FY2010 Audit Report City (3)City of Blair, Nebraska
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITOR'S REPORT
For the year ended September 30, 2010
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR'S REPORT
3 -4
MANAGEMENT'S DISCUSSION AND ANALYSIS
5 -17
BASIC FINANCIAL STATEMENTS
Statement of net assets - Government -wide
18
Statement of activities - Government -wide
19
Balance sheet - Governmental funds
20
Reconciliation of the balance sheet of the governmental funds
to the statement of net assets
21
Statement of revenues, expenditures, and changes in
fund balances - Governmental funds
22
Reconciliation of the statement of revenues, expenditures
and changes in fund balances of the governmental funds
to the statement of activities
23
Statement of net assets - Proprietary funds
24
Statement of revenues, expenses, and changes in
fund net assets - Proprietary funds
25
Statement of cash flows - Proprietary funds
26
Statement of net assets - Fiduciary funds
27
NOTES TO FINANCIAL STATEMENTS
28-46
SUPPLEMENTAL INFORMATION
Budgetary comparison schedule - General fund and major special revenue funds
48
Budgetary comparison schedule - General fund revenues
49
Budgetary comparison schedule - Street fund
50
Budgetary comparison schedule - KENO fund
51
TABLE OF CONTENTS — CONTINUED
Page
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 52-53
SCHEDULE OF FINDINGS AND RESPONSES 54-55
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 56
"&—
&ASSOCIATES, L.L.C.
Certified Public Accountants I Consultants
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and Members
of the City Council
City of Blair, Nebraska
We have audited the accompanying financial statements of the governmental activities, the business -
type activities, each major fund, and the aggregate remaining fund information of the City of Blair,
Nebraska (the City), as of and for the year ended September 30, 2010, which collectively comprise
the City's basic financial statements as listed in the table of contents. These financial statements are
the responsibility of the City's management. 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 Gohernment 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 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 the significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our
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, each major
fund, and the aggregate remaining fund information of the City, as of September 30, 2010, and the
respective changes in financial position and, where applicable, cash flows thereof for the year then
ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Gol�ernnlent Auditing Standards, we have also issued a report dated February 2,
2011 on our consideration of the City'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
the internal control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Goi,ernnrent Auditing Standards and should be considered in
assessing the results of our audit.
i
Westroads Pointe 1015 N.98th St.
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis and budgetary comparison information on pages 5 through 17
and 48 through 51 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 inquires, 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.
Hayes & Associates, L.L.C.
Omaha, Nebraska
February 2, 2011
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City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS
September 30, 2010
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, 2010. 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, 2010 by $27.0 million (net assets). Of this amount, $4.6 million
(unrestricted net assets) may be used to meet the government's ongoing obligations to
citizens and creditors.
• The City of Blair's total net assets increased by $2.5 million for the year ended
September 30, 2010. The increase in net assets of $2.5 million can be attributed to
grants, water revenue, and sales tax revenue used to purchase capital assets.
• As of September 30, 2010, the City of Blair's governmental funds reported combined
ending fund balances of $4.1 million, an increase of $1 million in comparison with the
prior fiscal year. This increase is attributed in part to the completion of capital projects
funded by sales tax.
• The fund balances for the General Fund did not significantly change for the fiscal year
ended September 30, 2010. The Debt Service Fund increased $900,000 and the Street
Fund increased $85,000 during the same period.
• The City's total debt decreased by $200,000 during the current fiscal year. The City
issued new debt during the current year and continued to make annual debt payments.
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.
-5-
City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
September 30, 2010
Government -wide financial statements. The government -wide financial statements are
designed to provide readers with a broad overview of the City of Blair's finances in a manner
similar to a private -sector business. The statement of net assets presents inforination on all of
the City of Blair's assets and liabilities, with the difference between the two reported as net
assets. Over time, increases or decrease in net assets may serve as a useful indicator of whether
the financial position of the City of Blair is improving or deteriorating. The statement of net
assets combines and consolidates govermnental 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 (Le. roads, drainage improvements, storm and sewer lines,
etc.), to assess the overall health or financial condition of the City. The statement of activities
presents information showing how expenses are taken into account regardless of when cash is
received or paid. Thus, revenues and expenses are reported in this statement for some items that
will only result in cash flows in future fiscal periods (e.g., uncollected taxes). Both the statement
of net assets and the statement of activities are prepared utilizing the accrual basis of accounting
as opposed to the modified accrual basis.
In the statement of net assets and the statement of activities, the City is divided into two kinds of
activities:
® Governmental Activities - Most of the City's basic services are reported here, including
the police, streets, fire, library, planning and development, parks and recreation, and
general administration. Property taxes, sales taxes, and state allocations finance most of
these activities.
® Business type Activities - The City charges a fee to customers to help it cover all or
most of the cost of certain services it provides. The City's water and sewer system are
reported here.
® Fiduciary Activities - The City accounts for Agency Funds for TIF District #1 Project
which are held in restriction to pay the costs of the District. TIF District #1 bonds are
held by the developer and do not carry the full faith and credit of the City.
City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
September 30, 2010
Reporting the City's Most Significant Funds
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.
-7-
City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
September 30, 2010
Fund Financial Statements - Continued
• Proprietary. funds - The City charges customers for the services it provides, whether to
outside customers or to other units within the City. These services are generally reported
in proprietary funds. Proprietary funds are reported in the same way that all activities are
reported in the statement of net assets and the statement of activities. In fact, the City's
enterprise funds (a component of proprietary funds) are identical to the business -type
activities that are reported in the government -wide statements but provide more detail
and additional information, such as cash flows, for proprietary funds.
The City of Blair maintains two individual enterprise funds. The City uses enterprise
funds to account for its water and sewer. The funds provide the same type of information
as the government -wide financial statements, only in more detail and include some of
the internal service fund type activity. The proprietary fund financial statements provide
separate information for the water and sewer funds, both of which are considered to be
major funds in the City.
• Fiduciary - 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 assets were $27.0 million as of September 30, 2010. Analyzing the net
assets and net expenses of governmental and business -type activities separately, the
governmental activities net assets were $14.3 million and the business type activities net assets
were $12.7 million. This analysis focuses on the net assets (table 1) and changes in general
revenues (table 2) and significant expenses of the City's govermilental and business -type
activities. The comparative government -wide results are provided in the tables for additional
analysis.
By far the largest portion of the City's net assets (83%) reflects its restricted capital assets (e.g.,
donations, community betterment, debt service, and capital projects).
SEE TABLE 1
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City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
SUMMARY OF NET ASSETS
Amounts expressed in thousands
-9-
TABLE 1
Governmental
Activities
Business -type
Activities
Total Primary
Government
2010
2009
2010
2009
2010
2009
ASSETS
Current and other assets
$ 8,027
$ 7,464 $
2,736
$ 1,870
$ 10,763
$ 9,334
Capital assets
16,771
14,525
34,797
35,825
51,568
50,350
Total assets
24,798
21,989
37,533
37,695
62,331
59,684
LIABILITIES
Long-term debt outstanding
6,195
5,515
22,473
22,711
28,668
28,226
Other liabilities
4,341
4,638
2,343
2,384
6,684
7,022
Total liabilities
10,536
10,153
24,816
25,095
35,352
35,248
NET ASSETS
Invested in capital assets
net of related debt
9,986
8,520
11,125
11,944
21,111
20,464
Restricted
221
251
1,080
267
1,301
518
Unrestricted (deficit)
4,055
3,065
512
389
4,567
3,454
Total net assets
S 14,262
$ 11,836 S
12,717
$ 12,600
$ 26,979
$ 24,436
-9-
City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
September 30, 2010
Governmental activities: Governmental activities increased the City's net assets by $2.4
million.
