FY2014 Audit Report City
City of Blair, Nebraska
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITOR’S REPORT
For the year ended September 30, 2014
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TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR’S REPORT 3 – 5
MANAGEMENT’S DISCUSSION AND ANALYSIS 6 – 16
BASIC FINANCIAL STATEMENTS
Statement of net position - Government-wide 17 – 18
Statement of activities - Government-wide 19
Balance sheet - Governmental funds 20
Reconciliation of the balance sheet of the governmental funds
to the statement of net position 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 the governmental funds
to the statement of activities 23
Statement of net position - Proprietary funds 24
Statement of revenues, expenses, and changes in
fund net position - Proprietary funds 25
Statement of cash flows - Proprietary funds 26
Statement of net position - Fiduciary funds 27
Statement of changes in fiduciary net position – Fiduciary funds 28
NOTES TO FINANCIAL STATEMENTS 29 – 53
REQUIRED SUPPLEMENTAL INFORMATION
Budgetary comparison schedule - General fund and major special revenue funds 55 – 56
Budgetary comparison schedule - General fund revenues 57
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TABLE OF CONTENTS – CONTINUED
Page
Budgetary comparison schedule - Street fund 58
Budgetary comparison schedule - Keno fund 59
SUPPLEMENTAL INFORMATION
Combining balance sheet – General fund 61
Combining statement of revenues, expenditures, and changes in 62
Fund balance – general fund
Schedule of Expenditures of Federal Awards 63
Notes to Schedule of Expenditures of Federal Awards 64
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 65 – 66
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR
EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER
COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 67 – 69
SCHEDULE OF FINDINGS AND QUESTIONED COSTS 70 – 72
INDEPENDENT AUDITOR’S REPORT
To the City Council
City of Blair, Nebraska
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, and each major fund of the City of Blair, Nebraska, as of and for the
year ended September 30, 2014, and the 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.
Westroads Pointe |1015 N. 98th St. |Suite 200 |Omaha, NE 68114 |T 402.390.2480 |F402.390.0885 www.hayes-cpa.com
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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, and
each major fund of the City of Blair, Nebraska, as of September 30, 2014, and the respective
changes in financial position, and, where applicable, cash flows thereof for the year then ended
in accordance with accounting principles generally accepted in the United States of America.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis and budgetary comparison information on pages 6 - 16
and 55 - 59 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 the City of Blair, Nebraska’s basic financial statements. The introductory
section is presented for the purpose of additional analysis and is not a required part of the basic
financial statements. The schedule of expenditures of federal awards 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.
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The combining and individual non-major fund financial statements and the schedule of
expenditures of federal awards 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 is fairly stated
in all material respects in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
February 23, 2015, on our consideration of the City of Blair, Nebraska’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 of Blair, Nebraska’s internal control over financial
reporting and compliance.
Hayes & Associates, L.L.C.
Omaha, Nebraska
February 23, 2015
Hayes & Associates, LLC
City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the year ended September 30, 2014
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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, 2014. It should be
read in conjunction with the accompanying basic financial statements.
FINANCIAL HIGHLIGHTS
The assets of the City of Blair exceeded its liabilities at the close of the fiscal year ending
September 30, 2014, by $35.1 million (net position). Of this amount, $7.4 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 position increased by $2,355,253 for the year ended September
30, 2014.
As of September 30, 2014, the City of Blair’s governmental funds reported combined ending
fund balances of $4.2 million, an increase of $35,656 in comparison with the prior fiscal
year.
The fund balances for the General Fund increased $481,049 for the fiscal year ended
September 30, 2014. The Debt Service Fund decreased $371,668 and the Street Fund
decreased $45,422 during the same period.
The City’s total debt decreased by $1.8 million during the current fiscal year.
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.
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 position presents information on all of the City of Blair’s assets plus deferred
outflows, and liabilities plus deferred inflows, with the difference between the two reported as net
position. Over time, increases or decrease in net position may serve as a useful indicator of whether the
financial position of the City of Blair is improving or deteriorating. The statement of net position
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.
City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the year ended September 30, 2014
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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 position and the statement of activities are prepared utilizing the full accrual basis of
accounting as opposed to the modified accrual basis.
In the statement of net position and the statement of activities, the City is divided into two kinds of
activities, with the third activity (fiduciary) not included in the government-wide totals:
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.
Reporting the City’s Major Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. Some funds are required to be established by state laws
and by bond covenants. However, the City also 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 three kinds of fund financial statements (governmental,
proprietary and fiduciary) 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 by management.
City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the year ended September 30, 2014
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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 position 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.
Fiduciary fund - 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.
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 position was $35.1 million as of September 30, 2014. Analyzing the net
position and net expenses of governmental and business-type activities separately, the governmental
activities net position were $20.2 million and the business type activities net position were $14.9
million. This analysis focuses on the net position (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 position (79%) reflects its restricted and capital assets
(e.g., donations, community betterment, debt service, and capital projects).
Governmental Activities
Governmental activities increased the City’s net position by $1.4 million, while Business-type
Activities increased it by $1.0 million.
Key elements of this increase are as follows:
The revenue in governmental funding activities did increase along with expenses. The
General Fund was 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.
2014 2013 2014 2013 2014 2013
ASSETS
Current and other assets 6,816 $ 6,507 $ 5,243 $ 6,826 $ 12,059 $ 13,333 $
Capital assets 19,244 18,321 42,633 41,971 61,877 60,292
Total assets 26,060 24,828 47,876 48,797 73,936 73,625
LIABILITIES
Long-term debt outstanding 4,760 5,275 32,038 33,210 36,798 38,485
Other liabilities 1,029 718 976 1,690 2,005 2,408
Total liabilities 5,789 5,993 33,014 34,900 38,803 40,893
DEFERRED INFLOWS 46 - - - 46 -
NET POSITION
Net investment in
capital assetst 14,484 13,045 10,596 8,761 25,080 21,806
Restricted 744 1,173 1,807 3,139 2,551 4,312
Committed 29 186 - - 29 4,313
Unrestricted (deficit)4,968 4,432 2,459 1,997 7,427 6,429
Total net position 20,225 $ 18,835 $ 14,862 $ 13,897 $ 35,087 $ 32,732 $
City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the year ended September 30, 2014
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Governmental Activities Business-type Activities Total Primary Government
TABLE 1
All numbers below are in thousands
City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the year ended September 30, 2014
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The comparative financial analysis is provided for additional information. The City’s governmental
revenues increased when compared to the prior year by 1.0% or $74,509. The primary reason for
this increase was the receipt of grants, contributions and other miscellaneous revenues over the prior
year. The assessed value of the City of Blair increased by $10,947,058 or 2.32% as compared to the
prior year, while the City’s property tax rate of $0.354788 per $100 assessment, decreased slightly
from the prior year. The increase in valuation was mainly a result of increased commercial
construction and a slight rebound in housing construction.
Business-type Activities
Revenues of the City’s business-type activities were $8.8 million for the fiscal year ending
September 30, 2014. Expenses for the City’s business-type activities were $6.9 million for the year,
resulting in a net operating income of $0.9 million before transfers. The net increase was the result
of increase in income and decrease in expenses.
Capital Assets
At the end of the fiscal year 2014, the City had nearly $91.6 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 increases and decreases) of
$3.93 million or 4.5% 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.
Debt
At year-end, the City had $36.80 million in General Obligation Bonds, Revenue Bonds, and General
Registered Warrants outstanding as compared to $38.49 million at the end of the prior fiscal year,
resulting in a decrease of $1.69 million shown in Table 4. The City has a 25 year take or pay contract with
Cargill to secure the Water Revenue bond debt for the plant expansion, which is about 90% of the water
fund debt.
THE CITY’S FUND
At the close of the City’s fiscal year on September 30, 2014, the governmental funds of the City reported
a combined fund balance of $4.25 million. The city’s general fund balance was increased by $481,049.
The primary reason for the general fund’s increase was an increase of revenue from sales tax and permit
fee’s as a result of the increase in construction from the June 3, 2014, hail storm that hit the entire
community of Blair.
