HomeMy WebLinkAbout12-17-18 City Commission Packet Materials - A4. Comprehensive Annual Financial Report for FY 2018
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 2018
MEETING DATE: December 17, 2018
RECOMMENDED MOTION: “I move to accept the Fiscal Year 2018 Comprehensive Annual
Financial Report and the accompanying Letter to Governance”.
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 2018, 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 7, 2018, 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 30 of the CAFR.
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 publishing.
Attachments: 1. CAFR Comprehensive Annual Financial Report
2. Auditor’s Letter to Governance Report compiled on December 06, 2018
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CITY OF BOZEMAN, MONTANA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2018
Prepared by the City of Bozeman Finance Department
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CITY OF BOZEMAN, MONTANA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
JUNE 30, 2018
TABLE OF CONTENTS
I.INTRODUCTORY SECTION
Letter of Transmittal ..................................................................................................................................................................................... 1-12 Government Financial Officers Association Certificate of Achievement ....................................................................................................... 13
Organizational Chart ....................................................................................................................................................................................... 14
City Elected Officials and Officers ............................................................................................................................................................ 15-16
II.FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT ................................................................................................................................................. 18-20
A.MANAGEMENT’S DISCUSSION AND ANALYSIS ............................................................................................................................. 22-37
B.BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Position .................................................................................................................................................................... 38-39 Statement of Activities .............................................................................................................................................................................. 40
Fund Financial Statements
Governmental Fund Financial Statements
Balance Sheet – Governmental Funds ............................................................................................................................................ 41-42
Reconciliation of the Balance Sheet to the Statement of Net Position – Governmental Funds .......................................................... 43 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ........................................................ 44
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to
The Statement of Activities – Governmental Funds ........................................................................................................................... 45
Proprietary Fund Financial Statements
Statement of Net Position – Proprietary Funds .............................................................................................................................. 46-47 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds ....................................................................... 48
Statement of Cash Flows – Proprietary Funds ............................................................................................................................... 49-50
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position – Fiduciary Funds ..................................................................................................................... 51
Notes to Financial Statements ............................................................................................................................................................ 52-132
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CITY OF BOZEMAN, MONTANA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
JUNE 30, 2018
TABLE OF CONTENTS (CONTINUED)
C. REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT DISCUSSION AND ANALYSIS
Schedule of Changes in Total OPEB Liability & Related Ratios ................................................................................................................. 133
Schedule of Proportionate Share of Net Pension Liability and Schedule of Contributions ................................................................... 134-136
Notes to Required Supplementary Information - Pension Plan Changes ............................................................................................... 137-144 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual – General Fund ................................................. 145
Schedule of Revenues, Expenditures, and Changes in fund Balances – Budget to Actual – Other Major Funds
Street Impact Fees Special Revenue ........................................................................................................................................................ 146
Street Maintenance Special Revenue ...................................................................................................................................................... 147
Notes to Required Supplementary Information- Budgetary Information ................................................................................................ 148
D. SUPPLEMENTAL INFORMATION
Combining and Individual Fund Statements and Schedules – Nonmajor Funds
Combining Balance Sheet – Nonmajor Governmental Funds ......................................................................................................... 149-155
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds .................. 156-162
Budget-to-Actual Statements- Nonmajor Funds
Schedules of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual –
Nonmajor Governmental Funds ................................................................................................................................................... 163-181
Combining Nonmajor Proprietary Funds
Combining Statement of Net Position .............................................................................................................................................. 182-183 Combining Statement of Revenues, Expenses, and Changes in Net Position ......................................................................................... 184
Combining Statement of Cash Flows ............................................................................................................................................... 185-186
Internal Service Funds Statements
Combining Statement of Net Position ..................................................................................................................................................... 187
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ............................................................................... 188 Combining Statement of Cash Flows ............................................................................................................................................... 189-190
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CITY OF BOZEMAN, MONTANA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
JUNE 30, 2018
TABLE OF CONTENTS (CONTINUED)
D.SUPPLEMENTAL INFORMATION (CONTINUED)
Agency Funds
Combining Statements of Fiduciary Net Position ................................................................................................................................... 191
Combining Statement of Changes in Assets and Liabilities ................................................................................................................... 192
III.STATISTICAL SECTION
Financial Trends Section
Net Position by Component ..................................................................................................................................................................... 193
Changes in Net Position ................................................................................................................................................................... 194-195
Fund Balances – Governmental Funds .................................................................................................................................................... 196
Changes in Fund Balances – Governmental Funds ................................................................................................................................. 197
Revenue Capacity Section
Assessed value of Taxable Property ........................................................................................................................................................ 198
City Taxable Market and Taxable Values ............................................................................................................................................... 199
Tax Increment District Taxable Valuation Detail ................................................................................................................................... 200
Downtown Bozeman Improvement District & Comparison to City Taxable Value ............................................................................... 201
Property Tax Levies in the Downtown Bozeman Improvement District ................................................................................................ 202
Direct and Overlapping Property Tax Rates ........................................................................................................................................... 203
Principal Property Tax Payers ................................................................................................................................................................. 204
Principal Property Tax Payers in Downtown Bozeman Improvement District ...................................................................................... 205
Property Tax Levies and Collections ...................................................................................................................................................... 206
Water Sold by Type of Customer ............................................................................................................................................................ 207
Water and Sewer Rates ............................................................................................................................................................................ 208
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CITY OF BOZEMAN, MONTANA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
JUNE 30, 2018
TABLE OF CONTENTS (CONTINUED)
Debt Capacity Section
Ratios of Outstanding Debt by Type ....................................................................................................................................................... 209
Ratios of General Bonded Debt Outstanding .......................................................................................................................................... 210
Direct and Overlapping Governmental Activities Debt .......................................................................................................................... 211
Legal Debt Margin Information .............................................................................................................................................................. 212
Pledged Revenue Coverage ..................................................................................................................................................................... 213
Debt Service Requirements and Coverage for Downtown Tax Increment District ................................................................................ 214
Summary of Outstanding SIDs ................................................................................................................................................................ 215
Revolving Fund Balance and Bond Secured Thereby ............................................................................................................................. 216
Special Improvement District Assessment Billing and Collections ........................................................................................................ 217
Demographics and Economic Section
Demographic and Economic Statistics .................................................................................................................................................... 218
Principal Employers for Gallatin County ................................................................................................................................................ 219
Operating Information
Full-time Equivalent City Government Employees by Function/Program ............................................................................................. 220
Operating Indicators by Function/Program ............................................................................................................................................. 221
Capital Asset Statistics by Function/Program ......................................................................................................................................... 222
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 ......................................... 223-224
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PART I
INTRODUCTORY SECTION
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CITY OF BOZEMAN, MONTANA
DATE
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, 2018, 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.
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 19 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.
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CITY OF BOZEMAN, MONTANA
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, Finance 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 2018 marked the sixth 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 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.
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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. “Bozeman’s overall cost of living was 0.7 percent above the
national average as of August 2017, compared to 253 other urban
areas in the United States. As seen in the figure following, in the
second quarter of 2017 the housing index score was 106.4, meaning
that area housing was 6.4 percent above the national average for the
quarter. The average price of a new 2,400 square foot home on an
8,000 square foot lot that met the index collection specifications was
$363,894. The average monthly rental rate for a 950 square foot
apartment in the Bozeman area that met the index collection
specifications was $1,096. Mortgage rates are also taken into
0%5%10%15%20%25%30%
Bozeman Employment by Industry, 2016
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, 2016
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CITY OF BOZEMAN, MONTANA
consideration when computing the housing index score. For Bozeman residents, all expense categories except for utilities and transportation came in above
national averages for the second quarter of 2017. To put Bozeman’s index scores in perspective, the table below includes the cities with the most expensive and
least expensive composite scores for the quarter—Manhattan, New York and McCallen, Texas respectively. The table also includes the comparable cities to
Bozeman in the Western region that participate in the index, as well as Prospera’s calculation of how expensive each city is in comparison to Bozeman.” -As
cited by Prospera Business Network, 2018 Economic Profile of Gallatin and Park Counties, 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
3.0% this year, on top of the 4.3% 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.
Adoption of Strategic Plan:
On April 16th, 2018, the Bozeman City Commission passed Resolution No
4852 which formally adopted the Bozeman Strategic Plan. The new plan
included seven vision statements that will guide future City projects: An
Engaged Community; An Innovative Economy; A Safe, Welcoming
Community; A Well-Planned City; A Creative, Learning Culture, A
Sustainable Environment; and a High Performance Organization.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Bozeman Population, Est.
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CITY OF BOZEMAN, MONTANA
New Fuel Tax Dollars:
House Bill 473, effective July 1, 2017 included several changes to the City of Bozeman’s allocation of collected taxes. The amount designated for the purposes
of the Montana local technical assistance transportation program increased $50,000. The Gasoline and Special Fuel tax rate increased from 27 cents per gallon to
31.5 cents per gallon for fiscal year FY18, which in turned increased the amount received by the City of Bozeman. It also established the Bridge and Road Safety
and Accountability Program funds of $12.5 million for FY18, of which the City received $263,495. This increased revenue from the state encouraged the City
Commission to adopt an increase in the Arterial and Collector Street Assessment that was lower than originally planned. The adopted increase was 63% instead
of the approximate 90% increased proposed for this fiscal year back in FY16.
FOR THE FUTURE
Bozeman Public Safety Facility:
The Bozeman Public Safety Facility is a new
project that will be on the November ballot
for voter approval of a bond issuance to
support the building of this proposed facility.
This facility is part of the “Safe, Welcoming
Community” value of the newly adopted
strategic plan. The City is proposing to build
this facility on the old MDOT property on
Rouse Ave. It will include the Police
Department, Municipal Court, City
Prosecutors, and it will replace Fire Station #1. The property that currently houses Fire Station #1 and the Police sub-station is proposed to be sold.
Parks Maintenance District: FY19 will see the last phase of consultant work for the creation of a new Parks Maintenance District. This district is the 5th
action item of the FY19 goals as established by the City Commission with the FY19 budget adoption. With the creation of the district, the Parks department will
no longer be funded by General Fund tax dollars, but instead will be a separate special assessment akin to the Forestry and Street annual assessments.
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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:
City Strategic Plan:
Adopted April, 2018
Plans for Service Provision, Facility Expansion & Maintenance:
• Bozeman Community Plan—Adopted 2010. Proposed update in fiscal year 2019
• 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.
• 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. Currently being updated
• Aquatics Facility Survey for Swim Center & Bogert Park Pool—July 2008.
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• 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 FY19-FY23.
• Water Rate Study (5 Years) – Updated for FY16-FY20. Currently being updated.
• Wastewater Rate Study (5 Years) – Updated for FY16-FY20. Currently being updated
• Impact Fee Studies (Water, Sewer, Streets, Fire) – Updated in FY18
Strategic Plan
With the adoption of the Strategic plan, the FY19 budget incorporated efforts to implement each of the vision statements. The highlights of the impact on the
budget include:
1. Engaged Community – The City’s first Communications Coordinator position, initially
funded in FY18, plays a key role in our community engagement efforts in FY19. This
position will significantly advance our work to foster a culture of civic engagement by
creating a detailed communication plan for the organization, expand outreach to the
community, and oversee a citizen engagement process. Communication and outreach is
one of the seven priorities for this fiscal year.
2. Innovative Economy – Several Strategic Plan action items, which can also be found in the
2016 Economic Development Strategy, will be implemented through the ongoing work of
the Economic Development Department this year.
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3. Safe, Welcoming Community – The Bozeman Public Safety Facility is a safety-related priority
for FY19; we will work towards supporting high quality public safety facilities and emergency
preparedness by resolving the current Police, Fire, Prosecution and Courts space needs now and into
the future.
4. Well Planned City – To consistently improve our community’s quality of life as it grows, the
priorities of Planning and Land Use Initiatives and Annexation Analysis and Study are included in
FY19’s efforts. We will be conducting studies in these areas to ensure we grow in a responsible
manner. We will also be enhancing our affordable housing program to further the FY19 Affordable
Housing priority, by using one-time monies from the General Fund. Included in the FY19 budget is
the last phase of the consultant work for creation of a Parks Maintenance District. This work will give
the Commission information on the possible paths toward defining a different funding source for park
maintenance city-wide.
5. Creative, Learning Culture – We plan to partner with MSU,
utilizing their student and faculty population to accomplish some
strategic plan action items through college-level class
assignments. This will be a new partnership for education and
learning between the City and the University that has not existed
in the past.
6. Sustainable Environment – Most notable in our sustainability
efforts is the Climate Action & Resiliency Plan that is to begin
in FY19.
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7. High Performance Organization – Maintaining the City’s current levels of service and implementing action items in the Strategic Plan requires
the additional staff that has been included in the FY19 budget. Key among them include civilian positions to support the Police Department
according to the recommendations from the Police Staffing Plan, a plan review engineer to assist with workload created by development
permitting, and a SCADA (supervisory control and data acquisition) Systems Manager for the Wastewater Division of Public Works.
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.
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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), with all capital purchases of $5,000 or more reported as capital outlays in the financial statements. Minor capital
outlays of less than $5,000 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.
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).
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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.
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, 2017. This was the 34th 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.
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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 ControllerDRAFT
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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 2018
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CITY OF BOZEMAN, MONTANA
CITY ELECTED OFFICIALS AND OFFICERS
Fiscal Year 2018
ELECTED OFFICIALS
Legislative
Cynthia Andrus Mayor Christopher Mehl Deputy Mayor Jeffrey Krauss Commissioner
I-Ho Pomeroy Commissioner Terence Cunningham 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 ELECTED OFFICIALS AND OFFICERS (CONTINUED)
Fiscal Year 2018 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 Thomas Radcliffe 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
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PART II FINANCIAL SECTION
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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, 2018, 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.
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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, 2018, 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.
Emphasis of Matter Change in Accounting Principle As described in Note 1 to the financial statements, in 2018, the City adopted new accounting guidance, GASB No. 75, Accounting and Financial Reporting
for Postemployment Benefits Other Than Pensions. Our opinion is not modified with respect to this matter.
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
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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.
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 DATE, 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
DATE
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A. MANAGEMENT’S DISCUSSION AND ANALYSIS
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CITY OF BOZEMAN, MONTANA
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018
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, 2018. Please read it in conjunction with the transmittal letter on page 1 and the City’s financial statements, which begin on page 38.
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 38 and 40) 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 41. 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 24. 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.
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CITY OF BOZEMAN, MONTANA
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018
Reporting the City’s Most Significant Funds
Fund Financial Statements
Our analysis of the City’s funds begins on page 29. The fund financial statements begin on page 41 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 43 and 45 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 51 and in the Combining Statement of Changes in Assets and Liabilities-Agency Funds on page 191. 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.
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24 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018 THE CITY AS A WHOLE The City’s combined net position increased by $33.6 million this year as compared to a $19.7 million increase last year. The significantly larger increase this year was mainly due to a $15.6 million increase in total revenues offset by only a $3 million increase in total expenses. Additionally, last year there was a $2 million loss on the disposal of City property (the Mandeville farm property reported in the Solid Waste fund) while this year there were no similar special items with a negative impact. The increase in total revenues was mainly due to large increases in Charges for Services and in Restricted Grants & Contributions, which mainly consists of street, water, wastewater, and stormwater 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 $15.7 million, or 10.3%, from $152.4 million last year compared to $168.1 million this year due to revenues exceeding expenses, the details of which are discussed below. 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 $0.7 million, or 14.6%, from negative ($4.8) million to negative ($5.5) 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 $17.8 million, or 7.2%, from $247.4 million to $265.2 million due primarily to a continuing trend of revenues provided by charges for services exceeding total expenses. Unrestricted Net Position increased by $4.1 million, or 45%, due to an increase in Restricted Capital Grants & Contributions (mainly water, wastewater, and stormwater infrastructure provided by private developers) combined with the effects of GASB 68 mentioned above. This net position cannot be used to make up for deficits reported by governmental activities in the event any such deficits were reported. The City generally can only use the net position of business-type activities to finance the continuing operations of the water, wastewater, solid waste, stormwater, and parking operations. 201820172018201720182017Current and Other Assets61.6$ 62.6$ 40.7$ 33.4$ 102.4$ 96.0$ Capital Assets157.4 136.5 274.9 263.3 432.3 399.8 Total Assets 219.0$ 199.1$ 315.7$ 296.7$ 534.7$ 495.8$ Deferred Outlflows of Resources6.5 5.4 1.8 1.4 8.3 6.8 Long-term Debt Outstanding (46.7) (44.1) (48.9) (46.9) (95.6) (91.0) Other Liabilities (9.7) (7.8) (3.1) (3.8) (12.8) (11.6) Total Liabilities (56.4)$ (51.9)$ (52.0)$ (50.7)$ (108.4)$ (102.6)$ Deferred Inflows of Resources (0.8) (0.2) (0.3) - (1.1) (0.2) Net Position:Net investment in capital assets137.1$ 115.7$ 239.3$ 229.4$ 376.4$ 345.1 Restricted for parking capital projects - - 0.3 0.3 0.3 0.3 Restricted for general government1.9 1.7 - - 1.9 1.7 Restricted for Public Safety4.4 3.8 - - 4.4 3.8 Restricted for Public Service13.6 15.2 - - 13.6 15.2 Restricted for Public Welfare5.9 5.4 - - 5.9 5.4 Restricted for capital projects3.7 7.8 9.3 5.4 13.0 13.2 Restricted for debt service7.0 7.1 3.1 3.1 10.1 10.2 Unrestricted(5.5) (4.8) 13.3 9.1 7.8 4.3 Total Net Position168.1$ 151.9$ 265.2$ 247.3$ 433.4$ 399.2$ Activities Activities Primary GovernmentTabl e 1Net Position(in Millions)Governmental Business-type TotalDRAFT484
25 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018 The City’s total revenues (excluding special items) increased by 17.1%, or $15.6 million, from $91.2 million to $106.8 million, driven primarily by an $8.1 million increase in Charges for Services, (Utility Charges and Street/Tree/Arterial Collector District Assessments) combined with a $7.2 million increase in Restricted Capital Grants & Contributions (which includes water, wastewater, stormwater, road, and park infrastructure provided by private developers). Other revenues also increased modestly, including an $800,000 increase in Property Taxes and a $1.4 million increase in general revenues, which will be discussed later in more detail. The total cost of all programs and services increased by $3.1 million, or 4.5%, from $69.4 million last year to $72.5 million this year. Public Safety (Police, Fire, and Building Inspection) and Public Service (mainly Street Maintenance) saw increases of $1 million each with General Government and Non-major activities reporting increases of just under $500,000 each. Our analysis on the following pages separately considers the operations of governmental and business-type activities. Governmental Activities Revenues for the year from governmental activities increased by 16.8%, or $9.3 million, from $55 million to $64.3 million, while total expenses increased by 5.2%, or $2.3 million, from $45 million to $47.3 million. Property Tax 201820172018201720182017RevenuesProgram revenues:Charges for Services 22.5$ 17.6$ 29.8$ 26.6$ 52.3$ 44.2$ Restricted Operating Grants & Contributions3.0 2.7 0.1 0.2 3.2 2.9 Restricted Capital Grants & Contributions7.7 2.7 9.7 7.8 17.4 10.5 General Revenues- Property Taxes22.5 21.7 - - 22.5 21.7 Unrestricted Operating Grants & Contributions 6.2 8.4 - - 6.2 8.4 Other General Revenues2.4 1.9 2.5 1.6 4.9 3.5 Total Revenues 64.3 55.0 42.1 36.2 106.5 91.2 Program ExpensesGeneral Government 9.9 9.4 - - 9.9 9.4 Public Safety18.6 17.7 - - 18.6 17.7 Public Service8.6 7.9 - - 8.6 7.9 Public Welfare9.5 9.2 - - 9.5 9.2 Interest and Fiscal Fees0.7 0.8 - - 0.7 0.8 Water- - 9.8 9.8 9.8 9.8 Waste Water- - 8.5 8.6 8.5 8.6 Non-major activities- - 6.5 6.1 6.5 6.1 Total Expenses 47.3 45.0 24.9 24.5 72.3 69.5 Excess (deficiency) beforespecial items and transfers16.9 10.0 17.2 11.7 34.2 21.7 Sale of Capital Assets0.0 (0.1) - (2.0) 0.0 (2.1) Transfers(0.7) (0.7) 0.8 0.7 - - Increase (decrease) in net position16.3$ 9.2$ 18.0$ 10.4$ 34.3$ 19.6$ Net position - beginning151.9 142.7 247.3 236.9 399.2 379.6 Net position - ending168.2$ 151.9$ 265.3$ 247.3$ 433.4$ 399.2$ ActivitiesActivities Primary GovernmentTabl e 2Changes in Net Position(in Millions)Governmental Business-typeTotalDRAFT485
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CITY OF BOZEMAN, MONTANA
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018
revenues increased by $800,000, or 3.8%, from $21.7 million to $22.5 million. Charges for services, which include Street Assessments and Fire and Street
Impact Fees, realized a net increase of $4.9 million, or 27.8%, from $17.6 million to $22.5 million. Restricted Capital Grants and Contributions (developer-
provided infrastructure reported under Program Revenues) increased $5 million, or 187%, from $2.7 million to $7.7 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 $4.9 million, or 27.8%, from $17.6 million last year to $22.5 million this year. Street Impact Fees increased notably by $1.5
million, or 39%, from $4 million last year to $5.5 million due to increased development requiring expansion of the City’s transportation system. Street
Maintenance District assessments and Arterial & Collector District assessments also 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 $729,300, or 67%, from $1.1 million to $1.8 million. Street Maintenance revenue increased by $915,000, or 20%,
from $4.5 million to $5.4 million. Fire impact fee revenues also increased significantly after reporting two years of stagnant and declining activity, increasing this year by $284,000, or 90%, from $316,000 to $600,000.e of $22,728 or 6.7%.
Property Tax collections increased by nearly $800,000, or 3.8%, from $21.7 million last year to $22.5 million this year. The number of total property tax mills levied actually decreased by 17.97 mills from 205.3 to 187.33, or 8.6%, so the increase in revenues was instead fueled by a 13.3% increase in the mill value from
$89,325 to $101,195 along with continued growth in the number of taxpayers.
Property Tax revenues also increased in each of the City’s Tax Increment Financing (TIF) Districts, with the exception of the North 7th/Midtown District
decreasing by 7.9%, or $51,000, from $652,000 to $601,000 as the results of the latest property reappraisal continued to take effect after the Montana Department of Revenue changed its appraisal cycle from every 6 years to every 2 years which also had the effect of shifting the 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 15.97 mills, or approximately $1,616,255 below the
statutory maximum allowable tax rate.
Restricted Capital Grants and Contributions (reported under Program Revenues) increased by $5 million, or 185%, from $2.7 million to $7.7 million, due to
general infrastructure provided by developers being significantly greater this year than last. Contributed road/transportation infrastructure increased by $2.2
million, or 132%, from $1.7 million last year to $3.9 million this year. Increased development in the City also impacted dedicated parkland, where developer contributions increased significantly by $2 million, or 346%, from $583,000 last year to $2.6 million this year
Program Expenses increased by 5.2%, or $2.3 million, from $45 million to $47.3 million with Public Safety and Public Service being the primary
drivers of the increase at nearly $1 million each. Personnel costs for Public Safety accounted for $460,000 of this increase due to departments being
closer to fully-staffed than in previous years, with Police, Fire and Building Inspection increasing 2%, 5%, and 2% respectively accounting for
roughly $.5 million of this increase. Additional information about Police and Fire is available in the later discussion of the General Fund. Contracted
Service expenses charged to the Building Inspection program also increased significantly by $368,500, or 218%, from $168,900 to $537,400 due mainly to a much heavier volume in the number of plan reviews being contracted out for third-party review.
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27 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018 Public Service expenses reported under Governmental Activities consist mainly of street maintenance and reconstruction activities. Personnel costs here increased by $306,250, or 22.3%, from $1.37 million last year to $1.67 million this year. Operational costs, including supplies and materials and non-construction contracted maintenance services such as seal-coating and pavement marking increased by $226,500, or 7.4% from $3.1 million to $3.3 million. The cost of all governmental activities this year was $47.3 million compared to $44.9 million last year. However, as shown in the Statement of Activities on page 40 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 $14,152,954 because some of the cost was paid by those who directly benefited from the programs ($22,498,750 in Charges for Services) or by other governments and organizations that subsidized certain programs with operating and capital grants and contributions ($3,021,399 plus $7,651,008 = $10,672,407). 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) increased by $6.2 million, or 17.2% ($42.4 million this year compared to $36.2 million last year) while expenses increased by $0.4 million, or 1.6% ($24.9 million compared to $24.5 million last year). The increase in revenues was due to a $2.1 million increase in Restricted Capital Grants & Contributions, which consisted primarily of privately constructed water, wastewater, and stormwater infrastructure that was contributed to the City by developers. Additionally, there was a $3.2 million overall increase in charges for services revenue. The increase in expenses this year was due to overall increased personnel costs of $390,000. Specific factors driving these and other regular operating results include: Water The City’s water system operating revenue (charges for services) have steadily increased over the past decade as a result of both an increase in the customer base and due to regular rate increases. However, the City Commission voted to hold water rates steady in fiscal years 2014 and 2015 followed by 2.5% rate increases in each of fiscal years 2016 and 2017. This year’s water rate increase was 2%. These rate increases have allowed the City to continue its water distribution pipe replacement program and replace or rehabilitate aging infrastructure every year instead of every two years. 2018201720182017Police9.1$ 9.1$ 7.8$ 7.5$ Fire6.9 6.5 5.6 5.5 Public Service11.3 9.5 (3.4) (1.5) Library2.5 2.5 1.7 1.6 Parks2.0 1.8 1.7 1.8 Recreation1.6 1.5 1.1 1.0 All Others14.0 14.0 2.6 5.5 Totals 47.4$ 44.9$ 17.1$ 21.4$ of Services of ServicesTabl e 3Governmental Activities(in Millions)Total Cost Net CostDRAFT487
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CITY OF BOZEMAN, MONTANA
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018
The City’s customer‐base growth grew by 491 customers, or 3.9%, from 12,361 average active customer accounts last year to 12,852 this year. This level of
growth rate is trending more closely to the 5% growth experienced between 2005‐2008.
As of three years ago, the cost of Public Works Administration has been recorded in 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 $1,011,644 of administration reimbursement revenue being recorded as part of the $1,086,293 reported under “Other income”.
Because of the increase in the water rates and in the number of utility customers, combined with a $556,302, or 89%, increase in cash-in-lieu-of-water-right revenue from $623,820 to $1,180,122 due to increased development, total water operating revenues increased by $876,067 or 9.4% from $9.3 million to $10.2
million. Additionally, the amount of infrastructure contributed by private developers increased this year. This amount, reported under Restricted Capital Grants and
Contributions, increased by $994,300, or 31%, from $3.2 million to $4.2 million this year. Water impact fee revenues increased significantly by $872,442, or 46.3%, from $1,885,123 to $2,757,566 due to an increase in impact-fee qualifying construction
during the year. Major collections included $480,500 for the South University District mixed-use residential/commercial complex, $221,000 for Bozeman High School, and $215,880 for The Springs Assisted Living Facility.
Total operating expenses held steady this year, actually decreasing slightly by $12,100, or .1%, from $9,249,739 to $9,237,639.
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 engineering working on the planned expansion of Kagy Boulevard from Willson Avenue South 19th Avenue.
Wastewater Revenues in the Wastewater Fund have generally been increasing over the past 10 years and are estimated at $9.6 million for the upcoming year. Seven 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, with a 2% increase this year. As a result of this rate increase, combined with the same customer growth experienced in the water system of 491 customers, operating revenues for the year increased by $309,124, or 3.5%, from $8,566,893 to $8,876,017 this year.
Wastewater impact fee revenues increased by $709,000, or 64.3%, from $1.1 million last year to $1.8 million this year. The South University District mixed-use residential/commercial complex, Bozeman High School, and The Springs Assisted Living Facility projects listed previously under Water impact fee
revenues were the same projects contributing to this increase.
Wastewater operating expenses increased by $216,000, or 2.7%, from $8,045,210 last year to $8,261,333 driven mainly by a $118,000 increase in personnel
costs and a $100,000 general increase in operating costs spread across material and supplies, repair and maintenance, and other expenses.
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CITY OF BOZEMAN, MONTANA
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018
Spending on major projects during the year included $185,000 for the Peach Street project in the Northeast Urban Renewal Tax Increment Financing District project, $184,000 in planned annual pipe replacement, $167,500 for the reconstruction of East Olive Street, $94,000 for the wastewater infrastructure under the
Graf Street extension and $547,000 in various “small works” projects. Solid Waste Operating revenues in the Solid Waste fund increased by $312,400, or 8.6%, from $3,613,721 to $3,926,123 due mainly to an increase in the
customer base for both garbage and recycling. The number of garbage collection customers increased by 564, or 6%, from 9,744 last year to 10,308 this year. The number of recycling customers increased by 504, or 17%, from 3,009 last year to 3,513 this year.
Operating expenses increased by $273,215, or 6.4%, from $4.26 million to $4.54 million driven mainly be a 38% increase in salaries and benefits expenses, which increased by $405,300 from $1.06 million to $1.46 million. Since the overall increase was only $273,215, this increase in personnel costs was offset by an actual decrease in expenses for supplies and materials, repair and maintenance, other expenses, and the expense recorded this year for the change in
estimated post-closure costs of the city landfill. Additional information is available in Note 21 on page 125 and in Note 12 on page 82.
Spending on major projects during the year included $576,000 for two new side-load garbage collection trucks and $73,000 for a new frontload container heavy-
duty transport pickup truck. THE CITY’S FUNDS
As the City completed the year, its governmental funds (as presented in the balance sheet on pages 41-42) reported a combined fund balance of $49,174,403.
Included in this year’s total change in fund balance is a positive General Fund balance of $7,464,768, up 15% or $974,609 from $6,490,159. 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 $5,319,255 for the end of this year. The City’s ending general fund balance
of $7,464,768 exceeds this recommendation by $2,145,513. 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 $0. 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.