Key elements of this increase are as follows:
® The increase was in part due to the fact that all revenue from taxes in governmental
funding activities was fairly stable. The General Fund and Street Fund were the most
effective at covering their costs due to sales tax, fees charged, operating grants, capital
grants, and contributions, which was generally a positive increase.
® Other revenues accounted for an increase of $1.5 million. These revenues consist of
reimbursements, developers' down payments, other donations, and miscellaneous
revenues.
The comparative financial analysis is provided for additional information. The City's
governmental revenues increased when compared to the prior year by 22% or $1.6 million. The
primary reason for this increase was the receipt of other funds such as grants and building fees.
The assessed value of the property of the City increased by $9.25 million or 2.1 % as compared
to the prior year while the City property tax rate of $.3569 per $100 assessed valuation stayed
the same.
Business -type Activities
Revenues of the City's business -type activities were $6.5 million for the fiscal year ending
September 30, 2010. Expenses for the City's business -type activities were $6.1 million for the
year, resulting in net revenues of $367,000. The net revenues are the result of several factors,
including the following:
® The City's water system recorded charges for services of $5.47 million, which exceeded
expenses of $4 million, which included $1.08 million in depreciation, by $1.44 million.
The most significant expenses of the water fund were $957,000 for operating expenses,
$770,000 for salaries and benefits and $1,220,000 for material and supplies.
® The sewer fund had a net operating income of $204,982 before depreciation.
SEE TABLE 2
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City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
CHANAGES IN NET ASSETS
Amounts expressed in thousands
TABLE 2
Governmental Activities
Business -type Activities
Total Primary Government
2010
2009
2010
2009
2010
2009
REVENUES
Program revenues
Charges for services
$ 601
$ 472
$ 6,482
$ 6,537
$ 7,083
$ 7,009
Operating grants and
contributions
62
86
-
-
62
86
Capital grants and
contributions
460
333
460
333
General revenues
Taxes
4,484
4,580
4,484
4,580
Interest income
159
187
4
10
163
197
Other
2,120
606
-
2,120
606
Total revenues
7,886
6,264
6,486
6,547
14,372
12,811
EXPENSES
Administration
771
687
-
-
771
687
Police
1,687
1,699
1,687
1,699
Fire
363
279
363
279
Parks
470
506
470
506
Library
285
277
285
277
Swimming pool
66
54
66
54
Zoning
157
138
157
138
Animal control
91
82
91
82
Donated fund
23
20
23
20
Streets
1,459
1,645
1,459
1,645
Keno
24
46
24
46
Bond issuance costs
18
-
18
-
Interest expense
295
282
-
-
295
282
Water
-
-
5,010
4,934
5,010
4,934
Sewer
1,109
944
1,109
944
Total expenses
5,709
5,715
6,119
5,878
11,828
11,593
\
CHANGE IN NET ASSETS
BEFORE TRANSFERS
2,177
549
367
669
2,544
1,218
TRANSFERS
249
(362)
(249)
362
CHANGE IN NET ASSETS
2,426
187
118
1,031
2,544
1,218
NET ASSETS,
BEGINNING OF YEAR
11,836
11,149
12,599
12,068
24,435
23,217
PRIOR PERIOD ADJUSTMENT
500
(500)
BEGINNING NET ASSETS, RESTATED
11,836
11,649
12,599
11,568
24,435
23,217
NET ASSETS, END OF YEAR$
14,262
$ 11,836
_1__j 2.717
$ 12,599
_L__26 979
_L____24 .435
City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
September 30, 2010
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At the end of the fiscal year 2010, the City had nearly $72.7 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 $3.1 million or 4.4% over the prior fiscal year. Beginning October 1, 2003, the
City began capitalizing general infrastructure assets and depreciating them over their useful
lives as required by GASB 34. The general infrastructure assets capitalized in 2010 were $3.2
million.
SEE TABLE 3
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City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
CHANGES IN CAPITAL ASSETS
Amounts expressed in thousands
TABLE 3
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Balance
Balance
September 30, 2009
Increases
Decreases
September 30, 2010
GOVERNMENTAL ACTIVITIES
Land S
206 $
S
S 206
Street infiastructure
10,032
2,473
-
12,505
Buildings
5,659
44
5,703
Equipment
3,721
396
(86)
4,031
Total governmental
19,618
2,913
(86)
22,445
BUSINESS -TYPE ACTIVITIES
Water assets
41,614
234
-
41,848
Sewer assets
8,356
37
(19)
8,374
Total business -type
49,970
271
(19)
50,222
Totals S
69,588 S
3,184 S
(105)
S 72,667
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City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
September 30, 2010
Debt
At year-end, the City had $7.68 million in General Obligation Bonds and General Registered
Warrants outstanding as compared to $7.68 million at the end of the prior fiscal year, resulting
in no change as shown in Table 4. The Water Revenue Bonds outstanding were decreased by
$339,000. The City has a 25 year take or pay contract with Cargill to secure the debt. The
expanded plant has a 17 million gallons per day (MPD) capacity with 12.5 MPD contracted to
Cargill and was designed to be easily expanded to 20 million gallon per day.
SEE TABLE 4
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City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
CHANGES IN OUTSTANDING DEBT
Amounts expressed in thousands
Description
General Registered Warrants
General Obligation Bonds
Water Revenue Bonds
Sewer Revenue Bonds
Totals
TABLE 4
Balance
Balance
September 30,
September 30,
2009
Additions
Reductions
2010
$ 1,677
$ 379
$ (1,156)
$ 900
6,005
1,270
(490)
6,785
21,741
7,270
(7,609)
21,402
2,140
1,645
(1,515)
2,270
$ 31,563 $ 10,564 $ (10,770) $ 31,357
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City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
September 30, 2010
THE CITY'S FUND
At the close of the City's fiscal year on September 30, 2010, the governmental funds of the City
reported a combined fund balance of $4.1 million. The primary reason for the general fund's
reduction is the transfer of cash to other funds for the purchase of capital improvements.
General Fund Budgetary Highlights
General Fund had revenues over expenditures of $572,000. This was primarily accomplished
from the fact expenses were below budgeted projections.
Debt Service had expenditures of $176,000 more than revenues. This was primarily result of
special assessments, including interest, were less than what had been budgeted.
Street Fund had an operating loss of $1,044,000. This was offset with the transfer in of
$1,916,000 in sales taxes for capital projects.
Keno and Capital Projects Fund had no major deviations in revenues or expenditures.
Water and Sewer Funds had no major deviation of revenues or expenditures. Water finished the
year with a 1.25 ratio of operating income before depreciation, plus interest income and
operating transfers in divided by Debt Service. Sewer had a net operating income to debt ratio of
1.44.
Internal Service Fund had a fund balance of $357,000. The fund was created to manage the
city's partially self-funded employee health insurance program. The balance reflects positive
management of the fund and savings over the previous commercial employee health plan. The
fund balance represents a snapshot of the fund on Sept. 30, 2010 and does not include any
accrued liabilities or refunds receivable from reinsurance. It does show the success the City has
had in helping manage the City's employee health care costs the past four and three quarter
years. The health care program and contracts operate on a calendar year bases. For the first five
years of the insurance program, it is estimated the City will have over $350,000 in cash savings
reserves above the expected medical costs to help hold down fixture premium costs.
-16-
City of Blair, Nebraska
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
September 30, 2010
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
Current economic conditions point toward a continued growth in the community that will allow
for a stable budget environment. The City did take a slight hit to the community with the closing
of Dana College in June of 2010. Despite the College closing, the City's sales tax has remained
stable. It appears that the industrial growth of the Bio industries on the Cargill Bio Campus is
providing a solid base for maintaining and growing the City's tax base. In addition to the
industrial development, Walmart broke ground for a new 100,000 square foot super center in
October of 2010 which should allow for the continued growth to the sales tax base. The City,
Blair Area Chamber of Commerce, and Gateway Development Corporation all continue to work
to help find a prospective buyer for the Dana College property to make the facility an asset to
the City.
