FY1995 Financial Reports Water FundCITY OF BLAIR, NEBRASKA
WATER FUND
JULY 31, 1995
EDWARD W. SCHROEDER
CERTIFIED PUBLIC ACCOUNTANT
1904 SOUTH STREET
BOX 486
BLAIR, NEBRASKA 68008
Honorable Mayor and Members
of the City Council
City of Blair, Nebraska
Gentlemen:
RESIDENCE:
(402) 468-5253
OFFICE:
(402) 426-4080
November 27, 1995
"Independent Auditor's Report"
I have audited the accompanying financial statements of
the Water Fund, City of Blair, Nebraska, as of and for the year
ended July 31, 1995. The financial statements are the
responsibility of the City of Blair, Nebraska management. My
responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
As discussed in Note B, the financial statements present only
the Water Fund and are not intended to present fairly the
financial position of the City of Blair, Nebraska, and the
results of its operations and the cash flows of its proprietary
fund types and expendable trust funds in conformity with
generally accepted accounting principles.
In my opinion, the financial statements referred to in the
first paragraph present fairly, in all material respects, the
financial position of the Water Fund of the City of Blair,
Nebraska, as of July 31, 1995, and the results of its operations
and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Edward W. Schroeder
Certified Public Accountant
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CITY OF BLAIR, NEBRASKA
WATER FUND BALANCE SHEET
JULY 31, 1995
ASSETS
CURRENT ASSETS:
Cash
Accounts receivable - user
Accounts receivable - other
Accrued interest receivable
Investments
Inventory
Prepaid expenses
Total current assets
RESTRICTED ASSETS:
Bond and interest sinking
fund cash and investments
PROPERTY:
Plant in service
Accumulated depreciation
Property - net
TOTAL ASSETS
$ 186,407
fees 311,073
472
10,791
534,200
30,300
3,055
1,076,298
See Notes to Financial Statements
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385,750
10,510,445
(2,972,280)
7,538,165
$ 9,000,213
CITY OF BLAIR, NEBRASKA
WATER FUND BALANCE SHEET
JULY 31, 1995
LIABILITIES AND FUND BALANCE
CURRENT LIABILITIES:
Current portion of long-term debt $ 95,000
Accounts payable 172,710
Accrued interest 142,012
Accrued expenses 4,896
Total current liabilities 414,618
DEPOSITS PAYABLE 2,320
LONG-TERM DEBT:
Revenue bonds payable-unmatured 4,760,000
Less current portion above (95,000)
Long-term debt -net 4,665,000
Total liabilities 5,081,938
FUND BALANCE:
Contributed capital 2,026,271
Retained earnings:
Reserved 385,750
Unreserved 1,506,254
Total fund balance 3,918,275
TOTAL LIABILITIES
AND FUND BALANCE $9,000,213
See Notes to Financial Statements
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CITY OF BLAIR, NEBRASKA
WATER FUND STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN RETAINED EARNINGS
FOR THE YEAR ENDED JULY 31, 1995
OPERATING REVENUES:
User fees $941,973
Sale of merchandise 20,269
Forfeited discounts 8,129
Hydrant rental -
Other 5,393
Total revenues 975,764
EXPENSES:
Personal services:
Salaries
257,627
FICA
19,800
Workman's compensation
6,126
HAL insurance
41,768
Retirement (city share)
12,160
Unemployment and disability
1,269
Total
338,750
Operating expenses:
Legal fees
23
Auditing
1,683
Consultants/Lab fee
4,351
Employee appreciation
151
Postage
6,286
Printing and publications
392
Computer programming
4,591
Schools, travel, and training
833
Dues
2,545
Utilities
133,347
Telephone
1,979
Vehicle insurance
567
Liability insurance
1,918
Buildings and contents insurance
3,791
Employee bonds
-
Radio maintenance
514
Office equipment maintenance
678
Motorized equipment maintenance
1,788
Building maintenance
12,230
Major maintenance
21,983
Contingent reserve
1,215
Maintenance agreements
3,402
Car expense
320
Bad accounts
2,948
Total
207,535
- continued -
See Notes to Financial Statements
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CITY OF BLAIR, NEBRASKA
WATER FUND STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN RETAINED EARNINGS
FOR THE YEAR ENDED JULY 31, 1995
- continued -
EXPENSES:
Materials and supplies:
Office supplies
$ 1,772
Janitorial supplies
571
Stores and supplies
1,747
Chemicals
113,334
Supplies for inventory