DRAFT
489
30 CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018 The general fund balance of $7,464,768 has been assigned as shown: General Fund The City’s general fund balance increased significantly by $974,609, or 15%, from $6,490,159 last year to $7,464,768 this year. The City had budgeted for ending fund balance to actually decrease by $1.3 million, but actual revenues and other financing sources ended up exceeding budgeted expectations by $767,000 while actual expenditures and other financing uses were under budget by $1.5 million. Some of this budget savings is reflected in the unspent TOTAL CIP / CAPITAL CARRY-OVER ITEMS listed in the preceding table while other savings were realized through careful and conservative budgetary management practices implemented throughout all City departments. FY18 ENDING GENERAL FUND BALANCE - TOTAL: 7,464,768$ ASSIGNMENTS:1CIP / CAPITAL CARRY-OVER BUDGETED IN FY18 BUT NOT TO BE SPENT UNTIL FY19:City Clerk: Agenda Management Software 10,000$ City Clerk: Municode16,000$ Sustainability: Climate Vulnerability Assessment & Resiliency Strategy 25,000$ Facilities: GF103 ADA Compliance Improvements 2,200$ Facilities: GF203 Senior Center Exterior Envelope Improvements 64,750$ Facilities: GF273 Professional Building - Electrical Upgrade 71,525$ Facilities: GF274 City Hall - Bozeman Creek Improvements 18,633$ Facilities: GF244 Library Site Drainage 15,000$ Recreation: GF236 Beall Park Recreation Center Wood Floor Replacement 35,000$ TOTAL CIP / CAPITAL-CARRY OVER ITEMS: 258,108$ 216.67% MINIMUM RESERVE LEVEL REQUIRED BY CITY CHARTER (2 MONTHS OF REVENUES): 5,319,255$ 3FY19 BUDGET: FY18 YEAR-END FUND BALANCE NEEDED TO BALANCE FY19 BUDGET: 1,887,405$ TOTAL GENERAL FUND ASSIGNMENTS: 7,464,768$ UNASSIGNED GENERAL FUND BALANCE - FY18: 0$ 490
31
CITY OF BOZEMAN, MONTANA
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018
Property tax revenues increased in the General Fund by $420,639 or 2.8%, from $15,268,625 to 15,689,264, although the number of total property tax mills levied actually decreased by 13.82 mills from 148.21 to 134.39, or 10.3%. Therefore the increase in property tax revenue was not driven by an increase in mills levied
but instead fueled by a 13.3% increase in the mill value from $89,325 to $101,195 based on information 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. This continues the trend reported last year, with a 3.2% increase in mill value compared to a 1.5% decrease two years ago due to the timing and nature of the appraisal cycle change.
Intergovernmental revenues increased by $292,320, or 4%, from $7,393,702 last year to $7,686,022. Montana State Entitlement Share revenue accounted for
$25,080 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 increased steadily over each of the past four years including a 4% increase last year, however this year’s increase from $4,299,752 to $4,324,831 was only less than .01%.
The State of Montana’s share of City employee retirement (recorded as a revenue) was the primary driver of the increase in intergovernmental revenues. Revenues increased this year by over $246,000, or 10.3% from $2,400,348 to $2,646,501. $165,408 of this increase was due to a new “on-behalf” revenue recorded in the
amount of $165,408 representing a contribution of Coal Severance Tax income by the State of Montana the Public Employee Retirement System (PERS) only.
This revenue amount and the regular on-behalf State share of retirement contributions 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 $1,513,870, or 5.4%, from $27,989,671 to $29,503,543. The largest general fund expenditures continued to be in
Public safety, with $8.5 million (29%) spent on Police and $6.5 million (22%) spent on Fire. Payroll expenditures across all functions (General government, Public safety, Public service, Public welfare) increased by $1.2 million, or 5.8% from $21,301,276 to $22,531,001. 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 $120,429, or 2%, from $6,221,841 to $6,342,270. Fire Department personnel costs (net of State Share of Retirement) increased by $221,904, or 5%, from $4,463,750 last year to $4,685,654.
Other factors contributing to increased expenditures in the General Fund include increased payroll costs for the Municipal Court of $100,500 (or 17.4%, from $578,900 to $679,400), $114,832 for the City Attorney’s Office (or 11.9%, from $961,500 to $1,076,300), $101,659 for Parks (or 12.3%, from $829,141 to $930,800) and $130,200 for the Library (or 9.2%, from $1,415,400 to $1,545,600).
However, as stated, total expenditures were under budget by $1.5 million, so these increased personnel costs were offset by under-spending on operations and
capital. Budgeted expenditures that remained unspent at year-end included $79,000 for the Veteran’s Court; $75,000 for the electrical upgrade of the Professional
Building; $64,750 for improvements to the exterior of the Senior Center; $200,000 for the Cemetery irrigation project; and $347,600 for park improvements and parkland acquisition. A more comprehensive list is shown on page xx under General Fund Assignments: CIP / CAPITAL CARRY-OVER.
DRAFT
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32
CITY OF BOZEMAN, MONTANA
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018
Notable expenditures in the general fund for the year included $237,435 for the upgrade of the Story Mill Park Community Center, $186,331 granted to the Streamline bus system, and $115,686 spent on new police patrol cars and related equipment.
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 an 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 35.
As shown on page 145, variances in the General Fund between the original budget of $31,198,222 and the final budget of $31,820,764 netted to an overall amount of $622,542, 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 $2.3 million increase to the Public safety budget (from $13,098,829 to $15,322,329) and the $2.3 million decrease to Other (from $2,861,483 to $555,483) 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 $2.3 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.
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 $2.3 million, or 20%, from $11,649,618 last year to $9,349,249 this year due to a large increase in expenditures even in light of increased revenues. Total expenditures increased by $2.7 million, or 53.3%, from $5,103,238 to $7,824,644 this year. Notable expenditures this year included: $1.8 million for the extension of South 11th avenue from Kagy Boulevard to Graf Street, $1.3 million for the intersection of Oak Street and Davis Lane, $600,000 for intersection improvements at Babcock Street and Ferguson Avenue, $425,300 for the extension of Graf Street to South 19th Avenue, and $3.5 million on other critical road extensions and intersection improvements throughout the city, in addition to $312,000 on right-of-way acquisition for these various projects.
Total revenues in the Street Impact fund increased by $1.4 million, or 35%, from $4.1 million last year to $5.5 million this year due to increased development and construction of projects which required an increase in capacity of the city’s transportation system. Street impact fee collections for the year included
$513,000 for The Springs Assisted Living Facility, $332,000 for the South University District mixed-use residential/commercial complex, $221,000 for
DRAFT
492
33
CITY OF BOZEMAN, MONTANA
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018
Bozeman High School, and $286,000 for The Springs Assisted Living Facility, and over $173,000 paid by the City of Bozeman for Trail and Open Space Bond project improvements during the year.
Street Maintenance Special Revenue Rebounding from last year’s decrease of $335,227, fund balance increased this year by $89,039 or 20.2%, from $439,721 to $528,761 due to actual revenues exceeding budgeted revenues and actual expenditures being less than budgeted. Total revenues increased by $1.1 million, or 24%, from $4,642,606 last year to $5,757,906 this year, over last year driven mainly by a 17% increase in street maintenance assessment rates combined with $173,172 in one-time miscellaneous revenues consisting mainly of reimbursements from the Montana Department of Environmental Quality for asbestos cleanup costs paid out of this fund in prior years in addition to a reimbursement from a developer to cover future maintenance costs caused by paving in cold weather. Actual street maintenance charges for services increased by $914,930, or 20.1%, from $4,545,407 to $5,460,337 due mainly to the 17% rate increase to fund operating increases and added pavement maintenance combined with an increase in the customer base. Other factors driving the rate increase include 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 three years ago, followed by Story Street and North Wallace Avenue two years ago, East Olive Street last year, and South Tracy Avenue this year. Transfers out of the Street Maintenance fund for these projects totaled $1,113,567 and included $613,800 for South Tracy and $700,000 for general street reconstruction. Debt service payments totaled $223,985 including $143,900 for repayment of the State of Montana Intercap loan for the reconstruction of South 8th Avenue. These projects demonstrate the City Commission’s focused goal of addressing deferred street and curb maintenance. Other major expenditures during the year included $244,531 booked for a new grader lease, $173,811 for a new asphalt patch truck, $115,045 for a new steel drum roller with trailer, and $134,204 spent on advertising street construction updates to the public.
Projects budgeted for but not started by the end of the fiscal year include over $500,000 for mill & overlay and chip seal work on various streets. DRAFT
493
34
CITY OF BOZEMAN, MONTANA
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018
CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As shown in Table 4, at the end of 2018 the City had $432.5 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 $32.8 million, or 8.2% over last year. Refer to capital assets disclosure Note 7 beginning on page 66 for more information.
2018 2017 2018 2017 2018 2017
Land 22.5$ 19.5$ 2.2$ 2.2$ 24.7$ 21.7$
Water Rights - - 2.1 2.1 2.1 2.1
Buildings 34.1 32.7 113.5 113.2 147.6 145.9
Other Structures and Improvements 1.1 1.1 30.5 30.5 31.6 31.6
Machinery & Equipment 13.3 12.5 10.2 9.1 23.5 21.6
Property under Capital Lease 0.8 0.5 0.5 0.5 1.3 1.0
Vehicle 3.8 3.7 2.2 2.1 6.0 5.8
Infrastructure 190.4 170.4 310.0 293.6 500.4 464.0
Subtotal 266.0 240.4 471.2 453.3 737.2 693.7
Accumulated Depreciation (108.5) (103.9) (196.3) (190.1) (304.8) (294.0)
Total Capital Assets 157.5$ 136.5$ 274.9$ 263.2$ 432.5$ 399.7$
Activities Activities Total s
Tabl e 4
Capital Assets at Year-end
(in Millions)
Governmental Business-type
DRAFT
494
35
CITY OF BOZEMAN, MONTANA
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018
Major additions and capital projects underway include the following expenditures made during this year:
Debt
At year-end, the City had $57.4 million in bonds and notes outstanding versus $56.1 million last year – an increase of $1.3 million, or 2.3%, as shown in Table
5. This increase was due to new debt issuances ($5.1 million) exceeding debt repayment for the year ($3.8 million) during the year.
New debt included a $3.2 million for the 5.3 million gallon Sourdough water storage tank, $851,000 for the Northeast Urban Renewal Tax Increment Financing
District project improvements, and $245,000 for the lease of a new road grader in the street department. Debt repayment included $1.1 million for the Water
Reclamation Facility; $847,000 for the new Water Plant; $151,000 for the Stormwater-backed landfill mitigation system loan; $255,000 for the refinanced transportation General Obligation (GO) Bonds; $620,000 for the TOP GO Bonds; $210,000 for the Downtown TIF District Bonds to finance the Parking Facility;
and $95,000 in Special Improvement District debt.
General obligation debt still outstanding, which is reported under Governmental Activities, consists of $13 million for the TOP Bonds along with $795,000
million in Series 2012 Refunding Bonds issued to refinance both the Series 2003A Transportation Refunding bonds and the Series 2001A / Series 2003B Library Construction Project bonds.
Trail and Open Space Bond: Sports Complex 3,713,523$
Sourdough Water Storage Reservoir 3,425,862$
South 11th Avenue construction: Kagy Boulevard to Graf Street 2,282,981$
Oak Street & Davis Lane Intersection Roundabout 1,583,310$
East Olive Street Reconstruction Special Improvement District 1,157,855$
Oak Street construction: New Holland Drive to Ferguson Avenue 1,023,475$
Northeast Urban Tax Increment Financing District construction: Peach Street 926,284$
Stormwater System Improvements & Equipment 889,821$
Baxter Lane construction: Ferguson Avenue to Cottonwood Street 767,453$
Street Improvements - Gas Tax: Mill & Overlay 747,924$
Trail and Open Space Bond: Story Mill Park 607,393$
Fire Department Equipment - Public Safety Mill Levy 601,041$
Babcock Street & Ferguson Avenue Intersection improvements 600,345$
Kagy Boulevard Engineering: Willson Avenue to South 19th Avenue 534,756$
Oak Street & Ferguson Avenue Intersection improvements 483,209$ DRAFT
495
36
CITY OF BOZEMAN, MONTANA
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018
Debt reported under Business-Type Activities includes $19.1 million of water revenue bonds and $16.4 million of wastewater revenue bonds issued to finance construction of the new Water Treatment Plant, Water Storage Tank, and Wastewater Reclamation Facility.
2018 2017 2018 2017 2018 2017
General obligation
bonds (backed by the City)13.8$ 14.7$ -$ -$ 13.8$ 14.7$
Tax Increment Financing
District (TIFD) bonds 5.0 4.4 - - 5.0 4.4
Special Improvement
District Debt 0.3 0.5 - - 0.3 0.5
Notes Payable 0.8 0.9 - - 0.8 0.9
Lease Payable 0.5 0.3 - - 0.5 0.3
Water Revenue Bonds
(backed by specific fee revenues)- - 19.1 15.8 19.1 15.8
Wastewater Revenue Bonds
(backed by specific fee revenues)- - 16.4 17.9 16.4 17.9
Stormwater Revenue Bonds
(backed by specific fee revenues)- - 1.3 1.4 1.3 1.4
Stormwater Lease Payable
(backed by specific fee revenues)- - 0.2 0.3 0.2 0.3
Totals 20.4$ 20.8$ 37.0$ 35.4$ 57.4$ 56.1$
Activities Activities Totals
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
DRAFT
496
37
CITY OF BOZEMAN, MONTANA
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2018
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.
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 statement.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
The City’s elected and appointed officials considered many factors when adopting the 2018-2019 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 2.11% for the last calendar year and over the last 12 months the all items index rose 2.5% (as of this report
date and before seasonal adjustment), with energy index rising 2.4%. 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. DRAFT
497
B. BASIC FINANCIAL STATEMENTS
DRAFT
499
GOVERNMENT-WIDE FINANCIAL STATEMENTS
DRAFT
501
38
CITY OF BOZEMAN, MONTANA
STATEMENT OF NET POSITION June 30, 2018
The Notes to Financial Statements are an integral part of this statement.
Governmental Business-type
Activities Activities Total
ASSETS
Cash and investments 38,203,395$ 21,422,126$ 59,625,521$
Restricted cash and investments 16,084,122 16,650,301 32,734,423
Accrued interest 125,724 130,021 255,745
Receivables, net 6,263,147 2,528,360 8,791,507
Notes receivable 625,083 9,442 634,525
Prepaid expenses 312,375 - 312,375
61,613,846 40,740,250 102,354,096
Capital assets:
Non-depreciable land and water rights 22,452,729 4,324,045 26,776,774
Other capital assets, net of depreciation 134,920,036 270,620,575 405,540,611
Total capital assets 157,372,765 274,944,620 432,317,385
Total assets 218,986,611 315,684,870 534,671,481
Deferred outflows of resources:
Interlocal lease agreement 1,009,999 - 1,009,999
Pension plan contributions 5,440,721 1,817,229 7,257,950
Total deferred outflows of resources 6,450,720 1,817,229 8,267,949
Total assets and deferred outflows of resources 225,437,331$ 317,502,099$ 542,939,430$
DRAFT
503
39
CITY OF BOZEMAN, MONTANA
STATEMENT OF NET POSITION (CONTINUED) June 30, 2018
The Notes to Financial Statements are an integral part of this statement.
Governmental Business-type
Activities Activities Total
LIABILITIES
Accounts payable and accrued expenses 8,663,465$ 3,041,900$ 11,705,365$
Unearned revenue 56,343 - 56,343
Current portion of long-term liabilities:
Compensated absences payable 1,427,400 368,612 1,796,012
Capital leases 68,250 85,346 153,596
Closure and post-closure care costs - 310,000 310,000
Bonds and notes 1,358,734 2,391,000 3,749,734
Long-term liabilities, due in more than one year:
Compensated absences 1,077,396 231,095 1,308,491
Capital leases 395,286 129,541 524,827
Closure and post-closure care costs - 1,982,253 1,982,253
Pollution remediation obligations 16,874 1,568,001 1,584,875
Other post-employment health benefits - implicit rate subsidy 2,134,567 551,314 2,685,881
Due to other governments and other liabilities 1,009,999 185 1,010,184
Bonds and notes 18,812,436 34,376,927 53,189,363
Net pension liability 21,421,473 6,934,875 28,356,348
Total liabilities 56,442,223 51,971,049 108,413,272
DEFERRED INFLOWS OF RESOURCES
Other post-employment health benefits - implicit rate subsidy 477,742 - 477,742
Unavailable revenues-special assessments - 105,596 105,596
Pension deferrals 368,162 177,231 545,393
Total deferred inflows of resources 845,904 282,827 1,128,731
NET POSITION
Net investment in capital assets 137,133,345 239,254,236 376,387,581
Restricted:
Restricted for parking capital projects - 344,465 344,465
Restricted for general government 1,927,674 - 1,927,674
Restricted for public safety 4,378,294 - 4,378,294
Restricted for public service 13,618,540 - 13,618,540
Restricted for public welfare 5,938,599 - 5,938,599
Restricted for capital projects 3,658,296 9,255,771 12,914,067
Restricted for debt service 7,000,792 3,102,477 10,103,269
Unrestricted (5,506,336) 13,291,274 7,784,938
Total net position 168,149,204$ 265,248,223$ 433,397,427$
DRAFT
504
40
CITY OF BOZEMAN, MONTANA
STATEMENT OF ACTIVITIES Year Ended June 30, 2018
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 9,890,842$ 3,139,427$ 123,161$ -$ (6,628,254)$ (6,628,254)$
Public safety 18,637,422 2,234,994 2,681,708 - (13,720,720) (13,720,720)
Public service 8,607,457 15,531,304 35,568 7,566,008 14,525,423 14,525,423
Public welfare 9,469,583 1,593,025 180,962 85,000 (7,610,596) (7,610,596)
Interest and fiscal fees 718,807 - - - (718,807) (718,807)
Total governmental activities 47,324,111 22,498,750 3,021,399 7,651,008 (14,152,954) (14,152,954)
Business-type activities:
Water 9,832,508 12,915,454 59,029 4,874,798 8,016,773 8,016,773
Waste water 8,548,138 10,686,506 36,704 4,102,663 6,277,735 6,277,735
Solid waste 4,535,865 3,926,123 24,471 - (585,271) (585,271)
Parking 1,133,777 958,378 6,020 - (169,379) (169,379)
Stormwater 878,173 1,324,461 8,299 685,144 1,139,731 1,139,731
Total business-type activities 24,928,461 29,810,922 134,523 9,662,605 14,679,589 14,679,589
Total primary government 72,252,572$ 52,309,672$ 3,155,922$ 17,313,613$ (14,152,954) 14,679,589 526,635
General revenues
Property taxes 22,532,724 - 22,532,724
Unrestricted grants and contributions 6,171,297 - 6,171,297
Investment earnings 64,058 3,389 67,447
Settlement income 1,000,000 - 1,000,000
Miscellaneous 1,320,536 2,529,824 3,850,360
Loss on sale of assets 28,861 10,005 38,866
Transfers (758,084) 758,084 -
Total general revenues and transfers 30,359,392 3,301,302 33,660,694
Change in net position 16,206,438 17,980,891 34,187,329
Net position, beginning of the year 152,441,481 247,393,246 399,834,727
Restatement, other post-employment health benefits
(498,715) (125,914) (624,629)
Net position, beginning of the year as restated 151,942,766 247,267,332 399,210,098
Net position, end of the year 168,149,204$ 265,248,223$ 433,397,427$
Primary Government
Program Revenues
DRAFT
505
FUND FINANCIAL STATEMENTS
DRAFT
507
GOVERNMENTAL FUND FINANCIAL STATEMENTS
DRAFT
509
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.
DRAFT
510
41
CITY OF BOZEMAN, MONTANA
BALANCE SHEET GOVERNMENTAL FUNDS
June 30, 2018
The Notes to Financial Statements are an integral part of this statement.
Street Street Other Total
General Impact Fees Maintenance Governmental Governmental
Fund Special Revenue Special Revenue Funds Funds
ASSETS
Cash and investments 9,130,838$ -$ 656,460$ 28,020,541$ 37,807,839$
Receivables:
Property taxes 1,092,941 - - 471,504 1,564,445
Accrued interest 19,641 32,710 - 73,373 125,724
Customers, net 1,326,896 6,500 13,252 643,319 1,989,967
Special assessments - - 146,923 2,150,679 2,297,602
Other governments 43,253 - - 356,680 399,933
Due from other city funds 76,631 - - - 76,631
Advances to other city funds - - - 510,503 510,503
Prepaid expenditures - - - 312,375 312,375
Notes receivable - - - 625,083 625,083
Restricted cash and investments - 10,787,062 - 5,297,060 16,084,122
Total assets 11,690,200$ 10,826,272$ 816,635$ 38,461,117$ 61,794,224$
(continued)
DRAFT
511
42
CITY OF BOZEMAN, MONTANA
BALANCE SHEET (CONTINUED) GOVERNMENTAL FUNDS
June 30, 2018
The Notes to Financial Statements are an integral part of this statement.
Street Street Other Total
General Impact Fees Maintenance Governmental Governmental
Fund Special Revenue Special Revenue Funds Funds
LIABILITIES AND FUND BALANCES
Liabilities
Accounts payable 2,968,591$ 1,286,606$ 200,700$ 3,760,181$ 8,216,078$
Escheat property payable 73,027 - 678 20,052 93,757
Accrued employee benefits 8,934 - 1,521 3,280 13,735
Appearance bonds and other liabilities - 137,619 - 158,526 296,145
Advanced from other city funds - - - 518,129 518,129
Total liabilities 3,050,552 1,424,225 202,899 4,460,168 9,137,844
Deferred inflows of resources
Unavailable revenue-property taxes 51,004 - - 17,607 68,611
Unavailable revenue-special assessments 6,500 52,798 84,976 2,151,716 2,295,990
Unavailable revenue-court fines 1,117,376 - - - 1,117,376
Total deferred inflows of resources 1,174,880 52,798 84,976 2,169,323 3,481,977
Fund balances
Nonspendable - - - 1,623,816 1,623,816
Restricted - 9,349,249 528,760 24,525,735 34,403,744
Committed - - - 3,856,238 3,856,238
Assigned 7,739,020 - - 1,868,485 9,607,505
Unassigned (274,252) - - (42,648) (316,900)
Total fund balances 7,464,768 9,349,249 528,760 31,831,626 49,174,403
Total liabilities, deferred inflows,
and fund balances 11,690,200$ 10,826,272$ 816,635$ 38,461,117$ 61,794,224$ DRAFT
512
43
CITY OF BOZEMAN, MONTANA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
June 30, 2018
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 49,174,403$
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the
governmental funds
Governmental capital assets 265,873,153$
Less: accumulated depreciation (108,500,388) 157,372,765
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 948,240
Less: capital assets included in governmental activities (1,681,112)
Plus: accumulated depreciation included in governmental activities 605,578
Plus: compensated absences included in governmental activities 23,250
Plus: other post-employment health benefits included in governmental activities 34,038
Plus: net pension liability and related deferred outflows and inflows included in governmental activities 364,007 294,001
Deferred inflows of resources are not available to pay for current period expenditures and, therefore, are deferred in the funds.3,481,977
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.6,450,720
Pension plan deferrals are deferred inflows of resources on the Statement of Net Position.(368,162)
(477,742)
Bond premiums are other financing source revenue in the governmental funds. They are a liability for the statement of net
position and amortized over the life of the issuance.
Bond premium (269,154)
Less: amortization 47,103 (222,051)
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 (19,949,119)
Net pension liability (21,421,473)
Capital lease obligations (463,536)
Pollution remediation obligations (16,874)
Other liabilities (1,009,999)
Post-employment health benefits (2,134,567)
Compensated absences (2,504,796) (47,500,364)
Net position of governmental activities 168,149,204$
The assumption change gain in the total other post-employment benefits liability (TOL) is a deferred inflow of resources and is
amortized over the expected future service life; therefore, the balance is deferred and not reported in governmental funds.DRAFT
513
44
CITY OF BOZEMAN, MONTANA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS
Year Ended June 30, 2018
The Notes to Financial Statements are an integral part of this statement.
Street Street Other Total
Impact Fees Maintenance Governmental Governmental
General Special Revenue Special Revenue Funds Funds
REVENUES
Taxes 15,689,264$ -$ -$ 6,864,708$ 22,553,972$
Special assessments 93 - 71,497 1,065,513 1,137,103
Licenses and permits 395,107 - 17,407 2,129,213 2,541,727
Intergovernmental 7,686,022 - 35,494 1,697,588 9,419,104
Charges for services 2,760,256 5,523,020 5,460,336 4,141,917 17,885,529
Fines and forfeitures 1,093,742 - - 146,412 1,240,154
Interest on investments - - - 34,709 34,709
Interest on loans receivable - - - 25,827 25,827
Other 1,141,637 1,255 173,172 997,033 2,313,097
Total revenues 28,766,121 5,524,275 5,757,906 17,102,920 57,151,222
EXPENDITURES
General government 6,922,180 - - 1,346,105 8,268,285
Public safety 14,961,342 - - 2,641,624 17,602,966
Public service 186,331 161,261 3,614,633 993,334 4,955,559
Public welfare 6,170,061 - - 1,805,293 7,975,354
Other 554,851 - - 100,681 655,532
Capital outlay 704,076 7,663,383 805,722 9,247,320 18,420,501
Debt service
Principal payments 4,702 - 223,985 1,272,000 1,500,687
Interest and fiscal fees - - - 718,597 718,597
Total expenditures 29,503,543 7,824,644 4,644,340 18,124,954 60,097,481
Revenues over (under) expenditures (737,422) (2,300,369) 1,113,566 (1,022,034) (2,946,259)
OTHER FINANCING SOURCES (USES)
Transfers in 2,323,901 - 31,900 2,038,476 4,394,277
Transfers out (632,084) - (1,313,800) (3,206,477) (5,152,361)
Issuance of long term debt 8,006 - 244,531 851,049 1,103,586
Sale of capital assets 12,208 - 12,842 10,094 35,144
Total other financing sources (uses)1,712,031 - (1,024,527) (306,858) 380,646
Net change in fund balances 974,609 (2,300,369) 89,039 (1,328,892) (2,565,613)
FUND BALANCE, beginning of year 6,490,159 11,649,618 439,721 33,160,518 51,740,016
FUND BALANCE, end of year 7,464,768$ 9,349,249$ 528,760$ 31,831,626$ 49,174,403$
DRAFT
514
45
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, 2018
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 (2,565,613)$
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 capital outlays and donated infrastructure exceeded depreciation expense in the current period.
Expenditures for capital assets 18,420,501$
Donated infrastructure 7,566,008
Less: current year depreciation (5,056,125) 20,930,384
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.(6,250)
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.410,559
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.(327,011)
Governmental funds do not report a liability for compensated absences. The change in the liability is presented in
the statement of activities.(791,264)
Governmental funds do not report a liability for other post-employment health benefits. The change in the liability is
presented in the statement of activities.(214,048)
Contributions to the pension plans in the current fiscal year are deferred outflows in the Statement of Net Position
The change in the deferred outflows for pension plan contributions presented in the statement of activities.(1,075,893)
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.(154,426)
Change in net position of governmental activities 16,206,438$
DRAFT
515
PROPRIETARY FUND FINANCIAL STATEMENTS
DRAFT
517
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.