The property tax request for fiscal year 2010/2011 was increased by less than 1%, which with
the valuation increase caused the levy per valuation dollar to decrease over the prior year.
The City's property valuation continues to grow at a 1.75% to 2% annual increase and sales
taxes continue to be stable. The City's short term (1-5 years) forecast continues to be solid as
the City budgets only $915,000 annually of the estimated $1.6 million in sales tax receipts for
ear -marked projects such as property tax relief, fire bond payment and economic development.
The balance of the sales tax dollars is currently available for discretionary capital projects and
equipment that are important to the citizens of the City. The 6 to 10 year projections also appear
to remain solid with exception that the City currently uses the $481,000 annual payment from
OPPD, from the sale of the City's electric system in 1984, for property tax relief. This $481,000
asset will go away in 2014. The Council, in annual discussion on the issue at budget preparation
time, is intent on expanding the City's economic growth in sales and property tax base through
economic development to offset the loss of revenue from the OPPD payment in FY 2015. In
addition, the City's current sales tax authorization is scheduled to expire on Sept. 30, 2015. The
extension of the sales tax beyond 2015 will be imperative to maintaining a reasonable property
tax levy.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and
creditors with a general overview of the City's finances and to show the City's accountability
for the money it receives. If you have questions about this report or need additional financial
information, contact the City of Blair, 218 S. 16th Street, Blair, NE 68008.
-17-
City of Blair, Nebraska
STATEMENT OF NET ASSETS
GOVERNMENT - WIDE
September 30, 2010
ASSETS
Cash and cash equivalents
Accounts receivable
Due from County Treasurer
Accrued interest receivable
Prepaid expense
Special assessments receivable
Interfund balances
Contract receivable
Restricted cash and cash equivalents
Bond issue costs - deferred
Capital assets
Land
Street infrastructure
Buildings
Equipment
Accumulated depreciation
Total capital assets
Total assets
LIABILITIES
Accounts payable
Accrued expenses
Accrued interest
Deposits payable
Registered warrants
Deferred revenue
Bonds payable
Due within one year
Due in more than one year
Total liabilities
NET ASSETS
Investment in capital assets,
net of related debt
Restricted:
Donated projects
Debt service
Community betterment
Capital projects
Unrestricted
Total net assets
Total liabilities and net assets
Governmental
Business -type
$ 397,084
Activities
Activities
Total
$ 2,645,874
$ 356,760
$ 3,002,634
287,416
1,089,318
1,376,734
123,946
-
123,946
70,243
2,130
72,373
-
6,862
6,862
2,868,310
-
2,868,310
(77,168)
77,168
-
1,560,947
-
1,560,947
547,576
1,080,173
1,627,749
-
123,266
123,266
206,241 423,783 630,024
12,505,089 - 12,505,089
5,703,022 47,634,141 53,337,163
4,030,902 2,163,926 6,194,828
(5,674,263) (15,424,945) (21,099,208)
16,770,991 34,796,905 51,567,896
$ 24,798,135 $ 37,532,582 $ 62,330,717
$ 159,723
$ 237,361
$ 397,084
245,437
162,490
407,927
60,914
242,430
303,344
36,350
1,700
38,050
400,000
500,000
900,000
2,848,462
-
2,848,462
590,000
1,199,438
1,789,438
6,195,000
22,472,596
28,667,596
10,535,886
24,816,015
35,351,901
9,985,991
11,124,871
21,110,862
41,934
-
41,934
-
1,080,173
1,080,173
110,072
-
110,072
68,792
-
68,792
4,055,460
511,523
4,566,983
14,262,249
12,716,567
26,978,816
$ 24,798,135
$ 31532,582
$ 62,330,717
See accompanying notes and independent auditor's report.
- 18 -
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OW
City of Blair, Nebraska
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
September 30, 2010
See accompanying notes and independent auditor's report.
-24-
Enterprise Funds
Internal
Water
Sewer
Total
Service Fund
ASSETS
CURRENT ASSETS
Casb
$ -
$ 356,760
$ 356,760
$ 357,501
Accounts receivable user fees
931,775
157,543
1,089,318
-
_
Accruedinterestreceivable
1,879
251
2,130
Prepaid expense
4,620
2,242
6,862
-
Total current assets
938,274
516,796
1,455,070
357,501
NON-CURRENT ASSETS
Restricted assets
Bond and interest sinking fund cash
and investments
825,673
254,500
1,080,173
Bond issuance costs - deferred
123,266
-
123,266
-
`'" Total non-current assets
948,939
254,500
1,203,439
CAPITAL ASSETS
Land
373,908
49,875
423,783
Buildings
40,404,402
7,229,739
47,634,141
Equipment
1,069,508
1,094,418
2,163,926
Accumulated depreciation
(11,572,648)
(3,852,297)
(15,424,945)
Total capital assets
30,275,170
4,521,735
34,796,905
Total assets
$ 32,162,383
$ 5,293,031
$ 37,455,414
$ 357,501
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts payable
$ 224,785
$ 12,576
$ 237,361
$
Accrued expenses
108,918
53,572
162,490
Accrued interest
227,364
15,066
242,430
-
Deposits
1,700
-
1,700
Registered warrants
500,000
-
500,000
Bonds payable - current
1,134,438
65,000
1,199,438
Total current liabilities
2,197,205
146,214
2,343,419
NON-CURRENT LIABILITIES
Bonds payable
20,267,596
2,205,000
22,472,596
Total liabilities
22,464,801
2,351,214
24,816,015
NET ASSETS
Investment in capital assets net of related debt
8,873,136
2,251,735
11,124,871
-
Restricted for debt service
825,673
254,500
1,080,173
-
Unrestricted
(1,227)
435,582
434,355
357,501
Total net assets
$ 9,697,582
$ 2,941,817
12,639,399
$ 357,501
RECONCILIATION
Eliminating entry between business -type activities and governmental
activities
77,168
$ 12,716,567
See accompanying notes and independent auditor's report.
-24-
RECONCILIATION
Change in net assets
Change in eliminating entry between business -type activities
and governmental activities
Change in net assets business -type activities
See accompanying notes and independent auditor's report.
-25-
$ 119,113
(2,501)
$ 116,612
City of Blair, Nebraska
STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For the year ended September
30, 2010
Enterprise Funds
Internal
Water
Sewer
Total
Service Fund
OPERATING REVENUES
Charges for services
$ 5,415,217
$ 989,733
$ 6,404,950
$ 1,073,249
Sale of merchandise
19,129
-
19,129
-
Forfeited discounts
14,381
-
14,381
Other
24,143
18,136
42,279
Total operating revenues
5,472,870
1,007,869
6,480,739
1,073,249
EXPENSES
Personnel
769,420
431,026
1,200,446
Operating expenses
957,641
356,609
1,314,250
Materials and supplies
1,227,239
12,580
1,239,819
Rental expense
6,637
2,672
9,309
-
Insurance claims and expenses
-
-
-
1,030,363
Depreciation
1,075,076
223,953
1,299,029
-
Total expenses
4,036,013
1,026,840
5,062,853
1,030,363
OPERATING INCOME
1,436,857
(18,971)
1,417,886
42,886
NONOPERATING REVENUES (EXPENSES)
Interest income
2,192
1,777
3,969
755
Interest expense
(927,947)
(81,040)
(1,008,987)
-
Bonding costs
(44,920)
-
(44,920)
-
Total nonoperating revenues (expenses)
(970,675)
(79,263)
(1,049,938)
755
Income(loss) before transfers
466,182
(98,234)
367,948
43,641
Operating transfers - in
4,183
244,266
248,449
-
Operating transfers - out
(214,013)
(283,271)
(497,284)
(45,380)
CHANGE IN NET ASSETS
256,352
(137,239)
119,113
(1,739)
NET ASSETS, BEGINNING OF YEAR
9,441,230
3,079,056
12,520,286
359,240
NET ASSETS, END OF YEAR
$ 9,697,582
$ 2,941,817
$ 12,639,399
$ 357,501
RECONCILIATION
Change in net assets
Change in eliminating entry between business -type activities
and governmental activities
Change in net assets business -type activities
See accompanying notes and independent auditor's report.