2014 2013 2014 2013 2014 2013
REVENUES
Program revenues
Charges for services 817 $ 511 $ 7,730 $ 7,038 $ 8,547 $ 7,549 $
Operating grants and
contributions 1,165 851 1,028 222 2,193 1,073
Capital grants and
contributions 6 99 - - 6 99
General revenues
Taxes 5,018 4,469 - - 5,018 4,469
Intergovernmental - - - - - -
Interest income 51 68 6 11 57 79
Special assessment 1 - - - 1 -
Other 405 1,390 75 147 480 1,537
Total revenues 7,463 7,388 8,839 7,418 16,302 14,806
EXPENSES
Administration 1,395 723 - - 1,395 723
Police 1,791 2,119 - - 1,791 2,119
Fire 356 369 - - 356 369
Parks 589 581 - - 589 581
Library 378 388 - - 378 388
Swimming pool 91 66 - - 91 66
Zoning 223 219 - - 223 219
Animal control 110 107 - - 110 107
Donated fund 35 30 - - 35 30
Mitigation 5 - - - 5 -
Streets 1,775 1,211 - - 1,775 1,211
Keno 25 17 - - 25 17
Community betterment 42 - - - 42 -
Rescue 41 - - - 41 -
Interest expense 153 148 - - 153 148
Water - - 5,730 5,110 5,730 5,110
Sewer - - 1,208 1,106 1,208 1,106
Total expenses 7,009 5,978 6,938 6,216 13,947 12,194 CHANGE IN NET POSITION
BEFORE TRANSFERS 454 1,410 1,901 1,202 2,355 2,612 TRANSFERS 936 573 (936) (573) - - CHANGE IN NET POSITION 1,390 1,983 965 629 2,355 2,612 NET POSITION, BEGINNING 18,835 16,895 13,897 15,850 32,732 32,745
PRIOR PERIOD ADJUSTMENT - (43) - (2,582) - (2,625)
NET POSITION, BEGINNING
OF YEAR, RESTATED 18,835 16,852 13,897 13,268 32,732 30,120
NET POSITION, END OF YEAR 20,225 $ 18,835 $ 14,862 $ 13,897 $ 35,087 $ 32,732 $
City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the year ended September 30, 2014
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TABLE 2
Governmental Activities Business-type Activities Total Primary Government
All numbers below are in thousands
City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the year ended September 30, 2014
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General Fund Budgetary Highlights
General Fund had revenues over expenditures of $481,049. This was primarily accomplished from
the fact expenses were below budgeted projections and sales tax revenue was slightly higher than
projected.
Debt Service had expenditures of $371,668 more than revenues. This was primarily due to the fact
that bond payments where greater than revenues from assessments. Assessment revenues were down
due to the fact that the City had foreclosed on delinquent assessments in Deerfield in a previous year.
Street Fund had an operating loss of $1.05 million. This was offset with the transfer in of $1.18
million in sales taxes for capital projects which resulted in a net decrease in fund balance of $45,422.
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 and Sewer
both finished the year with a ratio of operating income before depreciation, divided by Debt
Service greater than 1.25 as required by the covenants in the authorizing Ordinances. The City
had $54,017 in Construction funds available as part of the Water Plant expansion project at the
close of the fiscal year. With the completion of the construction project the remaining $54,017
will be used to pay interest on the construction bond anticipation notes.
Internal Service Fund from previous financial statements was combined into the General Fund, Fund
Balance as the City no longer maintains a self-funded health insurance program for funding the City
Employee health insurance benefit program.
The health care program and contracts have previously operated on a calendar year basis and effective
January 1, 2013, the City entered into a commercial health plan through Blue Cross and Blue Shield of
Nebraska at a saving of approximately $90,000 a year. Effective October 1, 2013, the City entered into
a revised contract with Blue Cross & Blue Shield to extend the coverage’s until September 30, 2014,
thus putting the City’s employee health insurance renewal on a fiscal year bases for future budgeting
purposes.
Summary of future projects and funding needs
The City of Blair is currently in the process of evaluating and/or designing a number of future
infrastructure projects that will require significant future funding. The Council has made a commitment
to fund a new library, Technology and Culture Center in cooperation with the Blair Library Foundation.
The Council has pledged up to $2.5 million towards the project assuming the Foundation can raise
another $2.5 million. The City’s share of the funds is anticipated to come through a lease purchase
agreement with the Library Foundation. The Foundation will enter into a 40 year USDA Library
facilities loan with an interest rate of 3.75%. The City’s annual payments to the Foundation are
anticipated to be funded by the use of Sales tax. Work also continues on the development of a Near
South by Pass to help get trucks off of the Washington Street corridor. This section of Highway 30
currently carries over 20% truck traffic in comparison to a State average of less than 10% on other State
Highways.
Balance Decreases /Balance
September 30, 2013 Increases Recharacterization September 30, 2014
GOVERNMENTAL ACTIVITIES
Land 1,273$ 240$ (156)$ 1,357$
Construction in progress 121 1,527 (95.00) 1,553
Infrastructure 14,173 99 - 14,272
Buildings 6,107 - - 6,107
Equipment 4,558 244 (79) 4,723
Total governmental 26,232 2,110 (330) 28,012
BUSINESS-TYPE ACTIVITIES
Water assets 51,947 10,553 (8,580) 53,920
Sewer assets 9,462 325 (142) 9,645
Total business-type 61,409 10,878 (8,722) 63,564
Totals 87,641$ 12,988$ (9,052)$ 91,576$
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City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the year ended September 30, 2014
TABLE 3
All numbers below are in thousands
City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the year ended September 30, 2014
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A recent study was completed on Pool improvements that got public input as to what the Community
wanted in an aquatic facility. The summary of the study was clear that the majority of the Citizens, at
least those that participated in the study, felt the City needs to replace the current pool that is over 70
years old with a new modern zero depth pool and aquatics facility.
The City was awarded a FEMA mitigation grant in July of 2014 to build flood protection around the
Water and Waste Water Plants to protect the plants from the possibility of flooding from the Missouri
River like that the occurred in 2011. The project will also include adding new generators to both plants
to help provide redundant power should OPPD distribution get cut off from the plants. The project is
estimated to cost approximately $6.9 million with FEMA providing 75% of the funding. The City’s
funding is anticipated to come from Water Revenues, Sales Tax, and a grant from the Papio-Missouri
River NRD.
The City staff continues to monitor and participate in discussions with other communities on potential
future environmental regulations by the Nebraska DEQ, the EPA, and other Federal agencies that could
inversely affect the future water and sewer rates. The City is currently in discussion with NDEQ on a
new NPDS permit for the Water Plant. The future requirements of that permit could result in the need
for future capital projects that could affect the future rates
Economic factors and next year’s budgets and rates
Current economic conditions continue to point toward solid growth in the community that will allow
for a stable budget environment. The City valuation for taxable year 2013 was slightly up from the
previous year’s value, and the 2014 City valuation increased about 1.0% or about $4.6 million.
As the City moves into the Fiscal year 2015, the City is in full recovery mode from the June 2014 hail
storm that damaged almost every building and most cars in the City. The City has issued over 3100
permits for new roofs, siding, and windows since the June storm and anticipates there are an
additional 1000 permits to still be issued. The City estimates the total cost of the hail storm repairs
will exceed $100 million not including vehicles. The total cost to City infrastructure is estimated to be
over $5.0 million. The City’s cost will be covered by insurance and FEMA. The City had a single
$3,000 deductible. FEMA will reimburse the City for any damage to property that was not covered by
insurance at 75%. The City anticipates the final FEMA claim will be less than $100,000.
Balance Balance
September 30,September 30,
2013 Additions Reductions 2014
General Obligation Bonds 5,275 - (515) 4,760
Water Revenue Bonds 30,255 120 (1,192) 29,183
Sewer Revenue Bonds 2,955 - (101) 2,854
Totals 38,485$ 120$ (1,808)$ 36,797$
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City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the year ended September 30, 2014
Description
TABLE 4
All numbers below are in thousands
City of Blair, Nebraska
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the year ended September 30, 2014
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With the purchase of the Dana College Campus by Midland University through a private development
partner the taxable valuation should remain stable and continue to grow over the next year or two.
Once Midland University executes their purchase of the Campus from the Development partner the
current $3.6 million valuation placed on the Campus property will be eliminated which will limit
valuation growth in a future fiscal year. Previous discussions with Midland University indicate that
they hope to complete the transaction for full ownership by 2016 but due to a number of
circumstances it will probably be 2017 or 2018. The positive side is that with the reopening of the
College, it is anticipated to have a positive effect on home sales, valuations and sales tax receipts. The
City’s sales tax continues to remain stable. It appears that the industrial growth of the Bio industries
on the Cargill Bio Campus along with the new retail stores over the past couple of years will help
maintain a solid base for continued growth of the City’s tax base. In addition to the industrial
development, interest in potential new retail establishments remains strong. The City is still working
on the development of a new motel and other retail businesses.
The City of Blair property tax request for fiscal year 2014/2015 remained stable with a property valued
at $200,000 in the City of Blair being assessed an annual property tax of $715.18 for City operations as
compared to $709.58 for 2013/2014.
As stated previously, the City’s property valuation seems to have stabilized. Although new
construction continues to be solid with 24 new housing starts in fiscal year 2014. The potential to
increase that number of housing starts for 2015 looks very positive. Developers are again looking at
development of new housing subdivisions and the City’s short term (1-5 years) forecast continues to
be solid. The City budgets about 60% annually of the estimated $2.2 million in sales tax receipts for
recurring projects such as property tax relief, fire bond payment and economic development. The
balance of the sales tax dollars are available for discretionary capital projects and equipment that are
important to the citizens of the City.. The City continues to work to create additional retail
opportunities through the promotion of solid economic development. The extension of the sales tax
beyond 2015 will allow for a continued reasonable property tax levy and the construction of future
infrastructure improvements such as a highway bypass, street overlays, new library, and improved
pool. The City has two projects on the repair of infrastructure that was damage from the flood of 2011
that will be repaired in the calendar year 2015.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and
creditors with a general overview of the City’s finances and to show the City’s accountability for the
money it receives. If you have questions about this report or need additional financial information,
contact the City of Blair, 218 S. 16th Street, Blair, NE 68008.
