HomeMy Public PortalAbout2012-2013 Audit Moab Issued Financial StatementsMoab City Corporation
Grand County, Utah
ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2013
Moab City Corporation
TABLE OF CONTENTS
June 30, 2013
Beginning
on page
INDEPENDENT AUDITORS' REPORT 1
MANAGEMENT'S DISCUSSION AND ANALYSIS 3
BASIC FINANCIAL STATEMENTS 13
Government -wide Financial Statements:
Statement of Net Position 15
Statement of Activities 16
Fund Financial Statements:
Balance Sheet - Governmental Funds 18
Statement of Revenues, Expenditures, and Changes
in Fund Balances - Governmental Funds 19
Reconciliation of the Balance Sheet of Governmental
Funds to the Statement of Net Position 20
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental
Funds to the Statement of Activities 21
Statement of Net Position - Proprietary Funds 22
Statement of Revenues, Expenses, and Changes
in Net Position - Proprietary Funds 23
Statement of Cash Flows - Proprietary Funds 24
Notes to Financial Statements 26
REQUIRED SUPPLEMENTARY INFORMATION 41
Notes to Required Supplementary Information 43
Schedule of Revenues, Expenditures, and Changes
in Fund Balances - Budget and Actual - General Fund 44
(Continued on following page)
Moab City Corporation
TABLE OF CONTENTS
June 30, 2013
OTHER REPORTS
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
Beginning
on page
47
Independent Auditors' Report on Compliance in Accordance
with the State of Utah Legal Compliance Audit Guide 49
A Larson
certified public accountants
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor
Members of the City Council
Moab, Utah
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 Moab City, Utah (herein
referred to as the "City"), as of and for the year ended June 30, 2013, and the related notes to the
financial statements, which collectively comprise the City's basic financial statements as listed in the table
of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America.
Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major fund,
and the aggregate remaining fund information of Moab City, as of June 30, 2013, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
1
Larson & Company
765 Norrh Main, Spanish Fork. Urah 84660
Main: (RO I) 798-3545 Fax: (801) 7$5-3678
v lyw.larsco.com
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CPAMECA
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In accordance with Government Auditing Standards, we have also issued a report dated December 6,
2013 on our consideration of Moab 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 internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be considered in assessing the results of
our audit.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and other required supplementary information on pages 3-11 and 41-44 be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers it to
be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Larson & Company, PC
Spanish Fork, Utah
December 6, 2013
2
MANAGEMENT'S DISCUSSION AND ANALYSIS
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4
Moab City Corporation
Management's Discussion and Analysis
June 30, 2013
As management of Moab City Corporation (the City), we offer readers of the City's financial
statements this narrative overview and analysis of financial activities of the City for the fiscal year
ended June 30, 2013.
FINANCIAL HIGHLIGHTS
*Total net position for the City as a whole increased by $69,546.
*Total unrestricted net position for the City as a whole increased by $284,746.
*Total net position for governmental activities decreased by $128,137.
*Total net position for business -type activities increased by $197,683.
BASIC FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the basic financial statements of
Moab City Corporation. The basic financial statements comprise three components: (1) government
wide financial statements, (2) fund financial statements, and (3) notes to the financial statements.
Government -wide financial statements. The government -wide financial statements are designed to
provide readers with a broad overview of the City's finances, in a manner similar to a private -sector
business.
The statement of net position presents information on all of the City's assets, deferred outlfows,
liabilities, and deferred inflows, with the difference between them reported as net position. Over time,
increases or decreases in net position may serve as a useful indicator of whether the financial position
of the City is improving or deteriorating.
The statement of activities presents information showing how the City's net position changed during
the fiscal year reported. All changes in net position are reported as soon as the underlying event
giving rise to the change occurs, regardless of the timing of related cash flows. Thus revenues and
expenses are reported in this statement for some items that will only result in cash flows in future
fiscal periods.
Both of the government -wide financial statements distinguish functions of the City that are
principally supported by taxes and intergovernmental revenues (governmental activities) from other
functions that are intended to recover all or a significant portion of their costs through user fees and
charges (business -type activities). The statement of activities is presented on two pages. The first page
reports the extent to which each function or program is self-supporting through fees and
intergovernmental aid. The second page identifies the general revenues of the City available to cover
any remaining costs of the functions or programs.
5
Moab City Corporation
Management's Discussion and Analysis
June 30, 2013
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. The City also uses fund
accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the
funds of the City can be divided into two categories: governmental funds and proprietary funds.
Governmental funds. These funds are used to account for the same functions reported as governmental
activities in the government -wide financial statements. Governmental fund financial statements focus
on near -term inflows and outflows of spendable resources, as well as on balances of spendable
resources available at the end of the fiscal year.
Because of the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for government funds with similar
information presented for governmental activities in the government -wide financial statements. By
doing so, readers may better understand the long-term impact of the government's near -term financing
decisions. Both the government fund balance sheet and the government fund statement of the
revenues, expenditures, and changes in fund balances provide reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The City maintains two major governmental funds, the general fund and the capital projects fund.
The City adopts an annual appropriated budget for its general and cemetery perpetual care funds. A
budgetary comparison schedule has been provided to demonstrate legal compliance with the adopted
budget for the general fund.
The basic governmental fund financial statements can be found later in this report; see Table of
Contents.
Proprietary funds. The City maintains one type of proprietary fund. Enterprise funds are used to report
the same functions presented as business -type activities in the government -wide financial statements.
The City uses two enterprise fund to account for the operations of the water, sewer and storm drain
activities.
Proprietary funds provide the same type of information as the government -wide financial statements,
only in more detail. The enterprise funds are considered major funds of the City.
The proprietary fund financial statements can be found later in this report; see Table of Contents.
Notes to the 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 are reported later in this report; see Table of Contents.
Other information. In addition to the basic financial statements and accompanying notes, this report
also presents certain required supplementary information concerning the City.
6
Moab City Corporation
Management's Discussion and Analysis
June 30, 2013
FINANCIAL ANALYSIS
Moab City Corporation's Net Position
Governmental Business -type
Activities Activities
Total Total
Current Previous Current Previous Current Previous
Year Year Year Year Year Year
Current and other assets $ 3,716,400 3,719,717 4,453,360 4,212,167 8,169,760 7,931,883
Net capital assets 18,026,870 18,587,258 6,479,853 6,538,572 24,506,723 25,125,830
Total assets 21,743,270 22,306,975 10,933,213 10,750,738 32,676,483 33,057,713
Current liabilities
Long-term liabilities
Total liabilities
669,721 705,177 57,066 72,274 726,788 777,451
6,050,861 6,450,973 - 6,050,861 6,450,973
6 720 582 7 156 150 57 066 72,274 6,777,648 7,228,424
Net position:
Net investment in
capital assets 11,976,010 12,136,285 6,479,853 6,538,572 18,455,863 18,674,857
Restricted 80,836 77,042 2,413,127 2,413,127 2,493,963 2,490,169
Unrestricted 2,965,842 2,937,498 1,983,167 1,726,766 4,949,010 4,664,263
Total net position $ 15 022 688 15 150 825 10 876 147 10 678 464 25 898 835 25 829 289
As noted earlier, net position may serve over time as a useful indicator of financial position. Total
assets exceeded total liabilities and deferred inflows at the close of the year by $25,898,835, an
increase of $69,546 from the previous year. This change is equivalent to the net income for the year, in
private sector terms.