-25-
$ 119,113
(2,501)
$ 116,612
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received fiom customers
Cash received from interfund services provided
Cash payments to suppliers
Cash payments to employees
Cash paid forinlerfund services used
Cash paid for judgments and claims
Cash provided from operating activities
CASH FLOWS FROM NON -CAPITAL
FINANCIAL ACTIVITIES
Operating transfers - in
Operating transfers - out
Cash used from non -capital financing
activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING
Acquisition of capital assets
Receipt of debt proceeds
Repaymentoflong-term debt
Interest payment long -tern debt
Bonding costs
Cash used from capital and related
financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from interest earnings
Disbursements from (to) restricted assets
Cash provided from investing activities
CHANGE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS,
END OF YEAR
Reconciliation of operating income to net cash
fi-om operating activities
Operating income
Adjustments to reconcile operating income
to net cash from operating activities
Depreciation
Change in receivables
Change in prepaid expenses
Change in accounts payable
Change in accrued expenses
Total adjustments
CASH PROVIDED FROM OPERATING ACTIVITIES
City of Blair, Nebraska
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
September 30, 2010
4,183 244,266 248,449
(214,013) (283,271) (497,284) (45,380)
(209,830) (39,005) (248,835) (45,380)
(234,075)
Enterprise Funds
(270,807)
Internal
Water
Server
Total
Service Fund
$ 5,446,586
$ 1,012,405
S 6,458,991
S -
-
-
-
1,073,249
(2,151,515)
(379,076)
(2,530,591)
-
(779,887)
(421,168)
(1,201,055)
(1,030,363)
2,515,184
212,161
2,727,345
42,886
4,183 244,266 248,449
(214,013) (283,271) (497,284) (45,380)
(209,830) (39,005) (248,835) (45,380)
(234,075)
(36,732)
(270,807)
7,270,000
1,645,000
8,915,000
(7,609,339)
(1,515,000)
(9,124,339)
(1,004,947)
(106,327)
(1,111,274)
(168,186)
9,858
(168,186)
(1,746,547)
(13,059)
(1,759,606)
313 1,729 2,042 755
(648,673) (164,500) (813,173)
(648,360) (162,771) (811,131) 755
(89,553) (2,674) (92,227) (1,739)
89,553 359,434 448,987 359,240
$ $ 356,760 -L-3 56,760 -L--357 .501
$ 1,436,857 $ (18,971) $ 1,417,886 $ 42,886
1,075,076
223,953
1,299,029
(26,284)
4,536
(21,748)
81
63
144
39,921
(7,278)
32,643
(10,467)
9,858
(609)
1,078,327
231,132
1,309,459
S 2,515,184
$ 212,161
-L 2,727,345 $ 42,886
See accompanying notes and independent auditor's report.
-26-
City of Blair, Nebraska
STATEMENT OF NET ASSETS
FIDUCIARY FUNDS
September 30, 2010
ASSETS
Cash
NET ASSETS
TIF
Fund 1
$ 48,431
Net Assets (Deficit) Held in Trust for Tax Incentive Funds (TIF) $ 48,431
See accompanying notes and independent auditor's report.
-27-
{
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS
September 30, 2010
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the City of Blair,
Nebraska:
Rgporting EqjLty
The City of Blair, Nebraska (the City) is a Municipal Corporation which was
founded and incorporated in 1869. With a population of 7,612, the City of Blair
functions as a City of the First Class under Nebraska Statutes. 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").
2. Basis of Accountinjz/Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is
considered a separate accounting entity. The operations of each fund are
accounted for with a separate set of self -balancing accounts that comprise its
assets, liabilities, fund equity, revenues, and expenditures. Governmental
resources are allocated to and accounted for in individual funds based upon the
purpose for which they are to be spent and the means by which spending activities
are controlled.
Government -Wide Financial Statements
The City's government -wide financial statements include a statement of net assets
and a statement of activities (including changes in net assets). These statements
are prepared using the standards of the Governmental Accounting Standards
Board (GASB), General Accepted Accounting Principles (GAAP), as well as
FASB pronouncements issued through November 30, 1989. These statements
present summaries of governmental and business -type activities for the City.
Fiduciary activities of the City are not included in these statements. These
statements are presented on an "economic resources" measurement focus and the
accrual basis of accounting.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
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
assets. The statement of activities presents changes in net assets. Under the
accrual basis of accounting, revenues are recognized in the period in which they
are earned while expenses are recognized in the period in which the liability is
incurred.
The statement of activities demonstrates the degree to which the direct expenses
of a given function are offset by program revenues. Direct expenses are those that
are clearly identifiable with a specific function. The types of transactions
reported as program revenues for the City are reported in three categories: 1)
charges for services, 2) operating grants and contributions, and 3) capital grants
and contributions. Charges for services include revenues from customers or
applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function. Grant and contributions include revenues
restricted to meeting the operational or capital requirements of a particular
function. Taxes and other items not properly included among program revenues
are reported instead as general revenues.
All internal balances in the statement of net assets and internal transactions in the
statement of activities have been eliminated. The purpose of transfers between
funds was to record proper allocation of expenses.
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.
-29-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
2. Basis of Accounting/Measurement Focus - Continued
Governmental Fund Financial Statements
Governmental fund financial statements include a balance sheet and a statement
of revenues, expenditures, and changes in fund balances for all major
governmental funds. An accompanying schedule is presented to reconcile and
explain the differences in fund balances as presented in these statements to the net
assets presented in the government -wide financial statements. The City has
presented all major funds that meet the qualifications of GASB Statement No. 34.
All governmental funds are accounted for on a spending or "current financial
resources" measurement focus and the modified accrual basis of accounting.
Accordingly, capital assets and bonds payable are not included on the balance
sheet. The statement of revenues, expenditures and changes in fund balances
present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in 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. Accordingly, revenues are recorded when received in cash, except that
revenues subject to accrual (generally 60 -days after year-end are recognized when
due. The primary sources susceptible to accrual are property tax, sales tax,
transient occupancy tax, and grant revenues.
Expenditures are generally recognized under the modified accrual basis of
accounting when the related fund liability is incurred. An exception to this
general rule is principal and interest on general long-term debt which is
recognized when due.
The City reports the following major governmental funds:
The General Fund is the government's primary operating fund. It accounts for all
financial resources of the City, except those required to be accounted for in
another fund.
The Debt Service Fund is used to account for the payment of principal and
interest on general long-term debt. The primary sources of revenue are property
taxes and special assessments.
-30-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
2. Basis of Accounting/Measurement Focus - Continued
Governmental Fund Financial Statements - Continued
The Street Fund is used to record transactions in the Street department, as the
State of Nebraska requires an accounting to verify the matching of funds it
provides for this purpose.
The Keno Fund maintains an accounting of Keno gambling activity because the
funds earned are restricted to community betterment projects and require special
state reporting.
The Capital Projects Fund is used to record transactions in the TIF 2 development
area, as the funds are required to be accounted for separately.
Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a statement of net assets, a
statement of revenues, expenses and changes in fund net assets, and a statement of
cash flows for each major proprietary fund. A column representing internal
service funds is also presented in these statements. However, internal service
balances and activities have been combined with the governmental activities in
the Government -Wide financial statements.
