FY1996 Financial Report Water FundCITY OF BLAIR, NEBRASKA
WATER FUND
SEPTEMBER 30, 1996
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
December 4, 1996
"Independent Auditor's Report"
I have audited the accompanying financial statements of
the Water Fund, City of Blair, Nebraska, as of and for the
fourteen months ended September 30, 1996. 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 September 30, 1996, and the results of its
operations and its cash flows for the fourteen months 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
SEPTEMBER 30, 1996
ASSETS
CURRENT ASSETS:
Cash
Accounts receivable - user fees
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
See Notes to Financial Statements
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$ 139,754
318,073
378
12,459
546,212
29,351
882
1,047,109
822,091
11,256,123
(3,212,237)
8,043,886
$ 9,913,086
CITY OF BLAIR, NEBRASKA
WATER FUND BALANCE SHEET
SEPTEMBER 30, 1996
LIABILITIES AND FUND BALANCE
CURRENT LIABILITIES:
Current portion of long-term debt
$ 340,000
Accounts payable
70,739
Accrued interest
91,220
Accrued expenses
11,727
Total current liabilities
513,686
DEPOSITS PAYABLE
1,750
LONG-TERM DEBT:
Revenue bonds payable-unmatured
5,020,000
Less current portion above
(340,000)
Long-term debt -net
4,680,000
Total liabilities
5,195,436
FUND BALANCE:
Contributed capital
2,055,100
Retained earnings:
Reserved
822,091
Unreserved
1,840,459
Total fund balance
4,717,650
TOTAL LIABILITIES
AND FUND BALANCE
$9,913,086
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 FOURTEEN MONTHS ENDED SEPTEMBER 30, 1996
OPERATING REVENUES:
User fees $2,015,491
Sale of merchandise 26,849
Forfeited discounts 14,642
Other 8,797
Total revenues 2,065,779
EXPENSES:
Personal services:
Salaries
326,004
FICA
23,823
Workman's compensation
7,084
HAL insurance
50,574
Retirement (city share)
17,416
Unemployment and disability
2,027
Total
426,928
Operating expenses:
Legal fees
19
Auditing
1,805
Consultants/Lab fee
5,765
Employee appreciation
94
Postage
6,180
Printing and publications
143
Computer programming
1,537
Schools, travel, and training
540
Dues
1,058
Utilities
269,535
Telephone
2,272
Vehicle insurance
584
Liability insurance
1,781
Buildings and contents insurance
4,377
Employee bonds
72
Radio maintenance
809
Office equipment maintenance
529
Motorized equipment maintenance
2,277
Building maintenance
19,544
Major maintenance
39,961
Contingent reserve
-
Maintenance agreements
1,090
Car expense
397
Bad accounts
3,417
Total
363,786
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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 FOURTEEN MONTHS ENDED SEPTEMBER 30, 1996
- continued -
EXPENSES:
Materials and supplies:
Office supplies
$ 3,838
Janitorial supplies
605
Shop and supplies
2,383
Chemicals
257,239
Meters
15,046
Supplies for inventory
7,889
Gas, oil and diesel
3,047
Uniforms
927
Small tools
1,747
Payment to OPPD
5,865
Other materials and supplies
7,773
Total
306,359
Rental expense -
Office equipment
1,076
Total expenses
1,098,149
OPERATING INCOME (LOSS) BEFORE
DEPRECIATION
967,630
DEPRECIATION (296,966)
OPERATING INCOME (LOSS) 670,664
OTHER REVENUES (EXPENSES):
Loss on assets (18,745)
Interest income 61,549
Interest expense (295,008)
Bonding and grant fees (49,445)
Operating transfers - in 481,531
Operating transfers - out (80,000)
NET INCOME (LOSS) 770,546
RETAINED EARNINGS
JULY 31, 1995 1,892,004
RETAINED EARNINGS
SEPTEMBER 30, 1996 $2,662,550
See Notes to Financial Statements
CITY OF BLAIR, NEBRASKA
WATER FUND STATEMENT OF CASH FLOW
FOR THE FOURTEEN MONTHS ENDED SEPTEMBER 30 1996
CASH FLOW FROM OPERATIONS:
Net operating income (loss)
$ 670,664
Adjustment to reconcile net
260,000
Decrease (increase) in
income to net cash from
operations:
(436,341)
Depreciation
(295,008)
296,966
Decrease (increase) in
accounts
receivable - user fees
(50,792)
(7,000)
Decrease (increase) in
accounts
_ (542,757)
receivable - other
(34,641)
94
Decrease (increase) in
inventory
949
Decrease (increase) in
prepaid
End of the period
expenses
See Notes
2,173
Increase (decrease) in
accounts
payable
(101,971)
Increase (decrease) in
accrued
expenses
6,831
Increase (decrease) in
deposits
payable
(570)
Net cash provided
(used)
by operations
868,136
CASH FLOW FROM INVESTING:
Purchase of property (821,432)
Interest income 61,549
Transfers - net 401,531
Decrease (increase) in accrued
interest receivable (1,668)
Cash flow from (used in)
investing (360,020)
CASH FLOW FROM FINANCING:
Increase in contributed capital
28,829
Increase in long-term debt
260,000
Decrease (increase) in
restricted assets
(436,341)
Interest expense
(295,008)
Bonding and grant fees
(49,445)
Increase (decrease) in accrued
interest payable
(50,792)
Cash flow from (used in)
financing
_ (542,757)
NET INCREASE (DECREASE) IN CASH
(34,641)
CASH AND CASH EQUIVALENTS -
Beginning of the period
720,607
CASH AND CASH EQUIVALENTS -
End of the period
$ 685,966
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.
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.
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 September 30, 1996.
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,
r:
and government securities. The assets are restricted for Bond
requirements in the amount of $822,091.
i
3. LONG-TERM DEBT
Water Debt:
Rate Total
Refunding Bonds 3.2-6.30 $1,970,000
Water Revenue Bonds 4.05-5.40 $3,050,000
Annual Principal Requirements
For Water Bonds
Year Ending September 30
1997
$ 340,000
1998
350,000
1999
350,000
2000
360,000
2001
380,000
2002-2014
3,240,000
TOTAL $5,020,000
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CITY OF BLAIR, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, continued
The City of Blair secured the November 1, 1992 refunding 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 or 1996.
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 50 of
gross wage in employee contributions and 5% 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 seven years of service. The plan is a
single employer plan with the City maintaining fiduciary
responsibility for it. Water Fund contributions for the fiscal
year ended September 30, 1996, were $28,604. Contributions are
expected to remain relatively level from year to year. The 1996
covered payroll and total payroll were $286,040 and $326,004
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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