FY2008 Audit Report CityCity of Blair, Nebraska
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITOR’S REPORTS
For the year ended September 30, 2008
CITY OF BLAIR, NEBRASKA
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR’S REPORT 3 -4
MANAGEMENT’S DISCUSSION AND ANALYSIS 5 -17
STATEMENTS
Statement of net assets -government-wide 18
Statement of activities -government-wide 19
Balance sheet -governmental funds 20
Reconciliation of the balance sheet of governmental funds
to the statement of net assets 21
Statement of revenues, expenditures, and changes in
fund balances -governmental funds 22
Reconciliation of the statement of revenues, expenditures
and changes in fund balances of governmental funds
to the statement of activities 23
Statement of net assets -proprietary funds 24
Statement of revenues, expenses, and changes in
fund net assets -proprietary funds 25
Statement of cash flows -proprietary funds 26
Statement of net assets -fiduciary funds 27
NOTES TO FINANCIAL STATEMENTS 28 -49
SUPPLEMENTAL INFORMATION
Budgetary comparison schedule -general fund and major special revenue funds 51
Budgetary comparison schedule -general fund revenues 52
Budgetary comparison schedule -Street fund 53
Budgetary comparison schedule -KENO fund 54
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 55 -56
SCHEDULE OF FINDINGS AND RESPONSES 57 -59
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 60
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City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS
September 30, 2008
The discussion and analysis of the City of Blair’s financial performance provides an overview
and analysis of the City’s financial activities for the fiscal year ended September 30, 2008. It
should be read in conjunction with the accompanying basic financial statements. All amounts in
this discussion, unless otherwise indicated, are expressed in thousands of dollars.
FINANCIAL HIGHLIGHTS
The assets of the City of Blair exceeded its liabilities at the close of the fiscal year
ending September 30, 2008 by $23.2 million (net assets). Of this amount, $4.0 million
(unrestricted net assets) may be used to meet the government’s ongoing obligations to
citizens and creditors.
The City of Blair’s total net assets decreased by $2.4 million for the year ended
September 30, 2008. The decrease in net assets of $2.4 million can be attributed to a
prior period adjustment 3.5 million, even though assets increased 1.1 million attributable
to grants, water revenue, and sales tax revenue used to purchase capital assets.
As of September 30, 2008, the City of Blair’s governmental funds reported combined
ending fund balances of $4.3 million, a decrease of $4.3 million in comparison with the
prior fiscal year. This decrease is attributed in part to a prior year adjustment decreasing
the beginning assets by $3.29 million.
The fund balances for the Street Fund decreased $4,121 for fiscal year ended September
30, 2008. The fund balance for the General Fund decreased $473,671 during the same
period.
The City’s total debt increased by $828,000 during the current fiscal year. This increase
can be attributed to the issuance of $1,140,000 in TIF Bonds for TIF Project #2 and
$700,000 for Public Safety Bonds for the purchase of a new Aerial ladder truck for the
Fire Department.
OVERVIEW OF FINANCIAL STATEMENTS
The discussion and analysis serves as an introduction to the City of Blair’s basic financial
statements. The City of Blair’s basic financial statements are comprised of three components,
government-wide financial statements, fund financial statements, and notes to the financial
statements. This report also contains other supplementary information in addition to the basic
financial statements themselves.
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City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS -CONTINUED
September 30, 2008
Government-wide financial statements. The government-wide financial statements are
designed to provide readers with a broad overview of the City of Blair’s finances in a manner
similar to a private-sector business. The statement of net assets presents information on all of
the City of Blair’s assets and liabilities, with the difference between the two reported as net
assets. Overtime, increases or decrease in net assets may serve as a useful indicator of whether
the financial position of the City of Blair is improving or deteriorating. The Statement of Net
Assets combines and consolidates governmental funds’ current financial resources (short-term
spendable resources with capital assets and long-term obligations. Other nonfinancial factors
should also be taken into consideration, such as changes in the City’s property tax base and the
condition of the City’s infrastructure (i.e. roads, drainage improvements, storm and sewer lines,
etc.), to assess the overall health or financial condition of the City. The statement of activities
presents information showing how expenses are taken into account regardless of when cash is
received or paid. Thus, revenues and expenses are reported in this statement for some items that
will only result in cash flows in future fiscal periods (e.g., uncollected taxes). Both the statement
of net assets and the statement of activities are prepared utilizing the accrual basis of accounting
as opposed to the modified accrual basis.
In the statement of net assets and the statement of activities, the City is divided into two kinds of
activities:
Governmental Activities -Most of the City’s basic services are reported here, including
the police, streets, fire, library, planning and development, parks and recreation, and
general administration. Property taxes, sales taxes, and state allocations 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 and sewer system are
reported here.
Fiduciary Activities -The City accounts for Agency Funds for TIF District #1 Project
which are held in restriction to pay the costs of the District. TIF District #1 bonds are
held by the developer and do not carry the full faith and credit of the City.
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City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS -CONTINUED
September 30, 2008
Reporting the City’s Most Significant Funds
Fund Financial Statements
The fund financial statements provide detailed information about the most significant funds -
not the City as a whole.Some funds are required to be established by state laws and by bond
covenants. However, the City establishes many other funds to help it control and manage money
for particular purposes or to show that it is meeting legal responsibilities for using certain taxes,
grant and other money. The City’s two kinds of funds -governmental and proprietary -utilize
different accounting approaches.
Governmental funds -The majority 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 identified as the modified accrual basis of accounting,
which measures cash and all other financial assets that can readily be converted into
cash. The governmental fund statements provide a detailed short-term view of the City’s
general governmental operations and the basic services it provides. Governmental fund
information helps determine whether there are more or fewer financial resources that can
be spent in the near future to finance the City’s programs. By comparing information
presented for governmental funds with similar information presented for governmental
activities in the government-wide statements, readers may better understand the long-
term effect of the government’s near term financing decisions. The relationships of
differences between governmental activities (reported in the statement of net assets and
the statement of activities) and governmental funds are detailed in a reconciliation
following the fund financial statements.
The City of Blair maintains five individual governmental funds. Information is presented
separately in the governmental funds balance sheet and in the governmental funds
statement of revenues, expenditures, and changes in fund balances for the general fund,
debt service fund, street fund, keno fund and capital projects fund,all of which are
considered to be major funds.
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City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS -CONTINUED
September 30, 2008
Fund Financial Statements -Continued
Proprietary funds -The City charges customers for the services it provides, whether to
outside customers or to other units within 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 Assets and the Statement of Activities. In fact, the
City’s enterprise funds (a component of proprietary funds) are identical to the business
type activities that are reported in the government-wide statements but provide more
detail and additional information, such as cash flows, for proprietary funds.
The City of Blair maintains two individual enterprise funds. The City uses enterprise
funds to account for its water and sewer. The funds provide the same type of information
as the government-wide financial statements, only in more detail and include some of
the internal service fund type activity. The proprietary fund financial statements provide
separate information for the water and sewer funds, both of which are considered to be
major funds in the City.
Notes to Financial Statements
The notes provide additional information that is essential to a full understanding of the data
provided in the government-wide and fund financial statements. The notes to the financial
statements can be found immediately following the basic financial statements.
THE CITY AS A WHOLE -Government-wide Financial Analysis
The City’s combined net assets were $23.2 million as of September 30, 2008. Analyzing the net
assets and net expenses of governmental and business-type activities separately, the business
type activities net assets were $12.0 million. This analysis focuses on the net assets (table 1) and
changes in general revenues (table 2) and significant expenses of the City’s governmental and
business-type activities. The comparative government-wide results are provided in the tables for
additional analysis.
By far the largest portion of the City’s net assets (82.6%) reflects its restricted capital assets
(e.g., donations,community betterment, debt service, and capital projects).
SEE TABLE 1
2008 2007 2008 2007 2008 2007
ASSETS
Current and other assets 8,319$ 8,889$ 1,745$ 10,818$ 10,064$ 19,707$
Capital assets 13,415 10,923 36,461 28,376 49,876 39,299
Total assets 21,734 19,812 38,206 39,194 59,940 59,006
LIABILITIES
Long-term debt outstanding 6,005 5,390 23,881 26,142 29,886 31,532
Other liabilities 4,579 227 2,257 1,622 6,836 1,849
Total liabilities 10,584 5,617 26,138 27,764 36,722 33,381
NET ASSETS
Invested in capital assets
net of related debt 6,795 5,533 11,435 2,233 18,230 7,766
Restricted 501 4,101 444 6,131 945 10,232
Unrestricted (deficit)3,854 4,561 189 3,066 4,043 7,627
Total net assets 11,150$ 14,195$ 12,068$ 11,430$ 23,218$ 25,625$
City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
SUMMARY OF NET ASSETS
September 30, 2008
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Governmental Activities Business-type Activities Total Primary Government
TABLE 1
Amounts expressed in thousands
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City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS -CONTINUED
September 30, 2008
Governmental activities: Governmental activities decreased the City’s net assets by $3.04
million.
Key elements of this decrease are as follows:
The decrease is in part due to a prior year adjustment of $3.29 million. This prior year
adjustment was summarized in Footnote “O”.
The decrease was minimized by the fact that all governmental activities were financed in
part by tax revenue. General Fund and Streets were the most effective at covering their
costs due to sales tax, fees charged, operating grants, capital grants, and contributions,
which was generally a positive increase.
The comparative financial analysis is provided for additional information. The City’s general
revenues decreased when compared to the prior year by 24% or $2.1 million. The primary
reason for this decrease was due to reduction of capital grants and contributions by $521,000,
reduction of special assessment income of $1,459,000 and reduction of other income by
$269,000. The assessed value of the property in the City increased by $24.58 million or 6.0%
as compared to the prior year while the City property tax rate of $.3569 per $100 assessed
valuation stayed the same.