Total unrestricted net position at the end of the year is $4,949,010, which represents an increase of
$284,746 from the previous year. Unrestricted net position are those resources available to finance
day-to-day operations without constraints established by debt covenants, enabling legislation, or other
legal requirements.
The amount of current and other assets represent the amounts of cash and receivables on hand at the
end of each year. Other liabilities are the amounts of current and other liabilities due, at year end, for
goods and services acquired.
Changes in capital assets are the result of the difference, in the current year, of the cost of acquisition
of capital assets and any depreciation charges on capital assets. Change in long-term debt is the
difference in the amount of debt issued and that which has been paid during the year.
7
Moab City Corporation
Management's Discussion and Analysis
June 30, 2013
FINANCIAL ANALYSIS (continued)
Moab City Corporation's Change in Net Position
Governmental Business -type
Activities Activities
Program revenues:
Charges for services
Operating grants
Capital grants
General revenues:
Property taxes
Sales tax
Other taxes
Other revenues
Total revenues
Total Total
Current Previous Current Previous Current Previous
Year Year Year Year Year Year
$ 1,582,289 1,554,232 1,519,900 1,441,511 3,102,189 2,995,742
207,936 205,991 - 207,936 205,991
418,389 720,866 418,389 720,866
1,491,497 1,473,101 - 1,491,497 1,473,101
4,391,831 4,332,050 - 4,391,831 4,332,050
330,465 288,812 191,493 89,521 521,958 378,333
8,422,406 8,575,051 1,711,394 1,531,032 10,133,800 10,106,083
Expenses:
General government 2,151,176 1,989,935 - 2,151,176 1,989,935
Public safety 2,355,757 2,182,652 - 2,355,757 2,182,652
Highways and improvements 2,366,560 2,122,139 - 2,366,560 2,122,139
Parks and recreation 2,045,437 1,912,461 - 2,045,437 1,912,461
Interest on long-term debt 41,613 60,580 - 41,613 60,580
Water, sewer and storm drain - - 1,103,711 1,122,923 1,103,711 1,122,923
Total expenses 8,960,543 8,267,768 1,103,711 1,122,923 10,064,254 9,390,690
Excess (deficiency) before
transfers and contributions (538,137) 307,283 607,683 408,109 69,546 715,392
Transfers (410,000) (410,000) 410,000 410,000
Change in net position $ (128,137) 717,283 197,683 (1,891) 69,546 715,392
Total revenues increased by $27,717, while total expenses increased by $673,564. The total net
increase for the year of $69,546 is a decrease from the previous year of $645,846.
Governmental activities revenues of $8,422,406 is a decrease of $152,645 from the previous year. This
is primarily due to a decrease in revenues from grants compared to the previous year. Governmental
activities expenses of $8,960,543 is an increase of $692,775 from the previous year. Spending within
all departments increased during the year.
Business -type activities revenues of $1,711,394 is an increase of $180,362 from the previous year.
Business -type activities expenses of $1,103,711 is an decrease of $19,212 from the previous year.
8
Moab City Corporation
Management's Discussion and Analysis
June 30, 2013
BALANCES AND TRANSACTIONS OF INDIVIDUAL FUNDS
Some of the more significant changes in fund balances and fund net position and any restrictions on
those amounts is described below:
General Fund
The fund balance of $1,771,350 reflects a decrease of $5,390 from the previous year. Total revenues
increased by $120,047. Tax revenues increased by $78,177. Revenue from charges for services
increased by $39,866. All other revenues decreased by $123,433.
Total expenditures, excluding transfers out, increased by $326,020. Expenditure changes from the
previous year, by department, were: general government increased by $136,737; public safety
increased by $168,111; streets and highways increased by $220,789; and parks and recreation
increased by $19,760. Capital outlay expenditures decreased by $212,072. Expeditures for princpal
increased by $5,518, while expenditures for interest decreased by $12,823.
The fund balance restricted for Class C roads is $80,836. The unassigned fund balance amounts to
$1,690,514.
Capital Projects Fund
The fund balance of $1,524,305 reflects a decrease of $13,350 from the previous year. Total revenue,
excluding transfers, decreased by $363,821. In the prior year, revenues from grants were higher.
Expenses decreased during the year by $270,667.
Water and Sewer Fund
Net income amounted to $101,836, which is an increase from the previous year of $198,103. The
amount restricted for construction is $2,413,127. Unrestricted net position amounts to $960,736.
Storm Drain Fund
The change in net position (net income) was $95,847. Unrestricted net position amounts to
$1,022,432.
GENERAL FUND BUDGETARY HIGHLIGHTS
Revenues for the current year, exclusive of transfers and fund balance appropriations, were originally
budgeted in the amount of $487,625. Budgeted revenues were amended during the year to $539,795.
Actual revenues amounted to $1,367,989. This significent difference is due to proceeds from bond
issues that were not budgeted for.
Expenditures for the current year, excluding transfers, were originally budgeted in the amount of
$498,125. Budgeted expenditures were amended during the year to $539,795. Actual expenditures
amounted to $1,414,726. This significant difference is due to additional principal paid on the existing
bond that was refunded by the new bond.
9
Moab City Corporation
Management's Discussion and Analysis
June 30, 2013
CAPITAL ASSETS AND DEBT ADMINISTRATION
Moab City Corporation's Capital Assets (net of depreciation)
Governmental Business -type
Activities Activities
Total Total
Current Previous Current Previous Current Previous
Year Year Year Year Year Year
Net Capital Assets:
Land and water rights $ 476,884 476,884 262,935 262,935 739,819 739,819
Buildings 10,644,403 10,947,322 - 10,644,403 10,947,322
Improvements other
than buildings 2,205,096 2,240,323 - 2,205,096 2,240,323
Machinery and equipment 1,900,046 2,103,953 430,451 411,901 2,330,497 2,515,854
Infrastructure 2,566,147 2,620,465 - 2,566,147 2,620,465
Water system 2,320,273 2,322,056 2,320,273 2,322,056
Sewer system 3,292,842 3,413,004 3,292,842 3,413,004
Work in progress 234,295 198,311 173,351 128,674 407,646 326,985
Totals $ 18,026,870 18,587,258 6,479,853 6,538,572 24,506,723 25,125,830
The total amount of capital assets, net of depreciation, of $24,506,723 is a decrease of $619,107 from
the previous year.
Governmental activities capital assets, net of depreciation, of $18,026,870 is a decrease of $560,388
from the previous year.
Business -type activities capital assets, net of depreciation, of $6,479,853 is a decrease of $58,719 from
the previous year.
Additional information regarding capital assets may be found in the notes to financial statements.
Moab City Corporation's Outstanding Debt
Current Previous
Year Year
Governmental activities:
2011 Equipment Lease $ 21,458 42,158
2009 Equipment Lease 58,695 114,996
2010 Refinance Vehicles 63,708 124,819
2003 Sales Tax Revenue 1,525,000 1,596,000
2009 Sales Tax Revenue 4,382,000 4,573,000
Total outstanding debt
$ 6,050,861 6,450,973
Additional information regarding long-term liabilities may be found in the notes to financial
statements.
