HomeMy Public PortalAbout2009-2010 annual final auditMoab City
Grand County, Utah
ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2010
Moab City
TABLE OF CONTENTS
June 30, 2010
Beginning
on page
INDEPENDENT ACCOUNTANT'S REPORT 1
MANAGEMENT'S DISCUSSION AND ANALYSIS 3
BASIC FINANCIAL STATEMENTS 13
Government-wide Financial Statements:
Statement of Net Assets 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 Assets 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 Assets - Proprietary Funds 22
Statement of Revenues, Expenses, and Changes
in Fund Net Assets - Proprietary Funds 23
Statement of Cash Flows - Proprietary Funds 24
Notes to Financial Statements 26
REQUIRED SUPPLEMENTARY INFORMATION 41
Schedule of Revenues, Expenditures, and Changes
in Fund Balances - Budget and Actual - General Fund 44
COMPLIANCE REPORTS
Report on Compliance and on Internal Control over
Financial Reporting 45
Report on Compliance with State Fiscal Laws 47
1
INDEPENDENT AUDITORS’ REPORT
October 14, 2010
Honorable Mayor
Members of the City Council
City of Moab, Utah
Mayor and Council Members:
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 Moab, as of and for the year ended June 30, 2010, which collectively comprise
the City of Moab’s basic financial statements as listed in the table of contents. These
financial statements are the responsibility of the City of Moab’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
Government 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 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 of
Moab, as of June 30, 2010, and the respective changes in financial position and cash flows,
where applicable, for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
2
The Management’s Discussion and Analysis on pages 3 through 11, and the budgetary
comparison for the general fund, are not a required part of the basic financial statements but are
supplementary information required by accounting principles generally accepted in the United
States of America. We have applied certain limited procedures, which consisted principally of
inquiries of management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and express no opinion
on it.
In accordance with Government Auditing Standards, we have also issued a report dated
December 10, 2010, on our consideration of the City of Moab’s internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grants. That report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
Larson & Rosenberger, LLP
Certified Public Accountants
3
MANAGEMENT'S DISCUSSION AND ANALYSIS
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Moab City
Management's Discussion and Analysis
June 30, 2010
5
As management of Moab City (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,
2010.
FINANCIAL HIGHLIGHTS
*Total net assets for the City as a whole increased by $2,487,352.
*Total unrestricted net assets for the City as a whole increased by $4,115,001.
*Total net assets for governmental activities increased by $2,333,701.
*Total net assets for business-type activities increased by $153,651.
BASIC FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the basic financial statements
of Moab City. 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 assets presents information on all of the City's assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets 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 assets changed during
the fiscal year reported. All changes in net assets 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.
Moab City
Management's Discussion and Analysis
June 30, 2010
6
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 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 fund. A budgetary comparison scedule
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 funds to account for the operations of the water, sewer, and
storm drain utilities.
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.
Moab City
Management's Discussion and Analysis
June 30, 2010
FINANCIAL ANALYSIS
Moab City's Net Assets
Governmental
Activities
Business-type
Activities
7
Current
Year
Previous
Year
Current
Year
Previous
Year
Total
Current
Year
Total
Previous
Year
Current and other assets $ 7,777,846 3,225,445 4,038,782 3,724,637 11,816,627 6,950,082
Net capital assets 13,414,075 10,593,800 6,723,979 6,896,381 20,138,054 17,490,181
Total assets 21,191,921 13,819,245 10,762,761 10,621,018 31,954,682 24,440,263
Long-term liabilities 6,958,477 2,363,333 - 36,481 6,958,477 2,399,814
Other liabilities 1,371,213 927,381 73,926 49,354 1,445,139 976,735
Total liabilities 8,329,689 3,290,715 73,926 85,835 8,403,615 3,376,549
Net assets:
Capital assets, net of debt 6,455,599 8,230,467 6,723,979 6,859,901 13,179,578 15,090,368
Restricted 456,694 173,553 2,039,710 2,039,710 2,496,404 2,213,263
Unrestricted 5,949,939 2,124,511 1,925,146 1,635,573 7,875,085 3,760,084
Total net assets $ 12,862,232 10,528,531 10,688,835 10,535,184 23,551,066 21,063,714
As noted earlier, net assets may serve over time as a useful indicator of financial position. Total assets
exceeded total liabilities at the close of the year by $23,551,066, an increase of $2,487,352 from the
previous year. This change is equivalent to the net income for the year, in private sector terms.
Total unrestricted net assets at the end of the year are $7,875,085, which represents an increase of
$4,115,001 from the previous year. Unrestricted net assets are those 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 assets 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.