Proprietary funds are accounted for using the "economic resources" measurement
focus and the accrual basis of accounting. Accordingly, all assets and liabilities
(whether current or noncurrent) are included on the statement of net assets. The
statement of revenues, expenses and changes in fund net assets presents increases
(revenues) and decreases (expenses) in total net assets. Under the accrual basis of
accounting, revenues are recognized in the period in which they are earned while
expenses are recognized in the period in which the liability is incurred.
Proprietary funds distinguish operating revenues and expense from non-operating
items. Operating revenues and expense generally result from providing services
and producing and delivering goods in connection with a proprietary fund's
principal ongoing operations. Operating expenses for enterprise funds include the
cost of services, administrative expenses, and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as non-operating
revenues and expenses.
-31-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
2. Basis of Accounting/Measurement Focus - Continued
Proprietary Fund Financial Statements - Continued
The City reports the following major proprietary funds:
The Water and Sewer Fund accounts for the activities related to the operation of
the City's water delivery and sewage systems. It operates the water treatment and
sewer treatment plants, water distribution systems, sewer collection systems, and
pump stations.
Internal service funds of the City (which provide services primarily to other funds
of the City) are presented, in summary form, as part of the proprietary fund
financial statements. Since the principal users of the internal services are the
City's governmental activities, financial activities of the internal service funds are
presented in the governmental activities column when presented at the
government -wide level.. The. costs of these services are allocated to the
appropriate function/program (public safety, streets, culture and recreation, public
improvements, planning and zoning, water and sewer services, and general
administrative services) in the statement of activities.
Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a statement of net assets. The City's
Fiduciary fund represents an agency fund, which is custodial in nature (assets
equal liabilities) and does not involve measurement of results of operations.
Accordingly, it presents only a statement of fiduciary net assets and does not
present a statement of changes in fiduciary net assets. 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.
The City reports the following fiduciary fund:
The TIF 1 Fund is an agency fund that accounts for the activities related to
redevelopment costs financed by tax incremental finance bonds. The tax
incremental finance bonds are to be paid by the taxes of the redeveloped area.
-32-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
3. Budgetary 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, 2010.
4. The Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
5. Deposits and Investments
The City's cash and cash equivalents are considered to be cash on hand, demand
deposit and short-term investments with original maturities of three months or
less from the date of acquisition.
Investments are restricted and consist of certificates of deposit shown at cost.
There are no significant differences in cost and fair values at September 30, 2010.
-33-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
6. Capital Assets
Capital assets, which include land, buildings, and equipment (furniture, vehicles,
etc.) and infrastructure assets (street systems, stone drains, etc.), are reported in
governmental activities column of the government -wide financial statements.
Capital assets are defined by the City as assets with an initial, individual cost of
more than $5,000. Such assets are recorded at historical cost or estimated
historical cost if purchased or constructed. Donated or annexed capital assets are
recorded at estimated market value at the date of donation or annexation.
The costs of normal maintenance or repairs that do not add to the value of the
asset or materially extend assets lives are not capitalized. Major outlays for
capital assets and improvements are capitalized as projects are constructed. The
City qualifies for the exemption under GASB 34 to not retroactively apply the
capitalization requirements of general infrastructure assets. The requirement to
capitalize and depreciate these assets has been applied as of October 1, 2003.
Depreciation is recorded in the government -wide financial statements on a
straight-line basis over the useful life of the assets as follows:
Assets
Years
Equipment
10
Vehicles
5
Buildings
40
Street infrastructure
40
7. Property Taxes
Property tax revenue is recognized when collected by the County as the City's
agent within the current period. There are no property taxes due which are not
delinquent and all delinquent taxes are considered collectible.
The City's December 31, 2009 valuation was $457,537,882. The levy for the
City for the year ending September 30, 2010 was $0.3569 per $100 of value. The
total tax levy was $1,632,785. 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.
-34-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
8. Claims and Judgments Payable
The City records a liability for litigation, judgments, and claims when it is
probable that an asset has been impaired or a liability has been incuffed prior to
year-end and the probable amount of loss (net of any insurance coverage) can be
reasonably estimated. The liability, if any, is reported in the government -wide
statement of net assets. The portion of the liability, which will be liquidated with
expendable, available financial resources, if any, is reflected as a liability of
applicable governmental funds.
9. Compensated Absences
General leave for the City includes both vacation and sick pay. Vacation leave is
based on an employee's length of employment. An employee is allowed to carry
forward each year, on their anniversary date, that year's earned vacation, plus 40
hours. Sick leave is earned at a rate approved by the personnel manual, which is
currently six (6) hours per month. Sick leave can be accumulated to a maximum
of 840 hours and can only be used for illness, medical care, and care of sick
members of the immediate family per the personnel manual.
Upon terniination 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.
-35-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
11. Allowance for doubtful accounts
The City uses the direct write-off for uncollectable accounts. The doubtful
accounts at September 30, 2010 were insignificant.
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.
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 carrying amount of the
City's cash deposits was $4,630,383 at September 30, 2010. The bank balances of the
City's cash deposits at September 30, 2010 was $3,598,293. The City's investments
were made up of $1,080,173 of certificates of deposit. The City's cash deposits and
certificates of deposit were either entirely insured or collateralized with securities held by
the pledging financial institutions in the City's name.
The City has no formal policy for handling credit risk, interest rate risk, or concentration
risk; however, deposits and investments consist of demand deposits, certificates of
deposits, and United States Treasury Notes. The statutes of the State of Nebraska require
that local governmental units follow the "prudent man" rule with deposits, and that
deposits be secured by collateral valued at market or par whichever is lower less the
amount insured by the Federal Deposit Insurance Corporation. The City has no deposit
and investment policy that would further limit its deposits, but the City administratively
has required all deposits to be collateralized at 105%.