Business-type Activities
Revenues of the City’s business-type activities were $5.5 million for the fiscal year ending
September 30, 2008. Expenses for the City’s business-type activities were $5.2 million for the
year, resulting in net revenues of $.30 million. The net revenues are the result of several factors,
including the following:
The City’s water system recorded charges for services of $4.4 million, which exceeded
expenses of $3.4 million, which included $1.06 million in depreciation, by $1.0 million.
The most significant expenses of the water fund were $668,880 for operating expenses,
$890,208 for salaries and benefits and $818,415 for material and supplies.
The sewer fund had a net operating income of $429,028 before depreciation.
SEE TABLE 2
2008 2007 2008 2007 2008 2007
REVENUES
Program revenues
Charges for services 356$ 372$ 5,331$ 4,790$ 5,687$ 5,162$
Operating grants and
contributions 119 88 - - 119 88
Capital grants and
contributions 66 587 - - 66 587
General revenues
Taxes 4,562 4,320 - - 4,562 4,320
Interest income 242 316 173 140 415 456
Special assessments 343 1,802 - - 343 1,802
Other 678 947 - - 678 947
Total revenues 6,366 8,432 5,504 4,930 11,870 13,362
EXPENSES
Administration 773 1,412 - - 773 1,412
Police 1,576 1,359 - - 1,576 1,359
Fire 213 177 - - 213 177
Parks 447 425 - - 447 425
Library 267 255 - - 267 255
Swimming pool 68 52 - - 68 52
Zoning 137 127 - - 137 127
Animal control 94 86 - - 94 86
Donated fund 95 55 - - 95 55
Streets 1,547 1,031 - - 1,547 1,031
Keno 68 161 - - 68 161
Interest expense 280 312 - - 280 312
Water - - 4,437 3,742 4,437 3,742
Sewer - - 773 706 773 706
Total expenses 5,565 5,452 5,210 4,448 10,775 9,900
CHANGE IN NET ASSETS
BEFORE TRANSFERS 801 2,980 294 482 1,095 3,462
TRANSFERS (554) (468) 554 468 - -
CHANGE IN NET ASSETS 247 2,512 848 950 1,095 3,462
NET ASSETS,
BEGINNING OF YEAR 14,195 11,683 11,430 10,480 25,625 22,163
PRIOR PERIOD ADJUSTMENT (3,292) - (210) - (3,502) -
BEGINNING NET ASSETS, RESTATED 10,903 11,683 11,220 10,480 22,123 22,163
NET ASSETS, END OF YEAR 11,150$ 14,195$ 12,068$ 11,430$ 23,218$ 25,625$
City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
CHANAGES IN NET ASSETS
September 30, 2008
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TABLE 2
Amounts expressed in thousands
Governmental Activities Business-type Activities Total Primary Government
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City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS -CONTINUED
September 30, 2008
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At the end of the fiscal year 2008, the City has nearly $67.464 million invested in a broad range
of capital assets, including police and fire equipment, buildings, park facilities, and water and
sewer plants. (See Table 3) This amount represents a net increase (including additions and
deductions) of $12.13 million or 22% over the prior fiscal year. Beginning October 1, 2003, the
City began capitalizing general infrastructure assets and depreciating them over their useful
lives as required by GASB 34. The general infrastructure assets capitalized in 2008 were $3.03
million.
SEE TABLE 3
Balance Balance
September 30, 2007 Additions Deletions September 30, 2008
GOVERNMENTAL ACTIVITIES
Land 191$ -$ -$ 191$
Street infrastructure 6,685 2,021 - 8,706
Buildings 5,503 - - 5,503
Equipment 2,879 1,011 (235) 3,655
Total governmental 15,258 3,032 (235) 18,055
BUSINESS-TYPE ACTIVITIES
Water assets 33,140 8,179 (21) 41,298
Sewer assets 6,937 1,174 - 8,111
Total business-type 40,077 9,353 (21) 49,409
Totals 55,335$ 12,385$ (256)$ 67,464$
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City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
CHANGES IN CAPITAL ASSETS
September 30, 2008
Amounts expressed in thousands
TABLE 3
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City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS -CONTINUED
September 30, 2008
Debt
At year-end, the City had $7.4 million in General Obligation Bonds and registered warrants
outstanding as compared to $5.4 million at the end of the prior fiscal year, an increase of 37%as
shown in Table 4. The Water Revenue Bonds outstanding were decreased by $1.061 million.
The City has a 25 year take or pay contract with Cargill to secure the debt. The expanded plant
will have a 17 million gallons per day (MPD) capacity with 12.5 MPD contracted to Cargill and
was designed to be easily expanded to 20 million gallon per day.
SEE TABLE 4
Balance Balance
September 30,September 30,
2007 Additions Dispositions 2008
General Registered Warrants 20$ 738$ (24)$ 734$
General Obligation Bonds 5,390 1,840 (610) 6,620
Water Revenue Bonds 23,887 - (1,061) 22,826
Sewer Revenue Bonds 2,255 - (55) 2,200
Totals 31,552$ 2,578$ (1,750)$ 32,380$
City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
CHANGES IN OUTSTANDING DEBT
September 30, 2008
Amounts expressed in thousands
Description
TABLE 4
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City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS -CONTINUED
September 30, 2008
THE CITY’S FUND
At the close of the City’s fiscal year on September 30, 2008, the governmental funds of the City
reported a combined fund balance of $4.339 million. This ending balance included an
adjustment to the beginning balance of $3.196 million. The primary reason for the general
fund’s reduction is the transfer of cash to other funds for the purchase of capital improvements.
General Fund Budgetary Highlights
General Fund had revenues over expenditures of $176,181. This was primarily accomplished
from the fact revenues received were above budgeted projections and expenses were below
budget projections.
Debt Service had expenditures of $340,098 more than revenues. This was primarily result of
special assessments, including interest, was less than what had been budgeted. In addition, the
city had additional costs for the acquisition of the new aerial ladder truck that was purchased for
the Fire Department.
Street Fund had an operating loss of $2,313,248. This was offset with the transfer in of
$2,305,685 in sales taxes for capital projects and the sale of $26,166 of assets.
Keno and Capital Projects Fund had no major deviations in revenues or expenditures.
Water and Sewer Funds had no major deviation of revenues or expenditures. Water finished the
year with a 1.36 ratio of operating income before depreciation, plus interest income and
operating transfers in divided by Debt Service. Sewer had a net operating income to debt ratio of
3.79.
Internal Service Fund had a fund balance of $237,526. The fund was created to manage the
city’s partially self funded employee health insurance program. The balance reflects positive
management of the fund and savings over the previous commercial employee health plan. The
Fund balance represents a snap shot of the fund on Sept. 30, 2008 and doesn’t include any
accrued liabilities or refunds from reinsurance. It does show the success the City has had in
helping manage the City’s employee health care costs the past two and three quarter years. The
health care program and contracts operate on a calendar year bases. For the first three years of
the insurance program, it is estimated the City will have over $300,000 in cash savings reserves
above the expected medical costs to help hold down future premium costs.
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City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS -CONTINUED
September 30, 2008
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
Current economic conditions point toward a continued growth in the community that will allow
for a stable budget environment in spite of the national economy down turn.
The property tax request for fiscal year 2008/2009 was increased 3.3%, which with the
valuation increase caused the levy per valuation dollar to not increase over the prior year.
The city’s property valuation continues to grow at a 4% to 6% annual increase and sales taxes
continue to be stable. The city’s short term (1-5 years) forecast continues to be solid as the city
budgets only $620,000 annually of the estimated $1,600,000 in sales tax receipts for ear marked
projects such as property tax relief, fire bond payment and economic development. The balance
of the sales tax dollars are currently available for discretionary capital projects and equipment
that are important to the citizens of the City. The 6 to 10 year projections also appear to remain
solid with exception that the city currently uses the $481,000 annual payment from OPPD, from
the sale of the city’s electric system in 1984, for property tax relief. This $481,000 asset will go
away in 2014. The Council, in annual discussion on the issue at budget preparation time, is
intent on expanding the City’s economic growth in sales and property tax base through
economic development to offset the loss of revenue from the OPPD payment in FY 2015. In
addition, the City’s current sales tax authorization is scheduled to expire on Sept. 30, 2015. The
extension of the sales tax beyond 2015 will be imperative to maintaining a reasonable property
tax levy.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and
creditors with a general overview of the City’s finances and to show the City’s accountability
for the money it receives. If you have questions about this report or need additional financial
information, contact the City of Blair, 218 S. 16th Street, Blair, NE 68008.
Governmental Business-type
Activities Activities Total
ASSETS
Cash and cash equivalents 2,144,420$ 145,956$ 2,290,376$
Accounts receivable 286,397 1,084,054 1,370,451
Due from County Treasurer 139,392 - 139,392
Accrued interest receivable 97,262 5,052 102,314
Prepaid expense - 6,249 6,249
Special assessments receivable 2,395,184 - 2,395,184
Interfund balances (59,579) 59,579 -
Contract receivable 2,161,384 - 2,161,384
Capital assets
Land 190,641 423,783 614,424
Street infrastructure 8,706,752 - 8,706,752
Buildings 5,503,145 46,961,104 52,464,249
Equipment 3,654,302 2,023,924 5,678,226
Accumulated depreciation (4,639,793) (12,947,080) (17,586,873)
Restricted assets 1,154,002 443,687 1,597,689
Total assets 21,733,509 38,206,308 59,939,817
LIABILITIES
Accounts payable 549,888 628,332 1,178,220
Accrued expenses 226,601 153,029 379,630
Accrued interest 55,169 328,479 383,648
Deposits payable 34,100 1,700 35,800
Registered warrants 733,713 - 733,713
Deferred revenue 2,364,548 - 2,364,548
Bonds payable
Due within one year 615,000 1,144,836 1,759,836
Due in more than one year 6,005,000 23,881,373 29,886,373
Total liabilities 10,584,019 26,137,749 36,721,768
NET ASSETS
Investment in capital assets net of related debt 6,795,047 11,435,522 18,230,569
Donated projects 59,371 - 59,371
Debt service - 443,687 443,687
Community betterment 129,853 - 129,853
Capital projects 312,089 - 312,089
Unrestricted 3,853,130 189,350 4,042,480
Total net assets 11,149,490$ 12,068,559$ 23,218,049$
City of Blair, Nebraska
STATEMENT OF NET ASSETS
September 30, 2008
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See accompanying notes and independent auditor's report.