Moab City
Management's Discussion and Analysis
June 30, 2010
FINANCIAL ANALYSIS (continued)
Moab City's Change in Net Assets
Governmental
Activities
Business-type
Activities
8
Current
Year
Previous
Year
Current
Year
Previous
Year
Total
Current
Year
Total
Previous
Year
Program revenues:
Charges for services 1,382,723 1,240,286 1,366,830 1,386,480 2,749,553 2,626,766
Operating grants 193,933 244,964 - - 193,933 244,964
Capital grants 1,930,756 130,172 390,363 57,679 2,321,119 187,851
General revenues:
Sales tax 1,303,089 1,454,430 - - 1,303,089 1,454,430
Other taxes 3,679,557 3,683,646 - - 3,679,557 3,683,646
Unrestricted investment earnings 87,537 103,178 12,098 55,217 99,635 158,395
Other revenues 236,313 167,030 - 93,105 236,313 260,135
Gain on sale of fixed assets 2,875 8,024 --2,875 8,024
Total revenues 8,816,783 7,031,731 1,769,291 1,592,481 10,586,074 8,624,212
Expenses:
General government 1,773,938 1,799,849 - - 1,773,938 1,799,849
Public safety 1,832,365 1,976,923 - - 1,832,365 1,976,923
Highways and improvements 2,156,643 2,202,589 - - 2,156,643 2,202,589
Parks and recreation 998,264 1,177,536 - - 998,264 1,177,536
Interest on long-term debt 66,372 102,690 - - 66,372 102,690
Water and sewer - - 1,009,327 958,013 1,009,327 958,013
Storm drain --261,813 641 261,813 641
Total expenses 6,827,582 7,259,587 1,271,140 958,654 8,098,722 8,218,241
Excess (deficiency)
before transfers 1,989,201 (227,856) 498,151 633,827 2,487,352 405,971
Transfers in (out) 344,500 (455,500)(344,500)455,500 --
Change in net assets 2,333,701 (683,356)153,651 1,089,327 2,487,352 405,971
For the City as a whole, total revenues increased by $1,961,862 compared to the previous year, while
total expenses decreased by $119,519. The total net change of $2,487,352 is, in private sector terms,
the net income for the year which is $2,081,381 more than the previous year.
Governmental activities revenues of $8,816,783 is an increase of $1,785,052 from the previous year.
This is primarly due to a significant increase in grants received. Governmental activities expenses of
$6,827,582 is a decrease of $432,005 from the previous year. Spending for all departments decreased
during the year.
Business-type activities revenue of $1,769,291 is an increase of $176,810 from the previous year.
This is due to an increase in grants received during the year. Business-type activities expenses of
$1,271,140 is an increase of $312,486 from the previous year. This is due to an overall increase in
operation expenses.
Moab City
Management's Discussion and Analysis
June 30, 2010
BALANCES AND TRANSACTIONS OF INDIVIDUAL FUNDS
Some of the more significant changes in fund balances and fund net assets and any restrictions on
those amounts is described below:
General Fund
The fund balance of $1,582,159 reflects an increase of $655,506 from the previous year. Total
revenues decreased by $161,915. Tax revenues decreased by $155,430. Intergovernmental revenue
decreased by $36,031. Proceeds from bonds increased by $31,380. All other revenues decreased by
$1,834.
Total expenditures, excluding transfers out, decreased by $458,899. Expenditure changes from the
previous year, by department: general government decreased by $37,468; public safety decreased by
$212,974; streets and highways decreased by $146,473; and parks and recreation decreased by
$117,755. Capital outlay expenditures decreased by $351,086. Expeditures for princpal and interest
increased by $400,501 and $6,356, respectively.
The amount restricted for Class C roads is $165,134. The unassigned fund balance amounts to
$1,417,025.
Capital Projects Fund
The fund balance of $5,055,560 reflects an increase of $3,463,563 from the previous year. Total
revenue, excluding transfers, increased by $6,708,970. Of this amount, proceeds from bonds
increased by $4,764,000; intergovenmental revenues increased by $1,780,172; and all other revenues
increased by $164,799. Expenses increased during the year by $2,594,291. This increase is primarily
due to construction on the Aquatic Center.
Water and Sewer Fund
The change in net assets (net income) was $307,458. The amounts restricted for debt service and
construction are $36,481 and $2,003,229, respectively. Unrestricted net assets amount to $1,170,866.
Storm Drain Fund
The change in net assets (net loss) was $153,807. This loss is due to repair and maintenance costs of
$261,813 to the storm drain system during the year. Unrestricted net assets amount to $754,280.
9
GENERAL FUND BUDGETARY HIGHLIGHTS
Revenues for the current year, exclusive of transfers and fund balance appropriations, were originally
budgeted in the amount of $6,093,900. This amount was amended in the final budget to $6,400,861.
Actual revenues, excluding transfers, amounted to $6,745,698.
Expenditures for the current year, excluding transfers, were originally budgeted in the amount of
$6,348,173. This amount was amended in the final budget to $6,771,136. Actual expenditures
amounted to $6,170,958.
Net transfers for the year were budgeted for net transfers in of $400,928. This amount was not
amended during the year. Actual net transfers in were made in the amount of $80,765.
Moab City
Management's Discussion and Analysis
June 30, 2010
CAPITAL ASSETS AND DEBT ADMINISTRATION
Moab City's Capital Assets (net of depreciation)
Governmental
Activities
Business-type
Activities
10
Current
Year
Previous
Year
Current
Year
Previous
Year
Total
Current
Year
Total
Previous
Year
Net Capital Assets:
Land and water rights $ 476,884 476,884 262,935 262,935 739,819 739,819
Buildings 4,290,809 4,404,485 - - 4,290,809 4,404,485
Improvements other than
buildings 1,193,220 1,298,780 - - 1,193,220 1,298,780
Machinery and equipment 1,964,635 2,217,377 175,768 141,429 2,140,403 2,358,807
Infrastructure 2,088,078 2,196,274 - - 2,088,078 2,196,274
Water system - - 2,553,231 2,672,162 2,553,231 2,672,162
Sewer system - - 3,670,298 3,739,499 3,670,298 3,739,499
Work in progress 3,400,449 -61,746 80,356 3,462,195 80,356
Totals $ 13,414,075 10,593,800 6,723,979 6,896,381 20,138,054 17,490,181
The total amount of capital assets, net of depreciation, of $20,138,054 is an increase of $2,647,873
from the previous year.