-36-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE C. CAPITAL ASSETS
A summary of changes in capital assets is as follows:
Governmental Activities
Capital assets not depreciated
Land
Other capital assets
Street infrastructure
Buildings
Equipment
Total other capital assets
Less accumulated depreciation
Street infrastructure
Buildings
Equipment
Total accumulated
depreciation
Other capital assets, net
Governmental activities capital
Balance
September 30,
2009 Increases
$ 206,241 $ -
Decreases
Balance
September 30,
2010
$ 206,241
10,032,570
2,472,519
-
12,505,089
5,658,662
44,360
-
5,703,022
3,720,389
396,606
(86,093)
4,030,902
19,411,621
2,913,485
(86,093)
22,239,013
(797,613)
(327,249)
-
(1,124,862)
(2,081,626)
(143,681)
-
(2,225,307)
(2,213,352)
(196,835)
86,093
(2,324,094)
(5,092,591)
(667,765)
86,093
(5,674,263)
14,319,030
2,245,720
-
16,564,750
assets, net
$ 14,525,271 $ 2,245,720 $ - $ 16,770,991
Depreciation expense was charged
to functions as follows:
Governmental Activities:
Administration
$ 57,378
Police
40,942
Fire
113,840
Parks
45,815
Library
4,218
Swimming pool
21,941
Animal control
8,139
Streets
375,492
Total depreciation
$ 667,765
-37-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE C. CAPITAL ASSETS - CONTINUED
Business -Type Activities
Balance Balance
September 30, September 30,
2009 Increases Decreases 2010
Capital assets not depreciated
Land
$ 423,783
$ -
$ -
$ 423,783
Other capital assets
Infrastructure
47,539,681
94,460
-
47,634,141
Equipment
2,006,848
176,347
(19,269)
2,163,926
Total other capital assets
49,546,529
270,807
(19,269)
49,798,067
Less accumulated depreciation
Infrastructure
(12,513,571)
(1,226,154)
-
(13,739,725)
Equipment
(1,631,614)
(72,875)
19,269
(1,685,220)
Total accumulated
depreciation
(14,145,185)
(1,299,029)
19,269
(15,424,945)
Other capital assets, net
35,401,344
(1,028,222)
-
34,373,122
Business -type activities capital
assets, net
$ 35,825,127
$ (1,028,222)
$ -
$ 34,796,905
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2010
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,
Dated
Description
Rate
2009
Additions
Reductions
2010
12/15/2002
Various purpose
1.60-4.25%
$ 420,000
$
$ (135,000)
$ 285,000
7/19/2005
Various purpose
2.90-4.25%
720,000
-
(85,000)
635,000
6/15/2006
Various purpose
3.70-4.35%
505,000
-
(65,000)
440,000
9/28/2007
Various purpose
3.70-5.00%
2,555,000
-
(130,000)
2,425,000
Tax increment
12/14/2007
financing bond
4.48%
1,140,000
-
(40,000)
1,100,000
Public safety tax
2/26/2008
anticipation bonds
2.75-4.25%
665,000
(35,000)
630,000
5/18/2010
Various purpose
0.85% - 4.25%
-
1,270,000
-
1,270,000
Total
$ 6,005,000
$ 1,270,000
$ (490,000)
$ 6,785,000
Business-tvne
Activities
Balance
Balance
Interest
September 30,
September 30,
Dated
Description
Rate
2009
Additions
Reductions
2010
WATER DEBT
6/15/2000
Refunding Bonds
4.70-5.55%
$ 690,000
$ -
$ (135,000)
$ 555,000
4/29/2002
DEQ Bonds
3.03%
4,655,397
-
(658,343)
3,997,054
6/1/2006
NRD Bonds
4.15-4.75%
1,895,976
-
(315,996)
1,579,980
4/24/2007
WA BANS 2007
4.50%
6,500,000
-
(6,500,000)
-
8/15/2007
WA BANS 2007B
4.65%
8,000,000
-
8,000,000
2010B Revenue
9/28/2010
Bonds
2.75%
-
6,500,000
6,500,000
2010C Revenue
9/28/2010
Bonds
3.25%
-
770,000
-
770,000
Total water
$ 21,741,373
$ 7,270,000
$ (7,609,339)
$ 21,402,034
SEWER DEBT
12/15/2004
Revenue Bonds
2.05-4.25%
$ 685,000
$ -
$ (60,000)
$ 625,000
6/26/2007
SE BANS Series 2007
4.05%
1,455,000
(1,455,000)
-
8/17/2010
2010 Revenue Bonds
2.70%
1,645,000
-
1,645,000
Total sewer
$ 2,140,000
$ 1,645,000
$ (1,515,000)
$ 2,270,000
-39-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For the year ended September 30, 2010
NOTE D. BONDS PAYABLE - CONTINUED
Governmental Activities
Year ending September 30,
Principal
Interest
Total
2011
$ 590,000
$ 274,609
$ 864,609
2012
620,000
253,882
873,882
2013
505,000
230,772
735,772
2014
470,000
212,483
682,483
2015
495,000
194,548
689,548
2016-2020
2,050,000
708,180
2,758,180
2021-2025
1,685,000
299,013
1,984,013
2026-2029
370,000
28,000
398,000
Total
$ 6,785,000
$ 2,201,487
$ 8,986,487
Business -type Activities
Bonds issued for the water and sewer funds are collateralized by a pledge of revenues derived and to be derived fi•om the
operations of the water and sewer fund. Sinking fund requirements for Water and Sewer debt were a total reserve of
$1,071,235 at September 30, 2010.
Water Bonds
Year ending September 30,
Principal
Interest
Total
2011
$
1,134,438
$ 784,875
$
1,919,313
2012
9,170,151
819,997
9,990,148
2013
1,196,495
405,241
1,601,736
2014
1,158,492
360,770
1,519,262
2015
1,081,160
318,490
1,399,650
2016-2020
1,981,298
1,281,347
3,262,645
2021-2025
2,290,000
939,124
3,229,124
2026-2030
2,765,000
445,271
3,210,271
2031
625,000
11,594
636,594
Total
$
21,402,034
$ 5,366,709
$
26,768,743
Sewer Bonds
Year ending September 30,
Principal
Interest
Total
2011
$
65,000
$ 63,327
$
128,327
2012
60,000
85,598
145,598
2013
65,000
83,361
148,361
2014
65,000
80,940
145,940
2015
70,000
78,340
148,340
2016-2020
505,000
340,921
845,921
2021-2025
510,000
249,091
759,091
2026-2030
625,000
136,280
761,280
2031
305,000
6,634
311,634
Total
$
2,270,000
$ 1,124,492
$
3,394,492
Bonds issued for the water and sewer funds are collateralized by a pledge of revenues derived and to be derived fi•om the
operations of the water and sewer fund. Sinking fund requirements for Water and Sewer debt were a total reserve of
$1,071,235 at September 30, 2010.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
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 ASSETS
In the government -wide financial statements net assets are classified in the following
categories:
Invested in Capital Assets - This category groups all capital assets, including
infrastructure, into one component of net assets. Accumulated depreciation on these
assets reduces this category.
Restricted Net Assets - This category presents external restrictions imposed by creditors,
grantors, contributors or laws or regulations of other governments and restrictions
imposed by law through constitutional provisions or enabling legislation.
Unresti-icted Net Assets- This category represents the net assets of the City that are not
restricted for any project or other purpose.
In the Fund financial statements, reserves and designations segregate portions of fund
balance that are either not available or have been earmarked for specific purposes. The
various designations are established by actions of the City Council and Management and
can be increased, reduced, or eliminated by similar actions.
Following is a description and summary of reservations of fund balance at September 30,
2010:
Donated Funds - The City has received donations toward specific projects. The
undisbursed funds with specific restrictions are accounted for in the donated fund
balance.
Debt Service - The Water and Sewer restricted cash is a sinking fund required by
conditions of Revenue Bonds. These funds will become unrestricted in the year 2010.
-41-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE F. NET ASSETS — CONTINUED
Com»lunity Betterment - The City has sponsored a licensed Keno operation and the
restricted funds are the accumulation of net proceeds to be used only for community
betterment projects.
Capital Projects - The TIF 2 fund balance is restricted to development projects within the
TIF 2 area.
NOTE G. PENSION PLANS
The City has three pension plans covering substantially all of its employees. Employees
other than policemen are covered by a defined contribution plan, either a 414(h) or
457(b) plan. Policemen are covered under a defined contribution plan established by the
statutes of the State of Nebraska.
The 414(h) pension plan was established on April 1, 1996 and last restated on August 25,
2008 (effective January 1, 2008). All contributions from a minimum of 3% up to 6% of
gross wages in employee contributions and up to a 6% match of gross wage in
contributions from the City are invested with an investment manager. The employees
must have accumulated six months of service, be at least age 21, and work 40 hours per
week to participate in the plan. Employees are 100% vested in employer contributions
after six years of service. The plan is a single employer plan with the City maintaining
fiduciary responsibility for it. Contributions for the year ended September 30, 2010,
totaled $170,690 which consisted of $85,345 contributed by employees and $85,345
contributed by the City. Contributions are expected to remain relatively level from year
to year. The City may amend, modify, or terminate the 414(h) plan. Funds in the plan
cannot be diverted to any purposes other than for the exclusive benefit of the participants
or their beneficiaries or estates.
The 457(b) pension plan was established on July 1, 2008. The 457(b) plan allows
employees to contribute additional dollars to their pension above the 414(h) requirement
and match. The City will contribute a maximum snatch of 6% based on a one-to-one
match.
-42-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE G. PENSION PLANS - CONTINUED
between the 457(b) and 414(h) plans. An employee can contribute voluntary pre-tax
amounts up to the legal limits as established by IRS code. The plan is a single employer
plan with the City maintaining fiduciary responsibility for it. Contributions for the year
ended September 30, 2010, totaled $65,338 which consisted of $54,115 contributed by
employees and $11,223 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 $112,270 for 2010, 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
2010.
