HomeMy WebLinkAboutA1. Comprehensive AuditCommission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM:Brian LaMeres, City Controller
Anna Rosenberry, Director of Administrative Services
(to be presented by Kyla Stafford, CPA, of Anderson ZurMuehlen & Co., P.C.)
SUBJECT:Comprehensive Annual Financial Report (CAFR) for Fiscal Year 2014-2015
MEETING DATE: December 28, 2015
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 2015, 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 22, 2015, the City’s Audit Committee reviewed
and voted unanimously to accept the CAFR and the accompanying letter to management. Additionally,
the Audit Committee approved the General Fund Balance Assignments presented on page 23 of the CAFR.
RECOMMENDATION: The City Commission accepts the CAFR and accompanying reports.
FISCAL EFFECTS: A clean unmodified audit opinion on the City’s financial statements is viewed favorably by investment analysts and strengthens the City’s ability
to issue bonds or other debt at a lower interest cost.
ALTERNATIVES: The CAFR is being presented in DRAFT form in case the Commission desires any changes to be made before the final printing.
Attachments: 1.CAFR Comprehensive Annual Financial Report - also postedonline at: http://www.bozeman.net/Business/Budgets-and-Financials
2.Auditor’s Letter to Governance (“Management Letter”)
Report compiled on December 21, 2015209
CITY OF BOZEMAN, MONTANA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Prepared by the City of Bozeman Finance Department DRAFT
CITY OF BOZEMAN, MONTANA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2015 TABLE OF CONTENTS I.INTRODUCTORY SECTIONLetter of Transmittal ........................................................................................................................................................................................................ 1-14 Governmental Financial Officers’ Association Certificate of Achievement ...................................................................................................................... 15 Organizational Chart ........................................................................................................................................................................................................... 16 City Elected Officials and Officers ................................................................................................................................................................................ 17-18 II.FINANCIAL SECTIONINDEPENDENT AUDITOR’S REPORT ..................................................................................................................................................................... 19-20 A.MANAGEMENT’S DISCUSSION AND ANALYSIS ................................................................................................................................................ 21-32 B.BASIC FINANCIAL STATEMENTSGovernment Wide Financial StatementsStatement of Net Position ............................................................................................................................................................................................. 33 Statement of Activities ................................................................................................................................................................................................. 34 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet – Governmental Funds .............................................................................................................................................................. 35-36 Reconciliation of the Balance Sheet to the Statement of Net Position – Governmental Funds ............................................................................. 37 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ........................................................................... 38 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to The Statement of Activities – Governmental Funds .............................................................................................................................................. 39 Proprietary Fund Financial Statements Statement of Net Position – Proprietary Funds ................................................................................................................................................. 40-41 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds ................................................................................ 42 Statement of Cash Flows – Proprietary Funds .................................................................................................................................................. 43-44 Fiduciary Fund Financial Statements Statement of Fiduciary Net Position – Fiduciary Funds ........................................................................................................................................ 45 Notes to Financial Statements ........................................................................................................................................................................................ 46-91
CITY OF BOZEMAN, MONTANA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2015 TABLE OF CONTENTS (CONTINUED) C.REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT DISCUSSION AND ANALYSISSchedule of Funding Progress – Other Post-Employment Health Care Benefits ............................................................................................................... 92 Schedule of Proportionate Share of Net Pension Liability ............................................................................................................................................... XX Statements of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual – General and Special Revenue Major Funds General Fund ................................................................................................................................................................................................................ 93 Street and Fire Impact Fees Fund ................................................................................................................................................................................. 94 Street Maintenance Special Revenue Fund .................................................................................................................................................................. 95 Building Inspection Special Revenue Fund ................................................................................................................................................................. 96 Capital Projects Fund ................................................................................................................................................................................................. XX Notes to Required Supplementary Information Other Than Management Discussion and Analysis .......................................................................... 97 D.SUPPLEMENTAL INFORMATIONCombining and Individual Fund Statements and SchedulesCombining Balance Sheet – Non-Major Governmental Funds ............................................................................................................................. 98-104 Combining Statement of Revenue, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds ....................................... 105-110Budget-to-Actual Statements – Other Major Funds Statements of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual - Other Major Funds SID Sinking Fund ....................................................................................................................................................................................................... 111 Note to Budget-to-Actual Statements – Other Major Funds ...................................................................................................................................... 112 Budget-to-Actual Statements- Nonmajor Funds Statements of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual – Nonmajor Governmental Funds Non-Major Governmental Funds ........................................................................................................................................................................ 113-126 Internal Service Funds Statements Combining Statements of Net Position – Internal Service Funds .............................................................................................................................. 127 Combining Statements of Revenues, Expenses, and Changes in Fund Net Position – Internal Service Funds ......................................................... 128 Combining Statements of Cash Flows ................................................................................................................................................................ 129-130 Agency Funds Combining Statements of Fiduciary Net Position ...................................................................................................................................................... 131 Combining Schedules of Changes in Assets and Liabilities – Agency Funds ........................................................................................................... 132
CITY OF BOZEMAN, MONTANA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2015 TABLE OF CONTENTS (CONTINUED) III.STATISTICAL SECTIONFinancial Trends SectionNet Position by Component ....................................................................................................................................................................................... 133 Changes in Net Position ...................................................................................................................................................................................... 134-135 Fund Balances of Governmental Funds ..................................................................................................................................................................... 136 Changes in Fund Balances, Governmental Funds ...................................................................................................................................................... 137 Revenue Capacity Section Assessed value of Taxable Property ........................................................................................................................................................................... 138 Direct and Overlapping Property Tax Rates .............................................................................................................................................................. 139 Principal Property Tax Payers .................................................................................................................................................................................... 140 Property Tax Levies and Collections ......................................................................................................................................................................... 141 Water Sold by Type of Customer ............................................................................................................................................................................... 142 Water and Sewer Rates ............................................................................................................................................................................................... 143 Debt Capacity Section Ratios of Outstanding Debt by Type .......................................................................................................................................................................... 144 Ratios of General Bonded Debt Outstanding ............................................................................................................................................................. 145 Direct and Overlapping General Bonded Debt Outstanding ...................................................................................................................................... 146 Legal Debt Margin Information ................................................................................................................................................................................. 147 Pledged Revenue Coverage ........................................................................................................................................................................................ 148 Demographics and Economic Section Demographic and Economic Statistics ....................................................................................................................................................................... 149 Principal Employers ................................................................................................................................................................................................... 150 Operating Section Full-time Equivalent City Government Employees by Function/Program ................................................................................................................ 151 Operating Indicators by Function/Program ................................................................................................................................................................ 152 Capital Assets Statistics by Function/Program……………………………………………………………………………………………………………….153
CITY OF BOZEMAN, MONTANA COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2015 TABLE OF CONTENTS (CONTINUED) IV.REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS AND SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AS REQUIRED BYOMB CIRCULAR A-133Schedule of Expenditures of Federal Awards ................................................................................................................................................................... 154 Notes to Schedule of Expenditures of Federal Awards .................................................................................................................................................... 155 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 ......................................................................................................................................................................... 156-157 Independent Auditor’s Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133........................................................................................................................................................................................... 158-159 Schedule of Findings and Questioned Costs ..................................................................................................................................................................... 160 Current Status of Prior Year Recommendations ............................................................................................................................................................... 161
PART IINTRODUCTORY SECTION
1 CITY OF BOZEMAN, MONTANA December 22, 2015 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, 2015 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. The City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1984 and the Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Information related to the single audit, including the Schedule of Expenditures of Federal Awards and the Auditor’s Reports on Basic Financial Statements and Supplementary Schedule of Expenditures of Federal Awards, Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards, and Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133, are included in the single audit section of this report. 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.
2 CITY OF BOZEMAN, MONTANA CITY OF BOZEMAN PROFILE The City of Bozeman was incorporated in April of 1883 with a city council form of government, and later in January 1922 transitioned to its current city manager/city commission form of government. Bozeman encompasses an area over 18 square miles and is located on the eastern slope of the Rocky Mountains. The 2012 census put Bozeman's population at 38,695 which is a total increase of 37.90% from 2000 to 2012 and making it the fourth largest city in the state. Bozeman is at the county seat of Gallatin County and is the home to Montana State University – Bozeman, and the fighting Bobcats. The government provides a full range of services. These services include police and fire protection; sanitation services; water, waste water & storm water utilities; the construction and maintenance of streets and infrastructure; recreational activities; cultural events; planning and zoning; and general administrative services. The City, as a primary government, is supported or works closely with certain entities to provide these services to the citizens of the City of Bozeman. Of these entities, Bozeman Public Library Foundation, Inc. is considered a component unit subject to the requirements for inclusion as a discretely presented component unit. The City Planning Board is presented as a blended component unit. The Bozeman Public Library Board of Trustees, Senior Advisory Council and the Parking Commission are excluded from presentation in these financial statements, since their relationship with the City is strictly advisory in nature at this time. BUDGET DEVELOPMENT PROCESS The City of Bozeman budget serves several purposes. For the citizens of the City of Bozeman, it presents a picture of the city government operations and intentions for the year. For the City Commission, it serves as a policy tool and as an expression of goals and objectives. For City Management, it is used as an operating guide and a control mechanism. The City Manager’s Recommended Budget is created and submitted to the City Commission. Public work sessions are then held by the Commissioners at which time the City Manager, Administrative Services Director, and department staff explain the budget recommendations and underlying justification for the requests. The Commission also reviews departmental requests which could not be funded, as an indication of unmet needs. During (or following) the work sessions, the Commissioners may make adjustments to the proposed budget. Following any adjustments to the City Manager's budget recommendation, a tentative appropriation ordinance is prepared and a public hearing is held. The Commission may again make adjustments to the budget following the public hearing, after which time, the Commission passes the appropriation ordinance in final form. Fiscal Year 2015 marked the third 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.
3 CITY OF BOZEMAN, MONTANA 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%Ag, forestry, fishing & hunting, miningConstructionManufacturingWholesale tradeRetail tradeTransportation, warehousing, and utilitiesInformationFinance and insurance, and real estateProf, scientific, mgmt, admin, & waste mgmtEducation, health care, & social assistanceArts, entertain., rec., accomodation, & foodOther services, except public administrationPublic administrationBozeman Employment by Industry, 20135.00%15.00%25.00%35.00%U.S. BozemanPercent Change in Population, 2000‐2013 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. Excerpts from the Bureau’s economic forecasts contained in the spring 2015 issue of the Montana Business Quarterly relating to Gallatin County and City of Bozeman are stated below. While the economy in the Bozeman area experienced a significant contraction in during the “Great Recession” of 2008, the turnaround began in 2010 and continues to be strong. Gallatin County along with Yellowstone County are the only two major urban areas in Montana to exceed the statewide growth rates by a significant amount. Short-term economic can be attributed to double-digit growth in all sectors of construction in 2013, increase in the non-residential travel industry, and finally the sale of RightNow Technologies to Oracle and the associated impact of the U.S. Bureau of Labor Statistics categorizing the employees stock options as wages and salaries in 2011 and 2012. Longer term, the positive trend for Gallatin County will be a result of continued expansion of the high-tech sector (both manufacturing and software), as well as Bozeman’s increasing role as a regional trade and service center. Associated is the fact that Montana State University is the largest basic industry in Gallatin County, accounting for about 30 percent of total basic earnings. The projections for long-term continued growth in enrollment suggest that in addition to the significant contribution to Gallatin County’s economic base in the form of wages and salaries, there are and will be additional positive influences on the local economy that are not reflected in the earnings data. The forecasts call for increases to be 5 percent or greater between 2015 and 2018 and Gallatin County continues to be projected to be the fastest growing urban area in the state.
4 CITY OF BOZEMAN, MONTANA FOR THE YEAR Significant Developments during the year include: Continued Growth in Construction Sector: The City’s Building Inspection division continued to experience strong permit issuance over the past 12 months. While never completely stopping, building construction significantly slowed during the recession. In a continued trend of recovery, the total value of Building Permits for New Construction in fiscal year 2015 was approximately 110% of the previous year. Building permit values are more than double what they were for the same period ending April 2011. With this continued growth, additional staff was added to the building team mid-year in FY15. This additional staff included 2.0 FTE Building Inspectors, 1.0 FTE Permit Technician and a 1.0 FTE Senior Plans Examiner; all of these positions are funded with building permit revenues. Continued Citizen Participation with Online City Hall Budget Forum: Online City Hall is a new interactive tool for citizens to provide feedback to the City on a variety of topics. The forum was installed two years ago as a way to utilize social media features to “welcome citizen involvement”, furthering our core value of Teamwork. We specifically asked for citizens to rank responses to: “How would you prioritize the City Manager’s recommended budget?” Approximately 130 people viewed the forum, with 40 making priority lists. This equates to roughly 2 hours of public comment, if it were to have been made during a public meeting. Considering that we rarely have more than 3-5 people commenting at a budget hearing, the forum provided significantly more input on the budget than we have received during past years.
5 CITY OF BOZEMAN, MONTANA Bozeman Online City Hall is one of many ways for citizens to have their voices heard. City officials and staff are listening and will consider what is said during policy development and decision processes. To participate and to be heard, visit www.bozeman.net/City-Government/City-Clerk. The City’s goal is to provide integrity and leadership while working unselfishly for its community and its citizens. Welcoming citizen involvement and respectfully working together to achieve the best result is an important core value at the city of Bozeman. The Mayor, City Commission and staff want to work with citizens to achieve the best results Continued Implementation of Energy Saving Projects: An in-depth audit of City buildings and facilities for potential energy savings was conducted two years ago, with the firm McKinstry being selected as the energy performance contractor for this assessment. McKinistry delivered a preliminary report that outlined a number of energy-saving projects and identified estimated “payback” periods, where energy savings will ultimately cover the costs of the improvements. Based on McKinstry’s reports, this year’s budget included approximately $516,000 in spending on the following Energy Saving Projects: 1. Street Lighting LED retro-fit Project ($226,000) 2. Parking Garage LED Lighting Project (up to $200,000) 3. Senior Center Facility and Hot Water System Project ($22,000) 4. Water Reclamation Facility Lighting Project ($18,000) Last Year for MMIA Settlement payments. In December 2009, the Montana Supreme Court ruled against the City in our appeal of Delaney v. City of Bozeman. At issue was the City’s purchase of the Mandeville Farm property in 2003. Delaney was awarded $3 Million. The City and MMIA sought judicial determination on the amounts owed by each party. In April 2012, a District Court in Helena determined that the City owed the full amount. The City filed an appeal with the Montana Supreme Court. Prior to a determination by the Court, the City and MMIA settled the case. Under the terms of the settlement, the City needed to pay the MMIA a total of $2 Million. The third and final payment of $673,334 to MMIA was made in fiscal year 2015. FOR THE FUTURE Family Aquatics Center: Previous studies have identified the limited life-span of Bogert Pool, the City’s only public outdoor swimming pool. There is money set aside for the design of a replacement facility for Bogert Pool so that a voter-approved bond measure can be considered in the future.
6 CITY OF BOZEMAN, MONTANA Storm Water Utility: In 2012 the City created its Storm Water Utility. During the last two years, the City has been working to identify assessment methodologies, infrastructure locations and conditions, and develop a funding plan for future storm water improvements. It has been decided that citizens will be assessed based on an “impervious surface” method rather than the current “meter-sized” method. The impervious surface method of assessment is expected to begin in the second half of the next fiscal year. . Transportation System Improvements: Over the past 12 months, numerous policy discussions have taken place surrounding the plans and funding structure for street expansions, reconstruction, and maintenance. Transportation issues were cited as the number one concern by citizens responding to last year’s Online City Hall budget priorities question. Next fiscal year’s budget substantially increases funding for transportation projects by adding a new Street Arterial and Collector Assessment fund and increasing the dollars for pavement maintenance in the current Street Maintenance Fund. In addition, numerous other projects and efforts that enhance pedestrian and vehicle transportation are included in the budget. Affordable Housing In November 2014, the City hired a consultant to perform an Affordable Housing Survey. The work will assist in determining alternatives for the City to consider when drafting an updated Affordable Housing Ordinance. The previous ordinance was suspended during the recession, and has not been readopted. In February 2015, the consultant presented their study and recommended regulatory changes. After discussing the study, the City Commission asked staff to draft a revised ordinance, taking into account the recommendations and Commission concerns. Next year’s budget contains an increase in the amount of tax revenues that will be deposited to the Community Housing fund; increasing from 1.0 mills to 3.0 mills. (increasing from $87,894 to $259,692.) Other Design and construction of a landfill soil gas remediation system. Pursue building a Bozeman convention center. Develop a plan for the City to get broadband for growing local businesses. Water Pipe Replacement Program - approximately $1M every year for the construction of necessary water system replacement work. Waste Water Pipe Replacement Program – approximately $1M every year for the construction of necessary sewer system replacement work.
7 CITY OF BOZEMAN, MONTANA Intersection Control - approximately $750,000 every year for improved traffic flow and safety at various intersections. Continue implementation of financial plans and asset management systems to properly maintain and replace the City’s infrastructure and facilities. FINANCIAL POLICIES The overall goal of the City's financial policies is to establish and maintain effective management of the city's financial resources. Formal policy statements and major objectives provide the foundation for achieving this goal. The City avoids budgetary practices that balance current expenditures at the expense of meeting future years' expenses and seeks to maintain a diversified and stable revenue base that is estimated in a realistic and conservative manner. For one-time revenues, highest priority is given to the funding of capital assets or other non-recurring expenditures. On-going expenditures are limited to levels which can be supported by current revenues. Construction projects and capital purchases of $10,000 or more are included in the Capital Improvement Plan (CIP). Minor capital outlays of less than $10,000 are included in the regular operating budget. Spending of resources happen in the following order (they are categorized according to Generally Accepted Accounting Principles (GAAP) for state and local governments, with the following general definitions): Restricted -- Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government) through constitutional provisions or by enabling legislation. Committed -- Amounts constrained to specific purposes by the City Commission; to be reported as committed, amounts cannot be used for any other purpose unless the City Commission takes action to remove or change the constraint. Assigned -- Amounts the City intends to use for a specific purpose; intent can be expressed by the Commission or by an official or body to which the Commission delegates the authority. The City Commission delegates this authority to the City Manager. Unassigned -- Amounts that are available for any purpose; these amounts are reported only in the General Fund.
8 CITY OF BOZEMAN, MONTANA 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 16.67% of annual revenues is maintained. This reserve is committed to be used for: cash flow purposes, accrued employee payroll benefits which are not shown as a liability, unanticipated equipment acquisition and replacement, and to enable the city to meet unexpected expenditure demands or revenue shortfalls. The City manages and accounts for its financial activity in accordance with Generally Accepted Accounting Principles (GAAP), as set forth by the Governmental Accounting Standards Board (GASB). The city maintains its accounting records for general governmental operations on a modified accrual basis, with revenues recorded when available and measurable, and expenditures recorded when services or goods are received and liabilities incurred. Accounting records for proprietary fund types and similar trust funds are maintained on an accrual basis, with all revenues recorded when earned and expenses recorded at the time liabilities are incurred, without regard to receipt or payment of cash. Internal Controls Internal accounting controls are designed to provide reasonable (but not absolute) assurance of the safeguarding of assets against loss, theft or misuse. They are also designed to aid in the reliability of financial records. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and that the evaluation of costs and benefits requires estimates and judgments by management. In developing and evaluating the City’s accounting system, great consideration is given to the adequacy of internal accounting controls. We believe that the City of Bozeman’s internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions.
9 CITY OF BOZEMAN, MONTANA 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, 2014. This was the 31st consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized comprehensive annual financial report. This report satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirement and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgements The preparation of the Comprehensive Annual Financial Report on a timely basis was made possible by the dedicated service of the entire staff of the Finance Department, with special appreciation extended to Assistant Controller Lieveka White. 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, Chris Kukulski Anna Rosenberry, CPA Brian LaMeres, CPA City Manager Director of Finance City Controller
10 CITY OF BOZEMAN, MONTANA GOVERNMENT FINANCE OFFICERS’ ASSOCIATION CERTIFICATE
11 CITY OF BOZEMAN, MONTANA ORGANIZATIONAL CHART Fiscal Year 2015 CITY CLERK Stacy Ulmen CITY COMMISSION PARKING COMMISSION MUNICIPAL JUDGES Karl Seel & Colleen Herrington LIBRARY BOARD OF TRUSTEES LIBRARY DIRECTOR Susan Gregory CITY MANAGER Chris Kukulski ECONOMIC DEVELOPMENT Brit Fontenot PARKING MANAGER Scott Lee ASSISTANT CITY MANAGER Chuck Winn FACILITIES James Goehrung FIRE DEPARTMENT Jason Shrauger PUBLIC SERVICE Craig Woolard PARKS & RECREATION Mitch Overton PLANNING & COMMUNITY DEVELOPMENT Wendy Thomas LEGAL Greg Sullivan ADMINISTRATIVE SERVICES Anna Rosenberry POLICE DEPARTMENT Ron Price CITIZENS OF BOZEMAN
12 CITY OF BOZEMAN, MONTANA CITY ELECTED OFFICIALS AND OFFICERS Fiscal Year 2015 ELECTED OFFICIALS Legislative Jeffrey Krauss Mayor Carson Taylor Deputy Mayor Cynthia Andrus Commissioner Christopher Mehl Commissioner I-Ho Pomeroy Commissioner Judicial Karl Seel Colleen Herrington Municipal Judge Municipal Judge OFFICERS Executive Chris Kukulski Chuck Winn Stacy Ulmen City Manager Assistant City Manager City Clerk Department of Law Gregory Sullivan City Attorney Timothy A. Cooper Assistant City Attorney Cory Allen Ryan McCarty Kyla Murray Anna Saverud Karen Stambaugh Assistant City Attorney Assistant City Attorney Assistant City Attorney Assistant City Attorney Assistant City Attorney Department of Administrative Services Anna Rosenberry, CPA Director of Administrative Services Brian LaMeres, CPA Controller Laurae Clark Treasurer Scott McMahan Information Technology Manager Bethany Jorgenson Human Resources Manager
13 CITY OF BOZEMAN, MONTANA CITY ELECTED OFFICIALS AND OFFICERS (CONTINUED) OFFICERS (CONTINUED) Department of Economic Development Brit Fontenot Department of Public Safety Director of Economic Development Ronald Price Chief of Police Richard McLane Deputy Chief of Police Jason Shrauger Fire Chief Greg Megaard Deputy Fire Chief of Operations Department of Public Service Craig Woolard Director of Public Service Rick Hixson City Engineer John Alston Superintendent of Water and Waste Water Operations John VanDelinder Superintendent of Street Operations Kevin Handelin Superintendent of Sanitation Operations Rick Moroney Superintendent of Water Treatment Plant Herb Bartle Superintendent of Water Reclamation Facility James Goehrung Superintendent of Facilities Department of Public Welfare Mitch Overton Thomas White Jamie Saitta Vacant 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 Wendy Thomas Chris Saunders Brian Krueger Director of Planning and Community Development Community Development Manager Development Review Manager
PART II FINANCIAL SECTION
14 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 • MSI GLOBAL ALLIANCE INDEPENDENT MEMBER FIRM 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, 2015, 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. 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, 2015, and the respective changes in financial position, and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
15 Change in Accounting Principle As discussed in Note 16 to the financial statements, in 2015 the City adopted new accounting guidance, GASB Statement No. 68, Accounting and Financial Reporting for 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 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 schedule of expenditures of federal awards, as listed in the table of contents, is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial statements. The schedule of expenditures of federal awards and other supplemental information, as listed in the table of contents, are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards and 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. ANDERSON ZURMUEHLEN & CO., P.C. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS
16 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 22, 2015, 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 December 22, 2015
A. MANAGEMENT’S DISCUSSION AND ANALYSIS
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS June 30, 2015 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, 2015. Please read it in conjunction with the transmittal letter on page 1 and the City’s financial statements, which begin on page 34. 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 34 and 35) 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 36. For governmental activities, these statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City’s operations in more detail than the government-wide statements by providing information about the City’s most significant funds. The remaining statements provide financial information about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the government. Reporting the City as a Whole The Statement of Net Position and the Statement of Activities Our analysis of the City as a whole begins on page 23. One of the most important questions asked about the City’s finances is, “Is the City as a whole better off or worse off as a result of the year’s activities?” The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the City’s net position and changes in net position. You can think of the City’s net position, the difference between assets, what the citizens own, and liabilities, what the citizens owe, as one way to measure the City’s financial health, or financial position. Over time, increases or decreases in the City’s net position are one indicator of whether its financial health is improving or deteriorating. You will need to consider other nonfinancial factors, however, such as changes in the City’s property tax base, income tax base, and the condition of the City’s capital assets (roads, buildings, water and sewer lines) to assess the overall health of the City. In the Statement of Net Position and the Statement of Activities, we divide the City into two kinds of activities: Governmental activities—Most of the City’s basic services are reported here, including police, fire, public works, parks, and general administration. Property taxes, 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.
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 Reporting the City’s Most Significant Funds Fund Financial Statements Our analysis of the City’s funds begins on page 28. The fund financial statements begin on page 36 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 38 and 40 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 46 and in the Combining Statement of Changes in Assets and Liabilities-Agency Funds on page 143. 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.
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 201520142015201420152014Current and Other Assets61.1$ 56.2$ 25.0$ 23.1$ 86.1$ 79.3$ Capital Assets116.5 108.3 249.1 244.7 365.6 353.0 Total Assets 177.5$ 164.5$ 274.1$ 267.8$ 451.7$ 432.3$ Deferred Outlflows of Resources 1.7 - 0.4 - 2.1 - Long-term Debt Outstanding (39.4) (20.3) (46.9) (44.9) (86.3) (65.2) Other Liabilities(6.6) (7.2) (3.5) (5.3) (10.2) (12.5) Total Liabilities (46.0)$ (27.5)$ (50.4)$ (50.2)$ (96.5)$ (77.7)$ Deferred Inflows of Resources (3.2) - (1.1) - (4.3) - Net Position:Invested in Capital Assets, net of related debt 93.4$ 89.3$ 211.4$ 196.3$ 304.8$ 285.6 Restricted for parking capital projects- - 0.3 0.3 0.3 0.3 Restricted for debt service7.2 4.0 3.1 - 10.3 4.0 Restricted for capital projects10.0 9.4 1.6 - 11.6 9.4 Restricted for general government0.5 1.0 0.5 1.0 Restricted for Public Safety2.4 2.7 - - 2.4 2.7 Restricted for Public Service15.3 13.2 - - 15.3 13.2 Restricted for Public Welfare6.4 5.3 - - 6.4 5.3 Unrestricted(5.1) 12.1 6.6 21.0 1.5 33.1 Total Net Position 130.0$ 137.0$ 223.0$ 217.6$ 353.0$ 354.6$ Activities Activities Primary GovernmentTabl e 1Net Position(in Millions)Governmental Business-typeTotal THE CITY AS A WHOLE The City’s combined net position decreased by $1.6 million this year as compared to a $13.6 million increase last year due to a prior period adjustment booked per newly-implemented GASB Statement 68 “Accounting and Financial Reporting for Pensions’ (see page XX) which resulted in a $21.1 million decrease in the City’s beginning net position for the year. This restatement was netted against what would have otherwise been a $19.6 million increase in net position for the year, due mainly to a continuing trend of increased revenues coupled with a slight decline in total expenses. Increases in Charges for Services and Property Taxes were the primary drivers of the increase in revenues, while Restricted Capital Grants & Contributions (mainly infrastructure provided by private developers) was again substantial. 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. Also due to the implementation of GASB 68, the net position of the City’s governmental activities decreased by 5.1% ($130 million this year compared to $137 million last year). Unrestricted net position for governmental activities, the part of net position that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation or other legal requirements actually decreased by $17.3 million, or 142%, from $8.6 million to negative ($5.1) million. The net position of the City’s business-type activities actually increased by $5.5 million, or 2.5%, from $217.6 million last year to $223 million this year, in spite of a $4.9 million decrease in the beginning net position due to GASB 68. Revenues did increase by $900,000, but the primary reason for this increase was a substantial decrease in expenses compared to last year. Expenses decreased $4.4 million, or 18.6%, from $23.8 million to $19.3 million this year because of two substantial expenses that were booked last year but did not recur this year, namely an increase in the estimate for the Landfill post-closure costs and an increase in the remediation liability for the Bozeman Solvent Site. This net position cannot be used to make up for deficits reported by governmental activities in the event any such deficits are reported. The City generally can only use the net position of business-type activities to finance the continuing operations of the water, waste water, solid waste, storm water, and parking operations.
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 201520142015201420152014RevenuesProgram revenues:Charges for Services15.0$ 14.0$ 22.8$ 21.9$ 37.9$ 35.9$ Restricted Operating Grants & Contributions2.2 0.5 0.1 0.0 2.3 0.5 Restricted Capital Grants & Contributions3.0 4.8 6.4 5.9 9.3 10.7 General Revenues- Property Taxes20.2 17.6 - - 20.2 17.6 Unrestricted Operating Grants & Contributions7.8 7.4 - - 7.8 7.4 Unrestricted Capital Grants & Contributions- - - - - - Other General Revenues0.8 0.6 - - 0.8 0.6 Total Revenues 48.9 44.8 29.3 27.8 78.3 72.7 Program ExpensesGeneral Government 7.4 7.0 - - 7.4 7.0 Public Safety 17.0 15.3 - - 17.0 15.3 Public Service 6.5 6.0 - - 6.5 6.0 Public Welfare 7.6 7.4 - - 7.6 7.4 Interest and Fiscal Fees 0.8 0.2 - - 0.8 0.2 Water - - 8.0 6.9 8.0 6.9 Waste Water - - 6.9 9.0 6.9 9.0 Solid Waste - - 3.3 7.0 3.3 7.0 Non-major activities - - 1.1 1.0 1.1 1.0 Total Expenses 39.3 35.9 19.3 23.8 58.6 59.7 Excess (deficiency) beforespecial items and transfers 9.6 8.9 10.0 4.1 19.6 13.0 Extraordinary items - - - 0.4 - 0.4 Sale of Capital Assets - 0.2 - - - 0.2 Transfers of capital assets - - - - - Transfers (0.4) (0.0) 0.4 0.0 - - Increase (decrease) in net position9.2$ 9.2$ 10.4$ 4.5$ 19.6$ 13.6$ Net position - beginning, as originally reported137.0 127.8 217.6 213.1 354.6 340.9Prior period adjustment-16.20.0-4.9-21.2Net position - beginning, as restated120.8 127.8 212.6 213.1 333.5 340.9Net position - ending130.0$ 137.0$ 223.0$ 217.6$ 353.1$ 354.6$ Activities Activities Primary GovernmentTabl e 2Changes in Net Position(in Millions)Governmental Business-type Total The City’s total revenues (excluding special items) increased by 7.1% ($5.3 million), driven primarily by a $2.6 million increase in Property Taxes and a $1.6 million increase in Charges for Services. The total cost of all programs and services actually decreased by $1.1 million, or 1.7% from $59.7 million last year to $58.6 million this year. While Public Safety expenses did increase (Police, Fire, Building Inspection, Parking), there were significant decreases in business-type activity expenses, especially in Solid Waste, where expenses decreased by $3.6 million, or 52.5%, due to a $2.8 adjustment to the Landfill Post-Closure cost estimate expensed last year but which did not occur again this year. Our analysis on the following pages separately considers the operations of governmental and business-type activities.
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 Governmental Activities Revenues for the year from governmental activities increased by 9.1%, or $4.1 million, to $48.9 million while total expenses increased by 9.4%, or $3.4 million, $39.3 million. Property Tax revenues increased by $2.6 million, or 15%, from $17.6 million to $20.2 million. Charges for services, which include Fire and Street Impact Fees, realized a net increase of $1 million, or 7.6%, from $14 million to $15 million. Restricted Operating Grants and Contributions (reported under Program Revenues) increased significantly by $1.7 million, or 370%, to 2.2 million this year because this is where the State of Montana’s contribution towards the GASB 68 pension liability is reported. This excess of revenues over expenses would have resulted in a $9.2 million increase in the total net position for governmental activities if not for the $16.2 million prior period GASB 68 adjustment. This restatement of net position at the beginning of the year resulted in ending net position actually decreasing by $7 million, or 5.1% from $137 million last year to $130 million this year. These and the other contributing factors listed below are primarily responsible for this year’s change in net position: Charges for services increased by $1 million, or 7.6%, from $14 million last year to $15 million this year. Impact Fees were the biggest driver here, with Street Impact Fee revenues increasing by $1 million, or 35.6%, from $2.8 million last year to $3.8 million year, and Fire Impact Fee revenues increasing by $128,000, or 43.2%, from $296,261 to $424,190. Street Assessment revenues already increased notably by $298,450, or 9.4%, from $3.1 million to $3.4 million due to the continued increase in Street Maintenance Assessment rates in response to the City Commission’s policy direction to address deferred street infrastructure maintenance and to build a reserve for curb and sidewalk replacement. Property Tax collections increased by approximately $2.6 million, or 15%, from $17.6 million last year to $20.2 million this year due to a 2.6% increase in the mill value (from $85,637 to $87,994) and a 9.4% increase in the number of property tax mills levied (from 173.08 to 188.76). $713,000 of this increase was due to this being the first year of the tax levy to repay the Trails & Open Space (TOP) Bond. Other increases include the Tax Increment Financing (TIF) Districts, where revenues the North 7th/Midtown, Northeast Urban Renewal, and Mandeville Farm Districts continuing to increase, in addition to a $221,735 increase in property tax revenues for the Downtown TIF District driven by a 5.1% increase in incremental taxable value. While property tax revenues did increase City-wide, it is important to note that this year’s tax levy was still 12.15 mills, or $1,067,941, below the statutory maximum allowable tax rate. Restricted Operating Grants and Contributions (reported under Program Revenues) increased by $1.7 million, or 370%, from $.5 million last year to $2.2 million this year due to the required recording of the State of Montana’s share of City employee retirement under GASB 68. The amounts reported for General government, Public safety, Public service, and Public welfare all reflect the State’s share of retirement for those respective City employees. Public safety is notably more substantial due to the much higher State contribution rates for Police Officers and Firefighters, 29.37% and 32.61% respectively, compared to .1% for employees covered by the Public Employee Retirement System. The amount reported for Public service reflects the employees of the City’s Vehicle Maintenance Internal Service Fund, with all other Public service employees being reported under Business-type activities. Program Expenses increased significantly by $3.4 million, or 9.4%, from $35.9 million to $39.3 million. Primary contributing factors include an additional $1.3 million reported under public safety for the full retirement cost of police officers and firefighters per the newly-implemented GASB 68. Public service expenses increased by $500,000 mainly due to an additional $356,000 recorded this year for capital asset depreciation, including new developer-provided street infrastructure booked at the end of last year which realized its first full year of deprecation this year. Interest and Fiscal Fees increased by $600,000 due mainly to the first-year interest expense on the TOP GO Bond amounting to $489,280.