Governmental activities capital assets, net of depreciation, of $13,414,075 is an increase of
$2,820,275 from the previous year.
Business-type activities capital assets, net of depreciation, of $6,723,979 is a decrease of $172,402
from the previous year.
Additional information regarding capital assets may be found in the notes to financial statements.
Moab City
Management's Discussion and Analysis
June 30, 2010
CAPITAL ASSETS AND DEBT ADMINISTRATION (continued)
Moab City's Outstanding Debt - Revenue Bonds
11
Current
Year
Previous
Year
Governmental activities:
2007 Lease Chargers (3) $ - 26,149
2008 Lease Vehicles - 59,264
2008 Lease Equipment - 207,420
2009 Equipment Lease 220,807 270,500
2010 Refinance Vehicles 269,869 -
2003 Sales Tax Revenue 1,734,000 1,800,000
2009 Sales Tax Revenue 4,764,000 -
Total governmental 6,988,676 2,363,333
Business-type activities:
1993A BWR Water - 3,240
1993B BWR Water -33,240
Total business-type -36,481
Total outstanding debt $ 6,988,676 2,399,814
Additional information regarding the long-term liabilities may be found in the notes to financial
statements.
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'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.
12
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13
BASIC FINANCIAL STATEMENTS
14
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Moab City
STATEMENT OF NET ASSETS
June 30, 2010
The notes to the financial statements are an integral part of this statement.
15
Governmental
Activities
Business-type
Activities Total
ASSETS:
Current Assets:
Cash and cash equivalents $ 1,552,002 3,185,105 4,737,107
Accounts receivable, net of allowances 1,290,591 105,277 1,395,868
Other assets 6,119 -6,119
Total current assets 2,848,712 3,290,382 6,139,094
Non-current assets:
Restricted cash and cash equivalents 4,929,134 748,400 5,677,534
Capital assets:
Not being depreciated 3,877,333 324,682 4,202,015
Net of accumulated depreciation 9,536,742 6,399,297 15,936,039
Total non-current assets 18,343,209 7,472,379 25,815,588
Total assets $ 21,191,921 10,762,761 31,954,682
LIABILITIES:
Current Liabilities:
Accounts payable $ 555,138 28,325 583,463
Customer security deposits - 6,450 6,450
Accrued interest 34,859 - 34,859
Deferred revenues 488,647 - 488,647
Revenue bonds due within one year 68,000 - 68,000
Capital leases due within one year 299,035 -299,035
Total current liabilities 1,445,679 34,775 1,480,454
Non-current liabilities:
Compensated absences 292,569 39,151 331,720
Revenue bonds due after one year 1,666,000 - 1,666,000
Capital leases due after one year 4,925,442 -4,925,442
Total non-current liabilities 6,884,011 39,151 6,923,162
Total liabilities 8,329,689 73,926 8,403,615
NET ASSETS:
Invested in capital assets, net of related debt 6,455,599 6,723,979 13,179,578
Restricted:
Class C roads 165,134 - 165,134
Debt service - 36,481 36,481
Construction 4,764,000 2,003,229 6,767,229
Unrestricted 1,477,499 1,925,146 3,402,645
Total net assets 12,862,232 10,688,835 23,551,066
Total liabilities and net assets $ 21,191,921 10,762,761 31,954,682
Moab City
STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2010
The notes to the financial statements are an integral part of this statement.
16
Expenses
Charges
for
Services
Operating
Grants and
Contributions
Capital
Grants and
Contributions
Net
(Expense)
Revenue
(To Next
Page)
FUNCTIONS/PROGRAMS:
Primary government:
Governmental activities:
Administration $ 1,773,938 1,090,040 - 15,000 (668,898)
Public safety 1,832,365 11,779 16,309 - (1,804,277)
Streets and highways 2,156,643 - 177,624 - (1,979,019)
Culture and recreation 998,264 280,904 - 1,915,756 1,198,396
Interest on long-term debt 66,372 ---(66,372)
Total governmental activities 6,827,582 1,382,723 193,933 1,930,756 (3,320,169)
Business-type activities:
Water & Sewer Utilities 1,009,327 1,239,324 - 390,363 620,360
Storm Drain Utility 261,813 127,506 --(134,307)
Total business-type activities 1,271,140 1,366,830 -390,363 486,053
Total primary government $ 8,098,722 2,749,553 193,933 2,321,119 (2,834,116)
(continued on next page)
Moab City
STATEMENT OF ACTIVITIES (continued)
For the Year Ended June 30, 2010
The notes to the financial statements are an integral part of this statement.