Governmental Business-type
Activities Activities Total
ASSETS
Current Assets
Cash and cash equivalents 3,723,089$ 1,911,304$ 5,634,393$
Accounts receivable 513,993 876,253 1,390,246
Grants receivable 111,736 638,964 750,700
Property tax receivable 171,859 - 171,859
Accrued interest receivable - - -
Prepaid expense 13,757 9,309 23,066
Special assessments receivable 1,236,804 - 1,236,804
Total Current Assets 5,771,238 3,435,830 9,207,068
Noncurrent Assets
Notes receivable 300,000 - 300,000
Restricted cash and cash equivalents 745,054 1,807,190 2,552,244
Capital assets
Non-depreciable
Land 1,356,683 423,783 1,780,466
Construction in progress 1,553,122 6,432 1,559,554
Depreciable
Infrastructure 14,271,991 17,959,843 32,231,834
Buildings 6,107,363 42,624,757 48,732,120
Equipment 4,723,326 2,549,609 7,272,935
Accumulated depreciation (8,768,397) (20,931,464) (29,699,861)
Net Capital Assets 19,244,088 42,632,960 61,877,048
Total Noncurrent Assets 20,289,142 44,440,150 64,729,292
Total assets 26,060,380$ 47,875,980$ 73,936,360$
See accompanying notes and independent auditor's report.
- 17 -
City of Blair, Nebraska
STATEMENT OF NET POSITION
September 30, 2014
GOVERNMENT - WIDE
Governmental Business-type
Activities Activities Total
LIABILITIES
Current Liabilities
Cash overdraft 32,956$ -$ 32,956$
Accounts payable 490,896 500,976 991,872
Accrued expenses 260,314 144,558 404,872
Accrued interest 29,705 329,238 358,943
Deposits payable 135,304 1,700 137,004
Register warrants 80,294 - 80,294
Total Current Liabilities 1,029,469 976,472 2,005,941
Noncurrent Liabilities
Bonds payable
Due within one year 525,000 1,257,079 1,782,079
Due in more than one year 4,235,000 30,780,181 35,015,181
Total Noncurrent Liabilities 4,760,000 32,037,260 36,797,260
Total Liabilities 5,789,469 33,013,732 38,803,201
DEFERRED INFLOWS
Nonrefundable deposits 46,000$ - 46,000$
NET POSITION
Net investment in capital assets 14,484,088 10,595,700 25,079,788
Restricted:
Capital outlay - 54,017 54,017
Debt service 436,294 1,753,173 2,189,467
Donated projects 25,277 - 25,277
Rescue Squad 155,568 - 155,568
Reuse funds 6 - 6
Economic Development 16,850 - 16,850
Community betterment 109,083 - 109,083
Committed:
Capital projects 29,305 - 29,305
Unrestricted 4,968,440 2,459,358 7,427,798
Total net position 20,224,911 14,862,248 35,087,159
Total liabilities, deferred inflows, and net position 26,060,380$ 47,875,980$ 73,936,360$
GOVERNMENT - WIDE
September 30, 2014
- 18 -
See accompanying notes and independent auditor's report.
City of Blair, Nebraska
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Net changes in fund balance - total governmental funds 35,656$
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 are allocated over
their estimated useful lives as functional expense when the cost is above
the capitalization threshhold. The activity is reconciled as follows:
Cost of assets capitalized, net of retirements 1,853,802
Depreciation expense (920,149)
Repayment of bond principal is an expenditure in the
govermental funds, but the repayment reduces long-term liabilities
in the statement of net position 515,000
Income that is recognized as current financial resources, but are not
reported as revenue at the government-wide statements (70,180)
Income recognized at the government-wide statements that is not a current
financial resource in the government funds.3,199
Reduction of certain liabilities reported in the statement of activities that do not
require the use of current financial resources, and therefore, the reduction of
expensesare not reported as reduced expenditures in governmental funds.(27,087)
Change in net position of governmental activities 1,390,241$
See accompanying notes and independent auditor's report.
- 23 -
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, 2014
TO THE STATEMENT OF ACTIVITIES
Water Sewer Total
CURRENT ASSETS
Cash 1,672,852$ 238,452$ 1,911,304$
Accounts receivable - Utilities/user fees 713,743 162,510 876,253
Grants receivable 628,923 10,041 638,964
Prepaid expense 7,161 2,148 9,309
Total current assets 3,022,679 413,151 3,435,830
NON-CURRENT ASSETS
Restricted assets
Bond and interest sinking fund cash
and investments 1,498,673 254,500 1,753,173
Capital project bond reserve 54,017 - 54,017
Total non-current assets 1,552,690 254,500 1,807,190
CAPITAL ASSETS
Land 373,908 49,875 423,783
Construction in progress 2,869 3,563 6,432
Infrastructure 15,366,900 2,592,943 17,959,843
Buildings 36,711,909 5,912,848 42,624,757
Equipment 1,464,415 1,085,194 2,549,609
Accumulated depreciation (16,173,174) (4,758,290) (20,931,464)
Total capital assets 37,746,827 4,886,133 42,632,960
DEFERRED OUTFLOWS OF RESOURCES
None - - -
TOTAL ASSETS 42,322,196$ 5,553,784$ 47,875,980$
CURRENT LIABILITIES
Accounts payable 339,739$ 161,237$ 500,976$
Accrued expenses 102,909 41,649 144,558
Accrued interest 284,453 44,785 329,238
Deposits 1,700 - 1,700
Registered warrants - - -
Unearned revenue - - -
Bonds payable, current portion 1,149,557 107,522 1,257,079
Total current liabilities 1,878,358 355,193 2,233,551
NON-CURRENT LIABILITIES
Bonds payable, net of current portion 28,033,870 2,746,311 30,780,181
Total liabilities 29,912,228 3,101,504 33,013,732
NET POSITION
Net investment in capital assets 8,563,400 2,032,300 10,595,700
Restricted for debt service 1,498,673 254,500 1,753,173
Restricted for capital projects 54,017 - 54,017
Unrestricted 2,293,878 165,480 2,459,358
Total net position 12,409,968 2,452,280 14,862,248
Total liabilities and net position 42,322,196$ 5,553,784$ 47,875,980$
City of Blair, Nebraska
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
September 30, 2014
See accompanying notes and independent auditor's report.
- 24 -
ASSETS
LIABILITIES AND NET POSITION
Enterprise Funds
Water Sewer Total
OPERATING REVENUES
Charges for services 6,717,376$ 969,112$ 7,686,488$
Sale of merchandise 27,126 - 27,126
Forfeited discounts 16,519 - 16,519
Intergovernmental 1,017,490 10,041 1,027,531
Other 36,926 38,579 75,505
Total operating revenues 7,815,437 1,017,732 8,833,169
EXPENSES
Personnel 954,489 487,049 1,441,538
Operating expenses 664,480 255,102 919,582
Utilities 711,290 58,613 769,903
Chemicals 1,048,076 36,867 1,084,943
Materials and supplies 90,255 11,175 101,430
Rental expense 4,668 4,044 8,712
Insurance claims and expenses - - -
Depreciation 1,244,724 249,043 1,493,767
Total expenses 4,717,982 1,101,893 5,819,875
OPERATING INCOME 3,097,455 (84,161) 3,013,294
NON-OPERATING REVENUES (EXPENSES)
Interest income 5,225 953 6,178
Interest expense (966,544)(106,418)(1,072,962)
Bonding costs (45,057)- (45,057)
Total nonoperating revenues (expenses)(1,006,376) (105,465) (1,111,841)
INCOME (LOSS) BEFORE TRANSFERS 2,091,079 (189,626) 1,901,453
OPERATING TRANSFERS
Operating transfers - in 14,209 - 14,209
Operating transfers - out (936,441)(14,209) (950,650)
Total operating transfers (922,232) (14,209) (936,441)
CHANGE IN NET POSITION 1,168,847 (203,835) 965,012
11,241,121 2,656,115 13,897,236
NET POSITION, END OF YEAR 12,409,968$ 2,452,280$ 14,862,248$
- 25 -
City of Blair, Nebraska
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
For the year ended September 30, 2014
See accompanying notes and independent auditor's report.