10
Moab City Corporation
Management's Discussion and Analysis
June 30, 2013
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
No significant economic changes that would affect the City are expected for the next year. Budgets
have been set on essentially the same factors as the current year being reported.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Moab City Corporation's
finances for all those with an interest in the City's finances. Questions concerning any information
provided in this report or requests for additional financial information should be addressed to: City
Recorder, 217 East Center Street, Moab, UT 84532.
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12
BASIC FINANCIAL STATEMENTS
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14
Moab City Corporation
STATEMENT OF NET POSITION
June 30, 2013
Governmental Business -type
Activities Activities Total
ASSETS:
Current assets:
Cash and cash equivalents $ 2,867,919 3,587,831 6,455,750
Accounts receivable, net of allowances 98,474 117,129 215,604
Due from other governments 606,508 606,508
Other current assets 57,608 57,608
Total current assets 3,630,509 3,704,960 7,335,470
Non -current assets:
Restricted cash and cash equivalents 85,890 748,400 834,290
Capital assets:
Not being depreciated 711,179 436,287 1,147,465
Net of accumulated depreciation 17,315,692 6,043,566 23,359,258
Total non -current assets 18,112,761 7,228,253 25,341,014
Total assets $ 21,743,270 10,933,213 32,676,483
LIABILITIES:
Current liabilities:
Accounts payable $ 284,359 9,286 293,646
Customer security deposits 4,100 4,100
Accrued interest payable 29,590 29,590
Capital leases due within one year 334,861 334,861
Revenue bond due within one year 73,000 73,000
Total current liabilities 721,810 13,386 735,196
Non -current liablities:
Compensated absences 355,772 43,680 399,452
Capital leases due after one year 4,191,000 4,191,000
Revenue bonds due after one year 1,452,000 1,452,000
Total non -current liablities 5,998,772 43,680 6,042,452
Total liabilties
6,720,582 57,066 6,777,648
NET POSITION:
Net investment in capital assets 11,976,010 6,479,853 18,455,863
Restricted:
Class C roads 80,836 80,836
Construction - 2,413,127 2,413,127
Unrestricted 2,965,842 1,983,167 4,949,010
Total net position 15,022,688 10,876,147 25,898,835
Total liabilities and net position $ 21,743,270 10,933,213 32,676,483
The notes to the financial statements are an integral part of this statement.
15
Moab City Corporation
STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2013
Net
(Expense)
Charges Operating Capital Revenue
for Grants and Grants and (To Next
Expenses Services Contributions Contributions Page)
FUNCTIONS/PROGRAMS:
Primary government:
Governmental activities:
Administration $ 2,151,176 1,134,849 72,331 (943,996)
Public safety 2,355,757 18,475 23,010 - (2,314,272)
Streets and highways 2,366,560 183,126 41,400 (2,142,034)
Parks and recreation 2,045,437 428,965 1,800 304,658 (1,310,015)
Interest on long-term debt 41,613 - (41,613)
Total governmental activities 8,960,543 1,582,289 207,936 418,389 (6,751,929)
Business -type activities:
Water and sewer utilities 1,103,711 1,379,053 - 179,844 455,186
Storm drain utility - 140,847 - 140,847
Total business -type activities 1 103 711 1 519 900 179,844 596,033
Total primary government $ 10,064,254 3,102,189 207,936 598,232 (6,155,897)
(The statement of activities
continues on following page)
The notes to the financial statements are an integral part of this statement.
16
Moab City Corporation
STATEMENT OF ACTIVITIES (continued)
For the Year Ended June 30, 2013
Governmental Business -type
Activities Activities
CHANGES IN NET POSITION:
Total
Net (expense) revenue
(from previous page) $ (6,751,929) 596,033 (6,155,897)
General revenues:
Sales tax 1,491,497 1,491,497
Other taxes 4,391,831 4,391,831
Unrestricted investment earnings 50,674 11,650 62,324
Miscellaneous 279,791 279,791
Transfers in (out) 410,000 (410,000)
Total general revenues and transfers 6,623,793 (398,350) 6,225,443
Change in net position (128,137) 197,683 69,546
Net position - beginning 15,150,825 10,678,464 25,829,289
Net position - ending $ 15,022,688 10,876,147 25,898,835
The notes to the financial statements are an integral part of this statement.
17
Moab City Corporation
BALANCE SHEET - GOVERNMENTAL FUNDS
June 30, 2013
Capital Other Total
General Projects Governmental Governmental
Fund Fund Funds Funds
ASSETS
Cash and cash equivalents $ 1,189,870 1,539,604 138,445 2,867,919
Accounts receivable, net of allowances 699,707 5,276 704,983
Other current assets 57,608 57,608
Restricted cash and cash equivalents 85,890 85,890
TOTAL ASSETS
$ 2,033,075 1,544,879 138,445 3,716,400
LIABILITIES
Accounts payable $ 88,567 3,475 2,060 94,102
Accrued liabilities 173,158 17,100 190,258
TOTAL LIABILITIES
261.725 20.575 2.060 284.359
FUND BALANCES:
Restricted for:
Class C roads 80,836 80,836
Assigned for:
Capital projects - 1,449,305 1,449,305
USU Set -aside - 75,000 75,000
Recreation - 133,325 133,325
Youth city council - 3,060 3,060
Unassigned 1,690,514 - 1,690,514
TOTAL FUND BALANCES
1,771,350 1,524,305 136,385 3,432,040
TOTAL LIABILITIES AND FUND BALANCES $ 2,033,075 1,544,879 138,445 3,716,400
The notes to the financial statements are an integral part of this statement.
18
Moab City Corporation
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the Year Ended June 30, 2013
Capital Other Total
General Projects Governmental Governmental
Fund Fund Funds Funds
REVENUES:
Taxes:
Sales $ 1,491,497 1,491,497
Other taxes 4,391,831 4,391,831
Licenses and permits 130,084 130,084
Intergovernmental revenues 278,467 270,965 76,893 626,325
Charges for services 1,262,302 139,107 1,401,409
Fines and forfeitures 50,796 50,796
Interest 49,784 1,438 (548) 50,674
Miscellaneous revenue 81,086 35,632 163,073 279,791
Total revenues 7,735,846 308,034 378,526 8,422,406
EXPENDITURES:
General government 1,808,994 1,808,994
Public safety 2,284,281 2,284,281
Highways and public improvements 2,127,625 2,127,625
Parks, recreation and public property 1,120,542 95,063 456,910 1,672,515
Capital outlay 23,158 441,041 927 465,127
Debt service:
Prinicpal 138,113 262,000 400,113
Interest 6,430 39,900 46,330
Total expenditures
Excess (Deficiency) of Revenues over
(Under) Expenditures
7,509,143 838,004 457,838 8,804,985
226,703 (529,970) (79,312) (382,579)
Other Financing Sources and (Uses):
Transfers in 410,000 516,620 125,473 1,052,093
Transfers (out) (642,093) (642,093)
Total other financing sources and (uses) (232,093) 516,620 125,473 410,000
Net Change in Fund Balances (5,390) (13,350) 46,161 27,421
Fund balances - beginning 1,776,740 1,537,655 90,224 3,404,619
Fund balances - end of year $ 1,771,350 1,524,305 136,385 3,432,040
The notes to the financial statements are an integral part of this statement.