17
Governmental
Activities
Business-type
Activities Total
CHANGES IN NET ASSETS:
Net (expense) revenue
(from previous page)$ (3,320,169)486,053 (2,834,116)
General revenues:
Sales tax 1,303,089 - 1,303,089
Other taxes 3,679,557 - 3,679,557
Unrestricted investment earnings 87,537 12,098 99,635
Gain on sales of capital assets 2,875 - 2,875
Miscellaneous 236,313 - 236,313
Transfers in (out)344,500 (344,500)-
Total general revenues and transfers 5,653,870 (332,402)5,321,468
Change in net assets 2,333,701 153,651 2,487,352
Net assets - beginning 10,528,531 10,535,184 21,063,714
Net assets - ending $ 12,862,232 10,688,835 23,551,066
Moab City
BALANCE SHEET - GOVERNMENTAL FUNDS
June 30, 2010
The notes to the financial statements are an integral part of this statement.
18
General
Fund
Capital
Projects
Fund
Other
Governmental
Funds
Total
Governmental
Funds
ASSETS
Cash and cash equivalents $ 946,251 501,600 104,151 1,552,002
Accounts receivable, net of allowances 663,812 625,758 1,021 1,290,591
Other assets 6,119 - - 6,119
Restricted cash and cash equivalents 165,134 4,764,000 -4,929,134
TOTAL ASSETS $ 1,781,315 5,891,358 105,172 7,777,846
LIABILITIES
Accounts payable $ 199,157 347,150 8,831 555,138
Deferred revenues -488,647 -488,647
TOTAL LIABILITIES 199,157 835,798 8,831 1,043,785
FUND BALANCES:
Restricted for:
Class C roads 165,134 - - 165,134
Capital projects - 4,764,000 - 4,764,000
Assigned for:
Capital projects - 291,560 - 291,560
Recreation - - 93,308 93,308
Youth city council - - 3,034 3,034
Unassigned:
General fund 1,417,025 --1,417,025
TOTAL FUND BALANCES 1,582,159 5,055,560 96,341 6,734,060
TOTAL LIABILITIES AND
FUND BALANCES $ 1,781,315 5,891,358 105,172 7,777,846
Moab City
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the Year EndedJune 30, 2010
The notes to the financial statements are an integral part of this statement.
19
General
Fund
Capital
Projects
Fund
Other
Governmental
Funds
Total
Governmental
Funds
REVENUES:
Taxes:
Sales $ 1,303,089 - - 1,303,089
Other taxes 3,679,557 - - 3,679,557
Licenses and permits 128,063 - - 128,063
Intergovernmental revenues 208,933 1,850,346 65,410 2,124,689
Charges for services 941,079 135,389 129,792 1,206,260
Fines and forfeitures 48,400 - - 48,400
Interest 12,425 75,125 (13) 87,537
Miscellaneous revenue 119,398 64,683 52,232 236,313
Total revenues 6,440,943 2,125,543 247,421 8,813,908
EXPENDITURES:
Current:
General government 1,467,813 - - 1,467,813
Public safety 1,757,390 - - 1,757,390
Highways and public improvements 1,963,622 - - 1,963,622
Parks, recreation and public property 499,710 11,617 386,204 897,530
Capital outlay 53,219 3,430,364 - 3,483,582
Debt service:
Principal 404,736 66,000 - 470,736
Interest 24,467 45,000 -69,467
Total expenditures 6,170,958 3,552,980 386,204 10,110,141
Excess (Deficiency) of Revenues over
(Under) Expenditures 269,986 (1,427,437)(138,782)(1,296,233)
Other Financing Sources and (Uses):
Proceeds from sale of bonds 301,880 4,764,000 - 5,065,880
Proceeds from sale of assets 2,875 - - 2,875
Transfers in 344,500 127,000 136,735 608,235
Transfers (out) (263,735)--(263,735)
Total other financing sources and (uses) 385,520 4,891,000 136,735 5,413,255
Net Change in Fund Balances 655,506 3,463,563 (2,047) 4,117,022
Fund balances - beginning of year 926,653 1,591,997 98,389 2,617,039
Fund balances - end of year $ 1,582,159 5,055,560 96,341 6,734,060
Moab City
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET ASSETS
June 30, 2010
The notes to the financial statements are an integral part of this statement.
20
Total Fund Balances for Governmental Funds $ 6,734,060
Total net assets reported for governmental 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 17,059,268
Less accumulated depreciation (3,645,192)
Net capital assets 13,414,075
Long-term liabilities, for funds other than enterprise funds are recorded
in the government-wide statements but not in the fund statements.
General long-term debt (6,958,477)
Interest accrued but not yet paid on long-term debt (34,859)
Compensated absences (292,569)
Total Net Assets of Governmental Activities $ 12,862,232
Moab City
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, 2010
The notes to the financial statements are an integral part of this statement.
21
Net Change in Fund Balances - Total Governmental Funds $ 4,117,022
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 is allocated over their estimated useful
lives and reported as depreciation expenses.
Capital outlays 3,483,582
Depreciation expense (663,307)
Net 2,820,275
Bond proceeds are reported as financing sources in government funds.
In the statement of net assets, however, issuing debt increases long-term
liabilities and does not affect the statement of activities.
Debt issued - bonds (5,065,880)
Repayment of debt principal is an expenditure in the governmental funds, but
the repayment reduces long-term liabilities in the statement of net assets.
Long-term debt principal repayments 470,736
Accrued interest for long-term debt is not reported as expenditure for
the current period, while it is recorded in the statement of activities.
Change in accrued interest 3,095
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 funds.