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 2015201420152014Police8.2$ 7.9$ 6.7$ 6.3$ Fire6.0 5.6 5.0 5.0 Public Service6.5 6.0 (5.3) (6.1) Library2.1 1.6 1.4 0.9 Parks1.6 1.3 1.6 1.2 Recreation1.3 1.3 0.9 0.8 All Others13.6 12.3 8.9 8.5 Total s 39.3$ 35.9$ 19.1$ 16.7$ Tabl e 3Governmental Activities(in Millions)Total Cost Net Costof Services of Services The cost of all governmental activities this year was $39.3 million compared to $35.9 million last year. However, as shown in the Statement of Activities on page 35 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 $19,132,501 because some of the cost was paid by those who directly benefited from the programs ($15,041,648) or by other governments and organizations that subsidized certain programs with operating and capital grants and contributions ($2,169,871 + $2,960,051 = $5,129,922). 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 $1.5 million, or 5.2% ($29.3 million in 2015 compared to $27.8 million in 2014) while expenses actually decreased substantially by $4.5 million, or 18.6% ($19.3 million in 2015 compared to $23.8 million in 2014). The increase in revenues was driven by a $1.1 million overall increase in charges for services and a $500,000 in Restricted Capital Grants & Contributions, which consisted primarily of privately-constructed infrastructure that was contributed to the City by developers. The large decrease in expenses this year was due in large part to two adjustments made last year which didn’t recur this year: a $2.8 million adjustment in the Landfill post-closure estimate and a net $163,000 adjustment to the Wastewater Solvent Site estimate, both of which were booked as expenses last year. 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 in past years and as a result of regular rate changes, although the Commission voted to hold water rates steady for this year and last year. Beginning this year, the Public Works Department budget was charged to the Water Fund instead of the General Fund, and this department’s administrative overhead is charged out to the departments that use their services, which resulted in a transfer-in amounting to $70,000. The City’s customer‐base growth grew by 383 customers, 3.4%, from 11,264 average active customer accounts to 11,646. This level of growth rate is trending more closely 5% growth experienced between 2005‐2008. In updating the rate study for slower customer growth in recent years, decreased Water Impact Fee collections and new estimates of Water Plant costs, the City implemented water rate increases of 4.5% each year in fiscal years 2011, 2012, and 2013 in order to fund plant construction and other scheduled operations and maintenance costs. Accordingly the City was able to revitalize its water distribution pipe replacement program and replace or
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 rehabilitate aging infrastructure every year instead of every two years. For last year and this year, the Commission voted to hold rates steady and not to implement a water rate increase in light of the other tax and rate increases imposed upon City residents this year. As would be expected with no rate increase, operating revenues remained steady compared to last year at $7,748,913 Water impact fee revenues actually decreased by $184,097, or 11.1%, and cash-in-lieu of water rights revenue also decreased slightly by $17,355, or 5.1%, from $357,206 to $339,851. However, the contribution of infrastructure by private developers increased significantly by $1.2 million, or 37.2%, from $3,137,978 last year to $4,305,327 this year due to a continued upturn in construction and development. Operating expenses increased by $1,017,053, or 15.8%, from $6,440,432 last year to $7,457,485 this year due his year mainly due to increased personnel and operating costs. Major accomplishments and projects completed during the year include: $850,000 spent on increased replacement of water distribution system pipes, which significantly enhances maintenance of the water distribution system; $572,000 spent on final construction costs of the new Water Plant, and continued use of six fixed base water meter receivers at Kenyon Dr. Water Tank, City Shops, 911 center, Laurel Glen Annex, Solid Waste office, and Nelson Story Tower at MSU which greatly improves the efficiency of the monthly water meter reading process. Wastewater Revenues in the Wastewater Fund have generally been increasing over the past 10 years and are estimated at $7.9 million for the upcoming year. Four years ago the City borrowed significantly to construct the new Water Reclamation Facility. This debt is being repaid by system users over the next 20 years. Accordingly, the City Commission adopted a two-year rate resolution of a 6% increase for the fiscal years 2012 and 2013 and 3% for last year and this year. As a result of the rate increase, combined with the same customer growth experienced in the water system of 383 customers, operating revenues for the year increased by $426,631, or 5.9% from $7,204,486 last year to $7,631,117 this year. Wastewater operating expenses actually decreased this year to $6,308,846 because of a large expense recorded last year which didn’t happen this year. Last year a $1,256,304 increase in the cost estimate for the Bozeman Solvent Site was expensed based on updated information from legal counsel following the most recent engineering update. Contribution of infrastructure by private developers also decreased by $680,854, or 32.7%, from $2.8 million last year to $2.1 million this year. Major projects during the year include $369,300 spent on a new wastewater flusher vacuum truck and $138,400 spent on updating the Wastewater Facility Plan. Solid Waste During fiscal year 2006, the Commission discussed how the City would continue solid waste disposal services as our landfill was nearing its capacity. In a measure to reserve the remaining cell space for residential use only, the Commission closed the landfill to tipping by commercial customers and non-city residents and to any construction and demolition waste. The Landfill officially closed in June 2008. Since the closure the City’s solid waste collection and disposal system revenues had been declining steadily up until last year when revenues actually increased, a trend which continued this year. The Solid Waste Collection Division continues to operate residential and commercial collection, and in FY09 the Division began to provide curb-side recycling collection services. Four years ago, the garbage rates were increased 5%, to cover fuel costs, employee salary and benefit increases, and the assumption of costs that were once shared with the Landfill / Disposal division. The garbage rates increased this, including adjusting the rate for 35 gallon totes to full cost-recovery. Overall solid waste revenues increased moderately due to a revival in local construction activity and corresponding demand for “roll-off” containers along with associated hauling and tipping services. Operating revenues increased by $244,378, or 9.1%, from $2,679,884 last year to $2,924,262. Operating expenses decreased substantially by $3.6 million, or 52.5%, from $6,958,209 to $3,308,441 this year due a significant adjustment last year which didn’t reoccur, namely the expensing of a $ 2,762,647 net increase in the estimate for Landfill Post-Closure costs. Additional information is available in Footnote 21 on page 87. The other factor contributing to the decreased expense level was less being charged this year on additional engineering, legal, and remediation costs associated with the Landfill Soil Gas issue described in that same footnote; $482,106 this year as compared to $1,369,685 last year.
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 Accomplishments in the Solid Waste operation this year include: Accomplishments include: lowest worker injury rate in the state for solid waste operations; growth of 5.9% in refuse customer accounts; growth of 37% in recycling customer accounts; increase of 80% in weight of recyclables collected and single stream recycling continues to collect over 50 tons per month; and expanded recycling opportunities with MSU at sports games and campus housing. THE CITY’S FUNDS As the City completed the year, its governmental funds (as presented in the balance sheet on pages 36-37) reported a combined fund balance of $49,999,428. Included in this year’s total change in fund balance is a positive General Fund balance of $6,061,965, down $522,329, or 9.1%, from $6,614,294. 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 $4,384,154 for this year. The City’s ending general fund balance of $6,061,968 exceeds this recommendation by $1,677,814. Of this excess, $503,498 has been assigned to be used for the specific purposes listed below, leaving an Unassigned General Fund Balance of $1,174,316. The contributing factors to this year’s ending General Fund balance are explained after the table below, followed by an analysis of each of the City’s other Major Funds. The general fund balance of $6,061,968 has been assigned as shown: FY15 ENDING GENERAL FUND BALANCE ‐ TOTAL:6,061,965$ ASSIGNMENTS:1CIP / CAPITAL CARRY‐OVER BUDGETED IN FY15 BUT NOT SPENT UNTIL FY16:RECREATION DEPT: CIP GF056 POOL DESIGN308,373$ PARKS DEPT: CIP GF207 CITYWORKS HARDWARE45,000$ FACILITIES MGMT: VARIOUS FACILITIES MANAGEMENT CIP PROJECTS150,125$ TOTAL CIP / CAPITAL‐CARRY OVER ITEMS:503,498$ 2 16.67% MINIMUM RESERVE LEVEL REQUIRED BY CITY CHARTER (2 MONTHS OF REVENUES):4,384,154$ TOTAL GENERAL FUND ASSIGNMENTS:4,887,652$ UNASSIGNED GENERAL FUND BALANCE ‐ FY15:1,174,313$
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 General fund The City’s general fund balance decreased by $522,329, or 9.1%, from $6,614,294 last year to $6,061,965 this year. The City had budgeted for fund balance to actually end up being $4,7 million, but actual revenues ended up exceeding budgeted expectations, and not as much spending occurred during the year as expected, as indicated by the TOTAL CIP / CAPITAL CARRY-OVER ITEMS in the preceding table. Other savings were realized through careful and cautious budgetary management practices implemented throughout all City departments. Property tax revenues increased noticeably in the General Fund by $2,003,261, or 16%, from $12,509,422 to $14,512,683 mainly due to a 2.6% increase in the value of the property tax mill value (from $85,637 to $87,894) and a 7.4% increase in the number of general fund property tax mills levied (from 134.76 to 144.77). Intergovernmental revenues increased by $236,777, or 3.6%, from $6,570,978 last year to $6,807,755. Entitlement Share revenue accounted for $168,414 of this increase. Montana State Entitlement Share began 2001 as a replacement to the City’s dedicated revenue sources from personal property tax reimbursements and taxes on motor vehicles, gaming, alcohol, and banking, among others. After several stagnant years of minimal or no change, Entitlement Share has increased over each of the past two years. The State of Montana’s share of City employee retirement also showed a marginal increase of $49,109, or 2.3%, from $2,160,232 last year to $2,209,341 this year. This revenue amount is a non-cash book-entry only on the City’s general accounting ledger, and is offset by an expenditure in the exact same amount (most of which is reported under Public Safety for the police and fire employees), so it increases revenues and expenditures by the same amount, resulting in no change to ending fund balance. Total general fund expenditures increased by $981,036, or 3.8%, from $25,834,293 to $26,815,329. Payroll expenditures across all functions (General government, Public safety, Public service, Public welfare) increased by $480,960 or 2.6% from $18,437,330 to $18,918,290. Capital outlay expenditures increased by $337,106, with an increase of $786,542 in spending on the proposed Rouse Justice Center this year compared to last; $473,003 spent last year compared to $1,259,545 this year, which included acquisition of the Rouse Avenue property. The largest expenditures continued to be in Public safety (Police and Fire). Notable expenditures in addition to the Rouse Justice Police/Court Facility included $184,638 spent on new Police vehicles. Salary expenditures increased as positions continued to be filled pursuant to the public safety mill levy beginning in 2009. Police personnel costs (net of State Share of Retirement) increased slightly by $72,899, or 1.3%, from $5,470,577 last year to $5,543,476. Fire Department personnel costs (net of State Share of Retirement) increased by $62,280, or 1.6%, from $3,983,096 last year to $3,983,096. Also contributing to the strength and relative stability of the General Fund balance is the utilization of conservative budgetary practices. Conservative, yet realistic, revenue estimates, combined with departments operating within their original budgets, naturally has a favorable effect on the bottom line. Maintaining adequate reserves has several internal and external benefits. Internally, reserves can provide for cash flow needs until property tax revenues are received, reducing or eliminating the need for cash flow borrowing; provide funds to leverage state or federal grants; and provide for the unexpected. Externally, reserves tend to be viewed favorably by investors, rating agencies, and local banks with which we do business, thus benefiting rating and the potential need for lines of credit. The City’s General Fund balance was a primary focus of a recent bond ratings when Moody’s Investor Services 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 rating 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.
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 As shown on page 95, variances in the General Fund between the original budget and the final budget appropriations totaled $1,813,332, which increased the original appropriation budget of $26,897,001 up to $28,710,333. $1,253,985 of this was for the Rouse Justice Police/Court Facility in the Capital outlay budget, and $439,470 of this budget amendment was for Transfers to other funds of the revenue collected under the new 5-mill property tax levy for the local funding portion of street intersections into the Community Transportation Fund in addition to 14.32% local share of spending under the Community Transportation Enhancement Program. The $2.1 million increase to the Public safety budget and the $2.1 million decrease to the General government budget both relate to the same budget amendment made for the State of Montana’s share of Police officer and Firefighter retirement. Approximately $98,370 of this overall increase was for the non-cash “book entry only” expenditure previously discussed for the Public Safety budget in order to record the additional amount of the State’s share of Police and Firefighter retirement in excess of the $2 million that was initially budgeted. This book-only/non-cash expenditure, including the amount requiring a budget amendment, is offset/“reimbursed” by intergovernmental revenue booked in the same amount. By design, the original $2 million of appropriation authority was initially budgeted under General Government and then later shifted the Public Safety budget at year-end, at which time the additional $98,370 necessary to cover Police and Firefighter retirement was added as an actual amendment to increase appropriation authority. This $98,370 combined with the $2 million shift from General Government accounts for the $2.1 million overall increase to the Public Safety budget, and it also explains most of the $2.1 million reduction in the budget reported under Other. The $476,096 positive Variance with Final Budget in the Public safety budget was due primarily to vacancy savings derived from unfilled positions in the police and fire departments. Street Impact Fees Special Revenue Fund balance increased by $3,091,346, or 31.6%, from $9,793,964 last year to $12,885,310 this year due to $3.9 million in revenues and only $925,641 in expenditures. Revenues increased by $1,002,692, or 34.2%, from $2,934,549 to $3,937,241 due to a continuing trend in increased construction and development. Construction activity for the year which required the payment of impact fees included: $343,845 for expansion of Bozeman Deaconess Hospital/Bozeman Health, $117,178 for expansion of the Barnard Construction headquarters, $94,624 for the new Jake Jabs MSU College of Business building, and $$75,989 for the new Town Pump Convenience Store/Gas Station on East Main Street. Street Maintenance Special Revenue Fund balance decreased by $386,786, or 19.6%, from $1,977,779 last year to $1,590,993 this year due expenditures and transfers-out exceeding revenues for the year. Revenues did increase by $292,599, or 9%, from $3,240,916 last year to $3,533,515 this year. Driving this was 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 completed last year. With the Commission’s focused goal of addressing deferred street and curb maintenance, Street Maintenance Assessment rates were increased four years ago by 18%, with the 18% allocated as follows: Continued increase to Curb Replacement Fund (2%); Debt Service Payments for the Reconstruction of South 8th Avenue (7%); Establishment of a Street Reconstruction Fund (6%); and Increase in Operating Budget (3%). Continuing the City Commission’s goal of addressing deferred street maintenance, this year rates were increased 10% this year for a general revenue increase of approximately $300,000, including adding $200,000/year for pavement maintenance (chip seals, overlay, patching.) Expenditures increased notably this year by $705,019, or 23.1%, from $3,048,808 to $3,753,827. Major expenditures included $232,513 in seal coat improvements and $152,300 for a new dump truck with plow & sander, in addition to the $234,300 accounting entry required at the inception of the Caterpillar motor grader lease. Additionally, $400,000 was transferred out to the Story Street SID Reconstruction Fund as the City’s general share of that project. Building Inspection Special Revenue The City’s Building Inspection division again experienced strong permit issuance over the past year. While never completely stopping, building construction significantly slowed during the recession. However, this year the total value of Building Permits for New Construction, upon which most permit revenue calculation are based, was more than double the value realized 4 years ago. However, the increase in fund balance was modest, since expenditures also increase. Fund balance increased by $78,787, or 5.6%, from $1,394,550 last year to $1,473,337 this year.
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 Revenues increased by $55,879, or 3.8%, from $1,483,743 to $1,539,622. The increase in expenditures was more notable, with a 19.6% increase of $239,283 over last year from $$1,221,552 to $1,460,835. $206,846 of this increase was in personnel costs, as with continued growth, additional staff was added to the building team mid-year. This additional staff included 2.0 FTE Building Inspectors, 1.0 FTE Permit Technician and a 1.0 FTE Senior Plans Examiner; all of these positions are funded with building permit revenues. SID Sinking Debt Service Fund balance decreased significantly by $780,246, or 62%, from $1,258,427 last year to $1,258,427 this year due to a substantial decrease in revenues and increased Transfers out. Revenues from Special Improvement District (SID) assessment collections along with fund interest income and other income amounted to $595,510 which was $467,743 or 44%, less than last year’s revenues of $1,063,253. Last year’s revenues were unusually high due to a large payoff (paying the entire amount due instead of choosing to pay installments annually) of the Valley Center Road/North 19th Avenue Special Improvement District (SID) by Gallatin Center LLP. Total expenditures actually decreased this year by $202,690, or 37%, from $547,760 to $345,070 because more SID debt was paid off by the City last year than in the current year. When enough cash has accumulated in the SID Sinking Funds due to regularly-scheduled repayments, or due to one-time payoffs such as the Gallatin Center, the City can choose to call/pay some of its SID bonds early to avoid future interest costs. The biggest contributor to the decreased fund balance, however, was transfers out amounting to $1,030,686. $720,000 of this was due to old debt service funds being closed out and residual fund balances transferred to the SID Revolving Fund in accordance with State law. The remaining $310,000 was transferred from the SID Debt Service Funds to the Capital Projects fund to cover deficits in the related SID construction funds. Capital Projects Fund balance increased by $644,850, or 6.5%, from $9,965,404 last year to $10,610,254 this year due mainly to the issuance of the remaining $5.1 million Trails and Opens Space General Obligation Bond and Transfers in from other funds. Revenues consisted of $117,937 interest income earned on the cash balance in the fund, boosted by proceeds from the TOP Bond issuance. This was $15,054 higher than last year’s total revenues of $102,883 which consisted of $62,967 in interest income and a $39,916 DNRC grant for Bozeman Creek. Debt issuance proceeds from the TOP Bond amounted to $5,369,154. Additionally, Transfers in amounted to $774,459 and consisted mainly of $400,000 from the Street Maintenance Fund as the City’s share of the Story Street SID Reconstruction project, and $310,188 transferred from the SID debt service fund as the property owners’ share of that same project. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As shown in Table 4, at the end of 2015 the City had $365.6 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 $12.6 million, or 3.6% over last year. Refer to capital assets disclosure Note 7 beginning on page 59 for more information.
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 201520142015201420152014Land16.9$ 11.1$ 4.9$ 4.9$ 21.8$ 16.1$ Water Rights - - 2.1 2.1 2.1 2.1 Buildings32.4 32.1 112.4 111.6 144.7 143.8 Other Structures and Improvements1.1 1.2 30.8 30.8 32.0 32.0 Machinery & Equipment11.3 11.2 7.6 6.8 19.0 17.9 Property under Capital Lease0.4 0.3 0.5 - 1.0 0.3 Vehicle3.2 3.3 1.9 1.8 5.1 5.1 Infrastructure146.9 141.8 268.0 260.8 414.9 402.6 Subtotal 212.3 201.0 428.2 418.8 640.5 619.9 Accumulated Depreciation(95.8) (92.8) (179.2) (174.2) (275.0) (267.0) Total Capital Assets 116.5$ 108.2$ 249.0$ 244.7$ 365.6$ 352.8$ ActivitiesActivitiesTotalsTabl e 4Capital Assets at Year-end(in Millions)GovernmentalBusiness-type Major additions and projects underway include the following expenditures made during this year: Top Bond: Story Mill Park2,650,207$ Top Bond: Sports Complex2,046,847$ Rouse Justice Center shared Police‐Court Facility & land purchase1,273,474$ Story Street Reconstruction SID718 Special Improvement District 718649,686$ Street Improvements ‐ Gas Tax616,130$ Community Transportation Enhancement Project CTEP Citywide Sidewalk Program563,512$ Water Plant Construction ‐ final payments: state of the art membrane filtration system518,797$ Water Line Replacement and Rehabilitation ‐ annual distribution pipe replacement program505,353$ Landfill legal costs ‐ Story Mill Landfill (refer to Footnote 20)390,079$ Flusher Vacuum Truck ‐ Wastewater operation369,323$ Energy upgrades per study conducted by consultant McKinistry 268,112$ Garbage Truck ‐ Solid Waste operation261,689$ Caterpillar Motor Grader ‐ Street Maintenance operation237,203$ Field Survey and Site Map Development Services ‐ Street, Water, Wastewater CIP Projects219,075$ Cottonwood Road Widening from Fallon Street to Alpha Drive ‐ street impact fees202,616$
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 Debt At year-end, the City had $61.2 million in bonds and notes outstanding versus $58.2 million last year – a modest increase of $3 million, or 5.2%, as shown in Table 5. This increase was primarily due to the final $5.1 million in general obligation bonds issued for the $15 million voter-approved Trails Open Space and Parks (TOP) program, netted against principal repayments on other debt. General obligation debt, which is reported under Governmental Activities, consists of $14.8 million for these TOP Bonds along with $1.5 million in Series 2012 Refunding Bonds issued to refinance both the Series 2003A Transportation Refunding bonds and the Series 2001A and Series 2003B Library Construction Project bonds. Debt reported under Business-Type Activities includes $17.4 million of water revenue bonds and $20 million of wastewater revenue bonds issued to finance construction of the new Water Treatment and Wastewater Reclamation Facilities. 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. As expressed in the fiscal year 2016 Approved Budget, City officials expect to end next fiscal year with general fund reserves totaling $5.3 million, or 19.4% of operating revenues. This exceeds the minimum level of 16 2/3% required by City Charter, which in May of 2011 was amended to include adoption of GFOA’s Best Practice for Unreserved General Fund Balance into the City’s Budget Administration Ordinance. Property taxes are the City's primary general revenue source (70.3%), followed by unrestricted grants and contributions (27.1%), and investment earnings (1.4%) Moody's expects the City to maintain a moderate debt position given current moderate debt burdens, above average principal payout, and expected tax base growth. More detailed information about the City’s long-term liabilities is presented in Note 9 to the financial statements.
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES The City’s elected and appointed officials considered many factors when adopting the 2015-2016 budget for next fiscal year’s tax rates and for fees that will be charged for the business-type activities. Some of these factors include: capital improvements identified in the City’s Capital Improvement Program; inflation rates, the City’s collective bargaining units, the local economy, and the citizen’s ability to pay. For the year, inflation rates continued to remain at relatively low yet increasing levels. The Bureau of Labor Statistics of the U.S. Department of Labor reported the Consumer Price Index-Unadjusted for All Items at .8% for the last calendar year and at .2% as of the report date, as the increase in food and shelter costs over the past months is not nearly enough to offset the fall in energy prices. Inflation rates have historically had a significant impact on the cost of City capital projects. 201520142015201420152014General obligationbonds (backed by the City) 16.3$ 11.7$ -$ -$ 16.3$ 11.7$ Tax Increment FinancingDistrict (TIFD) bonds 4.8 5.0 - - 4.8 5.0 Special ImprovementDistrict Debt 0.9 1.2 - - 0.9 1.2 Notes Payable 1.0 1.1 - - 1.0 1.1 Lease Payable 0.3 0.1 - - 0.3 0.1 Water Revenue Bonds(backed by specific fee revenues) - - 17.4 18.1 17.4 18.1 Wastewater Revenue Bonds(backed by specific fee revenues) - - 20.0 21.0 20.0 21.0 Stormwater Revenue Bonds(backed by specific fee revenues) - - 0.2 - 0.2 - Stormwater Lease Payable(backed by specific fee revenues) - - 0.4 - 0.4 - Total s23.3$ 19.1$ 38.0$ 39.1$ 61.2$ 58.2$ Activities Activities TotalsTabl e 5Outstanding Debt, at Year-end(in Millions)Governmental Business-type
CITY OF BOZEMAN, MONTANA MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2015 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 Administrative Services Director, Controller, or Assistant Controller at the City of Bozeman, 121 North Ro
B. BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
30 CITY OF BOZEMAN, MONTANA STATEMENT OF NET POSITION JUNE 30, 2015 The Notes to Financial Statements are an integral part of this statement. Governmental ActivitiesBusiness-type Activities TotalASSETSCash and investments 36,682,841$ 17,084,802$ 53,767,643$ Restricted cash and investments 15,428,115 6,128,975 21,557,090 Accrued interest 53,455 32,154 85,609 Receivables, net 7,834,307 1,760,282 9,594,589 Notes receivable 701,100 13,480 714,580 Prepaid expenses 369,750 - 369,750 Capital assetsNon-depreciable land and water rights 16,887,829 6,993,699 23,881,528 Other capital assets, net of depreciation 99,575,700 242,113,241 341,688,941 Total capital assets 116,463,529 249,106,940 365,570,469 Total assets 177,533,097 274,126,633 451,659,730 Deferred outflows of resourcesPension plan contributions 1,726,195 370,411 2,096,606 Total assets and deferred outflows of resources 179,259,292$ 274,497,044$ 453,756,336$ LIABILITIESAccounts payable and accrued expenses 4,901,158$ 1,783,610$ 6,684,768$ Unearned revenue 59,889 - 59,889 Current portion of long-term liabilitiesCompensated absences payable 1,215,000 361,275 1,576,275 Capital leases 54,905 85,000 139,905 Closure and post-closure care costs - 375,000 375,000 Bonds and notes 1,097,356 1,840,000 2,937,356 Long-term liabilities, due in more than one yearCompensated absences 455,689 189,799 645,488 Capital leases 241,007 349,598 590,605 Unearned revenue - grant conditions on revolving loan - - - Closure and post-closure care costs - 3,351,711 3,351,711 Pollution remediation obligations 16,874 1,845,595 1,862,469 Other post-employment health benefits - implicit rate subsidy1,672,489 416,411 2,088,900 Bonds and notes21,901,418 35,727,315 57,628,733 Net pension liability14,414,020 4,096,076 18,510,096 Total liabilities46,029,805 50,421,390 96,451,195 DEFERRED INFLOWS OF RESOURCESBond premium262,425 - 262,425 Pension deferrals2,939,728 1,058,494 3,998,222 Total deferred inflows of resources3,202,153 1,058,494 4,260,647 NET POSITIONNet investment in capital assets93,409,850 211,419,777 304,829,627 Restricted:Restricted for parking capital projects- 282,894 282,894 Restricted for general government464,578 - 464,578 Restricted for public safety2,417,204 - 2,417,204 Restricted for public service15,252,750 - 15,252,750 Restricted for public welfare6,306,680 - 6,306,680 Restricted for capital projects10,041,269 1,592,613 11,633,882 Restricted for debt service7,180,467 3,102,477 10,282,944 Unrestricted(5,045,464) 6,619,399 1,573,935 Total net position130,027,334$ 223,017,160$ 353,044,494$
31 CITY OF BOZEMAN, MONTANA STATEMENT OF ACTIVITIES Year Ended June 30, 2015 The Notes to Financial Statements are an integral part of this statement. Net (Expense) Revenue and Changes in Net PositionOperating CapitalCharges for Grants and Grants and Governmental Business-typeExpenses Services Contributions Contributions Activities Activities TotalPrimary GovernmentGovernmental activitiesGeneral government 7,417,644$ 1,947,445$ 84,181$ -$ (5,386,018)$ (5,386,018)$ Public safety 17,023,578 3,211,911 1,963,089 - (11,848,578) (11,848,578) Public service 6,458,930 8,784,447 24,578 2,960,051 5,310,146 5,310,146 Public welfare 7,579,652 1,097,845 182,204 - (6,299,603) (6,299,603) Interest and fiscal fees 824,266 - - - (824,266) (824,266) Total governmental activities 39,304,070 15,041,648 2,254,052 2,960,051 (19,048,319) (19,048,319) Business-type activitiesWater 7,995,910 9,969,058 46,622 4,305,327 6,325,097$ 6,325,097 Waste water 6,940,983 9,008,247 41,726 2,080,091 4,189,081 4,189,081 Solid waste 3,308,441 2,953,414 25,274 - (329,753) (329,753) 1,098,771 891,379 9,817 - (197,575) (197,575) Total business-type activities 19,344,105 22,822,098 123,439 6,385,418 9,986,850 9,986,850 Total primary government 58,648,175$ 37,863,746$ 2,377,491$ 9,345,469$ (19,048,319) 9,986,850 (9,061,469) General revenuesProperty taxes 20,203,718 - 20,203,718 Unrestricted grants and contributions 7,699,711 - 7,699,711 Investment earnings403,151 - 403,151 Miscellaneous374,966 - 374,966 Transfers(410,016) 380,347 (29,669) Total general revenues and transfers28,271,530 380,347 28,651,877 Change in net position9,223,211 10,367,197 19,590,408 Net position, beginning of the year137,016,103 217,597,640 354,613,743 Restatement(16,211,980) (4,947,677) (21,159,657) Net position, beginning of the year, restated120,804,123 212,649,963 333,454,086 Net position, end of the year130,027,334$ 223,017,160$ 353,044,494$ Non major activitiesFunctions/ProgramsPrimary GovernmentProgram Revenues
FUND FINANCIAL STATEMENTS
GOVERNMENTAL FUND FINANCIAL STATEMENTS
MAJOR GOVERNMENTAL FUNDS General Fund – the 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 Fund accounts for the collection and expenditures associated with the street impact fees. Street Maintenance – Accounts for special assessment revenues levied, received and expended for street maintenance provided to specific property owners. Building Inspection – This Fund was established to account for all activity of enforcing the building regulation adopted by the City. It includes all the money and staff associated with executing any aspect of the code enforcement program. Section 50-60-101 MCA established the code enforcement program requirement. General Improvements Capital Projects Fund – Accounts for the construction of general improvement projects financed by special assessments other than those financed by proprietary funds. SID Sinking Debt Service Fund - the Fund accounts for the accumulation of resources and payment of special assessment bond principal and interest related to general improvement, sidewalk and curb construction projects.
32 CITY OF BOZEMAN, MONTANA BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2015 The Notes to Financial Statements are an integral part of this statement. StreetStreetBuildingSIDOtherTotalGeneral Impact Fees Maintenance Inspection Sinking Capital Governmental GovernmentalFund Special Revenue Special Revenue Special Revenue Debt Service ProjectsFundsFundsASSETSCash and investments7,005,922$ -$ 1,754,725$ 1,537,744$ 868,161$ 10,971,477$ 14,060,575$ 36,198,604$ Receivables:Property taxes1,586,670 - - - - - 644,851 2,231,521 Accrued interest2,595 16,218 3,089 - - 21,367 10,186 53,455 Customers, net1,767,496 - 450 - - - 272,186 2,040,132 Special assessments275 - 174,838 - 3,219,998 - 56,955 3,452,066 Other governments2,541 - - - - - 63,634 66,175 Advances to other city funds- - - - - - 404,724 404,724 Prepaid expenditures- - - - - - 369,750 369,750 Notes receivable- - - - - - 701,100 701,100 Restricted cash and investments- 13,173,438 - - - - 2,254,677 15,428,115 Total assets10,365,499$ 13,189,656$ 1,933,102$ 1,537,744$ 4,088,159$ 10,992,844$ 18,838,638$ 60,945,642$
33 CITY OF BOZEMAN, MONTANA BALANCE SHEET (CONTINUED) GOVERNMENTAL FUNDS June 30, 2015 The Notes to Financial Statements are an integral part of this statement. StreetStreetBuildingSIDOtherTotalGeneral Impact Fees Maintenance Inspection SinkingCapital Governmental GovernmentalFund Special Revenue Special Revenue Special Revenue Debt Service ProjectsFundsFundsLIABILITIES AND FUND BALANCESLiabilitiesAccounts payable2,617,160$ 304,346$ 232,905$ 64,289$ 147$ 382,590$ 1,181,520$ 4,782,957$ Escheat property payable50,497 - - - - - - 50,497 Matured interest payable- - - - - - - - Accrued employee benefits 990 - 43 118 - - 16 1,167 Advanced from other city funds- - - - 404,724 - - 404,724 Total liabilities2,668,647 304,346 232,948 64,407 404,871 382,590 1,181,536 5,239,345 Deferred inflows of resourcesUnavailable revenue-property taxes84,986 - - - - - 47,514 132,500 Unavailable revenue-special assessments- - 109,161 - 3,205,107 - 9,100 3,323,368 Unavailable revenue-court fines1,549,901 - - - - - - 1,549,901 Total deferred inflows of resources1,634,887 - 109,161 - 3,205,107 - 56,614 5,005,769 Fund balancesNonspendable- - - - - - 1,360,690 1,360,690 Restricted- 12,885,310 1,590,993 1,473,337 478,181 10,041,269 13,155,857 39,624,947 Committed- - - - - 339,145 3,177,242 3,516,387 Assigned4,887,652 - - - - 229,840 - 5,117,492 Unassigned1,174,313 - - - - - (93,301) 1,081,012 Total fund balances6,061,965 12,885,310 1,590,993 1,473,337 478,181 10,610,254 17,600,488 50,700,528 Total liabilities and fund balances10,365,499$ 13,189,656$ 1,933,102$ 1,537,744$ 4,088,159$ 10,992,844$ 18,838,638$ 60,945,642$
34 CITY OF BOZEMAN, MONTANA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION June 30, 2015 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 funds50,700,528$ Capital assets used in governmental activities are not financial resources and therefore are not reportedin the governmental funds.Governmental capital assets212,306,307 Less: accumulated depreciation(95,842,778) 116,463,529 Internal service funds are used by management to charge the costs of certain activities to individualfunds. The assets and liabilities of the internal service funds are included in governmental activitiesin the statement of net position.Net position1,286,300 Less: capital assets included in governmental activities (1,631,771) Plus: accumulated depreciation included in governmental activities451,045 Plus: compensated absences included in governmental activities47,869 153,443 Deferred inflows of resources are not available to pay for current period expenditures and, therefore,are deferred in the funds.5,005,769 Bond premiums are other financing source revenue in the governmental funds. They are a liabilityfor the government-wide financial statements and amortized over the life of the issuance.Bond premium(269,154) Less: amortization6,729 (262,425) Impact fee credits do not affect current financial resources and therefore are not reported in thegovernmental funds.(59,889) Long-term liabilities are not due and payable in the current period and therefore are not reportedin the governmental funds.Bonds and notes payable(22,998,774) Net pension liability(15,318,883) Capital lease obligations(295,912) Pollution remediation obligations(16,874) Post-employment health benefits(1,672,489) Compensated absences(1,670,689) (41,973,621) Net position of governmental activities130,027,334$
35 CITY OF BOZEMAN, MONTANA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended June 30, 2015 The Notes to Financial Statements are an integral part of this statement. StreetStreetBuildingSIDOtherTotalImpact Fees Maintenance Inspection Sinking Capital Governmental GovernmentalGeneral Special Revenue Special Revenue Special Revenue Debt Service ProjectsFundsFundsREVENUESTaxes14,512,683$ -$ -$ -$ -$ -$ 5,891,553$ 20,404,236$ Special assessments45 - 20,902 - 586,116 - 971,792 1,578,855 Licenses and permits316,747 - 18,684 1,492,411 - - - 1,827,842 Intergovernmental6,807,755 - 979 32,305 - - 1,721,898 8,562,937 Charges for services1,928,343 3,849,705 3,462,079 6,495 - - 1,383,169 10,629,791 Fines and forfeitures1,157,270 - - - - 147,896 1,305,166 Interest on investments13,965 87,276 17,199 8,400 9,394 117,937 116,134 370,305 Loan repayment- - - - - - 29,929 29,929 Other89,684 260 13,672 11 - - 259,647 363,274 Total revenues24,826,492 3,937,241 3,533,515 1,539,622 595,510 117,937 10,522,018 45,072,335 EXPENDITURESCurrentGeneral government5,728,938 - - - - - 865,536 6,594,474 Public safety13,196,413 - - 1,423,272 - - 467,010 15,086,695 Public service87,894 54,397 2,860,786 - - - 783,206 3,786,283 Public welfare5,042,499 - - - - 92,982 1,791,884 6,927,365 Other1,020,465 - - - - - 92,875 1,113,340 Capital outlay1,738,493 871,244 708,221 37,563 - 5,507,034 1,042,778 9,905,333 Debt servicePrincipal payments447 - 171,146 - 295,000 - 655,000 1,121,593 Interest and fiscal fees180 - 13,674 - 50,070 - 760,342 824,266 Total expenditures26,815,329 925,641 3,753,827 1,460,835 345,070 5,600,016 6,458,631 45,359,349 Revenues over (under) expenditures(1,988,837) 3,011,600 (220,312) 78,787 250,440 (5,482,079) 4,063,387 (287,014) OTHER FINANCING SOURCES (USES)Transfers in2,103,263 79,746 48,584 - - 774,459 1,810,619 4,816,671 Transfers out(702,254) - (479,746) - (1,030,686) (16,684) (2,967,648) (5,197,018) Long-term debt issued15,907 - 234,300 - - 5,369,154 - 5,619,361 Sale of capital assets19,592 - 30,388 - - - 14,875 64,855 Total other financing sources (uses)1,436,508 79,746 (166,474) - (1,030,686) 6,126,929 (1,142,154) 5,303,869 Net change in fund balances(552,329) 3,091,346 (386,786) 78,787 (780,246) 644,850 2,921,233 5,016,855 FUND BALANCE, beginning of year6,614,294 9,793,964 1,977,779 1,394,550 1,258,427 9,965,404 14,352,685 45,357,103 Restatement- - - - - - 326,570 326,570 FUND BALANCE, end of year6,061,965$ 12,885,310$ 1,590,993$ 1,473,337$ 478,181$ 10,610,254$ 17,600,488$ 50,700,528$
36 CITY OF BOZEMAN, MONTANA RECONCILIATION OF STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITES Year Ended June 30, 2015 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 funds5,016,855$ Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costof these assets is allocated over their estimated useful lives and reported as depreciation expense. This isthe amount by which depreciation expense exceeded capital outlays in the current period.Expenditures for capital assets9,905,333$ Donated infrastructure2,528,883 Assets transferred to proprietary funds(29,667) Less: current year depreciation(4,121,579) 8,282,970 Governmental funds report asset disposals as sale of capital assets for the cash received. In the statement ofactivities, those gains and losses must be adjusted by the assets basis, net of any depreciation.(104,465) 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 ofgovernmental funds. Neither transaction, however, has any effect on net position. Also, governmental fundsthese amounts report the effect of premiums, discounts, and similar items when debt is first issued, whereasare deferred and amortized in the statement of activities, unless immaterial. This amount is the net effect of thesedifferences in the treatment of long-term debt and related items.(4,491,039) 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.(500,524) Governmental funds do not report a liability for compensated absences. The change in the liability is a currentperiod expense.38,178 Governmental funds do not report a liability for other post-employment health benefits.(123,830) Governmental funds do not recognize a liability for long-term legal settlements. The current year paymentwas recorded as an expenditure in the governmental funds. The liability and expense was previously accruedin the governmental activities.666,667 Contributions to the pension plans in the current fiscal year are deferred outflows in the Statement of Net Position573,762 Governmental funds do not report impact fee credits. The change in these credits during the year are chargedto the statement of activities.46,561 Internal service funds are used by management to charge the costs of certain activities to individual funds. Thenet revenue of the internal service funds is reported in the governmental activities.(181,924) Change in net position of governmental activities9,223,211$
PROPRIETARY FUND FINANCIAL STATEMENTS
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. 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 service 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.