DRAFT
518
46
CITY OF BOZEMAN, MONTANA
STATEMENT OF NET POSITION PROPRIETARY FUNDS
June 30, 2018
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 15,533,688$ 3,779,740$ 679,287$ 1,429,411$ 21,422,126$ 395,556$
Receivables:
Accrued interest 83,680 46,341 - - 130,021 -
Customers, net 715,195 1,228,110 331,343 236,844 2,511,492 11,200
Special assessments 16,733 - - 135 16,868 -
Prepaid expenses - - - - - -
Total current assets 16,349,296 5,054,191 1,010,630 1,666,390 24,080,507 406,756
Non-current assets
Other assets:
Notes receivable - - - 9,442 9,442 -
Restricted cash and investments 10,214,329 5,855,965 180,211 399,796 16,650,301 -
Total other assets 10,214,329 5,855,965 180,211 409,238 16,659,743 -
Property, plant and equipment
Nondepreciable:
Land 573,847 1,097,947 228,673 303,436 2,203,903 -
Water rights 2,120,142 - - - 2,120,142 -
Depreciable:
Buildings 40,573,387 60,341,231 746,509 11,840,479 113,501,606 1,424,215
Other structures and improvements 13,646,910 14,745,401 2,155,300 - 30,547,611 -
Machinery and equipment 1,738,387 2,958,484 5,162,261 383,636 10,242,768 186,585
Vehicles 647,683 755,997 592,580 175,604 2,171,864 70,312
Infrastructure 186,126,106 121,224,625 118,081 2,517,289 309,986,101 -
Property under capital lease - - - 519,943 519,943 -
Accumulated depreciation and amortization (107,349,263) (78,066,264) (6,367,476) (4,566,315) (196,349,318) (605,578)
Net property, plant and equipment 138,077,199 123,057,421 2,635,928 11,174,072 274,944,620 1,075,534
Total non-current assets 148,291,528 128,913,386 2,816,139 11,583,310 291,604,363 1,075,534
Deferred outflows of resources
Pension plan contributions 786,410 501,166 334,130 195,523 1,817,229 122,004
Total assets and deferred outflows of resources 165,427,234$ 134,468,743$ 4,160,899$ 13,445,223$ 317,502,099$ 1,604,294$
continued
Enterprise Funds
Business-type Activities
DRAFT
519
47
CITY OF BOZEMAN, MONTANA
STATEMENT OF NET POSITION (CONTINUED) PROPRIETARY FUNDS
June 30, 2018
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 1,307,097$ 541,002$ 890,815$ 302,986$ 3,041,900$ 44,672$
Compensated absences payable 206,821 35,064 91,085 35,642 368,612 23,581
Due to other city funds - - - - - 68,083
Capital lease obligations due in one year - - - 85,346 85,346 -
Closure and post-closure care costs, current portion - - 310,000 - 310,000 -
Bonds, notes, and loans payable 1,176,000 1,139,000 - 76,000 2,391,000 -
Total current liabilities 2,689,918 1,715,066 1,291,900 499,974 6,196,858 136,336
Noncurrent liabilities
Closure and post-closure care costs - - 1,982,253 - 1,982,253 -
Revenue bonds due after one year 17,931,497 15,229,000 - 1,216,430 34,376,927 -
Compensated absences payable 128,342 61,494 40,616 643 231,095 -
Capital lease obligations - - - 129,541 129,541 -
Other post-employment health benefits
implicit rate subsidy 233,324 155,448 113,937 48,605 551,314 33,707
Appearance bond and other liabilities - - - 185 185 -
Solvent site remediation liability - 1,568,001 - - 1,568,001 -
Net pension liability 3,001,084 1,912,543 1,275,099 746,149 6,934,875 472,511
Total noncurrent liabilities 21,294,247 18,926,486 3,411,905 2,141,553 45,774,191 506,218
Total liabilities 23,984,165 20,641,552 4,703,805 2,641,527 51,971,049 642,554
Deferred inflows of resources
Unavailable revenues-special assessments 52,798 52,798 - - 105,596 -
Pension deferrals 75,526 50,203 35,422 16,080 177,231 13,500
Total deferred inflows of resources 128,324 103,001 35,422 16,080 282,827 13,500
NET POSITION
Net investment in capital assets 118,969,702 106,689,421 2,635,928 10,959,185 239,254,236 1,075,534
Restricted for impact capital projects 5,313,531 3,942,240 - - 9,255,771 -
Restricted for parking capital projects - - - 344,465 344,465 -
Restricted for debt service 1,313,885 1,788,592 - - 3,102,477 -
Unrestricted 15,717,627 1,303,937 (3,214,256) (516,034) 13,291,274 (127,294)
Total net position 141,314,745 113,724,190 (578,328) 10,787,616 265,248,223 948,240
Total liabilities, deferred inflows of resources, and net position 165,427,234$ 134,468,743$ 4,160,899$ 13,445,223$ 317,502,099$ 1,604,294$
Enterprise Funds
Business-type Activities
DRAFT
520
48
CITY OF BOZEMAN, MONTANA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS
Year Ended June 30, 2018
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 10,157,888$ 8,876,017$ 3,926,123$ 2,282,839$ 25,242,867$ 6,070,606$
OPERATING EXPENSES
Salaries and benefits 3,203,119 1,987,336 1,463,390 937,207 7,591,052 492,099
Materials and supplies 1,004,762 445,133 442,130 75,857 1,967,882 662,307
Repairs and maintenance 84,600 132,747 198,474 55,642 471,463 10,912
Utilities 296,123 683,934 556,477 34,930 1,571,464 26,238
Administrative charges 684,394 980,522 749,729 123,308 2,537,953 148,346
Insurance claims - - - - - 4,733,165
Other expenses 1,221,123 962,726 481,995 308,629 2,974,473 113,603
Depreciation and amortization 2,743,518 2,786,821 386,766 421,027 6,338,132 57,677
Changes in estimated closure and
post-closure care costs - - 256,904 - 256,904 -
Total operating expenses 9,237,639 7,979,219 4,535,865 1,956,600 23,709,323 6,244,347
Operating income (loss)920,249 896,798 (609,742) 326,239 1,533,544 (173,741)
NON-OPERATING REVENUES (EXPENSES)
Interest income 66 23 3,300 - 3,389 3,522
Interest expense (594,869) (568,919) - (55,350) (1,219,138) (210)
Other income 1,086,293 1,413,035 17,857 12,639 2,529,824 7,439
Intergovernmental income 59,029 36,704 24,471 14,319 134,523 8,596
Impact fees 2,757,566 1,810,489 - - 4,568,055 -
Gain (loss) on disposal of assets 5,970 1,007 - 3,028 10,005 (33)
Total non-operating revenues (expenses)3,314,055 2,692,339 45,628 (25,364) 6,026,658 19,314
Income (loss) before contributions and transfers 4,234,304 3,589,137 (564,114) 300,875 7,560,202 (154,427)
Contributions of infrastructure - developers 4,874,798 4,102,663 - 685,144 9,662,605 -
Transfers in - - 368,084 390,000 758,084 -
Transfers out - - - - - -
Change in net position 9,109,102 7,691,800 (196,030) 1,376,019 17,980,891 (154,427)
NET POSITION, beginning of year 132,258,910 106,068,499 (356,187) 9,422,024 247,393,246 1,110,482
Restatement, other post-employment benefits (53,267) (36,109) (26,111) (10,427) (125,914) (7,815)
NET POSITION, beginning of year, restated 132,205,643 106,032,390 (382,298) 9,411,597 247,267,332 1,102,667
NET POSITION, end of year 141,314,745$ 113,724,190$ (578,328)$ 10,787,616$ 265,248,223$ 948,240$
Enterprise Funds
Business-type Activities
DRAFT
521
49
CITY OF BOZEMAN, MONTANA
STATEMENT OF CASH FLOWS PROPRIETARY FUNDS
Year Ended June 30, 2018
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 10,268,346$ 8,456,876$ 3,942,272$ 2,288,814$ 24,956,308$ 6,129,750$
Receipts from others 1,086,293 1,413,035 17,857 12,639 2,529,824 16,035
Operating loans from other City funds - - - - - 56,382
Payments to suppliers (3,258,482) (3,035,476) (1,743,559) (417,439) (8,454,956) (775,271)
Payments to employees (3,079,002) (1,990,040) (1,297,996) (798,687) (7,165,725) (5,225,940)
Payments to internal service funds and administrative fees (684,394) (980,522) (749,729) (123,308) (2,537,953) (148,346)
Net cash flows from operating activities 4,332,761 3,863,873 168,845 962,019 9,327,498 52,610
CASH FLOWS FROM NON-CAPITAL
FINANCING ACTIVITIES
Transfers in - - 368,084 390,000 758,084 -
Receipts from grants and intergovernmental sources 64,999 37,711 24,471 14,319 141,500 -
Net cash flows from non-capital financing activities 64,999 37,711 392,555 404,319 899,584 -
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition of capital assets (4,677,096) (1,823,480) (798,055) (1,049,158) (8,347,789) -
Principal paid on bonds, interfund loans, loans and leases (1,156,000) (1,488,000) - (150,651) (2,794,651) -
Interest paid on bonds, interfund loans, loans and leases (594,869) (568,919) - (55,350) (1,219,138) (210)
Proceeds from issuance of long-term debt 4,503,497 - - - 4,503,497 -
Impact fees received 2,757,566 1,810,489 - - 4,568,055 -
Proceeds from sale of property, plant and equipment - - - 3,028 3,028 (33)
Net cash flows from capital and
related financing activities 833,098 (2,069,910) (798,055) (1,252,131) (3,286,998) (243)
CASH FLOWS FROM INVESTING ACTIVITIES
Collections on notes - - - - - -
Interest on investments (36,954) (19,329) 8,691 - (47,592) 3,522
Net cash flows from investing activities (36,954) (19,329) 8,691 - (47,592) 3,522
Net change in cash and investments 5,193,904 1,812,345 (227,964) 114,207 6,892,492 55,889
Cash and investments, beginning of year 20,554,113 7,823,360 1,087,462 1,715,000 31,179,935 339,667
Cash and investments, end of year 25,748,017$ 9,635,705$ 859,498$ 1,829,207$ 38,072,427$ 395,556$
Classified as:
Cash and investments 15,533,688$ 3,779,740$ 679,287$ 1,429,411$ 21,422,126$ 395,556$
Restricted cash and investments 10,214,329 5,855,965 180,211 399,796 16,650,301 -
Totals 25,748,017$ 9,635,705$ 859,498$ 1,829,207$ 38,072,427$ 395,556$
continued
Business-type Activities
Enterprise Funds
DRAFT
522
50
CITY OF BOZEMAN, MONTANA
STATEMENT OF CASH FLOWS (CONTINUED) PROPRIETARY FUNDS
Year Ended June 30, 2018
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)920,249$ 896,798$ (609,742)$ 326,239$ 1,533,544$ (173,741)$
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities
Depreciation and amortization 2,743,518 2,786,821 386,766 421,027 6,338,132 57,677
Change in estimated closure and
post-closure care costs - - (336,911) - (336,911) -
Change in solvent site remediation obligation - (132,182) - - (132,182) -
Other income 1,086,293 1,413,035 17,857 12,639 2,529,824 16,035
Change in assets and liabilities:
(Increase) Decrease in:
Accounts receivable 57,660 (471,939) 16,149 5,975 (392,155) 59,144
Prepaid expenses - - - - - -
Increase (Decrease) in:
Accounts payable (651,874) (678,754) 529,332 57,619 (743,677) (12,721)
Due from other city funds - - - - - 56,382
Accrued employee benefits payable (1,339) (14,537) 29,503 15,118 28,745 (676)
Deferred inflows - unavailable revenue 52,798 52,798 - - 105,596 -
Net pension 125,456 11,833 135,891 123,402 396,582 50,510
Total adjustments 3,412,512 2,967,075 778,587 635,780 7,793,954 226,351
Net cash flows from operating activities 4,332,761$ 3,863,873$ 168,845$ 962,019$ 9,327,498$ 52,610$
SUPPLEMENTAL CASH FLOW INFORMATION
Noncash transactions:
Donated infrastructure 4,874,798$ 4,102,663$ -$ 685,144$ 9,662,605$ -$
Enterprise Funds
Business-type Activities
DRAFT
523
FIDUCIARY FUND FINANCIAL STATEMENTS
DRAFT
525
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.
DRAFT
526
51
CITY OF BOZEMAN, MONTANA
STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS
June 30, 2018
The Notes to Financial Statements are an integral part of this statement.
Agency
Funds
ASSETS
Cash and cash equivalents 890,664$
Customer receivables 1,254
Special assessments 9,541
Total assets 901,459$
LIABILITIES
Accounts payable 901,459$
Total liabilities 901,459$
DRAFT
527
NOTES TO FINANCIAL STATEMENTS
DRAFT
529
52
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS June 30, 2018
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 financial reporting requirements for state and
local governments throughout the United States.
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, 2018, 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, 2018:
• Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. This Statement replaces GASB
Statement No. 45. It requires the government to recognize the unfunded OPEB obligation as a liability and more comprehensively and
comparably measure the annual costs of OPEB benefits. The statement enhances the accountability and transparency through revised note
disclosures and required supplemental information (RSI). This Statement is effective for fiscal years beginning after June 15, 2017. In accordance with this guidance, the City has reported a $624,629 restatement to unrestricted net position as of July 1, 2017. DRAFT
531
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CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New Accounting Pronouncements (Continued)
• Statement No. 85, Omnibus 2017. This statement addresses various issues that have been addressed during implementation and application of certain GASB Statements. One update applicable to the City is the recognition of on-behalf payments as revenue for pensions. Another update implemented by the City is that pension liabilities and expenditures recognized in financial statements prepared using the current
financial resources measurement focus are now measured as of the reporting period. This statement is effective for fiscal years beginning
after June 15, 2017.
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.
DRAFT
532
54
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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.
DRAFT
533
55
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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.
DRAFT
534
56
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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. DRAFT
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57
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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.
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.
DRAFT
536
58
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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.
DRAFT
537
59
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 $5,000. 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).
DRAFT
538
60
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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.
DRAFT
539
61
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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.
DRAFT
540
62
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 30 to be assigned this fiscal year for the specific purposes listed on page 24. 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 35 and 155
for the specific purposes listed on page 132. 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.
DRAFT
541
63
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 2. CASH AND INVESTMENTS
At June 30, 2018, the carrying amount of the City's deposits in local banks and investments is $93,250,608. Interest bearing account balances are
covered by the Federal Depository Insurance Corporation (FDIC) up to $250,000 per bank, per depositor. In additional, all noninterest bearing
transaction account balances are fully insured by FDIC coverage. The remaining balances are covered by collateral held by the pledging bank's agent in the City's name.
The City’s cash and investments are reported as follows:
Unrestricted Restricted Total
Governmental activities 38,203,395$ 16,084,122$ 54,287,517$
Business-type activities 21,422,126 16,650,301 38,072,427
Fiduciary funds 890,664 - 890,664
60,516,185$ 32,734,423$ 93,250,608$
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, 2018, 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 2018-April
2021 NA 5,269,725$ Level 2
U.S. Government bonds September 2018 -
June 2022 S&P AA+58,387,991 Level 2
U.S. Bank Municipal Investor Account N/A N/A 378,097 Level 2
State of Montana Short Term Investment Pool Account N/A N/A 28,000,000
Demand deposits N/A N/A 1,209,418
Petty cash N/A N/A 5,377
93,250,608$
DRAFT
542
64
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 1st for the 1st installment and June 1st for the 2nd installment
Levy Date: November 1st
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.
DRAFT
543
65
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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, 2018. 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, 2018, rent expenditure
was $19,125 regarding this lease.
DRAFT
544
66
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 6. NOTES RECEIVABLE The City had the following notes receivable:
Special Revenue Funds
Economic Development Loan Fund 565,371$
Community Housing Fund 59,712
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, 2018, depreciation expense on capital assets was charged to the functions and programs as follows:
Governmental Activities:
General Government 288,250$
Public Safety 552,522
Public Services 3,344,598
Public Welfare 928,432
Total depreciation expense - governmental activities 5,113,802$
Business-type Activities:
Parking 309,199$
Storm Water 111,828
Water 2,743,518
Waste Water 2,786,822
Solid Waste 386,765
Total depreciation expense - business-type activities 6,338,132$
DRAFT
545
67
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 7. CAPITAL ASSETS (CONTINUED)
All capital assets of the City are depreciable with the exception of land, water rights, and construction in process, when applicable. Capital assets
activity of the City for the year ended June 30, 2018, consisted of the following:
June 30, 2017 Additions Disposals Transfers June 30, 2018
GOVERNMENTAL ACTIVITIES
Non-depreciable:
Land 19,513,699$ 2,939,030$ -$ -$ 22,452,729$
Depreciable:
Buildings 32,733,733 1,344,891 - - 34,078,624
Other structures and improvements 1,145,215 - - - 1,145,215
Machinery and equipment 12,508,052 1,137,121 (383,175) - 13,261,998
Property under capital lease 518,614 252,537 - - 771,151
Vehicles 3,655,557 306,354 (179,474) - 3,782,437
Infrastructure 170,374,423 20,006,576 - - 190,380,999
Total 240,449,293 25,986,509 (562,649) - 265,873,153 Accumulated depreciation (103,942,985) (5,113,802) 556,399 - (108,500,388)
Total governmental activities 136,506,308$ 20,872,707$ (6,250)$ -$ 157,372,765$
BUSINESS-TYPE ACTIVITIES
Non-depreciable:
Land 2,193,991$ 9,912$ -$ -$ 2,203,903$
Water rights 2,120,142 - - - 2,120,142
Depreciable:
Buildings 113,182,099 319,507 - - 113,501,606
Other structures and improvements 30,547,611 - - - 30,547,611
Machinery and equipment 9,104,137 1,140,367 (3,824) - 10,240,680
Property under capital lease 519,943 - - - 519,943
Vehicles 2,141,341 139,938 (109,415) - 2,171,864
Infrastructure 293,585,433 16,400,668 - - 309,986,101
Total 453,394,697 18,010,392 (113,239) - 471,291,850
Accumulated depreciation (190,122,337) (6,338,132) 113,239 - (196,347,230)
Total business-type activities 263,272,360$ 11,672,260$ -$ -$ 274,944,620$
Total capital assets 399,778,668$ 32,544,967$ (6,250)$ -$ 432,317,385$
DRAFT
546
68
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 7. CAPITAL ASSETS (CONTINUED) Changes in accumulated depreciation are as follows for the year ended June 30, 2018:
June 30, 2017 Additions Disposals Transfers June 30, 2018
GOVERNMENTAL ACTIVITIES
Buildings (15,974,313)$ (854,084)$ -$ -$ (16,828,397)$
Other structures and improvements (1,064,529) (22,238) - - (1,086,767)
Machinery and equipment (8,573,007) (643,950) 383,175 - (8,833,782)
Property under capital lease (120,052) (54,493) - - (174,545)
Vehicles (2,747,824) (256,301) 173,224 - (2,830,901)
Infrastructure (75,463,260) (3,282,736) - - (78,745,996)
Total governmental activities (103,942,985)$ (5,113,802)$ 556,399$ -$ (108,500,388)$
BUSINESS-TYPE ACTIVITIES
Buildings (16,470,870)$ (2,531,232)$ -$ -$ (19,002,102)$
Other structures and improvements (27,964,447) (451,909) - - (28,416,356)
Machinery and equipment (6,611,431) (591,802) 3,824 - (7,199,409)
Property under capital lease (129,985) (51,994) - - (181,979)
Vehicles (1,796,145) (51,383) 109,415 - (1,738,113)
Infrastructure (137,149,459) (2,659,812) - - (139,809,271)
Total business-type activities (190,122,337) (6,338,132) 113,239 - (196,347,230)
Total accumulated depreciation (294,065,322)$ (11,451,934)$ 669,638$ -$ (304,847,618)$
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.
DRAFT
547
69
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 8. COMPENSATED ABSENCES (CONTINUED)
Balance Balance
June 30, 2017 Incurred Satisfied June 30, 2018
Compensated absences:
Governmental activities 1,710,263$ 2,221,937$ (1,427,404)$ 2,504,796$
Business-type activities 515,581 533,887 (449,762) 599,706
Total compensated absences 2,225,844$ 2,755,824$ (1,877,166)$ 3,104,502$
Due within Due after
one year one year Total
Compensated absences:
Governmental activities 1,427,400$ 1,077,396$ 2,504,796$
Business-type activities 368,612 231,095 599,707
Total compensated absences 1,796,012$ 1,308,491$ 3,104,503$
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, 2018:
Balance Issuances and Repayments Balance
June 30, 2017 Restatement Additions and Deletions June 30, 2018
General obligation bonds 14,710,000$ -$ -$ (875,000)$ 13,835,000$
Tax increment financing bonds 4,425,000 - 851,049 (257,118) 5,018,931
Special assessment debt 501,000 - - (175,000) 326,000
Intercap notes payable 903,264 - - (134,076) 769,188
Subtotal bonds and notes 20,539,264 - 851,049 (1,441,194) 19,949,119
Bond premiums 235,509 - (13,458) 222,051
Compensated absences 1,710,263 - 2,221,937 (1,427,404) 2,504,796
Other post employment benefits liability 1,904,250 498,715 (268,398) - 2,134,567
Net pension liability 19,386,470 - 2,035,003 - 21,421,473
Totals 43,775,756$ 498,715$ 4,839,591$ (2,882,056)$ 46,232,006$
DRAFT
548
70
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 895,000$ 12,940,000$ 13,835,000$
Tax increment financing bonds 279,638 4,739,293 5,018,931
Special assessment debt 29,500 296,500 326,000
Intercap notes payable 141,138 628,050 769,188
Bond premiums 13,458 208,593 222,051
Subtotal bonds and notes 1,358,734 18,812,436 20,171,170
Compensated absences 1,427,400 1,077,396 2,504,796
Other post employment benefits liability - 2,134,567 2,134,567
Net pension liability - 21,421,473 21,421,473
Totals 2,786,134$ 43,445,872$ 46,232,006$ 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%795,000$ 260,000$
General Obligation TOP Bonds, Series 2013
serial maturities through 2034 2.00% 8,465,000 420,000
General Obligation TOP Bonds, Series 2014
serial maturities through 2035 1.00% 4,575,000 215,000
Total general obligations bonds 13,835,000$ 895,000$
DRAFT
549
71
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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,
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 690,000 388,750 1,078,750
2024-2028 3,790,000 1,617,900 5,407,900
2029-2033 4,570,000 838,600 5,408,600
2034-2035 1,380,000 69,400 1,449,400
13,835,000$ 4,657,877$ 18,492,877$
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,
2019 279,638 235,934 515,572
2020 292,108 224,114 516,222
2021 304,681 211,422 516,103
2022 317,360 197,942 515,302
2023 330,150 183,652 513,802
2024-2028 1,906,818 830,348 2,737,166
2029-2033 1,588,176 195,258 1,783,434
5,018,931$ 2,078,670$ 7,097,601$
DRAFT
550
72
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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, 2017 Issuances Repayments June 30, 2018
Special assessment bonds 270,000$ -$ (145,000)$ 125,000$
Note Payable to Department of Natural
Resources and Conservation, #WRF-05067 54,500 - (6,000) 48,500
Note Payable to Department of Natural
Resources and Conservation, #SRF-05132 176,500 - (24,000) 152,500
501,000$ -$ (175,000)$ 326,000$
Annual debt service requirements to maturity for special assessment notes payable are as follows:
Notes Payable
Principal Interest Total
Year ending June 30,
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 35,000 1,295 36,295
2024 38,500 590 39,090
201,000$ 13,640$ 214,640$
DRAFT
551
73
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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,
2019 55,000$
2020 -
2021 -
2022 -
2023 -
2024-2028 70,000
125,000$
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.
Intercap Loans – The City entered in a loan agreement with the Montana Board of Investments to partially finance the reconstruction of South
Eighth Avenue. This intercap loan payable had a balance outstanding at June 30, 2018, as follows:
Due within Due after
one year one year Total
141,138$ 628,050$ 769,188$
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
DRAFT
552
74
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 9. LONG-TERM DEBT (CONTINUED)
Governmental Activities Long-Term Debt (Continued)
The debt service requirements for the intercap loan at June 30, 2018, are as follows:
Principal Interest Total
Year ending June 30,
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
2023 79,957 992 80,949
2024-2028 72,116 - 72,116
2029-2031 43,633 - 43,633
769,188$ 44,255$ 813,443$ 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, 2018, are as follows:
Balance Repayments Balance Long-Term
June 30, 2017 Issuances and Settlements June 30, 2018 Due in One Year Portion
State Revolving Fund Revenue Bond - 12247
Series 2011A, serial maturities through 2032, 3% interest rate $ 7,856,000 $ - $ (440,000) $ 7,416,000 $ 453,000 6,963,000$
State Revolving Fund Revenue Bond - 13291
Series 2011B, serial maturities through 2033, 3% interest rate 7,904,000 - (422,000) 7,482,000 419,000 7,063,000
State Revolving Fund Revenue Bond - 17386
Series 2017, serial maturities through 2037, 2.5% interest rate - 4,503,497 (294,000) 4,209,497 304,000 3,905,497
15,760,000$ 4,503,497$ (1,156,000)$ 19,107,497$ 1,176,000$ 17,931,497$
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, 2018.
DRAFT
553
75
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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,
2019 1,176,000$ 376,310$ 1,552,310$
2020 1,210,000 352,620 1,562,620
2021 1,246,000 328,240 1,574,240
2022 1,282,000 303,150 1,585,150
2023 1,318,000 277,330 1,595,330
2024-2028 7,176,000 972,880 8,148,880
2029-2032 5,699,497 247,345 5,946,842
19,107,497$ 2,857,875$ 21,965,372$
Due within one year $ 1,176,000
Due after one year 17,931,497
19,107,497$
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, 2018.
DRAFT
554
76
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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, 2018, are as follows:
Balance Repayments Balance Long-Term
Interest Rate June 30, 2017 and Settlements June 30, 2018 Due in One Year Portion
Waste Water State Revolving -10252
Series 2010B, serial maturities through 2030 1.75% $ 239,000 $ (18,000) $ 221,000 18,000 203,000$
Waste Water Reclamation Facility Revenue Bonds - 10230,
Series 2010D, serial maturities through 2030 3.00% 6,653,000 (446,000) 6,207,000 459,000 5,748,000
Waste Water Reclamation Facility Revenue Bonds - 10262,
Series 2010F, serial maturities through 2030 3.00% 589,000 (38,000) 551,000 39,000 512,000
Waste Water Reclamation Facility Revenue Bonds ARRA A- 10261,
Series 2010E, serial maturities through 2030 0.00% 384,000 (384,000) - - -
Waste Water Reclamation Facility Revenue Bonds - 11291,
Series 2010C, serial maturities through 2031 3.00% 722,000 (44,000) 678,000 46,000 632,000
Waste Water Reclamation Facility Revenue Bonds - 11292,
Series 2010G, serial maturities through 2031 3.00% 2,184,565 (125,565) 2,059,000 131,000 1,928,000
Waste Water Reclamation Facility Revenue Bonds - 11281
Series 2010H, serial maturities through 2031 3.00%7,085,000 (433,000) 6,652,000 446,000 6,206,000
17,856,565$ (1,488,565)$ 16,368,000$ 1,139,000$ 15,229,000$ DRAFT
555
77
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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:
Waste Water
Principal Interest Total
Year ending June 30,
2019 1,139,000$ 335,059$ 1,474,059$
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 1,287,000 235,239 1,522,239
2024-2028 7,066,000 746,545 7,812,545
2029-2031 3,241,000 73,121 3,314,121
16,368,000$ 2,249,211$ 18,617,211$
Due within one year $ 1,139,000
Due after one year 15,229,000
16,368,000$ Stormwater Revenue Bonds
Waste Water revenue bonds outstanding at June 30, 2018, 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, 2017 Issuances and Settlements June 30, 2018 Due in One Year Portion
Stormwater System Revenue Bond, Series 2015 2.00% $ 1,367,430 $ - $ (75,000) $ 1,292,430 76,000$ 1,216,430$
DRAFT
556
78
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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, 2018, the Revenue Bond outstanding had an aggregate principal amount payable of $209,709 .
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 six 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.
DRAFT
557
79
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 10. CAPITAL LEASE OBLIGATIONS (CONTINUED)
In 2015, the City entered into a lease for a copier. The lease term is five 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.
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, the 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.
In 2018, the City entered into a lease for a 12M3AWD Motor Grader with Caterpillar. The lease term is six years payable in five annual payments
of $31,023 and one payment of $127,840 at 4.55%. The total amount capitalized of $244,531 represents the present value of the future lease payments. The payments for this obligation are being recorded in the street maintenance fund.
In 2018, the City entered into a lease for a printer. The lease term is five years payable in monthly installments of $157. The total amount capitalized
of $8,006 represents the present value of future lease payments. The payments for this obligation are being recorded in the general fund.
DRAFT
558
80
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 10. CAPITAL LEASE OBLIGATIONS (CONTINUED)
The capital lease balance outstanding at June 30, 2018, is as follows:
Balance Balance
June 30, 2017 Issuances Repayments June 30, 2018
Governmental Activities:
Caterpillar 2014 $ 191,879 $ - $ (12,852) $ 179,027
Savin Copier 2015 9,669 - (3,203) 6,466
Snow Blower 2016 68,944 - (11,727) 57,217
Caterpillar 2018 - 244,531 (31,023) 213,508
Canon Printer 2018 - 8,006 (688) 7,318
$ 270,492 $ 252,537 $ (59,493) $ 463,536
Business-Type Activities:
2015 Street Sweeper $ 77,441 -$ $ (24,981) $ 52,460
2015 Vactor Vacuum Truck 213,097 - (50,670) 162,427
$ 290,538 -$ $ (75,651) $ 214,887
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, 2018:
Governmental Business-Type
Activities Activities
Year ending June 30,
2019 $ 68,250 $ 85,346
2020 219,971 85,346
2021 46,839 57,809
2022 46,839 -
2023 135,421 -
2024 - -
Less amount representing interest (53,784) (13,614)
Present value of future minimum lease payments 463,536$ 214,887$
DRAFT
559
81
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 10. CAPITAL LEASE OBLIGATIONS (CONTINUED)
The property under capital lease and the corresponding accumulated depreciation at June 30, 2018, is as follows:
Governmental Business-Type
Activities Activities
Machinery and equipment 585,620$ 521,893$
Less: accumulated depreciation (72,504) (182,663)
513,116$ 339,230$
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.
DRAFT
560
82
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 12. DEFICIT FUND BALANCES
At June 30, 2018, the following fund had a deficit fund balance: Solid Waste fund ($578,328).
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 in fiscal year 2017. Additionally, in fiscal year 2018, there was an unanticipated expense of $256,904 to adjust the estimate for landfill
post-closure costs.
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.
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
2018 and 2017 total payroll and covered payroll for all retirement plans were $23,497,688 and $22,299,750, 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.
DRAFT
561
83
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued) 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.
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.
Second Retirement (requires returning to PERS-covered employer or PERS service):
1. Retire before January 1, 2016 and accumulate less than 2 years additional service credit or retire on or after January 1, 2016 and
accumulate less than 5 years additional service credit:
a) A refund of member’s contributions plus return interest (currently 0.77% effective July 1, 2017);
b) No service credit for second employment;
c) Start the same benefit amount the month following termination; and
DRAFT
562
84
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
Summary of Benefits (Continued)
d) Guaranteed Annual Benefit Adjustment (GABA) starts again in the January immediately following the second
retirement.
2. Retire before January 1, 2016 and accumulate at least 2 years of additional service credit;
a) A recalculated retirement benefit based on provisions in effect after the initial retirement; and
b) GABA starts on the recalculated benefit in the January after receiving the new benefit for 12 months.
3. Retire on or after January 1, 2016 and accumulate 5 or more years of service credit;
a) The same retirement as prior to the return to service;
b) A second retirement benefit as prior to the second of service based on laws in effect upon the rehire date; and
c) GABA starts on both benefits in January after receiving the original and new benefit for 12 months. 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.
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.
DRAFT
563
85
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
Summary of Benefits (Continued)
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.
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.
State &
Universities
Fiscal Year Employer Employer State Employer State
Hired
<07/01/11
Hired
>07/01/11
2018 7.900% 7.900% 8.570% 8.470% 0.100% 8.200% 0.370%
2017 7.900% 7.900% 8.470% 8.370% 0.100% 8.100% 0.370%
2016 7.900% 7.900% 8.370% 8.270% 0.100% 8.000% 0.370%
2015 7.900% 7.900% 8.270% 8.170% 0.100% 7.900% 0.370%
2014 7.900% 7.900% 8.170% 8.070% 0.100% 7.800% 0.370%
2012-2013 6.900% 7.900% 7.170% 7.070% 0.100% 6.800% 0.370%
2010-2011 6.900%7.170% 7.070% 0.100% 6.800% 0.370%
2008-2009 6.900%7.035% 6.935% 0.100% 6.800% 0.235%
2000-2007 6.900%6.900% 6.800% 0.100% 6.800% 0.100%
Member
School DistrictsLocal Government
DRAFT
564
86
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
Overview of Contributions (Continued)
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.
b. Effective July 1, 2013, employers are required to make contributions on working retirees’ compensation. Member contributions for
working retirees are not required.
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 Severance Tax 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.
DRAFT
565
87
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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, 2016,
actuarial valuation and applying standard roll forward procedures to update the TPL to June 30, 2017. There were several significant assumptions and other inputs used to measure the total pension liability. The actuarial assumptions used in the June 30, 2017, valuation were based on the results of the last actuarial experience study, dated May 2017, for the six-year period July 1, 2010 to June 30, 2016. Among those assumptions
were the following:
• Investment Return (net of admin expense) 7.65%
• Admin expense as a % of payroll 0.26%
• General Wage Growth* 3.50%
• *includes Inflation at 2.75%
• Merit Increases 0% to 4.8%
• 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, service retired members and beneficiaries are based on RP 2000 Combined Employee
and Annuitant Mortality Tables projected to 2020 with scale BB, males set back 1 year.
• Mortality assumptions among disabled members are based on RP 2000 Mortality Tables with no projections.
DRAFT
566
88
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 7.65%. 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 2121. 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 2010 through 2016, was outlined in a report dated May 2017 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, 2017, are summarized below.
DRAFT
567
89
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 2.75%
Portfolio Return
Expectation 7.12%
The long-term expected nominal rate of return above 7.12% is an expected portfolio rate of return provided by Board of Investments (BOI),
which differs from the total long-term assumed rate of return of 7.65% in the experience study. The assumed investment rate is comprised of
2.75% inflation rate and a real rate of return of 4.90%
Sensitivity Analysis
As of 1.0% Decrease Current Discount 1.0% Increase
Reporting Date at 6.65%Rate at 8.65%
City of Bozeman Net Pension Liability $29,553,546 $20,291,988 $12,517,611
DRAFT
568
90
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
Sensitivity Analysis (Continued)
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 7.65%, 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. 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 accounting principles generally accepted by the United States of America. MPERA applies all applicable pronouncements of the Governmental Accounting Standards Board (GASB). June 30, 2017 Measurement Date/ June 30, 2018 Reporting Date
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’ System Defined Benefit
Retirement Plan (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, 2017 measurement date for the 2018 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.