19
Moab City Corporation
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
For the Year Ended June 30, 2013
Total Fund Balances for Governmental Funds $ 3,432,040
Total net position reported for governmetnal activities in the statement
is different because:
Capital assets used in governmental funds are not financial resources and
therefore are not reported in the funds.
Capital assets, at cost 24,387,938
Less accumulated depreciation (6,361,067)
Net capital assets 18,026,870
Long-term debt, for funds other than enterprise funds are recorded in
the government -wide statements but not in the fund statements.
General long-term debt
Interest accrued but not yet paid on long-term debt
Compensated absences
(6,050,861)
(29,590)
(355,772)
Total Net Position of Governmetnal Activities $ 15,022,688
The notes to the financial statements are an integral part of this statement.
20
Moab City Corporation
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2013
Net Change in Fund Balances - Total Governmental Funds $ 27,421
Amounts reported for governmental activities in the statement of
activities are different because:
Governmental funds report capital outlays as expenditures. However,
in the statement of activities, assets with a material cost are
capitalized and the cost os allocated over their estimated useful
lives and reported as depreciation expenses.
Capital outlays 465,127
Depreciation expense (1,025,515)
Net (560,388)
Repayment of debt principal is an expenditure in the governmental funds, but
the repayment reduces long-term liabilities in the statement of net position.
Long-term debt principal repayments 400,113
Compensated absences expenses reported in the statement of activities do
not require the use of current financial resources and are not reported as
expenditures in governmental activites.
Change in accrued interest 4,717
Change in Net Position of Governmental Activities $ (128,137)
The notes to the financial statements are an integral part of this statement.
21
Moab City Corporation
STATEMENT OF NET POSITION - PROPRIETARY FUNDS
June 30, 2013
Water & Sewer Storm Drain
Fund Fund
Total
ASSETS:
Current assets:
Cash and cash equivalents $ 2,578,412 1,009,419 3,587,831
Accounts receivable, net 104,117 13,013 117,129
Total current assets 2,682,529 1,022,432 3,704,960
Non -current assets:
Resricted cash and cash equivalents 748,400 748,400
Capital assets:
Not being depreciated 410,382 25,904 436,287
Net of accumulated depreciation 6,043,566 6,043,566
Total non -current assets 7,202,349 25,904 7,228,253
Total assets $ 9,884,877 1,048,336 10,933,213
LIABILITIES:
Current liabilities:
Accounts payable $ 9,286 9,286
Customer security deposits 4,100 4,100
Total current liabilities 13,386 13,386
Non -current liablities:
Compensated absences 43,680 43,680
Total non -current liabilities 43,680 43,680
Total liabilities 57.066 57.066
NET POSITION:
Net investment in capital assets 6,453,949 25,904 6,479,853
Restricted for:
Construction 2,413,127 2,413,127
Unrestricted 960,736 1,022,432 1,983,167
Total net position 9,827,811 1,048,336 10,876,147
Total liabilities and net position $ 9,884,877 1,048,336 10,933,213
The notes to the financial statements are an integral part of this statement.
22
Moab City Corporation
STATEMENT OF REVENUES, EXPENSES, AND CHANGES
IN NET POSITION - PROPRIETARY FUNDS
For the Year Ended June 30, 2013
Water & Sewer Storm Drain
Fund Fund
Total
Operating income:
Charges for sales and service $ 1,263,692 140,847 1,404,539
Connection fees 17,646 17,646
Other operating income 97,716 97,716
Total operating revenue 1,379,053 140,847 1,519,900
Operating expenses:
Personnel services 309,550 309,550
Utilities 87,006 87,006
Repair & maintenance 36,405 36,405
Other supplies & expenses 346,314 346,314
Insurance expense 1,560 1,560
Depreciation expense 322,877 322,877
Total operating expense 1,103,711 - 1,103,711
Net operating income (loss)
275,342 140,847 416,189
Non -operating income (expense):
Impact fees 179,844 - 179,844
Interest income 11,650 - 11,650
Transfers in (out) (365,000) (45,000) (410,000)
Total non -operating income (expense) (173,506) (45,000) (218,506)
Change in net position 101,836 95,847 197,683
Net position, beginning 9,725,976 952,489 10,678,464
Net position, ending $ 9,827,811 1,048,336 10,876,147
The notes to the financial statements are an integral part of this statement.
23
Moab City Corporation
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
For the Year Ended June 30, 2013
Water & Sewer Storm Drain
Fund Fund
Total
Cash flows from operating activities:
Cash received from customers - service $ 1,379,990 142,189 1,522,179
Cash paid to suppliers (485,380) (485,380)
Cash paid to employees (309,550) (309,550)
Net cash provided (used) in operating activities 585,060 142,189 727,249
Cash flows from noncapital financing activities:
Change in customer deposits (1,113) (1,113)
Net interfund activity (365,000) (45,000) (410,000)
Net cash provided (used) in
noncapital financing activities (366,112) (45,000) (411,112)
Cash flows from capital and
related financing activities:
Cash from impact fees 179,844 - 179,844
Cash payments for capital assets (259,629) (4,529) (264,158)
Net cash provided (used) in capital
and related financing activities (79,785) (4,529) (84,314)
Cash flows from investing activities:
Cash received from interest earned 11,650 11,650
Net cash provided (used) in investing activities 11,650 11,650
Net increase (decrease) in cash 150,812 92,660 243,472
Cash balance, beginning 3,176,000 916,759 4,092,759
Cash balance, ending $ 3,326,812 1,009,419 4,336,231
Cash reported on the statement of net position:
Cash and cash equivalents $ 2,578,412 1,009,419 3,587,831
Non -current restricted cash 748,400 - 748,400
Total cash and cash equivalents $ 3,326,812 1,009,419 4,336,231
The notes to the financial statements are an integral part of this statement.
24
Moab City Corporation
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS (continued)
For the Year Ended June 30, 2013
Reconciliation of Operating Income to Net
Cash Provided (Used) in Operating Activities:
Net operating income (loss)
Adjustments to reconcile operating
income or (loss) to net cash provided (used)
in operating activities:
Depreciation and amortization
Water & Sewer Storm Drain
Fund Fund Total
$ 275,342 140,847 416,189
322,877 322,877
Changes in assets and liabilities:
(Increase) decrease in receivables 937 1,342 2,278
Increase (decrease) in payables (14,095) (14,095)
Net cash provided (used) in operating activities
$ 585,060 142,189 727,249
The notes to the financial statements are an integral part of this statement.
25
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1-A. Reporting entity
Moab City Corporation (the City ), a municipal corporation located in Grand County, Utah, operates
under a Mayor -Council form of government. The accompanying financial statements present the financial
activities of the City.
1-B. Government -wide and fund financial statements
Government -wide Financial Statements
The government -wide financial statements, consisting of the statement of net position and the statement
of changes in net position report information on all of the non -fiduciary activities of the primary
government and its component units. For the most part, the effect of inter -fund activity has been removed
from these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business -type activities, which rely to a
significant extent on fees and charges for support.
The statement of net position reports the financial position of the governmental and business -type
activities of the City at year-end.