37 CITY OF BOZEMAN, MONTANA STATEMENT OF NET POSITION PROPRIETARY FUNDS June 30, 2015 The Notes to Financial Statements are an integral part of this statement. GovernmentalActivitiesWaste Solid Non Major InternalWater Fund Water Fund Waste Fund Enterprise Funds Total Service FundsASSETS Current assetsCash and investments 12,227,172$ 3,850,736$ 703,675$ 303,219$ 17,084,802$ 484,237$ ReceivablesAccrued interest 21,917 10,237 - - 32,154 - Customers, net 646,905 667,271 289,425 156,681 1,760,282 44,413 Special assessments - - - - - - Total current assets 12,895,994 4,528,244 993,100 459,900 18,877,238 528,650 Non current assetsOther assetsNotes receivable - - - 13,480 13,480 - Restricted cash and investments 3,557,017 2,280,653 - 291,305 6,128,975 - Total other assets 3,557,017 2,280,653 - 304,785 6,142,455 - Property, plant and equipment Nondepreciable:Land 162,518 693,026 3,714,577 303,436 4,873,557 - Water rights 2,120,142 - - - 2,120,142 - Depreciable:Buildings 40,082,503 59,689,004 876,286 11,783,924 112,431,717 1,388,583 Other structures and improvements 13,907,432 14,745,401 2,155,300 - 30,808,133 - Machinery and equipment 1,499,298 2,780,284 3,179,681 187,252 7,646,515 159,376 Vehicles540,732 671,783 529,231 173,627 1,915,373 83,812 Infrastructure164,367,864 103,496,481 78,531 32,805 267,975,681 - Property under capital lease- - - 519,943 519,943 - Accumulated depreciation and amortization (99,750,227) (70,285,269) (5,707,309) (3,441,316) (179,184,121) (451,045) Net property, plant and equipment122,930,262 111,790,710 4,826,297 9,559,671 249,106,940 1,180,726 Total non current assets126,487,279 114,071,363 4,826,297 9,864,456 255,249,395 1,180,726 Deferred outflows of resourcesPension plan contributions144,056 128,929 78,093 19,333 370,411 24,019 Total assets139,527,329$ 118,728,536$ 5,897,490$ 10,343,689$ 274,497,044$ 1,733,395$ Enterprise FundsBusiness-type Activities
38 CITY OF BOZEMAN, MONTANA STATEMENT OF NET POSITION (CONTINUED) PROPRIETARY FUNDS June 30, 2015 The Notes to Financial Statements are an integral part of this statement. GovernmentalActivitiesWaste Solid Non Major InternalWater Fund Water Fund Waste Fund Enterprise Funds Total Service FundsLIABILITIESCurrent liabilities:Accounts payable and accrued expenses 504,751$ 843,086$ 361,777$ 73,996$ 1,783,610$ 66,537$ Compensated absences payable 152,721 140,342 55,101 13,111 361,275 - Capital lease obligations due in one year - - - 85,000 85,000 - Closure and post-closure care costs, current portion - - 375,000 - 375,000 - Bonds, notes, and loans payable 798,000 1,042,000 - - 1,840,000 - Total current liabilities 1,455,472 2,025,428 791,878 172,107 4,444,885 66,537 Noncurrent liabilitiesClosure and post-closure care costs - - 3,351,711 - 3,351,711 - Revenue bonds due after one year 16,567,000 18,930,565 - 229,750 35,727,315 - Compensated absences payable 90,680 54,351 37,768 7,000 189,799 47,869 Capital lease obligations - - - 349,598 349,598 - 177,199 119,972 87,633 31,607 416,411 - Solvent site remediation liability - 1,845,595 - - 1,845,595 - Net pension liability 1,585,655 1,419,143 859,585 231,693 4,096,076 264,378 Total noncurrent liabilities 18,420,534 22,369,626 4,336,697 849,648 45,976,505 312,247 Total liabilities19,876,006 24,395,054 5,128,575 1,021,755 50,421,390 378,784 Deferred inflows of resourcesPension deferrals409,760 366,730 222,131 59,873 1,058,494 68,311 NET POSITIONNet investment in capital assets105,565,262 91,818,145 4,826,297 9,210,073 211,419,777 1,180,726 Restricted for impact capital projects1,225,684 366,929 - - 1,592,613 - Restricted for parking capital projects- - - 282,894 282,894 - Restricted for debt service1,313,885 1,788,592 - - 3,102,477 - Unrestricted11,136,732 (6,914) (4,279,513) (230,906) 6,619,399 105,574 Total net position119,241,563 93,966,752 546,784 9,262,061 223,017,160 1,286,300 Total liabilities, deferred inflows of resources, and net position139,527,329$ 118,728,536$ 5,897,490$ 10,343,689$ 274,497,044$ 1,733,395$ Other post-employment health benefits - implicit rate subsidyEnterprise FundsBusiness-type Activities
39 CITY OF BOZEMAN, MONTANA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS Year Ended June 30, 2015 The Notes to Financial Statements are an integral part of this statement. GovernmentalActivitiesWaste Solid Non Major InternalWater Fund Water Fund Waste Fund Enterprise Funds Totals Service FundsOPERATING REVENUES Charges for services 7,748,913$ 7,631,117$ 2,924,262$ 881,263$ 19,185,555$ 5,250,756$ OPERATING EXPENSESSalaries and benefits 2,421,373 2,152,685 1,085,317 378,463 6,037,838 369,871 Materials and supplies 884,580 391,194 294,394 42,870 1,613,038 621,719 Repairs and maintenance 58,436 271,127 212,301 19,062 560,926 11,834 Utilities 272,402 568,249 421,303 31,924 1,293,878 4,714 Administrative charges 455,140 552,607 358,367 64,295 1,430,409 93,897 Insurance claims - - - - - 4,239,330 Other expenses 881,995 (21,408) 770,211 217,734 1,848,532 116,551 Depreciation and amortization 2,483,559 2,394,392 166,548 344,423 5,388,922 52,780 Changes in estimated closure and post-closure care costs - - - - - - Total operating expenses 7,457,485 6,308,846 3,308,441 1,098,771 18,173,543 5,510,696 Operating income (loss) 291,428 1,322,271 (384,179) (217,508) 1,012,012 (259,940) NON-OPERATING REVENUES (EXPENSES)Interest income 126,131 55,308 3,673 4,368 189,480 2,917 Interest expense (538,425) (632,137) - - (1,170,562) (855) Other income436,804 133,699 25,479 5,748 601,730 11,692 Intergovernmental income46,622 41,726 25,274 9,817 123,439 7,475 Impact fees1,655,405 1,051,745 - - 2,707,150 - Gain (loss) on disposal of assets1,805 136,378 - - 138,183 298 Total non-operating revenues (expenses)1,728,342 786,719 54,426 19,933 2,589,420 21,527 Income (loss) before contributions and transfers2,019,770 2,108,990 (329,753) (197,575) 3,601,432 (238,413) Contributions of infrastructure - developers4,305,327 2,080,091 - - 6,385,418 - Transfers in70,000 - 221,339 310,347 601,686 - Transfers out- - - (221,339) (221,339) - Change in net position6,395,097 4,189,081 (108,414) (108,567) 10,367,197 (238,413) NET POSITION, beginning of year114,761,790 91,491,863 1,693,496 9,650,491 217,597,640 1,844,048 Restatements(1,915,324) (1,714,192) (1,038,298) (279,863) (4,947,677) (319,335) NET POSITION, beginning of year, restated112,846,466 89,777,671 655,198 9,370,628 212,649,963 1,524,713 NET POSITION, end of year119,241,563$ 93,966,752$ 546,784$ 9,262,061$ 223,017,160$ 1,286,300$ Enterprise FundsBusiness-type Activities
40 CITY OF BOZEMAN, MONTANA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Year Ended June 30, 2015 The Notes to Financial Statements are an integral part of this statement. GovernmentalActivitiesWaste Solid Nonmajor InternalWater Fund Water Fund Waste Fund Funds Total Service FundsCASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 7,744,868$ 7,592,070$ 2,872,387$ 838,908$ 19,048,233$ 5,222,331$ Receipts from others436,804 133,699 25,479 5,748 601,730 19,167 Payments to suppliers(3,578,425) (2,083,956) (2,176,072) (263,584) (8,102,037) (739,429) Payments to employees(2,436,161) (2,192,140) (1,120,754) (384,242) (6,133,297) (4,616,157) Payments to internal service funds and administrative fees(455,140) (552,607) (358,367) (64,295) (1,430,409) (93,897) Net cash flows from operating activities1,711,946 2,897,066 (757,327) 132,535 3,984,220 (207,985) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIESTransfers in70,000 - 221,339 310,347 601,686 - Receipts from grants and intergovernmental sources48,427 178,104 25,274 9,817 261,622 - Net cash flows from non-capital financing activities118,427 178,104 246,613 98,825 641,969 - Acquisition of capital assets(1,373,077) (775,055) (585,005) (275,787) (3,008,924) (12,557) Principal paid on bonds, interfund loans, loans and leases(775,000) (1,053,000) - - (1,828,000) - Interest paid on bonds, interfund loans, loans and leases(538,425) (632,137) - - (1,170,562) (855) Proceeds from issuance of long-term debt- - - 229,750 229,750 - Impact fees received1,655,405 1,051,745 - - 2,707,150 - Proceeds from sale of property, plant and equipment- - - - - 298 Net cash flows from capital and related financing activities (1,031,097) (1,408,447) (585,005) (46,037) (3,070,586) (13,114) CASH FLOWS FROM INVESTING ACTIVITIESCollections on notes- - - 2,444 2,444 - Interest on investments124,130 45,071 7,118 4,371 180,690 2,917 Net cash flows from investing activities124,130 45,071 7,118 6,815 183,134 2,917 Net change in cash and investments923,406 1,711,794 (1,088,601) 192,138 1,738,737 (218,182) Cash and investments, beginning of year14,860,783 4,419,595 1,792,276 402,386 21,475,040 702,419 Cash and investments, end of year15,784,189$ 6,131,389$ 703,675$ 594,524$ 23,213,777$ 484,237$ Classified as:Cash and investments12,227,172$ 3,850,736$ 703,675$ 303,219$ 17,084,802$ 484,237$ Restricted cash and investments3,557,017 2,280,653 - 291,305 6,128,975 - Totals15,784,189$ 6,131,389$ 703,675$ 594,524$ 23,213,777$ 484,237$ CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESBusiness-type ActivitiesEnterprise Funds
41 CITY OF BOZEMAN, MONTANA STATEMENT OF CASH FLOWS (CONTINUED) PROPRIETARY FUNDS Year Ended June 30, 2015 The Notes to Financial Statements are an integral part of this statement. GovernmentalActivitiesWaste Solid Nonmajor InternalRECONCILIATION OF OPERATING INCOME TO Water Fund Water Fund Waste Fund Funds Total Service FundsNET CASH FROM OPERATING ACTIVITIES:Operating income (loss) 291,428$ 1,322,271$ (384,179)$ (217,508)$ 1,012,012$ (259,940)$ Adjustments to reconcile operating income (loss)to net cash provided (used) by operating activitiesDepreciation and amortization 2,483,559 2,394,392 166,548 344,423 5,388,922 52,780 Change in estimated closureand post-closure care costs - - (513,136) - (513,136) - Change in solvent site remediation obligation - (1,093,462) - - (1,093,462) - Other income 436,804 133,699 25,479 5,748 601,730 19,167 Change in Assets and Liabilities: (Increase) Decrease in:Accounts receivable (4,045) (39,047) (51,875) (42,355) (137,322) (28,425) Increase (Decrease) in:Accounts payable (1,481,012) 218,668 35,273 48,006 (1,179,065) 15,389 Accrued employee benefits payable 49,177 17,793 (762) 1,851 68,059 3,709 Net pension (63,965) (57,248) (34,675) (7,630) (163,518) (10,665) Total adjustments 1,420,518 1,574,795 (373,148) 350,043 2,972,208 51,955 Net cash fromoperating activities 1,711,946$ 2,897,066$ (757,327)$ 132,535$ 3,984,220$ (207,985)$ SUPPLEMENTAL CASH FLOW INFORMATION:Noncash transactions: Donated infrastructure 4,305,327$ 2,080,091$ -$ -$ 6,385,418$ -$ Enterprise FundsBusiness-type Activities
FIDUCIARY FUND FINANCIAL STATEMENTS
FIDUCIARY FUINDS 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.
42 CITY OF BOZEMAN, MONTANA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS June 30, 2015 The Notes to Financial Statements are an integral part of this statement. AgencyFundsASSETSCash and cash equivalents 374,028$ Total assets 374,028$ LIABILITIESAccounts payable 374,028$ Total liabilities 374,028$
NOTES TO FINANCIAL STATEMENTS
43 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS June 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Bozeman of Gallatin County, Montana (the City) was incorporated as a municipal corporation in 1883. The present City Code of Ordinances was adopted October 3, 2011. Under the charter, the City is governed by a mayor and commission members who comprise the City Commission. The day-to-day affairs of the City are conducted under the supervision of the City Manager, who is appointed by and serves at the pleasure of a majority of the City Commission. The accompanying financial statements of the City have been prepared in conformity with generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB), the accepted standard-setting body for establishing governmental accounting and financial reporting principles. In June 1999 the GASB issued Statement 34 Basic Financial Statements-and Management’s Discussion and Analysis-for State and Local Governments (GASB 34). This Statement establishes new financial reporting requirements for state and local governments throughout the United States. It requires new information and restructures much of the information that governments have presented in the past. Comparability with reports issued in prior years is affected. The accompanying financial statements present the financial position of the City and the various funds and fund types, the results of operations of the City and the various funds and fund types, and the cash flows of the proprietary funds. The financial statements are presented as of June 30, 2015, and for the year then ended. The more significant accounting policies of the City are described below. New Accounting Pronouncements For the fiscal year ended June 30, 2015, the City implemented GASB Statement 68, Accounting and Financial Reporting for Pensions. This statement addresses accounting and financial reporting for pensions that are provided to the employees of state and local governmental employers. This Statement establishes standards for measuring and recognizing net pension liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures. For defined benefit pensions, this Statement identifies the methods and assumptions that should be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. This Statement is effective for fiscal years beginning after June 15, 2014. 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.
44 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Reporting Entity (Continued) 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. Blended Component Units The following have been presented as blended component units since their governing bodies are substantially the same as the primary government’s government body and because their services are provided entirely or almost entirely to the primary government. 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. 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.
45 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Accounting/Measurement Focus (Continued) Government-Wide Financial Statements (Continued) 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. 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.
46 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Accounting/Measurement Focus (Continued) Governmental Fund Financial Statements (Continued) 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. 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.
47 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Accounting/Measurement Focus (Continued) Fiduciary Fund Financial Statements (Continued) 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. 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. 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.
48 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Funds (Continued) Governmental Funds (Continued) Building Inspection Special Revenue Fund – This fund was established to account for all activity of enforcing the building regulations adopted by the City. It includes all the money and staff associated with executing any aspect of the code enforcement program. Section 50-60-101 MCA established the code enforcement program requirement. General Improvements Capital Projects Fund – Accounts for the construction of general improvement projects financed by special assessments other than those financed by proprietary funds. SID Sinking Debt Service Fund – Accounts for the accumulation of resources and payment of special assessment debt principal and interest related to general improvement, sidewalk, and curb construction projects. Proprietary Funds Water Fund - Accounts for the City's water utility operations and to collect and administer water impact fees. Waste Water Fund - Accounts for the City's sewer utility operations and to collect and administer waste water impact fees. Solid Waste Fund - Accounts for the City's garbage service 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. 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.
49 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. 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. 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. Gifts or contributions of capital assets are recorded at fair market value when received. 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 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: 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; storm water 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. Vehicles5 to 10 yearsMachinery and equipment5 to 30 yearsBuildings 20 to 80 yearsOther structures and improvements10 to 100 yearsInfrastructure 25 to 100 years
50 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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). 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 generally accepted accounting principles. 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.
51 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Budgets (Continued) 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. 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.
52 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued) 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. On December 15, 2015, the City Commission accepted and approved the City Manager’s recommendation for the amount of General Fund balance presented on page 33 to be assigned this fiscal year for the specific purposes listed on page 23. Included in the assigned fund balance for the general fund are assignments for the portion of the current general fund balance that is projected to be used to fund expenditures and other cash outflows in excess of the expected revenues and other cash inflows projected for the next fiscal year. Similarly the City Manager exercised his delegated authority to assign the Nonmajor Capital Projects Fund balances presented on pages 33 and 108 for the for the specific purposes listed on page 87. 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.
53 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. NOTE 2. CASH AND INVESTMENTS At June 30, 2015, the carrying amount of the City's deposits in local banks and investments is $75,698,761. Interest bearing account balances are covered by the Federal Depository Insurance Corporation (FDIC) up to $250,000 per bank, per depositor. In additional, all noninterest bearing transaction account balances are fully insured by FDIC coverage. The remaining balances are covered by collateral held by the pledging bank's agent in the City's name. The City’s cash and investments are reported as follows: Unrestricted Restricted TotalGovernmental activities 36,682,841$ 15,428,115$ 52,110,956$ Business-type activities 17,084,802 6,128,975 23,213,777 Fiduciary funds 374,028 - 374,028 54,141,671$ 21,557,090$ 75,698,761$ 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.
54 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 2. CASH AND INVESTMENTS (CONTINUED) On June 30, 2015, the book value approximated the fair value of the investments, therefore no unrealized gain or loss was recorded for the year. The following table provides information about the interest rate risks associated with the City’s deposits and investments. InvestmentMaturitiesCredit Risk RatingFair ValueU.S. Government bondsJul 2014 - Jun 2015 S&P AA+ 6,221,183$ U.S. Government bondsJul 2015 - Jun 2016 S&P AA+ 2,142,169 U.S. Government bondsJul 2017 - Jun 2018 S&P AA+ 48,746,250 U.S. Bank Municipal Investor AccountN/AN/A1,815,397 U.S. Bank ICS AccountN/AN/A3,003,289 STIP AccountN/AN/A13,000,000 Demand depositsN/AN/A764,241 Petty cashN/AN/A6,232 75,698,761$ 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, 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. NOTE 3. PROPERTY TAX AND SPECIAL ASSESSMENTS REVENUE AND RECEIVABLES Property Taxes Real property taxes are assessed and collected each fiscal year according to the following property tax calendar: Lien Date: December 1 for the 1st installment and June 1 for the 2nd installment Levy Date: November 1 Due Dates: November 30th for the 1st installment and May 31 for the 2nd installment Personal property taxes are assessed on January 1 of each year and billed in May, with payment due within thirty days. Gallatin County collects all property taxes on behalf of the City and remits collections, including penalties and interest, on a monthly basis. The County assesses a delinquency penalty of 2%. If taxes become delinquent the County tax collector may sell the property to collect taxes due plus .83% per month interest.
55 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 3. PROPERTY TAX AND SPECIAL ASSESSMENTS REVENUE AND RECEIVABLES (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 OF RESOURCES Deferred inflows of resources in the General Fund represent outstanding general property taxes at June 30, 2015. These amounts are reported as revenue in the Government-Wide Financial Statements in the period in which they are levied. Deferred revenues 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 revenues in Debt Service Funds represent future assessments to be received to meet the related debt obligation. 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 $382,500, 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, 2015, rent expenditure was $19,125 regarding this lease.
56 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 6. NOTES RECEIVABLE The City had the following notes receivable: Special Revenue Funds:Economic Development Loan Fund600,922$ Community Housing Fund88,306$ Housing Revolving Loan Fund11,872$ Enterprise FundsParking Fund13,480$ 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, 2015, depreciation expense on capital assets was charged to the functions and programs as follows: Governmental Activities:General Government 291,717$ Public Safety 583,232 Public Services 2,549,263 Public Welfare 697,367 Total depreciation expense - governmental activities 4,121,579$ Business-type Activities:Parking 287,730$ Storm Water56,693 Water2,483,559 Waste Water2,394,392 Solid Waste166,548 Total depreciation expense - business-type activities5,388,922$
57 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 7. CAPITAL ASSETS (CONTINUED) All capital assets of the City are depreciable with the exception of land, and construction in process, when applicable. Capital assets activity of the City for the year ended June 30, 2015, consisted of the following: June 30, 2014 Additions Disposals Transfers June 30, 2015Governmental Activities:Non-depreciableLand 11,127,553$ 5,760,276$ -$ -$ 16,887,829$ DepreciableBuildings32,119,075 291,332 - - 32,410,407 Other structures and improvements1,210,726 - (62,299) - 1,148,427 Machinery and equipment11,228,735 681,494 (543,635) (44,019) 11,322,575 Property under capital lease329,435 250,207 (143,905) - 435,737 Vehicles3,281,096 273,942 (274,597) (91,656) 3,188,785 Infrastructure141,768,023 5,189,524 (45,000) - 146,912,547 Total201,064,643 12,446,775 (1,069,436) (135,675) 212,306,307 Accumulated depreciation(92,792,176) (4,121,579) 964,971 106,006 (95,842,778) Total governmental activities108,272,467$ 8,325,196$ (104,465)$ (29,669)$ 116,463,529$ Business-type Activities:Non-depreciableLand 4,934,574$ -$ (61,016)$ -$ 4,873,558$ Water rights2,065,142 55,000 - - 2,120,142 DepreciableBuildings111,635,920 895,439 (99,639) - 112,431,720 Other structures and improvements30,808,133 - - 30,808,133 Machinery and equipment6,797,835 1,211,389 (406,734) 44,019 7,646,509 Property under capital lease- 519,943 - - 519,943 Vehicles1,848,570 - (24,853) 91,656 1,915,373 Infrastructure260,797,166 7,178,515 - - 267,975,681 Total418,887,340 9,860,286 (592,242) 135,675 428,291,059 Accumulated depreciation(174,220,418) (5,388,922) 531,227 (106,006) (179,184,119) Total business-type activities244,666,922$ 4,471,364$ (61,015)$ 29,669$ 249,106,940$
58 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 7. CAPITAL ASSETS (CONTINUED) Changes in accumulated depreciation are as follows for the year ended June 30, 2015: Accumulated Depreciation:June 30, 2014 Additions Disposals Transfers June 30, 2015Governmental Activities:Buildings(13,471,514)$ (829,967)$ -$ -$ (14,301,481)$ Other structures and improvements(1,032,164) (23,808) 32,707 - (1,023,265) Machinery and equipment (7,981,926) (589,944) 543,200 10,187 (8,018,483) Property under capital lease(141,847) (24,830) 114,017 - (52,660) Vehicles (2,708,179) (185,581) 274,597 95,819 (2,523,344) Infrastructure (67,456,546) (2,467,449) 450 - (69,923,545) Total governmental activities (92,792,176) (4,121,579) 964,971 106,006 (95,842,778) Business-type Activities:Buildings (9,592,464) (2,336,147) 99,639 - (11,828,972) Other structures and improvements (26,869,241) (451,909) - - (27,321,150) Machinery and equipment (5,947,049) (324,829) 406,735 (14,350) (5,879,493) Property under capital lease - (25,997) - - (25,997) Vehicles (1,729,098) (26,326) 24,853 (91,656) (1,822,227) Infrastructure (130,082,566) (2,223,714) - - (132,306,280) Total business-type activities (174,220,418) (5,388,922) 531,227 (106,006) (179,184,119) 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 have been liquidated primarily by the general fund and the proprietary funds.
59 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 8. COMPENSATED ABSENCES (CONTINUED) Balance June 30, 20144 Incurred SatisfiedBalance June 30, 2015Compensated absencesGovernmental Activities1,708,867$ 1,176,867$ (1,215,045)$ 1,670,689$ Business-type Activities518,011 394,231 (361,276) 550,966 Total compensated absences2,226,878$ 1,571,098$ (1,576,321)$ 2,221,655$ Due within one yearDue after one yearTotalCompensated absencesGovernmental Activities1,215,000$ 455,689$ 1,670,689$ Business-type Activities361,300 189,666 550,966 Total compensated absences1,576,300$ 645,355$ 2,221,655$ 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, 2015: Balance June 30, 2014Issuances and additionsRepayments and deletionsBalance June 30, 2015General obligation bonds 11,685,000$ 5,100,000$ (465,000)$ 16,320,000$ Tax increment financing bonds 5,015,000 - (190,000) 4,825,000 Special assessment debt 1,185,500 - (295,000) 890,500 Intercap notes payable 1,086,396 - (123,122) 963,274 Subtotal bonds and notes 18,971,896 5,100,000 (1,073,122) 22,998,774 Compensated absences 1,708,867 1,176,867 (1,215,045) 1,670,689 Other post employment benefits liability 1,548,659 123,830 - 1,672,489 Net pension liability 14,414,020 - - 14,414,020 Totals 36,643,442$ 6,400,697$ (2,288,167)$ 40,755,972$
60 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 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: Current Portion (Due within one year)Long-term Portion (Due after one year)Total Long Term DebtGeneral obligation bonds750,000$ 15,570,000$ 16,320,000$ Tax increment financing bonds195,000 4,630,000 4,825,000 Special assessment debt28,000 862,500 890,500 Intercap notes payable124,356 838,918 963,274 Subtotal bonds and notes1,097,356 21,901,418 22,998,774 Compensated absences1,215,000 455,689 1,670,689 Other post employment benefits liability- 1,672,489 1,672,489 Net pension liability- 14,414,020 14,414,020 2,312,356$ 38,443,616$ 40,755,972$ 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: Interest Rate AmountDue within one yearGeneral Obligation Refunding Bonds, series 2012serial maturities through 2021 1.50% 1,545,000$ 245,000$ General Obligation TOP Bonds, Series 2013serial maturities through 2034 2.00% 9,675,000 395,000 General Obligation TOP Bonds, Series 2014serial maturities through 2035 1.00% 5,100,000 110,000 Total general obligations bonds 16,320,000$ 750,000$
61 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 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 TotalYear ending June 30,2016 750,000$ 603,891$ 1,353,891$ 2017 860,000 498,738 1,358,738 2018 875,000 481,538 1,356,538 2019 895,000 464,038 1,359,038 2020 910,000 446,138 1,356,138 2021-2025 3,735,000 1,941,025 5,676,025 2026-2030 4,065,000 1,340,875 5,405,875 2031-2035 4,230,000 465,800 4,695,800 16,320,000$ 6,242,041$ 22,562,041$ 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 TotalYear ending June 30,2016 195,000$ 228,288$ 423,288$ 2017 205,000 220,488 425,488 2018 210,000 212,288 422,288 2019 220,000 203,573 423,573 2020 230,000 194,222 424,222 2021-2025 1,315,000 805,173 2,120,173 2026-2030 1,660,000 453,790 2,113,790 2031-2032 790,000 59,750 849,750 4,825,000$ 2,377,572$ 7,202,572$
62 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 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 June 30, 2014 Issuances RepaymentsBalance June 30, 2015Special assessment bonds 875,000$ -$ (270,000)$ 605,000$ Note Payable to Department of Natural Resources and Conservation, #WRF-05067 59,500 - (5,000) 54,500 Note Payable to Department of Natural Resources and Conservation, #SRF-05132 251,000 - (20,000) 231,000 1,185,500$ -$ (295,000)$ 890,500$ Annual debt service requirements to maturity for special assessment notes payable are as follows: Notes PayablePrincipal Interest TotalYear ending June 30,2016 28,000$ 5,570$ 33,570$ 2017 26,500 5,020 31,520 2018 30,000 4,470 34,470 2019 29,500 3,875 33,375 2020 32,000 3,270 35,270 2021-2024 139,500 6,495 145,995 285,500$ 28,700$ 314,200$
63 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 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 BondsYear ending June 30,2017 60,000$ 2018 65,000 2019 65,000 2020 65,000 2021-2024 350,000 605,000$ Substantially all special assessment bonds mature eighteen to twenty years after the date of issuance but are redeemable at the option of the City whenever cash is available in the respective funds for each issue. The City follows the policy of early redemption on these bonds. Accordingly, a schedule of future interest payments through maturity of the bonds is deemed to be not meaningful and has been excluded. The net revenues of the water fund have been pledged as collateral to secure the debt service related to SID 665. This collateral is subordinate to commitments made prior to July 12, 1993 to pledge this collateral as a guarantee of the payment of other debt. In the event that the resources available to service debt related to SID 665 are insufficient, the City shall transfer amounts from the water fund to satisfy this obligation. The District will be under no obligation to reimburse the water fund for any such transfer. At this time, the City does not anticipate the need to make any such transfers. Intercap Loans – The City entered in a loan agreement with the Montana Board of Investments to partially finance the reconstruction of South Eight Avenue. This intercap loan payable had a balance outstanding at June 30, 2015 as follows: Due within one yearDue after one year TotalNote payable to Montana Board of Investments in uneven semi-annual installments including interest at variable rates through August 2022 124,355$ 838,919$ 963,274$
64 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 9. LONG-TERM DEBT (CONTINUED) Governmental Activities Long Term Debt (Continued) The debt service requirements for the intercap loan at June 30, 2015 are as follows: Principal Interest TotalYear ending June 30,2016124,355$ 27,967$ 152,322$ 2017125,602 24,228 149,830 2018126,862 20,450 147,312 2019128,134 16,635 144,769 2020129,418 12,781 142,199 2021-2023328,903 14,839 343,742 $ 963,274 $ 116,900 $ 1,080,174 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, 2015 are as follows: Balance June 30, 2014 IssuancesRepayments and settlementsBalance June 30, 2015Due in One YearLong Term PortionState Revolving Fund Revenue Bond - 12247Series 2011A, serial maturities through 2032, 3% interest rate $ 9,101,000 $ - $ (403,000) $ 8,698,000 $ 415,000 8,283,000$ State Revolving Fund Revenue Bond - 13291Series 2011B, serial maturities through 2032, 3% interest rate 9,039,000 - (372,000) 8,667,000 383,000 8,284,000 $ 18,140,000 $ - $ (775,000) $17,365,000 $ 798,000 $16,567,000 The revenue bond ordinances specifies that the City shall establish various restricted asset accounts and distribute the net revenues for the water fund to the restricted asset accounts and set user rates at levels which will generate minimum net revenues, as defined. The revenue bond ordinances specify that City management and/or the City Commission shall take corrective actions to bring the City into compliance with the revenue bond ordinances, if necessary, and that bondholders shall have the right to institute proceedings, judicial or otherwise, to enforce the covenants of the revenue bond ordinances. The City is in compliance with applicable covenants as of June 30, 2015.
65 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 9. LONG-TERM DEBT (CONTINUED) Business-type Activities Long Term Debt (Continued) Water revenue bond debt service requirements to maturity are as follows: Principal Interest TotalYear ending June 30,2016 798,000$ 360,710$ 1,158,710$ 2017 833,000 344,980 1,177,980 2018 862,000 328,710 1,190,710 2019 891,000 311,910 1,202,910 2020 922,000 294,520 1,216,520 2021-2025 5,097,000 1,190,520 6,287,520 2026-2030 6,025,000 658,450 6,683,450 2031-2032 1,937,000 100,050 2,037,050 $ 17,365,000 $ 3,589,850 $ 20,954,850 Due within one year $ 798,000 Due after one year 16,567,000 $ 17,365,000 The revenue bond ordinance specifies that the City shall establish various restricted asset accounts and distribute the net revenues for the water fund to the restricted asset accounts and set user rates at levels 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 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, 2015.
66 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 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, 2015 are as follows: Interest RateBalance June 30, 2014Repayments and settlementsBalance June 30, 2015Due in One YearLong Term PortionWaste Water State Revolving -10252 Series 2010B, serial maturities through 2030 1.75% $ 288,000 $ (16,000) $ 272,000 16,000$ 256,000$ Waste Water Reclamation Facility Revenue Bonds - 10230,Series 2010D, serial maturities through 20303.00% 7,913,000 (407,000) 7,506,000 420,000 7,086,000 Waste Water Reclamation Facility Revenue Bonds - 10262,Series 2010F, serial maturities through 20303.00% 695,000 (34,000) 661,000 36,000 625,000 Waste Water Reclamation Facility Revenue Bonds ARRA A- 10261,Series 2010E, serial maturities through 20300.00% 384,000 384,000 - 384,000 Waste Water Reclamation Facility Revenue Bonds - 11291,Series 2010C, serial maturities through 20313.00% 847,000 (40,000) 807,000 42,000 765,000 Waste Water Reclamation Facility Revenue Bonds - 11292,Series 2010G, serial maturities through 20313.00% 2,591,565 (161,000) 2,430,565 121,000 2,309,565 Waste Water Reclamation Facility Revenue Bonds - 11281Series 2010H, serial maturities through 20313.00% 8,307,000 (395,000) 7,912,000 407,000 7,505,000 $ 21,025,565 $(1,053,000) $19,972,565 $1,042,000 $18,930,565
67 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 9. LONG-TERM DEBT (CONTINUED) Business-type Activities Long Term Debt (Continued) Waste Water Revenue Bonds (Continued) Waste water revenue bond debt service requirements to maturity are as follows: Principal Interest TotalYear ending June 30,2016 1,042,000$ 402,300$ 1,444,300$ 2017 1,074,000 380,600 1,454,600 2018 1,109,000 358,184 1,467,184 2019 1,141,000 335,059 1,476,059 2020 1,175,000 311,224 1,486,224 2021-2025 6,447,000 1,171,981 7,618,981 2026-2030 7,172,000 427,486 7,599,486 2031-2032 812,565 3,460 816,025 $ 19,972,565 $ 3,390,294 $ 23,362,859 Due within one year $ 1,042,000 Due after one year 18,930,565 $ 19,972,565 Stormwater Revenue Bonds Waste Water revenue bonds outstanding at June 30, 2015 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. Interest RateBalance June 30, 2014Repayments and settlementsBalance June 30, 2015Due in One YearLong Term PortionStormwater System Revenue Bond, Series 20152.00% $ - $ - $ 229,750 -$ 229,750$
68 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 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, 2015, the Revenue Bond outstanding had an aggregate principal amount payable of $288,477. NOTE 10. CAPITAL LEASE OBLIGATIONS On February 24, 2009, the City entered into a lease for an Elgin street sweeper. The lease term is five years payable in annual installments of $27,900 at 6.3%. The total amount capitalized of $143,905 represents the present value of the future lease payments. The payments for this obligation are being recorded in the street maintenance fund. This lease was paid off during the year ended June 30, 2015. On April 30, 2012, the City entered into a lease for an Elgin street sweeper. The lease term is five years payable in annual installments of $33,495 at 3.3%. The total amount capitalized of $185,530 represents the present value of the future lease payments. The payments for this obligation are being recorded in the street maintenance fund. In 2014, the City entered into a lease for a motor grader with Caterpillar. The lease term is 6 years payable in annual installments of $27,500 at 3.25%. The total amount capitalized of $234,300 represents the present value of the future lease payments. The payments for this obligation are being recorded in the street maintenance fund. In 2015, the City entered into a lease for a copier. The lease term is 5 years payable in monthly installments of $300. The total amount capitalized of $15,907 represents the present value of the future lease payments. The payments for this obligation are being recorded in the general fund.
69 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 10. CAPITAL LEASE OBLIGATIONS (CONTINUED) In 2015, the City entered into a lease for an Elgin street sweeper. The lease term is five years payable in annual installments of $27,525 at 3.25%. The total amount capitalized of $152,570 represents the present value of the future lease payments. The payments for this obligation are being recorded in the stormwater fund. In 2015, the City entered into a lease for a Vactor vacuum truck. The lease term is six years payable in annual installments of $57,810 at 3.30%. The total amount capitalized of $367,373 represents the present value of the future lease payments. The payments for this obligation are being recorded in the stormwater fund. The capital lease balance outstanding at June 30, 2015 is as follows: Balance June 30, 2014 Issuances RepaymentsBalance June 30, 2015Governmental Activities:2012 Street Sweeper $ 94,176 $ - $ (30,374) $ 63,802 Caterpillar 2014 - 234,300 (17,649) 216,651 Savin Copier 2015 - 15,907 (448) 15,459 $ 94,176 $ 250,207 $ (48,471) $ 295,912 Business-Type Activities: $ - $ 152,570 $ (27,535) $ 125,035 2015 Street Sweeper - 367,373 (57,810) 309,563 2015 Vactor Vacuum Truck $ - $ 519,943 $ (85,345) $ 434,598
70 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 10. CAPITAL LEASE OBLIGATIONS (CONTINUED) The following is a schedule, by year, of future minimum lease payments under capital lease, together with the present value of minimum lease payments at June 30, 2015: Governmental ActivitiesBusiness-Type ActivitiesYear ending June 30,2016 $ 54,905 $ 85,345 2017 54,905 85,345 2018 21,410 85,345 2019 21,411 85,345 2020 173,132 85,345 2021 57,812 Less amount representing interest (29,851) (49,939) Present value of future minimum lease payments 295,912$ 434,598$ The property under capital lease and the corresponding accumulated depreciation at June 30, 2015, is as follows: Governmental ActvitiesBusiness-Type ActivitiesMachinery and equipment 435,737$ 519,943$ Less: accumulated depreciation (52,660) (25,997) 383,077$ 493,946$ 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.