DRAFT
569
91
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
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, 2017 was determined by taking the results of the June 30, 2016 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 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.
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, 2018 and 2017, 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 $20,291,988 and the employer’s proportionate share was 1.0419 percent.
As of Reporting Date Net Pension Liability as of
6/30/18
Net Pension Liability as of
6/30/17
Percent of Collective NPL
as of 6/30/18
Percent of Collective NPL
as of 6/30/17
Change in Percent of
Collective NPL
City of Bozeman Proportionate Share $ 20,291,988 $ 17,404,143 1.0419%1.0218%0.0201%
State of Montana Proportionate Share associated 266,967 212,659 1.3606%1.3057%0.0549%
Total 20,558,955$ 17,616,802$ 2.4025%2.3275%0.0750%
DRAFT
570
92
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
Changes in actuarial assumptions and methods:
Effective July 1, 2017, the following assumption changes were used:
• Lowered the interest rate from 7.75% to 7.65%.
• Lowered the inflation rate from 3.00% to 2.75%.
• Updated non-disabled mortality to the RP-2000 Combined Employee and Annuitant Mortality Table projected to 2020 using scale BB,
males set back 1 year.
• Increased rates of withdrawal.
• Lowered the merit component of the total salary increase.
• Lowered the wage base component of the total salary increase from 4.00% to 3.50%.
• Decreased the administrative expense load from 0.27% to 0.26%.
Effective July 1, 2017, the following method changes were used:
• Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the System. This amount will vary from year to year based on the prior year’s actual administrative expenses.
• To be consistent with the wage base growth change, the payroll growth assumption for amortization as a level percent of pay was reduced
from 4.00% to 3.50%. Changes in benefit terms: Effective July 1, 2017, the following benefit changes were:
• The interest rate credited to member accounts increased from 0.25% to 0.77%.
• Lump sum payouts in all systems are limited to the member’s accumulated contributions rather than the present value of the member’s benefit.
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.
DRAFT
571
93
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Public Employees' Retirement System (PERS) (Continued)
Pension Expense
As of reporting date Pension Expense as of
6/30/18
Pension Expense as of
6/30/17
City’s Proportionate Share 2,719,887$ 1,623,925$
Employer Grant Revenue - State of Montana 14,233 17,821
State of Montana Coal Tax for employer 290,280 304,925
Total 3,024,400$ 1,946,671$
At June 30, 2018 (reporting date), the employer recognized a pension expense of $2,719,887 for its proportionate share of the PERS’ pension
expense and recognized grant revenue of $14,233 for the state of Montana proportionate share of the pension expense associated with the employer. Additionally, the employer recognized grant revenue of $290,280 from the Coal Severance Tax fund. Recognition of Deferred Inflows and Outflows
At June 30, 2018, the employer reported its proportionate share of PERS’ deferred outflows of resources and deferred inflows of resources related
to PERS from the following sources:
As of Reporting Date Deferred Outflows of
Resources
Deferred Inflows of
Resources
Expected v. actual experience 499,728$ 29,371$
Projected investment earnings v. actual
investment earnings - 136,282
Changes in assumptions 2,773,703 -
Changes in proportion and differences between
employer contributions and proportionate share
of contributions 883,207 -
Employer contributions subsequent to the
measurement date 1,160,717 -
Total 5,317,355$ 165,653$
DRAFT
572
94
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 the employer’s 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
2019 718,792$
2020 1,586,746$
2021 1,234,144$
2022 (431,906)$
2023 -$
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.
DRAFT
573
95
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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, 2017, 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 300 employers that have participants in the PERS-DCRP totaled $396,650.
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 and benefit formulas
Service Retirement
• Hired on or after July 1, 1981, or has elected to be covered by GABA: o 20 years of membership service
o 2.5% of HAC x years of service credit
DRAFT
574
96
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters’ Unified Retirement System (FURS) (Continued)
Summary of Benefits (Continued)
Eligibility for benefit and benefit formulas (Continued)
• Hired prior to July 1, 1981, and who had not elected to be covered by GABA, the greater of above, or:
o If membership service is less than 20 years:
2% of the highest monthly compensation (HMC) x years of service credit and o If membership service is greater or equal to 20 years:
50% of HMC + 2% of HMC x years of service credit in excess of 20
Early Retirement
• Age 50 with 5 years of membership service Vesting
5 years of membership service for all other rights
Member’s compensation period used in benefit calculation 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 (or
shorter period of total service).
Part-time firefighter: 15% of regular compensation of a newly confirmed full-time firefighter. Compensation Cap Hired on or after July 1, 2013 – 110% annual cap on compensation considered as part of a member’s highest average compensation.
Guaranteed Annual Benefit Adjustment (GABA) Hired on or after July 1, 1997, or those electing GABA, and has been retired for at least 12 months – the member’s benefit increases by 3.0% each January.
DRAFT
575
97
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters’ Unified Retirement System (FURS) (Continued)
Summary of Benefits (Continued)
Minimum Benefit Adjustment (non-GABA) If hired before July 1, 1997 and member did not elect GABA – the minimum benefit adjustment is provided equal to 50% of the current
base compensation of a newly confirmed active firefighter of the employer that last employed the member as a firefighter.
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.
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.
DRAFT
576
98
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters' Unified Retirement System (FURS) (Continued)
Actuarial Assumptions
The TPL used to calculate the NPL was determined by taking the results of the June 30, 2016, actuarial valuation and applying standard roll forward procedures to update the TPL to June 30, 2017. There were several significant assumptions and other inputs used to measure the TPL.
The actuarial assumptions used in the June 30, 2017, valuation were based on the results of the last actuarial experience study, dated May 2017,
for the six- year period July 1, 2010 to June 30, 2016. Among those assumptions were the following:
• Investment Return 7.65%
• Admin expense as a % of payroll 0.23%
• General Wage Growth* 3.50%
*includes Inflation at 2.75%
• Merit Increases 0% to 6.30%
• Postretirement Benefit Increases
o Guaranteed Annual Benefit Adjustment (GABA)
Members hired on or after July 1, 1997, or those electing GABA, and has been retired for at least 12 months, the member’s benefit increases by a maximum of 3% each January. o Minimum Benefit Adjustment (non-GABA) Members hired before July 1, 1997 and member did not elect GABA – the minimum benefit adjustment is provided equal to
50% of the current base compensation of a newly confirmed active firefighter of the employer that last employed the member
as a firefighter.
• 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 2020 using Scale BB, males set back 1 year.
• Mortality assumptions among disabled members are based on RP 2000 Combined Mortality Tables.
Discount Rate The discount rate used to measure the TPL was 7.65%. 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 2124. 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.
DRAFT
577
99
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 2010 through 2016, was outlined in a report dated May 2017 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, 2017, 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 2.75%
Portfolio Return
Expectation 7.12%
The long-term nominal rate of return above 7.12% is an expected portfolio rate of return provided by the Board of Investments (BOI), which
differs from the total long-term assumed rate of return of 7.65% in the experience study. The assumed investment rate is comprised of a 2.75% inflation rate and a real rate of return of 4.90%.
DRAFT
578
100
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 7.65%, 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 (6.65%)Discount Rate (8.65%)
City of Bozeman's Net Pension
Liability $4,412,573 $2,655,380 $1,235,660
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).
June 30, 2017 Measurement Date/ June 30, 2018 Reporting Date
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, 2017
measurement date for the 2018 reporting.
DRAFT
579
101
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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, 2017 was determined by taking the results of the June 30, 2016 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’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, 2018 and 2017 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 $2,655,380 and the employer’s proportionate share was 2.3492 percent.
DRAFT
580
102
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters' Unified Retirement System (FURS) (Continued)
Net Pension Liability (Continued)
As of Reporting Date NPL as of 6/30/18 NPL as of 6/30/17
Percent of Collective
NPL as of 6/30/18
Percent of Collective
NPL as of 6/30/17
Change in Percent of
Collective NPL
City Proportionate Share $ 2,655,380 $ 2,707,390 2.3492%2.3705%-0.0213%
State of Montana Proportionate
Share associated with Employer 6,030,078 6,134,093 5.3347%5.3707%-0.0360%Total 8,685,458$ 8,841,483$ 7.6839%7.7412%-0.0573% Changes in actuarial assumptions and methods:
Effective July 1, 2017, the following assumption changes were used:
• Lowered the interest rate from 7.75% to 7.65%.
• Lowered the inflation rate from 3.00% to 2.75%.
• Updated non-disabled mortality to the RP-2000 Combined Employee and Annuitant Mortality Table projected to 2020 using scale BB,
males set back 1 year.
• Increased the rates of withdrawal.
• Lowered the wage base component of the total salary increase from 4.00% to 3.50%.
• Increased the administrative expense load from 0.19% to 0.23%.
Effective July 1, 2017, the following method changes were used:
• Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the System. This amount
varies from year to year based on the prior year’s actual administrative expenses.
• To be consistent with the wage base growth change, the payroll growth assumption for amortization as a level percent of pay was reduced from 4.00% to 3.50%.
Changes in benefit terms:
Effective July 1, 2017, the following benefits were:
• The interest rate credited to member accounts increased from 0.25% to 0.77%.
• Working Retiree Limitations applies to retirement system members who return on or after July 1, 2017 to covered employment in the
system from which they retired.
DRAFT
581
103
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters' Unified Retirement System (FURS) (Continued)
Changes in benefit terms (Continued):
• Second Retirement Benefit applies to retirement system members who return on or after July 1, 2017 to active service covered by the
system from which they retired.
• Lump sum payouts in all systems are limited to the member’s accumulated contributions rather than the present value of the member’s benefit.
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.
Pension Expense
As of reporting date Pension Expense as of 6/30/18 Pension Expense as of 6/30/17
City’s Proportionate Share 388,062$ 343,924$
Employer Grant Revenue - State of Montana Proportionate Share for
Employer 1,145,218 795,231
Total 1,533,280$ 1,139,155$ At June 30, 2018 reporting date, the employer recognized its proportionate share of the FURS’ pension expense of $388,062. The employer also recognized grant revenue of $1,145,218 for the support provided by the State of Montana for the proportionate share of the pension expense
that is associated with the employer.
Recognition of Deferred Inflows and Outflows
At June 30, 2017, the employer reported its proportionate share of FURS' deferred outflows of resources and deferred inflows of resources related to FURS from the following sources:
DRAFT
582
104
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Firefighters' Unified Retirement System (FURS) (Continued)
Recognition of Deferred Inflows and Outflows (Continued)
Deferred Outflows of Resources Deferred Inflows of Resources
Expected v. actual experience 17,494$ 20,082$
Projected investment earnings v. actual investment earnings 2,190$ -$
Changes in assumptions 331,147$ -$
Changes in proportion and differences between employer
contributions and proportionate share of contributions -$ 54,482$
Employer contributions subsequent to the measurement date 535,161$ -$
Total 885,992$ 74,564$
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
2019 26,828$
2020 140,698$
2021 91,603$
2022 1,892$
Thereafter 69,728$ DRAFT
583
105
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 and benefit formulas
Service retirement:
• 20 years of membership service, regardless of age
• Age 50, 5 years of membership service
• 2.5% of FAC x years of service credit Second retirement: (applies to members re-employed in a MPORS position after July 1, 2017):
1) If the member works more than 480 hours in a calendar year and accumulates less than 5 years of service credit before
terminating again, the member:
a. Is not awarded service credit for the period of reemployment;
DRAFT
584
106
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Municipal Police Officers’ Retirement System (MPORS)
Summary of Benefits (Continued)
Eligibility for benefit (Continued) b. Is refunded the accumulated contributions associated with the period of reemployment;
c. Starting the first month following termination of service, receives the same retirement benefit previously paid to the
member; and d. Does not accrue post-retirement benefit adjustments during the term of reemployment but receives a Guaranteed Annual
Benefit Adjustment (GABA) in January immediately following second retirement.
2) If the member works more than 480 hours in a calendar year and accumulates at least 5 years of service credit before terminating
again, the member:
a. Is awarded service credit for the period of reemployment; b. Starting the first month following termination of service, receives:
i. The same retirement benefit previously paid to the member, and
ii. A second retirement benefit for the period of reemployment calculated based on the laws in effect as of the
member’s rehire date; and
c. Does not accrue post-retirement benefit adjustments during the term of reemployment but receives a GABA: i. On the initial retirement benefit in January immediately following second retirement, and
ii. On the second retirement benefit starting in January after receiving that benefit for at least 12 months.
3) A member who returns to covered service is not eligible for a disability benefit.
Vesting 5 years of membership service
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.
DRAFT
585
107
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Municipal Police Officers' Retirement System (MPORS) (Continued)
Summary of Benefits (Continued) Compensation Cap Hired on or after July 1, 2013 – 110% annual cap on compensation considered as part of a member’s highest FAC.
Guaranteed Annual Benefit Adjustment (GABA)
Hired on or after July 1, 1997, or those electing GABA, and has been retired for at least 12 months, a GABA will be made each year in
January equal to 3.0%.
Minimum Benefit Adjustment (non-GABA) If hired before July 1, 1997 and member did not elect GABA, the minimum benefit adjustment provided is equal to 50% of the current
base compensation of a newly confirmed police officer of the employer that last employed the member as a police officer.
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 State Legislature has the authority to establish and amend
contribution rates. Member and employer contribution rates are shown in the table below.
Fiscal Year Hired <7/1/75 Hired >6/30/75 Hired >6/30/79
Hired >6/30/97
GABA Employer State
2000-2018 5.800% 7.000% 8.500% 9.000% 14.410% 29.370%
1998-1999 7.800% 9.000% 10.500% 11.000% 14.410% 29.370%
1997 7.800% 9.000% 10.500%14.360% 29.370%
Member
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 both are available on the MPERA website at http://mpera.mt.gov.
DRAFT
586
108
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Municipal Police Officers' Retirement System (MPORS) (Continued)
Actuarial Assumptions The TPL used to calculate the NPL was determined by taking the results of the June 30, 2016, actuarial valuation and applying standard roll forward procedures to update the TPL to June 30, 2017. There were several significant assumptions and other inputs used to measure the TPL.
The actuarial assumptions used in the June 30, 2017, valuation were based on the results of the last actuarial experience study, dated May 2017,
for the six- year period July 1, 2010 to June 30, 2016. Among those assumptions were the following:
• Investment Return (net of admin expense) 7.65%
• Admin Expense as % of Payroll 0.24%
• General Wage Growth* 3.50%
*includes Inflation at 2.75%
• Merit Increases 0% to 6.60%
• Postretirement Benefit Increases
i. Guaranteed Annual Benefit Adjustment (GABA)
Hired on or after July 1, 1997, or those electing GABA, and has been retired for at least 12 months, a GABA will be made each year in January equal to 3%.
ii. Minimum benefit adjustment (non-GABA)
If hired before July 1, 1997 and member did not elect GABA, the minimum benefit adjustment provided is equal to 50%
of the current base compensation of a newly confirmed police officer of the employer that last employed the member as
a police officer.
• Mortality assumptions among contributing members, service retired members and beneficiaries were based on RP 2000 Combined
Employee and Annuitant Mortality Tables projected to 2020 using scale BB, set back one year for males.
• Mortality assumptions among Disabled Retirees were based on RP 2000 Combined Mortality Tables.
Discount Rate The discount rate used to measure the TPL was 7.65%. 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 2124. 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.
DRAFT
587
109
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 2010 through 2016, was outlined in a report dated May 2017 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, 2017, 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 2.75%
Portfolio Return
Expectation 7.12%
The long-term expected nominal rate of return above of 7.12% is an expected portfolio rate of return provided by the Board of Investments
(BOI), which differs from the total long-term assumed rate of return of 7.65% in the experience study. The assumed investment rate is
comprised of a 2.75% inflation rate and a real rate of return of 4.90%. 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 7.65%, 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.
DRAFT
588
110
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Municipal Police Officers' Retirement System (MPORS) (Continued)
Sensitivity Analysis (Continued)
As of 1.0% Decrease Current 1.0% Increase
Reporting Date (6.65%)Discount Rate (8.65%)
City of Bozeman's Net Pension
Liability $7,875,682 $5,408,979 $3,431,203
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.
June 30, 2017 Measurement Date/ June 30, 2018 Reporting Date
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, 2017
measurement date for the 2018 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.
DRAFT
589
111
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Municipal Police Officers' Retirement System (MPORS) (Continued)
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, 2017 was determined by taking the results of the June 30, 2016 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, 2018 and 2017 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 $5,408,979 and the employer’s proportionate share was 3.0402 percent.
As of Reporting Date NPL as of 6/30/2018 NPL as of 6/30/2017
Percent of
Collective NPL as
of 6/30/2018
Percent of
Collective NPL as
of 6/30/2017
Change in Percent
of Collective NPL
City Proportionate Share 5,408,979$ 5,552,007$ 3.0402%3.0842%-0.0440%
State of Montana Proportionate
Share associated with Employer 11,024,418$ 11,020,975$ 6.1965%6.1223%0.0742%
Total 16,433,397$ 16,572,982$ 9.2367%9.2065%0.0302%
DRAFT
590
112
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Municipal Police Officers' Retirement System (MPORS) (Continued)
Changes in actuarial assumptions and methods: Effective July 1, 2017, the following assumption changes were used:
• Lowered the interest rate from 7.75% to 7.65%.
• Lowered the inflation rate from 3.00% to 2.75%.
• Updated non-disabled mortality to the RP-2000 Combined Employee and Annuitant Mortality Table projected to 2020 using scale BB, males set back 1 year.
• Increased the rates of withdrawal.
• Lowered the merit component of the total salary increase.
• Lowered the wage base component of the total salary increase from 4.00% to 3.50%.
• Increased the administrative expense load from 0.20% to 0.24%.
Effective July 1, 2017, the following method changes were used:
• Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the System. This amount
varies from year to year based on the prior year’s actual administrative expenses.
• To be consistent with the wage base growth change, the payroll growth assumption for amortization as a level percent of pay was reduced from 4.00% to 3.50%.
Changes in benefit terms:
Effective July 1, 2017, the following benefit changes were:
• The interest rate credited to member accounts increased from 0.25% to 0.77%.
• Working Retiree Limitations applies to retirement system members who return on or after July 1, 2017 to covered employment in the
system from which they retired.
• Second Retirement Benefit applies to retirement system members who return on or after July 1, 2017 to active service covered by the system from which they retired.
• Lump sum payouts in all systems are limited to the member’s accumulated contributions rather than the present value of the member’s
benefit.
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.
DRAFT
591
113
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Municipal Police Officers' Retirement System (MPORS) (Continued)
Pension Expense
As of reporting date Pension Expense as of
6/30/18
Pension Expense as of
6/30/18
City's Proportionate Share 657,460$ 629,731$
State of Montana Proportionate Share associated with the City 1,335,293 1,180,946
Total 1,992,753$ 1,810,677$
At June 30, 2018, the employer recognized its proportionate share of the MPORS’ pension expense of $657,460. The employer also recognized grant revenue of $1,335,293 for the support provided by the state of Montana for the proportionate share of the pension expense that is associated
with the employer.
Recognition of Deferred Inflows and Outflows
At June 30, 2017, the employer reported its proportionate share of MPORS' deferred outflows of resources and deferred inflows of resources related to MPORS from the following sources:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Expected v. actual experience -$ 184,557$
Projected investment earnings v. actual investment earnings 4,701 -
Changes in assumptions 365,094 -
Changes in proportion and differences between employer
contributions and proportionate share of contributions 17,797 -
Employer contributions subsequent to the measurement date 667,011 -
Total 1,054,603$ 184,557$
DRAFT
592
114
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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
2019 (7,698)$
2020 154,243$
2021 118,463$
2022 (79,770)$
2023 -$
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).
DRAFT
593
115
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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. No assets are accumulated in a trust that meets the criteria in paragraph 4 of
Statement 75.
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%.
Employees Covered by Benefit Terms
At June 30, 2018, the following employees were covered by the benefit terms: Category Count
Active employees 435
Inactive employees entitled to but not yet receiving benefit payment 0
Inactive employees or beneficiaries currently receiving benefit payments 74 Total 509
Contributions
Benefit contributions are paid by the City as they come due.
Total OPEB Liability (TOL) The City’s total OPEB liability of $2,694,455 was measured as of June 30, 2017, and was determined by an actuarial valuation as of July 1, 2016.
DRAFT
594
116
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED)
Changes in the TOL for the year ended June 30, 2018 are as follows:
Service cost 256,948$
Interest on net OPEB obligation 81,562
Employee contributions 431,737
Benefits paid (431,737)
Changes in assumptions (662,285)
Net changes in OPEB obligation (323,775)
Net OPEB obligation - beginning of year 3,009,656
Net OPEB obligation - end of year 2,685,881$
There is sensitivity of the TOL to changes in the discount rate. The TOL of the City as well as what the City’s TOL would be if it were
calculated using a discount rate that is one percentage point lower (2.13%) or one percentage point higher (4.13%) follows:
1% Decrease Discount Rate 1% Increase
(2.13%) (3.13%) (4.13%)
Total OPEB liability 2,972,805$ 2,694,455$ 2,447,164$
There is also sensitivity of the TOL to changes in the healthcare cost rates. The TOL of the City as well as what the City’s TOL would be if
it were recalculated using healthcare cost trend rates that are one percentage point lower (6.35%) or one percentage point higher (9.50%)
than the current healthcare cost trend rate follows:
1% Decrease Discount Rate 1% Increase
(6.35%) (7.35%) (8.35%)
Total OPEB liability 2,354,843$ 2,694,455$ 3,106,137$
DRAFT
595
117
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED)
For the year ended June 30, 2018, the City recognized an OPEB expense of $283,158. At June 30 2018, the City reported deferred outflows of
resources and deferred inflows of resources related to OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Changes of assumptions -$ 598,359$
Total -$ 598,359$
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as
follows:
Year Ended June 30:
2019 (55,352)$
2020 (55,352)
2021 (55,352)
2022 (55,352)
2023 (55,352)
Thereafter (321,599)
Total (598,359)$
DRAFT
596
118
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED)
The June 30, 2018, year-end OPEB cost is reported in the City’s funds as follows:
Functions/Programs Expenses
PRIMARY GOVERNMENT
Governmental activities:
General government 47,627$
Public safety 82,059
Public service 15,517
Public welfare 72,715
Total governmental activities 217,918
Business-type activities:
Water 27,693
Waste water 16,055
Solid waste 13,139
Parking 3,851
Storm water 4,502
Total business-type activities 65,240
Total primary government 283,158$
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 2018. For fiscal year 2018, 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 total OPEB liability was
determined using the following actuarial assumptions:
DRAFT
597
119
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED)
The following key assumptions were chosen by the City:
1. Discount Rate: 3.13% for determining fiscal 2018 disclosure and estimated fiscal 2019 expense; 2.71% for determining fiscal 2017 liability
and fiscal 2018 expense.
2. Inflation Rate: 2.5% long-term
3. Expected Real Rate of Return on Assets: N/A
4. Health Care Claim and Contribution Trend Rates: Updated from 7.35% initial in fiscal 2015 and 4.0% ultimate in fiscal 2035 to 7.35%
initial in fiscal 2018 and 4.50% 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: 3.00%
6. Retirement Rates: Updated according to the Fiscal Year 2017 Montana State Retirement System Valuation Assumptions
7. Retiree Participation Rate: 30%
8. Lapse Rate: 25% per year
9. Marriage Assumption: For future retirees, 60% of participants are assumed to be married, with husbands 3 years older than wives.
10. ACA Excise Tax: Results include an estimate of future ACA Excise Tax costs based on upon loading health care trend rates by 1% in
fiscal years 2036 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 discount rate was based on a yield or index rate for a 20-year, tax-exempt, general obligation municipal bond with an average rating of AA/Aa or higher. Rates were taken from the S&P municipal bond 20 year high rate index as of the measurement date.
For police and fire employees, mortality rates were based on the SOA RP-204 Blue Collar Mortality, with adjustments for mortality improvements
based on Scale MP-2017. All other occupations’ mortality rates were based on SOA RP-2014 Combined Healthy Mortality Table, with adjustments
for mortality improvements based on Scale MP-2017.
Projections of the sharing of benefit-related costs for financial reporting purposes are based on an established pattern of practice.
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.
DRAFT
598
120
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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. As of June 30, 2018, the
City has entered into joint venture contractual arrangements, as described below.
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.
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 December 31, 2018 through
December 31, 2019. The payments have been accrued as a liability and deferred outflow of resources in the governmental activities as of June 30,
2018.
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.
The County and City have entered into various other joint venture contractual arrangements, memorandums of understanding and inter-local agreements to support the following programs and/or operations: Victim Witness, Hazardous Materials, Solid Waste (Disposal and Convenient
Site), Fire Warden/Chief, Evidence Technician, Library Services, Board of Health, and rental of the Law and Justice Center. The financial interests
are not material.
DRAFT
599
121
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 $1 million
in profits from the sale of city-owned property known as the Mandeville Farm. The agreement came about as part of a settlement on legal claims from the City of Bozeman vs. MMIA litigation. A “profit” shall occur only when the City has recovered its total investment in the property, which
includes the original purchase price together with all “costs of development” as defined in the settlement agreement.
NOTE 17. RESTRICTED NET POSITION
At June 30, 2018, the balances of restricted net position for business-type activities are as follows:
Waste Water Solid Waste Nonmajor
Water Fund Fund
Fund Enterprise Total
Restricted by revenue bond covenants:
For bond reserve 1,313,885$ 1,788,592$ -$ -$ 3,102,477$
Restricted by ordinance:
Cash in lieu of parking - - - 393,434 393,434
Impact fees 5,313,531 3,942,240 - - 9,255,771
6,627,416$ 5,730,832$ -$ 393,434$ 12,751,682$
Business-Type Activities
DRAFT
600
122
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 18. INTERFUND TRANSFERS AND ASSETS/LIABILITIES
A summary of interfund transfers reported in the fund financial statements for the year ended June 30, 2018, follows:
Street Street Nonmajor Nonmajor
General Fund Impact Fee Maintenance Governmental Water Solid Waste Storm Water Enterprise Total
General Fund -$ -$ -$ 2,323,901$ -$ -$ -$ -$ 2,323,901$
Street Impact Fees - - - - - - - - -
Street Maintenance - - - 31,900 - - - - 31,900
Nonmajor Governmental 124,000 - 1,313,800 600,676 - - - - 2,038,476
Water Enterprise - - - - - - - - -
Solid Waste Enterprise 368,084 - - - - - - 368,084
Nonmajor Enterprise 140,000 - - 250,000 - - - - 390,000
Total 632,084$ -$ 1,313,800$ 3,206,477$ -$ -$ -$ -$ 5,152,361$
Governmental Funds
Transfers From
Proprietary Funds
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.
DRAFT
601
123
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 18. INTERFUND TRANSFERS AND ASSETS/LIABILITIES (CONTINUED)
A summary of advances and due from/to other funds at June 30, 2018, is as follows:
Advances to Advances from
other City funds other City funds
Non-major Governmental Funds:
SID Sinking Debt Service -$ 510,503$
SID Revolving Debt Service 510,503 -
510,503$ 510,503$
Due from Due to
other City funds other City funds
Major Funds:
General fund 76,631$ -$
Non-major Governmental Fund:
Housing Revolving Loan - 922
TIFD South Bozeman Technology - 7,626
Internal Service Fund:
Vehicle Maintenance - 68,083
76,631$ 76,631$
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.
DRAFT
602
124
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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, 2018, 2017, and 2016.
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.
DRAFT
603
125
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 $2,292,253, which is
its estimate of future landfill closure and post-closure care costs as of June 30, 2018. This amount is based on a Corrective Measures Assessment
completed in September 2014 by a third party engineering firm, from which a remediation plan has been adopted by the City and has been approved
the Montana Department of Environmental Quality. The cost of post closure care is an estimate and is subject to changes resulting from inflation, deflation, technology, or changes in applicable laws or regulations.
The Solid Waste Fund accounts for the City’s solid waste collection, recycling, and disposal utility operation – including assets, liabilities, and
post-closure costs associated with the closed Story Mill landfill. Segment information for the landfill is as follows:
Condensed Statement of Net Position
Restricted cash and cash equivalents 180,211$
Capital assets, net of depreciation 933,836
Total assets 1,114,047$
Current liabilities 39,866$
Closure and post-closure care cost 2,292,253
Total liabilities 2,332,119
Restricted for debt service (1,218,072)
Total net position (1,218,072)
Total liabilities and net position 1,114,047$
DRAFT
604
126
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 61,764
Change in post closure cost estimate 256,904
Other operating 15,759
Total operating expenses 334,427
Operating loss (334,427)
Non-operating revenues (expenses):
Interest expense 2,914
Other income -
Loss on the sale of assets -
Transfers 368,084
Total non-operating revenues 370,998
Change in net position 36,571
Net position, beginning of year (1,254,644)
Net position, end of year (1,218,073)$
DRAFT
605
127
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 21,235,670$
Capital assets 136,848,070
Other assets 786,410
Total assets 158,870,150$
Current liabilities 2,185,684$
Non-current liabilities 21,744,486
Total liabilities 23,930,170
Net investment in capital assets 117,498,251
Restricted for debt service 1,517,560
Unrestricted 15,924,169
Total net position 134,939,980
Total liabilities and net position 158,870,150$ DRAFT
606
128
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 10,157,888$
Operating expenses:
Depreciation 2,675,595
Other operating 6,389,828
Total operating expenses 9,065,423
Operating loss 1,092,465
Non-operating revenues (expenses)
Interest income 4,010
Interest expense (586,656)
Grant income 59,030
Gain on sale of assets 5,970
Contributions of infrastructure 4,874,798
Other income 1,082,690
Transfers -
Total non-operating revenues 5,439,842
Change in net position 6,532,307
Net position, beginning of year 128,407,673
Net position, end of year 134,939,980$
Condensed Statement of Cash Flows
Net cash provided by operating activities 4,667,166$
Net cash flows from capital and related financing activities (1,630,887)
Net cash flows from noncapital and financing activities -
Net cash flows from investing activities 410
Net change in cash flows 3,036,689
Beginning cash and equivalents 17,397,797
Ending cash and equivalents 20,434,486$
DRAFT
607
129
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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 $129,042, respectively, as of June 30, 2018. The Fire Impact Fee Fund does
not have any outstanding credits. The following impact fee revenues were collected and expensed/expended during fiscal year 2018:
Expenses,
Beginning Expenditures,
Balances Impact Fees Other Income and Transfers Ending Balances
Fire 1,550,752$ 599,364$ -$ (44,984)$ 2,105,132$
Water 3,545,442 2,757,566 - (153,080) 6,149,928
Waste water 2,601,891 1,810,489 - (83,977) 4,328,403
Streets 11,649,617 5,523,019 1,255 (7,824,644) 9,349,247
Total 19,347,702$ 10,690,438$ 1,255$ (8,106,685)$ 21,932,710$
DRAFT
608
130
CITY OF BOZEMAN, MONTANA
NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
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.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 24. POLLUTION REMEDIATION OBLIGATIONS (CONTINUED)
CMC Asbestos Bozeman CECRA Facility (Continued)
The City has an ongoing claim against the State orphan share for the orphan share funds’ proportional share of these 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
On June 11, 2018, the City Commission authorized the City Manager to sign a final $1.7 million loan agreement with First Security Bank at a later date when funds would be needed and issued for continued improvements to the Bozeman Sports Park, one of the projects identified for funding
by the Trail and Open Space General Obligation Bond.