Change in compensated absence liability (11,548)
Change in Net Assets of Governmental Activities $ 2,333,701
Moab City
STATEMENT OF NET ASSETS - PROPRIETARY FUND
June 30, 2010
The notes to the financial statements are an integral part of this statement.
22
Water & Sewer
Fund
Storm Drain
Fund Total
ASSETS:
Current assets:
Cash and cash equivalents $ 2,443,666 741,439 3,185,105
Accounts receivable, net 92,436 12,841 105,277
Total current assets 2,536,102 754,280 3,290,382
Non-current assets:
Restricted cash and cash equivalents 748,400 - 748,400
Capital assets:
Not being depreciated 324,682 - 324,682
Net of accumulated depreciation 6,399,297 -6,399,297
Total non-current assets 7,472,379 -7,472,379
Total assets $ 10,008,481 754,280 10,762,761
LIABILITIES:
Current liabilities:
Accounts payable $ 28,325 - 28,325
Customer security deposits 6,450 -6,450
Total current liabilities 34,775 -34,775
Non-current liabilities:
Compensated absences 39,151 -39,151
Total non-current liabilities 39,151 -39,151
Total liabilities 73,926 -73,926
NET ASSETS:
Invested in capital assets,
net of related debt 6,723,979 - 6,723,979
Restricted for:
Debt service 36,481 - 36,481
Construction 2,003,229 - 2,003,229
Unrestricted 1,170,866 754,280 1,925,146
Total net assets 9,934,555 754,280 10,688,835
Total liabilities and net assets $ 10,008,481 754,280 10,762,761
Moab City
STATEMENT OF REVENUES, EXPENSES, AND CHANGES
IN FUND NET ASSETS - PROPRIETARY FUND
June 30, 2010
The notes to the financial statements are an integral part of this statement.
23
Water & Sewer
Fund
Storm Drain
Fund Total
Operating income:
Charges for sales and service $ 1,192,120 127,506 1,319,626
Connection fees 4,875 - 4,875
Other operating income 42,329 -42,329
Total operating revenue 1,239,324 127,506 1,366,830
Operating expenses:
Personal services 245,568 - 245,568
Utilities 77,023 - 77,023
Repair & maintenance 25,819 261,813 287,632
Other supplies & expenses 312,998 - 312,998
Insurance expense 1,560 - 1,560
Depreciation expense 346,359 -346,359
Total operating expense 1,009,327 261,813 1,271,140
Net operating income (loss) 229,996 (134,307)95,690
Non-operating income (expense):
Impact fees 390,363 - 390,363
Interest income 12,098 -12,098
Total non-operating income (expense) 402,461 -402,461
Income (loss) before transfers
and capital contributions 632,458 (134,307)498,151
Transfers (out) 325,000 19,500 344,500
Change in net assets 307,458 (153,807) 153,651
Net assets, beginning 9,627,097 908,086 10,535,184
Net assets, ending $ 9,934,555 754,280 10,688,835
Moab City
STATEMENT OF CASH FLOWS
For the Year Ended June 30, 2010
The notes to the financial statements are an integral part of this statement.
24
Water & Sewer
Fund
Storm Drain
Fund Total
Cash flows from operating activities:
Cash received from customers - service $ 1,248,629 127,978 1,376,608
Cash paid to suppliers (396,150) (261,813) (657,963)
Cash paid to employees (240,496)-(240,496)
Net cash provided (used) in operating activities 611,983 (133,834)478,149
Cash flows from noncapital financing activities:
Change in customer deposits (1,750) - (1,750)
Net interfund activity (325,000)(19,500)(344,500)
Net cash provided (used) in
noncapital financing activities (326,750)(19,500)(346,250)
Cash flows from capital and
related financing activities:
Cash received from bonds issued (3,240) - (3,240)
Cash received from impact fees 390,363 - 390,363
Cash payments for capital assets (173,956) - (173,956)
Cash payments for long-term debt principal (33,240)-(33,240)
Net cash provided (used) in capital
and related financing activities 179,926 -179,926
Cash flows from investing activities:
Cash received from interest earned 12,098 -12,098
Net cash provided (used) in investing activities 12,098 -12,098
Net increase (decrease) in cash 477,257 (153,334) 323,923
Cash balance, beginning 2,714,809 894,773 3,609,582
Cash balance, ending $ 3,192,066 741,439 3,933,505
Cash reported on the balance sheet:
Cash and cash equivalents $ 2,443,666 741,439 3,185,105
Non-current restricted cash 748,400 -748,400
Total cash and cash equivalents $ 3,192,066 741,439 3,933,505
Moab City
STATEMENT OF CASH FLOWS (continued)
For the Year Ended June 30, 2010
Reconciliation of Operating Income
to Net Cash Provided form Operating Activity:
The notes to the financial statements are an integral part of this statement.
25
Water & Sewer
Fund
Storm Drain
Fund Total
Net operating income (expense) $ 229,996 (134,307) 95,690
Adjustments to reconcile operating
income or (loss) to net cash provided (used)
in operating activities:
Depreciation and amortization 346,359 - 346,359
Changes in assets and liabilities:
(Increase) decrease in receivables 9,306 472 9,778
Increase (decrease) in payables 26,322 -26,322
Net cash provided in operating activity $ 611,983 (133,834)478,149
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
26
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1-A. Reporting entity
Moab City (the City), a municipal corporation located in Grand County, Utah, operates under a Council-
Manager form of government. The accompanying financial statements present the City and its component
units, entities for which the City is considered to be financially accountable.