71 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 11. CLASSIFICATION OF NET POSITION (CONTINUED) 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 which are not restricted for any project or other purpose. In the Fund Financial Statements, commitments and assignments segregate portions of fund balance that are either not available or have been earmarked for specific purposes. The various commitments and assignments are established by actions of the City Commission and Management and can be increased, reduced or eliminated by similar actions. Refer to Note 25 for a further disclosure related to net position classifications. NOTE 12. DEFICIT FUND BALANCES At June 30, 2015, no individual reporting funds had deficit fund balances. 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.
72 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 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 2015 and 2014 total payroll and covered payroll for all retirement plans were $20,234,004 and $19,562,240, respectively. Financial information for all three plans is reported in the Public Employees' Retirement Board's published Comprehensive Annual Financial Report for the fiscal year end. It is available from the PERD at 100 North Park Avenue, Suite 220, P.O. Box 200131, Helena, MT 59620-0131. The authority to establish, amend and provide cost of living adjustments to all three plans is assigned to the State legislature. The authority to establish and amend contribution rates to all three plans is also assigned to the State legislature. Public Employees' Retirement System (PERS) Plan Description The PERS-Defined Benefit Retirement Plan (DBRP), administered by the Montana Public Employee Retirement Administration (MPERA), is a multiple-employer, cost-sharing plan established July 1, 1945, and governed by Title 19, chapters 2 & 3, Montana Code Annotated (MCA). This plan covers the State, local governments, certain employees of the Montana University System, and school districts. All new members are initially members of the PERS-DBRP and have a 12-month window during which they may choose to remain in the PERS-DBRP or join the PERS-DCRP by filing an irrevocable election. Members may not be members of both the defined contribution and defined benefit retirement plans. All new members from the universities also have a third option to join the university system’s Montana University System Retirement Program (MUS-RP). For members that choose to join the PERS-DCRP or the MUS-RP, a percentage of the employer contributions will be used to pay down the liability of the PERS-DBRP. 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. Benefits are based on eligibility, years of service, and highest average compensation. Member rights are vested after five years of service.
73 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Public Employees' Retirement System (PERS) (continued) Summary of Benefits 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; Hired on or after July 1, 2013 – 110% annual cap on compensation considered as part of a member’s highest average compensation. 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, actuarially reduced: Hired prior to July 1, 2011: Age 50, 5 years of membership service; or Any age, 25 years of membership service. Hired on or after July 1, 2011: Age 55, 5 years of membership service. Vesting 5 years of membership service 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.
74 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Public Employees' Retirement System (PERS) (continued) Guaranteed Annual Benefit Adjustment (GABA)* 3% for members hired prior to July 1, 2007 1.5% for members hired on or after July 1, 2007 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. *At this time, as a result of permanent injunction issued in the AMRPE vs State litigation, the GABA rate in effect is being used in the calculation. Clarification of the GABA rate for members hired on or after July 1, 2013, is pending. Total number of members (employees) covered by benefit terms as of June 30, 2015: 1. Active plan members: 28,237 2. Inactive members entitled to but not yet receiving benefits or a refund: Vested: 2,925 Non-vested: 8,839 3. Inactive members and beneficiaries currently receiving benefits: Service Retirements: 20,080 Disability Retirements: 176 Survivor Benefits: 425 Overview of Contributions 1. Rates are specified by state law for periodic employer and employee contributions The State legislature has the authority to establish and amend contribution rates to the plan. 2. Member contributions to the system: a. Plan members are required to contribute 7.90% of member’s compensation. Contributions are deducted from each member’s salary and remitted by participating employers. b. The 7.90% member contributions is 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.
75 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Public Employees' Retirement System (PERS) (continued) 3. Employer contributions to the system: a. State and University System employers are required to contribute 8.27% of members’ compensation. b. Local government entities are required to contribution 8.17% of members’ compensation. c. School district employers contributed 7.90% of members’ compensation. d. Following the 2013 Legislative Session, PERS-employer contributions were temporarily increased. Effective July 1, 2013, employer contributions increased 1.0%. Beginning July 1, 2014, employer contributions will increase an additional 0.1% a year over 10 years, through 2024. The employer additional contributions including the 0.27% added in 2007 and 2009, terminates on January 1 following actuary valuation results that show the amortization period of the PERS-DBRP has dropped below 25 years and would remain below 25 years following the reductions of both the additional employer and member contributions rates. e. Effective July 1, 2013, the additional employer contributions for DCRP and MUS-RP is allocated to the defined benefit plan’s Plan Choice Rate unfunded liability. f. Effective July 1, 2013, employers are required to make contributions on working retirees’ compensation. Member contributions for working retirees are not required. 4. 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 from the Coal Tax Severance fund Stand-Alone Statements The PERS financial information is reported in the Public Employees’ Retirement Board’s Comprehensive Annual Financial Report for the fiscal year ended. It is available from the PERB at 100 North Park, PO Box 200131, Helena MT 59620-0131, 406-444-3154. CAFR information including stand-alone financial statements can be found at http://mpera.mt.gov/annualreports.shtml. The latest actuarial valuation and experience study can be found at http://mpera.mt.gov/actuarialvaluations.shtml.
76 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Public Employees' Retirement System (PERS) (continued) Actuarial Assumptions The Total Pension Liability as of June 30, 2014, is based on the results of an actuarial valuation date of June 30, 2014. There were several significant assumptions and other inputs used to measure the Total Pension Liability. The actuarial assumptions used in the June 30, 2014, valuation were based on the results of the last actuarial experience study, dated May 2010, for the six-year period July 1, 2003 to June 30, 2009. Among those assumptions were the following: General Wage Growth* 4.00% *includes Inflation at 3.00% Merit Increases 0% to 6% Investment Return 7.75% Postretirement Benefit Increases 3% for members hired prior to July 1, 2007 1.5% for members hired on or after July 1, 2007 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. *At this time as a result of permanent injunction issued in the AMRPE vs State litigation, the GABA rate in effect is being used in the calculation. Clarification of the GABA rate for members hired on or after July 1, 2013 is pending. Mortality assumptions among contributing members, terminated vested members, service retired members and beneficiaries based on RP 2000 Combined Employee and Annuitant Mortality Tables projected to 2015 with scale AA. Mortality assumptions among Disabled Retirees are based on RP 2000 Combined Employee and Annuitant Mortality Tables with no projections. No future mortality improvement is assumed. Discount Rate The discount rate used to measure the Total Pension Liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that contributions from participating plan members, employers, and non-employer contributing entities will 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 is contributed monthly and the severance tax is contributed quarterly. 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 2122. 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. No municipal bond rate was incorporated in the discount rate.
77 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Public Employees' Retirement System (PERS) (continued) Target Allocations Asset Class Target Asset Allocation Long-Term Expected Real Rate of Return Cash Equivalents 2.00% -0.25% Domestic Equity 36.00% 4.80% Foreign Equity 18.00% 6.05% Fixed Income 24.00% 1.68% Private Equity 12.00% 8.50% Real Estate 8.00% 4.50% The long-term expected return on pension plan assets is reviewed as part of the regular experience studies prepared for the System. The most recent analysis, performed for the period covering fiscal years 2003 through 2009, is outlined in a report dated May 2010, which is located on the MPERA website. Several factors are considered in evaluating the long-term rate of return assumption including rates of return 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 by the investment consultant 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. The assumption is intended to be a long-term assumption and is not expected to change absent a significant change in the asset allocation, a change in the inflation assumption, or a fundamental change in the market that alters expected returns in future years. Best estimates are presented as the arithmetic real rates of return for each major asset class included in the System’s target asset allocation as of June 30, 2014, is summarized in the above table. Sensitivity Analysis Rate$5,719,466-8.75%PERS’ Net Pension LiabilityCity of Bozeman's proportion $1,982,274,732 $1,246,010,898 $625,044,646$18,138,790 $11,401,6131.0% Increase1.0% Decrease Current Discount-6.75%
78 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Public Employees' Retirement System (PERS) (continued) In accordance with GASB 68 regarding the disclosure of the sensitivity of the Net Pension Liability to changes in the discount rate, the above table presents the Net Pension Liability calculated using the discount rate of 7.75%, as well as what the Net Pension Liability would be if it were calculated using a discount rate that is 1.00% lower (6.75%) or 1.00% higher (8.75%) 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. For the purposes of measuring the Net Pension Liability, deferred inflows of resources and deferred outflows of resources related to pensions, Pension Expense, information about the fiduciary net position and additions to/deductions from fiduciary net position have been determined on the same accrual basis as they are reported by MPERA. For this purpose, 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. Net Pension Liability In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers are required to recognize and report certain amounts associated with their participation in the Public Employees’ Retirement System (PERS). Statement 68 became effective June 30, 2015, and includes requirements to record and report their proportionate share of the collective Net Pension Liability, Pension Expense, Deferred Inflows, and Deferred Outflows of resources associated with pensions. In accordance with Statement 68, PERS has a special funding situation in which the State of Montana is legally responsible for making contributions directly to PERS on behalf of the employers. Due to the existence of this special funding situation, local governments and school districts are required to report the portion of the State of Montana’s proportionate share of the collective Net Pension Liability that is associated with the employer. The State of Montana also has a funding situation that is not Special Funding whereby the State General Fund provides contributions from the Coal Severance Tax and interest. All employers are required to report the portion of Coal Tax Severance Tax and interest attributable to the employer.
79 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Public Employees' Retirement System (PERS) (continued) State of Montana Proportionate Share associated with Employer179,169.00$ 139,231.14$ 1.1624150%Total14,851,293.00$ 11,540,844.22$ 2.0774640%Net Pension Liability as of 6/30/14Percent of Collective NPLNet Pension Liability as of 6/30/13Employer Proportionate Share $ 14,672,124.00 $ 11,401,613.08 0.9150490% At June 30, 2015, the employer recorded a liability of $11,401,613 for its proportionate share of the Net Pension Liability. The Net Pension Liability was measured as of June 30, 2014, and the Total Pension Liability used to calculate the Net Pension Liability was determined by an actuarial valuation as of July 1, 2014. The employer’s proportion of the Net Pension Liability was based on the employer’s contributions received by PERS during the measurement period July 1, 2013, through June 30, 2014, relative to the total employer contributions received from all of PERS’ participating employers. At June 30, 2014, the employer’s proportion was 0.915049 percent. Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the measurement of the Total Pension Liability. Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date. Changes in proportionate share: There were no changes between the measurement date of the collective Net Pension Liability and the employer’s reporting date that are expected to have a significant effect on the employer’s proportionate share of the collective NPL.
80 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Public Employees' Retirement System (PERS) (continued) At June 30, 2015, the employer recognized a Pension Expense of $883,836 for its proportionate share of the PERS’ Pension Expense. The employer also recognized grant revenue of $322,389 for the support provided by the State of Montana for its proportionate share of the Pension Expense that is associated with the employer. Recognition of Beginning Deferred Outflow - GASB 71 At June 30, 2015, the employer recognized a beginning deferred outflow of resources for the employers FY2014 contributions of $904,183. Deferred Inflows and Outflows At June 30, 2015, the employer reported its proportionate share of PERS’ deferred outflows of resources and deferred inflows of resources related to PERS from the following sources: -$ -$ Difference between projected and actual earnings on pension plan investments -$ Differences between actual and expected experienceDeferred Outflows of Resources2,945,989.27$ #Contributions paid to PERS subsequent to the measurement date - FY 2015 Contributions [to be entered by the entity] 1,021,380.00$ -$ Total1,035,831.72$ 2,946,366.08$ Changes in proportion differences between employer contributions and proportionate share of contributions14,451.72$ 376.81$ Difference between actual and expected contributionsDeferred Inflows of ResourcesChanges in assumptions-$ -$
81 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Public Employees' Retirement System (PERS) (continued) Amounts reported as deferred outflows of resources related to pensions resulting from the employer’s contributions subsequent to the measurement date will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2016. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension Expense as follows: 736,497.32$ (736,497.32)$ Year ended June 30:Deferred Outflows of ResourcesDeferred Inflows of ResourcesAmount recognized in Pension Expense as an increase or (decrease) to Pension Expense2016 731,805.68$ (731,805.68)$ 2017 731,805.68$ (731,805.68)$ 2018 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 system 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. Benefits are based on eligibility, years of service, and either final monthly compensation or final average compensation. Effective July 1, 2005, the benefits are based on highest average compensation and highest average compensation. Member rights for death and disability are vested immediately. All other member rights are vested after five years of service.
82 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters' Unified Retirement System (FURS) (continued) Summary of Benefits Member’s Compensation 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. Hired on or after July 1, 2013 – 110% annual cap on compensation considered as a part of a member’s highest average compensation. Eligibility for Benefit 20 years of membership service, regardless of age Early retirement Age 50, 5 years of membership service Vesting 5 years of membership service Monthly benefit formula 1. Members hired prior to July 1, 1981 and not electing GABA are entitled to the greater of: 2.5% of HMC per year of service, OR a. if less than 20 years of service - 2% of HMC for each year of service; b. if more than 20 years of service - 50% of the member’s HMC plus 2% of the member’s HMC for each year of service over 20 years 2. Members hired on or after July 1, 1981 and those electing GABA: 2.5% of HAC per year of membership service Guaranteed Annual Benefit Adjustment (GABA) If hired before July 1, 1997, the monthly retirement, disability or survivor’s benefit may not be less than ½ the compensation of a newly confirmed firefighter employed by the city that last employed the member (provided the member has at least 10 years of membership service). If a benefit falls below that minimum, the benefit is increased and paid to the benefit recipient. Total number of members (employees) covered by benefit terms as of June 30, 2015: 1. Active plan members: 627 2. Inactive members entitled to but not yet receiving benefits or a refund: Vested: 21 Vested: 21 Non-vested: 71 3. Inactive members and beneficiaries currently receiving benefits: Service Retirements: 580 Disability Retirements: 9 Survivor Benefits: 20
83 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters' Unified Retirement System (FURS) (continued) Overview of Contributions 1. Rates are specified by state law for periodic employer and employee contributions The State legislature has the authority to establish and amend contribution rates to the plan. 2. Member contributions to the system: a. For members hired prior to July 1, 1997 and not electing GABA, member contributions as a percentage of salary are 9.5%, and b. For members hired on or after July 1, 1997 and members electing GABA, member contributions as a percentage of salary are 10.7%. 3. Employer contributions to the system: a. The employers are required to contribute 14.36% of member’s compensation. b. The State contributes 32.61% of member’s compensation from the general fund. c. Effective July 1, 2013, employer and state contributions are required to be paid on working retiree compensation. Member contributions are not required for working retirees. Stand-Alone Statements The FURS financial information is reported in the Public Employees’ Retirement Board’s Comprehensive Annual Financial Report for the fiscal year ended. It is available from the PERB at 100 North Park, PO Box 200131, Helena MT 59620-0131, 406-444-3154. CAFR information including our stand alone financial statements can be found on at http://mpera.mt.gov/annualReports.shtml. The latest actuarial valuation and experience study can be found at http://mpera.mt.gov/actuarialValuations.asp. Actuarial Assumptions The Total Pension Liability as of June 30, 2014, is based on the results of an actuarial valuation date of June 30, 2014. There were several significant assumptions and other inputs used to measure the Total Pension Liability. The actuarial assumptions used in the June 30, 2014 valuation were based on the results of the last actuarial experience study, dated May 2010 for the six year period July 1, 2003 to June 30, 2009. Among those assumptions were the following: · General Wage Growth* 4.00%· *includes Inflation at 3.00%· Merit Increases 0% to 7.3%· Investment Return 7.75%· Postretirement Benefit Increases If electing GABA or hired on or after July 1, 1997 3.00%
84 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters' Unified Retirement System (FURS) (continued) 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 member’s benefit. Minimum Benefit Adjustment 50% of a newly confirmed officer Mortality assumptions among contributing members, terminated vested members, service retired members and beneficiaries based on RP 2000 Combined Employee and Annuitant Mortality Tables projected to 2015 with scale AA. Mortality assumptions among Disabled Retirees are based on RP 2000 Combined Employee and Annuitant Mortality Tables with no projections. No future mortality improvement is assumed. Discount Rate The discount rate used to measure the Total Pension Liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that contributions from participating plan members, employers, and non- employer contributing entities will be made based on the Board’s funding policy, which establishes the contractually required rates under Montana Code Annotated. The State contributes 32.61% of salaries pensionable payroll 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 2122. 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. No municipal bond rate was incorporated in the discount rate. Target Allocations Asset Class Target Asset Allocation Long-Term Expected Real Rate of Return Cash Equivalents 2.00% -0.25% Domestic Equity 36.00% 4.80% Foreign Equity 18.00% 6.05% Fixed Income 24.00% 1.68% Private Equity 12.00% 8.50% Real Estate 8.00% 4.50%
85 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters' Unified Retirement System (FURS) (continued) The long-term expected return on pension plan assets is reviewed as part of the regular experience studies prepared for the System. The most recent analysis, performed for the period covering fiscal years 2003 through 2009, is outlined in a report dated May 2010, which is located on the MPERA website. Several factors are considered in evaluating the long-term rate of return assumption including rates of return 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 by the investment consultant 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. The assumption is intended to be a long term assumption and is not expected to change absent a significant change in the asset allocation, a change in the inflation assumption, or a fundamental change in the market that alters expected returns in future years. Best estimates are presented as the arithmetic real rates of return for each major asset class included in the System’s target asset allocation as of June 30, 2014, is summarized in the above table. Sensitivity Analysis 1.0% Decrease Current Discount 1.0% IncreaseRate -8.75%-6.75%FURS’ Net Pension Liability $156,823,891 $97,616,579 $49,290,705City's proportion $3,793,901 $2,361,551 $1,192,446 In accordance with GASB 68 regarding the disclosure of the sensitivity of the Net Pension Liability to changes in the discount rate, the above table presents the Net Pension Liability calculated using the discount rate of 7.75%, as well as what the Net Pension Liability would be if it were calculated using a discount rate that is 1.00% lower (6.75%) or 1.00% higher (8.75%) than the current rate.
86 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters' Unified Retirement System (FURS) (continued) Summary of Significant Accounting Policies The Montana Public Employee Retirement Administration (MPERA) prepares its financial statements using the accrual basis of accounting. For the purposes of measuring the Net Pension Liability, deferred inflows of resources and deferred outflows of resources related to pensions, Pension Expense, information about the fiduciary net position and additions to/deductions from fiduciary net position have been determined on the same accrual basis as they are reported by MPERA. For this purpose, 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. Net Pension Liability In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers are required to recognize and report certain amounts associated with their participation in the Firefighters’ Unified Retirement System (FURS). Statement 68 became effective June 30, 2015 and includes requirements to record and report their proportionate share of the collective Net Pension Liability, Pension Expense, Deferred Inflows and Deferred Outflows of resources associated with pensions. In accordance with Statement 68, FURS has a special funding situation in which the State of Montana is legally responsible for making contributions directly to FURS on behalf of the employers. Due to the existence of this special funding situation, employers are required to report the portion of the State of Montana’s proportionate share of the collective Net Pension Liability that is associated with the employer. Net Pension Liability as of 6/30/13Net Pension Liability as of 6/30/14Percent of Collective NPLTotal 9,841,585$ 7,689,095$ 3.1120811%City Proportionate Share $ 3,022,645 $ 2,361,551 2.4192110%State of Montana Proportionate Share associated with Employer6,818,940$ 5,327,544$ 0.6928701%
87 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters' Unified Retirement System (FURS) (continued) At June 30, 2015, the employer recorded a liability of $2,361,551 for its proportionate share of the Net Pension Liability. The Net Pension Liability was measured as of June 30, 2014, and the Total Pension Liability used to calculate the Net Pension Liability was determined by an actuarial valuation as of July 1, 2014. The employer’s proportion of the Net Pension Liability was based on the employer’s contributions received by FURS during the measurement period July 1, 2013, through June 30, 2014, relative to the total employer contributions received from all of FURS’ participating employers. At June 30, 2014, the employer’s proportion was 2.419211% percent. Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the measurement of the Total Pension Liability. Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date. Changes in proportionate share: There were no changes between the measurement date of the collective Net Pension Liability and the employer’s reporting date that are expected to have a significant effect on the employer’s proportionate share of the collective NPL. Pension Expense State of Montana Proportionate Share associated 591,417$ Total853,576$ Pension Expense as of 6/30/14City’s Proportionate Share262,159$ At June 30, 2015, the employer recognized a Pension Expense of $853,576 for its proportionate share of the FURS’ Pension Expense. The City also recognized grant revenue of $591,417 for the support provided by the State of Montana for its proportionate share of the Pension Expense that is associated with the employer. Recognition of Beginning Deferred Outflow – GASB 71 At June 30, 2015, the employer recognized a beginning deferred outflow of resources for the employers FY 2014 contributions of $454,194.
88 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Firefighters' Unified Retirement System (FURS) (continued) Deferred Inflows and Outflows At June 30, 2015, the employer reported its proportionate share of FURS’ deferred outflows of resources and deferred inflows of resources related to FURS from the following sources: Changes in proportion differences between employer -$ -$ Difference between actual and expected contributions-$ -$ #Contributions paid to PERS subsequent to the measurement 469,755$ -$ Total469,755$ 469,059$ Deferred Outflows of ResourcesDeferred Inflows of ResourcesDifferences between actual and expected experience-$ -$ Changes in assumptions-$ -$ Difference between projected and actual earnings on pension -$ 469,059$ Amounts reported as deferred outflows of resources related to pensions resulting from the employer’s contributions subsequent to the measurement date will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2016. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension Expense as follows: Year ended June 30:Deferred Outflows of ResourcesDeferred Inflows of ResourcesAmount recognized in Pension Expense as an increase or (decrease) to Pension Expense2016 117,264.66$ (117,264.66)$ 2017 117,264.66$ (117,264.66)$ 2018 117,264.66$ (117,264.66)$
89 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 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 that was established in 1974 and is governed by Title 19, chapters 2 & 9 of the MCA. This plan covers 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. Benefits are based on eligibility, years of service, and final average compensation. Member rights for death and disability are vested immediately. All other rights are vested after five years of service. Summary of Benefits 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. Hired on or after July 1, 2013 – 110% annual cap on compensation considered as a part of a member’s final average compensation. Eligibility for Benefit 20 years of membership service, regardless of age Early retirement Age 50, 5 years of membership service Vesting 5 years of membership service Monthly benefit formula 2.5% of FAC per year of service credit. Guaranteed Annual Benefit Adjustment (GABA):Hired on or after July 1, 1997, or those electing GABA - after the member has completed 12 full months of retirement, the member’s benefit increases by a maximum of 3% each January, inclusive of all other adjustments to the member’s benefit.
90 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Municipal Police Officers' Retirement System (MPORS) (continued) Minimum benefit adjustment (non-GABA): If hired before July 1, 1997 and member did not elect GABA - the monthly retirement, disability or survivor’s benefit may not be less than ½ the compensation of a newly confirmed officer in the city that the member was last employed. 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 participate in the DROP only 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 the date 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. Total number of members (employees) covered by benefit terms as of June 30, 2015: 1. Active plan members: 743 2. Inactive members entitled to but not yet receiving benefits or a refund: Vested: 60 Non-vested: 103 3. Inactive members and beneficiaries currently receiving benefits: Service Retirements: 694 Disability Retirements: 21 Survivor Benefits: 29
91 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Municipal Police Officers' Retirement System (MPORS) (continued) Overview of Contributions 1. Rates are specified by state law for periodic employer and employee contributions. The State legislature has the authority to establish and amend contribution rates to the plan. 2. Member contributions to the system: a. If employed on or before June 30, 1975, member contributions as a percentage of salary are 5.8%; b. If employed after June 30, 1975 and prior to July 1, 1979, member contributions as a percentage of salary are 7.0%; c. If employed after June 30, 1979 and prior to July 1, 1997, member contributions as a percentage of salary are 8.5%; and, d. If employed on or after July 1, 1997 and for members electing GABA, member contributions as a percentage of salary were 9.0%. 3. Employer contributions to the system: a. The employers are required to contribute 14.41% of member’s compensation. b. The State contributes 29.37% of member’s compensation from the general fund. Stand-Alone Statements The MPORS financial information is reported in the Public Employees’ Retirement Board’s Comprehensive Annual Financial Report for the fiscal year ended. It is available from the PERB at 100 North Park, PO Box 200131, Helena MT 59620-0131, 406-444-3154. CAFR information including our stand alone financial statements can be found on at http://mpera.mt.gov/annualReports.shtml. The latest actuarial valuation and experience study can be found at http://mpera.mt.gov/actuarialValuations.asp. Actuarial Assumptions The Total Pension Liability as of June 30, 2014, is based on the results of an actuarial valuation date of June 30, 2014. There were several significant assumptions and other inputs used to measure the Total Pension Liability. The actuarial assumptions used in the June 30, 2014 valuation were based on the results of the last actuarial experience study, dated May 2010 for the six year period July 1, 2003 to June 30, 2009. Among those assumptions were the following: · General Wage Growth* 4.00%· *includes Inflation at 3.00%· Merit Increases 0% to 7.3%· Investment Return 7.75%· Postretirement Benefit Increases If electing GABA or hired on or after July 1, 1997 3.00%
92 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Municipal Police Officers' Retirement System (MPORS) (continued) 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 member’s benefit. Minimum Benefit Adjustment 50% of a newly confirmed officer Mortality assumptions among contributing members, terminated vested members, service retired members and beneficiaries based on RP 2000 Combined Employee and Annuitant Mortality Tables projected to 2015 with scale AA. Mortality assumptions among Disabled Retirees are based on RP 2000 Combined Employee and Annuitant Mortality Tables with no projections. No future mortality improvement is assumed. Discount Rate The discount rate used to measure the Total Pension Liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that contributions from participating plan members, employers, and non- employer contributing entities will be made based on the Board’s funding policy, which establishes the contractually required rates under Montana Code Annotated. The State contributes 29.37% of salaries pensionable payroll 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 2122. 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. No municipal bond rate was incorporated in the discount rate. Target Allocations Asset Class Target Asset Allocation Long-Term Expected Real Rate of Return Cash Equivalents 2.00% -0.25% Domestic Equity 36.00% 4.80% Foreign Equity 18.00% 6.05% Fixed Income 24.00% 1.68% Private Equity 12.00% 8.50% Real Estate 8.00% 4.50%
93 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Municipal Police Officers' Retirement System (MPORS) (continued) The long-term expected return on pension plan assets is reviewed as part of the regular experience studies prepared for the System. The most recent analysis, performed for the period covering fiscal years 2003 through 2009, is outlined in a report dated May 2010, which is located on the MPERA website. Several factors are considered in evaluating the long-term rate of return assumption including rates of return 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 by the investment consultant 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. The assumption is intended to be a long term assumption and is not expected to change absent a significant change in the asset allocation, a change in the inflation assumption, or a fundamental change in the market that alters expected returns in future years. Best estimates are presented as the arithmetic real rates of return for each major asset class included in the System’s target asset allocation as of June 30, 2014, is summarized in the above table. Sensitivity Analysis MPORS’ Net Pension Liability $226,560,623 $157,135,903 $102,022,702City's proportion $6,844,190 $4,746,933 $3,082,0131.0% Decrease Current Discount 1.0% IncreaseRate -8.75%-6.75% In accordance with GASB 68 regarding the disclosure of the sensitivity of the Net Pension Liability to changes in the discount rate, the above table presents the Net Pension Liability calculated using the discount rate of 7.75%, as well as what the Net Pension Liability would be if it were calculated using a discount rate that is 1.00% lower (6.75%) or 1.00% higher (8.75%) than the current rate.
94 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Municipal Police Officers' Retirement System (MPORS) (continued) Summary of Significant Accounting Policies The Montana Public Employee Retirement Administration (MPERA) prepares its financial statements using the accrual basis of accounting. For the purposes of measuring the Net Pension Liability, deferred inflows of resources and deferred outflows of resources related to pensions, Pension Expense, information about the fiduciary net position and additions to/deductions from fiduciary net position have been determined on the same accrual basis as they are reported by MPERA. For this purpose, 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. Net Pension Liability In accordance with GASB Statement 68, Accounting and Financial Reporting for Pensions, employers are required to recognize and report certain amounts associated with their participation in the Municipal Police Officers’ Retirement System (MPORS). Statement 68 became effective June 30, 2015 and includes requirements to record and report their proportionate share of the collective Net Pension Liability, Pension Expense, Deferred Inflows and Deferred Outflows of resources associated with pensions. In accordance with Statement 68, MPORS has a special funding situation in which the State of Montana is legally responsible for making contributions directly to MPORS on behalf of the employers. Due to the existence of this special funding situation, employers are required to report the portion of the State of Montana’s proportionate share of the collective Net Pension Liability that is associated with the employer. 0.6688873%Total16,334,190$ Net Pension Liability as of Net Pension Liability as of Percent of Collective NPL14,336,304$ 3.6897963%3.0209090%City Proportionate Share $ 5,408,458 $ 4,746,933 State of Montana Proportionate Share associated with Employer 10,925,732$ 9,589,371$
95 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Municipal Police Officers' Retirement System (MPORS) (continued) At June 30, 2015, the employer recorded a liability of $4,746,932 for its proportionate share of the Net Pension Liability. The Net Pension Liability was measured as of June 30, 2014, and the Total Pension Liability used to calculate the Net Pension Liability was determined by an actuarial valuation as of July 1, 2014. The employer’s proportion of the Net Pension Liability was based on the employer’s contributions received by MPORS during the measurement period July 1, 2013, through June 30, 2014, relative to the total employer contributions received from all of MPORS’ participating employers. At June 30, 2014, the employer’s proportion was 3.020909% percent. Changes in actuarial assumptions and methods: There were no changes in assumptions or other inputs that affected the measurement of the Total Pension Liability. Changes in benefit terms: There have been no changes in benefit terms since the previous measurement date. Changes in proportionate share: There were no changes between the measurement date of the collective Net Pension Liability and the employer’s reporting date that are expected to have a significant effect on the employer’s proportionate share of the collective NPL. Pension Expense Total1,542,086$ Pension Expense as of 6/30/14City’s Proportionate Share510,604$ State of Montana Proportionate Share associated with the City1,031,481$ At June 30, 2015, the employer recognized a Pension Expense of $1,542,086for its proportionate share of the MPORS’ Pension Expense. The City also recognized grant revenue of $1,031,481 for the support provided by the State of Montana for its proportionate share of the Pension Expense that is associated with the employer. Recognition of Beginning Deferred Outflow – GASB 71 At June 30, 2015, the employer recognized a beginning deferred outflow of resources for the employers FY 2014 contributions of $589,332.
96 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 14. EMPLOYEE BENEFIT PLANS (CONTINUED) Municipal Police Officers' Retirement System (MPORS) (continued) Deferred Inflows and Outflows At June 30, 2015, the employer reported its proportionate share of MPORS’ deferred outflows of resources and deferred inflows of resources related to MPORS from the following sources: Changes in proportion differences between employer contributions and proportionate share of contributions -$ -$ Difference between actual and expected contributionsContributions paid to PERS subsequent to the measurement date - FY 2015 Contributions 592,735$ Total592,735$ 582,798$ Deferred Outflows of ResourcesDeferred Inflows of ResourcesDifferences between actual and expected experience-$ -$ Changes in assumptions-$ -$ Difference between projected and actual earnings on pension plan investments-$ 582,798$ Amounts reported as deferred outflows of resources related to pensions resulting from the employer’s contributions subsequent to the measurement date will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2016. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in Pension Expense as follows: Year ended June 30: Deferred Outflows Deferred Inflows of Amount recognized in Pension Expense 2016145,699.41$ (145,699.41)$ 2017145,699.41$ (145,699.41)$ 2018145,699.41$ (145,699.41)$
97 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 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). OPEB is recorded on an accrual basis for all enterprise and internal service funds. OPEB is recorded on a modified accrual basis for the governmental funds. Plan contributions are recognized in the period in which the contributions are made. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Funding Policy. The plan is unfunded by the City and plan members receiving benefits contribute 100 percent of their cost of the benefits on a pay-as-you-go basis. The City plan’s administratively established retiree medical, dental and vision premiums vary between $37 and $912 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. For a single individual, after an annual deductible of $300 for most non-Medicare-eligible retirees, the plan reimburses 70% for the first $500 medical claims and 100% thereafter. For a family, after an annual deductible of $600 for most non-Medicare-eligible retirees, the plan reimburses 70% for the first $1,000 medical claims and 100% thereafter. For fiscal year ended June 30, 2015, the City has 35 retired members receiving benefits.
98 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED) Annual OPEB Cost and Net OPEB Obligation. The City’s annual other post-employment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC). The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a closed amortization period not to exceed thirty years. The following table shows the components of the City’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City’s net OPEB obligation to the Retiree Health Plan: Annual required contribution330,107$ Interest on net OPEB obligation77,201 Adjustment to annual required contribution(111,616) Annual OPEB cost (expense)295,692 Contributions made(136,871) Increase in net OPEB obligation158,821 Net OPEB obligation - beginning of year1,930,074 Net OPEB obligation - end of year2,088,895$ The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation for fiscal year ended June 30, 2015 and the two preceding fiscal years were as follows: Percentage ofFiscal Year Annual Annual OPEB Cost Net OPEB Ended OPEB Cost Contributed ObligationJune 30, 2011 236,826$ 42.45% 1,608,338$ June 30, 2012 234,397$ 48.33% 1,729,462$ June 30, 2013 221,212$ 49.14% 1,841,971$ June 30, 2014 219,207$ 59.81% 1,930,074$ June 30, 2015 295,694$ 46.29% 2,088,897$
99 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED) The June 30, 2015 year end OPEB obligation is reported in the City’s funds as follows: Functions/ProgramsExpensesPrimary Government:Governmental activities:General government26,868$ Public safety52,132 Public service9,855 Public welfare34,975 Total governmental activities123,830 Business-type activities:Water14,459 Waste water10,904 Solid waste6,748 Parking1,646 Storm water1,234 Total business-type activities34,991 Total primary government158,821$ Funded Status and Funding Progress. The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The City has elected not to fund this liability.
100 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED) SCHEDULE OF FUNDING PROGRESS UAAL as a Actuarial Actuarial Actuarial Unfunded Funded Covered Percentage ofValuation Value of Accrued Liability AAL (UAAL) Ratio Payroll Covered PayrollDate Assets (a) (AAL) (b) (b-a) (a/b) (c) (b-a)/c)7/1/2011 -$ 2,203,253$ 2,203,253$ 0.0% 12,788,780$ 17.2%7/1/2013 -$ 2,002,345$ 2,002,345$ 0.0% Not available Not available7/1/2014 -$ 2,675,667$ 2,675,667$ 0.0% Not available Not available 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 2014, with an estimate provided for fiscal year 2015. For fiscal year 2015, an estimated valuation was derived based on the 2014 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, 2014, the most recent valuation date, the City’s actuarially accrued liability (AAL) for benefits was $2,675,667. The AAL by status breakdown is shown below: Fiscal Fiscal Fiscal 2013 2014 2015Actives 1,223,031$ N/A 1,679,064$ Retirees, Dependents and Surviving Spouses 779,314 N/A 996,603 Total AAL 2,002,345$ N/A 2,675,667$ Normal Cost 131,013$ N/A 168,628$ Impact on Statement of Activities Annual OPEB Cost 221,212$ 219,207$ 295,694$ Impact on Statement of Net Position Assumed Contributions 108,703$ 131,104$ 136,871$ Net OPEB Obligation at June 30 1,841,971$ 1,930,074$ 2,088,897$ Participant Information Actives309 N/A358 Retirees, Dependents and Surviving Spouses73 N/A68 Total382 N/A426
101 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 15. POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED) The following key assumptions were chosen by the City: 1. Discount Rate: 4.0% 2. Inflation Rate: 3.0% 3. Expected Long Term Rate of Return on Assets: 4.0% 4. Health Care Claim and Contribution Trend Rates: 7.5% for 2012, 7.0% for 2014, 6.5% for 2015, 6.0% for 2015, 5.5% for 2016, 5.0% for 2017, 5.0% for 2018 and thereafter. 5. Average Salary Increase: 4.0% 6. Retirement Rates: Based upon the separate rates used to value the pension obligations for Police Officers, Firefighters, and all other employees, respectively. 7. Retiree Participation Rate: 30% 8. Marital Assumption: For future retirees, 60% of participants are assumed to be married, with husbands 3 years older than wives. The Projected Unit Credit Actuarial Cost Method was used to determine the annual required contribution. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Examples, as detailed above, include assumptions about future employment, mortality, and the healthcare cost trend. Actuarially determined amounts are subject to continual revisions as actual results are compared with past expectations, and new estimates are made about the future. Actuarial calculations reflect a long-term perspective. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, is designed to present multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial liabilities for benefits. Historically, the net other post-employment benefit obligation has been liquidated primarily by the general fund and the proprietary funds. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. This report constitutes the only analysis and presentation of the City’s post-employment benefit plan. There is no separate, audited GAAP-basis post-employment benefit plan report.