The statement of activities reports the expenses of a given function offset by program revenues directly
connected with the functional program. A function is an assembly of similar activities and may include
portions of a fund or summarize more than one fund to capture the expenses and program revenues
associated with a distinct functional activity. Direct expenses are those that are clearly identifiable with a
specific function or segment. Indirect expenses are not allocated. All expenses are included in the
applicable function. Program revenues include (1) charges to customers or applicants who purchase, use,
or directly benefit from goods, services, or privilege provided by a given function or segment and (2)
grants and contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among program revenues are
reported instead as general revenues.
Fund Financial Statements
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds,
if any, even though the latter are excluded from the government -wide financial statements. Major
individual governmental funds and major individual enterprise funds are reported as separate columns in
the fund financial statement.
1-C. Measurement focus, basis of accounting and financial statement presentation
The financial statements of the City are prepared in accordance with generally accepted accounting
principles (GAAP).
26
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
1-C. Measurement focus, basis of accounting and financial statement presentation (continued)
The government -wide statements are reported using the economic resources measurement focus and the
accrual basis of accounting, generally including the reclassification of internal activity (between or within
funds). However, internal eliminations do not include utility services provided to City departments or
payments to the general fund by other funds for providing administrative and billing services for such
funds. Reimbursements are reported as reductions to expenses. Proprietary and any fiduciary fund
financial statements are also reported using this same focus and basis of accounting although internal
activity is not eliminated in these statements. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. The City considers
revenues to be available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However,
debt service expenditures, as well as expenditures related to compensated absences and claims and
judgments, are recorded only when payment is due.
Sales taxes, intergovernmental revenues, and interest associated with the current fiscal period are all
considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal
period. Only the portion of special assessments, if any, receivable within the current fiscal period is
considered to be susceptible to accrual as revenue of the current period. All other revenue items are
considered to be measurable and available only when cash is received by the government.
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating
income and expense reported in proprietary fund financial statements include those revenues and
expenses related to the primary, continuing operations of the fund. Principal operating revenues for
proprietary funds are charges to customers for sales or services. Principal operating expenses are the costs
of providing goods or services, including administrative expenses and depreciation of capital assets. Other
revenues and expenses are classified as non -operating in the financial statements.
Policy regarding use of restricted resources
When both restricted and unrestricted resources are available for use, it is the City's policy to use
restricted resources first, then unrestricted resources as needed. Restricted assets and liabilities payable
from restricted assets current in nature are reported with current assets and current liabilities. Restricted
assets, non -current reports assets restricted for acquisition or construction of non -current assets, or are
restricted for liquidation of long-term debt.
27
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
1-D. Fund types and major funds
Governmental funds
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
general government, except those required to be accounted for in another fund.
The capital projects fund accounts for financial resources used for the acquisition or construction of the
capital facilities of the City (other than those of the enterprise funds).
The City reports the following as non -major governmental funds:
The recreation fund accounts for the revenues and expenditures for the activities relation to recreation.
The youth city council fund accounts for revenues and expenditures for activities with the youth city
council.
Proprietary funds
The City reports the following major proprietary funds:
The water and sewer fund is used to account for the activities of water and sewer utilities.
The City reports the following non -major proprietary funds:
The storm drain fund is used to account for the revenues and expenditures of the storm drain utility.
1-E. Assets, Liabilities, and Net Position or Equity
1-E-1. Deposit and Investments
Investments are reported at fair value. Deposits are reported at cost, which approximates fair value.
Investments of the City are accounts at the Utah Public Treasurers Investments Fund. Additional
information is contained in Note 2.
1-E-2. Cash and Cash Equivalents
The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term
investments with original maturities of three months or less from the date of acquisition.
1-E-3. Receivables and Payables
Accounts receivable other thanintergovernmental receivables are from customers primarily for utility
services. Intergovernmental receivables are considered collectible. Customer accounts are reported net of
an allowance for uncollectible accounts. The allowance amount is estimated using accounts receivable
past due more than 90 days.
28
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
1-E. Assets, Liabilities, and Net Position or Equity (continued)
1-E-3. Receivables and Payables (continued)
During the course of operations, there may be transactions occur between funds that are representative of
lending/borrowing arrangements outstanding at year-end. These are reported as either due to or due from
other funds.
1-E-4. Restricted Assets
In accordance with certain revenue bond covenants, resources may be required to be set aside for the
repayment of such bonds, and, on occasion, for the repair and maintenance of the assets acquired with the
bond proceeds. These resources are classified as restricted assets on the balance sheet because of their
limited use. Most capital grant agreements mandate that grant proceeds be spent only on capital assets.
Unspent resources of this nature are also classified as restricted. The limited use resources described
above involve a reported restriction of both cash and net position.
Unspent proceeds of bonds issued to finance capital assets are also reported as restricted cash
1-E-5. Inventories and Prepaid items
Inventories in governmental funds are not reported. These consist of immaterial amounts of expendable
supplies for consumption. Such supplies are acquired as needed. Proprietary fund inventories, where
material, are stated at the lower of cost or market, using the first -in, first -out basis.
Prepaid items record payments to vendors that benefit future reporting and are reported on the
consumption basis. Both inventories and prepayments are similarly reported in government -wide and
fund financial statements.
1-E-6. Capital Assets
Capital assets includes property, plant, equipment, and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items), and are reported in the applicable governmental or business -type activities
columns in the government -wide financial statements. Capital assets are defined by the government as
assets with an initial, individual cost of $5,000 and an estimated useful life in excess of two years. Such
assets are recorded at historical cost or at estimated historical cost if purchased or constructed. Donated
capital assets are recorded at estimated fair market value at the date of donation. Infrastructure is
depreciated.
The cost of normal maintenance and repairs that does not add to the value of an asset or materially extend
the assets' life is not capitalized. Major outlays for capital assets and improvements are capitalized as
projects are constructed. Interest incurred during the construction phase of capital assets of business -type
activities is included as part of the capitalized value of the assets constructed.
29
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
1-E. Assets, Liabilities, and Net Position or Equity (continued)
1-E-6. Capital Assets (continued)
Upon retirement or disposition of capital assets, the cost and related accumulated depreciation are
removed from the respective accounts. Depreciation of capital assets is computed using the straight-line
method over their estimated useful lives.
Property, plant, and equipment of the primary government, as well as the component units if any, is
depreciated using the straight line method over the following estimated useful lives:
Assets Years
Building and structures 30-45
Infrastructure 30
Vehicles and equipment 5-15
1-E-7. Long-term Obligations
In the government -wide and proprietary fund financial statements, long-term debt and obligations are
reported as liabilities in the applicable governmental activities, business -type activities, or proprietary
fund statement of net position.
The governmental fund financial statements recognize the proceeds of debt and premiums as other
financing sources of the current period. Issuance costs are reported as expenditures.
1-E-8. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position will sometimes include a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of resources,
represents a consumption of net position that applies to a future period(s) and so will not be recognized as
an outflow of resources (expense/expenditure) until then. The City does not currently have any deferred
outflows of resources.
In addition to liabilities, the statement of net position will sometimes include a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to a future period(s) and so will not be recognized as
an inflow of resources (revenue) until then. The City does not currently have any deferred outflows of
resources.
1-E-9. Fund Equity
When both restricted and unrestricted resources are available for use, it is the City's policy to use
restricted resources first, then unrestricted resources as they are needed. When both committed, assigned,
or unassigned resources are available for use, it is the City's policy to use committed resources first,
followed by assigned resources and then unassigned resources as they are needed.
