after the member has completed 12 full months of retirement, the member’s
benefit increases by a maximum of 3% each January, inclusive of all other adjustments to the member’s benefit.
Minimum Benefit Adjustment (non-GABA) If hired before July 1, 1997 and member did not elect GABA - the monthly retirement, disability or survivor’s benefit may not be less than ½ the compensation of a newly confirmed officer in the city that the member was last employed.
• Mortality assumptions among contributing members, terminated vested members, service retired members and beneficiaries are based on RP 2000 Combined Employee and Annuitant Mortality Tables projected to 2015 with scale AA
• Mortality assumptions among Disabled Retirees are based on RP 2000 Combined Employee and Annuitant Mortality Tables with no projections. No future mortality improvement is assumed.
Discount Rate The discount rate used to measure the TPL was 7.75%. The projection of cash flows used to determine the discount rate assumed that contributions from participating plan members, employers, and non-employer contributing entities will be made based on the Board’s funding policy, which
establishes the contractually required rates under the Montana Code Annotated. The State contributed 29.37% of salaries paid by employers.
Based on those assumptions, the System’s fiduciary net position was projected to be adequate to make all the projected future benefit payments of current plan members through the year 2117. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL. A municipal bond rate was not incorporated in the discount rate. DRAFT422
103 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Municipal Police Officers' Retirement System (MPORS) (Continued)
Target Allocations The long-term expected return on pension plan assets is reviewed as part of the regular experience study prepared for the Plan. The experience study, performed for the period of fiscal years 2003 through 2009, was outlined in a report dated June 2010 and can be located on the MPERA website. The long-term expected rate of return on pension plan investments was determined by considering information from various sources, including historical rates of return, rate of return assumptions adopted by similar public sector systems, and by using a building-block method in
which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges were combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and then adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation as of June 30, 2016, are summarized below.
Target Asset Real Rate of Return Long-Term Expected
Asset Class Allocation Arithmetic Basis Real Rate of Return
(a)(b)(a) x (b)
Cash Equivalents 2.60%4.00%0.10%
Domestic Equity 36.00%4.55%1.64%
Foreign Equity 18.00%6.35%1.14%
Fixed Income 23.40%1.00%0.23%
Private Equity 12.00%7.75%0.93%
Real Estate 8.00%4.00%0.32%
Total 100.00%4.37%
Inflation 3.00%
Portfolio Return
Expectation 7.37%
Sensitivity Analysis The sensitivity of the NPL to the discount rate is shown in the table below. A small change in the discount rate can create a significant change in the liability. The NPL was calculated using the discount rate of 7.75%, as well as what the NPL would be if it were calculated using a discount
rate 1.0% lower or 1.00% higher than the current rate.
As of 1.0% Decrease Current 1.0% Increase
Reporting Date (6.75%)Discount Rate (8.75%)
City of Bozeman's Net Pension
Liability $7,475,482 $5,552,007 $3,453,834 DRAFT423
104 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Municipal Police Officers' Retirement System (MPORS) (Continued)
Summary of Significant Accounting Policies The Montana Public Employee Retirement Administration (MPERA) prepares its financial statements using the accrual basis of accounting. The same accrual basis was used by MPERA for the purposes of determining the NPL; deferred inflows of resources and deferred outflows of resources
related to pensions; Pension Expense; the fiduciary net position; and additions to or deductions from fiduciary net position. Member contributions
are recognized in the period in which contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Revenues are recognized in the accounting period they are earned and become measurable. Benefit payments and refunds are recognized in the accounting period when due and payable in accordance with the benefit terms. Expenses are recognized in the period incurred. Investments are reported at fair value. MPERA adheres to all applicable Governmental Accounting Standards
Board (GASB) statements.
In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers and the non-employer contributing entity are required to recognize and report certain amounts associated with their participation in the Municipal Police Officers’ Retirement System (the Plan). Employers are required to record and report their proportionate share of the collective Net Pension Liability (NPL), pension expense, and
deferred inflows and deferred outflows of resources associated with pensions. These disclosures provide information using a June 30, 2016
measurement date for the 2017 reporting.
Pension Amount Totals Employers are provided guidance in GASB Statement 68, paragraph 74, that pension amounts must be combined as a total or aggregate for
reporting. This is true when employees are provided benefits through more than one pension, whether cost-sharing, single-employer, or agent
plans.
Net Pension Liability The Total Pension Liability (TPL) minus the Fiduciary Net Position equals the Net Pension Liability (NPL). As GASB Statement 68 allows, a
measurement date of up to 12 months before the employer’s fiscal year-end can be utilized to determine the Plan’s TPL. The basis for the TPL
as of June 30, 2016 was determined by taking the results of the June 30, 2015 actuarial valuation and applying standard roll forward procedures. The roll forward procedure uses a calculation that adds the annual normal cost (also called the service cost), subtracts the actual benefit payments and refunds for the plan year, and then applies the expected investment rate of return for the year. The update procedures are in conformity with Actuarial Standards of Practice issued by the Actuarial Standards Board.
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105 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Municipal Police Officers' Retirement System (MPORS) (Continued)
Net Pension Liability (Continued) Special Funding
The Plan has a special funding situation in which the state of Montana is legally responsible for making contributions directly to the Plan on
behalf of the employers. Due to the existence of this special funding situation, the State is required to report a proportionate share of a local government or school district’s collective NPL that is associated with the non-state employer. The proportionate shares of the employer’s and the state of Montana’s NPL for June 30, 2017 and 2016 are displayed below. The employer’s
proportionate share equals the ratio of the employer’s contributions to the sum of all employer and non-employer contributions during the
measurement period. The state’s proportionate share for a particular employer equals the ratio of the contributions for a particular employer to the total state contributions paid. The employer recorded a liability of $5,552,007 and the employer’s proportionate share was 3.0842 percent.
As of Reporting Date NPL as of 6/30/2017 NPL as of 6/30/2016
Percent of
Collective NPL as
of 6/30/2017
Percent of
Collective NPL as
of 6/30/2016
Change in Percent
of Collective NPL
City Proportionate Share 5,552,007$ 4,920,638$ 3.0842%2.9746%0.1096%
State of Montana Proportionate
Share associated with Employer 11,020,975$ 9,969,680$ 6.1223%6.0269%0.0954%
Total 16,572,982$ 14,890,318$ 9.2065%9.0015%0.2050%
Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the measurement of the TPL.
Changes in benefit terms: There were changes in benefit terms since the previous measurement date. Changes in proportionate share: Between the measurement date of the collective NPL and the employer’s reporting date there were no changes in proportion that would have an effect on the employer’s proportionate share of the collective NPL since the previous measurement date. DRAFT425
106 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Municipal Police Officers' Retirement System (MPORS) (Continued)
Pension Expense
As of reporting date Pension Expense as of
6/30/17
Pension Expense as of
6/30/16
City's Proportionate Share 629,731$ 478,745$
State of Montana Proportionate Share associated with the City 1,180,946$ 1,013,945$
Total 1,810,677$ 1,492,690$ At June 30, 2017, the employer recognized its proportionate share of the MPORS’ pension expense of $629,731. The employer also recognized grant revenue of $1,180,946 for the support provided by the state of Montana for the proportionate share of the pension expense that is associated with the employer.
Recognition of Deferred Inflows and Outflows At June 30, 2016, the employer reported its proportionate share of MPORS' deferred outflows of resources and deferred inflows of resources related to MPORS from the following sources:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Expected v. actual experience -$ 113,109$
Projected investment earnings v. actual investment earnings 360,003$ -$
Changes in assumptions -$ -$
Changes in proportion and differences between employer
contributions and proportionate share of contributions 101,486$ -$
Employer contributions subsequent to the measurement date 655,143$ -$
Total 1,116,632$ 113,109$
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107 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Municipal Police Officers' Retirement System (MPORS) (Continued)
Recognition of Deferred Inflows and Outflows (Continued) Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension Expense as follows:
For the Reporting Year ended
June 30:
Recognition of deferred outflows
and deferred inflows in future
years as an increase or
(decrease) to pension expense
2018 (11,344)$
2019 (11,344)$
2020 152,940$
2021 116,642$
2022 -$
Thereafter -$
NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS
In addition to providing a deferred compensation plan, the City provides other post-employment benefits (OPEB) allowing its retired employees
to continue their medical, dental, and vision care coverage through the City's group health plan until death (Retiree Health Plan). The plan allows
retirees to participate, as a group, at a rate that does not cover all of the related costs. This results in the reporting of an implied rate subsidy in the financial statements and footnotes. The City's contract with Allegiance Benefits details the plan eligibility. MMIA is the administrator of the benefit plan, which covers both active and retired members. In accordance with MCA 2-18-704, the City’s retirees may continue coverage for themselves and their covered eligible dependents, if they are eligible for public employees' retirement by virtue of their employment with the City
of Bozeman. The City's current labor contracts do not include any obligations for payments to retirees. The City also allows terminated employees
to continue their health care coverage for 18 months past the date of termination as required by the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). DRAFT427
108 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED)
OPEB is recorded on an accrual basis for all enterprise and internal service funds. OPEB is recorded on a modified accrual basis for the governmental funds. Plan contributions are recognized in the period in which the contributions are made. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan.
Funding Policy. The plan is unfunded by the City and plan members receiving benefits contribute 100 percent of their cost of the benefits on a
pay-as-you-go basis. The City plan’s administratively established retiree medical, dental, and vision premiums vary between $37 and $1,313 per month depending on the medical plan selected, family coverage, and Medicare eligibility. The plan provides different coinsurance amounts depending on whether members use preferred, non-preferred, or other hospitals. Depending on the plan, for a single individual, after an annual deductible of $500 to $2,700 for non-Medicare-eligible retirees, the plan reimburses 70% to 80% of allowed charges after deductible and up to the
out-of-pocket maximum, and then 100%. Depending on the plan, for a family, after an annual deductible of $1,000 to $5,400 for non-Medicare-
eligible retirees, the plan reimburses 70% to 80% of allowed charges after deductible and up to the out-of-pocket maximum, and then 100%. For fiscal year ended June 30, 2017, the City has 44 retired members receiving benefits. Annual OPEB Cost and Net OPEB Obligation. The City’s annual other post-employment benefit (OPEB) cost (expense) is calculated based on
the annual required contribution of the employer (ARC). The ARC represents a level of funding that, if paid on an ongoing basis, is projected to
cover normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a closed amortization period not to exceed thirty years. The following table shows the components of the City’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes
in the City’s net OPEB obligation to the Retiree Health Plan:
Annual required contribution 329,862$
Interest on net OPEB obligation 89,303
Adjustment to annual required contribution (129,110)
Annual OPEB cost (expense)290,055
Contributions made (137,605)
Increase in net OPEB obligation 152,450
Net OPEB obligation - beginning of year 2,232,579
Net OPEB obligation - end of year 2,385,029$
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109 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED)
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation for fiscal year ended June 30, 2017, and the five preceding fiscal years were as follows:
Percentage of
Fiscal Year Annual Annual OPEB Cost Net OPEB
Ended OPEB Cost Contributed Obligation
June 30, 2012 234,397$ 48.33% 1,729,462$
June 30, 2013 221,212 49.14% 1,841,971
June 30, 2014 219,207 59.81% 1,930,074
June 30, 2015 295,694 46.29% 2,088,900
June 30, 2016 292,862 50.94% 2,232,579
June 30, 2017 290,055 47.44% 2,385,029
The June 30, 2017, year-end OPEB cost is reported in the City’s funds as follows:
Functions/Programs Expenses
PRIMARY GOVERNMENT
Governmental activities:
General government 21,769$
Public safety 44,165
Public service 9,402
Public welfare 46,398
Total governmental activities 121,734
Business-type activities:
Water 12,611
Waste water 7,849
Solid waste 6,070
Parking 2,093
Storm water 2,093
Total business-type activities 30,716
Total primary government 152,450$ DRAFT429
110 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED)
Funded Status and Funding Progress. The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The
schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The City has elected not to fund this liability. SCHEDULE OF FUNDING PROGRESS
UAAL as a
Actuarial Actuarial Actuarial Unfunded Funded Covered Percentage of
Valuation Value of Accrued Liability AAL (UAAL)Ratio Payroll Covered Payroll
Date Assets (a)(AAL) (b) (b-a)(a/b)(c) (b-a)/c)
7/1/2014 -$ 2,675,667$ 2,675,667$ 0.0% 26,884,822$ 9.95%
7/1/2014 - 2,675,667 2,675,667 0.0% 27,652,683 9.68%
7/1/2016 - 2,488,935 2,488,935 0.0% 28,482,263 8.74%
7/1/2014 - 2,675,667 2,675,667 0.0% 27,652,683 9.68%
7/1/2016 - 2,488,935 2,488,935 0.0% 28,482,263 8.74% Actuarial Methods and Assumptions. The City’s actuarial valuation is completed on a biennial frequency, provided no significant events have occurred warranting new measurement. The City completed the valuation for fiscal year 2016, with an estimate provided for fiscal year 2017. For
fiscal year 2017, an estimated valuation was derived based on the 2016 actual costs and participants. As a result of this biennial valuation, we have
marked the fields as “n/a” where actual financial data was not used to generate the estimate. As of July 1, 2016, the most recent valuation date, the City’s actuarially accrued liability (AAL) for benefits was $2,488,935. The AAL by status breakdown is shown below:
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111 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED)
Fiscal Fiscal Fiscal Fiscal
2014 2015 2016 2017
Actives N/A 1,679,064$ N/A 1,623,554$
Retirees, Dependents and Surviving Spouses N/A 996,603 N/A 865,381
Total AAL N/A 2,675,667$ N/A 2,488,935$
Normal Cost N/A 168,628$ N/A 178,776$
Impact on Statement of Activities
Annual OPEB Cost 219,207$ 295,694$ 292,862$ 290,055$
Impact on Statement of Net Position
Assumed Contributions 131,104$ 136,871$ 149,183$ 137,605$
Net OPEB Obligation at June 30 1,930,074$ 2,088,897$ 2,232,579$ 2,385,029$
Participant Information
Actives N/A 358 N/A 435
Retirees, Dependents and Surviving Spouses N/A 68 N/A 74
Total N/A 426 N/A 509 The following key assumptions were chosen by the City:
1. Discount Rate: 4.0%
2. Inflation Rate: 2.5%
3. Expected Real Rate of Return on Assets: 1.5%
4. Health Care Claim and Contribution Trend Rates: Updated from 7.0% initial in fiscal 2015 and 4.0% ultimate in fiscal 2035 to 7.5% initial
in fiscal 2017 and 4.5% ultimate in fiscal 2037. Ultimate medical trend rate is based on 2.5% long-term inflation, 1.0% real GDP growth and 1.0% medical technology
5. Average Salary Increase: 4.0%
6. Retirement Rates: Updated according to the Fiscal Year 2017 Montana State Retirement System Valuation Assumptions
7. Retiree Participation Rate: 30%
8. Lapse Rate: 15% per year
9. Dependent Assumption: For future retirees, 60% of participants are assumed to be married, with husbands 3 years older than wives. DRAFT431
112 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED)
10. ACA Excise Tax: Results include an estimate of future ACA Excise Tax costs based on upon loading health care trend rates by 1.77% in fiscal years 2019 and beyond. For purposes of the estimated Excise Tax, the tax payer (i.e., health plan) is assumed to be non-taxable. Future premiums are assumed to include the estimated ACA Excise Tax. The Projected Unit Credit Actuarial Cost Method was used to determine the annual required contribution. Actuarial valuations of an ongoing plan
involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Examples, as detailed above, include assumptions about future employment, mortality, and the healthcare cost trend. Actuarially determined amounts are subject to continual revisions as actual results are compared with past expectations, and new estimates are made about the future. Actuarial calculations reflect a long-term perspective. The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, is designed to present multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time
relative to the actuarial liabilities for benefits. Historically, the net other post-employment benefit obligation has been liquidated primarily by the general fund and the proprietary funds. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer
and plan members to that point. The methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. This report constitutes the only analysis and presentation of the City’s post-employment benefit plan. There is no separate, audited GAAP-basis post-employment benefit plan report.
NOTE 16. JOINT VENTURE AGREEMENTS
Joint ventures are legal entities or other organizations that result in a contractual arrangement and that are owned, operated, or governed by two or more participants. Each participant retains both an ongoing financial interest and an ongoing financial responsibility. Joint ventures are legal entities or other organizations that result in a contractual arrangement and that are owned, operated, or governed by two or more participants. Each participant retains both an ongoing financial interest and an ongoing financial responsibility. As of June 30, 2017, the City
has entered into joint venture contractual arrangements, as described below. DRAFT432
113 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 16. JOINT VENTURE AGREEMENTS (CONTINUED) 911 Communication Center The City and Gallatin County, Montana (the County) have entered into an inter-local agreement for the purposes of establishment of the operation and financing of a 911 communication services division (the Division) for dispatch and records services, to define the relationship of the Administrative Board with the City and County, and to establish the line of authority for personnel furnishing the communication services to the City and County and others who may contract for the services.
Though the City has no equity interest in the Division, the City has indirect access to the joint venture’s resources, as the Division’s purpose is of direct interest to the City, and the City has the ability to influence the management of the Division. In addition, the City and County have agreed to pay 45% and 55% of the Division expenditures, respectively. The agreement expired December 19, 2005, and automatically renewed until terminated by either party. Financial information regarding the Division can be obtained by contacting Shelley Vance, Gallatin County, Clerk and
Records Office, 311 West Main, Bozeman, MT 59715. The City has also entered into an inter-local agreement for the purpose of procuring equipment to upgrade the aforementioned 911 radio system. Under this agreement, the County has entered into a lease-purchase agreement for the system. The inter-local agreement requires the City to make two payments on November 30, 2018 and November 30, 2019 in the amount of $504,999, plus 2.99% interest from 12/31/2018 through 12/31/2019.
The payments have been accrued as a liability and deferred outflow of resources in the governmental activities as of June 30, 2017. City-County Drug Forfeitures The City and County have entered into an inter-local agreement for the purposes of establishment of a joint drug forfeiture account funded from drug related forfeitures, seizures, and prosecutions of City and County law enforcement cases and to establish an equitable means of distributing
those funds to continue drug interdiction activities. The goal of the agreement is to make the City and County Drug Enforcement operations less reliant on the general and public safety fund monies of the City and County. The original term of the agreement was for a period of one year, beginning September 20, 2004 and automatically renews for a period of one year until terminated by either party with written notice of intent to terminate. Financial information regarding the joint drug forfeiture account can be obtained by contacting the City of Bozeman Department of Finance, 411 East Main Street, Bozeman, MT 59715.
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114 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 16. JOINT VENTURE AGREEMENTS (CONTINUED)
Montana Municipal Interlocal Authority The City and Montana Municipal Interlocal Authority (MMIA) have entered into a 20-year agreement in December 2012 to share up to $1 million in profits from the sale of city-owned property known as the Mandeville Farm. The agreement came about as part of a settlement on legal claims from the City of Bozeman vs. MMIA litigation. A “profit” shall occur only when the City has recovered its total investment in the property, which
includes the original purchase price together with all “costs of development” as defined in the settlement agreement.
NOTE 17. RESTRICTED NET POSITION
At June 30, 2017, the balances of restricted net position for business-type activities are as follows:
Waste Water Solid Waste Nonmajor
Water Fund Fund
Fund Enterprise Total
Restricted by revenue bond covenants:
For bond reserve 1,313,885$ 1,788,592$ -$ -$ 3,102,477$
Restricted by ordinance:
Cash in lieu of parking - - - 344,465 344,465
Impact fees 3,168,326 2,251,683 - - 5,420,009
4,482,211$ 4,040,275$ -$ 344,465$ 8,866,951$
Business-Type Activities
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115 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 18. INTERFUND TRANSFERS AND ASSETS/LIABILITIES A summary of interfund transfers reported in the fund financial statements for the year ended June 30, 2017, follows:
Street SID Debt Nonmajor
General Fund Maintenance Service Governmental Water Storm Water Total
General Fund -$ -$ -$ 2,214,190$ -$ -$ 2,214,190$
Street Maintenance - - - 43,227 - - 43,227
Non-major Governmental 329,120 598,000 113,045 652,477 - - 1,692,642
Water Enterprise - - - - 500 - 500
Solid Waste Enterprise 352,999 - - - - 454,000 806,999
Parking Enterprise - - - 250,000 - - 250,000
Stormwater Enterprise 140,000 - - - - - 140,000
Total 822,119$ 598,000$ 113,045$ 3,159,894$ 500$ 454,000$ 5,147,558$
Governmental Funds
Transfers From Transfers ToProprietary Fund
Transfers are used to (1) move revenues from the fund that statute or budgets requires to collect them to the fund that statute or budgets require to
expend them, (2) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations, and (3) to transfer non-restricted interest income from the permanent fund to the general fund.
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116 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 18. INTERFUND TRANSFERS AND ASSETS/LIABILITIES
A summary of advances and due from/to other funds at June 30, 2017, is as follows:
Advances to Advances from
other City funds other City funds
Major Funds:
SID Sinking Debt Service -$ 539,533$
Non-major Governmental Funds:
SID Revolving Debt Service 539,533 -
539,533$ 539,533$
Due from Due to
other City funds other City funds
Major Funds:
General fund 12,623$ -$
Non-major Governmental Fund:
Housing Revolving Loan - 922
Internal Service Fund:
Vehicle Maintenance - 11,701
12,623$ 12,623$ Interfund balances reported as due from or due to other funds are usually a result of transfers for reporting purposes to cover negative cash balances within a fund. These transfers are reversed as cash becomes available in a fund where cash previously had been in a deficit.