Enterprise Funds
NET POSITION, BEGINNING OF YEAR
Water Sewer Total
Cash received from customers 7,233,932$ 1,005,144$ 8,239,076$
Cash payments to suppliers (3,375,207) (217,048) (3,592,255)
Cash payments to employees (940,048) (492,432) (1,432,480)
Cash paid for interfund services used - - -
Cash provided from operating activities 2,918,677 295,664 3,214,341
CASH FLOWS FROM NON-CAPITAL
FINANCIAL ACTIVITIES
Operating transfers (922,232) (14,209) (936,441)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition of capital assets (1,972,797) (182,668) (2,155,465)
Repayment of warrants - - -
Receipt of debt proceeds 120,644 - 120,644
Repayment of long-term debt (1,192,110) (101,570) (1,293,680)
Interest payment long-term debt (1,025,821) (107,975) (1,133,796)
Cash used from capital and related
financing activities (4,070,084) (392,213) (4,462,297)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from interest earnings 5,225 953 6,178
Disbursements from (to) restricted assets 1,332,433 - 1,332,433
Cash provided from investing activities 1,337,658 953 1,338,611
CHANGE IN CASH AND CASH EQUIVALENTS (735,981) (109,805) (845,786)
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 2,408,833 348,257 2,757,090
CASH AND CASH EQUIVALENTS,
END OF YEAR 1,672,852$ 238,452$ 1,911,304$
Reconciliation of operating income to net cash
from operating activities
Operating income 3,097,455$ (84,161)$ 3,013,294$
Adjustments to reconcile operating income
to net cash from operating activities
Depreciation 1,244,724 249,043 1,493,767
Extraordinary expense
Change in receivables (581,505) (12,588) (594,093)
Change in prepaid expenses (1,575) 299 (1,276)
Change in accounts payable (854,863) 148,454 (706,409)
Change in accrued expenses 14,441 (5,383) 9,058
Change in unearned revenues - - -
Total adjustments (178,778) 379,825 201,047
CASH PROVIDED FROM OPERATING ACTIVITIES 2,918,677$ 295,664$ 3,214,341$
See accompanying notes and independent auditor's report.
- 26 -
City of Blair, Nebraska
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
September 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Enterprise Funds
Pension
Trust Fund
ASSETS
Investment in fiscal agent:
Principal investment accounts 6,517,477$
Guaranteed interest accounts 67,705
Total Assets 6,585,182$
NET POSITION
Net position held in trust for retirement 6,585,182$
Total Net Position 6,585,182$
City of Blair, Nebraska
STATEMENT OF NET POSITION
September 30, 2014
See accompanying notes and independent auditor's report.
- 27 -
FIDUCIARY FUNDS
Pension
Trust Fund
Additions
Contributions
Employer 231,875$
Employee 235,869
Total Contributions 467,744
Investment Earnings
Dividends 12,843
Net increase in the fair value of investments 585,389
Total Additions 1,065,976
Deductions
Administrative expenses 4,760
Terminations 506,841
Contribution credit-forfeitures 1,997
Total Deductions 513,598
Change in Net Position 552,378
Net Position, Beginning of Year 6,032,804
Net Position, End of Year 6,585,182$
City of Blair, Nebraska
FIDUCIARY FUNDS
For the year ended September 30, 2014
See accompanying notes and independent auditor's report.
- 28 -
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 29 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the City of Blair,
Nebraska:
1. Reporting Entity
The City of Blair, Nebraska (the City) is a Municipal Corporation which was
founded and incorporated in 1869. With a population of 8,013, the City of Blair
functions as a City of the First Class under Nebraska Statutes. 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. This report
includes all funds of the City (the “primary government”). There are no
component units.
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
position and a statement of activities (including changes in net position). 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 and business-type activities for the
City. These statements are presented on an “economic resources” measurement
focus and the accrual basis of accounting.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 30 -
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 statement of net
position. 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 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 position and internal transactions in
the statement of activities have been eliminated. The purpose of transfers
between funds was to record proper allocation of expenses.
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 THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 31 -
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
position presented in the government-wide financial statements. The City has
presented all major funds that meet the qualifications of GASB Statement No. 34,
and has chosen to optionally present as major certain other funds (Keno and
Capital Projects) that do not meet the major fund requirements.
All governmental funds are accounted for on the 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 fund balances. 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. Measurable means knowing or being able to reasonably estimate the
amount. Available means collectible within the current period or within 60 days
after year end. Expenditures (including capital outlay) are recorded 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 main operating fund. It accounts for all
financial resources of the City, except those required to be accounted for in
another fund.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 32 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
2. Basis of Accounting/Measurement Focus – Continued
Governmental Fund Financial Statements – Continued
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.
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 Capital Projects Fund is used to fund capital project construction,
development, improvement, and repairs.
Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a statement of net position, a
statement of revenues, expenses and changes in fund net position, and a statement
of cash flows for each major proprietary fund. A column representing internal
service funds is also presented in these 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 fund net position presents
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.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 33 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
2. Basis of Accounting/Measurement Focus – Continued
Proprietary Fund Financial Statements – Continued
Proprietary funds distinguish operating revenues and expenses from non-
operating items. Operating revenues and expenses 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.
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.
Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a statement of net position. 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. Accordingly, it presents only a statement of fiduciary net position and
does not present a statement of changes in fiduciary net position. Fiduciary funds
are not reflected in the government-wide financial statements because the
resources of those funds are not available to support the City’s own programs.
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.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 34 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
2. Basis of Accounting/Measurement Focus – Continued
Fiduciary Fund Financial Statements – Continued
The City reports the following fiduciary fund:
TIF 1 Fund - 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.
Pension Trust Funds – Trust funds account for assets held by the City for the
members and beneficiaries of defined benefit and contribution pension plans and
deferred compensation plan. The reporting entity includes the following trust
funds:
Police Pension Accounts for the administration of the police pension
fund under the defined contribution plan.
General Government Accounts for the administration of the non- police
Pension employees' pension funds under the defined
contribution plan.
Deferred Compensation Accounts for the administration of employees that want
Plan to make additional contributions into a plan under the
deferred compensation plan.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 35 -
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 fund’s 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, 2014.
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.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 36 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
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, 2014.
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 fair 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.
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
Small Vehicles 5
Large Vehicles (i.e. Ambulance & Fire Truck) 10 to 20
Buildings 40
Infrastructure 40
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 37 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
7. Property Taxes
Property tax revenue is recognized when collected by the County, as the City’s
agent, within the current period and when available 60 days after the City’s year
end. There are no property taxes due which are not delinquent and all delinquent
taxes are considered collectible.
The City’s December 31, 2014 valuation was $482,920,495. The levy for the
City for the year ending September 30, 2014, was $0.3548 per $100 of value. The
total tax levy was $1,713,344. 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.
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 position. 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.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 38 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
9. Compensated Absences - Continued
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 governmental funds are related to the
reserved fund balances. Restricted assets in the proprietary funds are related to
the restricted for debt service fund balances.
11. Allowance for Doubtful Accounts
The City uses the direct write-off for uncollectable accounts. The City
determined that all receivable balances at September 30, 2014, were collectible.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 39 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
12. 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. Transfers are related to funding for capital projects, debts service,
or reallocations of special revenues. They are intended to maintain fund balances
and allocate the City’s resources.
Interfund transfers were as follows for the year ended September 30, 2014:
General Debt Street Water Capital
Transfers Out: Fund Service Fund Fund Projects Total
General Fund 1,649,963$ 198,830$ 522,170$ -$ 25,000$ 2,395,963$
Water Fund 280,000 - 656,441 - - 936,441$
Sewer Fund - - - 14,209 - 14,209$
Debt Service Fund 300,000 - - - - 300,000$
Street Fund 170,000 - - - - 170,000$
Keno Fund 49,751 - - - - 49,751$
2,449,714$ 198,830$ 1,178,611$ 14,209$ 25,000$ 3,866,364$
Transfers In :
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 40 -
NOTE B. DEPOSITS AND INVESTMENTS
Deposits and investments consist of demand deposits and certificates of deposit. The
City maintains a cash pool that is available for all funds. 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 carrying amount of the City’s
cash deposits was $8,153,321 at September 30, 2014. The bank balances of the City’s
cash deposits as September 30, 2014, was $8,178,688. The City’s carrying amount and
bank balances include $1,828,173 of certificates of deposit that are part of the Certificate
of Deposit Account Registry Service (CDARS). Each of the certificates of deposit has a
maturity date less than one year.
The following is detail of amounts included in cash, which are restricted for specific
purposes:
The City has no formal policy for handling credit risk, interest rate risk, or concentration
risk; however, deposits and investments consist of demand deposits and certificates of
deposits. The statutes of the State of Nebraska require that local governmental units
follow the “prudent man” rule with deposits, and that deposits be secured by collateral
valued at market or par whichever is lower less the amount insured by the Federal
Deposit Insurance Corporation. The City has no deposit and investment policy that
would further limit its deposits, but the City administratively has required all deposits to
be collateralized at 105%.