30
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
1-E. Assets, Liabilities, and Net Position or Equity (continued)
1-E-8. Fund Equity (continued)
Equity is classified in the government -wide financial statements and in the proprietary fund financial
statements as net assets and is displayed in three components as follows:
Net investment in capital assets represents capital assets, net of accumulated depreciation and
reduced by the outstanding balances of any long-term debt attributable to the acquisition,
construction, or improvement of those assets.
Restricted net position are net position with constraints placed on the use either by (1) external
groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2)
law through constitutional provisions or enabling legislation.
Unrestricted net position are all other resources that do not meet the definition of "restricted" or "net
investment in capital assets."
Equity is classified in governmental fund financial statements as fund balance and is further classified as
nonspendable, restricted, committed, assigned or unassigned as follows:
Nonspendable fund balance cannot be spent because it is either (a) not in spendable form, or (b)
legally or contractually required to be maintained intact.
Restricted fund balance is fund balance with constraints placed on the use either by (1) external
groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2)
law through constitutional provisions or enabling legislation.
Unrestricted net position are all other resources that do not meet the definition of "restricted" or "net
investment in capital assets."
Committed fund balance includes amounts that can only be used for specific purposes established
by formal action of the City Council, with is the City's highest level of decision making authority.
Fund balance commitments can only be removed or changed by the same type of action (for example
resolution) of the City Council. This classification also includes contractual obligations to the extent
that existing resources have been specifically committed for use in satisfying those contractual
requirements.
Assigned fund balance is constrained by the government's intent to be used for specific purposes, but
is neither restricted nor committed. The City Recorder is authorized to assign amounts to a specific
purpose in accordance with the City's budget policy.
Unassigned fund balance is a residual classification of the General Fund. This classification
represents fund balance that has not been assigned to other funds and that has not been restricted,
committed, or assigned to a specific purpose within the General Fund.
31
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
1-E. Assets, Liabilities, and Net Position or Equity (continued)
1-F. 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.
NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
2-A. Budgetary data
Annual budgets are prepared and adopted by ordinance by total for each department, in accordance with
State law, by the Mayor and City Council on or before June 22 for the following fiscal year beginning
July 1. Estimated revenues and appropriations may be increased or decreased by resolution of the City
Council at any time during the year. A public hearing must be held prior to any proposed increase in a
fund's appropriations. Budgets include activities in the General Fund. The level of the City's budgetary
control (the level at which the City's expenditures cannot legally exceed appropriations) is established at
the department level. Each department head is responsible for operating within the budget for their
department. All annual budgets lapse at fiscal year end.
Utah State law prohibits the appropriation of unreserved General Fund balance to an amount less than
5% of the General Fund revenues. The 5% reserve that cannot be budgeted is used to provide working
capital until tax revenue is received, to meet emergency expenditures, and to cover unanticipated deficits.
Any unreserved General Fund balance greater than 25% of the next year's budgeted revenues must be
appropriated within the following two years.
Once adopted, the budget may be amended by the City Council without hearing provided the budgeted
expenditures do not exceed budgeted revenues and appropriated fund balance. A public hearing must be
held if the budgeted expenditures will exceed budgeted revenues and any fund balance which is available
for budgeting. With the consent of the Mayor, depaament heads may reallocate unexpended appropriated
balances from one expenditure account to another within that department during the budget year.
Budgets for the General Fund are prepared on the modified accrual basis of accounting. Encumbrances
are not used.
2-B. Deficit fund net assets
None of the City's funds have deficit balances.
32
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
NOTE 3 - DETAILED NOTES
3-A. Deposits and investments
Cash and investments as of June 30, 2013 consist of the following:
Fair Value
Demand deposits $ 2,479,502
Savings 1,983,446
Investments - PTIF 2,827,092
Total cash $ 7,290,041
Cash and investments listed above are classified in the accompanying government -wide statement of net
position as follows:
Cash and cash equivalents (current)
Restricted cash and cash equivalents (non -current)
$ 6,455,750
834,290
Total cash and cash equivalents $ 7,290,041
Cash equivalents and investments are carried at fair value in accordance with GASB Statement No. 31.
The Utah Money Management Act (UMMA) establishes specific requirements regarding deposits of
public funds by public treasurers. UMMA requires that city funds be deposited with a qualified
depository which includes any depository institution which has been certified by the Utah State
Commissioner of Financial Institutions as having met the requirements specified in UMMA Section 51,
Chapter 7. UMMA provides the formula for determining the amount of public funds which a qualified
depository may hold in order to minimize risk of loss and also defines capital requirements which an
Institution must maintain to be eligible to accept public funds. UMMA lists the criteria for investments
and specifies the assets which are eligible to be invested in, and for some investments, the amount of time
to maturity.
UMMA enables the State Treasurer to operate the Public Treasurer's Investment Pool (PTIF). PTIF is
managed by the Utah State Treasurer's investment staff and comes under the regulatory authority of the
Utah Money Management Council. This council is comprised of a select group of financial professionals
from units of local and state government and financial institutions doing business in the state. PTIF
operations and portfolio composition is monitored at least semi-annually by the Utah Money Management
Council. PTIF is unrated by any nationally recognized statistical rating organizations. Deposits in PTIF
are not insured or otherwise guaranteed by the State of Utah. Participants share proportionally in any
realized gains or losses on investments which are recorded on an amortized cost basis. The balance
available for withdrawal is based on the accounting records maintained by PTIF. The fair value of the
investment pool is approximately equal to the value of the pool shares. The City maintains monies not
immediately needed for expenditure in PTIF accounts.
33
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
3-A. Deposits and investments (continued)
Deposit and Investment Risk
The City maintains no investment policy containing any specific provisions intended to limit the City's
exposure to interest rate risk, credit risk, and concentration of credit risk other than that imposed by
UMMA. The City's compliance with the provisions of UMMA addresses each of these risks.
Interest rate risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. All deposits and investments of the City are available immediately.
Credit risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligations. Custodial
credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a
government will not be able to recover its deposits. At June 30, 2013, $500,000 of the City's demand
deposits are covered by FDIC insurance.
Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g.,
broker -dealer) to a transaction, a government will not be able to recover the value of its investment or
collateral securities that are in the possession of another party. This risk is addressed through the policy of
investing excess monies only in PTIF.
Concentration of credit risk
Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in
a single issuer. PTIF falls under the constraints of UMMA in limiting concentrations of investments.