Operating Capital
Charges for Grants and Grants and Governmental Business-type
Expenses Services Contributions Contributions Activities Activities Total
FUNCTIONS/PROGRAMS
Governmental activities
Administration 773,309$ 186,884$ -$ 66,228$ (520,197)$ -$ (520,197)$
Police 1,576,385 35,647 2,714 - (1,538,024) - (1,538,024)
Fire 212,991 - - - (212,991) - (212,991)
Parks 447,490 47,546 - - (399,944) - (399,944)
Library 267,252 14,036 7,218 - (245,998) - (245,998)
Swimming pool 67,967 - - - (67,967) - (67,967)
Zoning 137,186 - - - (137,186) - (137,186)
Animal control 93,995 - - - (93,995) - (93,995)
Donated funds 95,218 - 108,925 - 13,707 - 13,707
Streets 1,546,714 - - - (1,546,714) - (1,546,714)
Keno 68,394 72,355 - - 3,961 - 3,961
Interest on long-term debt 279,688 - - - (279,688) - (279,688)
Total governmental activities 5,566,589 356,468 118,857 66,228 (5,025,036) - (5,025,036)
Business-type activities
Water 4,436,897 4,385,875 - - - (51,022) (51,022)
Sewer 772,568 945,331 - - - 172,763 172,763
Changes in Net Assets
Net (Expenses) Revenue and
City of Blair, Nebraska
STATEMENT OF ACTIVITIES
For the year ended September 30, 2008
Program Revenues
Sewer 772,568 945,331 - - - 172,763 172,763
Total business-type activities 5,209,465 5,331,206 - - - 121,741 121,741
Total primary government 10,776,054$ 5,687,674$ 118,857$ 66,228$ (5,025,036)$ 121,741 (4,903,295)
General revenues
Taxes
Property taxes 1,566,661$ - 1,566,661$
Sales tax 1,846,992 - 1,846,992
Occupation and franchise taxes 285,720 - 285,720
Highway allocation 576,872 - 576,872
Other taxes 285,858 - 285,858
Unrestricted investment earnings 241,937 173,286 415,223
Special Assessments 342,841 - 342,841
Other income 678,403 - 678,403
Transfers (554,135) 554,135 -
Total general revenues and transfers 5,271,149 727,421 5,998,570
Changes in net assets 246,113 849,162 1,095,275
Net assets, beginning of year as previously reported 14,195,386 11,429,229 25,624,615
Adjustments to beginning net assets (3,292,009) (209,832) (3,501,841)
Net assets, beginning of year restated 10,903,377 11,219,397 22,122,774
Net assets, end of year 11,149,490$ 12,068,559$ 23,218,049$
See accompanying notes and independent auditor's report.
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Capital
General Debt Service Street Keno Projects
Fund Fund Fund Fund Fund Total
ASSETS
Cash and cash equivalents 1,945,455$ -$ 198,965$ -$ -$ 2,144,420$
Receivables
Special assessments 1,775 2,393,409 - - - 2,395,184
Accrued interest 97,262 - - - - 97,262
Other 283,938 - - 2,459 - 286,397
Due from County Treasurer 62,696 4,095 14,207 - - 80,998
Reserved assets - cash and -
investments - at cost 59,371 411,192 - 130,705 312,565 913,833
Contract receivable - OPPD 2,161,384 - - - - 2,161,384
Total assets 4,611,881$ 2,808,696$ 213,172$ 133,164$ 312,565$ 8,079,478$
LIABILITIES
Accounts payable 493,021$ -$ 50,437$ 3,311$ 476$ 547,245$
Accrued expenses 46,333 5,547 8,704 - - 60,584
Deposits payable 34,100 - - - - 34,100
Registered warrants - 733,713 - - - 733,713
Deferred revenues 1,775 2,362,773 - - - 2,364,548
Total liabilities 575,229 3,102,033 59,141 3,311 476 3,740,190
FUND BALANCES
Reserved for
Donated funds 59,371 - - - - 59,371
Debt service - - - - - -
Community betterment - - - 129,853 - 129,853
Capital projects - - - - 312,089 312,089
Unreserved undesignated -
General funds 3,977,281 (293,337) - - - 3,683,944
Special revenue funds (deficit)- - 154,031 - - 154,031
Total fund balances 4,036,652 (293,337) 154,031 129,853 312,089 4,339,288
Total liabilities and
fund equity 4,611,881$ 2,808,696$ 213,172$ 133,164$ 312,565$ 8,079,478$
City of Blair, Nebraska
GOVERNMENTAL FUNDS
BALANCE SHEET
September 30, 2008
See accompanying notes and independent auditor's report.
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Fund balances of governmental funds 4,339,288$
Amounts reported for governmental activities in the statement of
net assets are different because
Capital assets, net of depreciation, are not current financial
resources and are not included in the governmental funds.13,415,047
Bonds payable are not a current financial resource. Therefore,
they are not included in the governmental funds.(6,620,000)
Internal service funds are used by management to charge the
costs of insurance to individual funds. The assets and
liabilities of internal service funds are included in
governmental activities in the statement of net assets.177,947
Taxes receivable that are not available to pay for current
period expenditures are not included in the governmental funds.58,394
Accrued interest does not require current financial resources and
therefore is not reported in the funds.(49,622)
Accrued compensated absences are not due and payable in the
current period and therefore are not reported in the funds.(171,564)
Net assets of governmental activities 11,149,490$
See accompanying notes and independent auditor's report.
- 21 -
City of Blair, Nebraska
GOVERNMENTAL FUNDS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
September 30, 2008
TO THE STATEMENT OF NET ASSETS
Capital
General Debt Service Street Keno Projects
Fund Fund Fund Fund Fund Total
REVENUES
Taxes 3,509,890$ 52,160$ 981,477$ -$ 12,507$ 4,556,034$
Keno proceeds - - - 72,355 - 72,355
Charges for services 284,113 - - - - 284,113
Special assessment 1,659 276,833 - - - 278,492
Special assessment interest - 64,349 - - - 64,349
Interest income 238,700 14,264 3,237 134 19,648 275,983
Other revenues 324,879 79,526 59,664 - 15,000 479,069
Total revenues 4,359,241 487,132 1,044,378 72,489 47,155 6,010,395
EXPENDITURES
Administration 722,948 431 - - 114 723,493
Police Department 1,524,549 - - - - 1,524,549
Fire Department 883,541 - - - - 883,541
Parks Department 432,556 - - - - 432,556
Library 261,073 - - - - 261,073
Swimming Pool 47,161 - - - - 47,161
Zoning 137,083 - - - - 137,083
Animal control 78,931 - - - - 78,931
Donated funds 95,218 - - - - 95,218
Keno expense - - - 40,677 - 40,677
Community betterment - - - 27,717 - 27,717
Street expense - - 3,357,626 - 79,192 3,436,818
Debt service
Bonding costs - 10,850 - - - 10,850
Redemption of bonds - 610,000 - - - 610,000
Bond interest - 205,949 - - 24,117 230,066
Total expenditures 4,183,060 827,230 3,357,626 68,394 103,423 8,539,733
REVENUES OVER (UNDER) EXPENDITURES 176,181 (340,098) (2,313,248)4,095 (56,268) (2,529,338)
OTHER FINANCING SOURCES (USES)
Bond proceeds - 700,000 - - 1,140,000 1,840,000
Sale of assets 90,000 - 26,166 - - 116,166
Operating transfers - in 2,694,930 189,578 2,305,685 - - 5,190,193
Operating transfers - out (3,502,748)(1,481,638)(25,005) - (734,937) (5,744,328)
Total other financing sources (717,818) (592,060) 2,306,846 - 405,063 1,402,031
REVENUES AND OTHER SOURCES OVER
(UNDER) EXPENDITURES AND OTHER
USES (541,637) (932,158) (6,402) 4,095 348,795 (1,127,307)
NET ASSETS, BEGINNING OF YEAR
AS PREVIOUSLY REPORTED 4,510,323 3,868,421 158,152 125,758 - 8,662,654
ADJUSTMENTS TO BEGINNING NET ASSETS 67,966 (3,229,600)2,281 - (36,706) (3,196,059)
NET ASSETS, BEGINNING OF YEAR, AS RESTATED 4,578,289 638,821 160,433 125,758 (36,706) 5,466,595
NET ASSETS, END OF YEAR 4,036,652$ (293,337)$ 154,031$ 129,853$ 312,089$ 4,339,288$
City of Blair, Nebraska
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE - GOVERNMENTAL FUNDS
For the year ended September 30, 2008
See accompanying notes and independent auditor's report.
- 22 -
Net changes in fund balance - total governmental funds (1,127,307)$
Amounts reported for governmental activities in the statement of
activities differ from the amounts reported in the statement of
revenues, expenditures, and changes in fund balances because
Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the costs of those
assets is allocated over their estimated useful lives as
functional expense when the cost is below the capitalization
threshold. This activity is reconciled as follows:
Cost of assets capitalized 3,023,868
Depreciation expense (539,738)
In the statement of activities, only the gain on the sale of assets
is reported, whereas in the governmental funds, the
proceeds from the sale increase financial resources. Thus,
the change in net assets differs from the change in fund
balance by the cost of the asset sold.8,185
Bonds payable are reported as expenditures when made and as
City of Blair, Nebraska
GOVERNMENTAL FUNDS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
For the year ended September 30, 2008
Bonds payable are reported as expenditures when made and as
revenue when repaid in the governmental funds. However,
there is no impact in the statement of activities when loans are
made or repaid. This amount represents the change in the
long-term loans receivable.(1,230,000)
Some expenses reported in the statement of activities do not
require the use of current financial resources and therefore (74,674)
are not reported as expenditures in governmental funds.