The terms of the loan are as follows: • 3.74% Interest Rate • 20 year Term
• $0 origination fee
• Bi-annual payments
• Interest only payments until June 2020 The Sports Park Foundation will provide the funding for the payments through their management of the Sports Park and debt agreements with the
City. The City’s General Fund will take on this debt and make payments. The Revenue generated at the Sports Park Foundation will offset the
payment. As of the report date, no funds have been issued pursuant to this loan agreement.
On November, 6, 2018, voters approved the issuance of General Obligation Bonds for the Bozeman Public Safety Center in the amount of $36,965,000 for the purpose of paying, with other available funds of the City, the costs of designing, constructing, equipping and furnishing on
City-owned land at the corner of East Oak Street and North Rouse Avenue a new Bozeman Public Safety Center, to include the City's Fire Station
#1, Police Department Headquarters, Municipal Courts, Prosecution, Victim Services, other justice services, associated site improvements, and
costs associated with the sale and issuance of the bonds for the Bozeman Public Safety Center. A lawsuit has been filed by local citizens challenging the fairness and legality of the election procedures followed by City officials. As of the report
date this issue remains unresolved.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2018
NOTE 26. NET POSITION COMPOSITION
The table presented below displays the City’s fund balances by major purpose as displayed on page 42 of the governmental funds balance sheet.
Street Street Nonmajor Total
General Impact Fees Maintenance Governmental Governmental
Fund Special Revenue Special Revenue Funds Funds
Nonspendable
Prepaids -$ -$ -$ 312,375$ 312,375$
Cemetery perpetual care - - - 1,311,441 1,311,441
Total nonspendable - - - 1,623,816 1,623,816
Restricted
General government-Planning - - - 1,515,730 1,515,730
General government-Health Insurance - - - 411,839 411,839
General government-other - - - 105 105
Public safety - Building Inspection - - - 1,782,768 1,782,768
Public safety-Fire Impact - - - 2,105,133 2,105,133
Public safety-Victim Witness - - - 383,546 383,546
Public safety-other - - - 106,847 106,847
Public service - 9,349,249 528,760 1,781,963 11,659,972
Public service - Gas Tax - - - 1,339,441 1,339,441
Public service - Community Transportation - - - 58,425 58,425
Public service - Lighting Districts - - - 532,069 532,069
Public welfare - Tax Increment Districts - - - 188,908 188,908
Public welfare - Econ Develop Loan Fund - - - 810,753 810,753
Public welfare - Tree Maint. District - - - 345,584 345,584
Public welfare - other - - - 4,593,354 4,593,354
Capital projects-Trail Open Space Parks - - - 3,658,296 3,658,296
Debt service-SID Sinking - - - 1,399,446 1,399,446
Debt service-SID Revolving Fund - - - 3,423,680 3,423,680
Debt service-GO Bonds - - - 87,848 87,848
Total restricted - 9,349,249 528,760 24,525,735 34,403,744
Committed
Public safety - - - 970,808 970,808
Public welfare - - - 2,547,902 2,547,902
Capital projects - - - 337,528 337,528
Total committed - - - 3,856,238 3,856,238
Assigned
General government 2,161,657 - - - 2,161,657
Public welfare - - - 1,200 1,200
Capital projects 258,108 - - 1,867,285 2,125,393
Budget ordinance minimum 16.67%5,319,255 - - - 5,319,255
Total assigned 7,739,020 - - 1,868,485 9,607,505
Unassigned (274,252) - - (42,648) (316,900)
Total net position 7,464,768$ 9,349,249$ 528,760$ 31,831,626$ 49,174,403$
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C. REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN
MANAGEMENT DISCUSSION AND ANALYSIS
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SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY & RELATED RATIOS Year Ended June 30, 2018
Assets are not accumulated in a trust that meets the criteria in GASB Statement No. 75, paragrpah 4 to pay related benefits. The total OPEB liability and ratio of OPEB liability as a percentage of covered-employee payroll as of June 30, 2018 is determined as follows:
Total OPEB Liability 2018
Service cost 256,948$
Interest 81,562
Assumption changes (662,285)
Employe contributions 431,737
Benefit payments (431,737)
Net change in total OPEB liability (323,775)
Total OPEB liability - beginning of year 3,009,656
Total OPEB liability - ending of year 2,685,881$
Covered-employee payroll 45,345,305$
Total OPEB liability as a percentage of
covered-employee payroll 5.94%
Assumption changes. Changes of assumptions reflect the effects of changes in the discount rate used each period. The following are the
discount rates used for each period presented: DRAFT
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CITY OF BOZEMAN, MONTANA
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY & RELATED RATIOS Year Ended June 30, 2018
Schedule of Proportionate Share of the Net Pension Liability:
As of Reporting Date 2018 2017 2016 2015
Employer's proportion of the net pension liability (percentage)1.0419% 1.0218% 0.9588% 0.91505%
Employer's net pension liability (amount) $ 20,291,988 $ 17,404,143 $ 13,403,285 $ 11,401,613
State's net pension liability (amount) $ 266,967 $ 212,659 $ 164,637 $ 139,231
Total $ 20,558,955 $ 17,616,802 $ 13,567,922 $ 11,540,844
Employer's covered payroll $ 12,924,792 $ 12,238,920 $ 11,189,797 $ 10,479,122
Employer's proportionate share as a percent of covered payroll 157.00% 142.20% 119.78% 111.22%
Plan fiduciary net position as a percent of total pension liability 73.75%74.71%78.40% 79.9000%
Schedule of Contributions:
As of Reporting Date 2018 2017 2016 2015
Contractually required DB contributions $ 1,160,717 $ 1,081,810 $ 1,022,996 $ 922,084
Plan choice rate required contributions $ - $ - $ 28,892 $ 52,151
Contributions in relation to the contractually required contributions $ 1,160,717 $ 1,081,810 $ 1,051,888 $ 974,235
Contribution deficiency (excess) $ - $ - $ - $ -
Employer's covered payroll $ 13,703,797 $ 12,924,792 $ 12,238,920 $ 11,189,797
Contributions as a percent of covered payroll 8.4700% 8.3700%8.59%8.71%
PERS
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.
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SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY AND SCHEDULE OF CONTRIBUTIONS
Year Ended June 30, 2018
Schedule of Proportionate Share of the Net Pension Liability:
As of Reporting Date 2018 2017 2016 2015
Employer's proportion of the net pension liability (percentage)1.0419% 1.0218% 0.9588% 0.91505%
Employer's net pension liability (amount) $ 20,291,988 $ 17,404,143 $ 13,403,285 $ 11,401,613
State's net pension liability (amount) $ 266,967 $ 212,659 $ 164,637 $ 139,231
Total $ 20,558,955 $ 17,616,802 $ 13,567,922 $ 11,540,844
Employer's covered payroll $ 12,924,792 $ 12,238,920 $ 11,189,797 $ 10,479,122
Employer's proportionate share as a percent of covered payroll 157.00% 142.20% 119.78% 111.22%
Plan fiduciary net position as a percent of total pension liability 73.75%74.71%78.40% 79.9000%
Schedule of Contributions:
As of Reporting Date 2018 2017 2016 2015
Contractually required DB contributions $ 1,160,717 $ 1,081,810 $ 1,022,996 $ 922,084
Plan choice rate required contributions $ - $ - $ 28,892 $ 52,151
Contributions in relation to the contractually required contributions $ 1,160,717 $ 1,081,810 $ 1,051,888 $ 974,235
Contribution deficiency (excess) $ - $ - $ - $ -
Employer's covered payroll $ 13,703,797 $ 12,924,792 $ 12,238,920 $ 11,189,797
Contributions as a percent of covered payroll 8.4700% 8.3700%8.59%8.71%
PERS
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.
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SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY AND SCHEDULE OF CONTRIBUTIONS (CONTINUED)
Year Ended June 30, 2018
Schedule of Proportionate Share of the Net Pension Liability:
As of Reporting Date 2018 2017 2016 2015
Employer's proportion of the net pension liability (percentage)2.3492% 2.3705% 2.4336% 2.4192%
Employer's net pension liability (amount) $ 2,655,380 $ 2,707,390 $ 2,489,054 $ 2,361,551
State's net pension liability (amount) $ 6,030,078 $ 6,134,093 $ 5,543,784 $ 5,327,544
Total $ 8,685,458 $ 8,841,483 $ 8,032,838 $ 7,689,095
Employer's covered payroll $ 3,511,860 $ 3,338,041 $ 3,270,451 $ 3,142,481
Employer's proportionate share as a percent of covered payroll 75.61%81.11%76.11%75.15%
Plan fiduciary net position as a percent of total pension liability 77.77%75.48%76.90%76.70%
Schedule of Contributions:
As of Reporting Date 2018 2017 2016 2015
Contractually required contributions $ 535,161 $ 504,303 $ 477,250 $ 478,776
Contributions in relation to the contractually required contributions $ 535,161 $ 504,303 $ 477,250 $ 478,776
Contribution deficiency (excess) $ - $ - $ - $ -
Employer's covered payroll $ 3,726,746 $ 3,511,860 $ 3,338,041 $ 3,270,451
Contributions as a percent of covered payroll 14.36%14.36%14.03%14.64%
*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.
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.
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SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY AND SCHEDULE OF CONTRIBUTIONS (CONTINUED)
Year Ended June 30, 2018
Schedule of Proportionate Share of the Net Pension Liability:
2018 2017 2016 2015
Employer's proportion of the net pension liability (percentage)3.0402% 3.0842% 2.9746% 3.0209%
Employer's net pension liability (amount) $ 5,408,979 $ 5,552,007 $ 4,920,638 $ 4,746,933
State's net pension liability (amount) $ 11,024,418 $ 11,020,975 $ 9,969,680 $ 9,589,371
Total $ 16,433,397 $ 16,572,982 $ 14,890,318 $ 14,336,304
Employer's covered payroll $ 4,555,121 $ 4,353,897 $ 4,116,930 $ 4,053,265
Employer's proportionate share as a percent of covered payroll 118.75% 127.52% 119.52% 117.11%
Plan fiduciary net position as a percent of total pension liability 68.34%65.62%66.90%67.01%
Schedule of Contributions:
2018 2017 2016 2015
Contractually required contributions $ 667,011 $ 655,143 $ 637,789 $ 596,791
Contributions in relation to the contractually required contributions $ 667,011 $ 655,143 $ 637,789 $ 596,791
Contribution deficiency (excess) $ - $ - $ - $ -
Employer's covered payroll $ 4,628,804 $ 4,555,121 $ 4,353,897 $ 4,116,930
Contributions as a percent of covered payroll 14.41%14.38%14.65%14.50%
*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.
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.
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NOTES TO REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN CHANGES Year Ended June 30, 2018
CHANGE OF BENEFIT TERMS The following changes to the PERS, FURS, and MPORS plan provisions were made as identified:
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%)
• 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. 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.
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NOTES TO REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN CHANGES Year Ended June 30, 2018
CHANGE OF BENEFIT TERMS (CONTINUED)
2017 Legislative Changes – PERS:
General Revisions – House Bill 101, effective July 1, 2017 Working Retiree Limitations – for PERS
If a PERS retiree returns as an independent contractor to what would otherwise be PERS-covered employment, general contractor
overhead costs are excluded from PERS working retiree limitations.
Terminating Employers – Recovery of actuary costs – for PERS
Employers who terminate participation in PERS must pay the actuarial liability associated with that termination. Starting July 1, 2017,
the terminating employer must also pay for the cost of the actuarial study used to determine that liability.
Refunds 1) Terminating members eligible to retire may, in lieu of receiving a monthly retirement benefit, refund their accumulated contributions in a
lump sum.
2) Terminating members with accumulated contributions between $200 and $1,000 who wish to rollover their refund must do so within 90
days of termination of service.
3) Trusts, estates, and charitable organizations listed as beneficiaries are entitled to receive only a lump-sum payment. Family Law Orders If a Family Law Order (FLO) is silent regarding the apportionment of post-retirement benefit adjustments such as the Guaranteed Annual
Benefit Adjustment (GABA), the FLO is presumed to require apportionment of the post-retirement benefit adjustment in the same
percentage as the monthly retirement benefit is apportioned. Disabled PERS Defined Contribution (DC) Members PERS members hired after July 1, 2011 have a normal retirement age of 65. PERS DC members hired after July 1, 2011 who became
disabled were previously only eligible for a disability benefit until age 65. Effective July 1, 2017, these individuals will be eligible for a
disability benefit until they reach 70, thus ensuring the same 5-year time period available to PERS DC disabled members hired prior to July 1, 2011 who have a normal retirement age of 60 and are eligible for a disability benefit until age 65.
PERS Statutory Appropriation – House Bill 648, effective July 1, 2017
Revenue from coal severance taxes and interest income from the coal severance tax permanent fund previously statutorily-appropriated to the
PERS defined benefit trust fund will be replaced with the following statutory appropriations:
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NOTES TO REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN CHANGES Year Ended June 30, 2018
CHANGE OF BENEFIT TERMS (CONTINUED)
2017 Legislative Changes – PERS (Continued):
1) FY2018 - $31.386 million
2) FY2019 - $31.958 million
3) Beginning July 1, 2019 through at least June 30, 2025, 101% of the contribution from the previous year from the general fund to the
PERS defined benefit trust fund, as follows:
a. FY2020 - $32.277 million b. FY2021 - $32.6 million
c. FY2022 - $32.926 million
d. FY2023 - $33.255 million
e. FY2024 - $33.588 million
f. FY2025 - $33.924 million
2015 Legislative Changes - FURS: General Revisions – House Bill 101, effective January 1, 2016
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.
2017 Legislative Changes – FURS: General Revisions – House Bill 101, effective July 1, 2017
Working Retiree Limitations – for FURS 1) Applies to retirement system members who return on or after July 1, 2017 to covered employment in the system from which they retired.
2) Members who return for less than 480 hours in a calendar year:
a. May not become an active member in the system; and
b. Are subject to a $1 reduction in their retirement benefit for each $3 earned in excess of $5,000 in the calendar year.
3) Members who return for 480 or more hours in a calendar year: a. Must become an active member of the system;
b. Will stop receiving a retirement benefit from the system; and
c. Will be eligible for a second retirement benefit if they earn 5 or more years of service credit through their second employment.
4) Employee, employer and state contributions, if any, apply as follows:
a. Employer contributions and state contributions (if any) must be paid on all working retirees;
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NOTES TO REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN CHANGES Year Ended June 30, 2018
CHANGE OF BENEFIT TERMS (CONTINUED)
2017 Legislative Changes – FURS (Continued):
b. Employee contributions must be paid on working retirees who return to covered employment for 480 or more hours in a calendar
year.
Second Retirement Benefit – for FURS
1) Applies to retirement system members who return on or after July 1, 2017 to active service covered by the system from which they retired.
2) If the member works more than 480 hours in a calendar year and accumulates less than 5 years of service credit before terminating again,
the member:
a. Is not awarded service credit for the period of reemployment;
b. Is refunded the accumulated contributions associated with the period of reemployment; c. Starting the first month following termination of service, receives the same retirement benefit previously paid to the member; and
d. Does not accrue post-retirement benefit adjustments during the term of reemployment but receives a Guaranteed Annual Benefit
Adjustment (GABA) in January immediately following second retirement.
3) If the member works more than 480 hours in a calendar year and accumulates at least 5 years of service credit before terminating again,
the member: a. Is awarded service credit for the period of reemployment;
b. Starting the first month following termination of service, receives:
i. The same retirement benefit previously paid to the member, and
ii. A second retirement benefit for the period of reemployment calculated based on the laws in effect as of the member’s
rehire date; and c. Does not accrue post-retirement benefit adjustments during the term of reemployment but receives a GABA:
i. On the initial retirement benefit in January immediately following second retirement, and
ii. On the second retirement benefit starting in January after receiving that benefit for at least 12 months.
4) A member who returns to covered service is not eligible for a disability benefit.
Terminating Employers – Recovery of actuary costs – for FURS
Employers who terminate participation in FURS must pay the actuarial liability associated with that termination. Starting July 1, 2017,
the terminating employer must also pay for the cost of the actuarial study used to determine that liability.
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NOTES TO REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN CHANGES Year Ended June 30, 2018
CHANGE OF BENEFIT TERMS (CONTINUED)
2017 Legislative Changes – FURS (Continued):
Refunds 1) Terminating members eligible to retire may, in lieu of receiving a monthly retirement benefit, refund their accumulated contributions in a
lump sum.
2) Terminating members with accumulated contributions between $200 and $1,000 who wish to rollover their refund must do so within 90
days of termination of service. 3) Trusts, estates, and charitable organizations listed as beneficiaries are entitled to receive only a lump-sum payment.
Family Law Orders
If a Family Law Order (FLO) is silent regarding the apportionment of post-retirement benefit adjustments such as the Guaranteed Annual
Benefit Adjustment (GABA), the FLO is presumed to require apportionment of the post-retirement benefit adjustment in the same percentage as the monthly retirement benefit is apportioned.
Eligibility to Participate – for FURS Part-Paid Firefighters
Part-paid firefighters become eligible to participate in FURS once they have earned $300 in a fiscal year. Previously, statute was unclear
on whether the limit applied to a calendar year or a fiscal year.
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. 2017 Legislative Changes – MPORS: General Revisions – House Bill 101, effective July 1, 2017
Working Retiree Limitations – for MPORS 1) Applies to retirement system members who return on or after July 1, 2017 to covered employment in the system from which they retired. 2) Members who return for less than 480 hours in a calendar year:
a. May not become an active member in the system; and
b. Are subject to a $1 reduction in their retirement benefit for each $3 earned in excess of $5,000 in the calendar year.
3) Members who return for 480 or more hours in a calendar year:
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NOTES TO REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN CHANGES Year Ended June 30, 2018
CHANGE OF BENEFIT TERMS (CONTINUED)
2017 Legislative Changes – MPORS (Continued):
a. Must become an active member of the system;
b. Will stop receiving a retirement benefit from the system; and
c. Will be eligible for a second retirement benefit if they earn 5 or more years of service credit through their second employment.
4) Employee, employer and state contributions, if any, apply as follows:
a. Employer contributions and state contributions (if any) must be paid on all working retirees; b. Employee contributions must be paid on working retirees who return to covered employment for 480 or more hours in a calendar
year.
Second Retirement Benefit – for MPORS
1) Applies to retirement system members who return on or after July 1, 2017 to active service covered by the system from which they retired.
2) If the member works more than 480 hours in a calendar year and accumulates less than 5 years of service credit before terminating again,
the member:
a. Is not awarded service credit for the period of reemployment;
b. Is refunded the accumulated contributions associated with the period of reemployment; c. Starting the first month following termination of service, receives the same retirement benefit previously paid to the member; and
d. Does not accrue post-retirement benefit adjustments during the term of reemployment but receives a Guaranteed Annual Benefit
Adjustment (GABA) in January immediately following second retirement. 2017 Legislative Changes:
3) If the member works more than 480 hours in a calendar year and accumulates at least 5 years of service credit before terminating again,
the member: a. Is awarded service credit for the period of reemployment;
b. Starting the first month following termination of service, receives:
i. The same retirement benefit previously paid to the member, and
ii. A second retirement benefit for the period of reemployment calculated based on the laws in effect as of the member’s
rehire date; and c. Does not accrue post-retirement benefit adjustments during the term of reemployment but receives a GABA:
i. On the initial retirement benefit in January immediately following second retirement, and
ii. On the second retirement benefit starting in January after receiving that benefit for at least 12 months.
4) A member who returns to covered service is not eligible for a disability benefit.
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CITY OF BOZEMAN, MONTANA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN CHANGES Year Ended June 30, 2018
CHANGE OF BENEFIT TERMS (CONTINUED)
2017 Legislative Changes – MPORS (Continued):
Terminating Employers – Recovery of actuary costs – for MPORS
Employers who terminate participation in MPORS must pay the actuarial liability associated with that termination. Starting July 1, 2017,
the terminating employer must also pay for the cost of the actuarial study used to determine that liability.
Refunds 1) Terminating members eligible to retire may, in lieu of receiving a monthly retirement benefit, refund their accumulated contributions in a
lump sum.
2) Terminating members with accumulated contributions between $200 and $1,000 who wish to rollover their refund must do so within 90
days of termination of service.
3) Trusts, estates, and charitable organizations listed as beneficiaries are entitled to receive only a lump-sum payment.
Family Law Orders If a Family Law Order (FLO) is silent regarding the apportionment of post-retirement benefit adjustments such as the Guaranteed Annual
Benefit Adjustment (GABA), the FLO is presumed to require apportionment of the post-retirement benefit adjustment in the same
percentage as the monthly retirement benefit is apportioned. DRAFT
626
145
CITY OF BOZEMAN, MONTANA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN CHANGES Year Ended June 30, 2018
CHANGES IN ACTUARIAL ASSUMPTIONS AND METHODS
Method and assumptions used in calculations of actuarially determined contributions
The following Actuarial Assumptions were adopted from the June 30, 2017 actuarial valuation:
PERS FURS MPORS
General Wage Growth* 3.50% 3.50% 3.50%
Investment Rate of Return* 7.65% 7.65% 7.65%
*Includes inflation at 2.75% 2.75% 2.75%
Merit increase 0% to 6.30% 0% to 6.30% 0% to 6.30%
Asset valuation method 4-year smoothed market 4-year smoothed market 4-year smoothed market
Actuarial cost method Entry age normal Entry age normal Entry age normal
Amortization method Level percentage of pay, open Level percentage of pay, open Level percentage of pay, open
Mortality (Healthy members) For Males & Females: RP 2000
Combined Employee and Annuitant Mortality Table projected to 2020 using
Scale BB, males set back 1 year
For Males & Females: RP 2000
Combined Employee and Annuitant Mortality Table projected to 2020 using
Scale BB, males set back 1 year
For Males & Females: RP 2000
Combined Employee and Annuitant Mortality Table projected to 2020
using Scale BB, males set back 1
year
Mortality (Disabled members) For Males & Females: RP 2000 Combined Mortality Table For Males & Females: RP 2000 Combined Mortality Table For Males & Females: RP 2000 Combined Mortality Table
Admin Expense as a % of Payroll 0.26% 0.23% 0.24%
Administrative expenses are recognized by an additional amount added to the normal cost contribution rate for the System. This amount varies
from year to year based on the prior year’s actual administrative expenses.
DRAFT
627
146
CITY OF BOZEMAN, MONTANA
SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL – GENERAL FUND
Year Ended June 30, 2018
Variance with
Actual Final Budget
Original Final Amounts Positive (Negative)
Budgetary fund balance, July 1 5,642,240$ 5,642,240$ 5,642,240$ -$
Resources (inflows):
Taxes 15,760,641 15,760,641 15,689,264 (71,377)
Special assessments - - 93 93
Licenses and permits 346,337 346,337 395,107 48,770
Intergovernmental 7,492,170 7,492,170 7,686,022 193,852
Charges for services 2,545,137 2,545,137 2,760,256 215,119
Fines and forfeitures 1,093,000 1,093,000 1,093,742 742
Sale of assets 15,000 15,000 12,208 (2,792)
Interest on investments 45,000 45,000 - (45,000)
Transfers from other funds 2,376,092 2,376,092 2,323,901 (52,191)
Proceeds of long-term debt 563,746 563,746 8,006
Other 106,500 106,500 1,141,637 1,035,137
Amounts available for appropriation 35,985,863 35,985,863 36,752,476 1,322,353
Charges to appropriations (outflows):
Current
General government 6,859,883 7,288,273 6,922,180 366,093
Public safety 13,098,829 15,322,329 14,961,342 360,987
Public service 122,331 186,331 186,331 -
Public welfare 6,223,066 6,283,005 6,170,061 112,944
Other 2,861,483 555,483 554,851 632
Capital outlay 1,284,996 1,433,509 704,076 729,433
Debt service 550 4,750 4,702 48
Transfers to other funds 747,084 747,084 632,084 115,000
Total charges to appropriations 31,198,222 31,820,764 30,135,627 1,685,137
Budgetary fund balance, June 30 4,787,641$ 4,165,099$ 6,616,849$ 3,007,490$
Budgeted Amounts
DRAFT
628
147
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, 2018
Variance with
Actual Amounts Final Budget
Original Final Budgetary Basis Positive (Negative)
Budgetary fund balance, July 1 9,865,944$ 9,865,944$ 11,649,617$ 1,783,673$
Resources (inflows):
Taxes - - - -
Special assessments - - - -
Licenses and permits - - - -
Intergovernmental - - - -
Charges for services 3,123,750 3,123,750 5,523,020 2,399,270
Fines and forfeitures - - - -
Interest on investments 100,000 100,000 - (100,000)
Transfers from other funds - - - -
Proceeds from long-term debt - - - -
Premium on bonds issued - - - -
Proceeds from the sale of capital assets - - - -
Other 960 960 1,255 295
Amounts available for appropriation 13,090,654 13,090,654 17,173,892 4,083,238
Charges to appropriations (outflows):
Current
General government - - - -
Public safety - - - -
Public service 95,000 161,300 161,261 39
Public welfare - - - -
Capital outlay 7,651,245 7,826,245 7,663,383 162,862
Debt service - - - -
Transfers to other funds - - - -
Total charges to appropriations 7,746,245 7,987,545 7,824,644 162,901
Budgetary fund balance, June 30 5,344,409$ 5,103,109$ 9,349,248$ 4,246,139$
Budgeted Amounts
DRAFT
629
148
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, 2018
Variance with
Actual Amounts Final Budget
Original Final Budgetary Basis Positive (Negative)
Budgetary fund balance, July 1 178,575$ 73,453$ 439,721$ 366,268$
Resources (inflows):
Taxes - - - -
Special assessments 21,950 21,950 71,497 49,547
Licenses and permits 17,500 17,500 17,407 (93)
Intergovernmental - - 35,494 35,494
Charges for services 5,328,172 5,328,172 5,460,336 132,164
Fines and forfeitures - - - -
Interest on investments 10,040 10,040 - (10,040)
Transfers from other funds - - 31,900 31,900
Proceeds from long-term debt - - 244,531 244,531
Premium on bonds issued - - -
Proceeds from the sale of capital assets - - 12,842 12,842
Other - - 173,172 173,172
Amounts available for appropriation 5,556,237 5,451,115 6,486,900 1,035,785
Charges to appropriations (outflows):
Current
General government - - - -
Public safety - - - -
Public service 3,155,901 3,585,401 3,614,633 (29,232)
Public welfare - - - -
Capital outlay 1,773,900 1,773,900 805,722 968,178
Debt service 295,207 295,207 223,985 71,222
Transfers to other funds 700,000 1,313,800 1,313,800 -
Total charges to appropriations 5,925,008 6,968,308 5,958,140 1,010,168
Budgetary fund balance, June 30 (368,771)$ (1,517,193)$ 528,760$ 2,045,953$
Budgeted Amounts
DRAFT
630
149
CITY OF BOZEMAN, MONTANA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION – BUDGETARY INFORMATION Year Ended June 30, 2018
Street
General Impact Street
Fund Fees Maintenance
Sources/inflows of resources
Actual amounts (budgetary basis) "available for appropriation"
from the budgetary comparison schedule 36,752,476$ 17,173,892$ 6,486,900$
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. (5,642,240) (11,649,617) (439,721)
Transfers from other funds are inflows of budgetary resources but
are not revenues for financial reporting purposes (2,323,901) - (31,900)
The proceeds from the issuance of long-term debt are a
budgetary resource but are a other financing source for
financial reporting purposes (8,006) - (244,531)
The proceeds from the sale of assets are budgetary resources
but are regarded as a special item, rather than revenue, for
financial reporting purposes (12,208) - (12,842)
Total revenues as reported on the statement of revenues,
expenditures, and changes in fund balances -
governmental funds 28,766,121$ 5,524,275$ 5,757,906$
Uses/outflows of resources
Actual amounts (budgetary basis) "total charges to appropriations"
from the budgetary comparison schedule 30,135,627$ 7,824,644$ 5,958,140$
Differences - budget to GAAP:
Transfers to other funds are outflows of budgetary resources
but are not expenditures for financial reporting purposes.(632,084) - (1,313,800)
Total expenditures as reported on the statement of revenues,
expenditures, and changes in fund balances -
governmental funds 29,503,543$ 7,824,644$ 4,644,340$
DRAFT
631
D. SUPPLEMENTAL INFORMATION
DRAFT
633
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
DRAFT
635
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.
DRAFT
636
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.
Building Inspection Fund – Accounts for all activity related to 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.
Street Arterial & Collector District – Accounts for special assessment revenues levied, received, and expended for necessary transportation infrastructure.
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.
TIF Mandeville/Wheat Dr. – In December 2006, the City created a tax increment financing district to encourage the attraction and retention of value-adding farming industries. This fund accounts for the revenue and expenditures associated with the district.
TIF South Bozeman Technology – In December 2012, the City created a tax increment financing district to improve existing infrastructure
deficiencies on property adjacent to Montana State University and the Innovation Campus. 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.
Special Improvement District (SID) Sinking – Accounts for the accumulation of resources and payment of special assessment bond principal and
interest related to general improvement, sidewalk, and curb construction projects.
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.
DRAFT
637
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.