102 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 16. RESTATEMENTS The City implemented Governmental Accounting Standards Board (GASB) Statement 68, Accounting and Financial Reporting for Pensions (an amendment of GASB Statement No. 27), in the fiscal year ending June 30, 2015. The implementation of the statement required the City to record beginning net pension liability and the effects on net position of contributions made by the City during the measurement period (fiscal year ending June 30, 2014). As a result, net position for the governmental and business-type activities decreased by $16,211,980 and $4,947,677, respectively. The City reclassified amounts previously recorded as deferred inflows of resources to fund balance in nonmajor governmental funds. As a result, beginning fund balance of nonmajor governmental funds increased by $326,570. NOTE 17. JOINT VENTURE AGREEMENTS Joint ventures are legal entities or other organizations that result in a contractual arrangement and that are owned, operated, or governed by two or more participants. Each participant retains both an ongoing financial interest and an ongoing financial responsibility. Joint ventures are legal entities or other organizations that result in a contractual arrangement and that are owned, operated, or governed by two or more participants. Each participant retains both an ongoing financial interest and an ongoing financial responsibility. As of June 30, 2015, 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. Though the City has no equity interest in the Division, the City has indirect access to the joint venture’s resources, as the Division’s purpose is of direct interest to the City, and the City has the ability to influence the management of the Division. In addition, the City and County have agreed to pay 45% and 55% of the Division expenditures, respectively. The agreement expired December 19, 2005, and automatically renewed until terminated by either party. Financial information regarding the Division can be obtained by contacting Shelley Vance, Gallatin County, Clerk and Records Office, 311 West Main, Bozeman, MT 59715.
103 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 17. JOINT VENTURE AGREEMENTS (CONTINUED) City-County Drug Forfeitures The City and Gallatin County, Montana (the 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. 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 $1 million in profits from the sale of city-owned property known as the Mandeville Farm. The agreement came about as part of a settlement on legal claims from the City of Bozeman vs. MMIA litigation. A “profit” shall occur only when the City has recovered its total investment in the property, which includes the original purchase price together with all “costs of development” as defined in the settlement agreement. NOTE 18. RESTRICTED ASSETS At June 30, 2015, the balances of restricted asset accounts for business-type activities are as follows: Water FundWaste Water FundSolid WasteFund Parking Fund TotalRestricted by revenue bond covenantsFor bond reserve1,313,885$ 1,788,592$ -$ -$ 3,102,477$ Restricted by ordinanceCash in lieu of parking- - - 282,894 282,894 Impact fees1,225,684 366,929 - - 1,592,613 2,539,569$ 2,155,521$ -$ 282,894$ 4,977,984$ Business-Type Activities
104 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 19. INTERFUND TRANSFERS AND ASSETS/LIABILITIES A summary of interfund transfers reported in the fund financial statements for the year ended June 30, 2015 follows: General Fund Street Maintenance SID Debt Service Capital Projects Nonmajor Governmental Stormwater Total General Fund -$ -$ -$ -$ 2,103,263$ -$ 2,103,263$ Impact Fees - 79,746 - - - - 79,746 Street Maintenance - - - 16,684 31,900 - 48,584 Capital Projects 44,271 400,000 310,188 - 20,000 - 774,459 Nonmajor Governmental 447,983 - 720,498 - 642,138 - 1,810,619 Water Enterprise 70,000 - - - - - 70,000 Solid Waste Enterprise - - - 221,339 221,339 Parking Enterprise - - - - 170,347 - 170,347 Stormwater Enterprise 140,000 140,000 Total 702,254$ 479,746$ 1,030,686$ 16,684$ 2,967,648$ 221,339$ 5,418,357$ Governmental FundsTransfers ToTransfers From Proprietary 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. A summary of advances from/to other funds at June 30, 2015, is as follows: Advances to other City fundsAdvances from other City fundsMajor FundsSID Sinking Debt Service -$ 404,724$ Nonmajor Governmental FundsSID Revolving Debt Service 404,724 - 404,724$ 404,724$ There are no due from/due to balances as of June 30, 2015. 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.
105 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 20. 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. 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, 2015, 2014, and 2012. 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.
106 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 21. CONTINGENCIES Zahara vs. Montana Firefighter Consortium, Scottsdale Ins. Co., Colony Ins. Co., et al. The Montana Firefighter Consortium is a group of Montana municipalities (including the City of Bozeman) which conducts joint testing of prospective firefighters. Plaintiff was tested as a prospective firefighter in the Summer of 2013, at which time Plaintiff suffered an injury. Plaintiff alleges negligence on the part of the consortium. The case is currently pending insurance resolution. At this time, it is not possible to determine whether there exist the potential for an unfavorable outcome or to estimate the potential range of loss. The City is involved with several other 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. Story Mill Landfill Claims The City has been named in three lawsuits by residential property owners located on or near the now closed Story Mill landfill. All three cases relate to presence and claimed effects of volatile organic compounds (VOCs) in the soil and groundwater outside the boundaries of the landfill. The City recently obtained approval from the Montana Department of Environmental Quality for a corrective measures assessment and comprehensive remediation system. The three lawsuits themselves all assert claims for “restoration damages,” referring to restoring the property to its pre-contamination state to the greatest degree possible, diminution in value or stigma damages, property damage, physical injuries and emotional distress including fear of future injury. All three cases are filed in Gallatin County. As of December 7, 2015, the cases have all been pending approximately a year and there has been little progress to date. Some initial discovery has been served and answered and a small number of initial motions have been filed. Only now are the parties in the process of putting together scheduling orders for the case. Given the preliminary status of these claims, it is not possible to estimate a likely outcome or possible loss. On December 15, 2014, the City was made aware that the City's insurer, the Montana Municipal Interlocal Authority (MMIA), filed a complaint for declaratory relief requesting a Montana state district court determine whether indemnity and defense exist for these claims under the MMIA Memorandum of Liability Coverage and the XL America, Inc. supplemental pollution policy obtained by the MMIA on the City's behalf. The MMIA complaint involves the City of Bozeman, the MMIA, the MMIA's reinsurer Government Entities Mutual, Inc. and XL America, Inc. and XL America’s affiliated companies. MMIA’s contends through the allegations in the complaint that XL America, Inc. and its affiliated companies is obligated to provide the City defense and indemnity as well as remediation coverage. Although the MMIA is currently providing a defense under a reservation of rights, in the complaint MMIA denies the City coverage under the MMIA Memorandum. The MMIA is currently providing the City a defense of the underlying lawsuits. The City continues to assert liability coverage exists for these claims under the MMIA/XL program including both the MMIA Memorandum and the XL America, Inc. policy and as such the City asserts not only that defense is proper but the City should be indemnified for all claims related to the Story Mill landfill under the MMIA/XL program. The City will continue to assert coverage exists under the XL America, Inc. insurance agreement for remediation and legal expenses.
107 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 22. 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 $3,726,711, which is its estimate of future landfill closure and post-closure care costs as of June 30, 2015. This amount is based on a Corrective Measures Assessment completed in September 2014 by a third party engineering firm, from which a remediation plan has been adopted by the City and has been approved the Montana Department of Environmental Quality. The Solid Waste Fund accounts for the City’s solid waste collection, recycling, and disposal utility operation – including assets, liabilities and post-closure costs associated with the closed Story Mill landfill. Segment information for the landfill is as follows: Condensed Statement of Net PositionRestricted cash and cash equivalents(454,064)$ Capital assets, net of depreciation4,486,547 Total assets4,032,483$ Current liabilities195,999$ Closure and post-closure care cost3,726,711 Total liabilities3,922,710 Net investment in capital assetsRestricted for debt service109,775 UnrestrictedTotal net position109,775 Total liabilities and net position4,032,485$
108 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 22. SOLID WASTE LANDFILL CLOSURE AND POST-CLOSURE CARE COSTS (CONTINUED) Condensed Statement of Revenues, Expenses and Changes in Net PositionOPERATING REVENUES AND EXPENSESOperating revenues -$ Operating expensesDepreciation 39,921 Other operating 482,106 Total operating expenses 522,027 Operating loss (522,027) NONOPERATING REVENUES (EXPENSES)Interest expense (2,273) Transfers 221,339 Total nonoperating revenues 219,066 Change in net position (302,961) Net position, beginning of year 412,736 Net position, end of year 109,775$
109 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 23. 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 PositionCurrent assets15,227,326$ Capital assets122,120,917 Total assets137,348,243$ Current liabilities1,673,217$ Noncurrent liabilities16,567,000 Total liabilities18,240,217 Net investment in capital assets74,755,917 Restricted for debt service1,313,885 Unrestricted43,038,224 Total net position119,108,026 Total liabilities and net position137,348,243$
110 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 23. SEGMENT INFORMATION FOR WATER ENTERPRISE FUND (CONTINUED) Condensed Statement of Revenues, Expenses and Changes in Net PositionOPERATING REVENUES AND EXPENSESOperating revenues 7,748,913$ Operating expensesDepreciation 2,436,248 Other operating 4,963,175 Total operating expenses 7,399,423 Operating loss 349,490 NONOPERATING REVENUES (EXPENSES)Interest income 117,957 Interest expense (538,425) Grant income 1,786 Gain on sale of assets 1,805 Contributions of infrastructure 4,305,327 Other income 436,804 Transfers 471,400 Total nonoperating revenues 4,796,654 Change in net position 5,146,144 Net position, beginning of year 113,961,882 Net position, end of year 119,108,026$ Condensed Statement of Cash FlowsNet cash provided by operating activities3,139,370$ Net cash flows from capital and related financing activities471,400 Net cash flows from noncapital and financing activities(4,031,004) Net cash flows from investing activities117,956 Net change in cash flows(302,278) Beginning cash and equivalents14,860,783 Ending cash and equivalents14,558,505$
111 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 24. 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 March 23, 1996Change as of May 10, 1998Change as of January 15, 1999Change as of July 15, 1999Change as of January 1, 2013Change as of March 30, 2013Fire 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 Wastewater Impact Fee Fund have recorded impact fee credits amounting to $33,232, $59,890, and $129,042, respectively, as of June 30, 2015. The Fire Impact Fee Fund does not have any outstanding credits. The following impact fee revenues were collected and expensed/expended during fiscal year 2015: Beginning balances Impact fees Other incomeExpenses, expenditures and transfersEnding balancesFire 463,997$ 424,190$ 6,026$ (2,008)$ 892,205$ Water799,910 1,655,405 8,175 (464,131) 1,999,359 Waste water251,137 1,051,745 835 (704,360) 599,357 Streets9,793,964 3,849,705 167,282 (925,641) 12,885,310 Total11,309,008$ 6,981,045$ 182,318$ (2,096,140)$ 16,376,231$
112 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 25. POLUTION 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 may be completed relatively quickly, monitoring of the site will continue for a period of up to 30 years. ATC and Associates, Inc. serves as the Project Engineer for the potentially liable parties (the City of Bozeman and CVS Pharmacy, Inc.). Based on the selected remedies identified in the ROD, ATC has completed a long-term cost projection for the project. The long-term cost projection for the City is $2,355,974 in remediation costs. Reduced by its insurer’s reimbursement, the amount is $1,845,595. This liability is recorded in the Waste Water Fund. 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 Voluntary Cleanup Plan, and cleanup work under the approved Addendum was completed in June 2009. On October 20, 2010, the City received notice from the DEQ stating that no further action is required at the facility and that the DEQ proposes removing the Facility from the CECRA priority list. Pursuant to an August 2007 Stipulated Agreement between the City and all other involved parties, additional cleanup after issuance of the DEQ’s closure letter may be required by DEQ based upon property use changes, modification of structures, or other factors. The City has an ongoing claim against the State orphan share for the orphan share funds’ proportional share of these 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.
113 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 NOTE 26. NET POSITION COMPOSITION The table presented below displays the City’s fund balances by major purpose as displayed on page 33 of the governmental funds balance sheet.
114 CITY OF BOZEMAN, MONTANA NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2015 Street Street BuildingNonmajor TotalGeneral Impact Fees Maintenance Inspection SID Sinking Capital Governmental GovernmentalFund Special Revenue Special Revenue Special Revenue Debt Service Projects FundsFundsNonspendablePrepaids-$ -$ -$ -$ -$ -$ 369,750$ 369,750$ Cemetery perpetual care- - - - - - 990,940 990,940 Total nonspendable- - - - - - 1,360,690 1,360,690 RestrictedGeneral government-Planning- - - - - - 778,240 778,240 General government-Health Insurance- - - - - - 180,852 180,852 General government-other- - - - - - 105 105 Public safety - Building Inspection- - - 1,473,337 - - - 1,473,337 Public safety-Fire Impact- - - - - - 892,205 892,205 Public safety-Victim Witness- - - - - - 390,611 390,611 Public safety-other- - - - - - 74,378 74,378 Public service- 12,885,310 1,590,993 - - - - 14,476,303 Public service - Gas Tax - - - - - - 695,891 695,891 Public service - Community Transportation- - - - - - 432,166 432,166 Public service - Lighting Districts- - - - - - 613,973 613,973 Public welfare - Tax Increment Districts- - - - - - 4,438,689 4,438,689 Public welfare - Econ Develop Loan Fund- - - - - - 855,079 855,079 Public welfare - Tree Maint. District- - - - - - 217,597 217,597 Public welfare - other- - - - - - 88,892 88,892 Capital projects-Trail Open Space Parks- - - - - 9,981,286 - 9,981,286 Capital projects-Story Street- - - - - 59,983 - 59,983 Debt service-SID Sinking- - - - 478,181 - - 478,181 Debt service-SID Revolving Fund- - - - - - 3,356,671 3,356,671 Debt service-GO Bonds- - - - - - 140,508 140,508 Total restricted- 12,885,310 1,590,993 1,473,337 478,181 10,041,269 13,155,857 39,624,947 CommittedGeneral government- - - - - - 1,269,343 1,269,343 Public safety- - - - - - 802,575 802,575 Public service- - - - - - 22,858 22,858 Public welfare- - - - - - 1,082,466 1,082,466 Capital projects- - - - - 339,145 - 339,145 Total committed- - - - - 339,145 3,177,242 3,516,387 AssignedCapital projects503,498 - - - - 229,840 - 733,338 Budget ordinance minimum 16.67%4,384,154 - - - - - - 4,384,154 Total assigned4,887,652 - - - - 229,840 - 5,117,492 Unassigned1,174,313 - - - - - (93,301) 1,081,012 Total net position6,061,965$ 12,885,310$ 1,590,993$ 1,473,337$ 478,181$ 10,610,254$ 17,600,488$ 50,700,528$
C. REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT DISCUSSION AND ANALYSIS
89 CITY OF BOZEMAN, MONTANA Net OPEB Obligation1,841,971$ 19,300,074$ 2,088,895$ The funded status of the plan was as follows:2,002,345$ - 2,002,345$ 0.0%Not availableNot availableActuarial Valuation DateActuarial Value of Assets (a)Actuarial Accrued Liability (AAL) (b)Unfunded AAL (UAAL) (b-a)Funded Ratio (a/b)Covered Payroll(c) UAAL as a Percentage of Covered Payroll ((b - a) / c)7/1/2011 -$ 2,203,253$ 2,203,253$ 0% 12,788,780$ 17.2%7/1/2013 -$ 2,002,345$ 2,002,345$ 0% Not available Not available7/1/2014 -$ 2,675,667$ 2,675,667$ 0% Not available Not availableSCHEDULE OF FUNDING PROGRESS6/30/2015295,692$ 46.29%6/30/2014221,212$ 59.81%SCHEDULE OF FUNDING PROGRESS - OTHER POST-EMPLOYMENT HEALTHCARE BENEFITSFor the Year Ended June 30, 2015ANNUAL OPEB COSTRetiree Health PlanThe annual OPEB costs, the percentage of OPEB cost contributed to the plan, and the net OPEB obligation for June 30, 2015 for the Retiree Health Plan are as follows: Retiree Medical Plan(c) Covered payrollYear Ended6/30/2013Annual OPEB Cost221,212$ Percentage of OPEB Cost 48.33%FUNDED STATUSUnfunded actuarial accrued liability (funding excess) as a percentage of covered payroll ({(a) - (b)} / (c))(a) Actuarial accrued liability (AAL)(b) Actuarial value of plan assets (UAAL)Unfunded actuarial accrued liability (funding excess) [(a) - (b)]Funded ratio (b) / (a)
90 CITY OF BOZEMAN, MONTANA SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY Schedule of Proportionate Share of the Net Pension Liability:PERS FURS MPORSEmployer's proportion of the net pension liability $ 11,401,613 $ 2,361,550.9 $ 4,746,933 Employer's proportionate share of the net pension liability associated with the Employer (as a percentage) 0.91505% 2.41921% 3.02091%State of MT proportionate share of the net pension liability associated with the Employer $ 139,231 $ 5,327,544 $ 9,589,371 Total $ 11,540,844 $ 7,689,095 $ 14,336,304 Employer's covered-employee payroll $ 10,358,342 $ 3,142,481 $ 4,053,265 Employer's proportionate share of the net pension liability as of its covered-employee payroll (as a percentage) 110.0720% 75.1490% 117.1140%Plan fiduciary net position the total pension liability (as a percentage) 79.9000% 76.7000% 67.0000%Schedule of Contributions:PERS FURS MPORSContractually required contributions $ 904,184 $ 454,194 $ 589,332 Contributions in relation to the contractually required contributions $ 904,184 $ 454,194 $ 589,332 Contribution deficiency (excess) $ - $ - $ - Employer's covered-employee payroll $ 10,358,342 $ 3,142,481 $ 4,053,265 Contributions of covered-employee payroll (as a percentage) 8.7290% 14.4534% 14.5397%
91 CITY OF BOZEMAN, MONTANA Variance withActual Final BudgetOriginal Final Amounts Positive (Negative)Budgetary fund balance, July 1 6,614,296$ 6,614,296$ 6,614,296$ -$ Resources (inflows):Taxes 13,916,234 13,916,234 14,512,683 596,449 Special assessments - - 45 45 Licenses and permits 310,195 310,195 316,747 6,552 Intergovernmental 6,684,958 6,684,958 6,807,755 122,797 Charges for services 1,794,858 1,794,858 1,928,343 133,485 Fines and forfeitures 1,285,500 1,285,500 1,157,270 (128,230) Sale of assets - - 19,592 19,592 Interest on investments 59,000 59,000 13,965 (45,035) Transfers from other funds 2,191,180 2,191,180 2,103,263 (87,917) Other 63,000 63,000 105,591 42,591 Amounts available for appropriation 32,919,221 32,919,221 33,579,550 660,329 Charges to appropriations (outflows):CurrentGeneral government 5,893,490 5,892,490 5,728,938 163,552 Public safety 11,515,139 13,672,509 13,196,413 476,096 Public service 89,062 89,062 87,894 1,168 Public welfare 5,204,741 5,170,241 5,042,499 127,742 Other 3,153,200 1,020,535 1,020,465 70 Capital outlay 831,369 2,161,996 1,738,493 423,503 Debt service - 1,000 627 373 Transfers to other funds210,000 702,500 702,254 246 Total charges to appropriations26,897,001 28,710,333 27,517,583 1,192,750 Budgetary fund balance, June 306,022,220$ 4,208,888$ 6,061,967$ 1,853,079$ Budgeted AmountsSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALGENERAL FUNDFor the Year Ended June 30, 2015
92 CITY OF BOZEMAN, MONTANA Variance withActual Amounts Final BudgetOriginal Final Budgetary Basis Positive (Negative)Budgetary fund balance, July 1 9,793,964$ 9,793,964$ 9,793,964$ -$ Resources (inflows):Taxes- - - - Special assessments- - - - Licenses and permits- - - - Intergovernmental- - - - Charges for services1,785,069 1,785,069 3,849,705 2,064,636 Fines and forfeitures- - - - Interest on investments87,700 87,700 87,276 (424) Transfers from other funds- - - - Proceeds from long term debt- - - - Premium on bonds issued- - - - Proceeds from the sale of capital assets- - - - Other- - 260 260 Amounts available for appropriation11,666,733 11,666,733 13,731,205 2,064,472 Charges to appropriations (outflows):CurrentGeneral government- - - - Public safety- - - - Public service- 54,750 54,397 353 Public welfare- - - - Capital outlay1,225,000 1,537,400 871,244 666,156 Debt service- - - - Transfers to other funds- - - - Total charges to appropriations1,225,000 1,592,150 925,641 666,509 Budgetary fund balance, June 3010,441,733$ 10,074,583$ 12,805,564$ 2,730,981$ Budgeted AmountsSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALOTHER MAJOR FUNDS - STREET IMPACT FEES SPECIAL REVENUEYear Ended June 30, 2015
93 CITY OF BOZEMAN, MONTANA Variance withActual Amounts Final BudgetOriginal Final Budgetary Basis Positive (Negative)Budgetary fund balance, July 1 1,977,779$ 1,977,779$ 1,977,779$ -$ Resources (inflows):Taxes- - - - Special assessments31,676 31,676 20,902 (10,774) Licenses and permits26,700 26,700 18,684 (8,016) Intergovernmental- - 979 979 Charges for services3,456,096 3,456,096 3,462,079 5,983 Fines and forfeitures- - - - Interest on investments14,700 14,700 17,199 2,499 Transfers from other funds- - 48,584 48,584 Proceeds from long term debt226,642 226,642 234,300 7,658 Premium on bonds issued- - - - Proceeds from the sale of capital assets- - 30,388 30,388 Other- - 13,672 13,672 Amounts available for appropriation5,733,593 5,733,593 5,824,566 90,973 Charges to appropriations (outflows):CurrentGeneral government- - - - Public safety- - - - Public service2,803,957 2,860,957 2,860,786 171 Public welfare- - - - Capital outlay1,286,642 1,286,642 708,221 578,421 Debt service245,000 245,000 184,820 60,180 Transfers to other funds- 480,500 479,746 754 Total charges to appropriations4,335,599 4,873,099 4,233,573 639,526 Budgetary fund balance, June 301,397,994$ 860,494$ 1,590,993$ 730,499$ SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALOTHER MAJOR FUNDS - STREET MAINTENANCE SPECIAL REVENUEYear Ended June 30, 2015Budgeted Amounts
94 CITY OF BOZEMAN, MONTANA Variance withActual Amounts Final BudgetOriginal Final Budgetary Basis Positive (Negative)Budgetary fund balance, July 1 1,394,550$ 1,394,550$ 1,394,550$ -$ Resources (inflows):Taxes- - - - Special assessments- - - - Licenses and permits1,180,050 1,180,050 1,492,411 312,361 Intergovernmental- - 32,305 32,305 Charges for services1,000 1,000 6,495 5,495 Fines and forfeitures- - - - Interest on investments9,000 9,000 8,400 (600) Transfers from other funds- - - - Proceeds from long term debt- - - - Premium on bonds issued- - - - Proceeds from the sale of capital assets- - - - Other- - 11 11 Amounts available for appropriation2,584,600 2,584,600 2,934,172 349,572 Charges to appropriations (outflows):CurrentGeneral government- - - - Public safety1,454,810 1,468,195 1,423,272 44,923 Public service- - - - Public welfare- - - - Capital outlay50,000 50,000 37,563 12,437 Debt service- - - - Transfers to other funds- - - - Total charges to appropriations1,504,810 1,518,195 1,460,835 57,360 Budgetary fund balance, June 301,079,790$ 1,066,405$ 1,473,337$ 406,932$ SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALOTHER MAJOR FUNDS - BUILDING INSPECTION SPECIAL REVENUEYear Ended June 30, 2015Budgeted Amounts
95 CITY OF BOZEMAN, MONTANA StreetGeneral Impact Street BuildingFund Fees Maintenance InspectionSources/inflows of resourcesActual amounts (budgetary basis) "available for appropriation" from the budgetarycomparison schedule 33,579,550$ 13,731,205$ 5,824,566$ 2,934,172$ Differences - budget to GAAP:The fund balance at the beginning of the year is a budgetary resource but isnot a current-year revenue for financial reporting purposes. (6,614,296) (9,793,964) (1,977,779) (1,394,550) Transfers from other funds are inflows of budgetary resources but are notrevenues for financial reporting purposes. (2,103,263) - (48,584) - The proceeds from the issuance of long-term debt are a budgetary resourcebut are a other financing source for financial reporting purposes (15,907) - (234,300) - The proceeds from the sale of assets are budgetary resources but are regardedas a special item, rather than revenue, for financial reporting purposes (19,592) - (30,388) - Total revenues as reported on the statement of revenues, expenditures, andchanges in fund balances - governmental funds 24,826,492$ 3,937,241$ 3,533,515$ 1,539,622$ Uses/outflows of resourcesActual amounts (budgetary basis) "total charges to appropriations" from thebudgetary comparison schedule 27,517,583$ 925,641$ 4,233,573 1,460,835 Differences - budget to GAAP:Transfers to other funds are outflows of budgetary resources but are notexpenditures for financial reporting purposes. (702,254) - (479,746) - Total expenditures as reported on the statement of revenues, expenditures, andchanges in fund balances - governmental funds 26,815,329$ 925,641$ 3,753,827$ 1,460,835$ NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONYear Ended June 30, 2015
D. SUPPLEMENTAL INFORMATION
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
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 Gallatin 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.
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. Tourism Business Improvement District – Accounts for program income derived from hotels within the district to enhance the economic vitality of Bozeman by promoting tourism through sales and marketing strategies. 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 - I n August of 2005, the City created a Renewal Plan for the North 7th Avenue business district. This fund accounts for the revenue and expenditures associated with the district. DEBT SERVICE FUNDS Special Improvement District (SID) Revolving – Accounts for property tax revenues received and expended for the payment of special improvement district bond principal and interest. General Obligation Bonds Debt Service Fund – Accounts for the debt service payments associated with the Library and Transportation general obligation bonds. Tax Increment Financing Bonds Debt Service Fund – Accounts for the debt service payments associated with the Tax Increment Urban Renewal Revenue Bonds issued as partial funding for the construction of a Downtown Intermodal Parking Facility. 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.