NOTE H. 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.
-43-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE I. LANDFILL CLOSURE
The City has closed its landfill operations. All material closing and monitoring costs
were accrued over the remaining life of the landfill. The Landfill closed October 31,
1993 and any remaining monitoring costs will be paid from City funds but are not
anticipated to be material to the financial statements.
NOTE J. SPECIAL ASSESSMENTS RECEIVABLE
The City's special assessments outstanding as of September 30, 2010, are composed of
special assessment principle of $2,868,310.
The delinquent special assessments at September 30, 2010 are 9% 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 K. 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 83.5% of water sales for the year ended September
30, 2010. Although Cargill represents 83.5% 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.
NOTE L. SELF INSURANCE
The City's Self Insurance Fund is used to account for employee health, dental, and vision
liability claims and is accounted for as an internal service fund. Claims expense as
reported in the fund was reported based on actual expenses paid during the year fiscal
year ended September 30, 2010. The City has not recorded a liability for insurance
claims expected to be paid in future years, as the amount of these future claims cannot be
reasonably estimated. For the fiscal year ending September 30, 2010, the Self Insurance
Fund received inter -fund premiums of $587,686 from various City departments in
monthly payments. Additionally, the fund received premiums $175,419 from employees
of the City. Claims expense for the year, which totaled $879,963, exceeded the total
premiums of $116,858 received by the fund. This $116,858 was covered in whole or part
by reinsurance and reserves.
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE L. SELF INSURANCE - CONTINUED
The City has purchased insurance for claims expenses incurred over a certain dollar
amount each year in order to limit its risk of loss. The cost of this insurance for the fiscal
year was $150,400. For the year ended September 30, 2010, the City received $281,398
in insurance recoveries fi-om claims. These recoveries have been reported as other
operating revenues in the statement of revenues, expenses, and changes in fund net assets,
proprietary funds.
NOTE M. GASBS No. 54
In March 2009, the Governmental Accounting Standards Board (GASB) approved
Statement No. 54, Fund Balance Reporting and Gove»nmental Fund Type Definitions
(Statement). Certain significant changes in the Statement will require the following:
Fund balances for each of the City's governmental funds (General Fund, Special Revenue
Funds, Capital Projects Fund, and Debt Service Fund) will be displayed in the following
Classifications depicting the relative strength of the spending constraints placed on the
purposes for which resources can be used:
Nonspendable fund balance—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 fund balance—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.
Connnitted fund balance—amounts that can be spent only for specific purposes
determined by a formal action of the government's highest level of decision-
making authority.
Assigned fund balance—amounts the government intends to use for specific
purposes that do not meet the criteria to be classified as restricted or committed.
Unassigned ,fund balance—amounts that are available for any purpose; these
amounts can be reported only in the City's General Fund.
-45-
City of Blair, Nebraska
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2010
NOTE M. GASBS No. 54 - CONTINUED
The Statement also establishes several new presentation and disclosure requirements,
including requirements related to stabilization arrangements (i.e., "rainy day" amounts).
In addition, the Statement clarifies the definitions of the various types of governmental
funds. Interpretations of certain terms within the new definition of special revenue funds
may affect which activities the City can report in special revenue funds.
The provisions of GASBS No. 54 must be implemented by the City no later than the
fiscal year beginning October 1, 2010. Implementation will require the City to restate
existing fund balances for the governmental funds.
-46-
SUPPLEMENTAL INFORMATION
City of Blair, Nebraska
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND AND MAJOR SPECIAL REVENUE FUNDS
For the year ended September 30, 2010
REVENUES
Taxes
Charges for services
Interest income
Other revenues
Total revenues
EXPENDITURES
Administration
Police Department
Fire Department
Parks Department
Library
Swimming Pool
Zoning
Animal control
Donated Funds
Total expenditures
REVENUES OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Operating transfers - in
Operating transfers - out
REVENUES AND OTHER FINANCING
SOURCES OVER (UNDER) EXPENDITURES
AND OTHER SOURCES
Original and
Variance
Final
Favorable
Budget
Actual
(Unfavorable)
$ 3,497,000
$ 3,455,109
$ (41,891)
407,250
469,715
62,465
2,800
3,701
901
1,555,714
884,300
(671,414)
5,462,764
4,812,825
(649,939)
2,913,070
718,238
2,194,832
1,696,506
1,661,614
34,892
242,160
280,883
(38,723)
495,318
438,111
57,207
506,060
293,228
212,832
51,200
55,101
(3,901)
308,021
288,615
19,406
93,797
83,329
10,468
114,711
29,680
85,031
6,420,843
3,848,799
2,572,044
(958,079)
964,026
1,922,105
1,422,000 1,123,505 (298,495)
(2,018,500) (1,749,769) (268,731)
(1,554,579) 337,762 $ 1,354,879
17
FUND BALANCE - September 30, 2009 1,277,087 "
FUND BALANCE - September 30, 2010 $ (277,492)
An explanation of the differences between budgetary inflows and outflows and
revenues and expenditures determined in accordance with generally accepted
accounting principles follows:
The budget fund balance at the beginning of the year is a based on cash
reserves rather than fund balance.
Accrual adjustments made because the City budgets for revenues and
expenditures on the cash basis, rather than on the modified accrual basis.
Adjustments for expenses paid out of the general fund that were for other
1,614,849
2,709,445
(845,296)
funds, 508,532
General Fund Balance $ 3,987,530
See independent auditor's report.
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City of Blair, Nebraska
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND REVENUES
For the year ended September 30, 2010
OTHER REVENUES
State grants
Original and
79,008
Variance
Federal grants
Final
9,694
Favorable
Donations
Budget
Actual
(Unfavorable)
REVENUES
40,000
178,313
138,313
Taxes
543,464
578,990
35,526
Property tax
$ 1,288,000
$ 1,206,302
$ (81,698)
Sales tax
1,700,000
1,708,448
8,448
Motor vehicle tax
134,000
125,922
(8,078)
Occupation and franchise tax
280,000
249,643
(30,357)
Other taxes
95,000
164,794
69,794
Total
3,497,000
3,455,109
(41,891)
Charges for services
Business licenses and permits
181,450
222,049
40,599
Library
14,000
14,929
929
Equipment rental
19,000
21,862
2,862
Cemetery lots
15,000
7,800
(7,200)
Grave openings
22,000
20,900
(1,100)
Towing
21,000
17,505
(3,495)
Rescure Squad
110,000
139,794
29,794
Other fees and charges
4,200
4,267
67
Sales of fireworks
15,000
15,000
-
RV park
5,600
5,609
9
Total
407,250
469,715
62,465
INTEREST INCOME
2,800
3,701
901
OTHER REVENUES
State grants
76,000
79,008
3,008
Federal grants
810,000
9,694
(800,306)
Donations
86,250
38,295
(47,955)
Reimbursements
40,000
178,313
138,313
Other miscellaneous revenue
543,464
578,990
35,526
Total
1,555,714
884,300
(671,414)
Total revenues
$ 5,462,764
$ 4,812,825
$ (649,939)
See independent auditor's report.
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City of Blair, Nebraska
BUDGETARY COMPARISON SCHEDULE
STREET FUND
For the year ended September 30, 2010
An explanation of the differences between budgetary inflows and outflows and revenues and expenditures detennined 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. (117,620)
Accrual adjustments made because the City budgets for revenues and expenditures on the cash basis, rather than on
the modified accrual basis. (1,604,974)
Street Fund Balance S 63,686
See independent auditors report.