Revenues in the statement of activities that do not provide
current financial resources are not reported as revenue
in the funds.6,069
Internal service funds are used by management to charge the
cost of certain activities, such as insurance, to individual
funds. The net revenue of certain internal service funds is
reported with governmental activities.179,710
Change in net assets of governmental activities 246,113$
See accompanying notes and independent auditor's report.
- 23 -
Internal
Water Sewer Total Service Fund
CURRENT ASSETS
Cash 58,550$ 87,406$ 145,956$ 240,169$
Accounts receivable user fees 926,139 157,915 1,084,054 -
Accrued interest receivable 1,327 3,725 5,052 -
Prepaid expense 4,176 2,073 6,249 -
Total current assets 990,192 251,119 1,241,311 240,169
NON-CURRENT ASSETS
Restricted assets
Bond and interest sinking fund cash
and investments 183,187 260,500 443,687 -
CAPITAL ASSETS
Land 373,908 49,875 423,783 -
Buildings 39,998,420 6,962,684 46,961,104 -
Equipment 925,391 1,098,533 2,023,924 -
Accumulated depreciation (9,513,128) (3,433,952) (12,947,080) -
Total capital assets 31,784,591 4,677,140 36,461,731 -
Total assets 32,957,970$ 5,188,759$ 38,146,729$ 240,169$
CURRENT LIABILITIES
Accounts payable 591,483$ 36,849$ 628,332$ 2,643$
Deposits 1,700 - 1,700 -
Accrued interest 289,460 39,019 328,479 -
Accrued expenses 114,651 38,378 153,029 -
Bonds payable - current 1,084,836 60,000 1,144,836 -
Total current liabilities 2,082,130 174,246 2,256,376 2,643
NON-CURRENT LIABILITITES
Bonds payable 21,741,373 2,140,000 23,881,373 -
Total liabilities 23,823,503 2,314,246 26,137,749 2,643
NET ASSETS
Investment in capital assets net of related debt 8,958,382 2,477,140 11,435,522 -
Restricted for debt service 183,187 260,500 443,687 -
Unrestricted (7,102) 136,873 129,771 237,526
Total net assets 9,134,467$ 2,874,513$ 12,008,980 237,526$
RECONCILIATION
Eliminating entry between business-type activities and governmental activities 59,579
12,068,559$
City of Blair, Nebraska
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
September 30, 2008
See accompanying notes and independent auditor's report.
- 24 -
ASSETS
LIABILITIES AND NET ASSETS
Enterprise Funds
Internal
Water Sewer Total Service Fund
OPERATING REVENUES
Charges for services 4,327,198$ 915,825$ 5,243,023$ 794,346$
Sale of merchandise 28,013 - 28,013 -
Forfeited discounts 14,105 - 14,105 -
Other 16,559 29,506 46,065 110,309
Total operating revenues 4,385,875 945,331 5,331,206 904,655
EXPENSES
Personnel 890,208 312,424 1,202,632 -
Operating expenses 668,880 191,921 860,801 -
Materials and supplies 818,415 10,073 828,488 -
Rental expense 6,305 1,885 8,190 -
Insurance claims and expenses - - - 666,254
Depreciation 1,059,615 187,443 1,247,058 -
Total expenses 3,443,423 703,746 4,147,169 666,254
OPERATING INCOME 942,452 241,585 1,184,037 238,401
NONOPERATING REVENUES (EXPENSES)
Interest income 149,332 23,954 173,286 888
Interest expense (978,686) (82,809) (1,061,495) -
Bonding costs (60,380) - (60,380) -
Total nonoperating revenues (expenses)(889,734) (58,855) (948,589) 888
Income(loss) before transfers 52,718 182,730 235,448 239,289
Operating transfers - in 700,185 74,775 774,960 -
Operating transfers - out (183,625) (37,200) (220,825) -
CHANGE IN NET ASSETS 569,278 220,305 789,583 239,289
NET ASSETS, BEGINNING OF YEAR
AS PREVIOUSLY REPORTED 8,755,732 2,673,497 11,429,229 -
ADJUSTMENTS TO BEGINNING NET ASSETS (190,543) (19,289) (209,832) (1,763)
NET ASSETS, BEGINNING OF YEAR, AS RESTATED 8,565,189 2,654,208 11,219,397 (1,763)
NET ASSETS, END OF YEAR 9,134,467$ 2,874,513$ 12,008,980$ 237,526$
RECONCILIATION
Change in net assets 789,583$
Eliminating entry between business-type activities and governmental activities 59,579
Change in net assets business-type activities 849,162$
- 25 -
City of Blair, Nebraska
STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For the year ended September 30, 2008
See accompanying notes and independent auditor's report.
Enterprise Funds
Internal
Water Sewer Total Service Fund
Cash received from customers 4,051,726$ 915,517$ 4,967,243$ 904,655$
Cash payments to suppliers (1,947,101) (420,788) (2,367,889) (574,791)
Cash payments to employees (787,740) (278,406) (1,066,146) (90,583)
Cash provided from operating activities 1,316,885 216,323 1,533,208 239,281
CASH FLOWS FROM NON-CAPITAL
FINANCIAL ACTIVITIES
Operating transfers - in 700,185 74,775 774,960 -
Operating transfers - out (183,625) (37,200) (220,825) -
Cash used from non-capital financing
activities 516,560 37,575 554,135 -
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING
Bond proceeds - - - -
Acquisition of capital assets (8,159,551) (1,173,694) (9,333,245) -
Repayment of long-term debt (1,060,910) (55,000) (1,115,910) -
Interest payment long-term debt (970,631) (67,795) (1,038,426) -
Bonding costs (60,380) - (60,380) -
Cash used from capital and related
financing activities (10,251,472) (1,296,489) (11,547,961) -
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from interest earnings 177,173 34,175 211,348 888
Disbursements to restricted assets 4,800,096 887,445 5,687,541 -
Cash provided from investing activities 4,977,269 921,620 5,898,889 888
City of Blair, Nebraska
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
September 30, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Enterprise Funds
Cash provided from investing activities 4,977,269 921,620 5,898,889 888
CHANGE IN CASH AND CASH EQUIVALENTS (3,440,758) (120,971) (3,561,729) 240,169
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 3,499,308 208,377 3,707,685 -
CASH AND CASH EQUIVALENTS, END OF YEAR 58,550$ 87,406$ 145,956$ 240,169$
Reconciliation of operating income to net cash
from operating activities
Operating income 942,452$ 241,585$ 1,184,037$ 238,401$
Adjustments to reconcile operating income
to net cash from operating activities
Depreciation 869,072 168,154 1,037,226 -
Change in receivables (143,606) (10,525) (154,131) -
Change in prepaid expenses (550) (197) (747) -
Change in accounts payable (452,951) (216,712) (669,663) 880
Change in accrued expenses 102,468 34,018 136,486 -
Total adjustments 374,433 (25,262) 349,171 880
CASH PROVIDED FROM OPERATING ACTIVITIES 1,316,885$ 216,323$ 1,533,208$ 239,281$
See accompanying notes and independent auditor's report.
- 26 -
TIF
Fund 1
ASSETS
Cash 3,862$
NET ASSETS
Net Assets (Deficit) Held in Trust for Tax Incentive Funds (TIF)3,862$
City of Blair, Nebraska
STATEMENT OF NET ASSETS - FIDUCIARY FUNDS
September 30, 2008
See accompanying notes and independent auditor's report.
- 27 -
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS
September 30, 2008
-28 -
NOTE A.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the City of Blair,
Nebraska (the City):
1.Reporting Entity
The City of Blair is a Municipal Corporation which was founded and incorporated
in 1869. With a population of 7,612, the City of Blair functions as a City of the
First Class under Nebraska Statutes. This report includes all funds of the City (the
“primary government”). The City operates under a Mayor/Council form of
government and provides the following services: public safety, streets, culture and
recreation, public improvements, planning and zoning, water and sewer services,
and general administrative services.
2.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. Governmental
resources are allocated to and accounted for in individual funds based upon the
purpose for which they are to be spent and the means by which spending activities
are controlled.
Government-Wide Financial Statements
The City’s government-wide financial statements include a statement of net assets
and a statement of activities (including changes in net assets). These statements
are prepared using the standards of the Governmental Accounting Standards
Board (GASB), General Accepted Accounting Principles (GAAP), as well as
FASB pronouncements issued through November 30, 1989. These statements
present summaries of governmental activities for the City. Fiduciary activities of
the City are not included in these statements.These statements are presented on
an “economic resources” measurement focus and the accrual basis of accounting.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-29 -
NOTE A.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
2.Basis of Accounting/Measurement Focus -Continued
Government-Wide Financial Statements -Continued
Accordingly, all of the City’s assets and liabilities, including capital assets and
infrastructure as well as long-term debt, are included in the accompanying
statement of net assets. The statement of activities presents changes in net assets.
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 statement of activities demonstrates the degree to which the direct expenses
of a given function are offset by program revenues. Direct expenses are those that
are clearly identifiable with a specific function. 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. Charges for services include revenues from customers or
applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function. Grant and contributions include revenues
restricted to meeting the operational or capital requirements of a particular
function. Taxes and other items not properly included among program revenues
are reported instead as general revenues.
All internal balances in the statement of net assets and internal transactions in the
statement of activities have been eliminated. The purpose of transfers between
funds was to record proper allocation of expenses.
The City applies all applicable Financial Accounting Standards Board (FASB)
pronouncements issued on or before November 30, 1989 in accounting and
reporting for its proprietary operations.