NOTE 19. RISK MANAGEMENT
The City faces a considerable number of risks of loss, including a) damage to and loss of property and contents, b) employee torts, c) professional
liability (i.e. errors and omissions), d) environmental damage, e) workers' compensation (i.e. employee injuries), and f) medical insurance cost of employees. A variety of methods are used to provide insurance for these risks. Commercial policies, transferring all risks of loss except for small deductible amounts, are purchased for property and content damage and professional liabilities. The City participates in two state-wide public risk pools operated by the Montana Municipal Interlocal Authority, for workers' compensation and for tort liability. Employee medical insurance is
provided through a privately-administered, partially self-insured plan. Given the lack of coverage available, the City has no coverage for potential
losses from environmental damages. DRAFT436
117 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 19. RISK MANAGEMENT (CONTINUED) Commercial Policies Coverage limits and the deductibles on the commercial policies have stayed relatively constant for the last several years. The premiums for the policies are allocated between the City's Enterprise Funds and the General Fund. Premiums are subsidized through a special purpose property tax
levy, based on total appropriations. Settled claims resulting from these risks did not exceed commercial insurance coverage during the three years
ended June 30, 2017, 2016, and 2015. Public Entity Risk Pools In 1986, the City joined together with other Montana cities to form the Montana Municipal Interlocal Authority, which established a workers'
compensation plan and a tort liability plan. Both public entity risk pools currently operate as common risk management and insurance programs for
the member governments. The liability limits for damages in tort action are $750,000 per claim and $1.5 million per occurrence, and $12.5 million per occurrence for any claim that is not subject to the limitations on governmental liability, as described in Montana Code Annotated Section 2-9-108 (the Statute) or any
successor statute, either as matter of law, by operation of the Statute, or by a judicial determination that the Statute is inapplicable or is otherwise
invalid, with $11,250 deductible per occurrence. State tort law limits the City's liability to $1.5 million. The City pays premiums for its employee injury insurance coverage, which is allocated to the employer funds based on total salaries and wages. The agreements for formation of the pools provide that they will be self-sustaining through member premiums. The tort liability plan and workers' compensation program issued debt of $4.41 million and $6.155 million, respectively, to immediately finance the necessary insurance reserves. All members signed a contingent note for a pro
rata share of this liability in case operating revenues were insufficient to cover the debt service; the debt was retired in 2011.
The City also owns a policy with MMIA for loss or damage to property. This is an all-risk policy, essentially all property owned by the City being insured for 100% of replacement cost, subject to a $5,000 deductible per occurrence. MMIA reinsures their property insurance with a national municipal pool, Public Entities’ Property Insurance.
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118 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 20. CONTINGENCIES The City is involved with several lawsuits, which arise out of the normal course of operations by the City. Management of the City intends to vigorously defend each claim and believes no material losses will be incurred on such claims. NOTE 21. SOLID WASTE LANDFILL CLOSURE AND POST-CLOSURE CARE COSTS The City has a municipal solid waste landfill. State and Federal laws and regulations require the City to place a final cover on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for 30 years after final closure. The City stopped
accepting waste effective June 30, 2008. The final capping of the cells is still pending. The City has accrued a liability for $2,629,164, which is its
estimate of future landfill closure and post-closure care costs as of June 30, 2017. This amount is based on a Corrective Measures Assessment completed in September 2014 by a third party engineering firm, from which a remediation plan has been adopted by the City and has been approved the Montana Department of Environmental Quality. The cost of post closure care is an estimate and is subject to changes resulting from inflation, deflation, technology, or changes in applicable laws or regulations.
The Solid Waste Fund accounts for the City’s solid waste collection, recycling, and disposal utility operation – including assets, liabilities, and post-closure costs associated with the closed Story Mill landfill. Segment information for the landfill is as follows:
Condensed Statement of Net Position
Restricted cash and cash equivalents 495,735$
Capital assets, net of depreciation 934,183
Total assets 1,429,918$
Current liabilities 55,398$
Closure and post-closure care cost 2,629,164
Total liabilities 2,684,562
Restricted for debt service (1,254,644)
Total net position (1,254,644)
Total liabilities and net position 1,429,918$ DRAFT438
119 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 21. SOLID WASTE LANDFILL CLOSURE AND POST-CLOSURE CARE COSTS (CONTINUED)
Condensed Statement of Revenues, Expenses and Changes in Net Position
Operating revenues and expenses:
Operating revenues -$
Operating expenses
Depreciation 58,346
Change in post closure cost estimate 299,808
Other operating 568,452
Total operating expenses 926,606
Operating loss (926,606)
Non-operating revenues (expenses):
Interest expense (7,593)
Other income (6,104)
Loss on the sale of assets (2,042,391)
Transfers 807,000
Total non-operating revenues (1,249,088)
Change in net position (2,175,694)
Net position, beginning of year 921,050
Net position, end of year (1,254,644)$ DRAFT439
120 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 22. SEGMENT INFORMATION FOR WATER ENTERPRISE FUND
The City’s Water Fund accounts for the City’s water utility operations and collection and administration of water impact fees. Segment information for the utility operations, excluding impact fees, is as follows:
Condensed Statement of Net Position
Current assets 18,227,505$
Capital assets 130,251,169
Other assets 618,517
Total assets 149,097,191$
Current liabilities 2,382,626$
Non-current liabilities 18,306,893
Total liabilities 20,689,519
Net investment in capital assets 114,491,169
Restricted for debt service 1,313,885
Unrestricted 12,602,618
Total net position 128,407,672
Total liabilities and net position 149,097,191$ DRAFT440
121 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 22. SEGMENT INFORMATION FOR WATER ENTERPRISE FUND (CONTINUED)
Condensed Statement of Revenues, Expenses, and Changes in Net Position
Operating revenues and expenses:
Operating revenues 9,281,821$
Operating expenses:
Depreciation 2,610,304
Other operating 6,474,546
Total operating expenses 9,084,850
Operating loss 196,971
Non-operating revenues (expenses)
Interest income 170,918
Interest expense (490,890)
Grant income 101,697
Gain on sale of assets 33,599
Contributions of infrastructure 3,240,002
Other income 1,126,262
Transfers 500
Total non-operating revenues 4,182,088
Change in net position 4,379,059
Net position, beginning of year 124,028,613
Net position, end of year 128,407,672$
Condensed Statement of Cash Flows
Net cash provided by operating activities 3,933,537$
Net cash flows from capital and related financing activities 500
Net cash flows from noncapital and financing activities (2,951,565)
Net cash flows from investing activities 170,918
Net change in cash flows 1,153,390
Beginning cash and equivalents 16,244,407
Ending cash and equivalents 17,397,797$
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122 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 23. IMPACT FEES
On January 22, 1996, the City Commission adopted fire, water, waste water and street impact fees in Ordinance number 1414. The impact fees were first effective on March 23, 1996. Impact fees were set at a percentage of the cost of the impact, as follows:
Original, as of Change as of Change as of Change as of Change as of Change as of
March 23, 1996 May 10, 1998 January 15, 1999 July 15, 1999 January 1, 2013 March 30, 2013
Fire impact fee 90%90%90%90%100%100%
Water impact fee 35%50%90%90%100%100%
Waste water impact fee 35%50%90%90%100%100%
Street impact fee 10%10%75%90%90%100% An applicant may obtain an Impact Fee Credit by dedication of non-site-related land or construction of non-site-related improvements. Credits must
be made before the beginning of improvement construction, must comply with the City’s Capital Improvements Program, and must be approved by
the City Commission. Credits may be used only for like-type impact fees. The full provisions for impact fee credits are contained in Chapter 3.24 of the Bozeman Municipal Code. For proprietary type funds, the City records a liability for the impact fee credit and capitalizes the underlying asset. For governmental-type funds, the credits are only disclosed in the footnotes. For government-wide financial reporting, the outstanding credits are reported as unearned revenue. The Water Impact Fee Fund, Street Impact Fee Fund, and Waste water Impact Fee Fund have recorded impact
fee credits amounting to $33,232, $56,343, and $129,042, respectively, as of June 30, 2017. The Fire Impact Fee Fund does not have any outstanding
credits. The following impact fee revenues were collected and expensed/expended during fiscal year 2017:
Expenses,
Beginning Expenditures,
Balances Impact Fees Other Income and Transfers Ending Balances
Fire 1,237,488$ 315,732$ 12,311$ (14,779)$ 1,550,752$
Water 2,104,525 1,885,123 26,982 (471,188) 3,545,442
Waste water 1,767,461 1,101,631 20,149 (287,350) 2,601,891
Streets 12,647,518 3,966,383 138,955 (5,103,239) 11,649,617
Total 17,756,992$ 7,268,869$ 198,397$ (5,876,556)$ 19,347,702$ DRAFT442
123 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 24. POLLUTION REMEDIATION OBLIGATIONS Jewel v. City of Bozeman / State of Montana v. City of Bozeman This action was filed in the United States District Court for the District of Montana. The multi-count complaint reduced itself to a cost recovery action under the Federal Superfund (CERCLA) and State Superfund (CECRA). On July 8, 1999, the City, Jewel Food Stores, Inc. and the other parties reached a final settlement agreement in this action. The settlement, in part, required Jewel Food Stores, Inc. to pay the City of Bozeman $1,200,000, the City and Jewel to extend alternative water supply to businesses and residents in the North 19th Avenue area of the City; and Jewel
and the City to share specified remediation costs on an equal basis (50% each) up to a cumulative amount of $4,000,000, and for eligible costs in excess of that amount, to be shared 70% by Jewel and 30% by the City. The City is reimbursed by insurers for 23% of the City’s expenditures for these purposes. The Montana Department of Environmental Quality (MDEQ) issued the Record of Decision (ROD) for the Bozeman Solvent Site (BSS) in August
2011. The Administrative Order of Consent (AOC) was finalized in January 2012. The ROD and AOC specifically delineate the remediation to be completed for the BSS. The AOC serves as the legal mechanism for the implementation of the selected remedies identified in the ROD. Though remediation is currently underway and may be completed relatively quickly, monitoring of the site will continue for a period of up to 30 years. Tasman Geosciences, Inc. serves as the contractor for the potentially liable parties (the City of Bozeman and CVS Pharmacy, Inc.). Based on the selected remedies identified in the ROD, Tasman has completed a long-term cost projection for the project in February 2016. The long-term cost
projection was reviewed in September 2017 and, at that time, it was determined it was still an accurate projection. This cost projection includes all remediation and monitoring cost, as well as, the MDEQ cost recovery associated with the BSS. The long-term cost projection for the City is $2,089,997 in remediation costs. Reduced by its insurer’s reimbursement, the amount is $1,700,183. This liability is recorded in the Waste Water Fund, is an estimate, and is subject to changes resulting from inflation, deflation, technology, or changes in applicable laws or regulations
CMC Asbestos Bozeman CECRA Facility In 2001, the City purchased property located within the CMC Asbestos Bozeman Facility (the “Facility”), a former asbestos ore storage and processing, recycling/salvage yard. In 2002, contractors for the City, under the Montana Voluntary Cleanup and Redevelopment Act (VCRA), submitted a Voluntary Cleanup Plan (VCP), which was approved by the Department of Environmental Quality (DEQ). Remediation work on City-owned property was completed in October 2003. On December 21, 2006, the City agreed to complete remedial actions at the remainder of the
Facility, which included adjacent, private properties. The City submitted an Addendum to its original VCP, and cleanup work under the approved Addendum was completed in June 2009. On October 20, 2010, the City received notice from the DEQ stating that no further action is required at the facility and that the DEQ proposes removing the Facility from the CECRA priority list. Pursuant to an August 2007 Stipulated Agreement between the City and all other involved
parties, additional cleanup after issuance of the DEQ’s closure letter may be required by DEQ based upon property use changes, modification of structures, or other factors. The City has an ongoing claim against the State orphan share for the orphan share funds’ proportional share of these DRAFT443
124 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 24. POLLUTION REMEDIATION OBLIGATIONS (CONTINUED)
CMC Asbestos Bozeman CECRA Facility (Continued) post-closure clean-up costs. In addition, all other parties are still liable for their proportional share of the clean-up. The result is that should additional work be required at the Facility, the City will only be liable for 1% of the total post-closure clean-up costs.
NOTE 25. SUBSEQUENT EVENT In December of 2017, The Trust for Public Land donated roughly 5 acres of land, including the former Boys & Girls Club building, to the City to serve as the new administration headquarters for the City’s recreation department and as a community center at the edge of Story Mill Community Park. The land and building were appraised at $1.5 million.
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125 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2017
NOTE 26. NET POSITION COMPOSITION
The table presented below displays the City’s fund balances by major purpose as displayed on page 41 of the governmental funds balance sheet.
Street Street Building Nonmajor Total
General Impact Fees Maintenance Inspection SID Sinking Governmental Governmental
Fund Special Revenue Special Revenue Special Revenue Debt Service Funds Funds
Nonspendable
Prepaids -$ -$ -$ -$ -$ 331,500$ 331,500$
Cemetery perpetual care - - - - - 1,201,838 1,201,838
Total nonspendable - - - - - 1,533,338 1,533,338
Restricted
General government-Planning - - - - - 1,356,157 1,356,157
General government-Health Insurance - - - - - 349,390 349,390
General government-other - - - - - 105 105
Public safety - Building Inspection - - - 1,701,829 - - 1,701,829
Public safety-Fire Impact - - - - - 1,550,752 1,550,752
Public safety-Victim Witness - - - - - 388,910 388,910
Public safety-other - - - - - 185,660 185,660
Public service - 11,649,617 439,721 - - 1,474,917 13,564,255
Public service - Gas Tax - - - - - 1,505,256 1,505,256
Public service - Community Transportation - - - - - 57,432 57,432
Public service - Lighting Districts - - - - - 574,910 574,910
Public welfare - Tax Increment Districts - - - - - 3,629,097 3,629,097
Public welfare - Econ Develop Loan Fund - - - - - 825,250 825,250
Public welfare - Tree Maint. District - - - - - 328,339 328,339
Public welfare - other - - - - - 619,072 619,072
Capital projects-Trail Open Space Parks - - - - - 7,789,279 7,789,279
Debt service-SID Sinking - - - - 999,850 - 999,850
Debt service-SID Revolving Fund - - - - - 3,420,424 3,420,424
Debt service-GO Bonds - - - - - 92,160 92,160
Total restricted - 11,649,617 439,721 1,701,829 999,850 24,147,110 38,938,127
Committed
General government - - - - - 1,291,778 1,291,778
Public safety - - - - - 1,432,797 1,432,797
Public service - - - - - 23,262 23,262
Public welfare - - - - - 801,354 801,354
Capital projects - - - - - 352,503 352,503
Total committed - - - - - 3,901,694 3,901,694
Assigned
General government 1,267,989 - - - - - 1,267,989
Public welfare - - - - - 1,171 1,171
Capital projects 77,622 - - - - 926,425 1,004,047
Budget ordinance minimum 16.67%5,057,271 - - - - - 5,057,271
Total assigned 6,402,882 - - - - 927,596 7,330,478
Unassigned 87,274 - - - - (50,900) 36,374
Total net position 6,490,156$ 11,649,617$ 439,721$ 1,701,829$ 999,850$ 30,458,838$ 51,740,011$ DRAFT445
C. REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT DISCUSSION AND ANALYSIS DRAFT447
126 CITY OF BOZEMAN, MONTANA SCHEDULE OF FUNDING PROGRESS – OTHER POST-EMPLOYMENT HEALTHCARE BENEFITS Year Ended June 30, 2017
The annual OPEB costs, the percentage of OPEB cost contibuted to the plan, and the net OPEB obligation for June 30, 2017, for the Retiree Health Plan are as follows:
Net OPEB Obligation
1,930,074$
2,088,897$
2,232,576$
2,385,029$
6/30/2016 292,862$ 50.39%
6/30/2015 295,694$ 46.29%
6/30/2017 290,055$ 47.44%
ANNUAL OPEB COST
Retiree Health Plan Year Ended
6/30/2014
Annual OPEB Cost
219,207$
Percentage of OPEB Cost
59.81%
The funded status of the plan was as follows:
-$
2,488,935
(2,488,935)$
0.0%
28,482,263$
8.74%
Actuarial
Valuation Date
Actuarial
Value of
Assets (a)
Actuarial Accrued
Liability (AAL)
(b)
Unfunded AAL
(UAAL)
(b-a)
Funded Ratio
(a/b)
Covered Payroll
(c)
UAAL as a Percentage of
Covered Payroll
((b - a) / c)
7/1/2014 -$ 2,675,667$ 2,675,667$ 0% 26,884,822$ 9.95%
7/1/2014 -$ 2,675,667$ 2,675,667$ 0% 27,652,683$ 9.68%
7/1/2016 -$ 2,488,935$ 2,488,935$ 0% 28,482,263$ 8.74%
SCHEDULE OF FUNDING PROGRESS
Retiree Medical Plan
(c) Covered payroll
FUNDED STATUS
Unfunded actuarial accrued liability (funding excess) as a percentage of covered payroll
({(a) - (b)} / (c))
(a) Actuarial accrued liability (AAL)
(b) Actuarial value of plan assets (UAAL)
Unfunded actuarial accrued liability (funding excess) [(a) - (b)]
Funded ratio (b) / (a)
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127 CITY OF BOZEMAN, MONTANA SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY AND SCHEDULE OF CONTRIBUTIONS
Year Ended June 30, 2017
Schedule of Proportionate Share of the Net Pension Liability:
As of Reporting Date 2017 2016 2015
Employer's proportion of the net pension liability (percentage)1.0218% 0.9588% 0.91505%
Employer's net pension liability (amount) $ 17,404,143 $ 13,403,285 $ 11,401,613
State's net pension liability (amount) $ 212,659 $ 164,637 $ 139,231
Total $ 17,616,802 $ 13,567,922 $ 11,540,844
Employer's covered payroll $ 12,238,920 $ 11,189,797 $ 10,479,122
Employer's proportionate share as a percent of covered payroll 142.20% 119.78% 111.22%
Plan fiduciary net position as a percent of total pension liability 74.71%78.40% 79.9000%
Schedule of Contributions:
As of Reporting Date 2017 2016 2015
Contractually required DB contributions $ 1,081,810 $ 1,022,996 $ 922,084
Plan choice rate required contributions $ 109,478 $ 28,892 $ 52,151
Contributions in relation to the contractually required contributions $ 1,191,288 $ 1,051,888 $ 974,235
Contribution deficiency (excess) $ - $ - $ -
Employer's covered payroll $ 12,924,792 $ 12,238,920 $ 11,189,797
Contributions as a percent of covered payroll 9.2171%8.59%8.71%
PERS
*The amounts presented for each fiscal year were determined as of June 30. Schedule is intended to show information for 10 years. Additional years will
be displayed as they become available.
*The amounts presented for each fiscal year were determined as of June 30. Schedule is intended to show information for 10 years. Additional years will
be displayed as they become available.
PERS
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128 CITY OF BOZEMAN, MONTANA SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY AND SCHEDULE OF CONTRIBUTIONS (CONTINUED)
Year Ended June 30, 2017
Schedule of Proportionate Share of the Net Pension Liability:
As of Reporting Date 2017 2016 2015
Employer's proportion of the net pension liability (percentage)2.3705% 2.4336% 2.4192%
Employer's net pension liability (amount) $ 2,707,390 $ 2,489,054 $ 2,361,551
State's net pension liability (amount) $ 6,134,093 $ 5,543,784 $ 5,327,544
Total $ 8,841,483 $ 8,032,838 $ 7,689,095
Employer's covered payroll $ 3,338,041 $ 3,270,451 $ 3,142,481
Employer's proportionate share as a percent of covered payroll 81.11%76.11%75.15%
Plan fiduciary net position as a percent of total pension liability 75.48%76.90%76.70%
Schedule of Contributions:
As of Reporting Date 2017 2016 2015
Contractually required contributions $ 504,303 $ 477,250 $ 478,776
Contributions in relation to the contractually required contributions $ 504,303 $ 477,250 $ 478,776
Contribution deficiency (excess) $ - $ - $ -
Employer's covered payroll $ 3,511,860 $ 3,338,041 $ 3,270,451
Contributions as a percent of covered payroll 14.36%14.03%14.64%
FURS
FURS
*The amounts presented for each fiscal year were determined as of June 30. Schedule is intended to show information for 10 years.
Additional years will be displayed as they become available.
*The amounts presented for each fiscal year were determined as of June 30. Schedule is intended to show information for 10 years.
Additional years will be displayed as they become available.
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129 CITY OF BOZEMAN, MONTANA SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY AND SCHEDULE OF CONTRIBUTIONS (CONTINUED)
Year Ended June 30, 2017
Schedule of Proportionate Share of the Net Pension Liability:
2017 2016 2015
Employer's proportion of the net pension liability (percentage)3.0842% 2.9746% 3.0209%
Employer's net pension liability (amount) $ 5,552,007 $ 4,920,638 $ 4,746,933
State's net pension liability (amount) $ 11,020,975 $ 9,969,680 $ 9,589,371
Total $ 16,572,982 $ 14,890,318 $ 14,336,304
Employer's covered payroll $ 4,353,897 $ 4,116,930 $ 4,053,265
Employer's proportionate share as a percent of covered payroll 127.52% 119.52% 117.11%
Plan fiduciary net position as a percent of total pension liability 65.62%66.90%67.01%
Schedule of Contributions:
2017 2016 2015
Contractually required contributions $ 655,143 $ 637,789 $ 596,791
Contributions in relation to the contractually required contributions $ 655,143 $ 637,789 $ 596,791
Contribution deficiency (excess) $ - $ - $ -
Employer's covered payroll $ 4,555,121 $ 4,353,897 $ 4,116,930
Contributions as a percent of covered payroll 14.38%14.65%14.50%
MPORS
MPORS
*The amounts presented for each fiscal year were determined as of June 30. Schedule is intended to show information for 10 years. Additional years will
be displayed as they become available.
*The amounts presented for each fiscal year were determined as of June 30. Schedule is intended to show information for 10 years. Additional years will
be displayed as they become available.
DRAFT452
130 CITY OF BOZEMAN, MONTANA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN CHANGES Year Ended June 30, 2017
CHANGE OF BENEFIT TERMS The following changes to the PERS, FURS, and MPORS plan provisions were made as identified: 2013 Legislative Changes: House Bill 454 – Permanent Injunction Limits Application of the GABA Reduction passed under HB 454
PERS Guaranteed Annual Benefit Adjustment (GABA) After the member has completed 12 full months of retirement, the member’s benefit increases by the applicable percentage (provided below) each January, inclusive of all other adjustments to the member’s benefit.
• 3% for members hired prior to July 1, 2007
• 1.5% for members hired on or after July 1, 2007 and before July 1, 2013
• Members hired on or after July 1, 2013 a. 1.5% each year PERS is funded at or above 90%
b. 1.5% is reduced by 0.1% for each 2% PERS is funded below 90%; and, c. 0% whenever the amortization period for PERS is 40 years or more.