3-B. Receivables
The allowance policy is described in Note 1-E-3. Receivables as of year end for the City's funds are
shown below:
Governmental Business -type
Activities Activities Total
Customers $ 88,067 117,129 205,196
Intergovernmental receivables 606,508 606,508
Other receivables 10,408 10,408
Total $ 704,983 117,129 822,112
34
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
3-D. Capital Assets
Capital asset activity for the governmental activities was as follows:
Beginning Ending
Balance Additions Retirements Balance
Governmental activities:
Capital assets, not being depreciated:
Land and rights $ 476,884 476,884
Construction in progress 198,311 35,984 234,295
Total capital assets, not being depreciated
675.195 35.984 711.179
Capital assets, beind depreciated:
Buildings 12,116,787 12,116,787
Improvements other than buildings 3,544,896 198,576 3,743,472
Machinery and equipment 4,108,053 145,521 4,253,574
Infrastructure 3,477,880 85,046 3,562,925
Total capital assets, being depreciated 23,247,616
429,143 - 23,676,759
Less accumulated depreciation for:
Buildings 1,169,465 302,920 1,472,385
Improvements other than buildings 1,304,573 233,803 1,538,376
Machinery and equipment 2,004,100 349,429 2,353,529
Infrastructure 857,415 139,364 996,778
Total accumulated depreciation 5,335,553 1,025,515 - 6,361,067
Total capital assets being depreciated, net 17,912,063 (596,372) - 17,315,692
Governmental activities capital assets, net $ 18,587,258 (560,388) - 18,026,870
Depreciation expense was charged to functions/programs of the primary government governmental
activities as follows:
Governmental activities:
General government $ 342,182
Public safety 71,476
Highways and public improvements 238,935
Parks, recreation and public property 372,922
Total $ 1,025,515
35
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
3-D. Capital assets (continued)
Capital asset activity for business -type activities was as follows:
Beginning Ending
Balance Additions Retirements Balance
Business -type activities:
Capital assets, not being depreciated:
Land and water shares $ 262,935 - 262,935
Construction in progress 128,674 44,677 173,351
Total capital assets, not being depreciated
391.610 44.677 436.287
Capital assets, being depreciated:
Water system 5,298,889 137,638 5,436,527
Sewer system 6,931,477 - 6,931,477
Machinery & equipment 1,166,222 77,785 1,244,007
Total capital assets, being depreciated
13,396,587 215,423 - 13,612,010
Less accumulated depreciation for:
Water system 2,976,832 139,421 3,116,254
Sewer system 3,518,472 120,162 3,638,634
Machinery & equipment 750,263 63,293 813,556
Total accumulated depreciation 7,245,567 322,877 - 7,568,444
Total capital assets being depreciated, net 6,151,020 (107,454) - 6,043,566
Business -type activities capital assets, net $ 6,542,630 (62,777) - 6,479,853
Depreciation expense was charged to functions/programs of the primary government business -type
activities as follows:
Business -type activities:
Water
Sewer
$ 173,008
149,869
Total $ 322,877
36
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
3-E. Long-term debt
Long-term debt activity for the year was as follows:
Original %
Governmental activities:
2011 Equipment Lease
Matures 1/25/2014
2009 Equipment lease
Matures 3/24/2014
REFINANCE VEHICLES 2010
Matures 6/24/2014
2003 Sales Tax Revenue
Matures 10/1/2029
2009 Sales Tax Revenue Bonds
Matures 10/1/2035
Total governmental activity
long-term liabilities
Due
Within
Principal Rate 6/30/2012 Additions Reductions 6/30/2013 One Year
$ 62,127 3.66 $ 42,158
270,500 4.25 114,996
301,880 4.25 124,819
2,050,000 2.50 1,596,000
20,700 21,458 21,458
56,302 58,695 58,695
61,111 63,708 63,708
71,000 1,525,000 73,000
4,764,000 - 4,573,000 - 191,000 4,382,000 191,000
$6,450,973 400,113 6,050,861 407,861
Principal Interest Total
2014 $ 407,861 44,112 451,973
2015 266,000 36,300 302,300
2016 268,000 34,425 302,425
2017 270,000 32,500 302,500
2018 272,000 30,525 302,525
2019 - 2023 1,390,000 121,250 1,511,250
2024 - 2028 1,446,000 64,125 1,510,125
2029 - 2033 1,169,000 8,050 1,177,050
2034 - 2035 562,000 562,000
Total $6,050,861 371,287 6,422,148
Other long-term liabilities: Increase
Beginning (Decrease) Ending
Compensated absences:
Governmental $ 355,772
Business -type 43,680
Total
37
355,772
43,680
$ 399,452 399,452
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
3-F. Interfund receivable, payables and transfers
Interfund transfers:
Transfers In Transfers Out
General fund $ 410,000 642,093
Recreation 125,473
Community development 41,000
Millcreek project 7,000
Capital projects 468,620
Water and sewer fund 365,000
Storm drain fund - 45,000
Total $ 1,052,093 1,052,093
Transfers are used to move unrestricted general fund revenues to finance various programs that the
government must account for in other funds in accordance with budgetary authorizations, including
amounts provided as subsidies or matching funds for various grant programs.
NOTE 4 - OTHER INFORMATION
4-A. Risk management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; and natural disasters. The City participates in the Utah Local Government Trust, a
public agency insurance mutual, which provides coverage for property damage and general liability. The
City is subject to a minimal deductible for claims. There have been no significant reductions in insurance
coverage from coverage in the prior year. Amounts of settlements have not exceeded insurance coverage
in any of the past three fiscal years.
4-B. Employee pension and other benefit plans
Plan Description:
Moab City Corporation contributes to the Local Governmental Contributory System (Contributory
System), Local Governmental Noncontributory System (Noncontributory System), Public Safety Safety
Contributory System, and Public Safety Noncontributory System, which are cost -sharing multiple -
employer defined benefit pension plans administered by the Utah Retirement Systems (the Systems). The
Systems provide retirement benefits, annual cost of living adjustments, death benefits and refunds to plan
members and beneficiaries in accordance with retirement statutes established and amended by the State
Legislature.
The Systems are established and governed by the respective sections of Chapter 49 of the Utah Code
Annotated 1953 (Chapter 49) as amended, which also establishes the Utah State Retirement Office
(Office) for the administration of the Utah Retirement Systems and Plans. Chapter 49 places the Systems,
the Office and related plans and programs under the direction of the Utah State Retirement Board
(Board) whose members are appointed by the Governor. The Systems issue a publicly available financial
report that includes financial statements and required supplementary information for the Systems and
Plans. A copy of the report may be obtained by writing to the Utah Retirement Systems, 540 East 200
South, Salt Lake City, UT 84102 or by calling 1-800-365-8772.
38
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2013
4-B. Employee pension and other benefit plans (continued)
Funding Policy:
The City is required to contribute a percentage of covered salaries to the respective Systems as follows:
12.74% to the Contributory System; 16.04% to the Noncontributory System; 19.25% to the Public Safety
Contributory System; and 30.45% to the Public Safety Noncontributory System. The contribution rate is
the actuarially determined rate and is approved by the Board as authorized by Chapter 49.
The City's contributions to the Systems for the years ending June 30, 2013, 2012 and 2011 were,
respectively: to the Contributory System $6,703, $700 and $0; to the Noncontributory System $343,208,
$281,016 and $251,908; to the Public Safety Contributory System $5,235, $5,273 and $0; and to the
Public Safety Noncontributory System $171,131, $139,246 and $125,207. The contributions were equal
to the required contributions for each year.
4-C. Subsequent Events
In preparing these financial statements, the City has evaluated events and transactions for potential
recognition or disclosure through December 6, 2013, the date the financial statements were available to
be used.
4-D. Landfill agreement
Moab City entered into an agreement with the Grand County Solid Waste Management Special Service
District No. 1 and Grand County in which the City agreed to guarantee the performance of closure and
post -closure care at the Klondike and Moab Landfills. Should the escrow moneys set aside by the District
not cover all costs associated with the closure and post -closure of the landfill, Moab would be liable for
one half of the uncovered costs. Total closure and post -closure costs are currently estimated to be no
more than $175,400 for the Klondike Landfill and for the Moab Landfill.