95 CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDSJune 30, 2015Special Revenue FundsCityPlanning Health-Medical CommunityDepartmental Board Insurance TransportationASSETSCash and cash equivalents 1,892,574$ 425,886$ 147$ 482,166$ ReceivablesProperty taxes 71,875 17,398 194,965 - Accrued interest - - - - Customers, net 4,878 185 - - Special assessments - - - - Other governments 63,634 - - - Others - - - - Advances to other city funds - - - - Prepaid expenditures - - - - Notes receivable - - - - Restricted cash and cash equivalents 25,000 346,926 - - Total assets 2,057,961$ 790,395$ 195,112$ 482,166$ (continued)
96 CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)June 30, 2015Special Revenue FundsDepartmentalCitySpecialPlanning Health-Medical CommunityRevenuesBoardInsurance TransportationLiabilities:Accounts payable134,662 10,914 - 50,000 Escheat property payable- - - - Accrued employee benefits payable- - - - Total liabilities134,662 10,914 - 50,000 Deferred inflows of resources:Unavailable revenue-property taxes1,931 1,241 14,260 - Unavailable revenue-special assessments- - - - Unavailable revenue-court fines- - - - Total deferred inflows of resources1,931 1,241 14,260 - Fund balances:Nonspendable- - - - Restricted155,270 778,240 180,852 432,166 Committed1,859,399 - - - Assigned- - - - Unassigned(93,301) - - - Total fund balances1,921,368 778,240 180,852 432,166 Total liabilities, deferred inflows of resources, and fund balances2,057,961$ 790,395$ 195,112$ 482,166$ (continued)
97 CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)June 30, 2015Special Revenue FundsDowntownGas Tax Tree Fire ImprovementApportionment Maintenance Impact Fees DistrictASSETSCash and cash equivalents 713,180$ 221,347$ -$ 2,516,455$ ReceivablesProperty taxes - - - 173,112 Accrued interest - - - 3,184 Customers, net - - - - Special assessments - 17,430 - 5,436 Other governments - - - - Others - - - - Advances to other city funds - - - - Prepaid expenditures - - - - Notes receivable - - - - Restricted cash and cash equivalents - - 892,529 - Total assets 713,180$ 238,777$ 892,529$ 2,698,187$ (continued)
98 CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)June 30, 2015Special Revenue FundsDowntownGas TaxTreeFireImprovementApportionment Maintenance Impact FeesDistrictLiabilities:Accounts payable17,289 12,064 324 814,782 Escheat property payable- - - - Accrued employee benefits payable- 16 - - Total liabilities17,289 12,080 324 814,782 Deferred inflows of resources:Unavailable revenue-property taxes- - - 11,364 Unavailable revenue-special assessments- 9,100 - - Unavailable revenue-security agreement- - - - Total deferred inflows of resources- 9,100 - 11,364 Fund balances:Nonspendable- - - - Restricted695,891 217,597 892,205 1,872,041 Committed- - - - Assigned- - - - Unassigned- - - - Total fund balances695,891 217,597 892,205 1,872,041 Total liabilities, deferred inflows of resources, and fund balances713,180$ 238,777$ 892,529$ 2,698,187$ (continued)
99 CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)June 30, 2015Special Revenue FundsEconomic Housing City-CountyDevelopment Community Revolving Drug Drug Revolving Loan Housing Loan Fund Forfeitures ForfeituresASSETSCash and cash equivalents -$ 321,216$ 3,329$ 2,583$ 153,866$ ReceivablesProperty taxes - 4,816 - - - Accrued interest - - - Customers, net 256,824 - - 4,176 - Special assessments - - - - - Other governments - - - - - Others - - - - - Advances to other city funds - - - - - Prepaid expenditures - - - - - Notes receivable 600,922 88,306 11,872 - - Restricted cash and cash equivalents - - - - - Total assets 857,746$ 414,338$ 15,201$ 6,759$ 153,866$ (continued)
100 CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)June 30, 2015Special Revenue FundsEconomic HousingCity-CountyDevelopment Community Revolving DrugDrug Revolving Loan HousingLoan Fund Forfeitures ForfeituresLiabilities:Accounts payable2,667 518 7,201 6,759 - Escheat property payable- - - - - Accrued employee benefits payable- - - - - Total liabilities2,667 518 7,201 6,759 - Deferred inflows of resources:Unavailable revenue-property taxes- 325 - - - Unavailable revenue-special assessments- - - - - Unavailable revenue-security agreement- - - - - Total deferred inflows of resources- 325 - - - Fund balances:Nonspendable- - - - - Restricted855,079 - 8,000 - - Committed- 413,495 - - 153,866 Assigned- - - - - Unassigned- - - - - Total fund balances855,079 413,495 8,000 - 153,866 Total liabilities, deferred inflows of resources, and fund balances857,746$ 414,338$ 15,201$ 6,759$ 153,866$ (continued)
101 CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)June 30, 2015Special Revenue FundsLaw andJustice TIF TIF N.E. Victim/Witness Fire DepartmentCenter N 7th Corridor Urban Renewal Advocate EquipmentASSETSCash and cash equivalents -$ 2,094,122$ 426,513$ 422,797$ 341,745$ ReceivablesProperty taxes - 52,888 9,226 - 33,130 Accrued interest - 3,184 - - - Customers, net - - - 5,405 - Special assessments - - - - - Other governments - - - - - Others - - - - - Advances to other city funds - - - - - Prepaid expenditures 369,750 - - - - Notes receivable - - - - - Restricted cash and cash equivalents - - - - - Total assets 369,750$ 2,150,194$ 435,739$ 428,202$ 374,875$ (continued)
102 CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)June 30, 2015Special Revenue FundsLaw andJusticeTIFTIF N.E. Victim/Witness Fire DepartmentCenter N 7th Corridor Urban Renewal Advocate EquipmentLiabilities:Accounts payable- 37,314 304 37,591 - Escheat property payable- - - - - Accrued employee benefits payable- - - - - Total liabilities- 37,314 304 37,591 - Deferred inflows of resources:Unavailable revenue-property taxes- 8,750 898 - 2,440 Unavailable revenue-special assessments- - - - - Unavailable revenue-security agreement- - - - - Total deferred inflows of resources- 8,750 898 - 2,440 Fund balances:Nonspendable369,750 - - - - Restricted- 2,104,130 434,537 390,611 - Committed- - - - 372,435 Assigned- - - - - Unassigned- - - - - Total fund balances369,750 2,104,130 434,537 390,611 372,435 Total liabilities, deferred inflows of resources, and fund balances369,750$ 2,150,194$ 435,739$ 428,202$ 374,875$ (continued)
103 CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)June 30, 2015Special Revenue FundsTourismBusiness Street Park Municipal CourtImprovement Lighting Land Restitution TotalASSETSCash and cash equivalents2,878$ 633,066$ 378,047$ 21,157$ 11,053,074$ ReceivablesProperty taxes- - - - 557,410 Accrued interest- - - 6,368 Customers, net- - - - 271,468 Special assessments25,103 8,986 - - 56,955 Other governments- - - - 63,634 Others- - - Advances to other city funds- - - - - Prepaid expenditures- - - - 369,750 Notes receivable- - - - 701,100 Restricted cash and cash equivalents- - - - 1,264,455 Total assets27,981$ 642,052$ 378,047$ 21,157$ 14,344,214$ (continued)
104 CITY OF BOZEMAN, MONTANA COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)June 30, 2015Special Revenue FundsTourismBusinessStreetParkMunicipal CourtImprovement LightingLandRestitutionTotalLiabilities:Accounts payable- 28,079 - 21,052 1,181,520 Escheat property payable- - - - - Accrued employee benefits payable- - - - 16 Total liabilities- 28,079 - 21,052 1,181,536 Deferred inflows of resources:Unavailable revenue-property taxes- - - - 41,209 Unavailable revenue-special assessments- - - - 9,100 Unavailable revenue-security agreement- - - - - Total deferred inflows of resources- - - - 50,309 Fund balances:Nonspendable- - - 369,750 Restricted27,981 613,973 - 105 9,658,678 Committed- - 378,047 - 3,177,242 Assigned- - - - Unassigned- - - - (93,301) Total fund balances27,981 613,973 378,047 105 13,112,369 Total liabilities, deferred inflows of resources, and fund balances27,981$ 642,052$ 378,047$ 21,157$ 14,344,214$ (continued)
105 CITY OF BOZEMAN, MONTANA Debt Service FundsSID G.O. TIFRevolving Bonds Bonds TotalASSETSCash and cash equivalents 2,948,129$ 59,372$ -$ 3,007,501$ ReceivablesProperty taxes - 87,441 - 87,441 Accrued interest 3,818 - - 3,818 Customers, net - - - - Special assessments - - - - Other governments - - - - Others - - - - Advances to other city funds 404,724 - - 404,724 Prepaid expenditures - - - - Notes receivable - - - - Restricted cash and cash equivalents - - - - Total assets 3,356,671$ 146,813$ -$ 3,503,484$ (continued)COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)June 30, 2015
106 CITY OF BOZEMAN, MONTANA Debt Service FundsSID G.O. TIFRevolving Bonds Bonds TotalLiabilities:Accounts payable- - - - Escheat property payable- - - - Accrued employee benefits payable- - - - Total liabilities- - - - Deferred inflows of resources:Unavailable revenue-property taxes- 6,305 - 6,305 Unavailable revenue-special assessments- - - - Unavailable revenue-security agreement- - - - Total deferred inflows of resources- 6,305 - 6,305 Fund balances:Nonspendable- - - - Restricted3,356,671 140,508 - 3,497,179 Committed- - - - Assigned- - - - Unassigned- - - - Total fund balances3,356,671 140,508 - 3,497,179 Total liabilities, deferred inflows of resources, and fund balances3,356,671$ 146,813$ -$ 3,503,484$ (continued)June 30, 2015NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)COMBINING BALANCE SHEET
107 CITY OF BOZEMAN, MONTANA PermanentFund TotalNonmajorPerpetual GovernmentalCemetery Care FundsASSETSCash and cash equivalents -$ 14,060,575$ ReceivablesProperty taxes - 644,851 Accrued interest - 10,186 Customers, net 718 272,186 Special assessments - 56,955 Other governments - 63,634 Others - - Advances to other city funds - 404,724 Prepaid expenditures - 369,750 Notes receivable - 701,100 Restricted cash and cash equivalents 990,222 2,254,677 Total assets 990,940$ 18,838,638$ (continued)COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)June 30, 2015
108 CITY OF BOZEMAN, MONTANA PermanentFund TotalNonmajorPerpetual GovernmentalCemetery Care FundsLiabilities:Accounts payable- 1,181,520 Escheat property payable- - Accrued employee benefits payable- 16 Total liabilities- 1,181,536 Deferred inflows of resources:Unavailable revenue-property taxes- 47,514 Unavailable revenue-special assessments- 9,100 Unavailable revenue-security agreement- - Total deferred inflows of resources- 56,614 Fund balances:Nonspendable990,940 1,360,690 Restricted- 13,155,857 Committed- 3,177,242 Assigned- - Unassigned- (93,301) Total fund balances990,940 17,600,488 Total liabilities, deferred inflows of resources, and fund balances990,940$ 18,838,638$ June 30, 2015COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
109 CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDSYear Ended June 30, 2015Special Revenue FundsCityPlanning Health-Medical CommunityDepartmental BoardInsurance TransportationREVENUESTaxes186,174$ 184,183$ 2,115,859$ -$ Special assessments- - - - Licenses and permits- - - - Intergovernmental295,984 110,596 - 431,167 Charges for services25,960 395,095 - - Fines and forfeitures- - - - Interest on investments15,728 3,961 - 1,662 Loan repayment- - - - Other124,984 18,635 - 5,584 Total revenues648,830 712,470 2,115,859 438,413 EXPENDITURESCurrentGeneral government- 786,152 - - Public safety206,231 - - - Public service3,323 - - 9,730 Public welfare118,808 - - - Other92,236 - 639 - Capital outlay35,799 - - 574,318 Debt servicePrincipal- - - - Interest and fiscal fees- - - - Total expenditures456,397 786,152 639 584,048 Revenues over (under) expenditures192,433 (73,682) 2,115,220 (145,635) OTHER FINANCING SOURCES (USES)Transfers in- 123,849 - 454,470 Transfers out(122,313) - (2,160,851) - Long-term debt issued- - - - Sale of capital assets- - - - Total other financing sources (uses)(122,313) 123,849 (2,160,851) 454,470 Net change in fund balance70,120 50,167 (45,631) 308,835 FUND BALANCES, beginning of year1,851,248 728,073 226,483 123,331 FUND BALANCES, end of year1,921,368$ 778,240$ 180,852$ 432,166$ (continued)
110 CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Year Ended June 30, 2015Special Revenue FundsDowntownGas Tax Tree Fire ImprovementApportionment Maintenance Impact Fees DistrictREVENUESTaxes -$ -$ -$ 1,039,099$ Special assessments - 1,209 - 120,793 Licenses and permits - - - Intergovernmental 658,584 20,225 - 56,050 Charges for services - 432,207 424,190 - Fines and forfeitures - - - - Interest on investments 4,460 1,636 6,026 17,134 Loan repayment - - - - Other - 7,670 - 1,466 Total revenues 663,044 462,947 430,216 1,234,542 EXPENDITURESCurrentGeneral government - - - - Public safety - - 2,008 - Public service 363,460 - - - Public welfare - 436,627 - 483,286 Other - - - - Capital outlay 261,271 41,650 - - Debt servicePrincipal - - - - Interest and fiscal fees - - - - Total expenditures 624,731 478,277 2,008 483,286 Revenues over (under) expenditures38,313 (15,330) 428,208 751,256 OTHER FINANCING SOURCES (USES)Transfers in- - - - Transfers out- - - (596,584) Long-term debt issued- - - - Sale of capital assets- - - - Total other financing sources (uses)- - - (596,584) Net change in fund balances38,313 (15,330) 428,208 154,672 FUND BALANCES, beginning of year657,578 232,927 463,997 1,717,369 FUND BALANCES, end of year695,891$ 217,597$ 892,205$ 1,872,041$ (continued)
111 CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Year Ended June 30, 2015Special Revenue FundsEconomic Housing City-CountyDevelopment Community Revolving Drug Drug Revolving Loan Housing Loan Fund Forfeitures ForfeituresREVENUESTaxes -$ 88,470$ -$ -$ -$ Special assessments - - - - - Licenses and permits - - - - - Intergovernmental - - - 110,013 - Charges for services - - - - - Fines and forfeitures - - - 71,154 - Interest on investments 451 2,958 18 - 1,217 Loan interest on note receivable 27,591 681 343 - - Other - - - - - Total revenues 28,042 92,109 361 181,167 1,217 EXPENDITURESCurrentGeneral government - - - - - Public safety - - - 237,764 1,882 Public service - - - - - Public welfare 32,000 180,422 14,400 - - Other - - - - - Capital outlay - - - - - Debt servicePrincipal- - - - - Interest and fiscal fees- - - - - Total expenditures32,000 180,422 14,400 237,764 1,882 Revenues over (under) expenditures(3,958) (88,313) (14,039) (56,597) (665) OTHER FINANCING SOURCES (USES)Transfers in- 56,248 - 29,317 - Transfers out- - - - - Long-term debt issued- - - - - Sale of capital assets- - - - - Total other financing sources (uses)- 56,248 - 29,317 - Net change in fund balance(3,958) (32,065) (14,039) (27,280) (665) FUND BALANCES, beginning of year646,981 347,768 5,317 27,280 154,531 Restatement212,056 97,792 16,722 - - FUND BALANCES, end of year855,079$ 413,495$ 8,000$ -$ 153,866$ (continued)
112 CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Year Ended June 30, 2015Special Revenue FundsLaw andJustice TIF TIF N.E. Victim/Witness Fire DepartmentCenter N 7th Corridor Urban Renewal Advocate EquipmentREVENUESTaxes -$ 772,688$ 121,342$ -$ 364,399$ Special assessments - - - - - Licenses and permits - - - - - Intergovernmental - 37,926 1,353 - - Charges for services - - - - - Fines and forfeitures - - - 76,742 - Interest on investments - 17,133 2,891 3,263 1,309 Loan repayment - - - - - Other - - - - 60 Total revenues - 827,747 125,586 80,005 365,768 EXPENDITURESCurrentGeneral government - - - 79,384 - Public safety 19,125 - - - - Public service - - - - - Public welfare - 35,346 2,813 - - Other - - - - - Capital outlay - 103,522 - - 26,218 Debt servicePrincipal- - - - - Interest and fiscal fees- - - - - Total expenditures19,125 138,868 2,813 79,384 26,218 Revenues over (under) expenditures(19,125) 688,879 122,773 621 339,550 OTHER FINANCING SOURCES (USES)Transfers in- - - - - Transfers out- (51,000) (5,000) - - Long-term debt issued- - - - - Sale of capital assets- - - - 14,875 Total other financing sources (uses)- (51,000) (5,000) - 14,875 Net change in fund balance(19,125) 637,879 117,773 621 354,425 FUND BALANCES, beginning of year388,875 1,466,251 316,764 389,990 18,010 FUND BALANCES, end of year369,750$ 2,104,130$ 434,537$ 390,611$ 372,435$ (continued)
113 CITY OF BOZEMAN, MONTANA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Year Ended June 30, 2015Special Revenue FundsTourism MunicipalBusiness Street Park CourtImprovement Lighting Land Restitution TotalsREVENUESTaxes -$ -$ -$ -$ 4,872,214$ Special assessments 475,036 374,754 - - 971,792 Licenses and permits - - - - - Intergovernmental - - - - 1,721,898 Charges for services - - - - 1,277,452 Fines and forfeitures - - - - 147,896 Interest on investments - 5,342 2,747 - 87,936 Loan repayment - - - - 28,615 Other - - 101,248 - 259,647 Total revenues 475,036 380,096 103,995 - 9,367,450 EXPENDITURESCurrentGeneral government - - - - 865,536 Public safety - - - - 467,010 Public service - 406,693 - - 783,206 Public welfare 458,382 - 29,800 - 1,791,884 Other - - - - 92,875 Capital outlay - - - - 1,042,778 Debt servicePrincipal- - - - - Interest and fiscal fees- - - - - Total expenditures458,382 406,693 29,800 - 5,043,289 Revenues over (under) expenditures16,654 (26,597) 74,195 - 4,324,161 OTHER FINANCING SOURCES (USES)Transfers in- - - - 663,884 Transfers out- (31,900) - - (2,967,648) Long-term debt issued- - - - - Sale of capital assets- - - - 14,875 Total other financing sources (uses)- (31,900) - - (2,288,889) Net change in fund balance16,654 (58,497) 74,195 - 2,035,272 FUND BALANCES, beginning of year11,327 672,470 303,852 105 10,750,527 326,570 FUND BALANCES, end of year27,981$ 613,973$ 378,047$ 105$ 13,112,369$ (continued)
114 CITY OF BOZEMAN, MONTANA Debt Service FundsSID G.O. TIFRevolving Bonds Bonds TotalsREVENUESTaxes -$ 1,019,339$ -$ 1,019,339$ Special assessments - - - - Licenses and permits - - - - Intergovernmental - - - - Charges for services 2,956 - - 2,956 Fines and forfeitures - - - - Interest on investments 20,545 156 - 20,701 Loan repayment 1,314 - - 1,314 Other - - - - Total revenues 24,815 1,019,495 - 1,044,310 EXPENDITURESCurrentGeneral government - - - - Public safety - - - - Public service - - - - Public welfare - - - - Other - - - Capital outlay - - - - Debt service- Principal - 465,000 190,000 655,000 Interest and fiscal fees - 524,105 236,237 760,342 Total expenditures - 989,105 426,237 1,415,342 Revenues over (under) expenditures24,815 30,390 (426,237) (371,032) OTHER FINANCING SOURCES (USES)Transfers in720,498 - 426,237 1,146,735 Transfers out- - - - Long-term debt issued- - - - Sale of capital assets- - - - Total other financing sources (uses)720,498 - 426,237 1,146,735 Net change in fund balance745,313 30,390 - 775,703 FUND BALANCES, beginning of year2,611,358 110,118 - 2,721,476 FUND BALANCES, end of year3,356,671$ 140,508$ -$ 3,497,179$ (continued)COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Year Ended June 30, 2015
115 CITY OF BOZEMAN, MONTANA Permanent FundTotalNonmajorCemeteryGovernmental Perpetual CareFundsREVENUESTaxes-$ 5,891,553$ Special assessments- 971,792 Licenses and permits- - Intergovernmental- 1,721,898 Charges for services102,761 1,383,169 Fines and forfeitures- 147,896 Interest on investments7,497 116,134 Loan repayment- 29,929 Other- 259,647 Total revenues110,258 10,522,018 EXPENDITURESCurrentGeneral government- 865,536 Public safety- 467,010 Public service- 783,206 Public welfare- 1,791,884 Other- 92,875 Capital outlay- 1,042,778 Debt servicePrincipal- 655,000 Interest and fiscal fees- 760,342 Total expenditures- 6,458,631 Revenues over (under) expenditures110,258 4,063,387 OTHER FINANCING SOURCES (USES)Transfers in- 1,810,619 Transfers out- (2,967,648) Long-term debt issued- - Sale of capital assets- 14,875 Total other financing sources (uses)- (1,142,154) Net change in fund balance110,258 2,921,233 FUND BALANCES, beginning of year880,682 14,352,685 326,570 FUND BALANCES, end of year990,940$ 17,600,488$ COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Year Ended June 30, 2015
BUDGET TO ACTUAL SCHEDULES OTHER MAJOR FUNDS
116 CITY OF BOZEMAN, MONTANA Variance withActual Amounts Final BudgetOriginal Final Budgetary Basis Positive (Negative)Budgetary fund balance, July 1 1,258,427$ 1,258,427$ 1,258,427$ -$ Resources (inflows):Taxes- - - - Special assessments1,045,200 1,045,200 586,116 (459,084) Licenses and permits- - - - Intergovernmental- - - - Charges for services- - - - Fines and forfeitures- - - - Interest on investments- - 9,394 9,394 Transfers from other funds- - - - Proceeds from long term debt- - - - Premium on bonds issued- - - - Proceeds from the sale of capital assets- - - Other- - - - Amounts available for appropriation2,303,627 2,303,627 1,853,937 (449,690) Charges to appropriations (outflows):CurrentGeneral government- - - - Public safety- - - - Public service- - - - Public welfare- - - - Capital outlay- - - - Debt service1,045,200 1,045,200 345,070 700,130 Transfers to other funds- 720,500 1,030,686 (310,186) Total charges to appropriations1,045,200 1,765,700 1,375,756 389,944 Budgetary fund balance, June 301,258,427$ 537,927$ 478,181$ (59,746)$ Budgeted AmountsOTHER MAJOR FUNDS - SID SINKING FUNDYear Ended June 30, 2015SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL
117 CITY OF BOZEMAN, MONTANA Variance withActual Amounts Final BudgetOriginalFinalBudgetary Basis Positive (Negative)Budgetary fund balance, July 19,965,404$ 9,965,404$ 9,965,404$ -$ Resources (inflows):Taxes- - - - Special assessments- - - - Licenses and permits- - - - Intergovernmental- - - - Charges for services- - - - Fines and forfeitures- - - - Interest on investments- - 117,937 117,937 Transfers from other funds- - 774,459 774,459 Proceeds from long term debt27,100,000 27,100,000 5,369,154 (21,730,846) Premium on bonds issued- - - - Proceeds from the sale of capital assets- - - - Other- - - - Amounts available for appropriation37,065,404 37,065,404 16,226,954 (20,838,450) Charges to appropriations (outflows):CurrentGeneral government- - - - Public safety- - - - Public service- - - - Public welfare- 93,600 92,982 618 Capital outlay32,052,584 31,973,984 5,507,034 26,466,950 Bond issuance costs- - - - Transfers to other funds- 16,750 16,684 66 Total charges to appropriations32,052,584 32,084,334 5,616,700 26,467,634 Budgetary fund balance, June 305,012,820$ 4,981,070$ 10,610,254$ 5,629,184$ Budgeted AmountsOTHER MAJOR FUNDS - CAPITAL PROJECTS FUNDYear Ended June 30, 2015SCHEDULE OF REVENUES, REXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL
118 CITY OF BOZEMAN, MONTANA CapitalSID Sinking ProjectsFundFundSources/inflows of resourcesActual amounts (budgetary basis) "available for appropriation" from the budgetarycomparison schedule1,853,937$ 16,226,954$ Differences - budget to GAAP:The fund balance at the beginning of the year is a budgetary resource but isnot a current-year revenue for financial reporting purposes.(1,258,427) (9,965,404) Transfers from other funds are inflows of budgetary resources but are notrevenues for financial reporting purposes.- (774,459) The proceeds from the issuance of long-term debt are a budgetary resourcebut are a other financing source for financial reporting purposes(15,907) (5,369,154) The proceeds from the sale of assets are budgetary resources but are regardedas a special item, rather than revenue, for financial reporting purposes- Total revenues as reported on the statement of revenues, expenditures, andchanges in fund balances - governmental funds579,603$ 117,937$ Uses/outflows of resourcesActual amounts (budgetary basis) "total charges to appropriations" from thebudgetary comparison schedule1,375,756$ 5,616,700$ Differences - budget to GAAP:Transfers to other funds are outflows of budgetary resources but are notexpenditures for financial reporting purposes.(1,030,686) (16,684) Total expenditures as reported on the statement of revenues, expenditures, andchanges in fund balances - governmental funds345,070$ 5,600,016$ NOTE TO BUDGET TO ACTUAL STATEMENT-OTHER MAJOR FUNDSYear Ended June 30, 2015
BUDGET TO ACTUAL SCHEDULES – NONMAJOR FUNDS
118 CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALNONMAJOR GOVERNMENTAL FUNDSYear Ended June 30, 2015Special Revenue FundsVariance VariancePositive PositiveBudget Actual (Negative) Budget Actual (Negative)REVENUESTaxes 125,159$ 186,174$ 61,015$ 178,125$ 184,183$ 6,058$ Special assessments - - - - - - Licenses and permits - - - - - - Intergovernmental 200,000 295,984 95,984 104,825 110,596 5,771 Charges for services 29,735 25,960 (3,775) 383,600 395,095 11,495 Fines and forfeitures - - - - - - Interest on investments 5,574 15,728 10,154 3,000 3,961 961 Loan repayment5,162 - (5,162) - - - Other82,041 124,984 42,943 12,000 18,635 6,635 Total revenues447,671 648,830 201,159 681,550 712,470 30,920 EXPENDITURES - BUDGETUNIT525,510 456,397 69,113 929,538 786,152 143,386 Revenues over (under) expenditures(77,839) 192,433 270,272 (247,988) (73,682) 174,306 OTHER FINANCING SOURCES (USES)Transfers in- - - 41,000 123,849 82,849 Transfers out(122,348) (122,313) 35 - - - Long-term debt issued- - - - - - Sale of capital assets- - - - - - Total other financing sources (uses)(122,348) (122,313) 35 41,000 123,849 82,849 Revenues and other sources over(under) expenditures(200,187)$ 70,120 270,307$ (206,988)$ 50,167 257,155$ FUND BALANCES, beginning of year1,851,248 728,073 FUND BALANCES, end of year1,921,368$ 778,240$ (continued)Departmental Special RevenuesCity Planning Board
119 CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Year Ended June 30, 2015Special Revenue FundsVariance VariancePositive PositiveBudget Actual (Negative) Budget Actual (Negative)REVENUESTaxes 2,037,401$ 2,115,859$ 78,458$ -$ -$ -$ Special assessments - - - - - - Licenses and permits - - - - - - Intergovernmental - - - 196,940 431,167 234,227 Charges for services - - - - - - Fines and forfeitures - - - - - - Interest on investments - - - 700 1,662 962 Loan repayment - - - - - - Other - - - - 5,584 5,584 Total revenues 2,037,401 2,115,859 78,458 197,640 438,413 240,773 EXPENDITURES - BUDGETUNIT 750 639 111 584,190 584,048 142 Revenues over (under) expenditures 2,036,651 2,115,220 78,569 (386,550) (145,635) 240,915 OTHER FINANCING SOURCES (USES)Transfers in - - - 445,310 454,470 9,160 Transfers out (2,160,901) (2,160,851) 50 - - - Long-term debt issued- - - - - - Sale of capital assets- - - - - - Total other financing sources (uses) (2,160,901) (2,160,851) 50 445,310 454,470 9,160 Revenues and other sources over(under) expenditures(124,250)$ (45,631) 78,619$ 58,760$ 308,835 250,075$ FUND BALANCES, beginning of year226,483 123,331 FUND BALANCES, end of year180,852$ 432,166$ (continued)Health-Medical InsuranceCommunity Transportation
120 CITY OF BOZEMAN, MONTANA VarianceVariancePositivePositiveBudgetActual (Negative) BudgetActual (Negative)REVENUESTaxes-$ -$ -$ -$ -$ -$ Special assessments- - - 4,000 1,209 (2,791) Licenses and permits- - - - - - Intergovernmental658,583 658,584 1 250 20,225 19,975 Charges for services- - - 434,710 432,207 (2,503) Fines and forfeitures- - - - - - Interest on investments3,800 4,460 660 3,000 1,636 (1,364) Loan repayment- - - - - - Other- - - 6,000 7,670 1,670 Total revenues662,383 663,044 661 447,960 462,947 14,987 EXPENDITURES - BUDGETUNIT659,500 624,731 34,769 533,073 478,277 54,796 Revenues over (under) expenditures2,883 38,313 35,430 (85,113) (15,330) 69,783 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) expenditures2,883$ 38,313 35,430$ (85,113)$ (15,330) 69,783$ FUND BALANCES, beginning of year657,578 232,927 FUND BALANCES, end of year695,891$ 217,597$ (continued)SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Year Ended June 30, 2015Special Revenue FundsGas Tax ApportionmentTree Maintenance
121 CITY OF BOZEMAN, MONTANA Year Ended June 30, 2015Special Revenue FundsFire Impact Fees Special RevenueVariance VariancePositive PositiveBudget Actual (Negative) Budget Actual (Negative)REVENUESTaxes -$ -$ - 1,538,600$ 1,039,099$ (499,501)$ Special assessments - - - 120,175 120,793 618 Licenses and permits - - - - - - Intergovernmental - - - 45,436 56,050 10,614 Charges for services 346,355 424,190 77,835 - - - Fines and forfeitures - - - - - - Interest on investments - 6,026 6,026 14,000 17,134 3,134 Loan repayment- - - - - - Other- - - 47,500 1,466 (46,034) Total revenues346,355 430,216 83,861 1,765,711 1,234,542 (531,169) EXPENDITURES - BUDGETUNIT2,100 2,008 92 2,230,195 483,286 1,746,909 Revenues over (under) expenditures344,255 428,208 83,953 (464,484) 751,256 1,215,740 OTHER FINANCING SOURCES (USES)Transfers in - - - - - - Transfers out - - - (631,588) (596,584) 35,004 Long-term debt issued - - - - - - Sale of capital assets - - - - - - Total other financing sources (uses)- - - (631,588) (596,584) 35,004 Revenues and other sources over(under) expenditures344,255$ 428,208 83,953$ (1,096,072)$ 154,672 1,250,744$ FUND BALANCES, beginning of year463,997 1,717,369 FUND BALANCES, end of year892,205$ 1,872,041$ (continued)SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Downtown Improvement District
122 CITY OF BOZEMAN, MONTANA SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Year Ended June 30, 2015Special Revenue FundsVarianceVariancePositivePositiveBudgetActual (Negative)BudgetActual (Negative)REVENUESTaxes-$ -$ -$ 89,062$ 88,470$ (592)$ Special assessments- - - - - - Licenses and permits- - - - - - Intergovernmental- - - - - - Charges for services- - - - - - Fines and forfeitures- - - - - - Interest on investments- 451 451 3,000 2,958 (42) Loan repayment- 27,591 27,591 5,000 681 (4,319) Other- - - - - - Total revenues- 28,042 28,042 97,062 92,109 (4,953) EXPENDITURES - BUDGETUNIT472,000 32,000 440,000 274,269 180,422 93,847 Revenues over (under) expenditures(472,000) (3,958) 468,042 (177,207) (88,313) 88,894 OTHER FINANCING SOURCES (USES)Transfers in- - - 56,248 56,248 - Transfers out- - - - - - Long-term debt issued- - - - - - Sale of capital assets- - - - - - Total other financing sources (uses)- - - 56,248 56,248 - Revenues and other sources over(under) expenditures(472,000)$ (3,958) 468,042$ (120,959)$ (32,065) 88,894$ FUND BALANCES, beginning of year646,981 347,768 FUND BALANCES, end of year643,023$ 315,703$ (continued)Economic Development Revolving Loan FumdCommunity Housing
123 CITY OF BOZEMAN, MONTANA VarianceVariancePositivePositiveBudgetActual(Negative)BudgetActual(Negative)REVENUESTaxes-$ -$ -$ -$ -$ -$ Special assessments- - - - - - Licenses and permits- - - - - - Intergovernmental- - - - 110,013 110,013 Charges for services- - - - - - Fines and forfeitures- - - 64,485 71,154 6,669 Interest on investments81 18 (63) - - - Loan repayment5,150 343 (4,807) - - - Other- - - - - - Total revenues5,231 361 (4,870) 64,485 181,167 116,682 EXPENDITURES - BUDGETUNIT17,807 14,400 3,407 241,277 237,764 3,513 Revenues over (under) expenditures(12,576) (14,039) (1,463) (176,792) (56,597) 120,195 OTHER FINANCING SOURCESTransfers in- - - - 29,317 29,317 Transfers out- - - - - - Long-term debt issued- - - - - - Sale of capital assets- - - - - - Total other financing sources (uses)- - - - 29,317 29,317 Revenues and other sources over(under) expenditures(12,576)$ (14,039) (1,463)$ (176,792)$ (27,280) 149,512$ FUND BALANCES, beginning of year5,317 27,280 FUND BALANCES, end of year(8,722)$ -$ (continued)Housing Revolving Loan FundDrug ForfeituresSCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Year Ended June 30, 2015Special Revenue Funds
124 CITY OF BOZEMAN, MONTANA VarianceVariancePositivePositiveBudgetActual(Negative)BudgetActual(Negative)REVENUESTaxes-$ -$ -$ -$ -$ -$ Special assessments- - - - - - Licenses and permits- - - - - - Intergovernmental- - - - - - Charges for services- - - - - - Fines and forfeitures- - - - - - Interest on investments- 1,217 1,217 - - - Loan repayment- - - - - - Other- - - - - - Total revenues- 1,217 1,217 - - - EXPENDITURES - BUDGETUNIT1,900 1,882 18 20,000 19,125 875 Revenues over (under) expenditures(1,900) (665) 1,235 (20,000) (19,125) 875 OTHER FINANCING SOURCESTransfers in- - - - - - Transfers out- - - - - - Long-term debt issued- - - - - - Sale of capital assets- - - - - - Total other financing sources (uses)- - - - - - Revenues and other sources over(under) expenditures(1,900)$ (665) 1,235$ (20,000)$ (19,125) 875$ FUND BALANCES, beginning of year154,531 388,875 FUND BALANCES, end of year153,866$ 369,750$ (continued)City-County Drug ForfeituresLaw and Justice CenterSpecial Revenue FundsSCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Year Ended June 30, 2015
125 CITY OF BOZEMAN, MONTANA Year Ended June 30, 2015VarianceVariancePositivePositiveBudgetActual(Negative)BudgetActual(Negative)REVENUESTaxes709,713$ 772,688$ 62,975$ 102,658$ 121,342$ 18,684$ Special assessments- - - - - - Licenses and permits- - - - - - Intergovernmental9,500 37,926 28,426 100 1,353 1,253 Charges for services- - - - - - Fines and forfeitures- - - - - - Interest on investments8,800 17,133 8,333 1,800 2,891 1,091 Loan repayment- - - - - - Other- - - - - - Total revenues728,013 827,747 99,734 104,558 125,586 21,028 EXPENDITURES - BUDGETUNIT997,500 138,868 858,632 316,312 2,813 313,499 Revenues over (under) expenditures(269,487) 688,879 958,366 (211,754) 122,773 334,527 OTHER FINANCING SOURCES (USES)Transfers in- - - - - - Transfers out(51,000) (51,000) - (5,000) (5,000) - Long-term debt issued- - - - - - Sale of capital assets- - - - - - Total other financing sources (uses)(51,000) (51,000) - (5,000) (5,000) - Revenues and other sources over(under) expenditures(320,487)$ 637,879 958,366$ (216,754)$ 117,773 334,527$ FUND BALANCES, beginning of year1,466,251 316,764 FUND BALANCES, end of year2,104,130$ 434,537$ (continued)Special Revenue FundsTIF N.E. Urban RenewalTIF N 7th CorridorNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL
126 CITY OF BOZEMAN, MONTANA VarianceVariancePositivePositiveBudgetActual(Negative)BudgetActual(Negative)REVENUESTaxes-$ -$ -$ 356,250$ 364,399$ 8,149$ Special assessments- - - - - - Licenses and permits- - - - - - Intergovernmental- - - - - - Charges for services- - - - - - Fines and forfeitures74,747 76,742 1,995 - - - Interest on investments2,815 3,263 448 1,125 1,309 184 Loan repayment- - - - - - Other- - - - 60 60 Total revenues77,562 80,005 2,443 357,375 365,768 8,393 EXPENDITURES - BUDGETUNIT135,000 79,384 55,616 37,000 26,218 10,782 Revenues over (under) expenditures(57,438) 621 58,059 320,375 339,550 19,175 OTHER FINANCING SOURCES (USES)Transfers in- - - - - - Transfers out- - - - - - Long-term debt issued- - - - - - Sale of capital assets- - - - 14,875 14,875 Total other financing sources (uses)- - - - 14,875 14,875 Revenues and other sources over(under) expenditures(57,438)$ 621 58,059$ 320,375$ 354,425 34,050$ FUND BALANCES, beginning of year389,990 18,010 FUND BALANCES, end of year390,611$ 372,435$ (continued)Special Revenue FundsYear Ended June 30, 2015Victim/Witness AdvocateFire Department EquipmentSCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
127 CITY OF BOZEMAN, MONTANA Special Revenue FundsVarianceVariancePositivePositiveBudgetActual(Negative)BudgetActual(Negative)REVENUESTaxes-$ -$ -$ -$ -$ -$ Special assessments874,874 475,036 (399,838) 362,785 374,754 11,969 Licenses and permits- - - - - - Intergovernmental- - - - - - Charges for services- - - - - - Fines and forfeitures- - - - - - Interest on investments- - - - 5,342 5,342 Loan repayment- - - - - - Other- - - - - - Total revenues874,874 475,036 (399,838) 362,785 380,096 17,311 EXPENDITURES - BUDGETUNIT458,548 458,382 166 414,520 406,693 7,827 Revenues over (under) expenditures416,326 16,654 (399,672) (51,735) (26,597) 25,138 OTHER FINANCING SOURCES (USES)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) expenditures416,326$ 16,654 (399,672)$ (83,635)$ (58,497) 25,138$ FUND BALANCES, beginning of year11,327 672,470 FUND BALANCES, end of year27,981$ 613,973$ (continued)Tourism Business Improvement DistrictYear Ended June 30, 2015Street LightingSCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
128 CITY OF BOZEMAN, MONTANA VarianceVariancePositivePositiveBudgetActual(Negative)BudgetActual(Negative)REVENUESTaxes-$ -$ -$ -$ -$ -$ Special assessments- - - - - - Licenses and permits- - - - - - Intergovernmental- - - - - - Charges for services- - - - - - Fines and forfeitures- - - - - - Interest on investments- 2,747 2,747 - - - Loan repayment- - - - - - Other- 101,248 101,248 - - - Total revenues- 103,995 103,995 - - - EXPENDITURES - BUDGETUNIT29,800 29,800 - - - - Revenues over (under) expenditures(29,800) 74,195 103,995 - - - 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(29,800)$ 74,195 103,995$ -$ - -$ FUND BALANCES, beginning of year303,852 105 FUND BALANCES, end of year378,047$ 105$ (continued)Park LandMunicipal Court RestitutionNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALYear Ended June 30, 2015Special Revenue Funds
129 CITY OF BOZEMAN, MONTANA VariancePositiveBudget Actual (Negative)REVENUESTaxes5,136,968$ 4,872,214$ (264,754)$ Special assessments1,361,834 971,792 (390,042) Licenses and permits- - - Intergovernmental1,215,634 1,721,898 506,264 Charges for services1,194,400 1,277,452 83,052 Fines and forfeitures139,232 147,896 8,664 Interest on investments47,695 87,936 40,241 Loan repayment15,312 28,615 13,303 Other147,541 259,647 112,106 Total revenues9,258,616 9,367,450 108,834 EXPENDITURES - BUDGETUNIT8,880,789 5,043,289 3,837,500 Revenues over (under) expenditures377,827 4,324,161 3,946,334 OTHER FINANCING SOURCES (USES)Transfers in542,558 663,884 121,326 Transfers out(3,002,737) (2,967,648) 35,089 Long-term debt issued- - - Sale of capital assets- 14,875 14,875 Total other financing sources (uses)(2,460,179) (2,288,889) 171,290 Revenues and other sources over(under) expenditures(2,082,352)$ 2,035,272 4,117,624$ FUND BALANCES, beginning of year10,750,527 FUND BALANCES, end of year12,785,799$ (continued)TotalSCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUALNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Year Ended June 30, 2015Special Revenue Funds
130 CITY OF BOZEMAN, MONTANA Debt Service FundsVarianceVariancePositivePositiveBudgetActual(Negative)BudgetActual(Negative)REVENUESTaxes-$ -$ -$ 987,554$ 1,019,339$ 31,785$ Special assessments- - - - - - Intergovernmental- - - - - - Charges for services- 2,956 2,956 - - - Interest on investments19,000 20,545 1,545 - 156 156 Loan repayment- 1,314 1,314 - - - Other - - - - - - Total revenue19,000 24,815 5,815 987,554 1,019,495 31,941 EXPENDITURESOther- - - - - - Debt servicePrincipal- - - 465,000 465,000 - Interest and fiscal fees - - - 524,304 524,105 199 Total expenditures - - - 989,304 989,105 199 Revenues over (under)expenditures 19,000 24,815 5,815 (1,750) 30,390 32,140 OTHER FINANCING SOURCES(USES)Transfers in - 720,498 720,498 - - - Transfers out - - - - - - Total other financingsources (uses) - 720,498 720,498 - - - Revenues and other sources over(under) expenditures 19,000$ 745,313 726,313$ (1,750)$ 30,390 32,140$ FUND BALANCES, beginning of year 2,611,358 110,118 FUND BALANCES, end of year 3,356,671$ 140,508$ (continued)G.O. BondsSCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUALNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)Year Ended June 30, 2015SID Revolving
131 CITY OF BOZEMAN, MONTANA VarianceVarianceFavorablePositiveBudgetActual (Unfavorable)BudgetActual(Negative)REVENUESTaxes-$ -$ -$ 987,554$ 1,019,339$ 31,785$ Special assessments- -$ - - - - Intergovernmental- - - - - - Charges for services- - - - 2,956 2,956 Interest on investments- - - 19,000 20,701 1,701 Loan repayment- - - - 1,314 1,314 Other - - - - - - Total revenue- - - 1,006,554 1,044,310 37,756 EXPENDITURESOther- - - - - - Debt servicePrincipal190,000 190,000 - 655,000 655,000 - Interest and fiscal fees238,738 236,237 2,501 763,042 760,342 2,700 Total expenditures428,738 426,237 2,501 1,418,042 1,415,342 2,700 Revenues over (under)expenditures(428,738) (426,237) 2,501 (411,488) (371,032) 40,456 OTHER FINANCING SOURCES(USES)Transfers in428,388 426,237 (2,151) 428,388 1,146,735 718,347 Transfers out- - - - - - Total other financingsources (uses)428,388 426,237 (2,151) 428,388 1,146,735 718,347 Revenues and other sources over(under) expenditures(350)$ - 350$ 16,900$ 775,703 758,803$ FUND BALANCES, beginning of year- 2,721,476 FUND BALANCES, end of year-$ 3,497,179$ (continued)TIF BondsTotalDebt Service FundsSCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUALNONMAJOR GOVERNMENTAL FUNDS Year Ended June 30, 2015
132 CITY OF BOZEMAN, MONTANA VariancePositiveBudget Actual (Negative)REVENUESIntergovernmental -$ -$ -$ Charges for services 82,000 102,761 20,761 Interest on investments 5,600 7,497 1,897 Total revenues 87,600 110,258 22,658 EXPENDITURES - BUDGETUNIT - - - Revenues over (under) expenditures 87,600 110,258 22,658 OTHER FINANCING SOURCES (USES)Long-term debt issued - - - Sale of capital assets - - - Total other financing sources (uses) - - - Revenues and other sources over(under) expenditures 87,600$ 110,258 22,658$ FUND BALANCES, beginning of year 880,682 FUND BALANCES, end of year 990,940$ Cemetery Perpetual CarePermanent FundYear Ended June 30, 2015SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUALNONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
COMBINING NONMAJOR PROPRIETARY FUNDS
NONMAJOR PROPRIETARY FUNDS
133 CITY OF BOZEMAN, MONTANA Business-type ActivitiesEnterprise FundsParking StormwaterFundFundTotalASSETS Current assetsCash and investments69,015$ 234,204$ 303,219$ ReceivablesCustomers, net114,087 42,594 156,681 Total current assets183,102 276,798 459,900 Non current assetsOther assetsNotes receivable13,480 - 13,480 Restricted cash and investments282,894 8,411 291,305 Total other assets296,374 8,411 304,785 Property, plant and equipment, net Nondepreciable:Land303,436 - 303,436 Depreciable:Buildings11,783,924 - 11,783,924 Other structures and improvements- - - Machinery and equipment27,974 159,278 187,252 Vehicles62,753 110,874 173,627 Infrastructure32,805 - 32,805 Property under capital lease- 519,943 519,943 Accumulated depreciation and amortization(3,229,809) (211,507) (3,441,316) Net property, plant and equipment8,981,083 578,588 9,559,671 Total non current assets9,277,457 586,999 9,864,456 Deferred outflows of resourcesPension plan contributions15,535 3,798 19,333 Total assets9,476,094$ 867,595$ 10,343,689$ NON MAJOR PROPRIETARY FUNDSJune 30, 2015COMBINING STATEMENT OF NET POSITION
134 CITY OF BOZEMAN, MONTANA Business-type ActivitiesEnterprise FundsParking StormwaterFund Fund TotalLIABILITIESCurrent liabilities:Accounts payable and accrued expenses60,748$ 13,248$ 73,996$ Compensated absences payable2,949 10,162 13,111 Capital lease obligations payable in one year- 85,000 85,000 Total current liabilities63,697 108,410 172,107 Noncurrent liabilitiesCapital lease obligations- 349,598 349,598 Revenue bonds due after one year- 229,750 229,750 Compensated absences payable4,048 2,952 7,000 28,546 3,061 31,607 Net pension liability170,998 60,695 231,693 Total noncurrent liabilities203,592 646,056 849,648 Total liabilities267,289 754,466 1,021,755 Deferred inflows of resourcesPension deferrals44,189 15,684 59,873 NET POSITIONNet Investment in capital assets8,981,083 228,990 9,210,073 Restricted for parking capital projects282,894 - 282,894 Unrestricted(99,361) (131,545) (230,906) Total net position9,164,616 97,445 9,262,061 Total liabilities and net position9,476,094$ 867,595$ 10,343,689$ Other post-employment health benefits - implicit rate subsidyCOMBINING STATEMENT OF NET POSITION (CONTINUED) NON MAJOR PROPRIETARY FUNDSJune 30, 2015
135 CITY OF BOZEMAN, MONTANA Parking StormwaterFund Fund TotalsOPERATING REVENUES Charges for services 576,357$ 304,906$ 881,263$ OPERATING EXPENSESSalaries and benefits 263,727 114,736 378,463 Materials and supplies 23,146 19,724 42,870 Repairs and maintenance 18,437 625 19,062 Utilities 30,590 1,334 31,924 Administrative charges 54,749 9,546 64,295 Other expenses 110,807 106,927 217,734 Depreciation and amortization 287,730 56,693 344,423 Changes in estimated closure and post-closure care costs - - - Total operating expenses 789,186 309,585 1,098,771 Operating income (loss) (212,829) (4,679) (217,508) NON-OPERATING REVENUES (EXPENSES)Interest income 2,296 2,072 4,368 Other income 5,748 - 5,748 Intergovernmental income 5,028 4,789 9,817 Total non-operating revenues (expenses) 13,072 6,861 19,933 Income (loss) before contributions and transfers (199,757) 2,182 (197,575) Transfers in 170,347 140,000 310,347 Transfers out - (221,339) (221,339) Change in net position (29,410) (79,157) (108,567) NET POSITION, beginning of year 9,400,575 249,916 9,650,491 Prior period adjustment (206,549) (73,314) (279,863) NET POSITION, beginning of year, restated 9,194,026 176,602 9,370,628 Business-type ActivitiesEnterprise FundsCOMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION- NON MAJOR PROPRIETARY FUNDSYear Ended June 30, 2015
136 CITY OF BOZEMAN, MONTANA Parking StormwaterFund Fund TotalCASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 548,601$ 290,307$ 838,908$ Receipts from others 5,748 - 5,748 Operating loans from other funds - - - Payments to suppliers (143,500) (120,084) (263,584) Payments to employees (279,412) (104,830) (384,242) Payments to internal service funds and administrative fees (54,749) (9,546) (64,295) Net cash flows from operating activities 76,688 55,847 132,535 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIESTransfers in 170,347 140,000 310,347 Transfers out - (221,339) (221,339) Receipts from grants and intergovernmental sources 5,028 4,789 9,817 Net cash flows from non-capital financing activities 175,375 (76,550) 98,825 Acquisition of capital assets (190,442) (85,345) (275,787) Principal paid on bonds, interfund loans, loans and leases - - - Interest paid on bonds, interfund loans, loans and leases - - - Proceeds from issuance of long-term debt - 229,750 229,750 Impact fees received - - - Proceeds from sale of property, plant and equipment - - - Net cash flows from capital and related financing activities (190,442) 144,405 (46,037) CASH FLOWS FROM INVESTING ACTIVITIESCollections on notes 2,444 - 2,444 Interest on investments 2,299 2,072 4,371 Net cash flows from investing activities 4,743 2,072 6,815 Net change in cash and investments 66,364 125,774 192,138 Cash and investments, beginning of year 285,545 116,841 402,386 Cash and investments, end of year 351,909$ 242,615$ 594,524$ Classified as:Cash and investments69,015$ 234,204$ 303,219$ Restricted cash and investments282,894 8,411 291,305 Totals351,909$ 242,615$ 594,524$ CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESSTATEMENT OF CASH FLOWS - NON-MAJOR PROPRIETARY FUNDSYear Ended June 30, 2015
137 CITY OF BOZEMAN, MONTANA Parking StormwaterRECONCILIATION OF OPERATING INCOME TO Fund Fund TotalNET CASH FROM OPERATING ACTIVITIES:Operating income (loss) (212,829)$ (4,679)$ (217,508)$ Adjustments to reconcile operating income (loss)to net cash provided (used) by operating activitiesDepreciation and amortization 287,730 56,693 344,423 Other income 5,748 - 5,748 Change in Assets and Liabilities: (Increase) Decrease in:Accounts receivable (27,756) (14,599) (42,355) Other governments receivable - - - Increase (Decrease) in:Accounts payable 39,480 8,526 48,006 Accrued employee benefits payable (8,788) 10,639 1,851 Net pension liabilities (6,897) (733) (7,630) Total adjustments 289,517 60,526 350,043 Net cash provided (used) byoperating activities 76,688$ 55,847$ 132,535$ STATEMENT OF CASH FLOWS - NON MAJOR PROPRIETARY FUNDS (CONTINUED)Year Ended June 30, 2015
INTERNAL SERVICE FUND STATEMENTS
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.