Fund Amount
Keno 106,400$
General-Reuse 6
General-Rescue Squad 160,546
Water 1,552,690
Sewer 254,500
Debt Service 435,875
General-Economic Development 16,850
General-Donations 25,377
2,552,244$
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 41 -
NOTE B. DEPOSITS AND INVESTMENTS - CONTINUED
The City of Blair has a number of cash funds and investments that are restricted due to
donor imposed restrictions or for purposes related to the fund. The certificates of deposit
of $1,753,173 are restricted for the enterprise funds (Water and Sewer) for bond and
interest expenditures. The cash in the Donations Fund are restricted based on the donor
imposed restrictions. The cash in the Economic Development Fund is restricted for
economic development and can only be used if it is approved via vote per the City
Council. The City Council annually decides how much to budget for the fund. The
budget is set not to exceed 1/10 of one per cent of the annual City valuation.
The cash in the Debt Service Fund are restricted for the special assessments pledged for
the payment of the G.O. bonds. The cash in the Capital Projects (TIF 1) are restricted to
pay for the construction projects. If a balance exists after the completion of the projects
at the end of the 15 years, those funds would be required to be returned to the County
Treasurer for distribution to all taxing entities. The cash in the Water Fund are restricted
to pay for the construction and related costs of the water plant expansion contract. If any
funds are still available upon completion of the plant expansion project, the unused funds
could only be used to pay principle and interest on the bond notes. These funds were
received per the bond anticipation note.
The cash in the Rescue Squad Fund are restricted for the use of the City Fire and Rescue
Departments. The cash in the Reuse fund are restricted and can only be used per the
Reuse plan or be forfeited to the Nebraska Department of Economic Development. The
cash in the Keno fund are restricted for Keno purposes.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 42 -
NOTE C. CAPITAL ASSETS
A summary of changes in capital assets is as follows:
Governmental Activities
Balance
September 30,
2013
Prior Period
Adjustments
Adjusted
Balance
September 30,
2013 Increases Decreases
Balance
September 30,
2014
Capital assets not depreciated
Land 1,273,015$ - 1,273,015 240,000$ (156,332)$ 1,356,683$
Construction in progress 120,971 (28,743) 92,228 1,526,507 (65,613) 1,553,122
Total capital assets not depreciated 1,393,986 (28,743) 1,365,243 1,766,507 (221,945) 2,909,805
Other capital assets
Infrastructure 14,172,856 - 14,172,856 99,135 - 14,271,991
Buildings 6,107,363 - 6,107,363 - - 6,107,363
Equipment 4,558,304 - 4,558,304 244,049 (79,027) 4,723,326
Total other capital assets 24,838,523 - 24,838,523 343,184 (79,027) 25,102,680
Less accumulated depreciated
Infrastructure (2,561,218) - (2,561,218) (438,940) - (3,000,158)
Buildings (2,684,981) - (2,684,981) (150,933) - (2,835,914)
Equipment (2,665,872) - (2,665,872) (330,276) 63,823 (2,932,325)
Total accumulated depreciation (7,912,071) - (7,912,071) (920,149) 63,823 (8,768,397)
Other capital assets, net 16,926,452 - 16,926,452 (576,965) (15,204) 16,334,283
Governmental activities capital assets, net 18,320,438 $ (28,743)$ 18,291,695$ 1,189,542$ (237,149)$ 19,244,088$
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 43 -
NOTE C. CAPITAL ASSETS - CONTINUED
Depreciation expense was charged to governmental activities functions as follows:
Business-Type Activities
Governmental Activities:
Administration 69,944$
Police 66,038
Fire 120,362
Parks 49,106
Library 4,046
Swimming pool 21,343
Animal control 13,976
Rescue Squad 41,013
Streets 534,322
Total Depreciation 920,150$
Balance
September 30,
2013 Increases Decreases
Balance
September 30,
2014
Capital assets not depreciated
Land 423,783$ - $ -$ 423,783$
Construction in progress 6,779,245 1,949,442 (8,722,255) 6,432
Total capital assets not depreciated 7,203,028 1,949,442 (8,722,255) 430,215
Other capital assets
Infrastructure 9,189,501 8,770,342 - 17,959,843
Buildings 42,624,757 - - 42,624,757
Equipment 2,391,673 157,936 - 2,549,609
Total other capital assets 54,205,931 8,928,278 - 63,134,209
Less accumulated depreciated
Infrastructure (1,135,347) (298,911) - (1,434,258)
Buildings (16,412,683) (1,091,169) - (17,503,852)
Equipment (1,889,667) (103,687) - (1,993,354)
Total accumulated depreciation (19,437,697) (1,493,767) - (20,931,464)
Other capital assets, net 34,768,234 6,633,657 - 42,202,745
Business-type activities, net 41,971,262$ 9,383,953 $ (8,722,255) $ 42,632,960 $
NOTE D. BONDS PAYABLE
A summary of the changes followed by principal and interest schedules and is as follows:
Governmental Activities
Balance Balance
Interest September 30,September 30,Due within
Dated Description Rate 2013 Additions Reductions 2014 One year
12/14/2007 Tax increment
financing bond 4.48%895,000$ - $ (80,000)$ 815,000$ 90,000$
2/26/2008 Public safety tax
anticipation bonds 3.30 - 4.25% 510,000 - (40,000) 470,000 45,000
5/18/2010 General Obligation 2.10-4.25% 1,055,000 - (75,000) 980,000 75,000
11/15/2011 General Obligation
Refunding Bond 0.75-3.60% 2,815,000 - (320,000) 2,495,000 315,000
Total 5,275,000$ -$ (515,000)$ 4,760,000$ 525,000$
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2014
- 44 -
NOTE D. BONDS PAYABLE (CONTINUED)
Business-type Activities
Balance Balance
Interest September 30,September 30,Due within
Dated Description Rate 2013 Additions Reductions 2014 One year
WATER DEBT
6/15/2000 Refunding Bonds 5.50%100,000$ - $ (100,000)$ - $ - $
4/29/2002 DEQ Bonds 3.03% 1,898,958 - (742,496) 1,156,462 765,164
6/1/2006 NRD Bonds 1.55-1.85% 631,992 - (315,996) 315,996 315,996
6/15/2010 SRF Loan 2010 2.75-4.35% 6,500,000 - - 6,500,000 -
9/28/2010 2010B Revenue Bonds 3.25-3.50% 770,000 - - 770,000 -
9/28/2010 2010C Revenue
Bonds 2.30% 2,673,943 120,644 (33,618) 2,760,969 68,397
6/5/2012 2012A Revenue Bonds 2.20-2.50% 9,480,000 - - 9,480,000 -
9/28/2012 2012 Bond
Anticipation Notes 2.50% 5,000,000 - - 5,000,000 -
5/15/2013 2013 Bond
Anticipation Notes 2.25% 3,200,000 - - 3,200,000 -
Total water 30,254,893$ 120,644$ (1,192,110)$ 29,183,427$ 1,149,557$
Balance Balance
Interest September 30,September 30,
Dated Description Rate 2013 Additions Reductions 2014
SEWER DEBT
12/15/2004 2004 Revenue Bonds 3.80-4.25% 435,000$ - $ (65,000)$ 370,000$ 70,000$
8/17/2010 2010 Revenue Bonds 2.70-4.35% 1,645,000 - - 1,645,000 -
2/17/2011 2011 Revenue Bonds 2.10%875,403 (36,570) 838,833 37,522
Total sewer 2,955,403$ - (101,570)$ 2,853,833$ 107,522$
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2014
- 45 -
City of Blair, Nebraska
NOTE D. BONDS PAYABLE - CONTINUED
Governmental Activities
Principal Interest Total
525,000 146,230 671,230$
530,000 135,685 665,685
390,000 123,287 513,287
405,000 111,775 516,775
410,000 99,335 509,335
1,855,000 289,533 2,144,533
645,000 42,637 687,637
4,760,000$ 948,482$ 5,708,482$
Business-type Activities
Principal Interest Total
1,149,557 941,763 3,036,645$
1,081,243 906,060 1,987,302
1,451,527 878,734 2,330,261
9,663,146 777,116 10,440,261
1,024,801 600,567 1,625,368
6,455,171 2,376,569 8,831,740
3,577,539 1,354,733 4,932,272
3,725,514 441,325 4,166,839
559,759 90,923 650,682
495,170 25,396 520,566
29,183,427$ 8,393,185$ 38,521,938$
Principal Interest Total
107,522 95,760 203,282$
113,314 92,103 205,417
119,123 88,155 207,278
124,949 83,978 208,927
215,793 78,414 294,207
707,250 324,213 1,031,463
841,169 195,817 1,036,986
624,713 30,686 655,399
2,853,833$ 989,126$ 3,842,959$
2030-2033
2015
2016
2017
2018
2019
2025-2029
2020-2024
2016
2017
City of Blair, NebraskaNOTES TO FINANCIAL STATEMENTS - CONTINUEDFor the year ended September 30, 2014
Year ending September 30,
- 46 -
Total
Bonds issued for the Water and Sewer funds are collateralized by a pledge of revenues derived and to be derived
from the operations of the Water and Sewer fund. Sinking fund requirements for Water and Sewer debt were a
total reserve of $1,753,173 at September 30, 2014.