Amounts reported as program revenues include (1) charges to customers or
applicants for goods, services, or privileges provided, (2) operating grants and
contributions, and (3) capital grants and contributions, including special
assessments. Internally dedicated resources are reported as general revenues
rather than as program revenues. Likewise, general revenues include all taxes.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-30 -
NOTE A.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
2.Basis of Accounting/Measurement Focus -Continued
Governmental Fund Financial Statements
Governmental fund financial statements include a balance sheet and a statement
of revenues, expenditures, and changes in fund balances for all major
governmental funds. An accompanying schedule is presented to reconcile and
explain the differences in fund balances as presented in these statements to the net
assets presented in the government-wide financial statements. The City has
presented all major funds that met the qualifications of GASB Statement No. 34.
All governmental funds are accounted for on a spending or “current financial
resources” measurement focus and the modified accrual basis of accounting.
Accordingly, capital assets and bonds payable are not included on the balance
sheet. 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 assets. Under 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 sources susceptible to accrual are property tax, sales tax,
transient occupancy tax, investment income, and grant revenues.
Expenditures are generally recognized under the modified accrual basis of
accounting when the related fund liability is incurred. An exception to this
general rule is principal and interest on general long-term debt which is
recognized when due.
The City reports the following major governmental funds:
The General Fund is the government’s primary operating fund. It accounts for all
financial resources of the City, except those required to be accounted for in
another fund.
The Debt Service Fund is used to account for the payment of principal and
interest on general long-term debt. The primary sources of revenue are property
taxes and special assessments.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-31 -
NOTE A.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
2.Basis of Accounting/Measurement Focus -Continued
Governmental Fund Financial Statements -Continued
The Street Fund is used to record transactions in the Street department, as the
State of Nebraska requires an accounting to verify the matching of funds it
provides for this purpose.
The Keno Fund maintains an accounting of Keno gambling activity because the
funds earned are restricted to community betterment projects and require special
state reporting.
The TIF 2 Fund is a capital projects fund and is used to record transactions in the
TIF 2 development area, as the funds are required to be accounted for separately.
Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a statement of net assets, a
statement of revenues, expenses and changes in fund net assets, and a statement of
cash flows for each major proprietary fund. A column representing internal
service funds is also presented in these statements. However, internal service
balances and activities 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 assets. The
statement of revenues, expenses and changes in fund net assets presents increases
(revenues) and decreases (expenses) in total net assets. 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.
Proprietary funds distinguish operating revenues and expense from non-operating
items. Operating revenues and expense generally result from providing services
and producing and delivering goods in connection with a proprietary fund’s
principal ongoing operations. Operating expenses for enterprise funds include the
cost of services, administrative expenses, and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as non-operating
revenues and expenses.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-32 -
NOTE A.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
2.Basis of Accounting/Measurement Focus -Continued
Proprietary Fund Financial Statements -Continued
The City reports the following major proprietary funds:
The Water and Sewer Fund accounts for the activities related to the operation of
the City’s water delivery and sewage systems. It operates the water treatment and
sewer treatment plants, water distribution systems, sewer collection systems, and
pump stations.
Internal service funds of the City (which provide services primarily to other funds
of the City) are presented, in summary form, as part of the proprietary fund
financial statements. Since the principal users of the internal services are the
City’s governmental activities, financial activities of the internal service funds are
presented in the governmental activities column when presented at the
government-wide level. The costs of these services are allocated to the
appropriate function/program (public safety, streets, culture and recreation, public
improvements, planning and zoning, water and sewer services, and general
administrative services) in the statement of activities.
Fiduciary Fund Financial Statements
Fiduciary Fund Financial Statements include a statement of net assets. The City’s
Fiduciary fund represents an Agency Fund, which is custodial in nature (assets
equal liabilities) and does not involve measurement of results of operations. The
Agency fund is accounted for on a spending or “economic resources”
measurement focus and the accrual basis of accounting as is the proprietary funds
explained above.
The City reports the following fiduciary fund:
The TIF 1 Fund is an agency fund that accounts for the activities related to
redevelopment costs financed by tax incremental finance bonds. The tax
incremental finance bonds are to be paid by the taxes of the redeveloped area.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-33 -
NOTE A.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
3.Budgetary Policy and Control
Budgetary Basis of Accounting
The City’s legally adopted budget is not in conformity with accounting principles
generally accepted in the United States of America, but meets the requirements of
the Nebraska Budget Act. The budget is prepared and adopted using the cash
basis of accounting whereby revenues budgeted are expected to be received rather
than earned and expenditures budgeted are expected to be disbursed rather than
incurred. Differences between the budgeted basis of accounting and the generally
accepted basis are reconciled in the budget to actual schedule in the required
supplementary information. The City Council sets the property tax levy needed to
support the coming year’s budget in August of each year and submits its budget as
required by State statute.
Budgetary Control
Each funds appropriated budget is prepared on a detailed line item basis.
Revenues are budgeted by source. Expenditures are budgeted by department.
Expenditures at the fund level constitute the legal level of control. Expenditures
may not exceed appropriations at this level. All budget revisions at this level are
subject to final review by the Council. No revisions to the budget were made for
the year ended September 30, 2008.
4.The 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.
5.Deposits and Investments
The City’s cash and cash equivalents are considered to be cash on hand, demand
deposit and short-term investments with original maturities of three months or
less from the date of acquisition.
Investments are restricted and consist of Certificates of Deposit shown at cost.
There are no significant differences in cost and fair values at September 30, 2008.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-34 -
NOTE A.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
6.Capital Assets
Capital assets, which include land, buildings,and equipment (furniture, vehicles,
etc.) and infrastructure assets (street systems, storm drains, etc.), are reported in
governmental activities column of the Government-Wide Financial Statements.
Capital assets are defined by the City as assets with an initial, individual cost of
more than $5,000. Such assets are recorded at historical cost or estimated
historical cost if purchased or constructed. Donated or annexed capital assets are
recorded at estimated market value at the date of donation or annexation.
The costs of normal maintenance or repairs that do not add to the value of the
asset or materially extend assets lives are not capitalized. Major outlays for
capital assets and improvements are capitalized as projects are constructed. The
City qualifies for the exemption under GASB 34 to not retroactively apply the
capitalization requirements of general infrastructure assets. The requirement to
capitalize and depreciate these assets has been applied as of October 1, 2003.
Depreciation is recorded in the government-wide financial statements on a
straight-line basis over the useful life of the assets as follows:
Assets Years
Equipment 10
Vehicles 5
Buildings 40
Street infrastructure 40
7.Property Taxes
Property tax revenue is recognized when collected by the County as the City’s
agent within the current period. There are no property taxes due which are not
delinquent and all delinquent taxes are considered collectible.
The City’ December 31, 2007 valuation was $433,928,223. The levy for the City
for the year ending September 30, 2008 was $0.3569 per $100 of value. The total
tax levy was $1,548,534. Property taxes are collected by the County and are due
December 31 of each year and delinquent in halves at May 1 and September 1 of
the following year. In-lieu of tax receipts are equivalent in value to payments for
service provided.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-35 -
NOTE A.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
8.Claims and Judgments Payable
The City records a liability for litigation, judgments, and claims when it is
probable that an asset has been impaired or a liability has been incurred prior to
year-end and the probable amount of loss (net of any insurance coverage) can be
reasonably estimated. The liability, if any, is reported in the Government-Wide
Statement of Net Assets. The portion of the liability, which will be liquidated
with expendable, available financial resources, if any, is reflected as a liability of
applicable governmental funds.
9.Compensated Absences
General leave for the City includes both vacation and sick pay. Vacation leave is
based on an employee’s length of employment. An employee is allowed to carry
forward each year, on their anniversary date, that year’s earned vacation, plus 40
hours. Sick leave is earned at a rate approved by the personnel manual, which is
currently six (6) hours per month. Sick leave can be accumulated to a maximum
of 840 hours and can only be used for illness, medical care, and care of sick
members of the immediate family per the personnel manual.
Upon termination of employment, an employee is entitled to be compensated for
all accumulated unused vacation pay. Unused sick leave is compensated as
follows: (1) Upon death or retirement, 50% (2) Upon resignation in good
standing, 5% after 10 years of employment increasing to a maximum of 50% after
20 years of employment.
10.Restricted Assets
Assets are reported as restricted when limitations on their use change the nature or
normal understanding of the availability of the asset. Such constraints are either
externally imposed by creditors, contributions, grantors, or laws of other
governments, or are imposed by law through constitutional provisions or enabling
legislation. The City’s policy is to first apply restricted resources to an expense
when incurred for purposes for which both restricted and unrestricted net assets
are available. Restricted assets in the debt service fund represent assets available
only for payment of general obligation debt or related expenses.
The City of Blair has sponsored a licensed Keno operation and the restricted
funds are the accumulation of net proceeds to be used only for community
betterment projects.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-36 -
NOTE A.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED
10.Restricted Assets -Continued
The City of Blair has received donations toward specific projects. The
undisbursed funds with specific restrictions are accounted for in the donated fund
balance.
The Water and Sewer restricted cash is a sinking fund required by conditions of
Revenue Bonds. These funds will become unrestricted in the year 2010.
11.Transfers
Transfers are used to move revenues from the fund that statute or budget requires
to collect them to the fund that statute or budget requires to expend them and to
move unrestricted revenue collected in the general fund to finance various
programs accounted for in other funds in accordance with budgetary
authorizations.
NOTE B.DEPOSITS AND INVESTMENTS
The City maintains a cash pool that is available for all funds. The carrying amount of the
City’s cash deposits was $3,372,058 at September 30, 2008. The bank balances of the
City’s cash deposits at September 30, 2008 was $3,246,200. The City’s investments
were made up of $336,682 of Certificates of Deposit and $183,187 of United States
Treasury Notes. The City’s cash deposits and certificates of deposit were either entirely
insured or collateralized with securities held by the pledging financial institutions in the
City’s name.