2015 Legislative Changes – PERS: General Revisions – House Bill 101, effective January 1, 2016: >PERS Second Retirement Benefit
1) Applies to PERS members who return to active service on or after January 1, 2016. Members who retire before January 1, 2016, return to PERS-covered employment, and accumulate less than 2 years of service credit before retiring again:
• Refund of each member’s contributions from second employment plus regular interest (currently 0.25%);
• No service credit for second employment;
• Start same benefit amount the month following termination; and
• GABA starts again in the January immediately following second retirement. 2) For members who retire before January 1, 2016, return to PERS-covered employment and accumulate two or more years of service credit before retiring again:
• Member receives a recalculated retirement benefit based on laws in effect at second retirement; and,
• GABA stars in the January after receiving recalculated benefit for 12 months. 3) For members who retire on or after January 1, 2016 return to PERS-covered employment and accumulate less than 5 years of service credit before
retiring again:
• Refund of member’s contributions from second employment plus regular interest (currently 0.25%0;
• No service credit for second employment;
• Start same benefit amount the month following termination; and, DRAFT453
131 CITY OF BOZEMAN, MONTANA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN CHANGES Year Ended June 30, 2017
CHANGE OF BENEFIT TERMS (CONTINUED) 2015 Legislative Changes – PERS (Continued):
• GABA starts again in the January immediately following second retirement. 4) For members who retire on or after January 1, 2016, return to PERS-covered employment and accumulate five or more years of service credit before retiring again:
• Member receives same retirement benefit as prior to return to service;
• Member receives second retirement benefit for second period of service base on laws in effect at second retirement; and,
• GABA starts on both benefits in January after member receives original and new benefit for 12 months. Revise DC Funding Laws – House Bill 107, effective July 1, 2015 Employer Contributions and the Defined Contribution Plan – for PERS and MUS-RP
The PCR was paid off effective March 2016 and the contributions of 2.37%, 0.47%, and the 1.0% increase previously directed to the PCR are now directed to the Defined Contribution or MUS-RP member’s account. 2015 Legislative Changes - FURS: 1. If a PERS member transfers employment to a FURS covered position and fails to elect FURS membership within 90 days, the default
is PERS membership.
2015 Legislative Changes - MPORS:
• General Revisions – House Bill 101, effective January 1, 2016:
>MPORS DROP Survivor Benefits Allow statutory beneficiary (spouse or dependent child) of a deceased DROP participant to receive a DROP benefit and a survivorship benefit rather than accumulated contributions or a lump sum payment. 19-9-1206(1), MCA.
DRAFT454
132 CITY OF BOZEMAN, MONTANA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN CHANGES Year Ended June 30, 2017
CHANGES IN ACTUARIAL ASSUMPTIONS AND METHODS Method and assumptions used in calculations of actuarially determined contributions The following addition to the actuarial assumptions was adopted in 2014 based upon implementation of GASB Statement 68:
PERS FURS MPORS
Admin Expense as a % of Payroll 0.27% 0.19% 0.20%
There were no changes following the 2013 Economic Experience study for PERS, FURS, and MPORS.
The following Actuarial Assumptions are from the June 2010 Experience Study:
PERS FURS and MPORS
General Wage Growth* 4.00% 4.00%
*Includes inflation at 3.00% 3.00%
Merit increase 0% to 6.0% 0% to 7.3%
Investment rate of return 7.75%, net of pension plan investment expense, and including inflation 7.75%, net of pension plan investment expense, and including inflation
Asset valuation method 4-year smoothed market 4-year smoothed market
Actuarial cost method Entry age Entry age
Amortization method Level percentage of pay, open Level percentage of pay, open DRAFT455
133 CITY OF BOZEMAN, MONTANA SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL – GENERAL FUND
Year Ended June 30, 2017
Variance with
Actual Final Budget
Original Final Amounts Positive (Negative)
Budgetary fund balance, July 1 6,521,099$ 6,521,099$ 6,521,099$ -$
Resources (inflows):
Taxes 15,417,000 15,417,000 15,268,625 (148,375)
Special assessments - - 62 62
Licenses and permits 316,170 316,170 356,361 40,191
Intergovernmental 7,037,266 7,037,266 7,393,702 356,436
Charges for services 2,122,555 2,122,555 2,295,677 173,122
Fines and forfeitures 1,203,500 1,203,500 1,139,309 (64,191)
Sale of assets - - 23,892 23,892
Interest on investments 45,000 45,000 51,635 6,635
Transfers from other funds 2,276,755 2,276,755 2,214,190 (62,565)
Other 116,500 116,500 37,394 (79,106)
Amounts available for appropriation 35,055,845 35,055,845 35,301,946 246,101
Charges to appropriations (outflows):
Current
General government 6,702,275 6,702,275 6,623,546 78,729
Public safety 12,157,212 14,555,712 14,555,066 646
Public service 122,331 122,331 108,295 14,036
Public welfare 6,386,811 6,246,311 5,612,254 634,057
Other 2,759,508 419,508 418,559 949
Capital outlay 800,760 800,760 668,191 132,569
Debt service 400 3,900 3,760 140
Transfers to other funds 484,308 822,808 822,119 689
Total charges to appropriations 29,413,605 29,673,605 28,811,790 861,815
Budgetary fund balance, June 30 5,642,240$ 5,382,240$ 6,490,156$ 1,107,916$
Budgeted Amounts
DRAFT456
134 CITY OF BOZEMAN, MONTANA SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL OTHER MAJOR FUNDS – STREET IMPACT FEES SPECIAL REVENUE
Year Ended June 30, 2017
Variance with
Actual Amounts Final Budget
Original Final Budgetary Basis Positive (Negative)
Budgetary fund balance, July 1 12,647,518$ 12,647,518$ 12,647,518$ -$
Resources (inflows):
Taxes - - - -
Special assessments - - - -
Licenses and permits - - - -
Intergovernmental - - 11,891 11,891
Charges for services 2,293,441 2,293,441 3,966,383 1,672,942
Fines and forfeitures - - - -
Interest on investments 94,500 94,500 126,257 31,757
Transfers from other funds - - - -
Proceeds from long-term debt - - - -
Premium on bonds issued - - - -
Proceeds from the sale of capital assets - - - -
Other 960 960 807 (153)
Amounts available for appropriation 15,036,419 15,036,419 16,752,856 1,716,437
Charges to appropriations (outflows):
Current
General government - - - -
Public safety - - - -
Public service 225,000 375,000 374,301 699
Public welfare - - - -
Capital outlay 4,945,475 4,795,475 4,728,938 66,537
Debt service - - - -
Transfers to other funds - - - -
Total charges to appropriations 5,170,475 5,170,475 5,103,239 67,236
Budgetary fund balance, June 30 9,865,944$ 9,865,944$ 11,649,617$ 1,783,673$
Budgeted Amounts
DRAFT457
135 CITY OF BOZEMAN, MONTANA SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL OTHER MAJOR FUNDS – STREET MAINTENANCE SPECIAL REVENUE
Year Ended June 30, 2017
Variance with
Actual Amounts Final Budget
Original Final Budgetary Basis Positive (Negative)
Budgetary fund balance, July 1 774,948$ 774,948$ 774,948$ -$
Resources (inflows):
Taxes - - - -
Special assessments 21,950 21,950 54,404 32,454
Licenses and permits 7,619 7,619 18,466 10,847
Intergovernmental - - 1,026 1,026
Charges for services 4,526,593 4,526,593 4,545,407 18,814
Fines and forfeitures - - - -
Interest on investments 17,040 17,040 3,892 (13,148)
Transfers from other funds - - 43,227 43,227
Proceeds from long-term debt - - 234,702 234,702
Premium on bonds issued - - - -
Proceeds from the sale of capital assets - - 19,385 19,385
Other - - 19,411 19,411
Amounts available for appropriation 5,348,150 5,348,150 5,714,868 366,718
Charges to appropriations (outflows):
Current
General government - - - -
Public safety - - - -
Public service 3,010,252 3,362,252 3,363,126 (874)
Public welfare - - - -
Capital outlay 1,376,501 1,101,123 1,101,123 -
Debt service 184,822 213,322 212,898 424
Transfers to other funds 598,000 598,000 598,000 -
Total charges to appropriations 5,169,575 5,274,697 5,275,147 (450)
Budgetary fund balance, June 30 178,575$ 73,453$ 439,721$ 366,268$
Budgeted Amounts
DRAFT458
136 CITY OF BOZEMAN, MONTANA SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL OTHER MAJOR FUNDS – BUILDING INSPECTION SPECIAL REVENUE
Year Ended June 30, 2017
Variance with
Actual Amounts Final Budget
Original Final Budgetary Basis Positive (Negative)
Budgetary fund balance, July 1 1,676,314$ 1,676,314$ 1,676,314$ -$
Resources (inflows):
Taxes - - - -
Special assessments - - - -
Licenses and permits 1,670,333 1,670,333 1,717,846 47,513
Intergovernmental - - 51,440 51,440
Charges for services 1,915 1,915 732 (1,183)
Fines and forfeitures - - - -
Interest on investments 13,000 13,000 12,117 (883)
Transfers from other funds - - - -
Proceeds from long- term debt - - - -
Premium on bonds issued - - - -
Proceeds from the sale of capital assets - - - -
Other - - 2 2
Amounts available for appropriation 3,361,562 3,361,562 3,458,451 96,889
Charges to appropriations (outflows):
Current
General government - - - -
Public safety 1,945,944 1,945,944 1,704,782 241,162
Public service - - - -
Public welfare - - - -
Capital outlay 32,500 32,500 51,840 (19,340)
Debt service - - - -
Transfers to other funds - - - -
Total charges to appropriations 1,978,444 1,978,444 1,756,622 221,822
Budgetary fund balance, June 30 1,383,118$ 1,383,118$ 1,701,829$ 318,711$
Budgeted Amounts
DRAFT459
137 CITY OF BOZEMAN, MONTANA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION – BUDGETARY INFORMATION Year Ended June 30, 2017
Street
General Impact Street Building
Fund Fees Maintenance Inspection
Sources/inflows of resources
Actual amounts (budgetary basis) "available for appropriation"
from the budgetary comparison schedule 35,301,946$ 16,752,856$ 5,714,868$ 3,458,451$
Differences - budget to GAAP:
The fund balance at the beginning of the year is a budgetary resource
but is not a current-year revenue for financial reporting purposes. (6,521,099) (12,647,518) (774,948) (1,676,314)
Transfers from other funds are inflows of budgetary resources but
are not revenues for financial reporting purposes (2,214,190) - (43,227) -
The proceeds from the issuance of long-term debt are a
budgetary resource but are a other financing source for
financial reporting purposes - - (234,702) -
The proceeds from the sale of assets are budgetary resources
but are regarded as a special item, rather than revenue, for
financial reporting purposes (23,892) - (19,385) -
Total revenues as reported on the statement of revenues,
expenditures, and changes in fund balances -
governmental funds 26,542,765$ 4,105,338$ 4,642,606$ 1,782,137$
Uses/outflows of resources
Actual amounts (budgetary basis) "total charges to appropriations"
from the budgetary comparison schedule 28,811,790$ 5,103,239$ 5,275,147$ 1,756,622$
Differences - budget to GAAP:
Transfers to other funds are outflows of budgetary resources
but are not expenditures for financial reporting purposes.(822,119) - (598,000) -
Total expenditures as reported on the statement of revenues,
expenditures, and changes in fund balances - governmental funds 27,989,671$ 5,103,239$ 4,677,147$ 1,756,622$ DRAFT460
D. SUPPLEMENTAL INFORMATION DRAFT462
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES DRAFT464
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Departmental Special Revenues – Accounts for monies received and expended for projects relating to various City departments.
Fire Impact Fees Special Revenues – Accounts for the collection and expenditures associated with the fire impact fees.
City Planning Board – Accounts for monies received from various sources including property taxes, fees, and County revenues. Expenditures are for short-term and long-term planning of City and adjacent County zones. Section 76-1-102 MCA provides that the purpose of City planning is to encourage local governments to improve the present health, safety, convenience, and welfare of the citizens.
Health-Medical Insurance – Accounts for property tax revenues received and transferred to the general fund for premiums and deductibles on group
insurance coverage for City employees.
Gas Tax Apportionment – Accounts for revenues from State gasoline taxes apportioned from the State of Montana Department of Highways.
Drug Forfeitures – Accounts for monies received from fines and forfeitures of drug-related criminal prosecution, to be expended on drug law enforcement and education.
City-County Drug Forfeitures – Accounts for monies received from fines and forfeitures of drug-related criminal prosecution, from an inter-local agreement with the County, to be expended on drug law enforcement and education.
Victim/Witness Advocate – Accounts for monies collected through the Court system to assist with Victim and Witness Advocate Program.
Tree Maintenance – Accounts for special assessment revenues levied, received, and expended for tree maintenance provided to specific property
owners.
Law and Justice Center – Accounts for the receipt and expenditure of monies earmarked by the City Commission for the City’s share of the Law and Justice Center renovation.
Community Transportation – Accounts for federal funding for highways, mass transit, and alternative transportation programs as defined by the Intermodal Surface Transportation Efficiency Act (ISTEA). Money is distributed on a per-capita basis.
Fire Department Equipment– Accounts for Public Safety mill levy tax revenues for fire department capital and equipment.
Economic Development Revolving Loan Fund – Accounts for revenues received and expended relative to loans made in accordance with the Community Development Block Grant Program, for economic development purposes.
Housing Revolving Loan Fund – Accounts for revenues received and expended relative to loans made in accordance with the Community Development Block Grant Program, for housing development purposes.
Community Housing – Accounts for money set aside by the City Commission and related expenditure for the establishment of safe, decent, and
affordable housing for low and moderate-income citizens. DRAFT465
Downtown Improvement District – In November 1995, the City adopted an Urban Renewal Plan for the downtown area. This fund accounts for the
revenue and expenditures associated with the district.
Street Lighting – Accounts for special assessment revenues levied, received, and expended for street and public highway lighting provided to specific property owners.
Park Land – Accounts for monies donated for the purpose of acquiring and developing City Parks.
Municipal Court Restitution – Accounts for checks that were canceled on the restitution checking account, per MCA 46-18-250.
TIF N.E. Urban Renewal – In August of 2005, the City created an Urban Renewal Plan for the Northeast Urban section of Bozeman. This fund
accounts for the revenue and expenditures associated with the district.
TIF N 7th Corridor - In August of 2005, the City created a Renewal Plan for the North 7th Avenue business district. This fund accounts for the revenue and expenditures associated with the district. DEBT SERVICE FUNDS
Special Improvement District (SID) Revolving – Accounts for property tax revenues received and expended for the payment of special improvement district bond principal and interest.
General Obligation Bonds Debt Service Fund – Accounts for the debt service payments associated with the Library and Transportation general
obligation bonds.
Tax Increment Financing Bonds Debt Service Fund – Accounts for the debt service payments associated with the Tax Increment Urban Renewal Revenue Bonds issued as partial funding for the construction of a Downtown Intermodal Parking Facility.
CAPITAL IMPROVEMENT FUNDS
General Improvements Capital Projects Fund – Accounts for the construction of general improvement projects financed by special assessments other than those financed by proprietary funds.
PERMANENT FUNDS
Perpetual Cemetery Care – Accounts for 15% maintenance fee received from the sale of City cemetery plots, which is to be used for perpetual care. The interest income from the trust is transferred to the general fund for use in maintaining the City’s cemetery. DRAFT466
138 CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS June 30, 2017
City
Planning Health-Medical Community
Departmental Board Insurance Transportation
ASSETS
Cash and cash equivalents 1,742,907$ 802,558$ 254,431$ 103,933$
Receivables:
Property taxes 3,988 8,179 105,156 -
Accrued interest - - - -
Customers, net 14,398 - - -
Special assessments - - - -
Other governments 292,173 - - -
Others - - - -
Advances to other city funds - - - -
Prepaid expenditures - - - -
Notes receivable - - - -
Restricted cash and cash equivalents 25,000 580,371 - -
Total assets 2,078,466$ 1,391,108$ 359,587$ 103,933$
LIABILITIES
Accounts payable 110,941$ 33,802$ -$ 46,501$
Escheat property payable - - - -
Accrued employee benefits payable 16 326 - -
Total liabilities 110,957 34,128 - 46,501
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes 399 823 10,197 -
Unavailable revenue-special assessments - - - -
Total deferred inflows of resources 399 823 10,197 -
FUND BALANCES
Nonspendable - - - -
Restricted 200,306 1,356,157 349,390 57,432
Committed 1,817,704 - - -
Assigned - - - -
Unassigned (50,900) - - -
Total fund balances 1,967,110 1,356,157 349,390 57,432
Total liabilities, deferred inflows
of resources, and fund balances 2,078,466$ 1,391,108$ 359,587$ 103,933$
(continued)
Special Revenue Funds
DRAFT468
139
CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) June 30, 2017
Special Revenue Funds
Downtown
Gas Tax Tree Fire Improvement
Apportionment Maintenance Impact Fees District
ASSETS
Cash and cash equivalents 1,552,472$ 339,831$ -$ 2,667,653$
Receivables:
Property taxes - - - 98,696
Accrued interest - - - 4,783
Customers, net - - - -
Special assessments - 17,370 - 1,628
Other governments - - - -
Others - - - -
Advances to other city funds - - - -
Prepaid expenditures - - - -
Notes receivable - - - -
Restricted cash and cash equivalents - - 1,551,263 -
Total assets 1,552,472$ 357,201$ 1,551,263$ 2,772,760$
LIABILITIES
Accounts payable 47,216$ 18,987$ 511$ 1,023,277$
Escheat property payable - - - -
Accrued employee benefits payable - 775 - -
Total liabilities 47,216 19,762 511 1,023,277
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes - - - 704
Unavailable revenue-special assessments - 9,100 - -
Total deferred inflows of resources - 9,100 - 704
FUND BALANCES
Nonspendable - - - -
Restricted 1,505,256 328,339 1,550,752 1,748,779
Committed - - - -
Assigned - - - -
Unassigned - - - -
Total fund balances 1,505,256 328,339 1,550,752 1,748,779
Total liabilities, deferred inflows
of resources, and fund balances 1,552,472$ 357,201$ 1,551,263$ 2,772,760$
(continued) DRAFT469
140
CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) June 30, 2017
Special Revenue Funds
Economic Housing City-County
Development Community Revolving Drug Drug
Revolving Loan Housing Loan Fund Forfeitures Forfeitures
ASSETS
Cash and cash equivalents -$ 522,102$ -$ 71,059$ 130,023$
Receivables:
Property taxes - 11,551 - - -
Accrued interest - - -
Customers, net 333,719 - - 4,336 -
Special assessments - - - - -
Other governments - - - - -
Others - - - - -
Advances to other city funds - - - - -
Prepaid expenditures - - - - -
Notes receivable 491,531 69,065 2,093 - -
Restricted cash and cash equivalents - - - - -
Total assets 825,250$ 602,718$ 2,093$ 75,395$ 130,023$
LIABILITIES
Accounts payable -$ 37,200$ 922$ 5,028$ -$
Escheat property payable - - - - -
Accrued employee benefits payable - - - 103 -
Total liabilities - 37,200 922 5,131 -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes - 794 - - -
Unavailable revenue-special assessments - - - - -
Total deferred inflows of resources - 794 - - -
FUND BALANCES
Nonspendable - - - - -
Restricted 825,250 - - 70,264 -
Committed - 564,724 - - 130,023
Assigned - - 1,171 - -
Unassigned - - - - -
Total fund balances 825,250 564,724 1,171 70,264 130,023
Total liabilities, deferred inflows
of resources, and fund balances 825,250$ 602,718$ 2,093$ 75,395$ 130,023$
(continued) DRAFT470
141
CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) June 30, 2017
Special Revenue Funds
Law and Street Arterial
Justice and Collector TIF TIF N.E.Victim/Witness Fire Department
Center District N 7th Corridor Urban Renewal Advocate Equipment
ASSETS
Cash and cash equivalents -$ 1,936,473$ 1,579,190$ 380,733$ 388,020$ 1,022,383$
Receivables:
Property taxes - - 23,935 7,037 - 15,940
Accrued interest - - - - - -
Customers, net - - - - 4,892 -
Special assessments - 26,815 - - - -
Other governments - - - - - -
Others - - - - - -
Advances to other city funds - - - - - -
Prepaid expenditures 331,500 - - - - -
Notes receivable - - - - - -
Restricted cash and cash equivalents - - - - - -
Total assets 331,500$ 1,963,288$ 1,603,125$ 387,770$ 392,912$ 1,038,323$
LIABILITIES
Accounts payable -$ 453,184$ 103,593$ 2,745$ 4,002$ -$
Appearance bonds and other liabilities 35,188
Escheat property payable - - - - - -
Accrued employee benefits payable - - - - - -
Total liabilities - 488,372 103,593 2,745 4,002 -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes - - 4,239 - - 1,583
Unavailable revenue-special assessments - - - - - -
Total deferred inflows of resources - - 4,239 - - 1,583
FUND BALANCES
Nonspendable 331,500 - - - - -
Restricted - 1,474,916 1,495,293 385,025 388,910 -
Committed - - - - - 1,036,740
Assigned - - - - - -
Unassigned - - - - - -
Total fund balances 331,500 1,474,916 1,495,293 385,025 388,910 1,036,740
Total liabilities, deferred inflows
of resources, and fund balances 331,500$ 1,963,288$ 1,603,125$ 387,770$ 392,912$ 1,038,323$
(continued)DRAFT471
142
CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) June 30, 2017
Special Revenue Funds
Street Park Municipal Court
Lighting Land Restitution Total
ASSETS
Cash and cash equivalents 591,545$ 534,163$ 21,157$ 14,640,633$
Receivables:
Property taxes - - - 274,482
Accrued interest - - - 4,783
Customers, net - - - 357,345
Special assessments 12,511 - - 58,324
Other governments - - - 292,173
Others - - -
Advances to other city funds - - - -
Prepaid expenditures - - - 331,500
Notes receivable - - - 562,689