3,359
Gasoline
2,178
Clothing allowance
969
Small tools
1,656
Construction contracts
96,857
Other materials and supplies
2,112
Total
224,555
Rental expense -
Office equipment
839
Total expenses
771,679
OPERATING INCOME (LOSS) BEFORE
DEPRECIATION 204,085
DEPRECIATION _ 254,594
OPERATING INCOME (LOSS) (50,509)
OTHER REVENUES (EXPENSES):
Interest income 85,240
Interest expense (246,537)
Bonding and grant fees (33,860)
Operating transfers - in 323,004
Operating transfers - out (90,189)
NET INCOME (LOSS) (12,851)
RETAINED EARNINGS
JULY 31, 1994 1,904,855
RETAINED EARNINGS
JULY 31, 1995 $1,892,004
See Notes to Financial Statements
CITY OF BLAIR, NEBRASKA
WATER FUND STATEMENT OF CASH FLOW
FOR THE YEAR ENDED JULY 31, 1995
CASH FLOW FROM OPERATIONS:
Net operating income (loss)
$ (50,509)
Adjustment to reconcile net
Increase (decrease) in
income to net cash from operations:
Depreciation
254,594
Decrease (increase) in accounts
Increase in contributed
receivable - user fees
(169,637)
Decrease (increase) in accounts
2,515,000
receivable - other
(291)
Decrease (increase) in inventory
(3,190)
Decrease (increase) in prepaid
59,845
expenses
(164)
Increase (decrease) in accounts
Bonding and grant fees
payable
134,047
Increase (decrease) in accrued
accrued
expenses
399
Increase (decrease) in deposits
113,108
payable
50
Net cash provided (used)
financing
by operations
165,299
CASH FLOW FROM INVESTING:
Purchase of property (2,597,180)
Interest income 85,240
Transfers - net 232,815
Decrease (increase) in accrued
interest receivable 5,638
Cash flow from (used in)
investing (2,273,487)
CASH FLOW FROM FINANCING:
Increase (decrease) in
Registered
warrants
(474,405)
Increase in contributed
capital
476,171
Increase in long-term debt
2,515,000
Decrease (increase) in
restricted assets
59,845
Interest expense
(246,537)
Bonding and grant fees
(33,860)
Increase (decrease) in
accrued
interest payable
113,108
Cash flow from
(used in)
financing
2,409,322
NET INCREASE (DECREASE) IN CASH 301,134
CASH AND CASH EQUIVALENTS
Beginning of the period 419,473
CASH AND CASH EQUIVALENTS -
End of the period $ 720,607
See Notes to Financial Statements
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CITY OF BLAIR, NEBRASKA
WATER FUND
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Blair accounts for its financial position and results
of operations in accordance with generally accepted accounting
principles applicable to governmental units. Accordingly, the City
uses several funds and account groups which are described below.
A. Fund Types and Account Groups:
A fund or account group is an accounting entity with a
self -balancing set of accounts established to record the
financial position and results of operations of a specific
governmental activity. The City maintains the
following fund types and account groups:
Governmental fund types, that include the General Fund,
Special Revenue Funds, and the Debt Service Fund, are used to
record the general operations of the City;
Proprietary fund types, that are used to account for
activities conducted on a fee for service basis in a manner
similar to commercial enterprises, provide services to the
public (enterprise funds);
Fiduciary fund types (trust and insurance funds), that are
used to account for assets held by the City as an agent for
private individuals or organizations or in trust;
General fixed assets and general long-term obligation
account groups, that are used to account for property and
equipment and long-term obligations of governmental funds.
General long-term bonded debt was repaid through the Debt
Service Fund.
B. Reporting Entity:
Only the Water Fund activities have been included in these
financial statements, for the years ended July 31, 1995. The
statements are not intended to present the combined financial
position of the City of Blair. The following criteria regarding
manifestation of oversight were considered by the City in its
evaluation of the City organizations and activities:
Financial interdependency -The City is responsible for its
debts and is entitled to surpluses. No separate agency receives a
financial benefit nor imposes a financial burden on the City.