The City has no formal policy for handling credit risk, interest rate risk, or concentration
risk; however, deposits and investments consist of demand deposits, Certificates of
Deposits, and United States Treasury Notes. The statutes of the State of Nebraska require
that local governmental units follow the “prudent man” rule with deposits, and that
deposits be secured by collateral valued at market or par whichever is lower less the
amount insured by the Federal Deposit Insurance Corporation. The City has no deposit
and investment policy that would further limit its deposits, but the City administratively
has required all deposits to be collateralized at 105%.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-37 -
NOTE C.CAPITAL ASSETS
A summary of changes in capital assets is as follows:
Governmental Activities
Balance Balance
September 30,
2007 Additions Deletions
September 30,
2008
Capital assets not depreciated
Land $ 190,641 $ - $ - -$ 190,641
Other capital assets
Street infrastructure 6,685,583 2,021,169 -8,706,752
Buildings 5,503,145 -- 5,503,145
Equipment 2,878,812 1,010,884 (235,394)3,654,302
Total other capital assets 15,067,540 3,032,053 (235,394) 17,864,199
Less accumulated depreciation
Street infrastructure (297,716) (227,829)- (525,545)
Buildings (1,844,879)(137,579)-(1,982,458)
Equipment (2,192,854)(174,330)235,394 (2,131,790)
Total accumulated depreciation (4,335,449) (539,738)235,394 (4,639,793)
Other capital assets, net 10,732,091 2,492,315 - 13,224,406
Governmental activities capital assets, net $ 10,922,732 $2,492,315 $ --$13,415,047
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-38 -
NOTE C.CAPITAL ASSETS -CONTINUED
Business-Type Activities
Balance Balance
September 30,
2007 Additions Deletions
September 30,
2008
Capital assets not depreciated
Land $ 215,833 $207,950 $ - $ 423,783
Other capital assets
Infrastructure 37,861,054 9,100,050 - 46,961,104
Equipment 2,000,069 44,699 (20,844)2,023,924
Total other capital assets 39,861,123 9,144,749 (20,844)48,985,028
Less accumulated depreciation
Infrastructure (10,180,760)(1,188,818)-(11,369,578)
Equipment (1,520,652)(58,240)1,390 (1,577,502)
Total accumulated depreciation (11,701,412)(1,247,058)1,390 (12,947,080)
Other capital assets, net 28,159,711 7,897,691 (19,454) 36,037,948
Business-Type activities capital assets, net $ 28,375,544 $8,105,641 $ (19,454)$ 36,461,731
Depreciation expense was charged to functions as follows:
Governmental Activities:
Administration $39,970
Police 40,471
Fire 122,608
Parks 35,233
Library 3,079
Swimming pool 20,806
Animal control 8,114
Streets 269,457
Total depreciation $539,738
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-39 -
NOTE D.RISK MANAGEMENT
The City of Blair is exposed to various risks of loss related to torts; theft, damage to and
destruction of assets; errors and omissions; injuries to employees; and natural disasters.
These risks are covered by the purchase of commercial insurance. The City assumes
liability for any deductibles and claims in excess of coverage limitations. Settled claims
from these risks have not exceeded commercial insurance coverage in any of the past
three fiscal years.
NOTE E.NET ASSETS
In the Government-Wide financial statements net assets are classified in the following
categories:
Invested in Capital Assets
This category groups all capital assets, including infrastructure, into one component of
net assets. Accumulated depreciation on these assets reduces this category.
Restricted Net Assets
This category presents external restrictions imposed by creditors, grantors, contributors or
laws or regulations of other governments and restrictions imposed by law through
constitutional provisions or enabling legislation.
Unrestricted Net Assets
This category represents the net assets of the City that are not restricted for any project or
other purpose.
In the Fund financial statements, reserves and designations segregate portions of fund
balance that are either not available or have been earmarked for specific purposes. The
various designations are established by actions of the City Council and Management and
can be increased, reduced, or eliminated by similar actions. Following is a summary of
reservations of fund balance and components of unreserved fund balance at September
30, 2008:
Governmental Funds Business-Type Activities
Reserved for:
Donated Funds $ 59,371 $ -
Debt Service - 443,687
Community Betterment 129,853 -
Capital Projects 312,089 -
NOTE F. BONDS PAYABLE
WATER DEBT
Interest Balance Balance
Dated Description Rate September 30, 2007 Additions Deletions September 30, 2008
8/9/2000 DEQ Bonds 3.03%5,914,151$ -$ (619,914)$ 5,294,237$
6/15/2000 Refunding Bonds 4.70 - 5.55%945,000 - (125,000) 820,000
6/1/2006 NRD Bonds 4.15 - 4.75%2,527,968 - (315,996) 2,211,972
4/24/2007 WA BANS Series 2007 4.50%6,500,000 - - 6,500,000
8/15/2007 WA BANS Series 2007B 4.65%8,000,000 - - 8,000,000
Total water 23,887,119$ -$ (1,060,910)$ 22,826,209$
SEWER DEBT
12/15/2004 Revenue Bonds 2.05 - 4.25% 800,000$ -$ (55,000)$ 745,000$
6/26/2007 SE BANS Series 2007 4.05%1,455,000 - 1,455,000
Total sewer 2,255,000$ -$ (55,000)$ 2,200,000$
Annual principal requirements for Water Bonds
Principal Interest
1,084,836$ 960,430$
1,109,339 921,259
1,134,438 880,956
15,670,151 837,357
1,196,495 130,101
2,630,950 134,268
22,826,209$ 3,864,371$
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2008
For the year ending September 30,
2008
- 40 -
2009
2010
2011
2012
2013
2014-2018
Total
NOTE F. BONDS PAYABLE - CONTINUED
Year ending September 30,Principal Interest
60,000$ 85,790$
60,000 84,065
1,520,000 52,614
60,000 21,028
65,000 18,791
365,000 53,360
70,000 1,488
2,200,000$ 317,136$
Sinking fund requirements for Water and Sewer debt were a reserve of $266,405 at September 30, 2008.
Net working capital of Water and Sewer funds is ($1,091,938) and $76,873, respectively. All liabilities
on the balance sheet of governmental funds are current.
2009
2010
2011
2012
2013
2014 - 2018
2019 - 2023
Total
For the year ended September 30 2008
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
- 41 -
NOTE F. BONDS PAYABLE - CONTINUED
Interest Balance Balance
Dated Description Rate September 30, 2007 Additions Deletions September 30, 2008
6/1/1998 Various purpose 4.10 - 4.85%45,000$ -$ (45,000)$ -$
4/15/1999 Various purpose 3.50 - 4.40%370,000 - (180,000) 190,000
12/15/2002 Various purpose 1.60 - 4.25%670,000 - (125,000) 545,000
7/19/2005 Various purpose 2.90 - 4.25%875,000 - (75,000) 800,000
6/15/2006 Various purpose 3.70 - 4.35%625,000 - (60,000) 565,000
9/28/2007 Various purpose 3.70 - 5.00%2,805,000 - (125,000) 2,680,000
12/14/2007
Tax increment
financing bond 4.48%- 1,140,000 - 1,140,000
2/26/2008
Public Safety Tax
Anticipation Bonds 2.75 - 4.25%- 700,000 - 700,000
Total 5,390,000$ 1,840,000$ (610,000)$ 6,620,000$
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30 2008
- 42 -
NOTE F. BONDS PAYABLE - CONTINUED
Principal Interest Total
Year ending September 30,
2009 615,000$ 277,620$ 892,620$
2010 490,000 253,140 743,140
2011 520,000 234,315 754,315
2012 550,000 213,845 763,845
2013 430,000 191,680 621,680
2014 - 2018 1,830,000 710,043 2,540,043
2019 - 2023 1,475,000 356,507 1,831,507
2024 - 2028 710,000 90,750 800,750
6,620,000$ 2,327,900$ 8,947,900$
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2008
- 43 -
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-44 -
NOTE G.ALLOWANCE FOR DOUBTFUL ACCOUNTS
The City uses the direct write-off for uncollectable accounts. The doubtful accounts at
September 30, 2008 were not significant.
NOTE H.PENSION PLANS
The City has three pension plans covering substantially all of its employees. Employees
other than policemen are covered by a defined contribution plan, either a 414(h) or
457(b) plan.
The 414(h) pension plan was established on April 1, 1996 and last restated on August 25,
2008 (effective January 1, 2008). All contributions from a minimum of 3% up to 6% of
gross wages in employee contributions and up to a 6% match of gross wage in
contributions from the City are invested with an investment manager. The employees
must have accumulated six months of service, be at least age 21, and work 40 hours per
week to participate in the plan. Employees are 100% vested in employer contributions
after six years of service.The plan is a single employer plan with the City maintaining
fiduciary responsibility for it. Contributions for the year ended September 30, 2008,
totaled $187,351 which consisted of $97,008 contributed by employees and $90,343
contributed by the City. Contributions are expected to remain relatively level from year
to year. The City may amend, modify, or terminate the 414(h) plan. Funds in the plan
cannot be diverted to any purposes other than for the exclusive benefit of the participants
or their beneficiaries or estates.
The 457(b) pension plan was established on July 1, 2008. The 457(b) plan allows
employees to contribute additional dollars to their pension above the 414(h) requirement
and match. The city will contribute a maximum match of 6% based on a 1 to 1 match
between the 457(b) and 414(h) plans. An employee can contribute voluntary pre-tax
amounts up to the legal limits as established by IRS code. The plan is a single employer
plan with the City maintaining fiduciary responsibility for it. Contributions for the year
ended September 30, 2008, totaled $10,311 which consisted of $9,057 contributed by
employees and $1,254 contributed by the City. Contributions are expected to remain
relatively level from year to year. The City may amend, modify, or terminate the 457(b)
plan. Funds in the plan cannot be diverted to any purposes other than for the exclusive
benefit of the participants or their beneficiaries or estates.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-45 -
NOTE H.PENSION PLANS -CONTINUED
The policemen are covered under a defined contribution plan established by the statues of
the State of Nebraska. Policemen terminating before retirement age receive payment for
their contributions to date of termination plus interest accrued and the vested portion of
the City’s contributions based on the statues of the State of Nebraska. The City has
fiduciary responsibility for the plan and it is a single employer plan only. Contributions
of $101,732 for 2008, were 12% of gross wages, which complies with statutory
requirements. The City contributed 6% of gross wages and the policemen contributed
6%. The City has no material pension benefit obligations as of September 30, 2008. The
City does expect contributions to remain relatively level from year to year. The
contributions are not actuarially determined. All qualifying police payroll was covered in
2008.