Restricted cash and cash equivalents - - - 2,156,634
Total assets 604,056$ 534,163$ 21,157$ 18,678,563$
LIABILITIES
Accounts payable 29,146$ -$ 1,000$ 1,918,055$
35,188
Escheat property payable - - 20,052 20,052
Accrued employee benefits payable - - - 1,220
Total liabilities 29,146 - 21,052 1,974,515
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes - - - 18,739
Unavailable revenue-special assessments - - - 9,100
Total deferred inflows of resources - - - 27,839
FUND BALANCES
Nonspendable - - - 331,500
Restricted 574,910 534,163 105 12,845,247
Committed - - - 3,549,191
Assigned - - 1,171
Unassigned - - - (50,900)
Total fund balances 574,910 534,163 105 16,676,209
Total liabilities, deferred inflows
of resources, and fund balances 604,056$ 534,163$ 21,157$ 18,678,563$
(continued)DRAFT472
143
CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) June 30, 2017
SID G.O.TIF
Revolving Bonds Bonds Total
ASSETS
Cash and cash equivalents 2,874,013$ 38,240$ -$ 2,912,253$
Receivables:
Property taxes - 59,772 - 59,772
Accrued interest 6,878 - - 6,878
Customers, net - - - -
Special assessments - - - -
Other governments - - - -
Others - - - -
Advances to other city funds 539,533 - - 539,533
Prepaid expenditures - - - -
Notes receivable - - - -
Restricted cash and cash equivalents - - - -
Total assets 3,420,424$ 98,012$ -$ 3,518,436$
LIABILITIES
Accounts payable -$ 500$ -$ 500$
Escheat property payable - - - -
Accrued employee benefits payable - - - -
Total liabilities - 500 - 500
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes - 5,352 - 5,352
Unavailable revenue-special assessments - - - -
Total deferred inflows of resources - 5,352 - 5,352
FUND BALANCES
Nonspendable - - - -
Restricted 3,420,424 92,160 - 3,512,584
Committed - - - -
Assigned - - - -
Unassigned - - - -
Total fund balances 3,420,424 92,160 - 3,512,584
Total liabilities, deferred inflows
of resources, and fund balances 3,420,424$ 98,012$ -$ 3,518,436$
(continued)
Debt Service Funds
DRAFT473
144
CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) June 30, 2017
Capital Permanent Total
Projects Fund Nonmajor
Perpetual Governmental
Construction Cemetery Care Funds
ASSETS
Cash and cash equivalents 8,614,201$ -$ 26,167,087$
Receivables:
Property taxes - - 334,254
Accrued interest 35,202 - 46,863
Customers, net 39,223 4,800 401,368
Special assessments - - 58,324
Other governments - - 292,173
Others - - -
Advances to other city funds - - 539,533
Prepaid expenditures - - 331,500
Notes receivable - - 562,689
Restricted cash and cash equivalents 885,571 1,200,396 4,242,601
Total assets 9,574,197$ 1,205,196$ 32,976,392$
LIABILITIES
Accounts payable 359,580$ 3,358$ 2,281,493$
Appearance bonds and other liabilities 146,410 181,598
Escheat property payable - - 20,052
Accrued employee benefits payable - - 1,220
Total liabilities 505,990 3,358 2,484,363
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes - - 24,091
Unavailable revenue-special assessments - - 9,100
Total deferred inflows of resources - - 33,191
FUND BALANCES
Nonspendable - 1,201,838 1,533,338
Restricted 7,789,279 - 24,147,110
Committed 352,503 - 3,901,694
Assigned 926,425 - 927,596
Unassigned - - (50,900)
Total fund balances 9,068,207 1,201,838 30,458,838
Total liabilities, deferred inflows
of resources, and fund balances 9,574,197$ 1,205,196$ 32,976,392$ DRAFT474
145
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS Year ended June 30, 2017
Special Revenue Funds
City
Planning Health-Medical Community
Departmental Board Insurance Transportation
REVENUES
Taxes 143,351$ 180,741$ 2,299,539$ -$
Special assessments - - - -
Licenses and permits - - - -
Intergovernmental 420,587 119,888 - 49,952
Charges for services 25,100 799,243 - -
Fines and forfeitures - - - -
Interest on investments 17,009 7,358 - 805
Interest on loans receivable - - - -
Other 108,295 59,556 - -
Total revenues 714,342 1,166,786 2,299,539 50,757
EXPENDITURES
Current:
General government - 965,863 - -
Public safety 268,664 - - -
Public service 19 - - -
Public welfare 324,658 - - -
Other 87,610 - - -
Capital outlay 159,202 - - 59,889
Debt service:
Principal - - - -
Interest and fiscal fees - - - -
Total expenditures 840,153 965,863 - 59,889
Revenues over (under) expenditures (125,811) 200,923 2,299,539 (9,132)
OTHER FINANCING SOURCES (USES)
Transfers in 100,000 88,037 - -
Transfers out - - (2,278,269) -
Sale of capital assets - - - -
Total other financing sources (uses)100,000 88,037 (2,278,269) -
Net change in fund balance (25,811) 288,960 21,270 (9,132)
FUND BALANCES, beginning of year 1,992,921 1,067,197 328,120 66,564
FUND BALANCES, end of year 1,967,110$ 1,356,157$ 349,390$ 57,432$
(continued)DRAFT475
146
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Special Revenue Funds
Downtown
Gas Tax Tree Fire Improvement
Apportionment Maintenance Impact Fees District
REVENUES
Taxes -$ -$ -$ 1,081,545$
Special assessments - 1,031 - 120,319
Licenses and permits - - -
Intergovernmental 693,945 10,261 - 56,050
Charges for services - 581,734 315,732 -
Fines and forfeitures - - - -
Interest on investments 11,418 2,634 12,311 19,698
Interest on loans receivable - - - -
Other - 3,244 - -
Total revenues 705,363 598,904 328,043 1,277,612
EXPENDITURES
Current:
General government - - - -
Public safety - - 14,778 -
Public service 157,342 - - -
Public welfare - 480,814 - 415,800
Other - - - -
Capital outlay - 33,246 - -
Debt service:
Principal - - - -
Interest and fiscal fees - - - -
Total expenditures 157,342 514,060 14,778 415,800
Revenues over (under) expenditures 548,021 84,844 313,265 861,812
OTHER FINANCING SOURCES (USES)
Transfers in - - - -
Transfers out - - - (792,398)
Sale of capital assets - - - -
Total other financing sources (uses)- - - (792,398)
Net change in fund balance 548,021 84,844 313,265 69,414
FUND BALANCES, beginning of year 957,235 243,495 1,237,487 1,679,365
FUND BALANCES, end of year 1,505,256$ 328,339$ 1,550,752$ 1,748,779$
(continued) DRAFT476
147
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Special Revenue Funds
Economic Housing City-County
Development Community Revolving Drug Drug
Revolving Loan Housing Loan Fund Forfeitures Forfeitures
REVENUES
Taxes -$ 260,687$ -$ -$ -$
Special assessments - - - - -
Licenses and permits - - - - -
Intergovernmental - - - 108,023 -
Charges for services - - - - -
Fines and forfeitures - - - 53,908 500
Interest on investments 863 4,401 - 69 1,115
Interest on loans receivable 27,755 494 143 - -
Other 2,400 - - 12,436 -
Total revenues 31,018 265,582 143 174,436 1,615
EXPENDITURES
Current:
General government - - - - -
Public safety - - - 249,716 -
Public service - - - - -
Public welfare 63,198 284,401 7,219 - -
Other - - - - -
Capital outlay - - - - -
Debt service:
Principal - - - - -
Interest and fiscal fees - - - - -
Total expenditures 63,198 284,401 7,219 249,716 -
Revenues over (under) expenditures (32,180) (18,819) (7,076) (75,280) 1,615
OTHER FINANCING SOURCES (USES)
Transfers in - - - 111,042 -
Transfers out - - - - -
Sale of capital assets - - - - -
Total other financing sources (uses)- - - 111,042 -
Net change in fund balance (32,180) (18,819) (7,076) 35,762 1,615
FUND BALANCES, beginning of year 857,430 583,543 8,247 34,502 128,408
FUND BALANCES, end of year 825,250$ 564,724$ 1,171$ 70,264$ 130,023$
(continued) DRAFT477
148
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Special Revenue Funds
Law and Street Arterial
Justice and Collector TIF TIF N.E.Victim/Witness Fire Department
Center District N 7th Corridor Urban Renewal Advocate Equipment
REVENUES
Taxes -$ -$ 651,949$ 130,468$ -$ 347,641$
Special assessments - 2,282 - - - -
Licenses and permits - - - - - -
Intergovernmental - - 37,926 1,353 - -
Charges for services - 1,092,411 - - - -
Fines and forfeitures - - - - 62,808 -
Interest on investments - 13,916 9,727 3,314 3,324 7,047
Interest on loans receivable - - - - - -
Other - - - - - -
Total revenues - 1,108,609 699,602 135,135 66,132 354,688
EXPENDITURES
Current:
General government - - - - 54,477 -
Public safety 19,125 - - - - -
Public service - 3,934 - - - -
Public welfare - - 331,066 121,700 - -
Other - - .- - -
Capital outlay - 637,794 778,288 - - -
Debt service:
Principal - - - - - -
Interest and fiscal fees - - - - - -
Total expenditures 19,125 641,728 1,109,354 121,700 54,477 -
Revenues over (under) expenditures (19,125) 466,881 (409,752) 13,435 11,655 354,688
OTHER FINANCING SOURCES (USES)
Transfers in - - 116,561 - - -
Transfers out - - (47,327) (10,000) - -
Sale of capital assets - - - - - -
Total other financing sources (uses)- - 69,234 (10,000) - -
Net change in fund balance (19,125) 466,881 (340,518) 3,435 11,655 354,688
FUND BALANCES, beginning of year 350,625 1,008,035 1,835,811 381,590 377,255 682,052
FUND BALANCES, end of year 331,500$ 1,474,916$ 1,495,293$ 385,025$ 388,910$ 1,036,740$
(continued) DRAFT478
149
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Municipal
Street Park Court
Lighting Land Restitution Totals
REVENUES
Taxes -$ -$ -$ 5,095,921$
Special assessments 426,189 - - 549,821
Licenses and permits - - - -
Intergovernmental - - - 1,497,985
Charges for services - - - 2,814,220
Fines and forfeitures - - - 117,216
Interest on investments 5,138 4,229 - 124,376
Interest on loans receivable - - - 28,392
Other - 105,064 - 290,995
Total revenues 431,327 109,293 - 10,518,926
EXPENDITURES
Current:
General government - - - 1,020,340
Public safety - - - 552,283
Public service 412,158 - - 573,453
Public welfare - - - 2,028,856
Other - - - 87,610
Capital outlay - - - 1,668,419
Debt service:
Principal - - - -
Interest and fiscal fees - - - -
Total expenditures 412,158 - - 5,930,961
Revenues over (under) expenditures 19,169 109,293 - 4,587,965
OTHER FINANCING SOURCES (USES)
Transfers in - - - 415,640
Transfers out (31,900) - - (3,159,894)
Sale of capital assets - - - -
Total other financing sources (uses)(31,900) - - (2,744,254)
Net change in fund balance (12,731) 109,293 - 1,843,711
FUND BALANCES, beginning of year 587,641 424,870 105 14,832,498
FUND BALANCES, end of year 574,910$ 534,163$ 105$ 16,676,209$
(continued)
Special Revenue Funds
DRAFT479
150
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
SID G.O.TIF
Revolving Bonds Bonds Totals
REVENUES
Taxes -$ 1,318,121$ -$ 1,318,121$
Special assessments - - - -
Licenses and permits - - - -
Intergovernmental - - - -
Charges for services 1,917 - - 1,917
Fines and forfeitures - - - -
Interest on investments 28,362 1,018 - 29,380
Interest on loans receivable 3,445 - - 3,445
Other - - - -
Total revenues 33,724 1,319,139 - 1,352,863
EXPENDITURES
Current:
General government - - - -
Public safety - - - -
Public service - - - -
Public welfare - - - -
Other - - -
Capital outlay - - - -
Debt service:-
Principal - 860,000 205,000 1,065,000
Interest and fiscal fees - 499,938 220,838 720,776
Total expenditures - 1,359,938 425,838 1,785,776
Revenues over (under) expenditures 33,724 (40,799) (425,838) (432,913)
OTHER FINANCING SOURCES (USES)
Transfers in - 425,838 425,838
Transfers out - - - -
Sale of capital assets - - - -
Total other financing sources (uses)- - 425,838 425,838
Net change in fund balance 33,724 (40,799) - (7,075)
FUND BALANCES, beginning of year 3,386,700 132,959 - 3,519,659
FUND BALANCES, end of year 3,420,424$ 92,160$ -$ 3,512,584$
(continued)
Debt Service Funds
DRAFT480
151
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Capital Permanent Total
Projects Fund Nonmajor
Cemetery Governmental
Construction Perpetual Care Funds
REVENUES
Taxes -$ -$ 6,414,042$
Special assessments - - 549,821
Licenses and permits - - -
Intergovernmental - - 1,497,985
Charges for services - 115,982 2,932,119
Fines and forfeitures - - 117,216
Interest on investments 151,434 9,906 315,096
Interest on loans receivable - - 31,837
Other 958,800 - 1,249,795
Total revenues 1,110,234 125,888 13,107,911
EXPENDITURES
Current:
General government - - 1,020,340
Public safety - - 552,283
Public service 3,596 - 577,049
Public welfare 12,949 - 2,041,805
Other - - 87,610
Capital outlay 4,249,509 - 5,917,928
Debt service:-
Principal - - 1,065,000
Interest and fiscal fees - - 720,776
Total expenditures 4,266,054 - 11,982,791
Revenues over (under) expenditures (3,155,820) 125,888 1,125,120
OTHER FINANCING SOURCES (USES)
Transfers in 851,164 - 1,692,642
Transfers out - - (3,159,894)
Sale of capital assets - - -
Total other financing sources (uses)851,164 - (1,467,252)
Net change in fund balance (2,304,656) 125,888 (342,132)
FUND BALANCES, beginning of year 11,372,863 1,075,950 30,800,970
FUND BALANCES, end of year 9,068,207$ 1,201,838$ 30,458,838$
DRAFT481
BUDGET TO ACTUAL SCHEDULES OTHER MAJOR FUNDS DRAFT482
152
CITY OF BOZEMAN, MONTANA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL OTHER MAJOR FUNDS – SID SINKING FUND Year Ended June 30, 2017
Variance with
Actual Amounts Final Budget
Original Final Budgetary Basis Positive (Negative)
Budgetary fund balance, July 1 730,278$ 730,278$ 730,278$ -$
Resources (inflows):
Taxes - - - -
Special assessments 616,449 616,449 558,988 (57,461)
Licenses and permits - - - -
Intergovernmental - - - -
Charges for services - - 3,512 3,512
Fines and forfeitures - - - -
Interest on investments 9,940 9,940 11,693 1,753
Transfers from other funds - - - -
Proceeds from long-term debt - - - -
Premium on bonds issued - - - -
Proceeds from the sale of capital assets - - -
Other - - 259 259
Amounts available for appropriation 1,356,667 1,356,667 1,304,730 (51,937)
Charges to appropriations (outflows):
Current:
General government - - - -
Public safety - - - -
Public service - - - -
Public welfare - - - -
Capital outlay - - - -
Debt service 379,800 379,800 191,835 187,965
Transfers to other funds 10,700 10,700 113,045 (102,345)
Total charges to appropriations 390,500 390,500 304,880 85,620
Budgetary fund balance, June 30 966,167$ 966,167$ 999,850$ 33,683$
Budgeted Amounts
DRAFT484
153
CITY OF BOZEMAN, MONTANA NOTE TO BUDGET TO ACTUAL STATEMENT - OTHER MAJOR FUNDS Year Ended June 30, 2017
SID Sinking
Fund
Sources/inflows of resources
Actual amounts (budgetary basis) "available for appropriation" from
the budgetary comparison schedule 1,304,730$
Differences - budget to GAAP:
The fund balance at the beginning of the year is a budgetary resource but is
not a current-year revenue for financial reporting purposes.(730,278)
Transfers from other funds are inflows of budgetary resources but are not
revenues for financial reporting purposes.-
The proceeds from the issuance of long-term debt are a budgetary resource
but are a other financing source for financial reporting purposes -
The proceeds from the sale of assets are budgetary resources but are regarded
as a special item, rather than revenue, for financial reporting purposes -
Total revenues as reported on the statement of revenues, expenditures,
and changes in fund balances - governmental funds 574,452$
Uses/outflows of resources
Actual amounts (budgetary basis) "total charges to appropriations" from
the budgetary comparison schedule 304,880$
Differences - budget to GAAP:
Transfers to other funds are outflows of budgetary resources but are not
expenditures for financial reporting purposes.(113,045)
Total expenditures as reported on the statement of revenues, expenditures,
and changes in fund balances - governmental funds 191,835$ DRAFT485
BUDGET TO ACTUAL SCHEDULES – NONMAJOR FUNDS
DRAFT486
154
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS Year Ended June 30, 2017
Special Revenue Funds
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes 124,392$ 143,351$ 18,959$ 176,591$ 180,741$ 4,150$
Special assessments 892 - 892 - - -
Licenses and permits - - - - - -
Intergovernmental 115,000 420,587 305,587 108,160 119,888 11,728
Charges for services 38,000 25,100 (12,900) 719,899 799,243 79,344
Fines and forfeitures - - - - - -
Interest on investments 14,232 17,009 2,777 3,000 7,358 4,358
Loan repayment - - - - - -
Other 116,082 108,295 (7,787) 47,694 59,556 11,862
Total revenues 408,598 714,342 305,744 1,055,344 1,166,786 111,442
EXPENDITURES - BUDGET UNIT 846,343 840,153 6,190 1,251,872 965,863 286,009
Revenues over (under) expenditures (437,745) (125,811) 311,934 (196,528) 200,923 397,451
OTHER FINANCING SOURCES (USES)
Transfers in - 100,000 100,000 209,162 88,037 (121,125)
Transfers out - - - - - -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)- 100,000 100,000 209,162 88,037 (121,125)
Revenues and other sources over
(under) expenditures (437,745)$ (25,811) 411,934$ 12,634$ 288,960 276,326$
FUND BALANCES, beginning of year 1,992,921 1,067,197
FUND BALANCES, end of year 1,967,110$ 1,356,157$
(continued)
Departmental Special Revenues City Planning Board
DRAFT488
155
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Special Revenue Funds
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes 2,369,713$ 2,299,539$ (70,174)$ -$ -$ -$
Special assessments - - - - - -
Licenses and permits - - - - - -
Intergovernmental - - - - 49,952 49,952
Charges for services - - - - - -
Fines and forfeitures - - - - - -
Interest on investments - - - 1,660 805 (855)
Loan repayment - - - - - -
Other - - - 50,934 - (50,934)
Total revenues 2,369,713 2,299,539 (70,174) 52,594 50,757 (1,837)
EXPENDITURES - BUDGET UNIT - - - 60,000 59,889 111
Revenues over (under) expenditures 2,369,713 2,299,539 (70,174) (7,406) (9,132) (1,726)
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - -
Transfers out (2,369,713) (2,278,269) 91,444 - - -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)(2,369,713) (2,278,269) 91,444 - - -
Revenues and other sources over
(under) expenditures -$ 21,270 21,270$ (7,406)$ (9,132) (1,726)$
FUND BALANCES, beginning of year 328,120 66,564 FUND BALANCES, end of year 349,390$ 57,432$
(continued)
Health-Medical Insurance Community Transportation
DRAFT489
156
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ -$ -$ -$
Special assessments - - - 1,350 1,031 (319)
Licenses and permits - - - - - -
Intergovernmental 676,439 693,945 17,506 250 10,261 10,011
Charges for services - - - 592,508 581,734 (10,774)
Fines and forfeitures - - - - - -
Interest on investments 3,900 11,418 7,518 1,600 2,634 1,034
Loan repayment - - - - - -
Other - - - 6,000 3,244 (2,756)
Total revenues 680,339 705,363 25,024 601,708 598,904 (2,804)
EXPENDITURES - BUDGET UNIT 694,500 157,342 537,158 717,219 514,060 203,159
Revenues over (under) expenditures (14,161) 548,021 562,182 (115,511) 84,844 200,355
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - -
Transfers out - - - - - -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)- - - - - -
Revenues and other sources over
(under) expenditures (14,161)$ 548,021 562,182$ (115,511)$ 84,844 200,355$
FUND BALANCES, beginning of year 957,235 243,495
FUND BALANCES, end of year 1,505,256$ 328,339$
(continued)
Gas Tax Apportionment Tree Maintenance
Special Revenue Funds
DRAFT490
157
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Special Revenue Funds
Fire Impact Fees Special Revenue
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ - 1,727,000$ 1,081,545$ (645,455)$
Special assessments - - - 132,200 120,319 (11,881)
Licenses and permits - - - - - -
Intergovernmental - - - 45,436 56,050 10,614
Charges for services 311,973 315,732 3,759 38,000 - (38,000)
Fines and forfeitures - - - - - -
Interest on investments 6,564 12,311 5,747 10,000 19,698 9,698
Loan repayment - - - - - -
Other - - - 17,500 - (17,500)
Total revenues 318,537 328,043 9,506 1,970,136 1,277,612 (692,524)
EXPENDITURES - BUDGET UNIT 25,000 14,778 10,222 2,433,300 415,800 2,017,500
Revenues over (under) expenditures 293,537 313,265 19,728 (463,164) 861,812 1,324,976
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - -
Transfers out - - - (590,488) (792,398) (201,910)
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)- - - (590,488) (792,398) (201,910)
Revenues and other sources over
(under) expenditures 293,537$ 313,265 19,728$ (1,053,652)$ 69,414 1,123,066$
FUND BALANCES, beginning of year 1,237,487 1,679,365
FUND BALANCES, end of year 1,550,752$ 1,748,779$
(continued)
Downtown Improvement District
DRAFT491
158
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Special Revenue Funds
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ 264,886$ 260,687$ (4,199)$
Special assessments - - - - - -
Licenses and permits - - - - - -
Intergovernmental - - - - - -
Charges for services - - - - - -
Fines and forfeitures - - - - - -
Interest on investments - 863 863 2,850 4,401 1,551
Loan repayment 48,500 27,755 (20,745) 9,500 494 (9,006)
Other - 2,400 2,400 - - -
Total revenues 48,500 31,018 (17,482) 277,236 265,582 (11,654)
EXPENDITURES - BUDGET UNIT 31,000 63,198 (32,198) 287,400 284,401 2,999
Revenues over (under) expenditures 17,500 (32,180) (49,680) (10,164) (18,819) (8,655)
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - -
Transfers out - - - - - -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)- - - - - -
Revenues and other sources over
(under) expenditures 17,500$ (32,180) (49,680)$ (10,164)$ (18,819) (8,655)$
FUND BALANCES, beginning of year 857,430 583,543
FUND BALANCES, end of year 825,250$ 564,724$
(continued)
Economic Development Revolving Loan Fund Community Housing
DRAFT492
159
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ -$ -$ -$
Special assessments - - - - - -
Licenses and permits - - - - - -
Intergovernmental - - - - 108,023 108,023
Charges for services - - - - - -
Fines and forfeitures - - - 53,931 53,908 (23)
Interest on investments 50 - (50) - 69 69
Loan repayment 5,275 143 (5,132) - - -
Other - - - - 12,436 12,436
Total revenues 5,325 143 (5,182) 53,931 174,436 120,505
EXPENDITURES - BUDGET UNIT 7,200 7,219 (19) 213,116 249,716 (36,600)
Revenues over (under) expenditures (1,875) (7,076) (5,201) (159,185) (75,280) 83,905
OTHER FINANCING SOURCES
Transfers in - - - 111,104 111,042 (62)
Transfers out - - - - - -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)- - - 111,104 111,042 (62)
Revenues and other sources over
(under) expenditures (1,875)$ (7,076) (5,201)$ (48,081)$ 35,762 83,843$
FUND BALANCES, beginning of year 8,247 34,502
FUND BALANCES, end of year 1,171$ 70,264$
(continued)
Housing Revolving Loan Fund Drug Forfeitures
Special Revenue Funds
DRAFT493
160
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ -$ -$ -$
Special assessments - - - - - -
Licenses and permits - - - - - -