138 CITY OF BOZEMAN, MONTANA Vehicle MedicalMaintenance HealthShopInsuranceTotal ASSETSCurrent assetsCash and equivalents338,651$ 145,586$ 484,237$ Customer receivables, net- 44,413 44,413 Total current assets338,651 189,999 528,650 Machinery and equipment159,376 - 159,376 Vehicles83,812 - 83,812 Buildings1,388,583 - 1,388,583 Less: accumulated depreciation(451,045) - (451,045) Net property, plant, and equipment1,180,726 - 1,180,726 Deferred outflows of resourcesPension plan contributions24,019 - 24,019 Total assets and deferred outflows of resources 1,543,396$ 189,999$ 1,733,395$ LIABILITIESCurrent liabilitiesAccounts payable 66,378$ 159$ 66,537$ Compensated absences payable 47,869 - 47,869 Total current liabilities 114,247 159 114,406 Noncurrent liabilitiesNet pension liability 264,378 - 264,378 Total liabilities 378,625 159 378,784 Deferred inflows of resourcesPension deferrals68,311 - 68,311 NET POSITIONNet investment in capital assets 1,180,726 - 1,180,726 Unrestricted (84,266) 189,840 105,574 1,096,460 189,840 1,286,300 Total liabilities, deferred inflows of resources, and net position 1,543,396$ 189,999$ 1,733,395$ COMBINING STATEMENT OF NET POSITIONJune 30, 2015INTERNAL SERVICE FUNDS
139 CITY OF BOZEMAN, MONTANA VehicleMedicalMaintenance HealthShopInsuranceTotalOPERATING REVENUESCharges for services985,863$ 4,264,893$ 5,250,756$ OPERATING EXPENSESSalaries and benefits369,871 - 369,871 Materials and supplies621,719 - 621,719 Repairs and maintenance11,834 - 11,834 Utilities4,714 - 4,714 Administrative charges93,897 - 93,897 Insurance claims- 4,239,330 4,239,330 Other expenses22,986 93,565 116,551 Depreciation52,780 - 52,780 Total operating expenses1,177,801 4,332,895 5,510,696 Operating income (loss)(191,938) (68,002) (259,940) NON-OPERATING REVENUES (EXPENSES)Interest income2,917 - 2,917 Interest expense- (855) (855) Other income3,864 7,828 11,692 Intergovernmental income7,475 - 7,475 Sale of assets298 - 298 Total non-operating revenue (expenses)14,554 6,973 21,527 Change in net position(177,384) (61,029) (238,413) NET POSITION, beginning of year1,593,179 250,869 1,844,048 Restatements(319,335) - (319,335) NET POSITION, beginning of year, restated1,273,844 250,869 1,524,713 COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONINTERNAL SERVICE FUNDSYear Ended June 30, 2015
140 CITY OF BOZEMAN, MONTANA VehicleMedicalMaintenance HealthShopInsurance TotalCASH FLOWS FROM OPERATIONS:Receipts from customers985,863$ 4,236,468$ 5,222,331$ Receipts from others11,339 7,828 19,167 Operating loans from other City funds- - - Payments to suppliers(646,023) (93,406) (739,429) Payments to employees(376,827) (4,239,330) (4,616,157) Payments to Internal Service Funds and administrative fees(93,897) - (93,897) Net Cash Flows From Operating Activities(119,545) (88,440) (207,985) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:Additions to property, plant and equipment(12,557) - (12,557) Proceeds from sale of capital assets298 - 298 Interest paid on bonds, interfund loans, loans and leases- (855) (855) Net Cash Flows From Capital and Related Financing Activities(12,259) (855) (13,114) CASH FLOWS FROM INVESTING ACTIVITIES:Interest on investments2,917 - 2,917 Net Increase (Decrease) in Cash and Cash Equivalents(128,887) (89,295) (218,182) CASH AND EQUIVALENTS, beginning of year467,538 234,881 702,419 CASH AND EQUIVALENTS, end of year338,651$ 145,586$ 484,237$ (continued)INTERNAL SERVICE FUNDSCOMBINING STATEMENT OF CASH FLOWSYear Ended June 30, 2015
141 CITY OF BOZEMAN, MONTANA Vehicle MedicalMaintenance HealthRECONCILIATION OF OPERATING INCOME TO Shop Insurance TotalNET CASH FROM OPERATING ACTIVITIES:OPERATING INCOME (LOSS)(191,938)$ (68,002)$ (259,940)$ Adjustments to reconcile operating income (loss)to net cash provided (used) by operating activitiesDepreciation52,780 - 52,780 Other income11,339 7,828 19,167 Changes in assets and liabilities:(Increase) Decrease in: Customer receivables- (28,425) (28,425) Prepaid expenses- - - Increase (Decrease) in: Accounts payable15,230 159 15,389 Compensated absences payable3,709 - 3,709 Net pension(10,665) - (10,665) Total adjustments72,393 (20,438) 51,955 Net cash provided (used) by operating activities(119,545)$ (88,440)$ (207,985)$ INTERNAL SERVICE FUNDSCOMBINING STATEMENT OF CASH FLOWS (CONTINUED)Year Ended June 30, 2015
AGENCY FUND STATEMENTS
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.
142 CITY OF BOZEMAN, MONTANA AGENCY FUNDSCOMBINING STATEMENT OF FIDUCIARY NET POSITIONJune 30, 2015CMC TotalMunicipal Bozeman Site AgencyCourt Remediation FundsASSETSCash and cash equivalents343,108$ 30,920$ 374,028$ Customer receivables- - - Total assets343,108$ 30,920$ 374,028$ LIABILITIESAccounts payable343,108$ 30,920$ 374,028$ Total liabilities343,108$ 30,920$ 374,028$
143 CITY OF BOZEMAN, MONTANA Municipal Court Balance June 30, 2014 Additions Deletions Balance June 30, 2015 ASSETSCash and cash equivalents 353,326$ (10,218)$ -$ 343,108$ Customer receivables 705 (705) - Interfund receivable - - - - Total assets 354,031$ (10,923)$ -$ 343,108$ LIABILITIESAccounts payable 354,031$ (10,923)$ -$ 343,108$ Total liabilities 354,031$ (10,923)$ -$ 343,108$ AGENCY FUNDSCOMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIESYear ended June 30, 2015
144 CITY OF BOZEMAN, MONTANA CMC Bozeman Site Remediation Balance June 30, 2014 Additions Deletions Balance June 30, 2015 ASSETSCash and cash equivalents-$ 30,920$ -$ 30,920$ Customer receivables1,573 (1,573) - - Total assets1,573$ 29,347$ -$ 30,920$ LIABILITIESAccounts payable1,573$ 29,347$ -$ 30,920$ Total liabilities1,573$ 29,347$ -$ 30,920$ AGENCY FUNDSCOMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIESYear ended June 30, 2015
PART III STATISTICAL SECTION
Statistical Section This part of the City of Bozeman's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financialstatements, note disclosures and required supplementary information says about the government's overall financial health. ContentsPageFinancial TrendsThese schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time.133Revenue CapacityThese schedules contain information to help the reader assess the government's most significant local revenue source, the property tax.138Debt CapacityThese schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's abilityto issue additional debt in the future. 144Demographic and Economic InformationThese schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activitiestake place.149Operating InformationThese schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to theservices the government provides and the activities it performs.151Sources: Unless otherwise noted, the information in these schedules is derived from the City of Bozeman comprehensive annual financial reports for the relevant year.
FINANCIAL TRENDS SECTION
145 2006200720082009201020112012201320142015Governmental activitiesNet investment in capital assets22,987,166 77,734,584 80,873,924 83,707,824 84,113,904 88,844,404 88,500,437 89,081,484 89,267,076 93,409,850 Restricted5,242,903 546,916 9,254,307 7,699,511 8,082,181 20,962,038 20,797,365 27,255,029 35,621,803 41,755,126 Unrestricted25,537,959 28,481,673 23,443,921 20,871,106 25,076,908 16,049,044 15,470,543 11,521,053 12,127,224 (5,137,642) Total governmental activities53,768,028$ 106,763,173$ 113,572,152$ 112,278,441$ 117,272,993$ 125,855,486$ 124,768,345$ 127,857,566$ 137,016,103$ 130,027,334$ Business-type activitiesNet investment in capital assets28,416,015 154,227,534 177,379,168 188,077,778 189,965,189 188,180,889 192,485,459 199,394,551 205,501,357 211,419,777 Restricted13,462,443 17,099,866 18,322,089 19,775,588 9,044,280 12,660,466 11,446,886 3,098,125 3,372,927 4,977,984 Unrestricted12,899,363 16,550,235 17,547,218 11,936,119 16,069,597 12,382,018 2,809,558 10,643,337 8,723,353 6,619,399 Total business-type activities54,777,821$ 187,877,635$ 213,248,475$ 219,789,485$ 215,079,066$ 213,223,373$ 206,741,903$ 213,136,013$ 217,597,637$ 223,017,160$ Primary governmentNet investment in capital assets51,403,181 231,962,118 258,253,092 271,785,602 274,079,093 277,025,293 280,985,896 288,476,035 294,768,433 304,829,627 Restricted18,705,346 17,646,782 27,576,396 27,475,099 17,126,461 33,622,504 32,244,251 30,353,154 38,994,730 46,733,110 Unrestricted38,437,322 45,031,908 40,991,139 32,807,225 41,146,505 28,431,062 18,280,101 22,164,390 20,850,577 1,481,757 Total primary government net position108,545,849$ 294,640,808$ 326,820,627$ 332,067,926$ 332,352,059$ 339,078,859$ 331,510,248$ 340,993,579$ 354,613,740$ 353,044,494$ Fiscal YearCITY OF BOZEMAN, MONTANANET POSITION BY COMPONENTPast Ten Fiscal Years
146 2006200720082009201020112012201320142015ExpensesGovernmental Activities:General Government 5,666,069 5,733,371 6,969,181 6,629,783 6,299,831 6,122,190 8,706,665 7,373,368 6,989,830 7,417,644 Public Safety9,858,055 10,488,873 11,183,637 11,556,016 12,382,157 12,859,702 13,215,680 14,340,301 15,297,088 17,023,578 Public Service4,163,644 8,511,308 8,979,085 10,130,184 9,703,594 9,190,515 8,174,461 3,939,061 6,031,768 6,458,930 Public Welfare5,477,065 5,536,741 5,412,192 6,465,940 6,915,557 7,500,727 7,249,008 6,518,822 7,417,158 7,579,653 Interest and Fiscal Fees550,296 549,667 649,226 737,762 714,714 679,652 636,478 433,766 179,280 - Total Governmental Activities Expenses25,715,129$ 30,819,960$ 33,193,321$ 35,519,685$ 36,015,853$ 36,352,786$ 37,982,292$ 32,605,318$ 35,915,124$ 39,304,071$ Business-Type Activities:Water4,824,505 10,490,811 11,150,266 11,872,984 12,016,149 11,649,639 11,674,222 6,154,746 6,869,870 7,995,910 Waste Water4,586,959 7,376,348 8,061,412 10,293,894 9,143,077 10,128,397 10,203,165 6,121,663 8,955,592 6,940,983 Solid Waste3,547,902 3,283,135 2,574,651 2,687,590 2,561,124 2,578,109 2,584,899 2,475,680 6,958,209 3,308,441 Non-Major Activities766,454 967,077 991,712 990,229 852,561 966,454 1,098,771 Total Business-Type Activities Expenses12,959,366 21,150,294 21,786,329 25,620,922 24,687,427 25,347,857 25,452,515 15,604,650 23,750,125 19,344,105 Total Primary Government Expenses38,674,495$ 51,970,254$ 54,979,650 61,140,607 60,703,280 61,700,643 63,434,807 48,209,968 59,665,249 58,648,176 Program RevenuesGovernmental Activities: Charges for Services:General Government1,496,818 2,023,362 2,237,962 1,795,469 2,774,869 2,870,443 1,949,125 1,966,966 2,453,015 1,947,445 Public Safety1,984,642 3,712,280 3,575,133 3,500,929 2,414,893 2,684,724 2,638,811 3,219,231 3,290,573 3,211,911 Public Service9,217,198 5,361,852 4,858,444 4,790,460 3,742,856 4,454,492 4,983,420 6,655,604 7,623,178 8,784,447 Public Welfare718,162 704,790 713,342 779,841 399,280 451,960 1,102,896 1,593,212 613,322 1,097,845 Operating Grants and Contributions502,198 409,263 502,863 439,131 693,342 1,114,835 566,586 406,239 457,354 2,169,871 Capital Grants and Contributions1,380,553 18,694,375 7,153,103 8,219,791 5,307,118 7,867,093 635,758 844,935 4,762,416 2,960,051 Total Governmental Activities Program Revenues 15,299,571$ 30,905,922$ 19,040,847$ 19,525,621$ 15,332,358$ 19,443,547$ 11,876,596$ 14,686,187$ 19,199,858$ 20,171,570$ Business-Type Activities Charges for Services:Water7,434,574 8,604,498 8,222,724 7,221,378 6,986,247 7,064,571 7,921,483 9,585,939 9,842,699 9,969,058 Waste Water6,430,206 7,052,987 6,918,132 6,052,668 6,505,119 6,930,036 7,488,473 8,560,438 8,852,738 9,008,247 Solid Waste2,582,437 2,428,230 2,608,662 2,391,641 2,716,981 2,569,607 2,570,644 2,532,676 2,725,465 2,953,414 Non-Major Activities- - - 467,607 326,820 417,114 382,968 644,672 872,325 891,379 Operating Grants and Contributions- - - - - - - - 9,596 123,439 Capital Grants and Contributions:1,624,237 26,464,222 29,405,599 6,465,230 3,621,051 6,589,612 566,138 156,123 5,898,923 6,385,418 Total Business-Type Activities Program Revenues 18,071,454 44,549,937 47,155,117 22,598,524 20,156,218 23,570,940 18,929,706 21,479,848 28,201,746 29,330,955 Total Primary Government Program Revenues 33,371,025$ 75,455,859$ 66,195,964 42,124,145 35,488,576 43,014,487 30,806,302 36,166,035 47,401,604 49,502,525 CITY OF BOZEMAN, MONTANACHANGES IN NET POSITIONPast Ten Fiscal Years(accrual basis of accounting)Fiscal Year
147 2006200720082009201020112012201320142015Net (Expense) / RevenueGovernmental Activities (10,415,558) 85,962 (14,152,474) (15,994,064) (20,683,495) (16,909,239) (26,105,696) (17,919,131) (16,715,266) (19,132,501) Business-Type Activities 5,112,088 23,399,643 25,368,788 (3,022,398) (4,531,209) (1,776,917) (6,522,809) 5,875,198 4,060,921 9,986,850 Total Primary Government Net Expense (5,303,470)$ 23,485,605$ 11,216,314$ (19,016,462)$ (25,214,704)$ (18,686,156)$ (32,628,505)$ (12,043,933)$ (12,654,345)$ (9,145,651)$ General Revenues and Other Changes in Net PositionGovernmental Activities: TaxesProperty Taxes 11,137,006 11,836,748 12,070,765 14,629,230 15,501,316 16,342,053 15,716,055 16,429,959 17,561,022 20,203,718 Unrestricted Grants and Contributions 5,163,288 5,375,807 5,617,243 6,125,789 6,284,467 6,782,383 6,898,717 6,342,884 7,436,419 7,783,892 Investment Earnings 852,222 1,093,115 1,362,790 671,859 352,378 301,424 283,090 243,744 355,790 403,152 Miscellaneous 3,416,890 1,940,156 1,859,313 2,766,671 2,256,071 1,556,790 155,484 - 293,884 374,966 Sale of Capital Assets - 490,637 51,342 68,057 761,952 (8,168) 4,414 1,765 236,688 - Transfers of Capital Assets - - - (6,311,324) - - (2,088) - - - Transfers1,784,100 489,780 - (3,249,929) 521,863 517,250 (37,136) (10,000) (10,000) (410,016) Extraordinary Items- - - - - - - - - - Total Governmental Activities22,353,506$ 21,226,243$ 20,961,453$ 14,700,353$ 25,678,047$ 25,491,732$ 23,018,536$ 23,008,352$ 25,873,803$ 28,355,712$ Business-Type Activities: Unrestricted Grants and Contributions- 3,182 2,052 2,155 342,653 438,475 2,115 508,912 - - Transfers of Capital Assets- - - 6,311,324 - - 2,088 - - - ARRA Debt Forgiveness- - - - - - - - 390,700 - Transfers(1,784,100) (489,780) - 3,249,929 (521,863) (517,251) 37,136 10,000 10,000 380,347 Extraordinary Items- - - - - - - - - - Total Business-Type Activities(1,784,100) (486,598) 2,052 9,563,408 (179,210) (78,776) 41,339 518,912 400,700 380,347 Total Primary Government20,569,406$ 20,739,645$ 20,963,505 24,263,761 25,498,837 25,412,956 23,059,875 23,527,264 26,274,503 28,736,059 Change in Net PositionGovernmental Activities11,937,948 21,312,205 6,808,979 (1,293,711) 4,994,552 8,582,493 (3,087,160) 5,089,221 9,158,537 9,223,211 Business-Type Activities3,327,988 22,913,045 25,370,840 6,541,010 (4,710,419) (1,855,693) (6,481,470) 6,394,110 4,461,621 10,367,197 Total Primary Government15,265,936$ 44,225,250$ 32,179,819$ 5,247,299$ 284,133$ 6,726,800$ (9,568,630)$ 11,483,331$ 13,620,158$ 19,590,408$ Fiscal YearCITY OF BOZEMAN, MONTANACHANGES IN NET POSITIONPast Ten Fiscal Years(accrual basis of accounting)
148 2006200720082009201020112012201320142015General FundReserved5,725 3,000 3,000 63,000 - Unreserved3,173,374 4,367,538 4,516,814 5,301,397 5,119,400 Nonspendable- - - - - Restricted- - - - - Committed- - - - - Assigned5,991,388 7,062,964 7,327,375 6,420,760 6,061,965 Unassigned905,862 264,091 - 193,534 - Total general fund3,179,099 4,370,538 4,519,814 5,364,397 5,119,400 6,897,250 7,327,055 7,327,375 6,614,294 6,061,965 All Other Governmental Reserved2,164,698 2,996,832 3,045,231 2,660,918 6,597,569 Unreserved, reported in:Special revenue funds 9,776,823 13,205,328 13,723,846 12,516,240 14,916,152 Capital projects funds 6,598,235 - 2,884,553 - 1,793,287 Debt service funds- - - - - Nonspendable999,464 1,113,484 1,193,530 1,269,557 1,360,690 Restricted19,962,574 19,683,881 26,061,499 19,927,526 12,546,935 Committed3,278,422 3,463,714 851,322 3,075,505 3,088,936 Assigned58,419 - - 229,602 - Unassigned- (51,586) 456,669 (184,101) (97,173) Total all other governmental funds 18,539,756 16,202,160 19,653,630 15,177,158 23,307,008 24,298,879 24,209,493 28,563,020 24,318,089 16,899,388 Note: The City of Bozeman implemented the new standards for reporting fund balance GASB Statement 54 in fiscal year 2011CITY OF BOZEMAN, MONTANAFUND BALANCE, GOVERNMENTAL FUNDSPast Ten Fiscal Years(modified accrual basis of accounting)Fiscal Year
2006200720082009201020112012201320142015RevenuesTaxes 11,222,034 11,853,872 12,004,946 14,451,954 15,055,844 16,634,924 16,057,318 16,540,972 17,385,371 20,404,236 Special assessments1,931,261 1,866,717 1,793,813 1,633,896 1,643,500 1,866,272 1,898,007 1,752,615 2,011,944 1,578,855 Licenses and permits1,653,546 1,762,086 1,351,887 1,140,831 958,590 1,308,378 1,214,705 1,629,744 1,784,282 1,827,842 Intergovernmental7,046,039 6,115,697 9,642,918 7,102,049 7,900,176 8,299,803 7,697,637 7,586,007 8,208,770 8,562,937 Charges for service6,347,087 7,403,739 6,748,891 6,468,006 5,790,382 6,629,507 6,891,594 8,806,969 9,656,123 10,629,791 Fines and forfeitures1,461,398 1,746,213 1,644,767 1,597,236 1,518,481 1,441,383 1,364,617 1,394,652 1,411,162 1,305,166 Interest on investments848,909 1,068,802 1,360,914 671,859 352,378 300,516 281,239 239,778 329,086 370,305 loan repayment291,338 10,193 19,849 9,985 10,401 193,302 306,385 157,069 63,980 94,989 Other3,412,410 1,940,156 1,859,313 2,766,671 2,256,071 1,556,790 155,484 394,677 287,089 363,274 Total revenues34,214,022 33,767,475 36,427,298 35,842,487 35,485,823 38,230,875 35,866,986 38,502,483 41,137,807 45,137,395 ExpendituresGeneral government5,309,637 5,577,810 6,153,838 5,946,355 5,690,488 5,939,771 6,266,566 7,276,839 6,138,575 6,594,474 Public safety9,494,622 10,160,291 10,778,917 11,056,742 11,709,170 12,137,616 12,513,270 13,822,691 14,637,886 15,086,695 Public service2,276,802 3,060,672 3,020,855 2,976,711 2,702,510 3,002,021 2,738,066 2,805,612 3,498,770 3,786,283 Public welfare5,099,873 4,315,086 4,819,758 5,161,997 4,916,828 6,435,916 6,184,073 6,216,387 6,678,347 7,366,955 Other- - - - - - - 15,776 1,046,712 1,113,340 Capital outlay18,374,651 11,397,365 12,205,040 9,380,742 4,248,758 3,299,017 3,881,388 2,782,435 8,053,456 9,905,333 Debt servicePrincipal989,041 833,158 2,013,232 1,138,051 1,194,819 1,611,087 3,235,664 1,826,126 1,482,142 1,121,593 Interest & Fiscal Fees570,360 549,667 649,662 738,198 715,150 680,088 666,082 445,736 380,950 824,266 Total expenditures42,135,050 35,894,049 39,641,302 36,398,796 31,177,723 33,105,516 35,485,109 35,191,602 41,916,838 45,798,939 Excess of revenuesover (under) expenditures(7,921,028) (2,126,574) (3,214,004) (556,309) 4,308,100 5,125,359 381,877 3,310,881 (779,031) (661,544) Other Financing Sources (Uses)Proceeds from borrowing1,376,869 - - - - - - - - - Transfers in17,619,744 4,565,896 4,604,100 8,394,126 10,857,332 6,985,734 3,482,550 4,291,417 3,103,787 4,816,671 Transfers out(15,835,644) (4,076,116) (4,604,100) (11,733,378) (11,033,925) (7,255,505) (3,821,010) (4,454,505) (3,113,787) (5,197,018) Issuance of debt6,554,166 177,346 890,000 - 3,357,798 1,203,279 10,012,647 5,619,361 Premium on Bonds Issued10,896 - - - - - - - Payments to Refunded Bond Escrow Agent(3,120,000) - - - Sales of capital assets1,483 490,637 249,688 86,326 766,922 10,555 59,204 2,775 243,092 64,855 Total other financing sources (uses)3,162,452 980,417 6,814,750 (3,075,580) 1,480,329 (259,216) (41,458) 1,042,966 10,245,739 5,303,869 Extraordinary itemsNet change in fund balances(4,758,576)$ (1,146,157)$ 3,600,746$ (3,631,889)$ 5,788,429$ 4,866,143$ 340,419$ 4,353,847$ 9,466,708$ 4,642,325$ Debt service as a percentage of 6.6% 5.6% 9.7% 6.9% 7.1% 7.7% 12.3% 7.0% 5.5% 5.4%noncapital expendituresFiscal Year(modified accrual basis of accounting)Past Ten Fiscal YearsCHANGES IN FUND BALANCES, GOVERNMENTAL FUNDSCITY OF BOZEMAN, MONTANA
REVENUE CAPACITY SECTION
150 FiscalTotalTotalAssessed TaxableYearTaxableDirectTotal Value ** as a Ended Residential Commercial & OtherAssessedTaxMarket Percentage ofJune 30,PropertyIndustrial PropertyPropertyValue **RateValue *Total Market Value2006 32,515,280 22,063,940 3,483,780 58,063,000 168.26 1,758,938,187 3.301%2007 35,419,440 24,034,620 3,794,940 63,249,000 163.42 1,959,659,877 3.228%2008 38,629,360 26,212,780 4,138,860 68,981,000 154.18 2,192,163,035 3.147%2009 41,539,680 28,187,640 4,450,680 74,178,000 171.16 2,407,420,224 3.081%2010 43,842,400 29,750,200 4,697,400 78,290,000 170.19 2,655,766,251 2.948%2011 45,023,440 30,551,620 4,823,940 80,399,000 168.75 2,827,548,097 2.843%2012 45,954,720 31,183,560 4,923,720 82,062,000 166.75 2,994,740,226 2.740%2013 46,606,560 31,625,880 4,993,560 83,226,000 166.75 3,176,282,865 2.620%2014 47,956,720 32,542,060 5,138,220 85,637,000 173.08 3,386,295,608 2.529%2015 50,978,520 31,641,840 5,273,640 87,894,000 188.76 3,598,269,877 2.443%Source: Based on information provided by Gallatin County and Montana Department of RevenueNote: Property in Gallatin County is reassessed by the State Department of Revenue every six years. * Sales price of property is not public record in the State of Montana, so the Total Market Value was used instead** Includes tax-exempt propertyCITY OF BOZEMAN, MONTANAASSESSED VALUE OF TAXABLE PROPERTYPast Ten Fiscal Years
151 FiscalNet Taxable ValueYearIncremental Value(excludes Tax Taxable Value Ended TaxableFullfor All TaxIncrement Districtsfor Open Space June 30,Market ValueTaxable ValueIncrement DistrictsIncremental Values)Purposes2007 1,959,659,877 64,133,892 884,321 63,249,571 n/a *2008 2,192,163,035 70,016,605 1,035,352 68,981,253 n/a *2009 2,407,420,224 75,458,468 1,280,371 74,178,097 n/a *2010 2,655,766,251 80,850,582 2,560,601 78,289,981 n/a *2011 2,827,058,097 83,309,165 2,910,650 80,398,515 n/a *2012 2,994,740,226 85,345,227 3,282,766 82,062,461 n/a *2013 3,176,282,865 86,934,533 3,708,138 83,226,395 n/a *2014 3,386,295,608 89,650,917 4,013,561 85,637,356 85,615,328 2015 3,598,269,877 92,081,322 4,186,781 87,894,541 90,735,030 Source: Based on information provided by Gallatin County and Montana Department of RevenueNote: Property is assessed by the State Department of Revenue every six years.* No certified value available, first certification available for FY2014CITY OF BOZEMAN, MONTANACITY TAXABLE MARKET AND TAXABLE VALUESPast Nine Fiscal Years
152
153 FiscalYearEnded Base Incremental Total Base Incremental Total Base Incremental TotalJune 30,TaxableTaxableTaxableTaxableTaxableTaxableTaxableTaxableTaxable2007 1,833,875 884,321 2,718,196 - - - - - - 2008 1,858,491 931,030 2,789,521 423,054 48,790 471,844 2,886,997 55,532 2,942,529 2009 1,858,491 1,115,768 2,974,259 423,054 71,287 494,341 2,886,997 93,316 2,980,313 2010 1,328,695 1,947,249 3,275,944 423,054 104,987 528,041 2,886,997 450,625 3,337,622 2011 1,328,695 2,060,807 3,389,502 423,054 135,162 558,216 2,886,997 664,127 3,551,124 2012 1,328,695 2,251,286 3,579,981 423,054 133,197 556,251 2,886,997 840,137 3,727,134 2013 1,328,695 2,396,293 3,724,988 423,054 150,217 573,271 2,886,997 1,084,216 3,971,213 2014 1,328,695 2,586,963 3,915,658 423,054 172,608 595,662 2,886,997 1,193,297 4,080,294 2015 1,328,695 2,718,220 4,046,915 423,054 190,579 613,633 2,886,997 1,225,604 4,112,601 FiscalYearEnded Base Incremental TotalBase Incremental TotalBase Incremental TotalJune 30,TaxableTaxableTaxableTaxableTaxableTaxableTaxableTaxableTaxable2007- - - - - - 1,833,875 884,321 2,718,196 2008- - - - - - 5,168,542 1,035,352 6,203,894 2009- - - - - - 5,168,542 1,280,371 6,448,913 201012,059 57,740 69,799 - - - 4,650,805 2,560,601 7,211,406 201112,059 50,554 62,613 - - - 4,650,805 2,910,650 7,561,455 201212,059 58,146 70,205 - - - 4,650,805 3,282,766 7,933,571 201312,059 77,412 89,471 - - - 4,650,805 3,708,138 8,358,943 201412,059 60,693 72,752 417 - 417 4,651,222 4,013,561 8,664,783 201512,059 52,376 64,435 417 3 420 4,651,222 4,186,782 8,838,004 Source: Based on information provided by Gallatin County and Montana Department of RevenueNote: Property is assessed by the State Department of Revenue every six years.MANDEVILLE FARM INDUSTRIALBOZEMAN TECHNOLOGYTOTALCITY OF BOZEMAN, MONTANATAX INCREMENT DISTRICT TAXABLE VALUATION DETAILPast Nine Fiscal YearsBOZEMAN DOWNTOWNNORTHEAST URBAN RENEWAL DISTRICTNORTH 7TH CORRIDOR
154 Fiscal TaxableCity Taxable Value The District's Year Market Value Taxable Value of Incremental(Excluding ALL taxIncremental TaxableEnded of Property in Property in the Taxableincrement districtValue as Percentage ofJune 30,the DistrictDistrictValuevaluations)City's Taxable Value200788,480,413 2,718,196 884,321 63,249,571 1.40%200894,996,536 2,789,521 931,030 68,981,253 1.35%200998,234,423 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%Source: Based on information provided by Gallatin County and Montana Department of RevenueNote: Property is assessed by the State Department of Revenue every six years.Downtown Bozeman Improvement DistrictCITY OF BOZEMAN, MONTANADOWNTOWN BOZEMAN IMPROVEMENT DISTRICT & COMPARISON TO CITY TAXABLE VALUEPast Nine Fiscal Years
155 Taxing Entity2008 2009 2010 2011 2012 2013 2014 2015Statewide School Equalization40.00 40.00 40.00 40.00 40.00 40.00 40.00 40.00 Gallatin County Operating and Bond 79.50 79.78 85.19 89.94 88.69 87.40 88.38 89.55 Open Space Bond4.17 4.63 5.81 6.14 5.99 4.89 4.90 4.95 County-Wide School97.05 100.26 94.02 95.74 95.61 96.47 101.28 99.94 Bozeman High School District65.34 71.40 69.05 75.34 73.48 71.81 73.16 72.97 Bozeman Elementary School District 118.51 141.13 130.49 121.55 123.38 131.45 145.25 143.70 City of Bozeman154.18 171.16 170.19 168.75 166.75 166.75 173.08 188.76 TOTAL558.75 608.36 594.75 597.46 593.90 598.77 626.05 639.87 Exempt from Tax IncrementUniversity Millage6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 Gallatin Conservation District1.06 1.04 1.01 0.99 1.00 0.98 0.97 0.95 County-Wide Planning2.43 2.58 2.50 2.40 2.40 2.39 2.39 2.35 Source: Based on information provided by Gallatin County and Montana Department of RevenueNote: Property is assessed by the State Department of Revenue every six years.CITY OF BOZEMAN, MONTANAPROPERTY TAX LEVIES IN THE DOWNTOWN BOZEMAN IMPROVEMENT DISTRICTPast Eight Fiscal YearsFiscal Year
156 FiscalGeneralTotalYearObligation DirectBozemanEnded BasicDebtTaxSchoolGallatinState ofJune 30,RateServiceRateDistrictCountyMontana2006155.89 12.37 168.26 265.55 196.74 46.00 2007152.07 11.35 163.42 182.74 197.36 46.00 2008142.98 11.20 154.18 183.85 205.40 46.00 2009160.59 10.57 171.16 212.53 210.14 46.00 2010160.18 10.01 170.19 199.54 210.25 46.00 2011158.96 9.79 168.75 196.89 217.21 46.00 2012157.19 9.56 166.75 196.86 215.77 46.00 2013158.38 8.37 166.75 203.26 215.10 46.00 2014164.83 8.25 173.08 218.41 221.00 46.00 2015177.52 11.24 188.76 216.67 215.78 46.00 Source: Based on information provided by Gallatin County and Department of RevenueCITY OF BOZEMAN, MONTANADIRECT AND OVERLAPPING PROPERTY TAX RATESPast Ten Fiscal Years(rate per $1,000 of assessed value)
157 PercentagePercentageof Total Cityof Total CityTaxableTaxableTotalTaxableAssessedAssessedAssessedAssessedTaxpayerValueRankValueValueRankValueNorthwestern Energy - Transmission & Distribution 3,830,123 14.36%3,407,867 15.87%Centurylink, Inc. (Qwest)733,061 20.83%1,301,414 22.24%Bresnan Communications596,481 30.68%Verizon Wireless460,115 60.52%Harry Daum - Gallatin Mall496,708 40.57%516,660 30.89%Stone Ridge Partners LLC472,006 50.54%J & D Family Limited Partnership355,492 90.40%Bridger Peaks Holding LLC362,555 70.41%329,112 50.57%First Security Bank362,097 80.41%0.00%George E. Westlake327,461 100.37%Wal-Mart Stores Inc392,693 40.68%Costco Wholesale281,944 60.49%Bozeman Deaconess Foundation277,352 70.48%Machinery Power & Equipment Company252,073 80.43%POB Gallatin LP224,093 90.39%Highgate Bozeman LLC223,186 100.38%Total7,996,099$ 9.10%7,206,394$ 12.41%Total City Taxable Assessed Value87,894,000$ 58,063,000$ Source: Gallatin County Treasurer20152006CITY OF BOZEMAN, MONTANAPRINCIPAL PROPERTY TAX PAYERSCurrent Year and Ten Years Ago
158
159 PercentagePercentageof Total Cityof Total CityTotalTaxableTaxableTaxableAssessedAssessedAssessedAssessedTaxpayerBusinessValueRankValueValueRankValueFirst Security BankBank301,257 17.44%288,194 17.36%Moose Point LPCommercial Property Developer128,407 23.17%127,174 23.25%F&H, LLCProperty Investor/Developer124,572 33.08%121,512 33.10%M & J Cowdrey LLCProperty Investor/Developer114,091 42.82%108,799 52.78%777 BuildingMulti Tennant Office Retail Building111,161 52.75%113,093 42.89%Atlantic Financial Group Ltd.Bank88,937 62.20%88,769 62.27%Downtowner Group LLCBusiness Support Services88,531 72.19%83,096 72.12%American Bank of MT Wells Fargo Bank Bank87,555 82.16%82,490 82.11%Callender Street LLPDesign-Construction Oversight72,769 91.80%69,106 91.76%Martel Plaza Ltd.Multi Story Office Building66,691 101.65%65,881 101.68%Total1,183,971$ 29.26%1,148,114$ 29.32%Total Downtown BID Taxable Assessed Value4,046,915$ 3,915,658$ Source: Gallatin County TreasurerCITY OF BOZEMAN, MONTANAPRINCIPAL PROPERTY TAX PAYERS IN DOWNTOWN BOZEMAN IMPROVEMENT DISTRICTCurrent Year and Prior Year20142015
160 FiscalYear Taxes Levied CollectionsEnded for the Percentage in Subsequent PercentageJune 30,Fiscal YearAmountof LevyYearsAmountof Levy20069,769,893 9,490,225 97.14%203,827 9,694,052 99.22%2007 10,336,467 10,227,386 98.94%106,611 10,333,998 99.98%2008 10,635,491 10,324,653 97.08%239,140 10,563,793 99.33%2009 12,696,306 12,493,145 98.40%149,497 12,642,642 99.58%2010 13,324,175 12,415,922 93.18%887,241 13,303,163 99.84%2011 13,567,611 13,001,537 95.83%492,141 13,493,678 99.46%2012 13,683,839 13,108,003 95.79%238,749 13,346,752 97.54%2013 13,878,293 13,633,347 98.24%61,554 13,694,901 98.68%2014 14,821,724 14,482,502 97.71%- 14,482,502 97.71%2015 16,590,871 15,795,913 95.21%155,126 15,951,039 96.14%Source: Gallatin CountyCity Manager's Final Adopted BudgetCollected within the Fiscal Year of the LevyTotal Collections to DateCITY OF BOZEMAN, MONTANAPROPERTY TAX LEVIES AND COLLECTIONSPast Ten Fiscal Years