1-B. Government-wide and fund financial statements
Government-wide Financial Statements
The government-wide financial statements, consisting of the statement of net assets and the statement of
changes in net assets 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 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.
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
27
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). The City's reporting entity applies all relevant Governmental Accounting Standards
Board (GASB) pronouncements and applicable Financial Accounting Standards Board (FASB)
pronouncements and Accounting Principles Board (APB) opinions issued on or before November 30,
1989, unless they conflict with GASB pronouncements. The City's reporting entity does not apply FASB
pronouncements or APB opinions issued after November 30, 1989.
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. Property tax revenues
are recognized in the year for which they are levied while grants are recognized when the grantor
eligibility requirements are met.
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.
Property taxes, 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.
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
28
1-C. Measurement focus, basis of accounting, and financial statement presentation (continued)
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.
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 Assets 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.
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
29
1-E. Assets, Liabilities, and Net Assets or Equity (continued)
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 than property taxes and intergovernmental receivables are from customers
primarily for utility services. Property tax and 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.
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.
Property taxes are assessed and collected for the City by Sanpete County and remitted to the City shortly
after collection. Property taxes become a lien on January 1 and are levied on the first Monday in August.
Taxes are due and payable on November 1, and are delinquent after November 30. All dates are in the
year of levy.
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 assets.
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.
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
30
1-E. Assets, Liabilities, and Net Assets or Equity (continued)
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 or more 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.
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
Buildings and improvements 30-45
Machinery and equipment 10-15
Vehicles 5-10
Infrastructure 30
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 assets. Bond issuance costs, bond discounts or premiums, and the difference
between the reacquisition price and the net carrying value of refunded debt are deferred and amortized
over the terms of the respective bonds using the effective interest method. Bonds payable are reported net
of the applicable bond premium or discount. Significant or material bond issuance costs are reported as
deferred charges.
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.
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
31
1-E. Assets, Liabilities, and Net Assets or Equity (continued)
1-E-8. Fund Equity
The governmental fund financial statements report reserved fund balance for amounts not available for
appropriation of legally restricted for specified purposes. The General Fund reserve for restricted
purposes includes fund balance/net assets resulting from Class C road allotments restricted for eligible
road maintenance. Designations of fund balance represent tentative management plans that are subject to
change.
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 18% 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, department 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
As of June 30, 2010, none of the City's funds have deficit fund balances.
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
NOTE 3 - DETAILED NOTES
3-A. Deposits and investments
Cash and investments as of June 30, 2010 consist of the following:
32
Fair Value
Cash on hand $ 650
Demand deposits - checking 1,447,000
Savings 1,104,852
Deposits - PTIF 7,862,139
Total cash $ 10,414,641
Cash and investments listed above are classified in the accompanying government-wide statement of net
assets as follows:
Cash and cash equivalents (current) $ 4,737,107
Restricted cash and cash equivalents (non-current) 5,677,534
Total cash and cash equivalents $ 10,414,641
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.
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
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, 2010, $500,000 of the City's demand and
bank trust deposits are covered by FDIC insurance; $2,049,814 is uninsured and uncollateralized;
$7,862,139 is deposited in PTIF.
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. Accounts not expected to be received within one year
are captioned as non-current receivables. Receivables as of year end for the City's funds are shown below.
All receivables are deemed collectible.
33
Governmental
Activities
Business-Type
Activities Total
Customers $ 221,719 109,736 331,455
Intergovernmental 539,440 - 539,440
Note receivable 488,647 - 488,647
Other receivables 40,784 -40,784
Total receivables $ 1,290,591 109,736 1,400,327
Allowance for uncollectibles -(4,459)(4,459)
Net receivables $ 1,290,591 105,277 1,395,868
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
3-C. Capital Assets
Capital asset activity for the governmental activities was as follows:
Beginning
Balance Additions Retirements
Ending
Balance
Governmental activities:
Capital assets, not being depreciated:
Land and rights $ 476,884 - - 476,884
Construction in progress -3,400,449 -3,400,449
Total capital assets, not being depreciated 476,884 3,400,449 -3,877,333