Intergovernmental - - - - - -
Charges for services - - - - - -
Fines and forfeitures - 500 500 - - -
Interest on investments 1,047 1,115 68 - - -
Loan repayment - - - - - -
Other - - - - - -
Total revenues 1,047 1,615 568 - - -
EXPENDITURES - BUDGET UNIT 29,000 - 29,000 19,125 19,125 -
Revenues over (under) expenditures (27,953) 1,615 29,568 (19,125) (19,125) -
OTHER FINANCING SOURCES
Transfers in - - - - - -
Transfers out - - - - - -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)- - - - - -
Revenues and other sources over
(under) expenditures (27,953)$ 1,615 29,568$ (19,125)$ (19,125) -$
FUND BALANCES, beginning of year 128,408 350,625
FUND BALANCES, end of year 130,023$ 331,500$
(continued)
City-County Drug Forfeitures Law and Justice Center
Special Revenue Funds
DRAFT494
161
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ 719,213$ 651,949$ (67,264)$
Special assessments 892 2,282 1,390 - - -
Licenses and permits - - - - - -
Intergovernmental - - - - 37,926 37,926
Charges for services 1,095,551 1,092,411 (3,140) - - -
Fines and forfeitures - - - - - -
Interest on investments - 13,916 13,916 8,800 9,727 927
Loan repayment - - - - - -
Other - - - - - -
Total revenues 1,096,443 1,108,609 12,166 728,013 699,602 (28,411)
EXPENDITURES - BUDGET UNIT 1,030,000 641,728 388,272 991,000 1,109,354 (118,354)
Revenues over (under) expenditures 66,443 466,881 400,438 (262,987) (409,752) (146,765)
OTHER FINANCING SOURCES
Transfers in - - - - 116,561 116,561
Transfers out - - - (36,000) (47,327) (11,327)
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)- - - (36,000) 69,234 105,234
Revenues and other sources over
(under) expenditures 66,443$ 466,881 400,438$ (298,987)$ (340,518) (41,531)$
FUND BALANCES, beginning of year 1,008,035 1,835,811
FUND BALANCES, end of year 1,474,916$ 1,495,293$
(continued)
Street Arterial and Collector District TIF N 7th Corridor
Special Revenue Funds
DRAFT495
162
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes 143,000$ 130,468$ (12,532)$ -$ -$ -$
Special assessments - - - - - -
Licenses and permits - - - - - -
Intergovernmental - 1,353 1,353 - - -
Charges for services - - - - - -
Fines and forfeitures - - - 76,800 62,808 (13,992)
Interest on investments 1,800 3,314 1,514 2,763 3,324 561
Loan repayment - - - - - -
Other 1,560,000 - (1,560,000) - - -
Total revenues 1,704,800 135,135 (1,569,665) 79,563 66,132 (13,431)
EXPENDITURES - BUDGET UNIT 1,867,944 121,700 1,746,244 140,000 54,477 85,523
Revenues over (under) expenditures (163,144) 13,435 176,579 (60,437) 11,655 72,092
OTHER FINANCING SOURCES
Transfers in - - - - - -
Transfers out (10,000) (10,000) - - - -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)(10,000) (10,000) - - - -
Revenues and other sources over
(under) expenditures (173,144)$ 3,435 176,579$ (60,437)$ 11,655 72,092$
FUND BALANCES, beginning of year 381,590 377,255
FUND BALANCES, end of year 385,025$ 388,910$
(continued)
Special Revenue Funds
TIF N.E. Urban Renewal Victim/Witness Advocate
DRAFT496
163
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes 353,181$ 347,641$ (5,540)$ -$ -$ -$
Special assessments - - - 369,507 426,189 56,682
Licenses and permits - - - - - -
Intergovernmental - - - - - -
Charges for services - - - - - -
Fines and forfeitures - - - - - -
Interest on investments 2,516 7,047 4,531 746 5,138 4,392
Loan repayment - - - - - -
Other - - - - - -
Total revenues 355,697 354,688 (1,009) 370,253 431,327 61,074
EXPENDITURES - BUDGET UNIT - - - 412,233 412,158 75
Revenues over (under) expenditures 355,697 354,688 (1,009) (41,980) 19,169 61,149
OTHER FINANCING SOURCES
Transfers in - - - - - -
Transfers out - - - (31,900) (31,900) -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)- - - (31,900) (31,900) -
Revenues and other sources over
(under) expenditures 355,697$ 354,688 (1,009)$ (73,880)$ (12,731) 61,149$
FUND BALANCES, beginning of year 682,052 587,641
FUND BALANCES, end of year 1,036,740$ 574,910$
(continued)
Street LightingFire Department Equipment
DRAFT497
164
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ -$ -$ -$
Special assessments - - - - - -
Licenses and permits - - - - - -
Intergovernmental - - - - - -
Charges for services - - - - - -
Fines and forfeitures - - - - - -
Interest on investments - 4,229 4,229 - - -
Loan repayment - - - - - -
Other - 105,064 105,064 - - -
Total revenues - 109,293 109,293 - - -
EXPENDITURES - BUDGET UNIT - - - - - -
Revenues over (under) expenditures - 109,293 109,293 - - -
OTHER FINANCING SOURCES
Transfers in - - - - - -
Transfers out - - - - - -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)- - - - - -
Revenues and other sources over
(under) expenditures -$ 109,293 109,293$ -$ - -$
FUND BALANCES, beginning of year 424,870 105
FUND BALANCES, end of year 534,163$ 105$
(continued)
Park Land Municipal Court Restitution
Special Revenue Funds
DRAFT498
165
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Variance
Positive
Budget Actual (Negative)
REVENUES
Taxes 5,877,976$ 5,095,921$ (782,055)$
Special assessments 504,841 549,821 44,980
Licenses and permits - - -
Intergovernmental 945,285 1,497,985 552,700
Charges for services 2,795,931 2,814,220 18,289
Fines and forfeitures 130,731 117,216 (13,515)
Interest on investments 61,528 124,376 62,848
Loan repayment 63,275 28,392 (34,883)
Other 1,798,210 290,995 (1,507,215)
Total revenues 12,177,777 10,518,926 (1,658,851)
EXPENDITURES - BUDGET UNIT 11,056,252 5,930,961 5,125,291
Revenues over (under) expenditures 1,121,525 4,587,965 3,466,440
OTHER FINANCING SOURCES
Transfers in 320,266 415,640 95,374
Transfers out (3,038,101) (3,159,894) (121,793)
Long-term debt issued - - -
Sale of capital assets - - -
Total other financing sources (uses)(2,717,835) (2,744,254) (26,419)
Revenues and other sources over
(under) expenditures (1,596,310)$ 1,843,711 3,440,021$
FUND BALANCES, beginning of year 14,832,498
FUND BALANCES, end of year 16,676,209$
(continued)
Total
Special Revenue Funds
DRAFT499
166
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Debt Service Funds
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ 1,358,738$ 1,318,121$ (40,617)$
Special assessments - - - - - -
Intergovernmental - - - - - -
Charges for services - 1,917 1,917 - - -
Interest on investments 19,000 28,362 9,362 - 1,018 1,018
Loan repayment - 3,445 3,445 - - -
Other - - - - - -
Total revenue 19,000 33,724 14,724 1,358,738 1,319,139 (39,599)
EXPENDITURES
Other - - - - - -
Debt service:
Principal - - - 860,000 860,000 -
Interest and fiscal fees - - - 499,938 499,938 -
Total expenditures - - - 1,359,938 1,359,938 -
Revenues over (under) expenditures 19,000 33,724 14,724 (1,200) (40,799) (39,599)
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - -
Transfers out (236,756) - 236,756 - - -
Total other financing sources (uses)(236,756) - 236,756 - - -
Revenues and other sources over (under) expenditures (217,756)$ 33,724 251,480$ (1,200)$ (40,799) (39,599)$
FUND BALANCES, beginning of year 3,386,700 132,959
FUND BALANCES, end of year 3,420,424$ 92,160$
(continued)
G.O. BondsSID Revolving
DRAFT500
167
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Variance Variance
Favorable Positive
Budget Actual (Unfavorable) Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ 1,358,738$ 1,318,121$ (40,617)$
Special assessments - -$ - - - -
Intergovernmental - - - - - -
Charges for services - - - - 1,917 1,917
Interest on investments - - - 19,000 29,380 10,380
Loan repayment - - - - 3,445 3,445
Other - - - - - -
Total revenue - - - 1,377,738 1,352,863 (24,875)
EXPENDITURES
Other - - - - - -
Debt service:
Principal 205,000 205,000 - 1,065,000 1,065,000 -
Interest and fiscal fees 220,838 220,838 - 720,776 720,776 -
Total expenditures 425,838 425,838 - 1,785,776 1,785,776 -
Revenues over (under) expenditures (425,838) (425,838) - (408,038) (432,913) (24,875)
OTHER FINANCING SOURCES (USES)
Transfers in 425,488 425,838 350 425,488 425,838 350
Transfers out - - - (236,756) - 236,756
Total other financing sources (uses)425,488 425,838 350 188,732 425,838 237,106
Revenues and other sources over (under) expenditures (350)$ - 350$ (219,306)$ (7,075) 212,231$
FUND BALANCES, beginning of year - 3,519,659
FUND BALANCES, end of year -$ 3,512,584$
(continued)
TIF Bonds Total
Debt Service Funds
DRAFT501
168
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Variance
Favorable
Budget Actual (Unfavorable)
REVENUES
Taxes -$ -$ -$
Special assessments - - -
Intergovernmental - - -
Charges for services - - -
Interest on investments - 151,434 151,434
Loan repayment - - -
Other - 958,800 958,800
Total revenue - 1,110,234 1,110,234
EXPENDITURES
Other 17,000 16,545 455
Capital outlay 4,181,375 4,249,509 (68,134)
Total expenditures 4,198,375 4,266,054 (67,679)
Revenues over (under) expenditures (4,198,375) (3,155,820) 1,042,555
OTHER FINANCING SOURCES (USES)
Transfers in - 851,164 851,164
Transfers out 834,756 - (834,756)
Long term debt issuance - - -
Sale of capital assets - - -
Total other financing sources (uses)834,756 851,164 16,408
Revenues and other sources over (under) expenditures (3,363,619)$ (2,304,656) 1,058,963$
FUND BALANCES, beginning of year 11,372,863
FUND BALANCES, end of year 9,068,207$
(continued)
Construction
Capital Projects Funds
DRAFT502
169
CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2017
Variance
Positive
Budget Actual (Negative)
REVENUES
Intergovernmental -$ -$ -$
Charges for services 100,000 115,982 15,982
Interest on investments 6,000 9,906 3,906
Total revenues 106,000 125,888 19,888
EXPENDITURES - BUDGET UNIT - - -
Revenues over (under) expenditures 106,000 125,888 19,888
OTHER FINANCING SOURCES (USES)- - -
Revenues and other sources over
(under) expenditures 106,000$ 125,888 19,888$
FUND BALANCES, beginning of year 1,075,950
FUND BALANCES, end of year 1,201,838$
Cemetery Perpetual Care
Permanent Fund
DRAFT503
COMBINING NONMAJOR PROPRIETARY FUNDS DRAFT504
NONMAJOR PROPRIETARY FUNDS
Parking Fund – Accounts for the City’s parking enforcement and facilities operations. Stormwater Fund – Accounts for the City’s stormwater management and mitigation operations.DRAFT505
170
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF NET POSITION NONMAJOR PROPRIETARY FUNDS June 30, 2017
Business-type Activities
Enterprise Funds
Parking Stormwater
Fund Fund Total
ASSETS
Current assets
Cash and investments 764,264$ 550,940$ 1,315,204$
Receivables:
Customers, net 122,809 119,922 242,731
Special assessments 221 221
Total current assets 887,073 671,083 1,558,156
Non-current assets
Other assets:
Notes receivable 9,442 - 9,442
Restricted cash and investments 344,465 55,331 399,796
Total other assets 353,907 55,331 409,238
Property, plant and equipment, net
Nondepreciable:
Land 303,436 - 303,436
Depreciable:
Buildings 11,803,086 - 11,803,086
Other structures and improvements - - -
Machinery and equipment 30,062 163,431 193,493
Vehicles 108,351 153,310 261,661
Infrastructure 47,058 963,466 1,010,524
Property under capital lease - 519,943 519,943
Accumulated depreciation and amortization (3,858,738) (372,608) (4,231,346)
Net property, plant and equipment 8,433,255 1,427,542 9,860,797
Total non current assets 8,787,162 1,482,873 10,270,035
Deferred outflows of resources
Pension plan contributions 55,468 71,194 126,662
Total assets 9,729,703$ 2,225,150$ 11,954,853$
continued DRAFT506
171
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF NET POSITION NONMAJOR PROPRIETARY FUNDS (CONTINUED) June 30, 2017
Business-type Activities
Enterprise Funds
Parking Stormwater
Fund Fund Total
LIABILITIES
Current liabilities
Accounts payable and accrued expenses 121,174$ 124,147$ 245,321$
Compensated absences payable 2,065 17,467 19,532
Capital lease obligations payable in one year - 81,460 81,460
Bonds and leases payable in one year - 75,000 75,000
Total current liabilities 123,239 298,074 421,313
Noncurrent liabilities
Closure and post-closure care costs - - -
Capital lease obligations - 209,078 209,078
Revenue bonds due after one year - 1,292,430 1,292,430
Compensated absences payable - - -
Other post-employment health benefits 32,833 6,980 39,813
Appearance bond and other liabilities - 231 231
Net pension liability 248,779 319,305 568,084
Total noncurrent liabilities 281,612 1,828,024 2,109,636
Total liabilities 404,851 2,126,098 2,530,949
Deferred inflows of resources
Pension deferrals 824 1,058 1,882
NET POSITION
Net Investment in capital assets 8,433,255 1,143,464 9,576,719
Restricted for impact capital projects - - -
Restricted for parking capital projects 344,465 - 344,465
Restricted for debt service - - -
Unrestricted 546,308 (1,045,470) (499,162)
Total net position 9,324,028 97,994 9,422,022
Total liabilities and net position 9,729,703$ 2,225,150$ 11,954,853$
DRAFT507
172
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUE, EXPENSES, AND CHANGES IN NET POSITION - NONMAJOR PROPRIETARY FUNDS Year Ended June 30, 2017
Parking Stormwater
Fund Fund Totals
OPERATING REVENUES 878,458$ 1,293,941$ 2,172,399$
OPERATING EXPENSES
Salaries and benefits 299,920 553,565 853,485
Materials and supplies 23,055 27,802 50,857
Repairs and maintenance 18,828 4,196 23,024
Utilities 29,710 1,222 30,932
Administrative charges 57,598 42,058 99,656
Other expenses 177,015 163,575 340,590
Depreciation and amortization 291,152 90,331 381,483
Changes in estimated closure and post-
closure care costs - - -
Total operating expenses 897,278 882,749 1,780,027
Operating income (loss)(18,820) 411,192 392,372
NON-OPERATING REVENUES (EXPENSES)
Interest income 6,904 7,080 13,984
Interest expense - (47,695) (47,695)
Other income 65,094 387 65,481
Intergovernmental income 4,813 6,180 10,993
Gain (loss) on sale of assets - (4,500) (4,500)
Total non-operating revenues (expenses)76,811 (38,548) 38,263
Income (loss) before contributions and transfers 57,991 372,644 430,635
Contributions of infrastructure - developers - 549,096 549,096
Transfers in 250,000 140,000 390,000
Transfers out - (454,000) (454,000)
Change in net position 307,991 607,740 915,731
NET POSITION, beginning of year 9,016,037 (509,746) 8,506,291
NET POSITION, end of year 9,324,028$ 97,994$ 9,422,022$
Business-type Activities
Enterprise Funds
DRAFT508
173
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF CASH FLOWS - NONMAJOR PROPRIETARY FUNDS Year Ended June 30, 2017
Parking Stormwater
Fund Fund Total
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 883,689$ 1,294,837$ 2,178,526$
Receipts from others 65,094 387 65,481
Payments to suppliers (286,852) (81,756) (368,608)
Payments to employees (306,718) (369,084) (675,802)
Payments to internal service funds and administrative fees (57,598) (42,058) (99,656)
Net cash flows from operating activities 297,615 802,326 1,099,941
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Transfers in 250,000 140,000 390,000
Transfers out - (454,000) (454,000)
Receipts from grants and intergovernmental sources 4,813 6,180 10,993
Net cash flows from non-capital financing activities 254,813 (307,820) (53,007)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition of capital assets (9,378) (303,640) (313,018)
Principal paid on bonds, interfund loans, loans and leases - (73,211) (73,211)
Interest paid on bonds, interfund loans, loans and leases - (47,695) (47,695)
Proceeds from issuance of long-term debt - (73,000) (73,000)
Proceeds from sale of property, plant and equipment - - -
Net cash flows from capital and related financing activities (9,378) (497,546) (506,924)
CASH FLOWS FROM INVESTING ACTIVITIES
Collections on notes 1,388 - 1,388
Interest on investments 6,904 7,080 13,984
Net cash flows from investing activities 8,292 7,080 15,372
Net change in cash and investments 551,342 4,040 555,382
Cash and investments, beginning of year 557,387 602,231 1,159,618
Cash and investments, end of year 1,108,729$ 606,271$ 1,715,000$
continuedDRAFT
509
174
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF CASH FLOWS - NONMAJOR PROPRIETARY FUNDS (CONTINUED) Year Ended June 30, 2017
Parking Stormwater
Fund Fund Total
Cash and investments classified as:
Cash and investments 764,264$ 550,940$ 1,315,204$
Restricted cash and investments 344,465 55,331 399,796
Totals 1,108,729$ 606,271$ 1,715,000$
Noncash transactions: donated infrastructure -$ 549,096$ 549,096$
RECONCILIATION OF OPERATING LOSS
TO NET CASH FROM OPERATING ACTIVITIES:
Operating income (loss)(18,820)$ 411,192$ 392,372$
Adjustments to reconcile operating loss
to net cash from operating activities:
Depreciation and amortization 291,152 90,331 381,483
Change in estimated closure costs - - -
Other income 65,094 387 65,481
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable 5,231 896 6,127
Increase (decrease) in:
Accounts payable (38,244) 115,039 76,795
Accrued employee benefits payable (5,711) 2,318 (3,393)
Net pension liabilities (1,087) 182,163 181,076
Total adjustments 316,435 391,134 707,569
Net cash from operating activities 297,615$ 802,326$ 1,099,941$
DRAFT510
INTERNAL SERVICE FUND STATEMENTS
DRAFT512
INTERNAL SERVICE FUNDS
Internal Service Funds are used to account for the goods or services provided by one department to other departments of the City on a cost-reimbursement basis.
Vehicle Maintenance Shop – Accounts for the maintenance and repair of vehicles used in operation of City services. Medical Health Insurance – Accounts for insurance premiums received from the various City departments and retirees, and the related costs of health and dental premiums paid to the City’s insurance provider. DRAFT513
175
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - INTERNAL SERVICE FUNDS Year Ended June 30, 2017
Vehicle Medical
Maintenance Health
Shop Insurance Total
ASSETS
Current assets
Cash and equivalents -$ 339,667$ 339,667$
Customer receivables, net - 70,344 70,344
Prepaid expenses - - -
Total current assets - 410,011 410,011
Property, plant, and equipment
Machinery and equipment 186,585 - 186,585
Vehicles 70,312 - 70,312
Buildings 1,424,215 - 1,424,215
Less: accumulated depreciation (547,902) - (547,902)
Net property, plant, and equipment 1,133,210 - 1,133,210
Deferred outflows of resources
Pension plan contributions 87,828 - 87,828
Total assets and deferred outflows of resources 1,221,038$ 410,011$ 1,631,049$
LIABILITIES
Current liabilities
Accounts payable 56,894$ 499$ 57,393$
Compensated absences payable 20,312 - 20,312
Other post-employment health benefits 29,837 29,837
Due to other city funds 11,701 - 11,701
Total current liabilities 118,744 499 119,243
Non-current liabilities
Net pension liability 397,732 - 397,732
Total liabilities 516,476 499 516,975
Deferred inflows of resources
Pension deferrals 3,593 - 3,593
NET POSITION
Net investment in capital assets 1,133,210 - 1,133,210
Unrestricted (432,241) 409,512 (22,729)
700,969 409,512 1,110,481
1,221,038$ 410,011$ 1,631,049$ DRAFT514
176
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - INTERNAL SERVICE FUNDS Year Ended June 30, 2017
Vehicle Medical
Maintenance Health
Shop Insurance Total
OPERATING REVENUES 1,121,811$ 4,696,412$ 5,818,223$
OPERATING EXPENSES
Salaries and benefits 418,300 - 418,300
Materials and supplies 567,900 - 567,900
Repairs and maintenance 14,941 - 14,941
Utilities 3,564 - 3,564
Administrative charges 164,486 - 164,486
Insurance claims - 4,626,480 4,626,480
Other expenses 29,620 89,112 118,732
Depreciation 57,120 - 57,120
Total operating expenses 1,255,931 4,715,592 5,971,523
Operating income (loss)(134,120) (19,180) (153,300)
NON-OPERATING REVENUES (EXPENSES)
Interest income 60 2,283 2,343
Interest expense - - -
Other income 468 9,001 9,469
Intergovernmental income 7,499 - 7,499
Sale of assets 655 - 655
Total non-operating revenue (expenses)8,682 11,284 19,966
Income before transfers (125,438) (7,896) (133,334)
Transfers in - - -
Change in net position (125,438) (7,896) (133,334)
NET POSITION, beginning of year 826,407 417,408 1,243,815
NET POSITION, end of year 700,969$ 409,512$ 1,110,481$ DRAFT515
177
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF CASH FLOWS - INTERNAL SERVICE FUNDS Year Ended June 30, 2017
Vehicle Medical
Maintenance Health
Shop Insurance Total
CASH FLOWS FROM OPERATIONS
Receipts from customers 1,121,832$ 5,055,869$ 6,177,701$
Receipts from others 7,967 9,001 16,968
Operating loans from other City funds 11,701 (11,274) 427
Payments to suppliers (584,721) (89,732) (674,453)
Payments to employees (418,674) (4,626,480) (5,045,154)
Payments to Internal Service Funds and administrative fees (164,486) - (164,486)
Net cash flows from operating activities (26,381) 337,384 311,003
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Additions to property, plant and equipment (41,209) - (41,209)
Proceeds from sale of capital assets 655 - 655 Interest paid on bonds, interfund loans, loans and leases - - -
Net cash flows from capital and related financing activities (40,554) - (40,554)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Transfers in - - -
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 60 2,283 2,343
Net increase (decrease) in cash and cash equivalents (66,875) 339,667 272,792
CASH AND EQUIVALENTS, beginning of year 66,875 - 66,875
CASH AND EQUIVALENTS, end of year -$ 339,667$ 339,667$
(continued)DRAFT516
178
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF CASH FLOWS - INTERNAL SERVICE FUNDS (CONTINUED) Year Ended June 30, 2017
Vehicle Medical
Maintenance Health
Shop Insurance Total
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH FROM OPERATING ACTIVITIES
Operating income (loss) (134,120)$ (19,180)$ (153,300)$
Adjustments to reconcile operating income (loss)
to net cash from operating activities:
Depreciation 57,120 - 57,120
Other income 7,967 9,001 16,968
Changes in assets and liabilities:
(Increase) decrease in:
Customer receivables 21 (23,084) (23,063)
Prepaid expenses - 382,541 382,541
Increase (decrease) in:
Accounts payable 19,295 (620) 18,675
Due to other city funds 11,701 (11,274) 427
Compensated absences payable (2,292) - (2,292)
Other post-employment health benefits 1,918 - 1,918
Net pension 12,009 - 12,009
Total adjustments 107,739 356,564 464,303
Net cash from operating activities (26,381)$ 337,384$ 311,003$ DRAFT517
AGENCY FUNDS STATEMENTS
DRAFT518
AGENCY FUNDS
Agency Funds are used to account for assets held by the City as an agent for individuals, private organizations, or other governments.