NOTE I.CONTRACT RECEIVABLE
In April 1984, the City of Blair contracted to sell its electrical transmission and
distribution generating facilities to the Omaha Public Power District. The terms of the
agreement were as follows:
Omaha Public Power District agreed to buy the City of Blair facilities for the sum
of $5,950,000. The terms of payment shall be $1,000,000 payable at the date of
the contract and the balance of $4,950,000 amortized over thirty years at nine
percent interest per annum, with annual payments of $481,815 commencing in
April 1985. This contract is unsecured.
This contract also provided for the Omaha Public Power District to supply electrical
service directly to the City and its residents. The transfer of electrical services was
completed on September 30, 1984.
NOTE J.LANDFILL CLOSURE
The City has closed its landfill operations. All material closing and monitoring costs
were accrued over the remaining life of the landfill. The Landfill closed October 31,
1993 and any remaining monitoring costs will be paid from City funds but are not
anticipated to be material to the financial statements.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-46 -
NOTE K.SPECIAL ASSESSMENTS RECEIVABLE
The City’s special assessments outstanding as of September 30, 2008, are composed of
special assessment principle of $2,395,184.
The delinquent special assessments at September 30, 2008 are 11%of those outstanding.
No special assessments have been pledged to specific debt.Although special assessments
principle and interest is reserved for various purpose bonds payments only.
NOTE L.CONCENTRATION OF CREDIT RISK
All of the receivables of the City of Blair proprietary funds and special assessments in the
debt service fund are from the local Blair area therefore creating a concentration of credit
risk. If the Blair area economy was depressed this could have an adverse effect on the
collection of the outstanding accounts receivable. Cargill, Inc. is a major water customer
for the City. Cargill, Inc. represents 85.46% of water sales for the year ended September
30, 2008.Although Cargill represents 85.46% of water sales, the City of Blair has a 25
year take or pay contract that secures the revenue stream for payment of the water debt
which minimizes the risk for payment of water bonds.
NOTE M.RELATED PARTY TRANSACTIONS
The City hold a Certificates of Deposit in the amount of $90,000 as of September 30,
2008 and has conducted other Certificate of Deposit business throughout the fiscal year
with Two Rivers State Bank, obtained through a process of requesting deposit rates from
several banks and selecting the best rate. The city council chair Lloyd Scheve is an
employee of Two Rivers State Bank.
In the ordinary course of business, the City has and expects to continue to have
transactions with the elected officials’ employer. In the opinion of management, such
transactions were on substantially the same terms, including interest rates and collateral,
as those prevailing at the time of comparable transactions with other persons and did not
involve more than a normal risk of collectability or present any other unfavorable
features to the City.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-47 -
NOTE N.SELF INSURANCE
The City’s Self Insurance Fund is used to account for employee health, dental and vision
liability claims and is accounted for as an internal service fund. Claims expense as
reported in the fund was reported based on actual expenses paid during the year fiscal
year ended September 30, 2008. The City has not recorded a liability for insurance
claims expected to be paid in future years, as the amount of these future claims cannot be
reasonably estimated. For fiscal year 2008, the Fund received interfund premiums of
$598,745 from various City departments in monthly payments. Additionally, the fund
received premiums $114,524 from employees of the City. These total premiums of
$713,269 exceeded claims expense for the year which totaled $666,254.
The City has purchased insurance for claims expenses incurred over a certain dollar
amount each year in order to limit its risk of loss. For the year ended September 30,
2008, the City received $110,309 in insurance recoveries from claims. These recoveries
have been reported as other operating revenues in the statement of revenues, expenses,
and changes in fund net assets, proprietary funds.
NOTE O.PRIOR PERIOD ADJUSTMENTS
Governmental Activities: In the Government-Wide statements, several adjustments were
required which had differing effects on the beginning net assets, as previously stated.
Prior period adjustments were required for the following reasons:
In the prior year, the City did not record a liability for accumulated compensated
absences. This liability has since been determined and would have amounted to
$146,512 in the prior year. The effect on this adjustment on prior year net assets
is a reduction of $146,512.
In the current year it was determined that the balance of special assessments
receivable in the prior year was misstated by $588,136. Additionally, special
assessments were improperly recorded as revenues in prior year when they should
have been shown as deferred revenues. The amount of deferred revenues which
should have been recognized at the end of the prior year was $2,641,761. Both
adjustments reduced the prior year net assets and the total adjustment amounted to
$3,229,897.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-48 -
NOTE O.PRIOR PERIOD ADJUSTMENTS -CONTINUED
In the prior year, property tax revenues and receivables were understated by
$50,280. Correcting this understatement resulted in an increase of prior year net
assets in the amount of $50,280.
In the prior year, the City did not record $70,826 in occupancy taxes which were
due at year end. The effect on this adjustment on prior year net assets is an
increase of $70,826.
In the prior year, the operations of the TIF 2 fund were improperly excluded from
reporting in the government wide financial statements. An adjustment was made
to include this fund in the government funds, resulting in a decrease of prior year
net assets of $36,706.
Governmental
Activities
Net Assets, as previously reported $ 14,195,386
Restatements for:
Compensated absences (146,512)
Special assessments (3,229,897)
Property tax revenues 50,280
Occupancy tax revenues 70,826
Capital improvements fund (36,706)
Total adjustments (3,292,009)
Net Assets, as restated $ 10,903,377
Business-Type Activities: In the Government-Wide statements, several adjustments were
required which had differing effects on the beginning net assets, as previously stated.
Prior period adjustments were required for the following reasons:
In the prior year, the City paid refundable deposits for the right to issue bonds.
These deposits were improperly recorded as an expense. The effect of this
adjustment is a decrease in net assets of $65,000.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS -CONTINUED
September 30, 2008
-49 -
NOTE O.PRIOR PERIOD ADJUSTMENTS -CONTINUED
Prior year revenues and receivables from utility sales were overstated by $27,877.
The effect of this adjustment on prior year net assets is a decrease of $27,877.
In the prior year, the City did not record a liability for accumulated compensated
absences. This liability has since been determined and would have amounted to
$116,955 in the prior year. The effect on this adjustment on prior year net assets
is a reduction of $116,955.
Business-type
Activities
Net Assets, as previously reported $ 11,429,229
Restatements for
Deposits for bond issuance (65,000)
Utility revenues (27,877)
Compensated absences (116,955)
Total adjustments (209,832)
Net Assets, as restated $ 11,219,397
SUPPLEMENTAL INFORMATION
Original and Variance
Final Favorable
Budget Actual (Unfavorable)
REVENUES
Taxes 3,319,363$ 3,591,190$ 271,827$
Charges for services 282,260 284,113 1,853
Interest income 37,200 32,315 (4,885)
Other revenues 1,442,234 1,628,959 186,725
Total revenues 5,081,057 5,536,577 455,520
EXPENDITURES
Administration 3,461,453 3,062,846 398,607
Contingency allowance 20,000 4,050 15,950
Police Department 1,519,413 1,494,876 24,537
Fire Department 95,050 104,896 (9,846)
Parks Department 735,686 427,087 308,599
Library 277,630 256,828 20,802
Swimming Pool 41,400 47,161 (5,761)
Zoning 140,210 134,217 5,993
Animal control 89,080 77,786 11,294
Donated Funds 81,518 138,838 (57,320)
Total expenditures 6,461,440 5,748,585 712,855
REVENUES OVER (UNDER) EXPENDITURES (1,380,383) (212,008) 1,168,375
OTHER FINANCING SOURCES (USES)
City of Blair, Nebraska
BUDGETARY COMPARISON SCHEDULE
For the year ended September 30, 2008
GENERAL FUND AND MAJOR SPECIAL REVENUE FUNDS
OTHER FINANCING SOURCES (USES)
Operating transfers - in 654,600 654,600 -
Operating transfers - out (645,000) (597,914) (47,086)
REVENUES AND OTHER FINANCING
SOURCES OVER (UNDER) EXPENDITURES
AND OTHER SOURCES (1,370,783) (155,322) 1,121,289$
FUND BALANCE - September 30, 2007 1,561,705 1,561,705
FUND BALANCE - September 30, 2008 190,922$ 1,406,383$
2,948,618$
(2,604,342)
2,285,993
4,036,652$
- 51 -
An explanation of the differences between budgetary inflows and outflows and
revenues and expenditures determined in accordance with generally accepted
accounting principles follows:
The budget fund balance at the beginning of the year is a based on cash
reserves rather than fund balance.
Accrual adjustments made because the City budgets for revenues and
expenditures on the cash basis, rather than on the modified accrual basis.
General Fund Balance
Adjustments for expenses paid out of the general fund that were for other
funds.