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40
REQUIRED SUPPLEMENTAL INFORMATION
(Unaudited)
41
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42
MOAB CITY CORPORATION
Notes to Required Supplementary Information
June 30, 2013
Budgetary Comparison Schedules
The Budgetary Comparison Schedules presented in this section of the report are for the City's General
Fund.
Budgeting and Budgetary Control
Budgets for the General Fund are legally required and are prepared and adopted on the modified
accrual basis of accounting.
Original budgets represent the revenue estimates and spending authority authorized by the City
Council prior to the beginning of the year. Final budgets represent the original budget amounts plus
any amendments made to the budget during the year by the Council through formal resolution. Final
budgets do not include unexpended balances from the prior year because such balances automatically
lapse to unreserved fund balance at the end of each year.
Current Year Excess of Expenditures over Appropriations
For the year ended June 30, 2013 spending for all departments spending was within the appropriated
budget.
43
MOAB CITY CORPORATION
SCHEDULE OF REVENUES, EXPENDITUES AND
CHANGED IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL FUND
(Unaudited)
For the Year Ended June 30, 2013
Revenues
Taxes
Licenses and permits
Intergovernmental revenues
Charges for services
Fines and forfeitures
Interest
Miscellaneous revenue
Budgeted
Original
$ 5,624,000
109,300
260,000
1,252,000
46,400
39,500
77,000
Budgeted
Final
5,624,000
109,300
265,000
1,290,605
47,315
39,500
102,000
Actual
5,883,328
130,084
278,467
1,262,302
50,796
49,784
81,086
Total revenues 7,408,200 7,477,720 7,735,846
Expenditures
General government
Public safety
Highways and public improvements
Parks, recreation and public property
Debt Service:
Principal
Interest
Total expenditures
1,933,625
2,317,564
2,166,180
1,167,234
1,957,325
2,494,464
2,204,230
1,197,984
138,113 143,513
11,736 6,336
1,812,966
2,300,706
2,130,385
1,120,542
138,113
6,430
7,734,452 8,003,852 7,509,143
Excess (Deficiency) of Revenues
Over (Under) Expenditures (354,352)
Other Financing Sources and (Uses)
Transfers in
Transfers (out)
Total Other Financing Sources and (Uses)
Net Change in Fund Balances
Fund Balances - beginning of year
Fund Balances - end of year
410,000
(173,473)
236,527
(117,825)
1,776,740
$1,658,915
44
(552,332)
410,000
(642,093)
226.703
410,000
(642,093)
(232,093) (232,093)
(784,425) (5,390)
1,776,740
992,315
1,776,740
1,771,350
Variance with
Final Budget
259,328
20,784
13,467
(28,303)
3,481
10,284
(20,914)
258,126
144,359
193,758
73,845
77,442
5,400
(94)
494,709
779.035
779,035
779.035
OTHER REPORTS
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46
A Larson
certified public accountants
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
The Honorable Mayor, and
Members of the City Council
Moab City, Utah
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business -type activities, each major fund, and the aggregate remaining fund information of
Moab City, Utah (herein referred to as the "City"), as of and for the year ended June 30, 2013, and the
related notes to the financial statements, which collectively comprise the City's basic financial statements
and have issued our report thereon dated December 6, 2013.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do
not express an opinion on the effectiveness of the City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of the entity's financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may
exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies
in internal control that we consider to be material weaknesses. However, material weaknesses may exist
that have not been identified. We did identify certain deficiencies in internal control, described in the
accompanying management letter that we consider to be significant deficiencies. See finding IC-2013.1
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards
Larson & Company
765 Norrh Main, Spanish Fork. Urah 84660
Main: (RO I) 798-3545 Fax: (801) 7$5-3678
v lyw.larsco.com
47
3kmber ni
CPAMECA
IN7fRNAiRIIC]NRL
__ 40, Crone Hnwalh FnernaLimal.
The City's Response to Findings
The City's response to the findings identified in our audit is described in the accompanying management
letter. The City's response was not subjected to the auditing procedures applied in the audit of the
financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity's internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Larson & Company, PC
Spanish Fork, Utah
December 6, 2013
48
A Larson
certified public accountants
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE
AND ON INTERNAL CONTROLS OVER COMPLIANCE
IN ACCORDANCE WITH THE STATE OF UTAH LEGAL COMPLIANCE AUDIT GUIDE
The Honorable Mayor, and
Members of the City Council
Moab City, Utah
REPORT ON COMPLIANCE
We have audited Moab City's (herein referred to as the "City") compliance with the general and major
state program compliance requirements described in the State of Utah Legal Compliance Audit Guide for
the year ended June 30, 2013
The general compliance requirements applicable to the City are identified as follows:
Cash Management
Budgetary Compliance
Fund Balance
Impact Fees
Utah Retirement Systems Compliance
Transfers from Utility Enterprise Funds
Government Records Access Management Act
Conflicts of Interest
Nepotism
Utah Public Finance Website
Open and Public Meetings Act
The City received the following major assistance programs from the State of Utah:
B&C Road Funds
Management's Responsibility
Compliance with the requirements referred to above is the responsibility of the City's management.
Auditor's Responsibility
Our responsibility is to express an opinion on the City's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States; and the State of Utah Legal
Compliance Audit Guide. Those standards and the State of Utah Legal Compliance Audit Guide require
that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the
compliance requirements referred to above that could have a material effect on the City and its major
programs occurred. An audit includes examining, on a test basis, evidence about the City's compliance
with those requirements and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not
provide a legal determination of the City's compliance with those requirements.
Larson & Company
765 Norrh Main, Spanish Fork. Utah 84660
Main: (RO I) 798-3545 Fax: (801) 7$5-3678
www.larsco.com
49
3kmber ni
CPAMECA
IN7fRNAiRIIC]NRL
__ 40, Crone Hnwalh FnernaLimal.
Opinion
In our opinion, Moab City, complied, in all material respects, with the general compliance requirements
identified above and the compliance requirements that are applicable to each of its major state programs
for the year ended June 30, 2013.
Other Matters
The results of our auditing procedures disclosed no instances of noncompliance, which are required to be
reported in accordance with the State of Utah Legal Compliance Audit Guide.
REPORT ON INTERNAL CONTROL OVER COMPLIANCE
Management of the City is responsible for establishing and maintaining effective internal control over
compliance with the compliance requirements referred to above. In planning and performing our audit, we
considered the City's internal control over compliance to determine the auditing procedures for the
purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the
effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the
effectiveness of the City's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control does not
allow management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, noncompliance on a timely basis. A material weakness in internal control over
compliance is a deficiency, or combination of deficiencies in internal control over compliance, such that
there is a reasonable possibility that material noncompliance with a compliance requirement will not be
prevented, or detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control that might be
deficiencies, significant deficiencies, or material weaknesses in internal control over compliance. We did
not identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined above. However, material weaknesses may exist that have not been identified.
Purpose of Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity's internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Pc
Larson & Company, PC
Spanish Fork, Utah
December 6, 2013
50