Capital assets, being depreciated:
Buildings 4,972,275 10,642 - 4,982,916
Improvements other than buildings 2,123,575 23,909 - 2,147,484
Machinery and equipment 3,298,050 48,583 - 3,346,632
Infrastructure 2,704,902 --2,704,902
Total capital assets, being depreciated 13,098,801 83,133 -13,181,934
Less accumulated depreciation for:
Buildings 567,790 124,318 - 692,108
Improvements other than buildings 824,795 129,469 - 954,264
Machinery and equipment 1,080,672 301,325 - 1,381,997
Infrastructure 508,628 108,196 -616,824
Total accumulated depreciation 2,981,885 663,307 -3,645,192
Total capital assets being depreciated, net 10,116,916 (580,174)-9,536,742
Governmental activities capital assets, net $ 10,593,800 2,820,275 -13,414,075
Depreciation expense was charged to functions/programs of the primary government governmental
activities as follows:
34
Governmental activities:
General government $ 294,576
Public safety 74,976
Highways and public improvements 193,021
Parks, recreation and public property 100,734
Total $ 663,307
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
3-C. Capital assets (continued)
Capital asset activity for business-type activities was as follows:
Beginning
Balance Additions Retirements
Ending
Balance
Business-type activities:
Capital assets, not being depreciated:
Land and water shares $ 262,935 - - 262,935
Construction in progress 80,356 (18,610)-61,746
Total capital assets, not being depreciated 343,292 (18,610)-324,682
Capital assets, being depreciated:
Water system 5,160,358 43,352 - 5,203,710
Sewer system 6,795,542 84,356 - 6,879,898
Machinery & equipment 766,206 64,858 -831,064
Total capital assets, being depreciated 12,722,105 192,566 -12,914,672
Less accumulated depreciation for:
Water system 2,488,196 162,283 - 2,650,479
Sewer system 3,056,043 153,556 - 3,209,599
Machinery & equipment 624,777 30,520 -655,296
Total accumulated depreciation 6,169,016 346,359 -6,515,375
Total capital assets being depreciated, net 6,553,090 (153,792)-6,399,297
Business-type activities capital assets, net $ 6,896,381 (172,402)-6,723,979
Depreciation expense was charged to functions/programs of the primary government business-type
activities as follows:
35
Business-type activities:
Water $ 187,986
Sewer 158,372
Total $ 346,359
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
3-D. Long-term debt
36
Due
Original % Within
Principal Rate 6/30/2009 Additions Reductions 6/30/2010 One Year
Governmental activities:
2007 Lease Chargers(3) $ 75,118 4.50 $ 26,149 - 26,149 - -
Matures 11/28/2009
2008 Lease Vehicles 87,500 3.26 59,264 - 59,264 - -
Matures 3/5/2011
2008 Lease Equipment 305,385 3.86 207,420 - 207,420 - -
Matures 6/24/2011
2009 Equipment lease 270,500 4.25 270,500 - 49,693 220,807 51,805
Matures 3/24/2014
2010 Refinance Vehicles 301,880 4.25 - 301,880 62,211 239,669 56,230
Matures 6/24/2014
2003 Sales Tax Revenue 2,050,000 2.50 1,800,000 - 66,000 1,734,000 68,000
Matures 10/1/2029
2009 Sales Tax Revenue Bonds 4,764,000 - - 4,764,000 - 4,764,000 191,000
Matures 10/1/2035
Total governmental activity
long-term liabilities $2,363,333 5,065,880 470,737 6,958,476 367,035
Bond debt service requirements to maturity for governmental activities are as follows:
Principal Interest Total
2011 $ 367,035 62,920 429,955
2012 373,626 56,629 430,255
2013 379,413 50,092 429,505
2014 386,403 43,327 429,730
2015 266,000 36,300 302,300
2016 - 2020 1,360,000 152,375 1,512,375
2021 - 2025 1,412,000 99,225 1,511,225
2026 - 2030 1,470,000 39,275 1,509,275
2031 - 2035 944,000 - 944,000
2036 - 2035 - - -
Total $6,958,477 540,143 7,498,620
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
3-D. Long-term debt (continued)
Due
Original % Within
Principal Rate 6/30/2009 Additions Reductions 6/30/2010 One Year
Business-type activities:
1993B BWR Water Revenue $ 764,000 - $ 33,240 - 33,240 - -
Matures 1/1/2010
1993A BWR Water Revenue 765,000 - 3,240 - 3,240 - -
Matures 1/1/2014
Total business-type activity
long-term liabilities $36,480 - 36,480 - -
Business-type revenue bond debt service requirements were paid off in full during the current year and
no new long-term debt was issued.
Other long-term liabilities:
Beginning
Increase
(Decrease)Ending
Compensate absences:
Governmental $ 281,021 11,548 292,569
Business-type 34,079 5,072 39,151
Total $ 315,100 16,620 331,720
3-E. Interfund receivables, payables, and transfers
Interfund transfers:
Transfers Out:
37
General
Water and
Sewer Storm Drain Total
Transfers In:
General fund $ - 325,000 19,500 344,500
Recreation 136,735 - - 136,735
Capital projects 127,000 --127,000
Total $ 263,735 325,000 19,500 608,235
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.
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
38
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:
The City contributes to the Local Governmental Noncontributory Retirement System (Noncontributory
System) and Public Safety Retirement System (Public Safety System) for employers with (without)
Social Security coverage, all of which are cost-sharing multiple-employer defined benefit pension plans
administered by the Utah Retirement Systems (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.
Funding Policy:
The City is required to contribute a percent of covered salary to the respective systems: 11.66% to the
Noncontributory and 23.34% to the Public Safety Noncontributory Systems. 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 various systems for the years ending June 30, 2010, 2009 and 2008
respectively, were: for the Noncontributory System, $211,007, $211,289, and $183,919, and for the
Public Safety Noncontributory $119,256, $126,600, and $108,375, respectively. The contributions were
equal to the required contributions for each year.
Moab City
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
39
4-C. Landfill agreement
Moab City entered into an agreement with the Grand County Sold 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 $164,126 for the Klondike Landfill and for the Moab Landfill.