Municipal Court – Accounts for monies held for appearance bonds and restitution related to criminal arrests and reimbursement for damage
caused. CMC Bozeman Site Remediation Fund – Accounts for pass-through monies provided by the State of Montana Department of Environmental Quality to Olive & Wallace, LLC, to reimburse the cost of work performed as part of the Voluntary Cleanup Plan of the CMC Asbestos
Bozeman Facility.
Tourism Business Improvement District – Accounts for amounts collected from hotels on behalf of the District, a special-purpose government, whose purpose is to enhance the economic vitality of Bozeman by promoting tourism through sales and marketing strategies.
DRAFT519
179
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF FIDUCIARY NET POSITION – AGENCY FUNDS June 30, 2017
CMC Tourism Total
Municipal Bozeman Site Business Agency
Court Remediation Improvement Funds
ASSETS
Cash and cash equivalents 335,344$ -$ 435,946$ 771,290$
Customer receivables 1,949 - - 1,949
Special assessments 50,072
Total assets 337,293$ -$ 486,018$ 773,239$
LIABILITIES
Accounts payable 339,993$ -$ 486,018$ 826,011$
Total liabilities 339,993$ -$ 486,018$ 826,011$
DRAFT520
180
CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES – AGENCY FUNDS Year Ended June 30, 2017
Balance Balance
June 30, 2016 Additions Deletions June 30, 2017
ASSETS
Cash and cash equivalents 353,598$ -$ (18,254)$ 335,344$
Customer receivables 785 1,164 1,949
Interfund receivable - - - -
Total assets 354,383$ 1,164$ (18,254)$ 337,293$
LIABILITIES
Accounts payable 354,383$ 1,164$ (18,254)$ 337,293$
Total liabilities 354,383$ 1,164$ (18,254)$ 337,293$
Court
Municipal
Balance Balance
June 30, 2016 Additions Deletions June 30, 2017
ASSETS
Cash and cash equivalents -$ -$ -$ -$
Customer receivables - - - -
Total assets -$ -$ -$ -$
LIABILITIES
Accounts payable -$ -$ -$ -$
Total liabilities -$ -$ -$ -$
Site Remediation
CMC Bozeman
Balance Balance
June 30, 2016 Additions Deletions June 30, 2017
ASSETS
Cash and cash equivalents 468,190$ -$ (32,244)$ 435,946$
Special Assessments - 50,072 - 50,072
Total assets 468,190$ 50,072$ (32,244)$ 486,018$
LIABILITIES
Accounts payable 468,190$ 50,072$ (32,244)$ 486,018$
Total liabilities 468,190$ 50,072$ (32,244)$ 486,018$
Site Remediation
Tourism Business Improvement District
DRAFT521
PART III STATISTICAL SECTION DRAFT522
Statistical Section
This part of the City of Bozeman's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial
statements, note disclosures and required supplementary information says about the government's overall financial health.
Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time.181
Revenue Capacity
These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax.186
Debt Capacity
These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability
to issue additional debt in the future. 197
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities
take place.206
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the
services the government provides and the activities it performs.208
Sources: Unless otherwise noted, the information in these schedules is derived from the City of Bozeman comprehensive annual financial reports for the relevant year.DRAFT523
FINANCIAL TRENDS SECTION DRAFT524
181
CITY OF BOZEMAN, MONTANA NET POSITION BY COMPONENT Past Ten Fiscal Years
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Governmental activities
Net investment in capital assets 80,873,924 83,707,824 84,113,904 88,844,404 88,500,437 89,081,484 89,267,076 93,409,850 104,093,224 115,696,956
Restricted 9,254,307 7,699,511 8,082,181 20,962,038 20,797,365 27,255,029 35,621,803 41,755,126 42,829,320 41,583,992
Unrestricted 23,443,921 20,871,106 25,076,908 16,049,044 15,470,543 11,521,053 12,127,224 (5,137,642) (3,674,499) (4,839,467)
Total governmental activities 113,572,152$ 112,278,441$ 117,272,993$ 125,855,486$ 124,768,345$ 127,857,566$ 137,016,103$ 130,027,334$ 143,248,045$ 152,441,481$
Business-type activities
Net investment in capital assets 177,379,168 188,077,778 189,965,189 188,180,889 192,485,459 199,394,551 205,501,357 211,419,777 221,385,655 229,372,281
Restricted 18,322,089 19,775,588 9,044,280 12,660,466 11,446,886 3,098,125 3,372,927 4,977,984 4,990,635 8,866,951
Unrestricted 17,547,218 11,936,119 16,069,597 12,382,018 2,809,558 10,643,337 8,723,353 6,619,399 10,582,408 9,154,014
Total business-type activities 213,248,475$ 219,789,485$ 215,079,066$ 213,223,373$ 206,741,903$ 213,136,013$ 217,597,637$ 223,017,160$ 236,958,698$ 247,393,246$
Primary government
Net investment in capital assets 258,253,092 271,785,602 274,079,093 277,025,293 280,985,896 288,476,035 294,768,433 304,829,627 325,478,879 345,069,237
Restricted 27,576,396 27,475,099 17,126,461 33,622,504 32,244,251 30,353,154 38,994,730 46,733,110 47,819,955 50,450,943
Unrestricted 40,991,139 32,807,225 41,146,505 28,431,062 18,280,101 22,164,390 20,850,577 1,481,757 6,907,909 4,314,547
Total primary government net position 326,820,627$ 332,067,926$ 332,352,059$ 339,078,859$ 331,510,248$ 340,993,579$ 354,613,740$ 353,044,494$ 380,206,743$ 399,834,727$
Fiscal Years
DRAFT526
182
CITY OF BOZEMAN, MONTANA CHANGES IN NET POSITION Past Ten Fiscal Years (accrual basis of accounting)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Expenses
Governmental Activities:
General Government 6,969,181 6,629,783 6,299,831 6,122,190 8,706,665 7,373,368 6,989,830 7,417,644 8,058,925 9,415,702
Public Safety 11,183,637 11,556,016 12,382,157 12,859,702 13,215,680 14,340,301 15,297,088 17,023,578 18,391,357 17,689,004
Public Service 8,979,085 10,130,184 9,703,594 9,190,515 8,174,461 3,939,061 6,031,768 6,458,930 6,861,939 7,857,917
Public Welfare 5,412,192 6,465,940 6,915,557 7,500,727 7,249,008 6,518,822 7,417,158 7,579,653 7,994,697 9,210,264
Interest and Fiscal Fees 649,226 737,762 714,714 679,652 636,478 433,766 179,280 824,266 893,470 771,714
Total Governmental Activities Expenses 33,193,321$ 35,519,685$ 36,015,853$ 36,352,786$ 37,982,292$ 32,605,318$ 35,915,124$ 39,304,071$ 42,200,388$ 44,944,601$
Business-Type Activities:
Water 11,150,266 11,872,984 12,016,149 11,649,639 11,674,222 6,154,746 6,869,870 7,995,910 9,273,395 9,740,629
Waste Water 8,061,412 10,293,894 9,143,077 10,128,397 10,203,165 6,121,663 8,955,592 6,940,983 8,163,312 8,590,477
Solid Waste 2,574,651 2,687,590 2,561,124 2,578,109 2,584,899 2,475,680 6,958,209 3,308,441 4,570,884 4,262,650
Non-Major Activities 766,454 967,077 991,712 990,229 852,561 966,454 1,098,771 1,300,612 1,827,722
Total Business-Type Activities Expenses 21,786,329 25,620,922 24,687,427 25,347,857 25,452,515 15,604,650 23,750,125 19,344,105 23,308,203 24,421,478
Total Primary Government Expenses 54,979,650 61,140,607 60,703,280 61,700,643 63,434,807 48,209,968 59,665,249 58,648,176 65,508,591 69,366,079
Program Revenues
Governmental Activities:
Charges for Services:
General Government 2,237,962 1,795,469 2,774,869 2,870,443 1,949,125 1,966,966 2,453,015 1,947,445 2,530,474 2,683,016
Public Safety 3,575,133 3,500,929 2,414,893 2,684,724 2,638,811 3,219,231 3,290,573 3,211,911 3,347,859 3,175,257
Public Service 4,858,444 4,790,460 3,742,856 4,454,492 4,983,420 6,655,604 7,623,178 8,784,447 9,310,147 10,342,921
Public Welfare 713,342 779,841 399,280 451,960 1,102,896 1,593,212 613,322 1,097,845 1,213,526 1,414,394
Operating Grants and Contributions 502,863 439,131 693,342 1,114,835 566,586 406,239 457,354 2,254,052 2,494,244 2,715,986
Capital Grants and Contributions 7,153,103 8,219,791 5,307,118 7,867,093 635,758 844,935 4,762,416 2,960,051 5,018,559 2,667,352
Total Governmental Activities Program Revenues 19,040,847$ 19,525,621$ 15,332,358$ 19,443,547$ 11,876,596$ 14,686,187$ 19,199,858$ 20,255,751$ 23,914,809$ 22,998,926$
Business-Type Activities
Charges for Services:
Water 8,222,724 7,221,378 6,986,247 7,064,571 7,921,483 9,585,939 9,842,699 9,969,058 11,935,016 11,166,944
Waste Water 6,918,132 6,052,668 6,505,119 6,930,036 7,488,473 8,560,438 8,852,738 9,008,247 9,283,600 9,668,524
Solid Waste 2,608,662 2,391,641 2,716,981 2,569,607 2,570,644 2,532,676 2,725,465 2,953,414 2,617,243 3,613,721
Non-Major Activities - 467,607 326,820 417,114 382,968 644,672 872,325 891,379 3,207,605 2,172,399
Operating Grants and Contributions - - - - - - 9,596 123,439 134,946 169,509
Capital Grants and Contributions:29,405,599 6,465,230 3,621,051 6,589,612 566,138 156,123 5,898,923 6,385,418 11,287,654 7,774,707
Total Business-Type Activities Program Revenues 47,155,117 22,598,524 20,156,218 23,570,940 18,929,706 21,479,848 28,201,746 29,330,955 38,466,064 34,565,804
Total Primary Government Program Revenues 66,195,964 42,124,145 35,488,576 43,014,487 30,806,302 36,166,035 47,401,604 49,586,706 62,380,873 57,564,730
Fiscal Years
DRAFT527
183
CITY OF BOZEMAN, MONTANA CHANGES IN NET POSITION (CONTINUED) Past Ten Fiscal Years (accrual basis of accounting)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Net (Expense) / Revenue
Governmental Activities (14,152,474) (15,994,064) (20,683,495) (16,909,239) (26,105,696) (17,919,131) (16,715,266) (19,048,320) (18,285,579) (21,945,675)
Business-Type Activities 25,368,788 (3,022,398) (4,531,209) (1,776,917) (6,522,809) 5,875,198 4,060,921 9,986,850 15,157,861 10,144,326
Total Primary Government Net Expense 11,216,314$ (19,016,462)$ (25,214,704)$ (18,686,156)$ (32,628,505)$ (12,043,933)$ (12,654,345)$ (9,061,470)$ (3,127,718)$ (11,801,349)$
General Revenues and Other Changes in Net Position
Governmental Activities:
Taxes
Property Taxes 12,070,765 14,629,230 15,501,316 16,342,053 15,716,055 16,429,959 17,561,022 20,203,718 21,234,288 21,708,812
Unrestricted Grants and Contributions 5,617,243 6,125,789 6,284,467 6,782,383 6,898,717 6,342,884 7,436,419 7,699,711 7,992,180 8,372,625
Investment Earnings 1,362,790 671,859 352,378 301,424 283,090 243,744 355,790 403,152 519,637 554,870
Miscellaneous 1,859,313 2,766,671 2,256,071 1,556,790 155,484 - 293,884 374,966 418,215 1,317,137
Sale of Capital Assets 51,342 68,057 761,952 (8,168) 4,414 1,765 236,688 - 123,934 (71,335)
Transfers of Capital Assets - (6,311,324) - - (2,088) - - - - -
Transfers - (3,249,929) 521,863 517,250 (37,136) (10,000) (10,000) (410,016) 1,218,036 (742,999)
Total Governmental Activities 20,961,453$ 14,700,353$ 25,678,047$ 25,491,732$ 23,018,536$ 23,008,352$ 25,873,803$ 28,271,531$ 31,506,290$ 31,139,110$
Business-Type Activities:
Unrestricted Grants and Contributions 2,052 2,155 342,653 438,475 2,115 508,912 - - - -
Transfers of Capital Assets - 6,311,324 - - 2,088 - - - - 304,231
ARRA Debt Forgiveness - - - - - - 390,700 - - 1,256,284
Transfers - 3,249,929 (521,863) (517,251) 37,136 10,000 10,000 380,347 (1,218,036) (2,013,292)
Extraordinary Items - - - - - - - - - 742,999
Total Business-Type Activities 2,052 9,563,408 (179,210) (78,776) 41,339 518,912 400,700 380,347 (1,218,036) 290,222
Total Primary Government 20,963,505 24,263,761 25,498,837 25,412,956 23,059,875 23,527,264 26,274,503 28,651,878 30,288,254 31,429,332
Change in Net Position
Governmental Activities 6,808,979 (1,293,711) 4,994,552 8,582,493 (3,087,160) 5,089,221 9,158,537 9,223,211 13,220,711 9,193,435
Business-Type Activities 25,370,840 6,541,010 (4,710,419) (1,855,693) (6,481,470) 6,394,110 4,461,621 10,367,197 13,939,825 10,434,548
Total Primary Government 32,179,819$ 5,247,299$ 284,133$ 6,726,800$ (9,568,630)$ 11,483,331$ 13,620,158$ 19,590,408$ 27,160,536$ 19,627,983$
Fiscal Year
DRAFT528
184
CITY OF BOZEMAN, MONTANA FUND BALANCE - GOVERNMENT FUNDS Past Ten Fiscal Years (modified accrual basis of accounting)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
General Fund
Reserved 3,000 63,000 - -
Unreserved 4,516,814 5,301,397 5,119,400
Nonspendable - - - - - -
Restricted - - - - - -
Committed - - - - - -
Assigned 5,991,388 7,062,964 7,327,375 6,420,760 6,061,965 5,541,841 6,402,882$
Unassigned 905,862 264,091 - 193,534 - 979,258 87,274$
Total general fund 4,519,814 5,364,397 5,119,400 6,897,250 7,327,055 7,327,375 6,614,294 6,061,965 6,521,099 6,490,156
All Other Governmental
Reserved 3,045,231 2,660,918 6,597,569 -
Unreserved, reported in:
Special revenue funds 13,723,846 12,516,240 14,916,152
Capital projects funds 2,884,553 - 1,793,287
Debt service funds - - -
Nonspendable 999,464 1,113,484 1,193,530 1,269,557 2,061,790 1,426,575 1,533,338
Restricted 19,962,574 19,683,881 26,061,499 19,927,526 12,546,935 39,856,356 38,938,127
Committed 3,278,422 3,463,714 851,322 3,075,505 3,088,936 3,528,263 3,901,694
Assigned 58,419 - - 229,602 - 1,883,557 927,596
Unassigned - (51,586) 456,669 (184,101) (97,173) (64,723) (50,900)
Total all other governmental funds 19,653,630 15,177,158 23,307,008 24,298,879 24,209,493 28,563,020 24,318,089 17,600,488 46,630,028 45,249,855
Fiscal Year
DRAFT529
185
CITY OF BOZEMAN, MONTANA CHANGES IN FUND BALANCES - GOVERNMENT FUNDS Past Ten Fiscal Years (modified accrual basis of accounting)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Revenues
Taxes 12,004,946 14,451,954 15,055,844 16,634,924 16,057,318 16,540,972 17,385,371 20,404,236 21,303,074 21,682,667
Special assessments 1,793,813 1,633,896 1,643,500 1,866,272 1,898,007 1,752,615 2,011,944 1,578,855 1,265,954 1,163,275
Licenses and permits 1,351,887 1,140,831 958,590 1,308,378 1,214,705 1,629,744 1,784,282 1,827,842 2,112,090 2,092,673
Intergovernmental 9,642,918 7,102,049 7,900,176 8,299,803 7,697,637 7,586,007 8,208,770 8,562,937 8,920,424 8,956,044
Charges for service 6,748,891 6,468,006 5,790,382 6,629,507 6,891,594 8,806,969 9,656,123 10,629,791 12,283,683 13,743,830
Fines and forfeitures 1,644,767 1,597,236 1,518,481 1,441,383 1,364,617 1,394,652 1,411,162 1,305,166 1,253,705 1,256,525
Interest on investments 1,360,914 671,859 352,378 300,516 281,239 239,778 329,086 370,305 479,699 520,690
loan repayment 19,849 9,985 10,401 193,302 306,385 157,069 63,980 94,989 38,552 31,837
Other 1,859,313 2,766,671 2,256,071 1,556,790 155,484 394,677 287,089 363,274 415,646 1,307,668
Total revenues 36,427,298 35,842,487 35,485,823 38,230,875 35,866,986 38,502,483 41,137,807 45,137,395 48,072,827 50,755,209
Expenditures
General government 6,153,838 5,946,355 5,690,488 5,939,771 6,266,566 7,276,839 6,138,575 6,594,474 7,318,539 7,643,886
Public safety 10,778,917 11,056,742 11,709,170 12,137,616 12,513,270 13,822,691 14,637,886 15,086,695 16,485,549 16,812,131
Public service 3,020,855 2,976,711 2,702,510 3,002,021 2,738,066 2,805,612 3,498,770 3,786,283 3,840,405 4,422,771
Public welfare 4,819,758 5,161,997 4,916,828 6,435,916 6,184,073 6,216,387 6,678,347 7,366,955 7,245,425 7,654,059
Other - - - - - 15,776 1,046,712 1,113,340 418,431 506,169
Capital outlay 12,205,040 9,380,742 4,248,758 3,299,017 3,881,388 2,782,435 8,053,456 9,905,333 9,337,470 12,468,020
Debt service
Principal 2,013,232 1,138,051 1,194,819 1,611,087 3,235,664 1,826,126 1,482,142 1,121,593 1,345,250 1,422,555
Interest & Fiscal Fees 649,662 738,198 715,150 680,088 666,082 445,736 380,950 824,266 893,470 771,714
Total expenditures 39,641,302 36,398,796 31,177,723 33,105,516 35,485,109 35,191,602 41,916,838 45,798,939 46,884,539 51,701,305
Excess of revenues
over (under) expenditures (3,214,004) (556,309) 4,308,100 5,125,359 381,877 3,310,881 (779,031) (661,544) 1,188,288 (946,096)
Other Financing Sources (Uses)
Proceeds from borrowing - - - - - - - - -
Transfers in 4,604,100 8,394,126 10,857,332 6,985,734 3,482,550 4,291,417 3,103,787 4,816,671 6,483,413 3,950,059
Transfers out (4,604,100) (11,733,378) (11,033,925) (7,255,505) (3,821,010) (4,454,505) (3,113,787) (5,197,018) (5,496,492) (4,693,058)
Issuance of debt 6,554,166 177,346 890,000 - 3,357,798 1,203,279 10,012,647 5,619,361 47,406 234,702
Premium on Bonds Issued 10,896 - - - - - - - - -
Payments to Refunded Bond Escrow Agent (3,120,000) - - - - -
Sales of capital assets 249,688 86,326 766,922 10,555 59,204 2,775 243,092 64,855 227,984 43,277
Total other financing sources (uses)6,814,750 (3,075,580) 1,480,329 (259,216) (41,458) 1,042,966 10,245,739 5,303,869 1,262,311 (465,020)
Extraordinary items
Net change in fund balances 3,600,746$ (3,631,889)$ 5,788,429$ 4,866,143$ 340,419$ 4,353,847$ 9,466,708$ 4,642,325$ 2,450,599$ (1,411,116)$
Debt service as a percentage of 9.7%6.9%7.1% 7.7% 12.3% 7.0% 5.5% 5.4% 6.0%5.6%
noncapital expenditures
Fiscal Year
DRAFT530
REVENUE CAPACITY SECTION
DRAFT532
186
CITY OF BOZEMAN, MONTANA ASSESSED VALUE OF TAXABLE PROPERTY Past Ten Fiscal Years
Fiscal Total Total Assessed Taxable
Year Taxable Direct Total Value ** as a
Ended Residential Commercial & Other Assessed Tax Market Percentage of
June 30,Property Industrial Property Property Value **Rate Value *Total Market Value
2008 38,629,360 26,212,780 4,138,860 68,981,000 154.18 2,192,163,035 3.147%
2009 41,539,680 28,187,640 4,450,680 74,178,000 171.16 2,407,420,224 3.081%
2010 43,842,400 29,750,200 4,697,400 78,290,000 170.19 2,655,766,251 2.948%
2011 45,023,440 30,551,620 4,823,940 80,399,000 168.75 2,827,548,097 2.843%
2012 45,954,720 31,183,560 4,923,720 82,062,000 166.75 2,994,740,226 2.740%
2013 46,606,560 31,625,880 4,993,560 83,226,000 166.75 3,176,282,865 2.620%
2014 47,956,720 32,542,060 5,138,220 85,637,000 173.08 3,386,295,608 2.529%
2015 50,978,520 31,641,840 5,273,640 87,894,000 188.76 3,598,269,877 2.443%
2016 50,899,738 29,864,642 5,799,800 86,564,180 210.16 5,698,588,679 1.519%
2017 52,777,954 30,966,657 6,013,815 89,758,426 205.30 5,870,738,906 1.529%
Source: Based on information provided by Gallatin County and Montana Department of Revenue
Note: Property in Gallatin County is reassessed by the State Department of Revenue every six years.