DRAFT
638
149
CITY OF BOZEMAN, MONTANA
COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS June 30, 2018
City
Planning Health-Medical Community
Departmental Board Insurance Transportation
ASSETS
Cash and cash equivalents 1,988,003$ 965,104$ 308,695$ 99,019$
Receivables:
Property taxes 4,580 9,157 112,150 -
Accrued interest - - - -
Customers, net 1,647 - - -
Special assessments - - - -
Other governments 93,184 - - -
Others - - - -
Advances to other city funds - - - -
Prepaid expenditures - - - -
Notes receivable - - - -
Restricted cash and cash equivalents 25,000 580,371 - -
Total assets 2,112,414$ 1,554,632$ 420,845$ 99,019$
LIABILITIES
Accounts payable 179,109$ 38,049$ -$ 40,594$
Appearance bonds and other liabilities - - - -
Escheat property payable - - - -
Accrued employee benefits payable (13) 121 - -
Due to other funds - - - -
Total liabilities 179,096 38,170 - 40,594
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes 365 732 9,006 -
Unavailable revenue-special assessments - - - -
Total deferred inflows of resources 365 732 9,006 -
FUND BALANCES
Nonspendable - - - -
Restricted 188,908 1,515,730 411,839 58,425
Committed 1,786,693 - - -
Assigned - - - -
Unassigned (42,648) - - -
Total fund balances 1,932,953 1,515,730 411,839 58,425
Total liabilities, deferred inflows
of resources, and fund balances 2,112,414$ 1,554,632$ 420,845$ 99,019$
(continued)
Special Revenue Funds
DRAFT
640
150
CITY OF BOZEMAN, MONTANA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) June 30, 2018
Downtown Building
Gas Tax Tree Fire Improvement Inspection
Apportionment Maintenance Impact Fees District Fund
ASSETS
Cash and cash equivalents 1,075,945$ 369,962$ -$ 2,912,665$ 2,007,423$
Receivables:
Property taxes - - - 208,940 -
Accrued interest - - 7,570 - 7,391
Customers, net - - - - -
Special assessments - 16,677 - 2,969 -
Other governments 263,496 - - - -
Others - - - - -
Advances to other city funds - - - - -
Prepaid expenditures - - - - -
Notes receivable - - - - -
Restricted cash and cash equivalents - - 2,155,288 - -
Total assets 1,339,441$ 386,639$ 2,162,858$ 3,124,574$ 2,014,814$
LIABILITIES
Accounts payable -$ 31,185$ 4,927$ 1,272,400$ 229,747$
Appearance bonds and other liabilities - - - - -
Escheat property payable - - - - -
Accrued employee benefits payable - 770 - - 2,299
Due to other funds - - - - -
Total liabilities - 31,955 4,927 1,272,400 232,046
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes - - - - -
Unavailable revenue-special assessments - 9,100 52,798 - -
Total deferred inflows of resources - 9,100 52,798 - -
FUND BALANCES
Nonspendable - - - - -
Restricted 1,339,441 345,584 2,105,133 1,852,174 1,782,768
Committed - - - - -
Assigned - - - - -
Unassigned - - - - -
Total fund balances 1,339,441 345,584 2,105,133 1,852,174 1,782,768
Total liabilities, deferred inflows
of resources, and fund balances 1,339,441$ 386,639$ 2,162,858$ 3,124,574$ 2,014,814$
(continued)
Special Revenue Funds
DRAFT
641
151
CITY OF BOZEMAN, MONTANA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) June 30, 2018
Special Revenue Funds
Economic Housing City-County
Development Community Revolving Drug Drug
Revolving Loan Housing Loan Fund Forfeitures Forfeitures
ASSETS
Cash and cash equivalents -$ 690,352$ 2,122$ 107,024$ 131,385$
Receivables:
Property taxes - 13,445 - - -
Accrued interest - - - - -
Customers, net 245,382 - - 5,411 -
Special assessments - - - - -
Other governments - - - - -
Others - - - - -
Advances to other city funds - - - - -
Prepaid expenditures - - - - -
Notes receivable 565,371 59,712 - - -
Restricted cash and cash equivalents - - - - -
Total assets 810,753$ 763,509$ 2,122$ 112,435$ 131,385$
LIABILITIES
Accounts payable -$ 1,500$ 922$ 5,485$ -$
Appearance bonds and other liabilities - - - - -
Escheat property payable - - - - -
Accrued employee benefits payable - - - 103 -
Due to other funds - - - - -
Total liabilities - 1,500 922 5,588 -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes - 800 - - -
Unavailable revenue-special assessments - - - - -
Total deferred inflows of resources - 800 - - -
FUND BALANCES
Nonspendable - - - - -
Restricted 810,753 - - 106,847 -
Committed - 761,209 - - 131,385
Assigned - - 1,200 - -
Unassigned - - - - -
Total fund balances 810,753 761,209 1,200 106,847 131,385
Total liabilities, deferred inflows
of resources, and fund balances 810,753$ 763,509$ 2,122$ 112,435$ 131,385$
(continued)
DRAFT
642
152
CITY OF BOZEMAN, MONTANA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) June 30, 2018
Special Revenue Funds
Law and Street Arterial
Justice and Collector TIF TIF N.E. TIF Mandeville/ TIFD South Boz
Center District N 7th Corridor Urban Renewal Wheat Dr.Technology
ASSETS
Cash and cash equivalents -$ 1,872,501$ 1,649,290$ 318,944$ 54,744$ -$
Receivables:
Property taxes - - 33,320 10,470 - -
Accrued interest - - - - - -
Customers, net - 272,624 - - - -
Special assessments - 32,998 - - - -
Other governments - - - - - -
Others - - - - - -
Advances to other city funds - - - - - -
Prepaid expenditures 312,375 - - - - -
Notes receivable - - - - - -
Restricted cash and cash equivalents - - - 92,000 - -
Total assets 312,375$ 2,178,123$ 1,682,610$ 421,414$ 54,744$ -$
LIABILITIES
Accounts payable -$ 371,952$ 117,569$ 8,797$ -$ -$
Appearance bonds and other liabilities - 24,208 - - - -
Escheat property payable - - - - - -
Accrued employee benefits payable - - - - - -
Due to other funds - - - - - 7,626
Total liabilities - 396,160 117,569 8,797 - 7,626
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes - - 582 - - -
Unavailable revenue-special assessments - - - - - -
Total deferred inflows of resources - - 582 - - -
FUND BALANCES
Nonspendable 312,375 - - - - -
Restricted - 1,781,963 1,564,459 412,617 54,744 (7,626)
Committed - - - - - -
Assigned - - - - - -
Unassigned - - - - - -
Total fund balances 312,375 1,781,963 1,564,459 412,617 54,744 (7,626)
Total liabilities, deferred inflows
of resources, and fund balances 312,375$ 2,178,123$ 1,682,610$ 421,414$ 54,744$ -$
(continued)
DRAFT
643
153
CITY OF BOZEMAN, MONTANA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) June 30, 2018
Victim/Witness Fire Department Street Park Municipal Court
Advocate Equipment Lighting Land Restitution Total
ASSETS
Cash and cash equivalents 402,543$ 822,561$ 564,000$ 716,986$ 21,157$ 17,080,425$
Receivables:
Property taxes - 18,313 - - - 410,375
Accrued interest - - - - - 14,961
Customers, net 5,546 - - - - 530,610
Special assessments - - 7,196 - - 59,840
Other governments - - - - - 356,680
Others - - - - - -
Advances to other city funds - - - - - -
Prepaid expenditures - - - - - 312,375
Notes receivable - - - - - 625,083
Restricted cash and cash equivalents - - - - - 2,852,659
Total assets 408,089$ 840,874$ 571,196$ 716,986$ 21,157$ 22,243,008$
LIABILITIES
Accounts payable 24,543$ -$ 39,127$ -$ 1,000$ 2,366,906$
Appearance bonds and other liabilities - - - - - 24,208
Escheat property payable - - - - 20,052 20,052
Accrued employee benefits payable - - - - - 3,280
Due to other funds - - - - - 7,626
Total liabilities 24,543 - 39,127 - 21,052 2,422,072
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes - 1,451 - - - 12,936
Unavailable revenue-special assessments - - - - - 61,898
Total deferred inflows of resources - 1,451 - - - 74,834
FUND BALANCES
Nonspendable - - - - - 312,375
Restricted 383,546 - 532,069 716,986 105 15,956,465
Committed - 839,423 - - .3,518,710
Assigned - - - - 1,200
Unassigned - - - - - (42,648)
Total fund balances 383,546 839,423 532,069 716,986 105 19,746,102
Total liabilities, deferred inflows
of resources, and fund balances 408,089$ 840,874$ 571,196$ 716,986$ 21,157$ 22,243,008$
(continued)
Special Revenue Funds
DRAFT
644
154
CITY OF BOZEMAN, MONTANA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) June 30, 2018
SID G.O.TIF SID
Revolving Bonds Bonds Debt Service Total
ASSETS
Cash and cash equivalents 2,903,817$ 31,890$ -$ 1,912,051$ 4,847,758$
Receivables:
Property taxes - 61,129 - - 61,129
Accrued interest 9,360 - - - 9,360
Customers, net - - - - -
Special assessments - - - 2,090,839 2,090,839
Other governments - - - - -
Others - - - - -
Advances to other city funds 510,503 - - - 510,503
Prepaid expenditures - - - - -
Notes receivable - - - - -
Restricted cash and cash equivalents - - - - -
Total assets 3,423,680$ 93,019$ -$ 4,002,890$ 7,519,589$
LIABILITIES
Accounts payable -$ 500$ -$ 3,123$ 3,623$
Appearance bonds and other liabilities - - - -
Escheat property payable - - - - -
Accrued employee benefits payable - - - - -
Due to other funds - - - 510,503 510,503
Total liabilities - 500 - 513,626 514,126
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes - 4,671 - - 4,671
Unavailable revenue-special assessments - - - 2,089,818 2,089,818
Total deferred inflows of resources - 4,671 - 2,089,818 2,094,489
FUND BALANCES
Nonspendable - - - - -
Restricted 3,423,680 87,848 - 1,399,446 4,910,974
Committed - - - - -
Assigned - - - - -
Unassigned - - - - -
Total fund balances 3,423,680 87,848 - 1,399,446 4,910,974
Total liabilities, deferred inflows
of resources, and fund balances 3,423,680$ 93,019$ -$ 4,002,890$ 7,519,589$
(continued)
Debt Service Funds
DRAFT
645
155
CITY OF BOZEMAN, MONTANA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) June 30, 2018
Capital Permanent Total
Projects Fund Nonmajor
Perpetual Governmental
Construction Cemetery Care Funds
ASSETS
Cash and cash equivalents 6,092,358$ -$ 28,020,541$
Receivables:
Property taxes - - 471,504
Accrued interest 49,052 - 73,373
Customers, net 107,723 4,986 643,319
Special assessments - - 2,150,679
Other governments - - 356,680
Others - - -
Advances to other city funds - - 510,503
Prepaid expenditures - - 312,375
Notes receivable - - 625,083
Restricted cash and cash equivalents 1,134,588 1,309,813 5,297,060
Total assets 7,383,721$ 1,314,799$ 38,461,117$
LIABILITIES
Accounts payable 1,386,294$ 3,358$ 3,760,181$
Appearance bonds and other liabilities 134,318 - 158,526
Escheat property payable - - 20,052
Accrued employee benefits payable - - 3,280
Due to other funds - - 518,129
Total liabilities 1,520,612 3,358 4,460,168
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue-property taxes - - 17,607
Unavailable revenue-special assessments - - 2,151,716
Total deferred inflows of resources - - 2,169,323
FUND BALANCES
Nonspendable - 1,311,441 1,623,816
Restricted 3,658,296 - 24,525,735
Committed 337,528 - 3,856,238
Assigned 1,867,285 - 1,868,485
Unassigned - (42,648)
Total fund balances 5,863,109 1,311,441 31,831,626
Total liabilities, deferred inflows
of resources, and fund balances 7,383,721$ 1,314,799$ 38,461,117$
DRAFT
646
156
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS Year ended June 30, 2018
City
Planning Health-Medical Community
Departmental Board Insurance Transportation
REVENUES
Taxes 100,931$ 201,857$ 2,469,553$ -$
Special assessments - - - -
Licenses and permits - - - -
Intergovernmental 216,210 136,688 - -
Charges for services 25,610 884,628 - -
Fines and forfeitures 1,374 - - -
Interest on investments 198 - - 993
Interest on loans receivable - - - -
Other 85,561 49,330 - -
Total revenues 429,884 1,272,503 2,469,553 993
EXPENDITURES
Current:
General government 40,027 1,219,680 - -
Public safety 171,603 - - -
Public service 240 - - -
Public welfare 166,396 - - -
Other 100,681 - - -
Capital outlay 20,479 - - -
Debt service:
Principal - - - -
Interest and fiscal fees - - - -
Total expenditures 499,426 1,219,680 - -
Revenues over (under) expenditures (69,542) 52,823 2,469,553 993
OTHER FINANCING SOURCES (USES)
Transfers in 35,000 106,750 - -
Transfers out - - (2,407,104) -
Sale of capital assets - - - -
Issuance of long term debt - - - -
Total other financing sources (uses)35,000 106,750 (2,407,104) -
Net change in fund balance (34,542) 159,573 62,449 993
FUND BALANCES, beginning of year 1,967,495 1,356,157 349,390 57,432
FUND BALANCES, end of year 1,932,953$ 1,515,730$ 411,839$ 58,425$
(continued)
Special Revenue Funds
DRAFT
647
157
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Downtown Building
Gas Tax Tree Fire Improvement Inspection
Apportionment Maintenance Impact Fees District Fund
REVENUES
Taxes -$ -$ -$ 1,232,868$ -$
Special assessments - 2,094 - 126,386 -
Licenses and permits - - - 1,750 2,127,463
Intergovernmental 971,627 8,575 - 56,050 72,228
Charges for services - 687,038 599,364 - 67
Fines and forfeitures - - - - -
Interest on investments - 3,578 - - -
Interest on loans receivable - - - - -
Other - 7,031 - - 2
Total revenues 971,627 708,316 599,364 1,417,054 2,199,760
EXPENDITURES
Current:
General government - - - - -
Public safety - - 44,984 - 2,118,822
Public service 502,278 - - - -
Public welfare - 576,391 - 592,186 -
Other - - - - -
Capital outlay 635,164 124,773 - - -
Debt service:
Principal - - - - -
Interest and fiscal fees - - - - -
Total expenditures 1,137,442 701,164 44,984 592,186 2,118,822
Revenues over (under) expenditures (165,815) 7,152 554,380 824,868 80,938
OTHER FINANCING SOURCES (USES)
Transfers in - - - - -
Transfers out - - - (721,473) -
Sale of capital assets - 10,094 - - -
Issuance of long term debt - - - - -
Total other financing sources (uses)- 10,094 - (721,473) -
Net change in fund balance (165,815) 17,246 554,380 103,395 80,938
FUND BALANCES, beginning of year 1,505,256 328,338 1,550,753 1,748,779 1,701,830
FUND BALANCES, end of year 1,339,441$ 345,584$ 2,105,133$ 1,852,174$ 1,782,768$
(continued)
Special Revenue Funds
DRAFT
648
158
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Special Revenue Funds
Economic Housing City-County
Development Community Revolving Drug Drug
Revolving Loan Housing Loan Fund Forfeitures Forfeitures
REVENUES
Taxes -$ 302,781$ -$ -$ -$
Special assessments - - - - -
Licenses and permits - - - - -
Intergovernmental - 500 - 111,431 -
Charges for services - - - - -
Fines and forfeitures - - - 72,985 -
Interest on investments 1,549 - 21 784 1,362
Interest on loans receivable 21,737 398 7 - -
Other - 20,000 - 10,616 -
Total revenues 23,286 323,679 28 195,816 1,362
EXPENDITURES
Current:
General government - - - - -
Public safety - - - 269,186 -
Public service - - - - -
Public welfare 37,783 131,168 - - -
Other - - - - -
Capital outlay - - - 1,500 -
Debt service:
Principal - - - - -
Interest and fiscal fees - - - - -
Total expenditures 37,783 131,168 - 270,686 -
Revenues over (under) expenditures (14,497) 192,511 28 (74,870) 1,362
OTHER FINANCING SOURCES (USES)
Transfers in - - - 111,453 -
Transfers out - - - - -
Sale of capital assets - - - - -
Issuance of long term debt - - - - -
Total other financing sources (uses)- - - 111,453 -
Net change in fund balance (14,497) 192,511 28 36,583 1,362
FUND BALANCES, beginning of year 825,250 568,698 1,172 70,264 130,023
FUND BALANCES, end of year 810,753$ 761,209$ 1,200$ 106,847$ 131,385$
(continued)
DRAFT
649
159
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Special Revenue Funds
Law and Street Arterial
Justice and Collector TIF TIF N.E. TIF Mandeville/ TIFD South Boz
Center District N 7th Corridor Urban Renewal Wheat Dr.Technology
REVENUES
Taxes -$ -$ 600,687$ 144,461$ 56,063$ 14$
Special assessments - 4,895 - - - -
Licenses and permits - - - - - -
Intergovernmental - - 37,926 1,353 - -
Charges for services - 1,821,677 - - - -
Fines and forfeitures - - - - - -
Interest on investments - - - 3,765 198 -
Interest on loans receivable - - - - - -
Other - 221,891 - - - -
Total revenues - 2,048,463 638,613 149,579 56,261 14
EXPENDITURES
Current:
General government - - - - - -
Public safety 19,125 - - - - -
Public service - 34,181 - - - -
Public welfare - - 184,331 19,987 4,721 79
Other - - - - - -
Capital outlay - 1,707,236 397,951 - - -
Debt service:
Principal - - - 92,000 - -
Interest and fiscal fees - - - - - -
Total expenditures 19,125 1,741,417 582,282 111,987 4,721 79
Revenues over (under) expenditures (19,125) 307,046 56,331 37,592 51,540 (65)
OTHER FINANCING SOURCES (USES)
Transfers in - - 48,835 - - -
Transfers out - - (36,000) (10,000) - -
Sale of capital assets - - - - - -
Issuance of long term debt - - - - - -
Total other financing sources (uses)- - 12,835 (10,000) - -
Net change in fund balance (19,125) 307,046 69,166 27,592 51,540 (65)
FUND BALANCES, beginning of year 331,500 1,474,917 1,495,293 385,025 3,204 (7,561)
FUND BALANCES, end of year 312,375$ 1,781,963$ 1,564,459$ 412,617$ 54,744$ (7,626)$
(continued)
DRAFT
650
160
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Municipal
Victim/Witness Fire Department Street Park Court
Advocate Equipment Lighting Land Restitution Totals
REVENUES
Taxes -$ 403,725$ -$ -$ -$ 5,512,940$
Special assessments - - 425,319 - - 558,694
Licenses and permits - - - - - 2,129,213
Intergovernmental - - - - - 1,612,588
Charges for services - - - - - 4,018,384
Fines and forfeitures 72,053 - - - - 146,412
Interest on investments 4,084 - 5,929 - - 22,461
Interest on loans receivable - - - - - 22,142
Other - - - 187,145 - 581,576
Total revenues 76,137 403,725 431,248 187,145 - 14,604,410
EXPENDITURES
Current:
General government 81,500 - - - - 1,341,207
Public safety - 17,904 - - - 2,641,624
Public service - - 442,189 - - 978,888
Public welfare - - - 4,322 - 1,717,364
Other - - - - - 100,681
Capital outlay - 583,137 - - - 3,470,240
Debt service:
Principal - - - - - 92,000
Interest and fiscal fees - - - - - -
Total expenditures 81,500 601,041 442,189 4,322 - 10,342,004
Revenues over (under) expenditures (5,363) (197,316) (10,941) 182,823 - 4,262,406
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - 302,038
Transfers out - - (31,900) - - (3,206,477)
Sale of capital assets - - - - - 10,094
Issuance of long term debt - - - - - -
Total other financing sources (uses)- - (31,900) - - (2,894,345)
Net change in fund balance (5,363) (197,316) (42,841) 182,823 - 1,368,061
FUND BALANCES, beginning of year 388,909 1,036,739 574,910 534,163 105 18,378,041
FUND BALANCES, end of year 383,546$ 839,423$ 532,069$ 716,986$ 105$ 19,746,102$
(continued)
Special Revenue Funds
DRAFT
651
161
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
SID G.O.TIF SID
Revolving Bonds Bonds Debt Service Totals
REVENUES
Taxes -$ 1,351,768$ -$ -$ 1,351,768$
Special assessments - - - 506,819 506,819
Licenses and permits - - - - -
Intergovernmental - - - - -
Charges for services 5,095 - - 409 5,504
Fines and forfeitures - - - - -
Interest on investments - 1,659 - 10,589 12,248
Interest on loans receivable 3,685 - - - 3,685
Other - - - - -
Total revenues 8,780 1,353,427 - 517,817 1,880,024
EXPENDITURES
Current:
General government - - - - -
Public safety - - - - -
Public service - - - - -
Public welfare 5,524 - - - 5,524
Other - - - - -
Capital outlay - - - - -
Debt service:
Principal - 875,000 210,000 95,000 1,180,000
Interest and fiscal fees - 482,738 212,638 23,221 718,597
Total expenditures 5,524 1,357,738 422,638 118,221 1,904,121
Revenues over (under) expenditures 3,256 (4,311) (422,638) 399,596 (24,097)
OTHER FINANCING SOURCES (USES)
Transfers in - - 422,638 - 422,638
Transfers out - - - - -
Sale of capital assets - - - - -
Issuance of long term debt - - - - -
Total other financing sources (uses)- - 422,638 - 422,638
Net change in fund balance 3,256 (4,311) - 399,596 398,541
FUND BALANCES, beginning of year 3,420,424 92,159 - 999,850 4,512,433
FUND BALANCES, end of year 3,423,680$ 87,848$ -$ 1,399,446$ 4,910,974$
(continued)
Debt Service Funds
DRAFT
652
162
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Capital Permanent Total
Projects Fund Nonmajor
Cemetery Governmental
Construction Perpetual Care Funds
REVENUES
Taxes -$ -$ 6,864,708$
Special assessments - - 1,065,513
Licenses and permits - - 2,129,213
Intergovernmental 85,000 - 1,697,588
Charges for services - 118,029 4,141,917
Fines and forfeitures - - 146,412
Interest on investments - - 34,709
Interest on loans receivable - - 25,827
Other 415,457 - 997,033
Total revenues 500,457 118,029 17,102,920
EXPENDITURES
Current:
General government 4,898 - 1,346,105
Public safety - - 2,641,624
Public service 14,446 - 993,334
Public welfare 73,979 8,426 1,805,293
Other - - 100,681
Capital outlay 5,777,080 - 9,247,320
Debt service:
Principal - - 1,272,000
Interest and fiscal fees - - 718,597
Total expenditures 5,870,403 8,426 18,124,954
Revenues over (under) expenditures (5,369,946) 109,603 (1,022,034)
OTHER FINANCING SOURCES (USES)
Transfers in 1,313,800 - 2,038,476
Transfers out - - (3,206,477)
Sale of capital assets - - 10,094
Issuance of long term debt 851,049 - 851,049
Total other financing sources (uses)2,164,849 - (306,858)
Net change in fund balance (3,205,097) 109,603 (1,328,892)
FUND BALANCES, beginning of year 9,068,206 1,201,838 33,160,518
FUND BALANCES, end of year 5,863,109$ 1,311,441$ 31,831,626$
DRAFT
653
BUDGET TO ACTUAL SCHEDULES – NONMAJOR FUNDS
DRAFT
655
163
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS Year Ended June 30, 2018
Special Revenue Funds
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes 92,915$ 100,931$ 8,016$ 185,830$ 201,857$ 16,027$
Special assessments 2,000 - 2,000 - - -
Licenses and permits - - - - - -
Intergovernmental 205,000 216,210 11,210 108,700 136,688 27,988
Charges for services 18,500 25,610 7,110 745,925 884,628 138,703
Fines and forfeitures - 1,374 1,374 - - -
Interest on investments 16,195 198 (15,997) 6,000 - (6,000)
Loan repayment - - - - - -
Other 102,615 85,561 (17,054) 53,400 49,330 (4,070)
Total revenues 437,225 429,884 (7,341) 1,099,855 1,272,503 172,648
EXPENDITURES - BUDGET UNIT 587,168 499,426 87,742 1,505,363 1,219,680 285,683
Revenues over (under) expenditures (149,943) (69,542) 80,401 (405,508) 52,823 458,331
OTHER FINANCING SOURCES (USES)
Transfers in 150,000 35,000 (115,000) 124,284 106,750 (17,534)
Transfers out - - - - - -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)150,000 35,000 (115,000) 124,284 106,750 (17,534)
Revenues and other sources over
(under) expenditures 57$ (34,542) (34,599)$ (281,224)$ 159,573 440,797$
FUND BALANCES, beginning of year 1,967,495 1,356,157
FUND BALANCES, end of year 1,932,953$ 1,515,730$
(continued)
Departmental Special Revenues City Planning Board
DRAFT
657
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, 2018
Special Revenue Funds
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes 2,476,888$ 2,469,553$ (7,335)$ -$ -$ -$
Special assessments - - - - - -
Licenses and permits - - - - - -
Intergovernmental - - - - - -
Charges for services - - - - - -
Fines and forfeitures - - - - - -
Interest on investments - - - 1,660 993 (667)
Loan repayment - - - - - -
Other - - - - - -
Total revenues 2,476,888 2,469,553 (7,335) 1,660 993 (667)
EXPENDITURES - BUDGET UNIT - - - - - -
Revenues over (under) expenditures 2,476,888 2,469,553 (7,335) 1,660 993 (667)
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - -
Transfers out (2,476,888) (2,407,104) 69,784 - - -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)(2,476,888) (2,407,104) 69,784 - - -
Revenues and other sources over
(under) expenditures -$ 62,449 62,449$ 1,660$ 993 (667)$
FUND BALANCES, beginning of year 349,390 57,432 FUND BALANCES, end of year 411,839$ 58,425$
(continued)
Health-Medical Insurance Community Transportation
DRAFT
658
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, 2018
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ -$ -$ -$
Special assessments - - - 1,350 2,094 744
Licenses and permits - - - - - -
Intergovernmental 959,999 971,627 11,628 750 8,575 7,825
Charges for services - - - 682,373 687,038 4,665
Fines and forfeitures - - - - - -
Interest on investments 7,000 - (7,000) 1,600 3,578 1,978
Loan repayment - - - - - -
Other - - - 6,000 7,031 1,031
Total revenues 966,999 971,627 4,628 692,073 708,316 16,243
EXPENDITURES - BUDGET UNIT 1,138,500 1,137,442 1,058 706,937 701,164 5,773
Revenues over (under) expenditures (171,501) (165,815) 5,686 (14,864) 7,152 22,016
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - -
Transfers out - - - - - -
Long-term debt issued - - - - - -
Sale of capital assets - - - - 10,094 10,094
Total other financing sources (uses)- - - - 10,094 10,094
Revenues and other sources over
(under) expenditures (171,501)$ (165,815) 5,686$ (14,864)$ 17,246 32,110$
FUND BALANCES, beginning of year 1,505,256 328,338
FUND BALANCES, end of year 1,339,441$ 345,584$
(continued)
Tree Maintenance
Special Revenue Funds
Gas Tax Apportionment
DRAFT
659
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, 2018
Special Revenue Funds
Fire Impact Fees Special Revenue
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ - 1,813,350$ 1,232,868$ (580,482)$
Special assessments - - - 132,200 126,386 (5,814)
Licenses and permits - - - - 1,750 1,750
Intergovernmental - - - 45,660 56,050 10,390
Charges for services 362,250 599,364 237,114 - - -
Fines and forfeitures - - - - - -
Interest on investments 10,000 - (10,000) 10,000 - (10,000)
Loan repayment - - - - - -
Other - - - 25,500 - (25,500)
Total revenues 372,250 599,364 227,114 2,026,710 1,417,054 (609,656)
EXPENDITURES - BUDGET UNIT 50,000 44,984 5,016 1,451,899 592,186 859,713
Revenues over (under) expenditures 322,250 554,380 232,130 574,811 824,868 250,057
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - -
Transfers out - - - (721,473) (721,473) -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)- - - (721,473) (721,473) -
Revenues and other sources over
(under) expenditures 322,250$ 554,380 232,130$ (146,662)$ 103,395 250,057$
FUND BALANCES, beginning of year 1,550,753 1,748,779
FUND BALANCES, end of year 2,105,133$ 1,852,174$
(continued)
Downtown Improvement District
DRAFT
660
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, 2018
Special Revenue Funds
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ 278,745$ -$ (278,745)$
Special assessments - - - - - -
Licenses and permits 1,749,800 2,127,463 377,663 - - -
Intergovernmental - 72,228 72,228 - - -
Charges for services 2,350 67 (2,283) - - -
Fines and forfeitures - - - - - -
Interest on investments 17,000 - (17,000) 3,000 1,549 (1,451)
Loan repayment - - - 9,500 21,737 12,237
Other - 2 2 - - -
Total revenues 1,769,150 2,199,760 430,610 291,245 23,286 (267,959)
EXPENDITURES - BUDGET UNIT 39,000 2,118,822 (2,079,822) 324,400 37,783 286,617
Revenues over (under) expenditures 1,730,150 80,938 (1,649,212) (33,155) (14,497) 18,658
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 1,730,150$ 80,938 (1,649,212)$ (33,155)$ (14,497) 18,658$
FUND BALANCES, beginning of year 1,701,830 825,250
FUND BALANCES, end of year 1,782,768$ 810,753$
(continued)
Building Inspection Fund Economic Development Revolving Loan Fund
DRAFT
661
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, 2018
Variance
Positive
Budget Actual (Negative)
REVENUES
Taxes 278,745$ 302,781$ 24,036$
Special assessments - - -
Licenses and permits - - -
Intergovernmental - 500 500
Charges for services - - -
Fines and forfeitures - - -
Interest on investments 3,000 - (3,000)
Loan repayment 9,500 398 (9,102)
Other - 20,000 20,000
Total revenues 291,245 323,679 32,434
EXPENDITURES - BUDGET UNIT 324,400 131,168 193,232
Revenues over (under) expenditures (33,155) 192,511 225,666
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 (33,155)$ 192,511 225,666$
FUND BALANCES, beginning of year 568,698
FUND BALANCES, end of year 761,209$
(continued)
Community Housing
Special Revenue Funds
DRAFT
662
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, 2018
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ -$ -$ -$
Special assessments - - - - - -
Licenses and permits - - - - - -
Intergovernmental - - - 70,000 111,431 41,431
Charges for services - - - - - -
Fines and forfeitures - - - 50,500 72,985 22,485
Interest on investments 50 21 (29) - 784 784
Loan repayment 5,275 7 (5,268) - - -
Other - - - - 10,616 10,616
Total revenues 5,325 28 (5,297) 120,500 195,816 75,316
EXPENDITURES - BUDGET UNIT - - - 221,124 270,686 (49,562)
Revenues over (under) expenditures 5,325 28 (5,297) (100,624) (74,870) 25,754
OTHER FINANCING SOURCES
Transfers in - - - 111,512 111,453 (59)
Transfers out - - - - - -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)- - - 111,512 111,453 (59)
Revenues and other sources over
(under) expenditures 5,325$ 28 (5,297)$ 10,888$ 36,583 25,695$
FUND BALANCES, beginning of year 1,172 70,264
FUND BALANCES, end of year 1,200$ 106,847$
(continued)
Housing Revolving Loan Fund Drug Forfeitures
Special Revenue Funds
DRAFT
663
170
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
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 1,000 1,362 362 - - -
Loan repayment - - - - - -
Other - - - - - -
Total revenues 1,000 1,362 362 - - -
EXPENDITURES - BUDGET UNIT - - - 19,125 19,125 -
Revenues over (under) expenditures 1,000 1,362 362 (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 1,000$ 1,362 362$ (19,125)$ (19,125) -$
FUND BALANCES, beginning of year 130,023 331,500
FUND BALANCES, end of year 131,385$ 312,375$
(continued)
City-County Drug Forfeitures Law and Justice Center
Special Revenue Funds
DRAFT
664
171
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ 700,000$ 600,687$ (99,313)$
Special assessments 2,000 4,895 2,895 - - -
Licenses and permits - - - - - -
Intergovernmental - - - - 37,926 37,926
Charges for services 1,816,250 1,821,677 5,427 - - -
Fines and forfeitures - - - - - -
Interest on investments 3,000 - (3,000) 8,800 - (8,800)
Loan repayment - - - - - -
Other - 221,891 221,891 - - -
Total revenues 1,821,250 2,048,463 227,213 708,800 638,613 (70,187)
EXPENDITURES - BUDGET UNIT 1,780,311 1,741,417 38,894 676,000 582,282 93,718
Revenues over (under) expenditures 40,939 307,046 266,107 32,800 56,331 23,531
OTHER FINANCING SOURCES
Transfers in - - - - 48,835 48,835
Transfers out - - - (36,000) (36,000) -
Long-term debt issued - - - - - -
Sale of capital assets - - - - - -
Total other financing sources (uses)- - - (36,000) 12,835 48,835
Revenues and other sources over
(under) expenditures 40,939$ 307,046 266,107$ (3,200)$ 69,166 72,366$
FUND BALANCES, beginning of year 1,474,917 1,495,293
FUND BALANCES, end of year 1,781,963$ 1,564,459$
(continued)
Street Arterial and Collector District TIF N 7th Corridor
Special Revenue Funds
DRAFT
665
172
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes 143,000$ 144,461$ 1,461$ 36,097$ 56,063$ 19,966$
Special assessments - - - - - -
Licenses and permits - - - - - -
Intergovernmental - 1,353 1,353 - - -
Charges for services - - - - - -
Fines and forfeitures - - - - - -
Interest on investments 1,800 3,765 1,965 - 198 198
Loan repayment - - - - - -
Other - - - - - -
Total revenues 144,800 149,579 4,779 36,097 56,261 20,164
EXPENDITURES - BUDGET UNIT 156,600 111,987 44,613 4,750 4,721 29
Revenues over (under) expenditures (11,800) 37,592 49,392 31,347 51,540 20,193
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 (21,800)$ 27,592 49,392$ 31,347$ 51,540 20,193$
FUND BALANCES, beginning of year 385,025 3,204
FUND BALANCES, end of year 412,617$ 54,744$
(continued)
TIF Mandeville/Wheat Dr.