Total
2015
2016
2017
2018
2019
2020-2024
Sewer Bonds
Year ending September 30,
Year ending September 30,
2019
2020-2024
2025-2029
2030-2034
2035-2039
2040-2043
2015
2018
Water Bonds
Total
2025-2027
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 47 -
NOTE E. 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 F. NET POSITION AND FUND BALANCES
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, into one component of net position. Accumulated
depreciation on these assets reduces this category.
Restricted Net Position - 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 Position - This category represents the net position of the City
that is not restricted for any project or other purpose.
In the fund financial statements, certain significant changes in the statement require the
City to classify fund balances in the following categories:
Nonspendable - amounts that cannot be spent because they are either not in a
spendable form (such as inventories and prepaid amounts) or are legally or
contractually required to be maintained intact.
Restricted - amounts that can be spent only for specific purposes because of
constraints imposed by external providers (such as grantors, bondholders, and
higher levels of government), or imposed by constitutional provisions or enabling
legislation.
Committed - amounts that can be spent only for specific purposes determined
through an ordinance by the City Council, the government’s highest level of
decision-making authority.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 48 -
NOTE F. NET POSITION AND FUND BALANCES – CONTINUED
Assigned - amounts the government intends to use for specific purposes that do
not meet the criteria to be classified as restricted or committed.
Unassigned - amounts that are available for any purpose; these amounts can be
reported only in the City’s General Fund.
The formal spending processes adopted by the City Council allow departments to
encumber funds to make specific purchases that will actually be paid for in the next fiscal
year. The encumbrance must be in the form of an approved purchase order before the
end of the budget fiscal year. Department managers are authorized to make
encumbrances in their respective departments. They are included in restricted,
committed, or assigned fund balances as appropriate. Encumbrances can be made in any
fund and do not lapse at year end.
NOTE G. PENSION PLANS
The City has four pension plans covering substantially all of its employees. Employees
other than policemen, volunteer firefighters or rescue personnel are covered by a defined
contribution plan, either a 414(h) or 457(b) plan. Policemen are covered under a defined
contribution plan established by the statutes of the State of Nebraska. Firefighters or
rescue personnel are covered by the Blair Fire and Rescue Volunteers’ Service Award
Program. This plan is intended to comply with the Volunteer Emergency Responders
Recruitment and Retention Act as set forth in Nebraska Revised Statute and Internal
Revenue Code section 457(e)(11).
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
administration of the plan. Contributions for the year ended September 30, 2014,
$183,164 which consisted of $91,582 contributed by employees and $91,582 contributed
by the City.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 49 -
NOTE G. PENSION PLANS – CONTINUED
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 one-to-one
match.
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, 2014,
totaled $100,668 which consisted of $81,869 contributed by employees and $18,799
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.
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 $126,585 for 2014 were 12% of gross wages, which complies with statutory
requirements. The City contributed 6% of gross wages and the policemen contributed
6%. The City expects contributions to remain relatively level from year to year. The
contributions are not actuarially determined. All qualifying police payroll was covered in
2014.
The Blair Fire and Rescue Volunteers’ Service Award Program became effective October
1, 2008 and covers firefighters or rescue personnel. This plan complies with the
Volunteer Emergency Responders Recruitment and Retention Act as set forth in
Nebraska Revised Statute and Internal Revenue Code section 457(e)(11).To qualify as a
participant for any year of service, one must accumulate at least fifty points during such
year of service. For each year of service in which one qualifies as a participant, the City
will determine contribution amount and allocated to the account which shall not exceed
$3,000 and shall not be less than $100. The City’s contribution for the year ended
September 30, 2014, totaled $58,786.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 50 -
NOTE G. PENSION PLANS – CONTINUED
Combining financial statements for the pension plans as of and for the year
ending are as follows:
Civilian Police 457 Fire & Rescue Total
Assets
Investments with fiscal agent:
Principal investment accounts 3,765,049$ 1,728,460$ 608,668$ 415,300$ 6,517,477$
Gauranteed interest accounts 63,676 4,029 - - 67,705
Total Assets 3,828,725 1,732,489 608,668 415,300 6,585,182
Net Position
Net position held in
trust for pension benefits 3,828,725$ 1,732,489$ 608,668$ 415,300$ 6,585,182$
COMBINING STATEMENT OF NET POSITION
457
Civilian Police 457 Fire & Rescue Total
Additions
Contributions
Employer 91,474$ 62,823 $ 18,793 $ 58,786$ 231,876$
Employee 91,474 62,823 81,571 - 235,868
Total Contributions 182,948 125,646 100,364 58,786 467,744
Investment Earnings
Dividends - - - 12,843 12,843
Net increase in the
fair value of investments 338,427 168,797 47,332 30,833 585,389
Total Additions 338,427 168,797 47,332 43,676 598,232
Deductions
Terminations 369,895 135,393 1,553 - 506,841
Contribution credit-forfeitures - 1,997 - - 1,997
Member Requested Services 80 80 40 200
Administrative Expenses 25 - 4,535 - 4,560
Total Deductions 370,000 137,470 6,128 - 513,598
Changes in Net Position 151,375 156,973 141,568 102,462 552,378
Net Position, Beginning of Year 3,677,350 1,575,516 467,100 312,838 6,032,804
Net Position, End of Year 3,828,725$ 1,732,489 $ 608,668 $ 415,300 $ 6,585,182$
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 51 -
NOTE H. RECEIVABLES
1. Accounts Receivable
Accounts receivable of the business-type activities consists of utilities accounts
receivable (57.8%) and grants receivable (42.2%). Accounts receivable of the
governmental activities consists of special assessments (60.8%), sales taxes
(24.8%), grants receivable (5.5%), property taxes (8.4%) and other (0.5%)
receivables The City has considered collection history and determined that an
allowance is not necessary.
2. Contract Receivable
In April 1984, the City 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 facilities for the sum
of $5.95 million. The terms of payment shall be $1.0 million payable at
the date of the contract and the balance of $4.95 million 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.
3. Notes Receivable
Notes receivable in the governmental-activities at September 30, 2014 consist of
Community Development Block Grant funds received by the City. These funds
were required to be loaned to a benefited business for eligible economic
development public infrastructure costs. The CDBG note receivable was
$400,000. If the benefited business meets certain specific job creation and job
maintenance requirements, as defined by the State of Nebraska Department of
Economic Development, the note can be forgiven. The benefited business’
progress towards the job creation and job maintenance requirements will be
examined on an ongoing basis.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 52 -
NOTE H. RECEIVABLES (CONTINUED)
1. Notes Receivable – Continued
The City also entered into a 66-month loan agreement with the benefited business
to loan up to $800,000 with an interest rate of 8%. The City’s agreement allows
the loan to be forgiven if certain general job creation and job maintenance
requirements, as defined by the City, are met. The likelihood that these general
job creation and job maintenance requirements are not met is considered to be
very low. Therefore, the City has fully discounted the note receivable to zero for
the year ended September 30, 2014.
NOTE I. SPECIAL ASSESSMENTS RECEIVABLE
The City’s special assessments outstanding as of September 30, 2014, are composed of
special assessment principle of $1,236,804.
The delinquent special assessments at September 30, 2014, are 5.20% 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 J. CONCENTRATION OF CREDIT RISK
All of the receivables of the City proprietary funds and special assessments in the debt
service fund are from the local Blair area, thereby 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 84.15% of water sales for the year ended September
30, 2014. Although Cargill represents 84.15% of water sales, the City has a contract with
the company that secures a minimum monthly revenue stream for payment of the water
debt through June 2032, which minimizes the risk for payment of water bonds.
City of Blair, Nebraska
NOTES TO THE FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 53 -
NOTE K. NEW GASB STANDARD
In the fiscal year ending September 30, 2014, the City implemented GASB Statements
No. 66, Technical Corrections—2012—an amendment of GASB Statements No. 10 and
No. 62, No. 67, Financial Reporting for Pension Plans—an amendment of GASB
Statement No. 25, and No. 70, Accounting and Financial Reporting for Nonexchange
Financial Guarantees. GASB Statements No. 66 and No. 67 establish amended
accounting and financial reporting requirements for risk financing and related insurance
issues, operating leases with scheduled rent increases, and pension plans. In addition,
GASB Statement No. 67 addresses the financial reporting of governmental defined
benefit and defined contribution pension plans administered through trusts. GASB No.
70 establishes the recognition and measurement attributes of a nonexchange financial
obligation, but does not apply to guarantees related to special assessment debt.
Implementation of GASB Statements No. 66, No. 67, and No. 70 had no material effect
on the October 1, 2013, beginning balance of net position for the government-wide
financial statements and fund financial statements.
NOTE L. PRIOR PERIOD ADJUSTMENT – CONSTRUCTION IN PROGRESS
Construction-in-progress expenses totaling $28,743 from the prior fiscal year were not
capitalized. An adjustment to move the expenses from construction-in-progress to the
Street Fund has been made to restate beginning net position.