161 2006200720082009201020112012201320142015Type of CustomerResidential 1,318,837 1,437,114 1,379,115 1,516,359 1,224,164 1,181,195 1,323,816 1,513,986 1,433,833 1,385,140 Government 27,640 62,913 49,623 66,253 51,168 48,228 49,349 59,589 52,448 53,165 MSU 295,121 298,352 260,232 254,891 228,789 227,019 235,965 233,484 213,698 210,107 Commercial 711,878 659,831 626,846 670,961 571,223 568,474 602,352 638,337 607,444 599,193 Total 2,353,476 2,458,209 2,315,816 2,508,464 2,075,343 2,024,916 2,211,481 2,445,396 2,307,423 2,247,605Total direct rate 2,055.72$ 2,190.03$ 2,478.36$ 2,495.43$ 2,679.44$ 2,787.06$ 2,887.40$ 2,955.66$ 3,053.40$ 3,105.14$ per 1,000 HCFSource: City of Bozeman Finance DepartmentCITY OF BOZEMAN, MONTANAWATER SOLD BY TYPE OF CUSTOMERPast Ten Fiscal Years(in hundreds of cubic feet "HCF")Fiscal Year
FiscalYear Monthly Rate per Monthly Rate perEnded Base 1,000 Base 1,000June 30,RateGallonsRateGallons200611.46$ 18.53$ 9.88$ 16.30$ 200712.60$ 19.74$ 10.87$ 18.00$ 200812.60$ 19.74$ 11.17$ 18.50$ 200912.60$ 19.74$ 12.13$ 20.10$ 201013.00$ 20.37$ 13.37$ 22.15$ 201113.42$ 21.02$ 14.73$ 24.41$ 201214.02$ 21.96$ 15.61$ 25.87$ 201314.65$ 22.95$ 16.55$ 27.42$ 201414.65$ 22.95$ 17.56$ 29.10$ 201514.65$ 22.95$ 17.56$ 29.10$ * For Residential Customers, using 5/8 inch meter size.Sources: City of Bozeman, Montana Commission Resolution 3804City of Bozeman, Montana Commission Resolution 3805City of Bozeman, Montana Commission Resolution 3929City of Bozeman, Montana Commission Resolution 3930City of Bozeman, Montana Commission Resolution 4042City of Bozeman, Montana Commission Resolution 4043City of Bozeman, Montana Commission Resolution 4184City of Bozeman, Montana Commission Resolution 4185City of Bozeman, Montana Commission Resolution 4327City of Bozeman, Montana Commission Resolution 4328City of Bozeman, Montana Commission Resolution 4454WaterSewerCITY OF BOZEMAN, MONTANAWATER AND SEWER RATESPast Ten Fiscal Years
DEBT CAPACITY
161 FiscalYear General Special Tax Increment Water Wastewater Total PercentageEnded Obligation Notes Assessment Financing Revenue State of MT Primary of Personal PerJune 30,BondsPayableBondsBondsBondsRLF LoansGovernmentIncomeCapita2006 6,325,000 159,286 7,004,769 - 700,412 - 14,189,467 2.42% 426.37$ 2007 5,840,000 79,198 6,736,700 - 226,460 - 12,882,358 2.00% 369.84$ 2008 5,340,000 - 5,601,000 6,000,000 143,729 - 17,084,729 2.43% 475.32$ 2009 4,815,000 - 5,211,000 5,850,000 56,615 - 15,932,615 1.97% 431.39$ 2010 4,275,000 851,071 4,819,000 5,695,000 28,992 7,902,127 23,571,191 2.72% 632.27$ 2011 3,710,000 509,705 4,351,500 5,535,000 - 24,017,080 38,123,285 4.65% 1,021.69$ 2012 3,080,000 306,727 2,269,500 5,370,000 182,577 23,853,427 35,062,231 4.36% 919.88$ 2013 2,445,000 1,198,823 1,659,500 5,195,000 13,751,878 22,501,119 46,751,320 5.54% 1,206.39$ 2014 11,685,000 1,086,396 1,185,500 5,015,000 18,140,000 21,025,565 58,137,461 6.82% 1,496.07$ 2015 16,320,000 963,274 890,500 4,825,000 17,365,000 19,972,565 60,336,339 7.11% 1,448.30$ Sources: City Manager's Final Adopted BudgetCity of Bozeman Finance DepartmentBusiness-Type ActivitiesGovernmental ActivitiesCITY OF BOZEMAN, MONTANARATIO OF OUTSTANDING DEBT BY TYPEPast Ten Fiscal Years
162 Percentage ofFiscal Actual Year General Tax Increment TaxableEnded Obligation Financing DistrictValue of PerJune 30, BondsBondsTotalProperty Capita20066,325,000 - 13,329,769 23.0% 400.53$ 20075,840,000 - 12,576,700 19.9% 361.07$ 20085,340,000 6,000,000 11,340,000 16.4% 315.49$ 20094,815,000 5,850,000 10,665,000 14.4% 288.77$ 20104,275,000 5,695,000 9,970,000 12.7% 267.44$ 20113,710,000 5,535,000 9,245,000 11.5% 247.76$ 20123,080,000 5,370,000 8,450,000 10.3% 221.69$ 20132,445,000 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$ Source: City Manager's Final Adopted BudgetGeneral Bonded Debt OutstandingCITY OF BOZEMAN, MONTANARATIOS OF GENERAL BONDED DEBT OUTSTANDINGPast Ten Fiscal Years
163 Debt Estimated Outstanding Estimated Share ofas of Percentage Overlapping June 30, 2015 Applicable (1) DebtOverlapping Bonded IndebtednessGallatin County:Various issues outstanding 53,306,387$ 36% 19,099,358$ Bozeman School District #7:Various issues outstanding 75,873,367 31% 23,438,599$ Subtotal overlapping debt 42,537,957$ City of Bozeman, MontanaDirect Debt23,294,686 100%23,294,686$ Total Direct & Overlapping Debt65,832,643 Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. Thisschedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents andbusinesses 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 implythat 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 percentageswere estimated by determining the portion of another governmental unit's taxable assessed value that is within the City'sboundaries and dividing it by each entity's total taxable assessed value. Sources:City of Bozeman Finance DepartmentGallatin County Assessor's OfficeBozeman School District #7CITY OF BOZEMAN, MONTANADIRECT & OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
164 2006200720082009201020112012201320142015Debt limit*29,591,000 34,755,653 54,804,000 60,185,000 66,375,000 70,688,000 74,875,000 76,450,000 84,657,000 84,500,000 Total net debt applicable to limit (6,568,569) (5,595,558) (5,423,128) (4,842,905) (4,295,240)$ (3,638,239)$ (3,386,727)$ (3,643,823)$ (12,771,396)$ (15,356,726)$ Legal debt margin23,022,431$ 29,160,095$ 49,380,872$ 55,342,095$ 62,079,760$ 67,049,761$ 71,488,273$ 72,806,177$ 71,885,604$ 69,143,274$ Total net debt applicable to the limit 22.2% 16.1% 9.9% 8.0% 6.5% 5.1% 4.5% 4.8% 15.1% 18.2% as a percentage of debt limit*2.5% of total market value of taxable property of $3.38 BillionSource: City Manager's Final Adopted BudgetFiscal YearCITY OF BOZEMAN, MONTANALEGAL DEBT MARGIN INFORMATIONPast Ten Fiscal Years
165 FiscalYear UtilityLess:SpecialEnded Service OperatingAssessmentJune 30,Charges Expenses Principal Interest CoverageCollections Principal Interest Coverage- 20065,401,069 (2,866,140) (450,220) (45,317) 2,039,392 1,472,058 (437,700) (297,876) 736,482 20076,124,533 (3,114,053) (473,952) (23,391) 2,513,137 1,428,084 (268,069) (309,119) 850,896 20086,163,883 (3,769,941) (82,731) (10,231) 2,300,981 1,178,846 (1,135,700) (278,393) (235,247) 20095,938,745 (3,770,800) (87,009) (5,978) 2,074,958 1,022,641 (390,000) (241,395) 391,246 20105,860,144 (3,950,566) (27,622) (2,440) 1,879,516 989,977 (392,000) (223,763) 374,214 20116,013,211 (3,869,048) (28,992) (1,070) 2,114,101 1,134,049 (467,500) (211,204) 455,345 20126,814,990 (4,063,529) (159,000) (6,405) 2,586,056 858,699 (2,082,000) (192,320) (1,415,621) 20137,806,922 (4,364,506) (502,000) (163,250) 2,777,166 820,090 (650,975) (103,198) 65,917 20147,871,386 (4,405,464) (751,000) (429,438) 2,285,484 1,054,483 (474,000) (73,760) 506,723 20157,748,913 (4,973,926) (775,000) (538,425) 1,461,562 586,116 (295,000) (50,070) 241,046 FiscalYear UtilityLess:Ended Service OperatingJune 30,Charges Expenses Principal Interest Coverage2006 3,839,157 (2,675,004) - - 1,164,153 20074,262,052 (2,792,274) - - 1,469,778 20084,739,702 (2,981,164) - - 1,758,538 20094,905,772 (4,843,180) - - 62,592 20105,389,070 (3,468,705) (166,300) (69,470) 1,684,594 20115,939,996 (4,183,596) (606,000) (494,298) 656,102 20126,385,404 (3,784,420) (883,000) (857,842) 860,141 20136,916,226 (3,947,821) (1,465,227) (847,778) 655,400 20147,204,486 (5,895,751) (1,084,854) (660,771) (436,891) 20157,631,117 (3,914,454) (1,053,000) (632,268) 2,031,395 CITY OF BOZEMAN, MONTANAPLEDGED-REVENUE COVERAGEPast Ten Fiscal YearsWaste Water Revenue BondsDebt ServiceWater Revenue BondsSpecial Assessment BondsDebt ServiceDebt Service
166 FiscalYear Revenues Annual Ended Available Debt ServiceJune 30,for Debt Service Payment Coverage2008 585,839 416,223 1.41 2009742,192 425,288 1.75 20101,209,378 424,288 2.85 20111,135,166 423,088 2.68 20121,266,104 421,688 3.00 20131,497,572 425,088 3.52 20141,644,960 423,088 3.89 20151,853,725 425,888 4.35 DEBT SERVICE REQUIREMENTS AND COVERAGE FOR DOWNTOWN TAX INCREMENT DISTRICTPast Eight Fiscal YearsCITY OF BOZEMAN, MONTANA
167 BondOriginal Maturity BondsCash Assessments DelinquentIssueAmount Date Outstanding Balance Outstanding AssessmentsSID 6691,160,000$ 7/1/2020 255,000 65,975 250,503 5,544 SID 6831,372,000 7/1/2024 280,000 13,809 515,402 6,967 SID 6841,376,869 7/1/2025 70,000 56,903 568,709 1,321 TOTAL3,908,869$ 605,000$ 136,687$ 1,334,614$ 13,832$ As of June 30, 2015CITY OF BOZEMAN, MONTANASUMMARY OF OUTSTANDING SID'sCURRENT FISCAL YEAR
168 FiscalYearEnded Revolving Fund PrincipalJune 30,Cash Balance Amount of Bonds2007 569,446$ 6,271,200$ 2008 629,510 5,155,000 2009 647,235 4,785,000 2010 1,228,197 4,415,000 2011 3,160,685 3,970,000 2012 3,190,244 1,910,000 2013 2,443,769 1,468,529 2014 2,474,971 1,006,726 2015 2,948,129 1,009,724 CITY OF BOZEMAN, MONTANAREVOLVING FUND BALANCE AND BOND SECURED THEREBYPast Nine Fiscal Years
169 Fiscal AssessmentTotal AnnualYearBillingCollections20071,040,977$ 1,428,085 20081,074,991 1,178,846 2009951,885 1,022,641 2010915,398 989,977 2011871,180 1,134,049 2012750,418 858,699 2013741,886 820,090 2014676,613 1,054,484 2015538,697 586,116 CITY OF BOZEMAN, MONTANASPECIAL IMPROVEMENT DISTRICT ASSESSMENT BILLING AND COLLECTIONSPast Nine Fiscal Years
DEMOGRAPHIC AND ECONOMIC INFORMATION
170 FiscalEstimatedPerResidentsYearAnnual %Capita Median with Bachelors K-12EndedChange in Personal Personal Age Degree or School UnemploymentJune 30,Population Population IncomeIncome (years) Higher Schooling Enrollment Rate200633,280 4.1% 585,880,500$ 20,553$ 26.349.5%5,332 2.5%200734,832 4.5% 643,862,953$ 21,581$ 26.549.5%5,356 2.2%200835,944 3.1% 703,013,220$ 23,387$ 27.253.7%5,432 2.7%200936,933 2.7% 808,624,803$ 26,313$ 27.052.7%5,463 4.6%201037,280 0.9% 866,396,960$ 25,909$ 26.050.6%5,509 5.8%201137,314 0.1% 819,014,169$ 25,611$ 27.250.1%5,679 5.6%201238,116 2.1% 803,487,262$ 24,709$ 27.253.9%5,810 5.0%201338,753 1.6% 843,399,480$ 25,608$ 27.155.4%5,994 4.5%201438,860 0.3% 852,165,042$ 26,427$ 26.853.3%6,216 3.6%201541,660 6.7% 849,198,410$ 26,335$ 27.353.6%6,294 2.8%CITY OF BOZEMAN, MONTANADEMOGRAPHIC AND ECONOMIC STATISTICSPast Ten Fiscal Years
171 PrivateEmployerPrivateEmployerEmployersClassEmployersClassBy ClassSizeBy ClassSizeBozeman Deaconess Hospital9Bozeman Deaconess Hospital8Oracle America7Capital Opportunities (Home Care Services)7Wal Mart7Wal-Mart7Albertson's6Albertsons6Bridger Bowl6Bozeman Daily Chronicle6Community Food Co-Op6Community Food Coop6Costco6Costco6Federal Premium Ammunition6First Security Bank6First Student6Grantree Inn6Kenyon Noble Lumber & Hardware6Kenyon Noble Lumber & Hardware6Korman Marketing Group6Laidlaw Transit6Martel Construction6Martel Construction6McDonalds6Murdoch's Ranch & Home Supply6Murdoch's Ranch & Home Supply6Ressler Motor Co6Ressler Motor6Schlauch Bottcher Construction6Rosauers Super Markets6Simkins Hallin Lumber6Simkins Hallin Lumber & Hardware6Town & Country Foods6Town Pump Convenience Stores6Zoot Enterprises6PublicEmployerPublicEmployerEmployersClassEmployersClassBy ClassSizeBy ClassSizeMontana State University9Montana State University9School District #79Bozeman School District8Belgrade School District8City of Bozeman7City of Bozeman7Gallatin County7Department of Agriculture7Gallatin County7Class 6 - 100 to 249 EmployeesClass 7 - 250 to 499 EmployeesClass 8 - 500 to 999 EmployeesClass 9 - 1,000+ EmployeesSource: Montana Department of Labor & Industry2015 2006CITY OF BOZEMAN, MONTANAPRINCIPAL EMPLOYERS FOR GALLATIN COUNTYCurrent Year and Ten Years AgoJune June
OPERATING INFORMATION
172 2010 2011 2012 2013 2014 2015General GovernmentCity Commission 2.10 2.10 2.10 2.10 2.10 2.10 City Manager * 11.50 11.50 8.00 8.00 5.00 5.00 Municipal Court 7.50 8.50 8.50 8.50 8.50 9.00 City Attorney 11.50 7.00 7.00 7.00 7.00 9.00 Administrative Services - - - - 19.00 21.00 Finance * 8.75 8.75 10.00 11.00 - - Information Technology *5.88 5.88 6.00 6.00 - - Community Development12.20 12.20 8.75 9.00 8.00 12.60 Building Maintenance 3.55 3.55 3.00 3.50 3.50 3.50 Total General Government62.98 59.48 53.35 55.10 53.10 62.20 Public SafetyPolice Department 71.75 71.75 71.25 72.75 72.75 72.25 Fire Department41.75 41.75 41.75 43.75 45.75 45.00 Building Inspection 9.55 10.55 10.55 10.55 12.55 14.00 Parking 4.75 4.75 4.50 4.50 5.50 6.00 Total Public Safety127.80 128.80 128.05 131.55 136.55 137.25 Public ServicesPublic Services Administration / Engineering 8.15 8.15 10.00 10.00 12.00 6.58 Streets17.62 17.62 17.62 17.62 18.62 16.20 Storm Water- - - 1.00 1.00 4.00 Water Treatment Plant 9.27 9.27 9.77 9.77 11.27 12.75 Water Operations15.62 15.62 15.62 15.62 15.62 17.33 Wastewater Operations10.25 10.25 10.25 10.25 11.25 13.09 Wastewater Plant15.87 15.87 15.87 16.37 17.47 15.50 Solid Waste Collection/Recycling 15.74 15.74 15.74 15.74 15.74 15.90 Solid Waste Disposal- - - - - - Vehicle Maintenance5.00 5.00 5.00 5.00 5.00 5.00 Total Public Services97.52 97.52 99.87 101.37 107.97 106.35 Public WelfareCemetery (numerous short terms) 5.75 5.75 3.33 3.33 3.33 4.90 Parks (numerous short terms) 13.45 13.45 11.77 11.77 11.77 15.40 Forestry 4.60 4.60 4.60 4.60 4.60 5.95 Library21.66 21.66 21.66 21.56 23.11 23.41 Recreation (numerous short terms)15.00 15.00 15.83 15.83 16.83 16.83 Community Services2.00 2.00 2.00 2.00 4.00 3.50 Total Public Welfare62.46 62.46 59.19 59.09 63.64 69.99 Total of all Funds350.76 348.26 340.46 347.11 361.26 375.79 Source: City Manager's Final Adopted Budget* Administrative Services was created in fiscal year 2014 and consists of Finance, Information Technology and Human ResourcesCITY OF BOZEMAN, MONTANAFULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAMPast Ten Fiscal YearsFiscal Year Ended June 30,
173 2006200720082009 2010 2011 2012 2013 2014 2015FinanceSID Statements11,086 11,086 14,919 15,000 15,816 16,000 16,000 16,200 16,700 16,500 Utility Bills111,463 112,775 134,460 134,000 135,000 135,000 135,000 138,000 141,000 241,000 Accounts Payable Checks Processed13,211 11,387 13,301 12,218 12,076 12,122 11,962 12,519 11,989 12,722 Business Licenses3,577 3,711 3,825 3,836 3,789 3,986 3,886 3,831 3,861 4,098 PoliceNumber of Officers47 45 51 52 55 56 60 63 63 61 Calls for Service39,790 40,758 42,728 45,145 43,385 45,131 45,358 47,361 47,854 48,300 Arrests2,299 2,524 2,581 2,853 2,338 2,325 2,152 2,096 3,464 3,000 Traffic Citation Issued **n/an/an/an/a 3,311 4,504 5,234 5,205 5,397 4,800 Traffic Stops **n/an/an/an/a 10,702 10,036 9,358 10,629 10,754 9,000 Traffic Crashes1,666 1,780 1,519 1,302 1,194 1,486 1,264 1,320 1,750 1,900 FireFires, Hazardous Conditions & Rupture/Explosions230 242 230 248 248 278 278 309 340 395 Emergency Medical Services/Rescue1,373 1,454 1,658 1,441 1,441 1,483 1,483 1,941 2,051 2,200 Service Calls96 118 148 145 145 187 187 145 212 230 Building InspectionCommercial Permits: Number860 1,015 972 1,047 961 1,535 1,420 1,305 1,238 1,166 Value (Millions)90.62 140.95 151.50 140.50 70.41 106.90 95.03 69.64 90.27 105.26 Residential Permits: Number2,067 1,775 1,710 1,571 1,543 3,613 2,421 2,338 2,650 2,783 Value (Millions)173.96 181.89 141.22 79.67 67.02 72.57 89.74 146.32 191.72 225.94 WaterNew Service Main Taps7679153916320415055Meter Replacement/Repair844663878368 650 467 279 113 200 250Water Main Breaks/Repairs5856416466WastewaterMain Line Flushing (in Miles)101951109081 78.2690479090New Infrastructure TV (in Miles)10194.811112.61218New Service Taps29372215544172530Solid Waste Collection & RecyclingResidential Accounts6,310 6,608 6,779 6,957 7,130 7,092 7,240 7,470 7,869 8,369 Commercial Customers211 239 254 262 268 271 281 265 258 265 Recycling Customers- - 484 881 965 970 1,000 1,135 1,601 2,100 Annual Tonnage Collected: Collections Program11,171 11,953 11,879 10,397 10,657 10,920 11,248 10,695 10,960 11,457 Vehicle MaintenanceWork Orders Processed1,068 1,070 974 870 1,005 1,435 1,473 1,646 1,717 1,549 Gallons of Oil Disposed11,384 10,000 9,350 9,350 9,175 9,445 8,751 8,640 8,740 8,969 ParksPark Reservations 340 340 360 221 280 319 320 350 400 400 Sources: City Manager's Final Adopted Budget City of Bozeman Finance Department** Not used as an operating indicator until 2010CITY OF BOZEMAN, MONTANAOPERATING INDICATORS BY FUNCTION/PROGRAMPast Ten Fiscal YearsFiscal Year Ended June 30,
2006 2007 20082013 2014 2015PoliceStations1 1 1 1 1 1 Patrol Units (Cars)16 17 18 20 20 22 Patrol Units (Motorcycles)4 4 4 4 4 2 FireStations2 2 2 3 3 3 Fire Trucks5 5 5 6 7 7 StreetsStreet & Alley Mileage196.773 229.905 234.736 255.769 259.133 262.058Lane Miles Painted35.0 40.0 42.0 37.0 43.0 44.0 Number of Signs Installed/Repaired756 652 652 669700700WaterWater Mains (Miles)230.15 247.23 250.16 264.61 267.28 268.57Fire Hydrants2,045 2,206 2,238 2,388 2,406 2,419 WastewaterSanitary Sewers (Miles)179.45 198.17 200.01 210.22 211.51 212.53Number of Manholes3,571 3,888 3,946 4,154 4,185 4,219 Solid WasteNumber of Collection Vehicles687888Number of Roll-off Trucks123444Number of Recycling Trucks000122Number of Compost Collection Trucks222222ParksFormal Turf Acres258 258 265 125125126Natural Parkland Acres110110115220220220Miles of Trails45 45 50 556163Sources: City Manager's Final Adopted Budget City of Bozeman Finance Department City of Bozeman GIS Department City of Bozeman Police DepartmentCITY OF BOZEMAN, MONTANACAPITAL ASSET STATISTICS BY FUNCTION/PROGRAMPast Ten Fiscal YearsFiscal Year Ended June 30,
PART IV REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS AND SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AS REQUIRED BY U.S. OFFICE OF MANAGEMENT AND BUDGET CIRCULAR A-133, AUDITS OF STATE AND LOCAL GOVERNMENTS AND NON-PROFIT ORGANIZATIONS
175 CITY OF BOZEMAN, MONTANA Grant GrantFederalGrant Balance Revenue Revenue Total Awards BalanceFEDERAL GRANTORCFDA AwardJune 30,2014 Received Accrued Revenue ExpendedJune 30,2015U.S. Department of JusticeRural Domestic Violence Assistance Program (OVW 2011-WR-AX-0014) 16.589 40,024$ -$ 40,024$ -$ 40,024$ 40,024$ -$ Rural Domestic Violence Assistance Program (OVW 2014-WR-AX-0003) 16.589 122,137 - 77,818 44,319 122,137 122,137 - Passed through Gallatin County:Missouri River Drug Task Force16.738 69,422 - 69,422 - 69,422 69,422 - Bullet-Proof Vest Partnership16.607 5,978 - 5,978 - 5,978 5,978 - JAG: SRT Helmets, Rifle & Scope 2014-DJ-BX-067616.738 19,315 - - 19,315 19,315 19,315 - U.S. Department of Homeland Security, FEMA Federal Emergency Management AgencyPassed through the Montana Department of Military AffairsBearcat EMW-2013-SS-00064 Police HS Response Vehicle97.067 4,000 - 4,000 - 4,000 4,000 - U.S. Department of TransportationPassed through MT Dept. of Transportation: Traffic SafetySTEP-Bozeman Occupant Protection: 00-03-09-02 20.600 6,267 - 3,726 2,541 6,267 6,267 - Passed through MT Dept. of Transportation:CTEP Community Transportation Enhancement Projects STPE 1299(30) - Citywide Sidewalks20.205 431,167 - 431,167 - 431,167 431,167 - U.S. Department of InteriorPassed through the Historical Society:- Historic Preservation 15.904 5,225 - 5,225 - 5,225 5,225 - U.S. Department of AgriculturePassed through MT Department of Resources & ConservationCooperative Forestry Assistance 10.664 19,200 - 19,200 - 19,200 19,200 - U.S. Environmental Protection AgencyPassed through MT Department of Evironmental QualityProtecting Bozeman's Waters: Stormwater Education and Outreach 66.460 4,720 - 3,720 1,000 4,720 4,720 - U.S. Department of CommerceLocal Technical Assistance, Feasibility Study for a Hybrid Community Fiber Optic Network in Bozeman, MT. 11.303 29,254 - 29,254 - 29,254 29,254 - Total Federal Financial Assistance756,709$ -$ 689,534$ 67,175$ 756,709$ 756,709$ -$ SCHEDULE OF EXPENDITURES FEDERAL AWARDSFOR THE YEAR ENDED JUNE 30, 2015
176 CITY OF BOZEMAN, MONTANA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS JUNE 30, 2015 NOTE 1. REPORTING ENTITY The City of Bozeman’s reporting entity is defined in Note 1 of the City’s financial statements. Expenditures of federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included in the accompanying schedule. NOTE 2. BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards is presented using the modified accrual basis of accounting, which is described in Note 1 of the City’s financial statements. NOTE 3. NON-CASH TRANSACTIONS The City had no non-cash transactions in the accompanying schedule of expenditures of federal awards. NOTE 4. SUBRECIPIENTS The City has passed through Federal funds to subrecipients under the Rural Domestic Violence Assistance Program, as follows: The Help Center (SACC) 28,437$ Haven 36,221 Guardian Ad Litem 5,113 Gallatin County 17,007 86,778$
177 ANDERSON ZURMUEHLEN & CO., P.C. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS 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 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, 2015, which collectively comprise the City’s basic financial statements and have issued our report thereon, dated December 22, 2015. 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 preceding paragraph 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. 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.
178 ANDERSON ZURMUEHLEN & CO., P.C. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS City of Bozeman Response to Findings City of Bozeman’s response to the finding identified in our audit are described in the accompanying schedule. City of Bozeman’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. 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 December 22, 2015
179 ANDERSON ZURMUEHLEN & CO., P.C. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS 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 • MSI GLOBAL ALLIANCE INDEPENDENT MEMBER FIRM INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 Honorable Mayor, City Commissioners, and City Manager of the City of Bozeman, Montana Report on Compliance on Major Federal Program We have audited City of Bozeman’s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of City of Bozeman’s major federal programs for the year ended June 30, 2015. City of Bozeman’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of City of Bozeman’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements (referred to above), which could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about City of Bozeman’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of City of Bozeman’s compliance. Opinion on Each Major Federal Program In our opinion, the City of Bozeman complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2015.
180 ANDERSON ZURMUEHLEN & CO., P.C. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS Report on Internal Control Over Compliance Management of the City of Bozeman is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City of Bozeman’s internal control over compliance with the types of requirements that could have a direct and material effect on the major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of City of Bozeman’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Bozeman, Montana December 22, 2015
181 CITY OF BOZEMAN, MONTANA SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2015 Section I - Summary of Auditor’s Results Financial Statements Type of auditor’s report issued: Unmodified Internal control over financial reporting: Material weakness identified? No Significant deficiencies identified not considered to be material weaknesses? None reported Noncompliance material to financial statements noted? No Federal Awards Internal control over major programs: Material weakness identified? No Significant deficiencies identified not considered to be material weaknesses? None reported Type of auditor’s report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section .510(a)? No
182 CITY OF BOZEMAN, MONTANA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) Year Ended June 30, 2015 Identification of major programs: 20.205 CTEP Community Transportation Enhancement Projects Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee? No Section II – Financial Statement Findings None. Section III – Federal Award Finding and Questioned Costs None. Status of prior year findings: 2014-01 Budgetary Amendments Status: Implemented 2014-02 Federal Funding Accountability and Transparency Act Reporting –Rural Domestic Violence Assistance Program – CFDA 16.589 Status: Implemented 2014-03 Time and Effort Documentation – Rural Domestic Violence Assistance Program – CFDA 16.589 Status: Implemented
- 1 - 1019 E MAIN ST • SUITE 201 • BOZEMAN, MONTANA 59715TEL: 406.556.6160 • FAX: 406.586.8719 • WEB: www.azworld.com ANDERSON ZURMUEHLEN & CO., P.C. • CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS
MEMBER: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
To the Board of City Commissioners Bozeman, Montana
We have audited the financial statements of the governmental activities, the business-type
activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of City of Bozeman (the City) for the year ended June 30, 2015. Professional standards require that we provide you with information about our
responsibilities under generally accepted auditing standards Government Auditing Standards
and OMB Circular A-133, 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 9, 2014. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial
statements. During 2015, the City adopted the following new accounting policy:
GASB Statement No. 68, Accounting and Financial Reporting for Pensions We noted no transactions entered into by the governmental unit during the year for which
there is a lack of authoritative guidance or consensus. All significant transactions have been
recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and
current events and assumptions about future events. Certain accounting estimates are
particularly sensitive because of their significance to the financial statements and because of
the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: (i) valuation of the solvent site remediation liability in the waste water fund, which is based on an engineer’s
projection of the long term costs; (ii) valuation of post-closure costs for the landfill, which is
based on an engineer’s estimate of landfill post-closure care costs; (iii) depreciation expense,
which is based on management’s estimate of useful lives of fixed assets; (iv) the liability for the other post-employment benefits which is based on an actuarial study; and (v) the liability for net pension costs which is based on actuarial studies of the respective plans. We
evaluated the key factors and assumptions used to develop these estimates and determined
that they are reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosure affecting the
financial statements was the Pension disclosure in Note 14 and the Other Post Employment
Benefit disclosure in Note 15 to the financial statements.
The financial statement disclosures are neutral, consistent, and clear.
ANDERSON ZURMUEHLEN & CO., P.C
CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS
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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 trivial, and communicate them to the
appropriate level of management. We noted no such adjustments.
Disagreements with Management For purposes of this letter, a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be
significant to the financial statements or the auditor’s report. We are pleased to report that
no such disagreements arose during the course of our audit.
Management Representations We have requested certain representations from management that are included in the
management representation letter dated DRAFT.
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a
consultation involves application of an accounting principle to the governmental unit’s
financial statements or a determination of the type of auditor’s opinion that may be
expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental
unit’s auditors. However, these discussions occurred in the normal course of our
professional relationship and our responses were not a condition to our retention.
Other Matters We applied certain limited procedures to the management’s discussion and analysis, the
budgetary comparison – General Fund and Special Revenue Major Funds, Schedule of
Funding Progress – Other Postemployment Benefits, and the Schedule of Proportionate
Share of Net Pension Liability which are required supplementary information (RSI) that
supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We did not audit the RSI and do not express an opinion or provide any
assurance on the RSI.
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We were engaged to report on the combining fund statements, other budgetary comparison
reports, and the schedule of expenditures of federal awards, 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. We did not audit or perform other procedures on this other information and 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
DRAFT