Special Revenue Funds
TIF N.E. Urban Renewal
DRAFT
666
173
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ 14$ 14$ -$ -$ -$
Special assessments - - - - - -
Licenses and permits - - - - - -
Intergovernmental - - - - - -
Charges for services - - - - - -
Fines and forfeitures - - - 60,950 72,053 11,103
Interest on investments - - - 3,000 4,084 1,084
Loan repayment - - - - - -
Other - - - - - -
Total revenues - 14 14 63,950 76,137 12,187
EXPENDITURES - BUDGET UNIT 100 79 21 150,000 81,500 68,500
Revenues over (under) expenditures (100) (65) 35 (86,050) (5,363) 80,687
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 (100)$ (65) 35$ (86,050)$ (5,363) 80,687$
FUND BALANCES, beginning of year (7,561) 388,909
FUND BALANCES, end of year (7,626)$ 383,546$
(continued)
TIFD South Boz Technology Victim/Witness Advocate
Special Revenue Funds
DRAFT
667
174
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes 371,660$ 403,725$ 32,065$ -$ -$ -$
Special assessments - - - 369,507 425,319 55,812
Licenses and permits - - - - - -
Intergovernmental - - - - - -
Charges for services - - - - - -
Fines and forfeitures - - - - - -
Interest on investments 2,500 - (2,500) 746 5,929 5,183
Loan repayment - - - - - -
Other - - - - - -
Total revenues 374,160 403,725 29,565 370,253 431,248 60,995
EXPENDITURES - BUDGET UNIT 601,250 601,041 209 442,233 442,189 44
Revenues over (under) expenditures (227,090) (197,316) 29,774 (71,980) (10,941) 61,039
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 (227,090)$ (197,316) 29,774$ (103,880)$ (42,841) 61,039$
FUND BALANCES, beginning of year 1,036,739 574,910
FUND BALANCES, end of year 839,423$ 532,069$
(continued)
Special Revenue Funds
Street LightingFire Department Equipment
DRAFT
668
175
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
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 - - - - - -
Loan repayment - - - - - -
Other - 187,145 187,145 - - -
Total revenues - 187,145 187,145 - - -
EXPENDITURES - BUDGET UNIT 4,500 4,322 178 - - -
Revenues over (under) expenditures (4,500) 182,823 187,323 - - -
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 (4,500)$ 182,823 187,323$ -$ - -$
FUND BALANCES, beginning of year 534,163 105
FUND BALANCES, end of year 716,986$ 105$
(continued)
Special Revenue Funds
Park Land Municipal Court Restitution
DRAFT
669
176
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Variance
Positive
Budget Actual (Negative)
REVENUES
Taxes 6,377,230$ 5,512,940$ (864,290)$
Special assessments 507,057 558,694 51,637
Licenses and permits 1,749,800 2,129,213 379,413
Intergovernmental 1,390,109 1,612,588 222,479
Charges for services 3,627,648 4,018,384 390,736
Fines and forfeitures 111,450 146,412 34,962
Interest on investments 96,351 22,461 (73,890)
Loan repayment 24,275 22,142 (2,133)
Other 187,515 581,576 394,061
Total revenues 14,071,435 14,604,410 532,975
EXPENDITURES - BUDGET UNIT 10,183,660 10,342,004 (158,344)
Revenues over (under) expenditures 3,887,775 4,262,406 374,631
OTHER FINANCING SOURCES
Transfers in 385,796 302,038 (83,758)
Transfers out (3,276,261) (3,206,477) 69,784
Long-term debt issued - - -
Sale of capital assets - 10,094 10,094
Total other financing sources (uses)(2,890,465) (2,894,345) (3,880)
Revenues and other sources over
(under) expenditures 997,310$ 1,368,061 370,751$
FUND BALANCES, beginning of year 18,378,041
FUND BALANCES, end of year 19,746,102$
(continued)
Special Revenue Funds
Total
DRAFT
670
177
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Debt Service Funds
Variance Variance
Positive Positive
Budget Actual (Negative)Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ 1,356,538$ 1,351,768$ (4,770)$
Special assessments - - - - - -
Intergovernmental - - - - - -
Charges for services - 5,095 5,095 - - -
Interest on investments 26,000 - (26,000) - 1,659 1,659
Loan repayment 5,000 3,685 (1,315) - - -
Other - - - - - -
Total revenue 31,000 8,780 (22,220) 1,356,538 1,353,427 (3,111)
EXPENDITURES
Other - 5,524 (5,524) - - -
Debt service:
Principal - - - 875,000 875,000 -
Interest and fiscal fees - - - 482,738 482,738 -
Total expenditures - 5,524 (5,524) 1,357,738 1,357,738 -
Revenues over (under) expenditures 31,000 3,256 (27,744) (1,200) (4,311) (3,111)
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - -
Transfers out (1,588,781) - 1,588,781 - - -
Total other financing sources (uses)(1,588,781) - 1,588,781 - - -
Revenues and other sources over (under) expenditures (1,557,781)$ 3,256 1,561,037$ (1,200)$ (4,311) (3,111)$
FUND BALANCES, beginning of year 3,420,424 92,159
FUND BALANCES, end of year 3,423,680$ 87,848$
(continued)
G.O. BondsSID Revolving
DRAFT
671
178
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Variance Variance
Favorable Positive
Budget Actual (Unfavorable) Budget Actual (Negative)
REVENUES
Taxes -$ -$ -$ -$ -$ -$
Special assessments - - - 616,449 506,819 (109,630)
Intergovernmental - - - - - -
Charges for services - - - - 409 409
Interest on investments - - - 9,940 10,589 649
Loan repayment - - - - - -
Other - - - - - -
Total revenue - - - 626,389 517,817 (108,572)
EXPENDITURES
Other - - - - - -
Debt service:
Principal 210,000 210,000 - 271,000 95,000 176,000
Interest and fiscal fees 212,638 212,638 - 108,800 23,221 85,579
Total expenditures 422,638 422,638 - 379,800 118,221 261,579
Revenues over (under) expenditures (422,638) (422,638) - 246,589 399,596 153,007
OTHER FINANCING SOURCES (USES)
Transfers in 422,288 422,638 350 - - -
Transfers out - - - (10,700) - 10,700
Total other financing sources (uses)422,288 422,638 350 (10,700) - 10,700
Revenues and other sources over (under) expenditures (350)$ - 350$ 235,889$ 399,596 163,707$
FUND BALANCES, beginning of year - 999,850
FUND BALANCES, end of year -$ 1,399,446$
(continued)
TIF Bonds SID Debt Service
Debt Service Funds
DRAFT
672
179
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
DRAFT
673
180
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Variance
Positive
Budget Actual (Negative)
REVENUES
Taxes 1,356,538$ 1,351,768$ (4,770)$
Special assessments 616,449 506,819 (109,630)
Intergovernmental - - -
Charges for services - 5,504 5,504
Interest on investments 35,940 12,248 (23,692)
Loan repayment 5,000 3,685 (1,315)
Other - - -
Total revenue 2,013,927 1,880,024 (133,903)
EXPENDITURES
Other - 5,524 (5,524)
Debt service:
Principal 1,356,000 1,180,000 176,000
Interest and fiscal fees 804,176 718,597 85,579
Total expenditures 2,160,176 1,904,121 256,055
Revenues over (under) expenditures (146,249) (24,097) 122,152
OTHER FINANCING SOURCES (USES)
Transfers in 422,288 422,638 350
Transfers out (1,599,481) - 1,599,481
Total other financing sources (uses)(1,177,193) 422,638 1,599,831
Revenues and other sources over (under) expenditures (1,323,442)$ 398,541 1,721,983$
FUND BALANCES, beginning of year 4,512,433
FUND BALANCES, end of year 4,910,974$
(continued)
Total
Debt Service Funds
DRAFT
674
181
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Variance
Favorable
Budget Actual (Unfavorable)
REVENUES
Taxes -$ -$ -$
Special assessments - - -
Intergovernmental - 85,000 85,000
Charges for services - - -
Interest on investments - - -
Loan repayment - - -
Other - 415,457 415,457
Total revenue - 500,457 500,457
EXPENDITURES
Other 93,500 93,323 177
Capital outlay 5,777,175 5,777,080 95
Total expenditures 5,870,675 5,870,403 272
Revenues over (under) expenditures (5,870,675) (5,369,946) 500,729
OTHER FINANCING SOURCES (USES)
Transfers in 2,886,581 1,313,800 (1,572,781)
Transfers out - - -
Long term debt issuance - 851,049 851,049
Sale of capital assets - - -
Total other financing sources (uses)2,886,581 2,164,849 (721,732)
Revenues and other sources over (under) expenditures (2,984,094)$ (3,205,097) (221,003)$
FUND BALANCES, beginning of year 9,068,206
FUND BALANCES, end of year 5,863,109$
(continued)
Construction
Capital Projects Funds
DRAFT
675
182
CITY OF BOZEMAN, MONTANA
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET TO ACTUAL
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) Year Ended June 30, 2018
Variance
Positive
Budget Actual (Negative)
REVENUES
Intergovernmental -$ -$ -$
Charges for services 100,000 118,029 18,029
Interest on investments 6,000 - (6,000)
Total revenues 106,000 118,029 12,029
EXPENDITURES - BUDGET UNIT - 8,426 (8,426)
Revenues over (under) expenditures 106,000 109,603 3,603
OTHER FINANCING SOURCES (USES)- - -
Revenues and other sources over
(under) expenditures 106,000$ 109,603 3,603$
FUND BALANCES, beginning of year 1,201,838
FUND BALANCES, end of year 1,311,441$
Cemetery Perpetual Care
Permanent Fund
DRAFT
676
COMBINING NONMAJOR PROPRIETARY FUNDS
DRAFT
677
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.
DRAFT
678
182
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF NET POSITION
NONMAJOR PROPRIETARY FUNDS June 30, 2018
Business-type Activities
Enterprise Funds
Parking Stormwater
Fund Fund Total
ASSETS
Current assets
Cash and investments 1,035,602$ 393,809$ 1,429,411$
Receivables:
Customers, net 113,784 123,060 236,844
Special assessments - 135 135
Total current assets 1,149,386 517,004 1,666,390
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 11,840,479 - 11,840,479
Other structures and improvements - - -
Machinery and equipment 152,005 231,631 383,636
Vehicles 22,294 153,310 175,604
Infrastructure 47,058 2,470,231 2,517,289
Property under capital lease - 519,943 519,943
Accumulated depreciation and amortization (4,081,880) (484,435) (4,566,315)
Net property, plant and equipment 8,283,392 2,890,680 11,174,072
Total non current assets 8,637,299 2,946,011 11,583,310
Deferred outflows of resources
Pension plan contributions 82,200 113,323 195,523
Total assets 9,868,885$ 3,576,338$ 13,445,223$
(continued)
DRAFT
679
183
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF NET POSITION
NONMAJOR PROPRIETARY FUNDS (CONTINUED) June 30, 2018
Business-type Activities
Enterprise Funds
Parking Stormwater
Fund Fund Total
LIABILITIES
Current liabilities
Accounts payable and accrued expenses 83,619$ 219,367$ 302,986$
Compensated absences payable 12,701 22,941 35,642
Capital lease obligations payable in one year - 85,346 85,346
Bonds and leases payable in one year - 76,000 76,000
Total current liabilities 96,320 403,654 499,974
Noncurrent liabilities
Closure and post-closure care costs - - -
Capital lease obligations - 129,541 129,541
Revenue bonds due after one year - 1,216,430 1,216,430
Compensated absences payable - 643 643
Other post-employment health benefits 37,046 11,559 48,605
Appearance bond and other liabilities - 185 185
Net pension liability 313,689 432,460 746,149
Total noncurrent liabilities 350,735 1,790,818 2,141,553
Total liabilities 447,055 2,194,472 2,641,527
Deferred inflows of resources
Pension deferrals 10,798 5,282 16,080
NET POSITION
Net Investment in capital assets 8,283,392 2,675,793 10,959,185
Restricted for impact capital projects - - -
Restricted for parking capital projects 344,465 - 344,465
Restricted for debt service - - -
Unrestricted 783,175 (1,299,209) (516,034)
Total net position 9,411,032 1,376,584 10,787,616
Total liabilities and net position 9,868,885$ 3,576,338$ 13,445,223$
DRAFT
680
184
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
NONMAJOR PROPRIETARY FUNDS Year Ended June 30, 2018
Parking Stormwater
Fund Fund Totals
OPERATING REVENUES 958,378$ 1,324,461$ 2,282,839$
OPERATING EXPENSES
Salaries and benefits 389,114 548,093 937,207
Materials and supplies 41,477 34,380 75,857
Repairs and maintenance 49,717 5,925 55,642
Utilities 30,758 4,172 34,930
Administrative charges 61,842 61,466 123,308
Other expenses 242,533 66,096 308,629
Depreciation and amortization 309,199 111,828 421,027
Changes in estimated closure and post-
closure care costs - - -
Total operating expenses 1,124,640 831,960 1,956,600
Operating income (loss)(166,262) 492,501 326,239
NON-OPERATING REVENUES (EXPENSES)
Interest income - -
Interest expense (9,137) (46,213) (55,350)
Other income 11,952 687 12,639
Intergovernmental income 6,020 8,299 14,319
Gain (loss) on sale of assets 3,028 - 3,028
Total non-operating revenues (expenses)11,863 (37,227) (25,364)
Income (loss) before contributions and transfers (154,399) 455,274 300,875
Contributions of infrastructure - developers - 685,144 685,144
Transfers in 250,000 140,000 390,000
Transfers out - - -
Change in net position 95,601 1,280,418 1,376,019
NET POSITION, beginning of year 9,324,030 97,994 9,422,024
Restatement (8,599) (1,828) (10,427)
NET POSITION, beginning of year, restated 9,315,431 96,166 9,411,597
NET POSITION, end of year 9,411,032$ 1,376,584$ 10,787,616$
Business-type Activities
Enterprise Funds
DRAFT
681
185
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF CASH FLOWS -
NONMAJOR PROPRIETARY FUNDS Year Ended June 30, 2018
Parking Stormwater
Fund Fund Total
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 967,405$ 1,321,409$ 2,288,814$
Receipts from others 11,952 687 12,639
Payments to suppliers (402,040) (15,399) (417,439)
Payments to employees (334,712) (463,975) (798,687)
Payments to internal service funds and administrative fees (61,842) (61,466) (123,308)
Net cash flows from operating activities 180,763 781,256 962,019
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Transfers in 250,000 140,000 390,000
Receipts from grants and intergovernmental sources 6,020 8,299 14,319
Net cash flows from non-capital financing activities 256,020 148,299 404,319
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition of capital assets (159,336) (889,822) (1,049,158)
Principal paid on bonds, interfund loans, loans and leases - (150,651) (150,651)
Interest paid on bonds, interfund loans, loans and leases (9,137) (46,213) (55,350)
Proceeds from sale of property, plant and equipment 3,028 - 3,028
Net cash flows from capital and related financing activities (165,445) (1,086,686) (1,252,131)
CASH FLOWS FROM INVESTING ACTIVITIES
Collections on notes - - -
Interest on investments - - -
Net cash flows from investing activities - - -
Net change in cash and investments 271,338 (157,131) 114,207
Cash and investments, beginning of year 1,108,729 606,271 1,715,000
Cash and investments, end of year 1,380,067$ 449,140$ 1,829,207$
(continued)
DRAFT
682
186
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF CASH FLOWS -
NONMAJOR PROPRIETARY FUNDS (CONTINUED) Year Ended June 30, 2018
Parking Stormwater
Fund Fund Total
Cash and investments classified as:
Cash and investments 1,035,602$ 393,809$ 1,429,411$
Restricted cash and investments 344,465 55,331 399,796
Totals 1,380,067$ 449,140$ 1,829,207$
Noncash transactions: donated infrastructure -$ 685,144$ 685,144$
RECONCILIATION OF OPERATING LOSS
TO NET CASH FROM OPERATING ACTIVITIES:
Operating income (loss)(166,262)$ 492,501$ 326,239$
Adjustments to reconcile operating loss
to net cash from operating activities:
Depreciation and amortization 309,199 111,828 421,027
Change in estimated closure costs - - -
Other income 11,952 687 12,639
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable 9,027 (3,052) 5,975
Increase (decrease) in:
Accounts payable (37,555) 95,174 57,619
Accrued employee benefits payable 6,250 8,868 15,118
Net pension liabilities 48,152 75,250 123,402
Total adjustments 347,025 288,755 635,780
Net cash from operating activities 180,763$ 781,256$ 962,019$
DRAFT
683
INTERNAL SERVICE FUND STATEMENTS
DRAFT
685
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.
DRAFT
686
187
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF NET POSITION -
INTERNAL SERVICE FUNDS Year Ended June 30, 2018
Vehicle Medical
Maintenance Health
Shop Insurance Total
ASSETS
Current assets
Cash and equivalents -$ 395,556$ 395,556$
Customer receivables, net 91 11,109 11,200
Prepaid expenses - - -
Total current assets 91 406,665 406,756
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 (605,578) - (605,578)
Net property, plant, and equipment 1,075,534 - 1,075,534
Deferred outflows of resources
Pension plan contributions 122,004 - 122,004
Total assets and deferred outflows of resources 1,197,629$ 406,665$ 1,604,294$
LIABILITIES
Current liabilities
Accounts payable 43,297$ 1,375$ 44,672$
Compensated absences payable 23,581 - 23,581
Other post-employment health benefits 33,707 - 33,707
Due to other city funds 68,083 - 68,083
Total current liabilities 168,668 1,375 170,043
Non-current liabilities
Net pension liability 472,511 - 472,511
Total liabilities 641,179 1,375 642,554
Deferred inflows of resources
Pension deferrals 13,500 - 13,500
NET POSITION
Net investment in capital assets 1,075,534 - 1,075,534
Unrestricted (532,584) 405,290 (127,294)
542,950 405,290 948,240
1,197,629$ 406,665$ 1,604,294$
DRAFT
687
188
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION -
INTERNAL SERVICE FUNDS Year Ended June 30, 2018
Vehicle Medical
Maintenance Health
Shop Insurance Total
OPERATING REVENUES 1,270,587$ 4,800,019$ 6,070,606$
OPERATING EXPENSES
Salaries and benefits 492,099 - 492,099
Materials and supplies 662,307 - 662,307
Repairs and maintenance 10,912 - 10,912
Utilities 26,238 - 26,238
Administrative charges 148,346 - 148,346
Insurance claims - 4,733,165 4,733,165
Other expenses 32,303 81,300 113,603
Depreciation 57,677 - 57,677
Total operating expenses 1,429,882 4,814,465 6,244,347
Operating income (loss)(159,295) (14,446) (173,741)
NON-OPERATING REVENUES (EXPENSES)
Interest income - 3,522 3,522
Interest expense (210) - (210)
Other income 737 6,702 7,439
Intergovernmental income 8,596 - 8,596
Loss on sale of assets (33) - (33)
Total non-operating revenue (expenses)9,090 10,224 19,314
Income before transfers (150,205) (4,222) (154,427)
Transfers in - - -
Change in net position (150,205) (4,222) (154,427)
NET POSITION, beginning of year 700,970 409,512 1,110,482
Restatement (7,815) - (7,815)
NET POSITION, beginning of year, restated 693,155 409,512 1,102,667
NET POSITION, end of year 542,950$ 405,290$ 948,240$
DRAFT
688
189
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF CASH FLOWS -
INTERNAL SERVICE FUNDS Year Ended June 30, 2018
Vehicle Medical
Maintenance Health
Shop Insurance Total
CASH FLOWS FROM OPERATIONS
Receipts from customers 1,270,496$ 4,859,254$ 6,129,750$
Receipts from others 9,333 6,702 16,035
Operating loans from other City funds 56,382 - 56,382
Payments to suppliers (694,847) (80,424) (775,271)
Payments to employees (492,775) (4,733,165) (5,225,940)
Payments to Internal Service Funds and administrative fees (148,346) - (148,346)
Net cash flows from operating activities 243 52,367 52,610
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Additions to property, plant and equipment - - -
Proceeds from sale of capital assets (33) - (33)
Interest paid on bonds, interfund loans, loans and leases (210) - (210)
Net cash flows from capital and related financing activities (243) - (243)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Transfers in - - -
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments - 3,522 3,522
Net increase (decrease) in cash and cash equivalents - 55,889 55,889
CASH AND EQUIVALENTS, beginning of year - 339,667 339,667
CASH AND EQUIVALENTS, end of year -$ 395,556$ 395,556$
(continued)
DRAFT
689
190
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF CASH FLOWS -
INTERNAL SERVICE FUNDS (CONTINUED) Year Ended June 30, 2018
Vehicle Medical
Maintenance Health
Shop Insurance Total
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH FROM OPERATING ACTIVITIES
Operating loss (159,295)$ (14,446)$ (173,741)$
Adjustments to reconcile operating income (loss)
to net cash from operating activities:
Depreciation 57,677 - 57,677
Other income 9,333 6,702 16,035
Changes in assets and liabilities:
(Increase) decrease in:
Customer receivables (91) 59,235 59,144
Prepaid expenses - - -
Increase (decrease) in:
Accounts payable (13,597) 876 (12,721)
Due to other city funds 56,382 - 56,382
Compensated absences payable 3,269 - 3,269
Other post-employment health benefits (3,945) - (3,945)
Net pension 50,510 - 50,510
Total adjustments 159,538 66,813 226,351
Net cash from operating activities 243$ 52,367$ 52,610$ DRAFT
690
AGENCY FUNDS STATEMENTS
DRAFT
691
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.
DRAFT
692
191
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF FIDUCIARY NET POSITION –
AGENCY FUNDS June 30, 2018
CMC Tourism Total
Municipal Bozeman Site Business Agency
Court Remediation Improvement Funds
ASSETS
Cash and cash equivalents 413,967$ -$ 476,697$ 890,664$
Customer receivables 1,254 - - 1,254
Special assessments - - 9,541 9,541
Total assets 415,221$ -$ 486,238$ 901,459$
LIABILITIES
Accounts payable 415,221$ -$ 486,238$ 901,459$
Total liabilities 415,221$ -$ 486,238$ 901,459$ DRAFT
693
192
CITY OF BOZEMAN, MONTANA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES –
AGENCY FUNDS Year Ended June 30, 2018
Balance Balance
June 30, 2017 Additions Deletions June 30, 2018
ASSETS
Cash and cash equivalents 335,967$ 78,000$ -$ 413,967$
Customer receivables 1,949 - (695) 1,254
Interfund receivable - - - -
Total assets 337,916$ 78,000$ (695)$ 415,221$
LIABILITIES
Accounts payable 337,916 78,000$ (695)$ 415,221$
Total liabilities 337,916$ 78,000$ (695)$ 415,221$
Court
Municipal
Balance Balance
June 30, 2017 Additions Deletions June 30, 2018
ASSETS
Cash and cash equivalents -$ -$ -$ -$
Customer receivables - - - -
Total assets -$ -$ -$ -$
LIABILITIES
Accounts payable -$ -$ -$ -$
Total liabilities -$ -$ -$ -$
Site Remediation
CMC Bozeman
Balance Balance
June 30, 2017 Additions Deletions June 30, 2018
ASSETS
Cash and cash equivalents 435,946$ 40,751$ -$ 476,697$
Special Assessments 50,072 - (40,531) 9,541
Total assets 486,018$ 40,751$ (40,531)$ 486,238$
LIABILITIES
Accounts payable 486,018$ 40,751$ (40,531)$ 486,238$
Total liabilities 486,018$ 40,751$ (40,531)$ 486,238$
Site Remediation
Tourism Business Improvement DistrictDRAFT
694
PART III
STATISTICAL SECTION
DRAFT
696
Statistical Section
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.193
Revenue Capacity
These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax.198
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. 209
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.218
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.220
Sources: Unless otherwise noted, the information in these schedules is derived from the City of Bozeman comprehensive annual financial reports for the relevant year.