REQUIRED SUPPLEMENTAL INFORMATION
Original and Variance
Final Positive
Budget Actual (Negative)
REVENUES
Taxes 4,021,600$ 4,316,852$ 295,252$
Charges for services 1,356,650 1,606,432 249,782
Interest income 10,420 5,831 (4,589)
Other revenues 3,696,374 969,745 (2,726,629)
Total revenues 9,085,044 6,898,860 (2,186,184)
EXPENDITURES
Administration 2,126,311 1,062,857 1,063,454
Police Department 2,011,680 1,863,246 148,434
Fire Department 161,150 101,921 59,229
Parks Department 639,990 608,334 31,656
Library 3,387,580 422,063 2,965,517
Swimming Pool 68,550 69,828 (1,278)
Zoning 303,174 220,910 82,264
Mitigation 20,000 4,998 15,002
Insurance 941,610 949,004 (7,394)
Animal control 127,944 113,775 14,169
Donated Funds 21,723 35,317 (13,594)
Rescue Squad 224,298 133,634 90,664
Reuse 50,000 75,000 (25,000)
Economic Development 410,000 395,000 15,000
Total expenditures 9,809,712 6,055,887 4,357,459
REVENUES OVER (UNDER) EXPENDITURES (724,668) 842,973 1,567,641
OTHER FINANCING SOURCES (USES)
Operating transfers - in 1,896,761 1,727,898 (168,863)
Operating transfers - out (2,603,541) (1,674,147) (929,394)
Total other financing sources (uses)(706,780) 53,751 (1,098,257)
REVENUES AND OTHER
SOURCES OVER (UNDER) EXPENDITURES
AND OTHER USES (1,431,448) 896,724 469,384$
FUND BALANCE - BEGINNING 2,365,066 2,365,066
FUND BALANCE - ENDING 933,618$ 3,261,790
City of Blair, Nebraska
BUDGETARY COMPARISON SCHEDULE
For the year ended September 30, 2014
GENERAL FUND
See independent auditor's report.
- 55 -
FUND BALANCE - ENDING 3,261,790$
857,797
Accrual adjustment for receivables (360,828)
Accrual adjustments for payables (54,847)
3,703,912$
Accrual adjustments made because the City budgets for revenues and
expenditures on the cash basis, rather than on the modified accrual basis.
City of Blair, Nebraska
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND - CONTINUED
For the year ended September 30, 2014
- 56 -
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.
General Fund Balance
See independent auditor's report.
Original and Variance
Final Positive
Budget Actual (Negative)
REVENUES
Taxes
Property tax 1,371,100$ 1,343,693$ (27,407)$
Sales tax 2,195,000 2,466,353 271,353
Motor vehicle tax 135,500 157,148 21,648
Occupation and franchise tax 257,000 282,344 25,344
Special Assessments - 170 170
Other taxes 63,000 67,144 4,144
Total 4,021,600 4,316,852 295,252
Charges for services
Business licenses and permits 169,450 365,742 196,292
Library 13,400 11,686 (1,714)
Equipment rental 49,500 48,997 (503)
Cemetery lots 14,000 11,250 (2,750)
Insurance 912,900 959,043 46,143
Grave openings 22,000 24,400 2,400
Towing 6,500 10,923 4,423
Rescue Squad 140,000 144,718 4,718
Other fees and charges 4,900 8,568 3,668
Sales of fireworks 15,000 15,000 -
RV park 9,000 6,105 (2,895)
Total 1,356,650 1,606,432 249,782
INTEREST INCOME 10,420 5,831 (4,589)
OTHER REVENUES
State grants 50,500 44,944 (5,556)
Federal grants - - -
Donations 23,260 56,257 32,997
Reimbursements 74,000 82,983 8,983
Other miscellaneous revenue 3,548,614 785,561 (2,763,053)
Total 3,696,374 969,745 (2,726,629)
Total revenues 9,085,044$ 6,898,860$ (2,186,184)$
City of Blair, Nebraska
GENERAL FUND REVENUES
For the year ended September 30, 2014
BUDGETARY COMPARISON SCHEDULE
- 57 -
See independent auditor's report.
Original and Variance
Final Positive
Budget Actual (Negative)
REVENUES
Property taxes 331,100$ 323,710 (7,390)$
Other local taxes 38,220 38,084 (136)
State funds 751,295 845,010 93,715
Interest income 200 154 (46)
Other revenue 120,000 142,202 22,202
Total revenues 1,240,815 1,349,160 108,345
EXPENDITURES
Salaries 392,970 376,643 16,327
FICA 29,000 27,688 1,312
Employee insurance 142,219 144,712 (2,493)
Retirement 24,400 22,259 2,141
Legal 3,000 3,150 (150)
Auditing 8,000 8,492 (492)
Engineering 517,600 109,589 408,012
Office expense 10,100 5,981 4,119
Utilities 8,200 18,629 (10,429)
Telephone 2,200 2,270 (70)
Travel 7,000 6,554 446
Training 4,000 4,532 (532)
Insurance 13,250 15,422 (2,172)
Maintenance 88,800 126,211 (37,411)
Street lighting 150,000 145,368 4,632
County fees - 3,108 (3,108)
Car expense 3,400 3,344 56
Contract landscaping 57,500 43,502 13,998
Gas, diesel, and oil 43,000 36,328 6,672
Materials and supplies 146,500 206,949 (60,449)
Rental 10,000 3,766 6,234
Capital outlay
Equipment 77,700 50,185 27,515
Street improvements 799,600 150,078 649,522
Total expenditures 2,538,439 1,514,760 1,023,679
REVENUES OVER (UNDER) EXPENDITURES (1,297,624) (165,600) (1,132,024)
OTHER FINANCING SOURCES (USES)
Operating transfers - in 1,407,850 1,178,611 229,239
Operating transfers - out 170,000 (170,000) 340,000
REVENUES AND OTHER SOURCES
OVER (UNDER) EXPENDITURES 280,226 843,011 (562,785)$
FUND BALANCE - BEGINNING 2,387,196 105,650
FUND BALANCE - ENDING 2,667,422$ 948,661
(30,923)
Accrual adjustment for receivables 222,126
Accrual adjustments for payables (1,110,559)
29,305$
An explanation of the differences between budgetary inflows and outflows and revenues and expenditures determined
in accordance with generally accepted accounting principles follows:
- 58 -
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
City of Blair, Nebraska
BUDGETARY COMPARISON SCHEDULE
STREET FUND
For the year ended September 30, 2014
See independent auditor's report.
The budget fund balance at the beginning of the year is based on cash reserves rather than fund balance.
Original and Variance
Final Positive
Budget Actual (Negative)
REVENUES
Keno/lottery proceeds 84,000$ 112,479$ (28,479)$
Other revenue 40 32 8
Total Revenue 84,040 112,511 (28,471)
EXPENDITURES
Community Betterment Project 25,000 41,500 (16,500)
Other expenses 18,100 24,828 (6,728)
Total expenditures 43,100 66,328 (23,228)
REVENUES OVER EXPENDITURES 40,940 46,183 (5,243)
OTHER FINANCING USES
Operating transfers - out (80,000) (49,751) (30,249)
REVENUES AND OTHER FINANCING SOURCES
OVER (UNDER) EXPENDITURES
AND OTHER USES (39,060) (3,568) (35,492)$
FUND BALANCE - BEGINNING 38,791 107,406
FUND BALANCE - ENDING (269)$ 103,838
The budget fund balance at the beginning of the year is based on cash 3,631
reserves rather than fund balance.
Accrual adjustment for receivables 1,614
Keno Fund Balance 109,083$
City of Blair, Nebraska
BUDGETARY COMPARISON SCHEDULE
KENO FUND
For the year ended September 30, 2014
- 59 -
See independent auditor's report.
An explanation of the differences between budgetary inflows and outflows
and revenues and expenditures determined in accordance with generally
accepted accounting principles follows:
Accrual adjustments made because the City budgets for revenues and
expenditures on the cash basis, rather than on the modified accrual
basis.