* Sales price of property is not public record in the State of Montana, so the Total Market Value was used instead
** Includes tax-exempt property
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187
CITY OF BOZEMAN, MONTANA CITY TAXABLE MARKET AND TAXABLE VALUES Past Ten Fiscal Years
Fiscal Net Taxable Value
Year Incremental Value (excludes Tax Taxable Value
Ended Taxable Full for All Tax Increment Districts for Open Space
June 30,Market Value Taxable Value Increment Districts Incremental Values)Purposes
2008 2,192,163,035 70,016,605 1,035,352 68,981,253 n/a *
2009 2,407,420,224 75,458,468 1,280,371 74,178,097 n/a *
2010 2,655,766,251 80,850,582 2,560,601 78,289,981 n/a *
2011 2,827,058,097 83,309,165 2,910,650 80,398,515 n/a *
2012 2,994,740,226 85,345,227 3,282,766 82,062,461 n/a *
2013 3,176,282,865 86,934,533 3,708,138 83,226,395 n/a *
2014 3,386,295,608 89,650,917 4,013,561 85,637,356 85,615,328
2015 3,598,269,877 92,081,322 4,186,781 87,894,541 90,735,030
2016 5,698,588,679 90,787,797 4,223,617 86,564,180 234,985,893
2017 5,870,738,906 94,102,761 4,344,335 89,758,426
Source: Based on information provided by Gallatin County and Montana Department of Revenue
Note: Property is assessed by the State Department of Revenue every six years.
* No certified value available, first certification available for FY2014 DRAFT535
188
CITY OF BOZEMAN, MONTANA TAX INCREMENT DISTRICT TAXABLE VALUATION DETAIL Past Ten Fiscal Years
Fiscal
Year
Ended Base Incremental Total Base Incremental Total Base Incremental Total
June 30,Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable
2008 1,858,491 931,030 2,789,521 423,054 48,790 471,844 2,886,997 55,532 2,942,529
2009 1,858,491 1,115,768 2,974,259 423,054 71,287 494,341 2,886,997 93,316 2,980,313
2010 1,328,695 1,947,249 3,275,944 423,054 104,987 528,041 2,886,997 450,625 3,337,622
2011 1,328,695 2,060,807 3,389,502 423,054 135,162 558,216 2,886,997 664,127 3,551,124
2012 1,328,695 2,251,286 3,579,981 423,054 133,197 556,251 2,886,997 840,137 3,727,134
2013 1,328,695 2,396,293 3,724,988 423,054 150,217 573,271 2,886,997 1,084,216 3,971,213
2014 1,328,695 2,586,963 3,915,658 423,054 172,608 595,662 2,886,997 1,193,297 4,080,294
2015 1,328,695 2,718,220 4,046,915 423,054 190,579 613,633 2,886,997 1,225,604 4,112,601
2016 1,328,695 2,898,551 4,227,246 423,054 214,470 637,524 2,886,997 1,055,385 3,942,382
2017 1,328,695 3,068,902 4,397,597 423,054 193,281 616,335 3,473,127 1,003,546 4,476,673
Fiscal
Year
Ended Base Incremental Total Base Incremental Total Base Incremental Total
June 30,Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable
2008 - - - - - - 5,168,542 1,035,352 6,203,894
2009 - - - - - - 5,168,542 1,280,371 6,448,913
2010 12,059 57,740 69,799 - - - 4,650,805 2,560,601 7,211,406
2011 12,059 50,554 62,613 - - - 4,650,805 2,910,650 7,561,455
2012 12,059 58,146 70,205 - - - 4,650,805 3,282,766 7,933,571
2013 12,059 77,412 89,471 - - - 4,650,805 3,708,138 8,358,943
2014 12,059 60,693 72,752 417 - 417 4,651,222 4,013,561 8,664,783
2015 12,059 52,376 64,435 417 3 420 4,651,222 4,186,782 8,838,004
2016 12,059 55,211 67,270 417 - 417 4,651,222 4,223,617 8,874,839
2017 12,059 78,606 90,665 417 - 283 5,237,352 4,344,335 9,581,687
Source: Based on information provided by Gallatin County and Montana Department of Revenue
Note: Property is assessed by the State Department of Revenue every six years.
MANDEVILLE FARM INDUSTRIAL BOZEMAN TECHNOLOGY TOTAL
BOZEMAN DOWNTOWN NORTHEAST URBAN RENEWAL DISTRICT NORTH 7TH CORRIDOR
DRAFT536
189
CITY OF BOZEMAN, MONTANA DOWNTOWN BOZEMAN IMPROVEMENT DISTRICT & COMPARISON TO CITY TAXABLE VALUE Past Ten Fiscal Years
Fiscal Taxable City Taxable Value The District's
Year Market Value Taxable Value of Incremental (Excluding ALL tax Incremental Taxable
Ended of Property in Property in the Taxable increment district Value as Percentage of
June 30,the District District Value valuations)City's Taxable Value
2008 94,996,536 2,789,521 931,030 68,981,253 1.35%
2009 98,234,423 2,974,259 1,115,768 74,178,097 1.50%
2010 110,487,369 3,275,944 1,947,249 78,289,981 2.49%
2011 119,431,550 3,389,502 2,060,807 80,398,515 2.56%
2012 129,285,686 3,579,981 2,251,286 82,062,461 2.74%
2013 142,099,662 3,724,988 2,396,293 83,226,395 2.88%
2014 153,063,721 3,915,658 2,586,963 85,367,356 3.03%
2015 190,128,511 4,046,915 2,718,220 87,894,541 3.09%
2016 259,138,001 4,227,246 2,898,551 86,564,180 3.35%
2017 4,397,597 3,068,902 89,758,426 3.42%
Source: Based on information provided by Gallatin County and Montana Department of Revenue
Note: Property is assessed by the State Department of Revenue every six years.
Downtown Bozeman Improvement District
DRAFT537
190
CITY OF BOZEMAN, MONTANA PROPERTY TAX LEVIES IN THE DOWNTOWN BOZEMAN IMPROVEMENT DISTRICT Past Ten Fiscal Years
Taxing Entity 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Statewide School Equalization 40.00 40.00 40.00 40.00 40.00 40.00 40.00 40.00 40.00 40.00
Gallatin County Operating and Bond 79.50 79.78 85.19 89.94 88.69 87.40 88.38 89.55 99.77 100.41
Open Space Bond 4.17 4.63 5.81 6.14 5.99 4.89 4.90 4.95 5.03 5.85
County-Wide School 97.05 100.26 94.02 95.74 95.61 96.47 101.28 99.94 106.85 105.39
Bozeman High School District 65.34 71.40 69.05 75.34 73.48 71.81 73.16 72.97 76.76 77.25
Bozeman Elementary School District 118.51 141.13 130.49 121.55 123.38 131.45 145.25 143.70 151.15 154.81
City of Bozeman 154.18 171.16 170.19 168.75 166.75 166.75 173.08 188.76 210.16 205.30
TOTAL 558.75 608.36 594.75 597.46 593.90 598.77 626.05 639.87 689.72 689.01
Exempt from Tax Increment
University Millage 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00
Gallatin Conservation District 1.06 1.04 1.01 0.99 1.00 0.98 0.97 0.95 1.05 1.01
County-Wide Planning 2.43 2.58 2.50 2.40 2.40 2.39 2.39 2.35 2.39 2.39
Source: Based on information provided by Gallatin County and Montana Department of Revenue
Note: Property is assessed by the State Department of Revenue every six years and beginning in 2017 every two years.
Fiscal Year
DRAFT538
191
CITY OF BOZEMAN, MONTANA DIRECT AND OVERLAPPING PROPERTY TAX RATES Past Ten Fiscal Years (rate per $1,000 of assessed value)
Fiscal General Total
Year Obligation Direct Bozeman
Ended Basic Debt Tax School Gallatin State of
June 30,Rate Service Rate District County Montana
2008 142.98 11.20 154.18 183.85 205.40 46.00
2009 160.59 10.57 171.16 212.53 210.14 46.00
2010 160.18 10.01 170.19 199.54 210.25 46.00
2011 158.96 9.79 168.75 196.89 217.21 46.00
2012 157.19 9.56 166.75 196.86 215.77 46.00
2013 158.38 8.37 166.75 203.26 215.10 46.00
2014 164.83 8.25 173.08 218.41 221.00 46.00
2015 177.52 11.24 188.76 216.67 215.78 46.00
2016 194.51 15.65 210.16 227.91 241.69 46.00
2017 190.17 15.13 205.30 232.06 241.69 46.00
Source: Based on information provided by Gallatin County and Department of Revenue DRAFT539
192
CITY OF BOZEMAN, MONTANA PRINCIPAL PROPERTY TAX PAYERS Current Year and Ten Years Ago
Percentage Percentage
of Total City of Total City
Taxable Taxable Total Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
Northwestern Energy - Transmission & Distribution 4,203,090 1 4.68%3,243,216 1 4.70%
Centurylink, Inc. (Qwest)736,068 2 0.82%1,259,168 2 1.83%
Bresnan Communications 708,027 3 0.79%
Verizon Wireless 495,140 4 0.55%
Harry Daum - Gallatin Mall 444,051 5 0.49%520,427 3 0.75%
Stone Ridge Partners LLC 417,262 6 0.46%322,570 8
Mitchell Development & Investment 390,752 7 0.44%
First Security Bank 362,625 8 0.40%
J & D Family Limited Partnership 349,579 9 0.39%
Bridger Peaks Holding LLC 348,926 10 0.39%
Bozeman Deaconess Foundation 504,873 4 0.73%
Wal-Mart Stores Inc 387,238 5 0.56%
Lowes HIW inc 348,229 6
Machinery Power & Equipment 340,124 7
Highgate Bozeman LLC 297,102 10 0.43%
Costco Wholesale 308,461 9 0.45%
Total 8,455,520$ 9.42%7,531,408$ 9.45%
Total City Taxable Assessed Value 89,758,426$ 68,981,000$
Source: Gallatin County Treasurer
2017 2008
DRAFT540
193
CITY OF BOZEMAN, MONTANA PRINCIPAL PROPERTY TAX PAYERS IN DOWNTOWN BOZEMAN IMPROVEMENT DISTRICT Current Year and Prior Year
Percentage Percentage
of Total City of Total City
Total Taxable Total Taxable
Assessed Assessed Assessed Assessed
Taxpayer Business Value Rank Value Value Rank Value
First Security Bank Bank 228,171 1 5.40%228,171 1 5.40%
F&H, LLC Property Investor/Developer 128,240 2 3.03%128,240 2 3.03%
Moose Point LP Commercial Property Developer 110,531 3 2.61%110,531 3 2.61%
777 Building Multi Tennant Office Retail Building 107,477 4 2.54%107,477 4 2.54%
Atlantic Financial Group Ltd.Bank 89,991 5 2.13%89,991 5 2.13%
Downtowner Group LLC Business Support Services 89,618 6 2.12%89,618 6 2.12%
M & J Cowdrey LLC Property Investor/Developer 88,667 7 2.10%88,667 7 2.10%
777 LLC & UND 50%Property Investor/Developer 71,497 8 1.69%71,497 8 1.69%
First Security Bank of Bozeman Bank 69,695 9 1.65%69,695 9 1.65%
Baxter Main LLC Commercial 62,268 10 1.47%62,268 10 1.47%
American Bank of MT Wells Fargo Bank Bank
Callender Street LLP Design-Construction Oversight
Martel Plaza Ltd.Multi Story Office Building
Total 1,046,155$ 24.75%1,046,155$ 24.75%
Total Downtown BID Taxable Assessed Value 4,227,246$ 4,046,915$
Source: Gallatin County Treasurer
20162017
DRAFT541
194
CITY OF BOZEMAN, MONTANA PROPERTY TAX LEVIES AND COLLECTIONS Past Ten Fiscal Years
Fiscal
Year Taxes Levied Collections
Ended for the Percentage in Subsequent Percentage
June 30,Fiscal Year Amount of Levy Years Amount of Levy
2008 10,635,491 10,324,653 97.08%286,240 10,610,893 99.77%0.23%
2009 12,696,306 12,493,145 98.40%179,326 12,672,470 99.81%0.19%
2010 13,324,175 12,415,922 93.18%898,397 13,314,319 99.93%0.07%
2011 13,567,611 13,001,537 95.83%530,723 13,532,260 99.74%0.26%
2012 13,683,839 13,108,003 95.79%413,237 13,521,239 98.81%1.19%
2013 13,878,293 13,633,347 98.24%186,441 13,819,788 99.58%0.42%
2014 14,821,724 14,482,502 97.71%153,116 14,635,618 98.74%1.26%
2015 16,590,871 16,559,270 99.81%61,615 16,620,884 100.18%-0.18%
2016 18,191,892 18,009,556 99.00%27,256 18,036,812 99.15%0.85%
2017 18,338,501 18,069,230 98.53%- 18,069,230 98.53%1.47%
Source:Gallatin County
City Manager's Final Adopted Budget
Collected within the
Fiscal Year of the Levy Total Collections to Date
DRAFT542
195
CITY OF BOZEMAN, MONTANA WATER SOLD BY TYPE OF CUSTOMER Past Ten Fiscal Years (in hundreds of cubic feet “HCF”)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Type of Customer
Residential 1,379,115 1,516,359 1,224,164 1,181,195 1,323,816 1,513,986 1,433,833 1,385,140 1,493,192 1,601,439
Government 49,623 66,253 51,168 48,228 49,349 59,589 52,448 53,165 51,923 56,956
MSU 260,232 254,891 228,789 227,019 235,965 233,484 213,698 210,107 208,618 225,394
Commercial 626,846 670,961 571,223 568,474 602,352 638,337 607,444 599,193 610,741 620,761
Total 2,315,816 2,508,464 2,075,343 2,024,916 2,211,481 2,445,396 2,307,423 2,247,605 2,364,473 2,504,550
Total direct rate 2,478.36$ 2,495.43$ 2,679.44$ 2,787.06$ 2,887.40$ 2,955.66$ 3,053.40$ 3,105.14$ 3,175.41$ 3,256.72$
per 1,000 HCF
Source: City of Bozeman Finance Department
Fiscal Year
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196
CITY OF BOZEMAN, MONTANA WATER AND SEWER RATES Past Ten Fiscal Years
Fiscal
Year Monthly Rate per Monthly Rate per
Ended Base 1,000 Base 1,000
June 30,Rate Gallons Rate Gallons
2008 12.60$ 19.74$ 11.17$ 18.50$
2009 12.60$ 19.74$ 12.13$ 20.10$
2010 13.00$ 20.37$ 13.37$ 22.15$
2011 13.42$ 21.02$ 14.73$ 24.41$
2012 14.02$ 21.96$ 15.61$ 25.87$
2013 14.65$ 22.95$ 16.55$ 27.42$
2014 14.65$ 22.95$ 17.56$ 29.10$
2015 14.65$ 22.95$ 17.56$ 29.10$
2016 15.02$ 23.53$ 18.09$ 29.98$
2017 15.39$ 24.11$ 18.63$ 30.87$
* For Residential Customers, using 5/8 inch meter size.
Sources:City of Bozeman, Montana Commission Resolution 3804
City of Bozeman, Montana Commission Resolution 3805
City of Bozeman, Montana Commission Resolution 3929
City of Bozeman, Montana Commission Resolution 3930
City of Bozeman, Montana Commission Resolution 4042
City of Bozeman, Montana Commission Resolution 4043
City of Bozeman, Montana Commission Resolution 4184
City of Bozeman, Montana Commission Resolution 4185
City of Bozeman, Montana Commission Resolution 4327
City of Bozeman, Montana Commission Resolution 4328
City of Bozeman, Montana Commission Resolution 4454
City of Bozeman, Montana Commission Resolution 4626&4627
Water Sewer
DRAFT544
DEBT CAPACITY
DRAFT546
197
CITY OF BOZEMAN, MONTANA RATIO OF OUTSTANDING DEBT BY TYPE Past Ten Fiscal Years
Fiscal
Year General Special Tax Increment Water Wastewater Total Percentage
Ended Obligation Notes Assessment Financing Revenue State of MT Primary of Personal Per
June 30,Bonds Payable Bonds Bonds Bonds RLF Loans Government Income Capita
2008 5,340,000 - 5,601,000 6,000,000 143,729 - 17,084,729 2.43%475.32$
2009 4,815,000 - 5,211,000 5,850,000 56,615 - 15,932,615 1.97%431.39$
2010 4,275,000 851,071 4,819,000 5,695,000 28,992 7,902,127 23,571,191 2.72%632.27$
2011 3,710,000 509,705 4,351,500 5,535,000 - 24,017,080 38,123,285 4.65% 1,021.69$
2012 3,080,000 306,727 2,269,500 5,370,000 182,577 23,853,427 35,062,231 4.36%919.88$
2013 2,445,000 1,198,823 1,659,500 5,195,000 13,751,878 22,501,119 46,751,320 5.54% 1,206.39$
2014 11,685,000 1,086,396 1,185,500 5,015,000 18,140,000 21,025,565 58,137,461 6.82% 1,496.07$
2015 16,320,000 963,274 890,500 4,825,000 17,365,000 19,972,565 60,336,339 7.11% 1,448.30$
2016 15,570,000 884,841 662,500 4,630,000 16,567,000 18,930,565 57,244,906 6.74% 1,318.86$
2017 14,710,000 903,264 501,000 4,425,000 15,745,000 17,856,000 54,140,264 5.89% 1,196.47$
Sources:City Manager's Final Adopted Budget
City of Bozeman Finance Department
Business-Type ActivitiesGovernmental Activities
DRAFT548
198
CITY OF BOZEMAN, MONTANA RATIO OF GENERAL BONDED DEBT OUTSTANDING Past Ten Fiscal Years
Percentage of
Fiscal Actual
Year General Tax Increment Taxable
Ended Obligation Financing District Value of Per
June 30,Bonds Bonds Total Property Capita
2008 5,340,000 6,000,000 11,340,000 16.4% 315.49$
2009 4,815,000 5,850,000 10,665,000 14.4% 288.77$
2010 4,275,000 5,695,000 9,970,000 12.7% 267.44$
2011 3,710,000 5,535,000 9,245,000 11.5% 247.76$
2012 3,080,000 5,370,000 8,450,000 10.3% 221.69$
2013 2,445,000 5,195,000 7,640,000 9.2% 197.15$
2014 11,685,000 5,015,000 16,700,000 19.5% 429.75$
2015 16,320,000 4,825,000 21,145,000 24.1% 507.56$
2016 15,570,000 4,630,000 20,200,000 23.3% 465.38$
2017 14,710,000 4,425,000 19,135,000 21.3% 422.87$
Source:City Manager's Final Adopted Budget
General Bonded Debt Outstanding
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199
CITY OF BOZEMAN, MONTANA DIRECT & OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
Debt Estimated
Outstanding Estimated Share of
as of Percentage Overlapping
June 30, 2017 Applicable (1)Debt
Overlapping Bonded Indebtedness
Gallatin County:
Various issues outstanding 48,637,635$ 36%17,426,572$
Bozeman School District #7:
Various issues outstanding 93,693,846$ 31%28,943,654$
Subtotal overlapping debt 46,370,226$
City of Bozeman, Montana
Direct Debt 14,710,000$ 100%14,710,000$
Total Direct & Overlapping Debt 61,080,226
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This
schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and
businesses of Bozeman. This process recognizes that, when considering the City's ability to issue and repay long-term debt,
the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply
that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.
(1) The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages
were estimated by determining the portion of another governmental unit's taxable assessed value that is within the City's
boundaries and dividing it by each entity's total taxable assessed value.