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
DRAFT
697
FINANCIAL TRENDS SECTION
DRAFT
698
193
CITY OF BOZEMAN, MONTANA
NET POSITION BY COMPONENT
Past Ten Fiscal Years
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Governmental activities
Net investment in capital assets 83,707,824$ 84,113,904$ 88,844,404$ 88,500,437$ 89,081,484$ 89,267,076$ 93,409,850$ 104,342,191$ 115,696,956$ 137,133,345$
Restricted 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 36,522,195
Unrestricted 20,871,106 25,076,908 16,049,044 15,470,543 11,521,053 12,127,224 (5,137,642) (3,923,466) (4,839,467) (5,506,336)
Total governmental activities 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$ 168,149,204$
Business-type activities
Net investment in capital assets 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$ 239,254,236$
Restricted 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 12,702,713
Unrestricted 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 13,291,274
Total business-type activities 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$ 265,248,223$
Primary government
Net investment in capital assets 271,785,602$ 274,079,093$ 277,025,293$ 280,985,896$ 288,476,035$ 294,768,433$ 304,829,627$ 325,727,846$ 345,069,237$ 376,387,581$
Restricted 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 49,224,908
Unrestricted 32,807,225 41,146,505 28,431,062 18,280,101 22,164,390 20,850,577 1,481,757 6,658,942 4,314,547 7,784,938
Total primary government net position 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$ 433,397,427$
Fiscal Years
DRAFT
700
194
CITY OF BOZEMAN, MONTANA
CHANGES IN NET POSITION
Past Ten Fiscal Years (accrual basis of accounting)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Net (Expense) / Revenue
Governmental Activities (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)$ (16,975,316)$
Business-Type Activities (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 14,679,589
Total Primary Government Net Expense (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) (2,295,727)
General Revenues and Other Changes in Net Position
Governmental Activities:
Taxes
Property Taxes 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 22,532,724
Unrestricted Grants and Contributions 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 8,993,659
Investment Earnings 671,859 352,378 301,424 283,090 243,744 355,790 403,152 519,637 554,870 64,058
Miscellaneous 2,766,671 2,256,071 1,556,790 155,484 - 293,884 374,966 418,215 1,317,137 2,320,536
Sale of Capital Assets 68,057 761,952 (8,168) 4,414 1,765 236,688 - 123,934 (71,335) 28,861
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) (758,084)
Extraordinary Items - - - - - - - -
Total Governmental Activities 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 33,181,754
Business-Type Activities:
Unrestricted Grants and Contributions 2,155 342,653 438,475 2,115 508,912 - - - - -
Investment Earnings - - - - - - - - 304,231 3,389
Transfers of Capital Assets 6,311,324 - - 2,088 - - - - (2,013,292) 10,005
ARRA Debt Forgiveness - - - - - 390,700 - - - -
Transfers 3,249,929 (521,863) (517,251) 37,136 10,000 10,000 380,347 (1,218,036) 742,999 758,084
Miscellaneous - - - - - - - - 1,256,284 2,529,824
Total Business-Type Activities 9,563,408 (179,210) (78,776) 41,339 518,912 400,700 380,347 (1,218,036) 290,222 3,301,302
Total Primary Government 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 36,483,056
Change in Net Position
Governmental Activities (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 16,206,438
Business-Type Activities 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 17,980,891
Fiscal Year
DRAFT
701
195
CITY OF BOZEMAN, MONTANA
CHANGES IN NET POSITION (CONTINUED)
Past Ten Fiscal Years (accrual basis of accounting)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Net (Expense) / Revenue
Governmental Activities (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)$ (16,975,316)$
Business-Type Activities (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 14,679,589
Total Primary Government Net Expense (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) (2,295,727)
General Revenues and Other Changes in Net Position
Governmental Activities:
Taxes
Property Taxes 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 22,532,724
Unrestricted Grants and Contributions 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 8,993,659
Investment Earnings 671,859 352,378 301,424 283,090 243,744 355,790 403,152 519,637 554,870 64,058
Miscellaneous 2,766,671 2,256,071 1,556,790 155,484 - 293,884 374,966 418,215 1,317,137 2,320,536
Sale of Capital Assets 68,057 761,952 (8,168) 4,414 1,765 236,688 - 123,934 (71,335) 28,861
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) (758,084)
Extraordinary Items - - - - - - - -
Total Governmental Activities 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 33,181,754
Business-Type Activities:
Unrestricted Grants and Contributions 2,155 342,653 438,475 2,115 508,912 - - - - -
Investment Earnings - - - - - - - - 304,231 3,389
Transfers of Capital Assets 6,311,324 - - 2,088 - - - - (2,013,292) 10,005
ARRA Debt Forgiveness - - - - - 390,700 - - - -
Transfers 3,249,929 (521,863) (517,251) 37,136 10,000 10,000 380,347 (1,218,036) 742,999 758,084
Miscellaneous - - - - - - - - 1,256,284 2,529,824
Total Business-Type Activities 9,563,408 (179,210) (78,776) 41,339 518,912 400,700 380,347 (1,218,036) 290,222 3,301,302
Total Primary Government 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 36,483,056
Change in Net Position
Governmental Activities (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 16,206,438
Business-Type Activities 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 17,980,891
Total Primary Government 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$ 34,187,329$
Fiscal Year
DRAFT
702
196
CITY OF BOZEMAN, MONTANA
FUND BALANCE - GOVERNMENT FUNDS
Past Ten Fiscal Years (modified accrual basis of accounting)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
General Fund
Reserved 63,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Unreserved 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 7,739,020
Unassigned - - 905,862 264,091 - 193,534 - 979,258 87,274 (274,252)
Total general fund 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 7,464,768
All Other Governmental
Reserved 2,660,918 6,597,569 - - - - - - - -
Unreserved, reported in:- - - - - - - - - -
Special revenue funds 12,516,240 14,916,152 - - - - - - - -
Capital projects funds - 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 1,623,816
Restricted - - 19,962,574 19,683,881 26,061,499 19,927,526 12,546,935 39,856,356 38,938,127 34,403,744
Committed - - 3,278,422 3,463,714 851,322 3,075,505 3,088,936 3,528,263 3,901,694 3,856,238
Assigned - - 58,419 - - 229,602 - 7,425,398 7,259,749 1,868,485
Unassigned - - - (51,586) 456,669 (184,101) (97,173) 914,535 107,103 (42,648)
Total all other governmental funds 15,177,158$ 23,307,008$ 24,298,879$ 24,209,493$ 28,563,020$ 24,318,089$ 17,600,488$ 53,151,127$ 51,740,011$ 41,709,635$
Note: The City of Bozeman implemented the new standards for reporting fund balance GASB Statement 54 in fiscal year 2011
Fiscal Year
DRAFT
703
197
CITY OF BOZEMAN, MONTANA
CHANGES IN FUND BALANCES - GOVERNMENT FUNDS
Past Ten Fiscal Years (modified accrual basis of accounting)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Revenues
Taxes 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$ 22,553,972$
Special assessments 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 1,137,103
Licenses and permits 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 2,541,727
Intergovernmental 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 9,419,104
Charges for service 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 17,885,529
Fines and forfeitures 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 1,240,154
Interest on investments 671,859 352,378 300,516 281,239 239,778 329,086 370,305 479,699 520,690 34,709
loan repayment 9,985 10,401 193,302 306,385 157,069 63,980 94,989 38,552 31,837 25,827
Other 2,766,671 2,256,071 1,556,790 155,484 394,677 287,089 363,274 415,646 1,307,668 2,313,097
Total revenues 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 57,151,222
Expenditures
General government 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 8,268,285
Public safety 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 17,602,966
Public service 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 4,955,559
Public welfare 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 7,975,354
Other - - - - 15,776 1,046,712 1,113,340 418,431 506,169 655,532
Capital outlay 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 18,420,501
Debt service -
Principal 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 1,500,687
Interest & Fiscal Fees 738,198 715,150 680,088 666,082 445,736 380,950 824,266 893,470 771,714 718,597
Total expenditures 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 60,097,481
Excess of revenues
over (under) expenditures (556,309) 4,308,100 5,125,359 381,877 3,310,881 (779,031) (661,544) 1,188,288 (946,096) (2,946,259)
Other Financing Sources (Uses)
Proceeds from borrowing - - - - - - - -
Transfers in 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 4,394,277
Transfers out (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) (5,152,361)
Issuance of debt 177,346 890,000 - 3,357,798 1,203,279 10,012,647 5,619,361 47,406 234,702 1,103,586
Premium on Bonds Issued - - - - - - - - - -
Payments to Refunded Bond Escrow Agent (3,120,000) - - - - - -
Sales of capital assets 86,326 766,922 10,555 59,204 2,775 243,092 64,855 227,984 43,277 35,144
Total other financing sources (uses)(3,075,580) 1,480,329 (259,216) (41,458) 1,042,966 10,245,739 5,303,869 1,262,311 (465,020) 380,646
Extraordinary items
Net change in fund balances (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)$ (2,565,613)$
Debt service as a percentage of
noncapital expenditures 6.9% 7.1% 7.7% 12.3% 7.0% 5.5% 5.4% 6.0% 5.6% 5.3%
Fiscal Year
DRAFT
704
REVENUE CAPACITY SECTION
DRAFT
706
198
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
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%
2018 56,956,360 37,201,773 7,043,644 101,201,777 187.33 6,745,351,312 1.500%
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 two 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 DRAFT
708
199
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
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 91,973,923
2017 5,870,738,906 94,102,761 4,344,335 89,758,426 93,212,816
2018 6,745,351,312 106,224,806 5,030,031 101,194,775 105,727,520
Source: Based on information provided by Gallatin County and Montana Department of Revenue
Note: Property is assessed by the State Department of Revenue every two years.
* No certified value available, first certification available for FY2014 DRAFT
709
200
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
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
2018 1,328,695 3,769,917 5,098,612 423,054 223,765 646,819 3,507,723 948,746 4,456,469
Fiscal
Year
Ended Base Incremental Total Base Incremental Total Base Incremental Total
June 30,Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable Taxable
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
2018 12,059 87,633 99,692 417 - 305 5,271,948 5,030,061 10,302,009
Source: Based on information provided by Gallatin County and Montana Department of Revenue
Note: Property is assessed by the State Department of Revenue every two years.
MANDEVILLE FARM INDUSTRIAL BOZEMAN TECHNOLOGY TOTAL
BOZEMAN DOWNTOWN NORTHEAST URBAN RENEWAL DISTRICT NORTH 7TH CORRIDOR
DRAFT
710
201
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 Incremental (Excluding ALL tax Incremental Taxable
Ended of Property in of Property Taxable increment district Value as Percentage of
June 30,the District in the District Value valuations)City's Taxable Value
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 265,793,431 4,397,597 3,068,902 89,758,426 3.42%
2018 297,005,720 5,098,612 3,769,917 101,201,777 3.73%
Source: Based on information provided by Gallatin County and Montana Department of Revenue
Note: Property is assessed by the State Department of Revenue every two years.
Downtown Bozeman Improvement District
DRAFT
711
202
CITY OF BOZEMAN, MONTANA
PROPERTY TAX LEVIES IN THE DOWNTOWN BOZEMAN IMPROVEMENT DISTRICT
Past Ten Fiscal Years
Taxing Entity 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
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 79.78 85.19 89.94 88.69 87.40 88.38 89.55 99.77 100.41 91.23
Open Space Bond 4.63 5.81 6.14 5.99 4.89 4.90 4.95 5.03 5.85 5.13
County-Wide School 100.26 94.02 95.74 95.61 96.47 101.28 99.94 106.85 105.39 99.67
Bozeman High School District 71.40 69.05 75.34 73.48 71.81 73.16 72.97 76.76 77.25 73.10
Bozeman Elementary School District 141.13 130.49 121.55 123.38 131.45 145.25 143.70 151.15 154.81 146.92
City of Bozeman 171.16 170.19 168.75 166.75 166.75 173.08 188.76 210.16 205.30 187.33
TOTAL 608.36 594.75 597.46 593.90 598.77 626.05 639.87 689.72 689.01 643.38
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 1.04 1.01 0.99 1.00 0.98 0.97 0.95 1.05 1.01 0.89
County-Wide Planning 2.58 2.50 2.40 2.40 2.39 2.39 2.35 2.39 2.39 2.48
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
DRAFT
712
203
CITY OF BOZEMAN, MONTANA
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Past Ten Fiscal Years (rate per $1,000 of assessed value)
Fiscal General Total
Year Obligation Direct Bozeman
Ended Basic Debt Tax School Gallatin State of
June 30,Rate Service Rate District County Montana
2009 160.59 10.57 171.16 212.53 210.14 46.00
2010 160.18 10.01 170.19 199.54 210.25 46.00
2011 158.96 9.79 168.75 196.89 217.21 46.00
2012 157.19 9.56 166.75 196.86 215.77 46.00
2013 158.38 8.37 166.75 203.26 215.10 46.00
2014 164.83 8.25 173.08 218.41 221.00 46.00
2015 177.52 11.24 188.76 216.67 215.78 46.00
2016 194.51 15.65 210.16 227.91 241.69 46.00
2017 190.17 15.13 205.30 232.06 241.69 46.00
2018 173.92 13.41 187.33 220.02 223.33 46.00
Source: Based on information provided by Gallatin County and Department of Revenue DRAFT
713
204
CITY OF BOZEMAN, MONTANA
PRINCIPAL PROPERTY TAX PAYERS
Current Year and Ten Years Ago
Percentage Percentage
Taxable of Total Total of Total
Assessed City Taxable Assessed City Taxable
Taxpayer Value Rank Assessed Value Value Rank Assessed Value
Northwestern Energy - Transmission & Distribution 5,379,804$ 1 5.32%3,126,536$ 1 4.21%
Verizon Wireless 583,961 2 0.58%
Centurylink, Inc. (Qwest)524,350 3 0.52%1,138,418 2 1.53%
Charter Communications Inc 498,174 4 0.49%
NB Stadium View Distrcit 460,554 5 0.46%
Harry Daum - Gallatin Mall 446,722 6 0.44%533,461 3 0.72%
Stone Ridge Partners LLC 423,820 7 0.42%357,325 7 0.48%
Mitchell Development & Investment LLC 376,921 8 0.37%326,043 10 0.44%
Bridger Peaks Holding LLC 375,052 9 0.37%
First Security Bank 352,421 10 0.35%
Bozeman Deaconness Foundation 504,584 4 0.68%
BVI/HJSI Bozeman LLC 402,806 5 0.54%
Wal-Mart Stores 377,391 6 0.51%
Celloco Partnership 344,823 8 0.46%
Lowes HIW Inc.340,678 9 0.46%
Total 9,421,779$ 9.31%7,452,065$ 10.05%
Total City Taxable Assessed Value 101,201,777$ 74,178,000$
Source: Gallatin County Treasurer
2018 2009
DRAFT
714
205
CITY OF BOZEMAN, MONTANA
PRINCIPAL PROPERTY TAX PAYERS IN
DOWNTOWN BOZEMAN IMPROVEMENT DISTRICT Current Year and Prior Year
Percentage Percentage
Taxable of Total Taxable of Total
Assessed City Taxable Assessed City Taxable
Taxpayer Business Value Rank Assessed Value Value Rank Assessed Value
G25 HOLDINGS LLC Property Investor/Developer 278,567$ 2 5.46%209,245$ 2 4.95%
First Security Bank Bank 220,843 1 4.33%296,961 1 7.02%
5 West LLC Multi Tennant Commercial/Residential Buildling 132,329 3 2.60%N/A N/A N/A
F&H, LLC Property Investor/Developer 126,764 4 2.49%119,590 3 2.83%
Moose Point LP Commercial Property Developer 124,225 5 2.44%113,996 4 2.70%
777 Building Multi Tennant Office Retail Building 115,658 6 2.27%104,808 5 2.48%
Downtowner Group LLC Business Support Services 96,034 7 1.88%89,618 6 2.12%
Atlantic Financial Group Ltd.Bank 92,786 8 1.82%79,733 7 1.89%
M & J Cowdrey LLC Property Investor/Developer 83,944 9 1.65%71,265 10 1.69%
702 LLC Property Investor/Developer 80,750 10 1.58%71,497 9 1.69%
Total 1,351,900$ 26.52%1,156,713$ 27.36%
Total Downtown BID Taxable Assessed Value 5,098,612$ 4,227,246$
Source: Gallatin County Treasurer
20172018
DRAFT
715
206
CITY OF BOZEMAN, MONTANA
PROPERTY TAX LEVIES AND COLLECTIONS
Past Ten Fiscal Years
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
DRAFT
716
207
CITY OF BOZEMAN, MONTANA
WATER SOLD BY TYPE OF CUSTOMER
Past Ten Fiscal Years (in hundreds of cubic feet “HCF”)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Type of Customer
Residential 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 1,623,881
Government 66,253 51,168 48,228 49,349 59,589 52,448 53,165 51,923 56,956 75,001
MSU 254,891 228,789 227,019 235,965 233,484 213,698 210,107 208,618 225,394 217,967
Commercial 670,961 571,223 568,474 602,352 638,337 607,444 599,193 610,741 620,761 618,398
Total 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 2,535,247
Total direct rate 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$ 3,337.92$
per 1,000 HCF
Source: City of Bozeman Finance Department
Fiscal Year
DRAFT
717
208
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
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$
2018 15.70$ 24.60$ 19.01$ 31.50$
* For Residential Customers, using 5/8 inch meter size.
Sources: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
City of Bozeman, Montana Comission Resolution 4819 & 4820
Water Sewer
DRAFT
718
DEBT CAPACITY
DRAFT
720
209
CITY OF BOZEMAN, MONTANA
RATIO OF OUTSTANDING DEBT BY TYPE
Past Ten Fiscal Years
Fiscal
Year General Special Tax Increment Water Wastewater Stormwater Total Percentage
Ended Obligation Notes Capital Assessment Financing Revenue State of MT Revenue Capital Primary of Personal Per
June 30,Bonds Payable Leases Bonds Bonds Bonds RLF Loans Bond Leases Government Income Capita
2009 4,815,000$ -$ 360,127$ 5,211,000$ 5,850,000$ 56,615$ -$ -$ -$ 16,292,742$ 2.01%441.14$
2010 4,275,000 851,071 291,237 4,819,000 5,695,000 28,992 7,902,127 - - 23,862,428 2.75%640.09$
2011 3,710,000 509,705 214,016 4,351,500 5,535,000 - 24,017,080 - - 38,337,301 4.68%1,027.42$
2012 3,080,000 306,727 203,860 2,269,500 5,370,000 182,577 23,853,427 - - 35,266,091 4.39%925.23$
2013 2,445,000 1,198,823 149,892 1,659,500 5,195,000 13,751,878 22,501,119 - - 46,901,212 5.56%1,210.26$
2014 11,685,000 1,086,396 94,176 1,185,500 5,015,000 18,140,000 21,025,565 - - 58,231,637 6.83%1,498.50$
2015 16,320,000 963,274 295,912 890,500 4,825,000 17,365,000 19,972,565 229,750 434,598 61,296,599 7.22%1,471.35$
2016 15,570,000 884,844 249,501 662,500 4,630,000 16,567,000 18,930,565 1,440,430 363,749 59,298,589 6.98%1,366.17$
2017 14,710,000 902,500 270,492 501,000 4,425,000 15,760,000 17,856,000 1,367,430 290,538 56,082,960 6.11%1,239.40$
2018 13,835,000 763,588 463,535 406,000 5,018,931 19,107,497 16,368,000 1,292,430 214,887 57,469,869 5.78%1,233.36$
Sources:City Manager's Final Adopted Budget
City of Bozeman Finance Department
Governmental Activities Business-Type Activities
DRAFT
722
210
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
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$
2018 13,835,000 4,926,931 18,761,931 18.5% 402.65$
Source:City Manager's Final Adopted Budget
General Bonded Debt Outstanding
DRAFT
723
211
CITY OF BOZEMAN, MONTANA
DIRECT & OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
Debt Estimated
Outstanding Estimated Share of
as of Percentage Overlapping
June 30, 2018 Applicable (1)Debt
Overlapping Bonded Indebtedness
Gallatin County:
Various issues outstanding 33,270,000$ 36%11,920,441$
Bozeman School District #7:
Various issues outstanding 197,531,849$ 31%61,021,015$
Subtotal overlapping debt 72,941,456$
City of Bozeman, Montana
Direct Debt 20,487,055$ 100%20,487,055$
(NOTE 9 & 10)
Total Direct & Overlapping Debt 93,428,510
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
DRAFT
724
212
CITY OF BOZEMAN, MONTANA
LEGAL DEBT MARGIN INFORMATION
Past Ten Fiscal Years
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Debt limit*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$ 168,633,783$
Total net debt applicable to limit (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)$ (14,598,588)$
Legal debt margin 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$ 154,035,195$
Total net debt applicable to the limit 8.0% 6.5% 5.1% 4.5% 4.8% 15.1% 18.2% 11.6% 12.6% 8.7%
as a percentage of debt limit
*2.5% of total market value of taxable property of $6.7 Billion
Source: City Manager's Final Adopted Budget
Fiscal Years
DRAFT
725
213
CITY OF BOZEMAN, MONTANA
PLEDGED REVENUE COVERAGE
Past Ten 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
DRAFT
726
214
CITY OF BOZEMAN, MONTANA
DEBT SERVICE REQUIREMENTS AND COVERAGE
FOR TAX INCREMENT DISTRICTS Past Ten Fiscal Years
Fiscal
Year Revenues Annual Revenues Annual
Ended Available Debt Service Available Debt Service
June 30,for Debt Service Payment Coverage for Debt Service Payment Coverage
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 - - -
2018 2,430,377 422,288 5.76 149,580 92,000 1.63
**$863,000 Bond issuance for the Northeast Urban Renewal District on 7/20/2017
DOWNTOWN IMPROVEMENT DISTRICT NORTHEAST URBAN RENEWAL DISTRICT
DRAFT
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CITY OF BOZEMAN, MONTANA
SUMMARY OF OUTSTANDING SIDs
Current Fiscal Year
Bond Original Maturity Bonds Cash Assessments Delinquent
Issue Amount Date Outstanding Balance Outstanding Assessments
SID 669 1,160,000$ 7/1/2020 65,000 41,174 95,445 1,735
SID 683 1,372,000 7/1/2024 140,000 102,869 327,099 (3,114)
SID 684 1,376,869 7/1/2025 - 249,902 383,256 (958)
TOTAL 3,908,869$ 205,000$ 393,945$ 805,800$ (2,338)$
As of June 30, 2018
DRAFT
728
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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
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
2018 2,903,817 916,503 DRAFT
729
217
CITY OF BOZEMAN, MONTANA
SPECIAL IMPROVEMENT DISTRICT ASSESSMENT BILLING AND COLLECTIONS
Past Ten Fiscal Years
Fiscal Assessment Total Annual
Year Billing Collections
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
2018 505,481 506,819.00
DRAFT
730
DEMOGRAPHIC AND ECONOMIC INFORMATION
DRAFT
732
218
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
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%
2018 46,596 2.9% 993,940,022$ 28,748 27.9 55.6%6,908 2.8%
Sources:
Bozeman Public Schools
U.S. Bureau of Labor Statistics
U.S. Census Bureau DRAFT
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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 8 Right Now Technologies 7
Kenyon Noble Lumber & Hardware 7 Wal-Mart 7
Town Pump Convenience Stores 7 Albertsons 6
Wal Mart 7 Bozeman Daily Chronicle 6
Albertson's 6 Community Food Coop 6
Blackhawk Industries 6 Costco 6
Bridger Bowl 6 First Security Bank 6
Community Food Co-Op 6 Kenyon Noble Lumber & Hardware 6
Costco 6 Lowes 6
First Security Bank 6 Martel Construction 6
First Student 6 McDonald's 6
JC Billion 6 Murdoch's Ranch & Home Supply 6
McDonalds 6 Ressler Motor Co 6
Murdoch's Ranch & Home Supply 6 Ridge Athletic Club 6
Ressler Motor 6 Riverside Country Club 6
Simms Fishing Products 6 Rosauers Supermarket 6
Town & Country Foods 6 Simkins Hallin Lumber 6
Williams Plumbing & Heating 6 Town Pump 6
Zoot Enterprises 6 Zoot Enterprises 6
Public Employer Public Employer
Employers Class Employers Class
By Class Size By Class Size
Montana State University 9 Montana State University 9
Belgrade School District 8 Bozeman School District 8
Bozeman School District 8 City of Bozeman 7
Gallatin County 8 Gallatin County 7
City of Bozeman 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
2018 2009
June June
DRAFT
735
OPERATING INFORMATION
DRAFT
736
220
CITY OF BOZEMAN, MONTANA
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES
BY FUNCTION / PROGRAM Past Ten Fiscal Years
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
General Government
City Commission 2.10 2.10 2.10 2.10 2.10 2.10 2.10 2.10 2.10 0.10
City Manager *10.50 11.50 11.50 8.00 8.00 5.00 5.00 6.00 6.00 9.00 Municipal Court 7.00 7.50 8.50 8.50 8.50 8.50 9.00 8.50 8.50 9.50 City Attorney 6.00 11.50 7.00 7.00 7.00 7.00 9.00 10.20 10.20 10.70 Administrative Services - - - - - 19.00 21.00 21.50 23.50 22.50 Finance *10.00 8.75 8.75 10.00 11.00 - - - - Information Technology *6.00 5.88 5.88 6.00 6.00 - - - - Community Development 13.70 12.20 12.20 8.75 9.00 8.00 12.60 11.60 13.00 13.00 Building Maintenance 3.55 3.55 3.55 3.00 3.50 3.50 3.50 3.50 3.50 4.50
Total General Government 58.85 62.98 59.48 53.35 55.10 53.10 62.20 63.40 66.80 69.30
Public SafetyPolice Department 62.75 71.75 71.75 71.25 72.75 72.75 72.25 71.70 72.70 72.70
Fire Department 45.25 41.75 41.75 41.75 43.75 45.75 45.00 46.00 46.00 46.00
Building Inspection 13.55 9.55 10.55 10.55 10.55 12.55 14.00 18.50 18.50 19.50
Parking 4.75 4.75 4.75 4.50 4.50 5.50 6.00 6.00 6.00 6.00 Total Public Safety 126.30 127.80 128.80 128.05 131.55 136.55 137.25 142.20 143.20 144.20
Public Services
Public Services Administration / Engineering 8.15 8.15 8.15 10.00 10.00 12.00 6.58 10.25 11.50 11.50 Streets 17.62 17.62 17.62 17.62 17.62 18.62 16.20 18.85 19.85 21.85 Storm Water - - - - 1.00 1.00 4.00 6.25 6.50 7.50 Water Treatment Plant 9.27 9.27 9.27 9.77 9.77 11.27 12.75 10.50 10.50 10.00 Water Operations 16.62 15.62 15.62 15.62 15.62 15.62 17.33 14.45 14.45 12.00 Wastewater Operations 11.25 10.25 10.25 10.25 10.25 11.25 13.09 13.30 14.05 12.00 Wastewater Plant 15.87 15.87 15.87 15.87 16.37 17.47 15.50 14.75 14.75 15.00 Solid Waste Collection/Recycling 15.74 15.74 15.74 15.74 15.74 15.74 15.90 15.15 16.15 17.15
Solid Waste Disposal - - - - - - - - - -
Vehicle Maintenance 4.00 5.00 5.00 5.00 5.00 5.00 5.00 6.50 6.50 7.50
Total Public Services 98.52 97.52 97.52 99.87 101.37 107.97 106.35 110.00 114.25 114.50
Public Welfare
Cemetery (numerous short terms)5.75 5.75 5.75 3.33 3.33 3.33 4.90 5.04 5.04 4.75
Parks (numerous short terms)13.45 13.45 13.45 11.77 11.77 11.77 15.40 14.51 14.51 14.90 Forestry 4.60 4.60 4.60 4.60 4.60 4.60 5.95 5.65 6.65 5.20 Library 21.66 21.66 21.66 21.66 21.56 23.11 23.41 26.02 28.02 28.02 Recreation (numerous short terms)15.00 15.00 15.00 15.83 15.83 16.83 16.83 23.55 24.26 23.41 Community Services 1.00 2.00 2.00 2.00 2.00 4.00 3.50 3.50 3.50 2.00 Total Public Welfare 61.46 62.46 62.46 59.19 59.09 63.64 69.99 78.27 81.98 78.28
Total of all Funds 345.13 350.76 348.26 340.46 347.11 361.26 375.79 393.87 406.23 406.28
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
DRAFT
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CITY OF BOZEMAN, MONTANA
OPERATING INDICATORS BY FUNCTION / PROGRAM
Past Ten Fiscal Years
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Finance
SID Statements 15,000 15,816 16,000 16,000 16,200 16,424 16,506 16,893 17,200 17,463 Utility Bills 134,000 135,000 135,000 135,000 138,000 155,000 162,000 166,000 169,000 172,000 Accounts Payable Checks Processed 12,218 12,076 12,122 11,962 12,519 10,453 11,098 11,000 11,800 12,350 PoliceNumber of Officers 52 55 56 60 63 63 61 60 61 60
Calls for Service 45,145 43,385 45,131 45,358 47,361 48,542 46,290 47,400 48,200 49,257 Arrests 2,853 2,338 2,325 2,152 2,096 2,165 2,195 2,078 2,427 2,430 Misdemeanor Citations Issued - includes traffic **n/a 3,311 4,504 5,234 5,205 6,045 6,169 6,390 5,886 6,500 Traffic Stops **n/a 10,702 10,036 9,358 10,629 8,210 7,757 7,482 7,900 7,675 Traffic Crashes 1,302 1,194 1,486 1,264 1,320 1,469 1,601 1,792 1,850 2,047 Fire
Fires, Hazardous Conditions & Rupture/Explosions 248 248 278 278 309 340 296 349 275 459 Emergency Medical Services/Rescue 1,441 1,441 1,483 1,483 1,941 2,051 2,032 2,424 1,584 2,504 Service Calls 145 145 187 187 145 212 202 244 250 349 Building InspectionCommercial Permits:
Number 1,047 961 1,535 1,420 1,305 1,165 1,560 1,628 1,731 883 Value (Millions)140.50 70.41 106.90 95.03 69.64 $44.50 $98.02 $164.47 $65 $216Residential Permits: Number 1,571 1,543 3,613 2,421 2,338 2,911 2,836 3,937 3,905 3,222 Value (Millions)79.67 67.02 72.57 89.74 146.32 $130.68 $191.97 $200 $130 $340
Water
New Service Main Taps 39 16 3 20 41 57 70 60 72 65Meter Replacement/Repair 368 650 467 279 113 479 1006 978 1500 994Water Main Breaks/Repairs 6 4 1 6 4 7 5 7 6 7WastewaterMain Line Flushing (in Miles)90 81 78.26 90 47 30 90 50 30.9 50
New Infrastructure TV (in Miles)1 1 1 1 2.6 2 8 2.6 9.9 7New Service Taps 15 5 4 4 17 37 44 20 30 30Solid Waste Collection & RecyclingResidential Accounts 6,957 7,130 7,092 7,240 7,470 7,869 8,369 8,878 9,378 9,843 Commercial Customers 262 268 271 281 265 258 265 461 516 300
Recycling Customers 881 965 970 1,000 1,135 1,601 2,100 2,663 3,300 3,700
Annual Tonnage Collected: Collections Program 10,397 10,657 10,920 11,248 10,695 10,960 11,457 11,691 12,490 13,600 Vehicle MaintenanceWork Orders Processed 870 1,005 1,435 1,473 1,646 1,717 1,549 1,453 1,509 2,592 Gallons of Oil Disposed 9,350 9,175 9,445 8,751 8,640 8,740 8,969 7,395 6,475 5,007 Parks
Park Reservations 221 280 319 320 350 400 400 400 400 425
Sources: City Manager's Final Adopted Budget City of Bozeman Finance Department
** Not used as an operating indicator until 2010
Fiscal Year Ended June 30,
DRAFT
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CITY OF BOZEMAN, MONTANA
CAPITAL ASSET STATISTICS BY FUNCTION / PROGRAM
Past Ten Fiscal Years
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Police
Stations 1 1 1 1 1 1 1 1 1 1
Patrol Units (Cars)19 20 20 20 20 20 22 21 21 22
Patrol Units (Motorcycles)4 4 4 4 4 4 2 3 3 3
Fire
Stations 3 3 3 3 3 3 3 3 3 3
Fire Trucks 5 6 6 6 6 7 7 7 7 7
Streets
Street & Alley Mileage 243 247 255 255 256 252 253 254 274 280
Lane Miles Painted 35 40 40 41 37 35 49 50 50 52.0
Number of Signs Installed/Repaired 732 750 722 1,120 669 798 600 600 600 708
Water
Water Mains (Miles)254 256 258 261 265 267 269 275 277 283.95
Fire Hydrants 2,274 2,308 2,324 2,351 2,388 2,406 2,419 2,511 2,573 2,618
Wastewater
Sanitary Sewers (Miles)201 205 205 208 210 212 213 219 224 234.64
Number of Manholes 3,988 4,034 4,080 4,084 4,154 4,185 4,219 4,360 4,492 4,614
Solid Waste
Number of Collection Vehicles 8 8 8 8 8 8 8 8 8 8
Number of Roll-off Trucks 4 4 4 4 4 4 4 4 4 5
Number of Recycling Trucks 1 1 1 1 1 2 2 2 2 2
Number of Compost Collection Trucks 2 2 2 2 2 2 2 2 2 1
Parks
Formal Turf Acres 120 120 125 125 125 125 126 140 140 172
Natural Parkland Acres 205 205 210 220 220 220 220 220 220 323
Miles of Trails 50 54 55 55 55 61 63 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,
DRAFT
740
PART IV REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS – GOVERNMENT AUDITING STANDARDS
DRAFT
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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 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, 2018, 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.
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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
DATE
DRAFT
745
1019 E MAIN ST • SUITE 201 • BOZEMAN, MONTANA 59715TEL: 406.556.6160 • FAX: 406.586.8719 • WEB: www.azworld.comANDERSON 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, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information of the City of Bozeman (the City) for the year ended June 30, 2018. 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 July 13, 2018. Professional standards
also require that we communicate to you the following information related to our audit.
Significant Audit Matters
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 2018, the City adopted the following new accounting standards:
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment
Benefits Other Than Pensions
GASB Statement No. 85, Omnibus 2017
The application of existing policies was not changed during 2018. 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 in determining 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 disclosures affecting the financial statements were
the disclosure of Pension in Note 14 to the financial statements and the disclosure of Other Post Employment Benefit in Note 15 to the financial statements.
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The financial statement disclosures are neutral, consistent, and clear.
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 uncorrected misstatements
of the financial statements. Management has determined that their effects 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 is 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 17, 2018.
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 City’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 City’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
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inquiries, the basic financial statements, and other knowledge we obtained during our audit of the
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 provide 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 17, 2018
748
City of Bozeman Schedule of Uncorrected Misstatements June 30, 2018
Account Description W/P Ref Debit Credit
Government-Wide Passed Adjustment:
Dr. Net Position 5510 465,037$
Cr. Public Safety Expenditures 5510 465,037$
Compensated absences were understated in the prior year for firefighters and corrected in the current year. This
causes the current year expense to be overstated and the prior year expense to be understated. The above
adjustment was proposed to move the prior year expense to the proper period.
749