SUPPLEMENTAL INFORMATION
Economic Total
Ge
n
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a
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AS
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s
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s
83
4
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-
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2
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6
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6
$
62
,
6
2
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$
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0
$
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$
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$
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- $ 3,311,844 $
Re
c
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v
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b
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s
Sp
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c
i
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l
a
s
s
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s
m
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n
t
s
1,9
2
7
-
-
-
-
-
-
-
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- 1,927
Ac
c
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r
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50
4
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2
5
-
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Pr
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p
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y
t
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e
13
3
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9
3
9
-
-
-
-
-
-
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-
- 133,939
Re
s
t
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Ca
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-
85
,
5
4
6
-
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-
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25
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3
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16,850 127,779
Ce
r
t
i
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f
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p
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t
-
75
,
0
0
0
-
-
-
-
-
-
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- 75,000
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t
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To
t
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s
97
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6
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18
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9
7
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Ac
c
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p
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s
11
,
5
7
6
-
-
-
-
-
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-
- 11,576
De
p
o
s
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t
s
p
a
y
a
b
l
e
13
5
,
3
0
4
-
-
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-
-
- 135,304
To
t
a
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a
b
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t
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s
32
7
,
7
3
2
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8
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-
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- 332,810
DE
F
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a
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t
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s
12
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To
t
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s
12
2
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-
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FU
N
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s
-
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25
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2
7
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- 25,277
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o
p
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-
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16,850 16,850
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-
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5
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51
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51
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1
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2
4
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Ch
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s
50
2
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6
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4
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In
t
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v
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n
m
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n
t
a
l
82
,
6
7
3
-
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In
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24
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25,722
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s
34
3
,
5
1
8
-
-
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48
,
0
7
4
-
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0
0
- 441,592
To
t
a
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v
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n
u
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s
2
,
7
1
3
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m
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65
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2,171,005
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l
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p
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r
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m
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n
t
1,7
0
6
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4
7
8
-
-
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-
-
-
-
-
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Fi
r
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p
a
r
t
m
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n
t
10
1
,
9
2
1
13
3
,
6
3
4
-
-
-
-
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-
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- 235,555
Pa
r
k
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p
a
r
t
m
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n
t
53
8
,
4
5
3
-
-
-
-
-
-
-
-
- 538,453
Lib
r
a
r
y
37
2
,
3
1
9
-
-
-
-
-
-
-
-
- 372,319
Sw
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m
i
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g
P
o
o
l
69
,
8
2
8
-
-
-
-
-
-
-
-
- 69,828
Zo
n
i
n
g
22
1
,
2
0
2
-
-
-
-
-
-
-
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City of Blair, Nebraska
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended September 30, 2014
- 64 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. General
The accompanying schedule of expenditures of federal awards (the Schedule)
presents the activity of all federal financial assistance programs of City of Blair,
Nebraska (the City). The City’s reporting entity is defined in note A to the City’s
financial statements. Federal financial assistance received directly from federal
agencies, as well as passed through other governmental agencies, is included on
the Schedule.
The Schedule presents total expenditures for each federal financial award program
in accordance with U.S. Office of Management and Budget (OMB) Circular A-
133. Federal program titles are reported as presented in the Catalog of Federal
Domestic Assistance (CFDA) whenever possible.
2. Basis of Accounting
The Schedule is prepared on the accrual basis of accounting.
NOTE B. CONTINGENCIES
The City receives funds under various federal grant programs, and such awards are to be
expended in accordance with the provisions of the various grants. Compliance with the
grants is subject to audit by various government agencies, which may impose sanctions in
the event of noncompliance. Management believes that is has complied with all aspects
of the various grant provisions and the results of adjustments, if any, relating to such
audits would not have any material financial impact.
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
To the City Council
City of Blair, Nebraska
We have audited, in accordance with the 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, and each major fund of the
City of Blair, Nebraska, as of and for the year ended September 30, 2014, and the related notes to
the financial statements, which collectively comprise the City of Blair, Nebraska’s basic
financial statements, and have issued our report thereon dated February 23, 2015.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered City of Blair,
Nebraska’s internal control over financial reporting 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 the City of
Blair, Nebraska’s internal control over financial reporting. Accordingly, we do not express an
opinion on the effectiveness of City of Blair, Nebraska’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.
Westroads Pointe |1015 N. 98th St. |Suite 200 |Omaha, NE 68114 |T 402.390.2480 |F402.390.0885 www.hayes-cpa.com
- 66 -
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies and therefore, material weaknesses or significant
deficiencies may exist that were not identified. 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. We did identify a
deficiency in internal control, described in the accompanying schedule of findings and
questioned costs that we consider to be a significant deficiencies. 2014-01.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Blair, Nebraska’s financial
statements are free from 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 material noncompliance or other matters that are required to be reported under
Government Auditing Standards.
City of Blair, Nebraska’s Response to Findings
The City’s response to the finding identified in our audit is described in the accompanying
schedule of findings and questioned costs. The City’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 over
financial reporting and compliance and the results of that testing, and not to provide an opinion
on the effectiveness of the entity’s internal control over financial reporting 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 over financial reporting and compliance.
Accordingly, this communication is not suitable for any other purpose.
Hayes & Associates, L.L.C.
Omaha, Nebraska
February 23, 2015
Hayes & Associates, LLC
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB
CIRCULAR A-133
To the City Council
City of Blair, Nebraska
Report on Compliance for Each Major Federal Program
We have audited the City of Blair, Nebraska’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 the City of Blair, Nebraska’s major federal program for the year
ended September 30, 2014. The City of Blair, Nebraska’s major federal program is 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 the City of Blair, Nebraska’s major
federal program 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 that could have a direct and material effect on a major federal program
occurred. An audit includes examining, on a test basis, evidence about the City of Blair,
Nebraska’s compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances.
Westroads Pointe |1015 N. 98th St. |Suite 200 |Omaha, NE 68114 |T 402.390.2480 |F402.390.0885 www.hayes-cpa.com
- 68 -
We believe that our audit provides a reasonable basis for our opinion on compliance for the
major federal program. However, our audit does not provide a legal determination of the City of
Blair, Nebraska’s compliance.
Opinion on Each Major Federal Program
In our opinion, the City of Blair, Nebraska, complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on its
major federal program for the year ended September 30, 2014.
Report on Internal Control Over Compliance
Management of City of Blair, Nebraska, 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 Blair, Nebraska’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 Blair, Nebraska’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 first paragraph of this section 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, as defined above.
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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.
Hayes & Associates, L.L.C.
Omaha, Nebraska
February 23, 2015
Hayes & Associates, LLC
City of Blair, Nebraska
SCHEDULE OF FINDINGS AND QUESTIONED COST
For the year ended September 30, 2014
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I. SUMMARY OF AUDIT RESULTS
Financial Statements
Type of auditors’ reports issued: Unmodified
Internal controls over financial reporting:
Material weaknesses identified: No
Significant deficiencies identified: Yes
Noncompliance material to financial statements noted: No
Federal Awards
Internal control over major programs:
Material weaknesses identified: No
Significant deficiencies identified: No
Type of auditors’ report issued on
compliance for each major program: Unmodified
Any audit findings disclosed that are required to
Be reported in accordance with Section 510(a) of
OMB Circular A-133: No
Identification of major programs:
CFDA Numbers Name of Federal Program or Cluster
97.039 Hazard Mitigation Grant
City of Blair, Nebraska
SCHEDULE OF FINDINGS AND QUESTIONED COST – CONTINUED
For the year ended September 30, 2014
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I. SUMMARY OF AUDIT RESULTS – CONTINUED
Dollar threshold used to distinguish between
Type A and Type B programs: $300,000
Auditee qualified as low-risk auditee: No
II. FINDINGS - FINANCIAL STATEMENTS
None noted
City of Blair, Nebraska
SCHEDULE OF FINDINGS AND QUESTIONED COST – CONTINUED
For the year ended September 30, 2014
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III. FINDINGS AND QUESTIONED COSTS—MAJOR FEDERAL AWARD PROGRAMS
Finding 2014-01: Expenditures Improperly Included on the Schedule of Expenditures
of Federal Awards
Condition – The SEFA provided by the client included expenditures from the Disaster
Relief Grant (CFDA #97.036) that should not have been reported until the following
year.
Criteria – The OMB Compliance Supplement for the Disaster Relief Grant states in Part
IV (Other Information): "Non-Federal entities must record expenditures on the SEFA
when: (1) FEMA has approved the non-Federal entity's Project Worksheet, and (2) the
non-Federal entity has incurred the eligible expenditures. ...For example, if the non-
Federal entity incurs eligible expenditures in its fiscal year 2014 and FEMA approves the
non-Federal entity's PW in fiscal year 2015, the non-Federal entity records the eligible
expenditures in its fiscal year 2015 SEFA with a footnote that discloses the amount
included on the SEFA that was incurred in a prior year."
Cause – With most grants, the expenditures are reported on the SEFA in the year they are
incurred. However, the Compliance Supplement for the Disaster Relief Grant provide
superseding additional instructions for reporting. Responsible city employees were
unfamiliar with these regulations.
Effect – Expenditures totaling $92,340 were listed on the SEFA for the Disaster Relief
Grant. These expenditures had been paid out by year end, but FEMA had not approved
their corresponding Project Worksheet by year end. Per the Compliance Supplement,
because they had not yet been approved, they were improperly included on the SEFA.
Recommendation – Management should ensure that they are knowledgeable about the
Compliance Supplements for each federal grant.
Management Response – In the future, the City will review all entries listed on the SEFA
with funding agencies and applicable OMB circulars for reporting requirements prior to
finalizing the SEFA. In addition, the City will look at having key accounting staff attend
additional seminars to fully understand Federal SEFA, and general Federal grant
reporting requirements.