FY1996 Financial Report Sewer FundCITY OF BLAIR, NEBRASKA
SEWER FUND
SEPTEMBER 30, 1996
s
EDWARD . SCS � OEDE
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 Sewer 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 Sewer 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 Sewer 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
SEWER FUND BALANCE SHEET
SEPTEMBER 30, 1996
ASSETS
CURRENT ASSETS:
Cash $ 14,670
Accounts receivable - user fees 58,132
Accounts receivable - other -
Accrued interest receivable 1,324
Investments 355,385
Prepaid expenses 737
Total current assets 430,248
PROPERTY:
Plant in service 4,404,449
Accumulated depreciation (2,067,657)
Property - net 2,336,792
TOTAL ASSETS $2,767,040
LIABILITIES AND FUND BALANCE
CURRENT LIABILITIES:
Accounts payable
Accrued interest
Accrued expenses
Total current liabilities
LONG-TERM DEBT:
Revenue bonds payable-unmatured
Total liabilities
FUND BALANCE:
Contributed capital
Retained earnings:
Reserved
Unreserved
Total fund balance
$ 35,434
39,915
3,132
78,481
980,000
1,058,481
2,770,834
(1,062,275)
1,708,559
TOTAL LIABILITIES
AND FUND BALANCE $2,767,040
See Notes to Financial Statements
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CITY OF BLAIR, NEBRASKA
SEWER FUND STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN RETAINED EARNINGS
FOR THE FOURTEEN MONTHS ENDED SEPTEMBER 30, 1996
OPERATING REVENUES:
User fees
$ 394,134
Sale of merchandise
7,604
Total revenues
401,738
EXPENSES:
Personal services:
Salaries
148,362
FICA
10,891
Workman's compensation
4,769
H.A.L. insurance
24,124
Retirement (city share)
71930
Unemployment and disability
1,040
Total
197,116
Operating expense:
Legal
11
Auditing
2,416
Consulting/engineering
9,109
Employee appreciation
54
Postage
4,082
Computer programming
764
School, travel and training
798
Dues
570
Utilities
53,737
Telephone
13
Insurance
6,602
Maintenance
51,562
Car expense
205
Total
129,923
Materials and supplies
46,971
Rental expense
854
Total expenses
374,864
OPERATING INCOME (LOSS) BEFORE DEPRECIATION
26,874
DEPRECIATION
(79,951)
OPERATING INCOME (LOSS)
(53,077)
OTHER REVENUE (EXPENSE):
Interest income
31,717
Interest expense
(39,915)
Underwriting costs
(10,290)
NET.INCOME (LOSS) (71,565)
RETAINED EARNINGS (DEFICIT)
JULY 31, 1995 (990,710)
RETAINED EARNINGS (DEFICIT)
SEPTEMBER 30, 1996 $(1,062,275)
See Notes to Financial Statements
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CITY OF BLAIR, NEBRASKA
SEWER FUND STATEMENT OF CASH FLOW
FOR THE FOURTEEN MONTHS ENDED SEPTEMBER 30, 1996
CASH FLOW FROM OPERATIONS:
Net operating income (loss)
Adjustment to reconcile net
income to net cash from operations:
Depreciation
Decrease (increase) in accounts
receivable - user fees
Decrease (increase) in accounts
receivable - other
Decrease (increase) in inventory
Decrease (increase) in prepaid
expenses
Increase (decrease) in accounts
payable
Increase (decrease) in accrued
expenses
Net cash provided (used)
by operations
CASH FLOW FROM INVESTING:
Purchase of property
Interest income
Decrease (increase) in accrued
interest receivable
Cash flow from (used in)
investing
CASH FLOW FROM FINANCING:
Increase in long-term debt
Interest expense
Bonding and grant fees
Increase (decrease) in accrued
interest payable
Cash flow from (used in)
financing
NET INCREASE (DECREASE) IN CASH
CASH AND CASH EQUIVALENTS
Beginning of the period
CASH AND CASH EQUIVALENTS
End of the period
See Notes to Financial Statements
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$(53,077)
79,951
1,219
1,790
1,809
7,406
3,132
42,230
(791,647)
31,717
(1,324)
(761,254)
980,000
(39,915)
(10,290)
39,915
969,710
250,686
119,369
$370,055
CITY OF BLAIR, NEBRASKA
SEWER 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 Sewer 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.
om
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 Sewer 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. 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.
E. Compensated Absences:
The City of Blair does not record accrued compensated
absences as they are unmeasurable as of September 30, 1996.
Q►Z
CITY OF BLAIR, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
F. 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'
name.
2. 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. Sewer Fund contributions for the fiscal
year ended September 30, 1996, were $15,860. Contributions are
expected to remain relatively level from year to year. The 1995
covered payroll and total payroll were $148,362 and $148,362
respectfully.
3. 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.
4. LONG-TERM DEBT:
Sewer Bond Anticipation Notes:
DATE RATE DUE AMOUNT
October 13, 1995 4.25% October 15, 1998 $980,000