Sources:
City of Bozeman Finance Department
Gallatin County Assessor's Office
Bozeman School District #7 DRAFT550
200
CITY OF BOZEMAN, MONTANA LEGAL DEBT MARGIN INFORMATION Past Ten Fiscal Years
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Debt limit*54,804,000 60,185,000 66,375,000 70,688,000 74,875,000 76,450,000 84,657,000 84,500,000 142,464,717 147,500,000
Total net debt applicable to limit (5,423,128) (4,842,905) (4,295,240)$ (3,638,239)$ (3,386,727)$ (3,643,823)$ (12,771,396)$ (15,356,726)$ (16,454,841)$ (18,613,264)$
Legal debt margin 49,380,872$ 55,342,095$ 62,079,760$ 67,049,761$ 71,488,273$ 72,806,177$ 71,885,604$ 69,143,274$ 126,009,876$ 128,886,736$
Total net debt applicable to the limit 9.9% 8.0% 6.5% 5.1% 4.5% 4.8% 15.1% 18.2% 11.6% 12.6%
as a percentage of debt limit
*2.5% of total market value of taxable property of $5.9 Billion
Source: City Manager's Final Adopted Budget
Fiscal Years
DRAFT551
201
CITY OF BOZEMAN, MONTANA PLEDGED REVENUE COVERAGE Past Ten Fiscal Years
Fiscal
Year Utility Less:Special
Ended Service Operating Assessment
June 30,Charges Expenses Principal Interest Coverage Collections Principal Interest Coverage
-
2008 6,163,883 (3,769,941) (82,731) (10,231) 2,300,981 1,178,846 (1,135,700) (278,393) (235,247)
2009 5,938,745 (3,770,800) (87,009) (5,978) 2,074,958 1,022,641 (390,000) (241,395) 391,246
2010 5,860,144 (3,950,566) (27,622) (2,440) 1,879,516 989,977 (392,000) (223,763) 374,214
2011 6,013,211 (3,869,048) (28,992) (1,070) 2,114,101 1,134,049 (467,500) (211,204) 455,345
2012 6,814,990 (4,063,529) (159,000) (6,405) 2,586,056 858,699 (2,082,000) (192,320) (1,415,621)
2013 7,806,922 (4,364,506) (502,000) (163,250) 2,777,166 820,090 (650,975) (103,198) 65,917
2014 7,871,386 (4,405,464) (751,000) (429,438) 2,285,484 1,054,483 (474,000) (73,760) 506,723
2015 7,748,913 (4,973,926) (775,000) (538,425) 1,461,562 586,116 (295,000) (50,070) 241,046
2016 8,414,870 (6,176,752) (798,000) (515,010) 925,108 705,143 (228,000) (39,343) 437,800
2017 9,281,821 (6,589,396) (822,000) (490,890) 1,379,535 558,988 (161,500) (30,335) 367,153
Fiscal
Year Utility Less:
Ended Service Operating
June 30,Charges Expenses Principal Interest Coverage
2008 4,739,702 (2,981,164) - - 1,758,538
2009 4,905,772 (4,843,180) - - 62,592
2010 5,389,070 (3,468,705) (166,300) (69,470) 1,684,594
2011 5,939,996 (4,183,596) (606,000) (494,298) 656,102
2012 6,385,404 (3,784,420) (883,000) (857,842) 860,141
2013 6,916,226 (3,947,821) (1,465,227) (847,778) 655,400
2014 7,204,486 (5,895,751) (1,084,854) (660,771) (436,891)
2015 7,631,117 (3,914,454) (1,053,000) (632,268) 2,031,395
2016 7,927,692 (5,139,029) (1,042,000) (552,269) 1,194,394
2017 8,566,893 (5,496,164) (1,074,565) (545,267) 1,450,897
Waste Water Revenue Bonds
Debt Service
Water Revenue Bonds Special Assessment Bonds
Debt Service Debt Service
DRAFT552
202
CITY OF BOZEMAN, MONTANA DEBT SERVICE REQUIREMENTS AND COVERAGE FOR DOWNTOWN TAX INCREMENT DISTRICT Past Eight Fiscal Years
Fiscal
Year Revenues Annual
Ended Available Debt Service
June 30,for Debt Service Payment Coverage
2008 585,839 416,223 1.41
2009 742,192 425,288 1.75
2010 1,209,378 424,288 2.85
2011 1,135,166 423,088 2.68
2012 1,266,104 421,688 3.00
2013 1,497,572 425,088 3.52
2014 1,644,960 423,088 3.89
2015 1,853,725 425,888 4.35
2016 2,066,749 423,288 4.88
2017 2,160,187 425,488 5.08 DRAFT553
203
CITY OF BOZEMAN, MONTANA SUMMARY OF OUTSTANDING SIDs Current Fiscal Year
Bond Original Maturity Bonds Cash Assessments Delinquent
Issue Amount Date Outstanding Balance Outstanding Assessments
SID 669 1,160,000$ 7/1/2020 130,000 54,238 146,251 822
SID 683 1,372,000 7/1/2024 140,000 32,425 384,045 2,615
SID 684 1,376,869 7/1/2025 - 165,532 442,036 2,302
TOTAL 3,908,869$ 270,000$ 252,195$ 972,332$ 5,739$
As of June 30, 2017
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204
CITY OF BOZEMAN, MONTANA REVOLVING FUND BALANCE AND BOND SECURED THEREBY Past Ten Fiscal Years
Fiscal
Year
Ended Revolving Fund Principal
June 30,Cash Balance Amount of Debt
2008 629,510 5,601,000
2009 647,235 5,211,000
2010 1,228,197 4,819,000
2011 3,160,685 4,351,500
2012 3,190,244 2,269,500
2013 2,443,769 1,803,029
2014 2,474,971 1,317,226
2015 2,948,129 1,295,224
2016 2,924,604 1,120,708
2017 2,874,013 1,040,533 DRAFT555
205
CITY OF BOZEMAN, MONTANA SPECIAL IMPROVEMENT DISTRICT ASSESSMENT BILLING AND COLLECTIONS Past Ten Fiscal Years
Fiscal Assessment Total Annual
Year Billing Collections
2008 1,074,991$ 1,178,846
2009 951,885 1,022,641
2010 915,398 989,977
2011 871,180 1,134,049
2012 750,418 858,699
2013 741,886 820,090
2014 676,613 1,054,484
2015 538,697 586,116
2016 543,351 705,143
2017 528,622 558,988 DRAFT556
DEMOGRAPHIC AND ECONOMIC INFORMATION DRAFT558
206
CITY OF BOZEMAN, MONTANA DEMOGRAPHIC AND ECONOMIC STATISTICS Past Ten Fiscal Years
Fiscal Estimated Per Residents
Year Annual %Capita Median with Bachelors K-12
Ended Change in Personal Personal Age Degree or School Unemployment
June 30,Population Population Income Income (years)Higher Schooling Enrollment Rate
2008 35,944 3.1% 703,013,220$ 23,387$ 27.2 53.7%5,432 2.7%
2009 36,933 2.7% 808,624,803$ 26,313$ 27.0 52.7%5,463 4.6%
2010 37,280 0.9% 866,396,960$ 25,909$ 26.0 50.6%5,509 5.8%
2011 37,314 0.1% 819,014,169$ 25,611$ 27.2 50.1%5,679 5.6%
2012 38,116 2.1% 803,487,262$ 24,709$ 27.2 53.9%5,810 5.2%
2013 38,753 1.6% 843,399,480$ 25,608$ 27.1 55.4%5,994 4.3%
2014 38,860 0.3% 852,165,042$ 26,427$ 26.8 53.3%6,216 3.5%
2015 41,660 6.7% 849,198,410$ 26,335$ 27.3 53.6%6,294 2.9%
2016 43,405 4.0% 849,682,100$ 26,350$ 27.5 54.4%6,533 2.8%
2017 45,250 4.1% 918,565,430$ 26,506$ 27.7 56.5%6,770 2.8%
Sources:
Bozeman Public Schools
U.S. Bureau of Labor Statistics
U.S. Census Bureau
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207
CITY OF BOZEMAN, MONTANA PRINCIPAL EMPLOYERS FOR GALLATIN COUNTY Current Year and Ten Years Ago
Private Employer Private Employer
Employers Class Employers Class
By Class Size By Class Size
Bozeman Deaconess Hospital 9 Bozeman Deaconess Hospital 9
Oracle America 7 Albertsons 7
Town Pump Convenience Stores 7 Right Now Technologies 7
Wal Mart 7 Wal-Mart 7
Albertson's 6 Zoot Enterprises 7
Barnard Construction 6 Bay Bar and Grill 6
Best Western Gran Tree Inn 6 Bozeman Daily Chronicle 6
Bridger Bowl 6 Community Food Coop 6
Community Food Co-Op 6 Costco 6
Costco 6 JTL group Inc - Belgrade 6
First Student 6 Kenyon Noble Lumber & Hardware 6
JC Billion 6 First Security Bank 6
Kenyon Noble Lumber & Hardware 6 Laidlaw Transit 6
Korman Marketing Group 6 Martel Construction 6
Martel Construction 6 McDonald's 6
McDonalds 6 Murdoch's Ranch & Home Supply 6
Murdoch's Ranch & Home Supply 6 On Site management 6
Ressler Motor 6 Ressler Motor Co 6
Rosauers Super Markets 6 Riverside Country Club 6
Target 6 Simkins Hallin Lumber 6
Town & Country Foods 6 Williams Plumbing and Heating 6
Zoot Enterprises 6
Public Employer Public Employer
Employers Class Employers ClassBy Class Size By Class Size
Montana State University 9 Montana State University 9
School District #7 9 Bozeman School District 8
Belgrade School District 8 City of Bozeman 7
City of Bozeman 7 Gallatin County 7
Department of Agriculture 7
Gallatin County 7
Class 6 - 100 to 249 Employees
Class 7 - 250 to 499 Employees
Class 8 - 500 to 999 Employees
Class 9 - 1,000+ Employees Source: Montana Department of Labor & Industry
2017 2008JuneJune
DRAFT561
OPERATING INFORMATION DRAFT562
208
CITY OF BOZEMAN, MONTANA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION / PROGRAM Past Ten Fiscal Years
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017General GovernmentCity Commission 2.10 2.10 2.10 2.10 2.10 2.10 2.10 2.10 2.10 2.10 City Manager *10.50 10.50 11.50 11.50 8.00 8.00 5.00 5.00 6.00 6.00 Municipal Court 7.00 7.00 7.50 8.50 8.50 8.50 8.50 9.00 8.50 8.50 City Attorney 7.00 6.00 11.50 7.00 7.00 7.00 7.00 9.00 10.20 10.20 Administrative Services - - - - - - 19.00 21.00 21.50 23.50 Finance *10.00 10.00 8.75 8.75 10.00 11.00 - - - - Information Technology *6.00 6.00 5.88 5.88 6.00 6.00 - - - - Community Development 15.20 13.70 12.20 12.20 8.75 9.00 8.00 12.60 11.60 13.00 Building Maintenance 3.05 3.55 3.55 3.55 3.00 3.50 3.50 3.50 3.50 3.50 Total General Government 60.85 58.85 62.98 59.48 53.35 55.10 53.10 62.20 63.40 66.80
Public SafetyPolice Department 57.75 62.75 71.75 71.75 71.25 72.75 72.75 72.25 71.70 72.70 Fire Department 34.25 45.25 41.75 41.75 41.75 43.75 45.75 45.00 46.00 46.00 Building Inspection 16.55 13.55 9.55 10.55 10.55 10.55 12.55 14.00 18.50 18.50 Parking 3.75 4.75 4.75 4.75 4.50 4.50 5.50 6.00 6.00 6.00 Total Public Safety 112.30 126.30 127.80 128.80 128.05 131.55 136.55 137.25 142.20 143.20
Public ServicesPublic Services Administration / Engineering 8.15 8.15 8.15 8.15 10.00 10.00 12.00 6.58 10.25 11.50 Streets 15.62 17.62 17.62 17.62 17.62 17.62 18.62 16.20 18.85 19.85 Storm Water - - - - - 1.00 1.00 4.00 6.25 6.50 Water Treatment Plant 9.27 9.27 9.27 9.27 9.77 9.77 11.27 12.75 10.50 10.50 Water Operations 15.62 16.62 15.62 15.62 15.62 15.62 15.62 17.33 14.45 14.45 Wastewater Operations 10.25 11.25 10.25 10.25 10.25 10.25 11.25 13.09 13.30 14.05 Wastewater Plant 14.87 15.87 15.87 15.87 15.87 16.37 17.47 15.50 14.75 14.75 Solid Waste Collection/Recycling 15.74 15.74 15.74 15.74 15.74 15.74 15.74 15.90 15.15 16.15 Solid Waste Disposal 2.00 - - - - - - - - - Vehicle Maintenance 3.00 4.00 5.00 5.00 5.00 5.00 5.00 5.00 6.50 6.50 Total Public Services 94.52 98.52 97.52 97.52 99.87 101.37 107.97 106.35 110.00 114.25
Public WelfareCemetery (numerous short terms)5.75 5.75 5.75 5.75 3.33 3.33 3.33 4.90 5.04 5.04 Parks (numerous short terms)13.45 13.45 13.45 13.45 11.77 11.77 11.77 15.40 14.51 14.51 Forestry 4.60 4.60 4.60 4.60 4.60 4.60 4.60 5.95 5.65 6.65 Library 20.66 21.66 21.66 21.66 21.66 21.56 23.11 23.41 26.02 28.02 Recreation (numerous short terms)14.90 15.00 15.00 15.00 15.83 15.83 16.83 16.83 23.55 24.26 Community Services 2.00 1.00 2.00 2.00 2.00 2.00 4.00 3.50 3.50 3.50 Total Public Welfare 61.36 61.46 62.46 62.46 59.19 59.09 63.64 69.99 78.27 81.98
Total of all Funds 329.03 345.13 350.76 348.26 340.46 347.11 361.26 375.79 393.87 406.23
Source: City Manager's Final Adopted Budget
* Administrative Services was created in fiscal year 2014 and consists of Finance, Information Technology and Human Resources
Fiscal Years
DRAFT564
209
CITY OF BOZEMAN, MONTANA OPERATING INDICATORS BY FUNCTION / PROGRAM Past Ten Fiscal Years
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Finance
SID Statements 14,919 15,000 15,816 16,000 16,000 16,200 16,424 16,506 16,893 17,200 Utility Bills 134,460 134,000 135,000 135,000 135,000 138,000 155,000 162,000 166,000 169,000 Accounts Payable Checks Processed 13,301 12,218 12,076 12,122 11,962 12,519 10,453 11,098 11,000 11,800 PoliceNumber of Officers 51 52 55 56 60 63 63 61 60 61 Calls for Service 42,728 45,145 43,385 45,131 45,358 47,361 48,542 46,290 47,400 48,200 Arrests 2,581 2,853 2,338 2,325 2,152 2,096 2,165 2,195 2,078 2,200 Misdemeanor Citations Issued - includes traffic **n/a n/a 3,311 4,504 5,234 5,205 6,045 6,169 6,390 6,500 Traffic Stops **n/a n/a 10,702 10,036 9,358 10,629 8,210 7,757 7,482 7,900 Traffic Crashes 1,519 1,302 1,194 1,486 1,264 1,320 1,469 1,601 1,792 1,850 Fire Fires, Hazardous Conditions & Rupture/Explosions 230 248 248 278 278 309 340 296 349 275 Emergency Medical Services/Rescue 1,658 1,441 1,441 1,483 1,483 1,941 2,051 2,032 2,424 1,584 Service Calls 148 145 145 187 187 145 212 202 244 250 Building InspectionCommercial Permits: Number 972 1,047 961 1,535 1,420 1,305 1,165 1,560 1,628 1,200 Value (Millions)151.50 140.50 70.41 106.90 95.03 69.64 $44.50 $98.02 $164.47 $65.00Residential Permits: Number 1,710 1,571 1,543 3,613 2,421 2,338 2,911 2,836 3,937 3,500 Value (Millions)141.22 79.67 67.02 72.57 89.74 146.32 $130.68 $191.97 $200 $130WaterNew Service Main Taps 15 39 16 3 20 41 57 70 60 50Meter Replacement/Repair 878 368 650 467 279 113 479 1006 978 1500Water Main Breaks/Repairs 5 6 4 1 6 4 7 5 7 6WastewaterMain Line Flushing (in Miles)110 90 81 78.26 90 47 30 90 50 65New Infrastructure TV (in Miles)4.8 1 1 1 1 2.6 2 8 2.6 5New Service Taps 22 15 5 4 4 17 37 44 20 40Solid Waste Collection & RecyclingResidential Accounts 6,779 6,957 7,130 7,092 7,240 7,470 7,869 8,369 8,878 9,378 Commercial Customers 254 262 268 271 281 265 258 265 270 275 Recycling Customers 484 881 965 970 1,000 1,135 1,601 2,100 2,663 3,300 Annual Tonnage Collected: Collections Program 11,879 10,397 10,657 10,920 11,248 10,695 10,960 11,457 11,691 12,490 Vehicle MaintenanceWork Orders Processed 974 870 1,005 1,435 1,473 1,646 1,717 1,549 1,453 1,509 Gallons of Oil Disposed 9,350 9,350 9,175 9,445 8,751 8,640 8,740 8,969 7,395 6,475 ParksPark Reservations 360 221 280 319 320 350 400 400 400 400
Sources: City Manager's Final Adopted Budget City of Bozeman Finance Department
** Not used as an operating indicator until 2010 DRAFT565
210
CITY OF BOZEMAN, MONTANA CAPITAL ASSET STATISTICS BY FUNCTION / PROGRAM Past Ten Fiscal Years
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Police
Stations 1 1 1 1 1 1 1 1 1 1
Patrol Units (Cars)18 19 20 20 20 20 20 22 21 21
Patrol Units (Motorcycles)4 4 4 4 4 4 4 2 3 3
Fire
Stations 2 3 3 3 3 3 3 3 3 3
Fire Trucks 5 5 6 6 6 6 7 7 7 7
Streets
Street & Alley Mileage 234.736 242.650 246.951 254.565 254.957 255.769 252 253 254 274
Lane Miles Painted 42.0 34.8 40.0 40.3 41.0 37.0 34.6 49.2 50.0 50.0
Number of Signs Installed/Repaired 652 732 750 722 1120 669 798 600 600 600
Water
Water Mains (Miles)250.16 253.73 256.32 257.51 261.33 264.61 267.28 268.57 274.89 276.92
Fire Hydrants 2,238 2,274 2,308 2,324 2,351 2,388 2,406 2,419 2,511 2,573
Wastewater
Sanitary Sewers (Miles)200.01 201.37 205.00 205.00 207.56 210.22 211.51 212.53 219.14 224.28
Number of Manholes 3,946 3,988 4,034 4,080 4,084 4,154 4,185 4,219 4,360 4,492
Solid Waste
Number of Collection Vehicles 7 8 8 8 8 8 8 8 8 8
Number of Roll-off Trucks 3 4 4 4 4 4 4 4 4 4
Number of Recycling Trucks 0 1 1 1 1 1 2 2 2 2
Number of Compost Collection Trucks 2 2 2 2 2 2 2 2 2 2
Parks
Formal Turf Acres 265 120 120 125 125 125 125 126 140 140
Natural Parkland Acres 115 205 205 210 220 220 220 220 220 220
Miles of Trails 50 50 54 55 55 55 61 63 63 63
Sources: City Manager's Final Adopted Budget
City of Bozeman Finance Department
City of Bozeman GIS Department
City of Bozeman Police Department
Fiscal Year Ended June 30,
DRAFT566
PART IV REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS – GOVERNMENT AUDITING STANDARDS
DRAFT568
211 1019 E MAIN ST • SUITE 201 • BOZEMAN, MONTANA 59715 TEL: 406.556.6160 • FAX: 406.586.8719 • WEB: www.azworld.com ANDERSON ZURMUEHLEN & CO., P.C. • CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORSMEMBER: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor, City Commissioners, and City Manager of the City of Bozeman, Montana We have audited, 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, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Bozeman, Montana (the City), as of and for the year ended June 30, 2017, which collectively comprise the City’s basic financial statements and have issued our report thereon, dated . Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of Bozeman’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City of Bozeman’s internal control. Accordingly, we do not express an opinion on the effectiveness of City of Bozeman’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. DRAFT570
212 Compliance and Other Matters As part of obtaining reasonable assurance about whether City of Bozeman’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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance, and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Bozeman, Montana DRAFT571
1019 E MAIN ST • SUITE 201 • BOZEMAN, MONTANA 59715 TEL: 406.556.6160 • FAX: 406.586.8719 • WEB: www.azworld.com ANDERSON ZURMUEHLEN & CO., P.C. • CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS
MEMBER: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
To the Board of City Commissioners Bozeman, Montana
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 Bozeman (the City) for the year ended June 30, 2017. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing
standards and Government Auditing Standards, as well as certain information related to the
planned scope and timing of our audit. We have communicated such information in our letter to you dated August 18, 2017. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. During 2017, the City adopted the following new accounting standards:
• GASB Statement No. 77, Tax Abatement Disclosures
The application of existing policies was not changed during 2017 as the City had no tax abatements for disclosure. We noted no transactions entered into by the City during the year for
which there is a lack of authoritative guidance or consensus. All significant transactions have
been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive because
of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: (i) valuation of the solvent site remediation liability in the waste water fund, which is based on an engineer’s projection of the long term costs; (ii)
valuation of post-closure costs for the landfill, which is based on an engineer’s estimate of
landfill post-closure care costs; (iii) depreciation expense, which is based on management’s estimate of useful lives of fixed assets; (iv) the liability for the other post-employment benefits which is based on an actuarial study; and (v) the liability for net pension costs which is based on actuarial studies of the respective plans. We evaluated the key factors and assumptions used to
develop these estimates and determined that they are reasonable in relation to the financial
statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosure affecting the financial statements were
the Pension disclosure in Note 14 and the Other Post Employment Benefit disclosure in Note 15
to the financial statements. The financial statement disclosures are neutral, consistent, and clear. DRAFT572
- 2 -
Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. The attached schedule summarizes corrected and uncorrected
misstatements of the financial statements. Management has determined that the uncorrected
misstatements are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. Disagreements with Management For purposes of this letter, a disagreement with management as a financial accounting, reporting,
or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations
We have requested certain representations from management that are included in the management representation letter dated December 18, 2017. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the governmental unit’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to
determine that the consultant has all the relevant facts. To our knowledge, there were no such
consultations with other accountants.
Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the governmental unit’s
auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters
We applied certain limited procedures to the management’s discussion and analysis, the
budgetary comparison – General Fund and Special Revenue Major Funds, Schedule of Funding Progress – Other Postemployment Benefits, and the Schedule of Proportionate Share of Net Pension Liability and Schedule of Contributions, and the related notes, which are required supplementary information (RSI) that supplements the basic financial statements. Our
procedures consisted of inquiries of management regarding 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 DRAFT573
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basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on the combining fund statements and other budgetary comparison
reports, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of
preparing it has not changed from the prior period, and the information is appropriate and
complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
We were not engaged to report on the introductory or statistical sections, which accompany the
financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provided any assurance on it.
Restriction on Use This information is intended solely for the use of the Board of City Commissioners and management of the City and is not intended to be and should not be used by anyone other than these specified parties.
Bozeman, Montana December 18, 2017
DRAFT574
City of Bozeman Schedule of Schedule of Corrected and Uncorrected Misstatements June 30, 2017
Passed Adjusting Journal Entry:
To adjust investments to fair value
Fund Level Adjustment and Allocation:
Opinion Unit:735,301$
General 67,455$
Street Impact 107,549$
Street Maint 4,502$
Build Inspection 15,416$
SID Debt Serv 12,882$
Agg Remaining 279,560$
Water 172,955$
Waste Water 65,831$
Solid Waste Fund 9,151$
Dr. Unrealized loss on investments 735,301$
Cr. Cash and Investments 735,301$
Government-Wide Adjustment:
Dr. Investment Earnings/Unrealized Loss - Governmental Activities 487,364$
Dr. Investment Earnings/Unrealized Loss - Business-Type Activities 247,937$
Cr. Governmental cash and investments 487,364$
Cr. Business-type cash and investments 247,937$
Recorded Adjusting Journal Entry:
To accrue construction costs completed in FY 2017
Dr.620-5210-444.80-90 Olive & Church Recnstcn PRJ 182,094$
Cr.620-0000-201.20-00 Olive & Church Recnstcn PRJ 182,094$
Dr.620-0000-189.10-00 Olive & Church Recnstcn PRJ 182,094$
Cr.620-9999-999.80-90 Olive & Church Recnstcn PRJ 182,094$
Dr.600-5010-442.80-90 Olive & Church Recnstcn PRJ 50,147$
Dr.600-0000-201.20-00 Olive & Church Recnstcn PRJ 50,147$
Cr.600-0000-189.10-00 Olive & Church Recnstcn PRJ 50,147$
Dr.600-9999-999.80-90 Olive & Church Recnstcn PRJ 50,147$
Cr.670-4530-435.80-90 Olive & Church Recnstcn PRJ 35,830$
Dr.670-0000-201.20-00 Olive & Church Recnstcn PRJ 35,830$
Dr.670-0000-189.10-00 Olive & Church Recnstcn PRJ 35,830$
Cr.670-9999-999.80-90 Olive & Church Recnstcn PRJ 35,830$
Dr.504-4130-201.20-00 Olive & Church Recnstcn PRJ 68,607$
Cr.504-0000-201.20-00 Olive & Church Recnstcn PRJ 68,607$
Dr.900-0000-189.10-00 Olive & Church Recnstcn PRJ 68,607$
Cr.900-0000-281.10-00 Olive & Church Recnstcn PRJ 68,607$ DRAFT575