Election of the government authority -The locally elected City
Council is exclusively responsible for all public decisions and
accountable for the decisions it makes.
we
CITY OF BLAIR, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Designation of management -The City Council appoints the City
Administrator. The City Administrator hires other members of City
management. The activities under the purview of management are
within the scope of the reporting entity and management is
accountable to the City Council for the activities being managed.
Ability to significantly influence operations -The City Council
has the statutory authority under the provisions of the Revised
Statutes to significantly influence operations. This authority
includes, but is not limited to, adoption of the budget, control
over all assets, including facilities and properties, short term
borrowing, signing contracts, and developing the programs to be
provided.
Accountability of fiscal matters -The responsibility and
accountability over all funds is vested in the City management.
C. Basis of Accounting:
The Water Fund is a proprietary fund type and all
proprietary fund types and similar trust funds are accounted
for using the accrual basis whereby revenues are recognized
when earned and expenses are recognized when incurred.
D. Inventory•
Inventory is stated at the lower of cost (first -in,
first -out) or market value. The consumption method is used
in regard to inventory expenditure recognition.
E. Property:
All fixed assets are recorded at cost or estimated
cost if actual cost is not available.
The proprietary and fiduciary fund assets are
presented on the respective balance sheets except for the
cost of any underground utility lines which are not
included in the assets. Depreciation of the assets is
computed on a straight-line method over the estimated
useful lives of the assets. The range of estimated lives
is from five to fifty years.
Qs'm
CITY OF BLAIR, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
F. Compensated Absences:
The City of Blair does not record accrued compensated
absences as they are unmeasurable as of July 31, 1995.
G. Investments•
The Investments are bank Certificates of Deposit or
U.S. Government Securities with no unusual restrictions other
than penalty for early withdrawal. All unrestricted investments
are short-term. Investments are stated at cost, which
approximates market value. All investments are entirely insured
or collateralized with U.S. Government Securities and are
considered cash equivalents.
The City's investments are categorized to give an
indication of the level of risk assumed by the City at
year end. The City's investments are all category 1, which
means that the investments are insured or registered. The
securities are held by the City or its agent in the City's
name.
2. RESTRICTED ASSETS
Restricted assets consist of cash, certificates of deposit,
and government securities. The assets are restricted for Bond
requirements in the amount of $385,750.
3. LONG-TERM DEBT
Water Debt:
Rate
Total
Refunding Bonds 3.2-6.30 $2,065,000
Anticipation Notes 4.750 $2,695,000
Annual Principal Requirements
For Water Bonds
Year Ending July 31,
1996
$ 95,000
1997
90,000
1998
2,785,000
1999
80,000
2000
80,000
2001-2014
1,630,000
TOTAL
$4,760,000
=012
CITY OF BLAIR, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, continued
The City of Blair secured the November 1, 1992 water bonds by
pledging $20,000 of annual M.I.R.F. receipts to the payment of
the bonds through July 31, 1999. The issuance of the November
1, 1992 bonds provided funds for the defeasance of an June 15,
1988 issue callable May 1, 1994. The amount defessed was
$2,310,000. The economic gain of the refinance was $430,648.
The funds necessary for defeasement have been placed in
non -accessible trust accounts. There was no interest capitalized
during 1995.
4. PENSION PLANS
The city has two pension plans covering substantially all
of its employees. Employees other than policemen are covered
by a defined contribution plan. All contributions up to 40 of
gross wage in employee contributions and 40 of gross wage in
contributions from the City are invested with an investment
manager. The employees must have accumulated one year of
service to participate in the plan. The plan is a single
employer plan with the City maintaining fiduciary
responsibility for it. Water Fund contributions for the fiscal
year ended July 31, 1995, were $18,714. Contributions are
expected to remain relatively level from year to year. The 1995
covered payroll and total payroll were $233,925 and $257,627
respectfully.
5. CONCENTRATION OF CREDIT RISK
All of the receivables of the City of Blair proprietary funds
are from the local Blair area therefore creating a concentration of
credit risk. If the Blair area economy was depressed this could
have an adverse effect on the collection of the outstanding
accounts receivable.
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