-50-
Original and
Variance
Final
Favorable
Budget
Actual
(Unfavorable)
REVENUES
Highway allocation
S 550,000 S
525,859
S (24,141)
Property taxes
269,500
256,623
(12,877)
Other taxes
98,500
99,998
1,498
Incentive payment
6,000
6,000
-
State maintenance agreement
22,000
27,248
5,248
In -Lieu of tax
10,000
10,744
744
Homestead exemption
-
10,365
10,365
Interest income
750
23
(727)
Other revenue
1,657,000
407,172
(1,249,828)
Total revenues
2,613,750
1,344,032
(1,269,718)
EXPENDITURES
Salaries
354,670
339,307
15,363
FICA
25,000
23,934
1,066
Employee insurance
116,116
96,154
19,962
Retirement
20,400
18,964
1,436
Legal
8,000
3,142
4,858
Auditing
8,600
7,727
873
Engineering
10,000
102,763
(92,763)
Office expense
5,250
3,934
1,316
Utilities
7,000
10,090
(3,090)
Telephone
2,400
2,757
(357)
Travel
5,000
6,393
(1,393)
Training
1,200
2,322
(1,122)
Insurance
19,000
10,837
8,163
Maintenance
44,750
41,548
3,202
Street lighting
158,000
173,556
(15,556)
County fees
-
2,798
(2,798)
Car expense
2,000
3,330
(1,330)
Contract mowing
16,000
16,472
(472)
Gas, diesel, and oil
28,000
36,886
(8,886)
Materials and supplies
146,100
163,037
(16,937)
Rental
10,000
4,199
5,801
Capital outlay
Equipment
140,000
143,900
(3,900)
Street improvements
1,399,000
728,385
670,615
Total expenditures
2,526,486
1,942,435
584,051
REVENUES OVER (UNDER) EXPENDITURES
87,264
(598,403)
(685,667)
OTHER FINANCING SOURCES (USES)
Payment of warrant liabilities
(851,000)
769,732
1,620,732
Operating transfers - in
763,500
1,518,996
755,496
REVENUES AND OTHER FINANCING SOURCES
OVER (UNDER) EXPENDITURES AND OTHER SOURCES
(236)
1,690,325
S 1,690,561
FUND BALANCE - September 30, 2009
95,955
95,955
FUND BALANCE - September 30, 2010
S 95,719
1,786,280
An explanation of the differences between budgetary inflows and outflows and revenues and expenditures detennined 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. (117,620)
Accrual adjustments made because the City budgets for revenues and expenditures on the cash basis, rather than on
the modified accrual basis. (1,604,974)
Street Fund Balance S 63,686
See independent auditors report.
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City of Blair, Nebraska
BUDGETARY COMPARISON SCHEDULE
KENO FUND
For the year ended September 30, 2010
GROSSPROCEEDS
PRIZES
Declared prizes
Unclaimed wins
Net Prizes paid
NET HOLD
ALLOWABLE EXPENSES PAID
Lottery Operator's Commission
NET KENO PROCEEDS
EXPENSES PAID BY CITY
State taxes
Other expenses
TOTAL EXPENSES PAID
PROCEEDS AVAILABLE FOR DISTRIBUTION
TRANSFER FROM (TO) PRIZE RESERVES
COMMUNITY BETTERMENT - Direct
TRANSFER TO GENERAL
TRANSFER TO STREET
TRANSFER TO DEBT SERVICE
NET AFTER TRANSFERS
Beginning Keno account
Fund balance
Interest
Reimbursements
KENO ACCOUNT FUND BALANCE
PRIZE RESERVE FUND RECONCILIATION FOR
THE REPORTING PERIOD
Beginning reserve balance
Increase in reserve
Withdrawals from reserve
Ending reserve balance (deficit)
Original and
Variance
Final
Favorable
Budget Actual
(Unfavorable)
$ - $ 862,624
$ 862,624
- 658,783
658,783
-(2,317)
(2,317)
- 656,466
656,466
- 206,158
206,158
- (120,767) (120,767)
80,000 85,391 5,391
17,600
17,252
348
3,200
100
3,100
20,800
17,352
3,448
59,200
68,039
8,839
-
(5,437)
(5,437)
70,000
7,000
(63,000)
61,000
35,000
(26,000)
41,000
30,000
(11,000)
25,000
10,000
(15,000)
(137,800)
(19,398)
118,402
129,348
129,348
-
100
122
22
$ (8,352) $ 110,072 $ 118,424
See independent auditor's report.
-51-
$ 41,547
21,236
(15,800)
$ 46,983
"&—
S
& ASSOCIATES, L.L.C.
Certified Public Accountants I Consultants
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GO VERNMENT A UDITING STANDARDS
Honorable Mayor and Members
of the City Council
City of Blair, Nebraska
We have audited the financial statements of the governmental activities, the business -type
activities, each major fund, and the aggregate remaining fund information of City of Blair,
Nebraska (the City), as of and for the year ended September 30, 2010, which collectively
comprise the City's basic financial statements and have issued our report thereon dated February
2, 2011. 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our
opinions on the financial statements, but not for the purpose of expressing an opinion of the
effectiveness of the City's internal control over financial reporting. Accordingly, we do not
express an opinion on the effectiveness of the City's internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose
described in the preceding paragraph and was not designed to identify all deficiencies in internal
control over financial reporting that might be significant deficiencies, or material weaknesses
and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material
weaknesses have been identified. However, as described in the accompanying schedule of
findings and responses, we identified a certain deficiency in internal control over financial
reporting that we consider to be a material weakness and another deficiency that we consider to
be a significant deficiency.
Westroads Pointe 11015 N.98th St.
rte 200 I Omaha, NE 68114 I T402.390.2480 I F
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 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. We consider the deficiency 10-01 described in the accompanying
schedule of findings and questioned costs to be a material weakness.
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. We consider the deficiency 10-02 described in the accompany schedule of
findings and questioned costs to be a significant deficiency.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free
of 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
noncompliance or other matters that are required to be reported under Government Auditing
Standards.
We noted certain other matters that we reported to management of the City, in a separate letter
dated February 2, 2011.
The City's response to the findings identified in our audit is described in the accompanying
schedule of findings and responses. We did not audit the City's response and, accordingly, we
express no opinion on it.
This report is intended solely for the information and use of management, City Council, others
within the entity, and federal awarding agencies and pass-through entities and is not intended to
be and should not be used by anyone other than these specified parties.
Hayes & Associates, L.L.C.
Omaha, Nebraska
February 2, 2011
- 53 -
City of Blair, Nebraska
SCHEDULE OF FINDINGS AND RESPONSES - CONTINUED
For the year ended September 30, 2010
Finding 10-02 Continued:
Effect - Reliance on informal information from City Administrator and City Treasurer on
majority of City's accounting procedures and information.
Recommendation - We recommend that the City formalize and maintain a policy and
procedures manual. This manual should include all key areas of activities, including
administration and operations. A policy and procedures manual will document how the
City operates and will support cross -training and reduce training issues relating to
employee turnover.
Officials Response - The City has drafted up formal policy and procedure documents in the
current fiscal year. These documents are still in draft stage but the City anticipates that they
will be formally adopted during the next fiscal year.
-55-
City of Blair, Nebraska
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the year ended September 30, 2010
Finding 09-01:
Condition - The City of Blair keeps it books on a cash basis and relies on its auditors to
prepare the financial statements.
Recommendation - The City of Blair may consider gathering the necessary expertise to
prepare a required set of financial statements in a format acceptable for GAAP reporting.
Current Status — Unresolved, see finding 10-01
Finding 09-02:
Condition - Employees do not have documentation of procedures to support their job duties.
Recommendation - We recommend that the City formalize and maintain a policy and
procedures manual. This manual should include all key areas of activities, including
administration and operations. A policy and procedures manual will document how the City
operates and will support cross -training and reduce training issues relating to employee
turnover.
Current Status — Unresolved, see finding 10-02
-56-