Original and Variance
Final Favorable
Budget Actual (Unfavorable)
REVENUES
Taxes
Property tax 1,174,763$ 1,082,150$ (92,613)$
Sales tax 1,656,000 1,867,972 211,972
Motor vehicle tax 128,600 131,784 3,184
Occupation and franchise tax 257,000 359,111 102,111
Other taxes 103,000 150,173 47,173
Total 3,319,363 3,591,190 271,827
Charges for services
Business licenses and permits 157,160 147,033 (10,127)
Library 13,500 14,036 536
Equipment rental 19,000 19,751 751
Cemetery lots 20,000 15,600 (4,400)
Grave openings 22,000 25,825 3,825
Towing 17,500 35,647 18,147
Other fees and charges 11,600 5,100 (6,500)
Sales of fireworks 15,000 15,000 -
RV park 6,500 6,121 (379)
Total 282,260 284,113 1,853
INTEREST INCOME 37,200 32,315 (4,885)
OTHER REVENUES
State grants 318,440 68,942 (249,498)
Federal grants - - -
Donations 54,000 152,545 98,545
Reimbursements 29,200 882,860 853,660
Other miscellaneous revenue 1,040,594 524,612 (515,982)
Total 1,442,234 1,628,959 186,725
Total revenues 5,081,057$ 5,536,577$ 455,520$
City of Blair, Nebraska
GENERAL FUND REVENUES
For the year ended September 30 2008
BUDGETARY COMPARISON SCHEDULE
- 52 -
Original and Variance
Final Favorable
Budget Actual (Unfavorable)
REVENUES
Highway allocation 530,000$ 576,872$ 46,872$
Property taxes 298,685 279,443 (19,242)
Other taxes 836,600 97,133 (739,467)
Incentive payment 6,000 6,000 -
State maintenance agreement 21,798 21,798 -
In-Lieu of tax 12,000 16,682 4,682
Homestead exemption - 11,538 11,538
Interest income 2,000 3,237 1,237
Other revenue 2,437,300 205,564 (2,231,736)
Total revenues 4,144,383 1,218,267 (2,926,116)
EXPENDITURES
Salaries 317,855 297,853 20,002
FICA 24,000 21,201 2,799
Employee insurance 81,500 91,261 (9,761)
Retirement 17,900 18,472 (572)
Legal 3,000 1,950 1,050
Auditing 3,300 5,988 (2,688)
Engineering 10,000 23,494 (13,494)
Office expense 5,150 4,541 609
Utilities 7,000 6,972 28
Telephone 2,000 2,542 (542)
Travel 2,800 5,978 (3,178)
Training 1,600 353 1,247
Insurance 20,200 20,917 (717)
Maintenance 38,750 52,199 (13,449)
Street lighting 130,000 145,832 (15,832)
County fees - 3,057 (3,057)
Car expense 3,000 1,499 1,501
Contract mowing 20,000 14,954 5,046
City of Blair, Nebraska
BUDGETARY COMPARISON SCHEDULE
STREET FUND
For the year ended September 30 2008
Contract mowing 20,000 14,954 5,046
Gas, diesel, and oil 26,000 30,651 (4,651)
Materials and supplies 109,900 163,692 (53,792)
Rental 35,500 22,479 13,021
Capital outlay
Equipment 28,000 29,848 (1,848)
Street improvements 2,214,000 259,284 1,954,716
Total expenditures 3,101,455 1,225,017 1,876,438
REVENUES OVER (UNDER) EXPENDITURES 1,042,928 (6,750) (1,049,678)
OTHER FINANCING SOURCES (USES)
Payment of warrant liabilities 1,290,000 25,004 (1,264,996)
Purchase of land - 9,600 9,600
Sale of assets 1,000 26,166 25,166
Operating transfers - in 194,000 14,318 (179,682)
REVENUES AND OTHER FINANCING SOURCES
OVER (UNDER) EXPENDITURES AND OTHER SOURCES 2,527,928 68,338 (2,459,590)$
FUND BALANCE - September 30, 2007 131,445 131,445
FUND BALANCE - September 30, 2008 2,659,373$ 199,783$
26,707$
(13,318)
213,172$
- 53 -
The budget fund balance at the beginning of the year is a based on cash reserves rather than fund balance.
Accrual adjustments made because the City budgets for revenues and expenditures on the cash basis, rather than on
the modified accrual basis.
Street Fund Balance
An explanation of the differences between budgetary inflows and outflows and revenues and expenditures determined in
accordance with generally accepted accounting principles follows:
Original and Variance
Final Favorable
Budget Actual (Unfavorable)
GROSS PROCEEDS -$ 783,846$ 783,846$
PRIZES
Declared prizes - 571,708 571,708
Unclaimed wins - (1,843) (1,843)
Net Prizes paid - 569,865 569,865
NET HOLD - 213,981 213,981
ALLOWABLE EXPENSES PAID
Lottery Operator's Commission - (109,738) (109,738)
KENO RECEIPTS
Revenues 96,000 104,243 8,243
TOTAL RECEIPTS 96,000 104,243 8,243
EXPENSES PAID BY CITY
State taxes 19,000 15,712 3,288
Other expenses 5,100 - 5,100
TOTAL EXPENSES PAID 24,100 15,712 8,388
PROCEEDS AVAILABLE FOR DISTRIBUTION 71,900 88,531 16,631
TRANSFER FROM (TO) PRIZE RESERVES - (31,853) (31,853)
COMMUNITY BETTERMENT - Direct 165,000 27,717 (137,283)
TRANSFER TO DEBT SERVICE 25,000 25,000 -
NET AFTER TRANSFERS (118,100) 3,961 122,061
Beginning Keno account
Fund balance 128,998 125,758 (3,240)
Interest 500 134 (366)
Reimbursements - - -
KENO ACCOUN FUND BALANCE 11,398$ 129,853$ 118,455$
PRIZE RESERVE FUND RECONCILIATION FOR
THE REPORTING PERIOD
Beginning reserve balance 12,475$
Increase in reserve 36,189
Withdrawals from reserve (4,337)
Ending reserve balance (deficit)44,327$
City of Blair, Nebraska
BUDGETARY COMPARISON SCHEDULE
KENO FUND
For the year ended September 30 2008
- 54 -
City of Blair, Nebraska
SCHEDULE OF FINDINGS AND RESPONSES
For the year ended September 30, 2008
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Item 1.-Preparation of Supporting Schedules
Criteria -Schedules that agree to the financial statements and the general ledger should
be maintained and on hand for proper supporting documentation of the City’s financial
statements and footnotes.
Condition -Certain schedules were prepared by the City for year-end financial statement
preparation that needed material adjustments to properly support the financial statements.
The schedules should be prepared during the closing process to assist the City in
preparing adjusting entries for the preparation of the financial statements and to reconcile
balances between the schedules and the general ledger. The schedules should also be
prepared to support disclosures for the City’s footnotes.
Cause -Lack of internal control procedures to define the required schedules necessary
and lack of processes for the maintenance of the financial statement supporting
schedules.
Effect -At the beginning of the audit process, there was no documented schedules for
cash and investment holdings, fixed assets, bond activities, property taxes, compensated
absences, or other various lead schedules that supported the amounts on the balance sheet
that explained the necessary adjusting entries and full accrual balances for the City.
Schedules were created during the audit by the client with our assistance based on the
organization’s documents which determined material audit adjustments and disclosures
for the basic set of financial statements.
Recommendation -Implement internal control policies to define schedules needed, and
internal control procedures to create and maintain proper schedules to track city activities
on a full accrual basis for financial statement reporting.
Officials Response -The City’s previous auditing firm maintained these schedules.The
City has purchased necessary software and will create proper schedules to maintain
necessary documentation and approval of all adjusting entries to maintain accrual
balances.City will work with a consultant to help perfect applications.
City of Blair, Nebraska
SCHEDULE OF FINDINGS AND RESPONSES -CONTINUED
For the year ended September 30, 2008
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Item 2.-Preparation of Basic Financial Statements
Criteria -Many organizations, including the City, rely on their auditor to generate the
annual financial statements including footnotes. We assisted in the proper presentation of
the financials and proposed material adjusting entries to present fairly the financial
statements of the City. With the issuance of Statement of Auditing Standards (SAS) No
112, the lack of expertise and controls to prepare the financial statements constitutes at
least a significant deficiency in internal controls.
Condition -The City of Blair keeps it books on a cash basis and relies on its auditors to
prepare the financial statements.
Cause -Lack of the required expertise in preparing the basic set of financial statements.
Effect -Material adjusting entries are required to be made during the audit for the proper
presentation of the City’s financial statements.
Recommendation -The City of Blair may consider gathering the necessary expertise to
prepare a required set of financial statements in a format acceptable for GAAP reporting.
Officials Response -The City will work to develop the ability to prepare necessary
financial statements. This maybe through the hiring of additional staff or contracting
with an independent entity.
Item 3.-Documentation of Policies and Procedures
Criteria -The City of Blair should have formalized policies and procedures for its key
administrative functions. A standard operating procedure (SOP) can be an effective
catalyst to drive performance improvements and improving overall results. SOP’s will
ensure that City operations are done consistently, approved procedures are being
followed in compliance with City regulations, they will serve as training documents for
teaching users about processes, and they will serve as a historical record of the how,
where, when, and why of City’s operations and information.
Condition -Employees do not have documentation of procedures to support their job
duties.
Cause -Lack of formalized standard operating procedures and controls.
City of Blair, Nebraska
SCHEDULE OF FINDINGS AND RESPONSES -CONTINUED
For the year ended September 30, 2008
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Item 3. -Documentation of Policies and Procedures -Continued
Effect -Reliance on informal information from City Administrator and City Treasurer on
majority of City’s accounting procedures and information.
Recommendation -We recommend that the City formalize and maintain a policy and
procedures manual. This manual should include all areas of activities, including
administration and operations. A policy and procedures manual will document how the
City operates and will support cross-training and reduce training issues relating to
employee turnover.
Officials Response -City will work to develop a policy and procedures manual for all
areas of activities.
City of Blair, Nebraska
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the year ended September 30, 2008
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Item 1.-Preparation of Supporting Schedules listed in the schedule of findings and responses was a
prior year finding.
Item 2.-Preparation of Basic Financial Statements listed in the schedule of findings and responses
was a prior year finding.
Item 3. -Documentation of Policies and Procedures listed in the schedule of findings and responses
was a prior year finding.