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41
REQUIRED SUPPLEMENTAL INFORMATION
(Unaudited)
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Moab City
Notes to Required Supplementary Information
June 30, 2010
43
Budgetary Comparison Schedules
The Budgetary Comparison Schedules presented in this section of the report are for the Town'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, 2010, spending for all departments spending was within the appropriated
budget.
Moab City
SCHEDULE OF REVENUES, EXPENDITUES AND
CHANGED IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL FUND
(Unaudited)
For the Year Ended June 30, 2010
44
Budgeted
Original
Budgeted
Final Actual
Variance with
Final Budget
Under (Over)
Revenues
Taxes $ 4,556,100 4,556,100 4,982,646 (426,546)
Licenses and permits 109,300 109,300 128,063 (18,763)
Intergovernmental revenues 220,000 220,000 208,933 11,067
Charges for services 919,700 930,700 941,079 (10,379)
Fines and forfeitures 64,500 64,500 48,400 16,100
Interest 44,500 44,500 12,425 32,076
Miscellaneous revenue 124,800 124,800 119,398 5,402
Total revenues 6,038,900 6,049,900 6,440,943 (391,043)
Expenditures
General government 1,536,989 1,560,279 1,467,813 92,466
Public safety 2,047,669 2,022,386 1,805,972 216,414
Highways and public improvements 2,206,580 2,202,330 1,963,622 238,708
Parks and recreation 556,935 556,935 504,346 52,589
Debt Service:
Principal - 404,737 404,736 1
Interest -24,469 24,467 2
Total expenditures 6,348,173 6,771,136 6,170,958 600,178
Excess (Deficiency) of Revenues
Over (Under) Expenditures $ (455,928)(751,889)269,986 (1,021,875)
Other Financing Sources and (Uses)
Proceeds from sale of bonds 55,000 350,961 301,880 49,081
Proceeds from sale of fixed assets - - 2,875 (2,875)
Transfers in 664,663 664,663 344,500 320,163
Transfers (out) (263,735)(263,735)(263,735)-
Total Other Financing Sources and (Uses) 455,928 751,889 385,520 366,369
Net Change in Fund Balances - - 655,506 (655,506)
Fund Balances - beginning of year 926,653 926,653 926,653 -
Fund Balances - end of year $ 926,653 926,653 1,582,159 (655,506)
45
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ON
INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN
AUDIT OF GENERAL -PURPOSE FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
October 14, 2010
Honorable Mayor and
Members of the City Council
Moab City, Utah
Mayor and Council Members:
We have audited the accompanying basic financial statements of Moab City, Utah (herein
referred to as the “City”), as of and for the year ended June 30,2010, and have issued our report
thereon dated October 14, 2010. 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.
Compliance
As part of obtaining reasonable assurance about whether the City’s basic financial statements are
free of material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts and grants, 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 that are required to be reported under Government Auditing Standards.
However, we noted certain immaterial instances of noncompliance that we have reported to
management of the City in the management letter.
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 on 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.
46
Our consideration of internal control over financial reporting was for the limited purpose
described in the preceding paragraph and would not necessarily identify all deficiencies in
internal control over financial reporting that might be significant deficiencies or material
weaknesses. However, as discussed below, we identified certain deficiencies in internal control
over financial reporting that we consider to be significant deficiencies.
A control deficiency 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 significant deficiency is a control deficiency, or combination
of control deficiencies, that adversely affects the City’s ability to initiate, authorize, record,
process, or report financial data reliably in accordance with generally accepted accounting
principles such that there is more than a remote likelihood that a misstatement of the City ’s
financial statements that is more than inconsequential will not be prevented or detected by the
City’s internal control. We consider the deficiencies described in the accompanying manage ment
letter to be significant deficiencies in internal control over financial reporting.
A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material misstatement of the financial statements
will not be prevented or detected by the City’s internal control.
Our consideration of the internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify all deficiencies
in the internal control that might be significant deficiencies and, accordingly, would not
necessarily disclose all significant deficiencies that are also considered to be material
weaknesses.However, we believe that none of the significant deficiencies described in the
management letter are a material weakness.
This report is intended for the information of the Mayor and City Council, management, and
various federal and state funding and auditing agencies and is not intended to be and should not
be used by anyone other than these specified parties.
Larson & Rosenberger, LLP
Certified Public Accountants
47
INDEPENDENT AUDITORS’ REPORT ON LEGAL COMPLIANCE WITH
APPLICABLE UTAH STATE LAWS AND REGULATIONS
October 14, 2010
Honorable Mayor and
City Council Members
Moab City, Utah
Mayor and Council Members:
We have audited the basic financial statements of Moab City, Utah,(herein referred to as the
“City”)as of and for the year ended June 30,2010 , and have issued our report thereon dated
October 14, 2010. As part of our audit, we have audited Moab City’s compliance with the
requirements governing types of services allowed or un-allowed; eligibility; matching, level of
effort, or earmarking; reporting; special tests and provisions applicable to each of its major State
assistance programs as required by the State of Utah Legal Compliance Audit Guide for the year
ended June 30,2010 . The City received the following major State assistance programs from the
State of Utah:
B & C Road Funds (Department of Transportation)
Liquor Law Enforcement (State Tax Commission)
Our audit also included test work on the City’s compliance with those general compliance
requirements identified in the State of Utah Legal Compliance Audit Guide, including:
Public Debt
Cash Management
Purchasing Requirements
Budgetary Compliance
Truth in Taxation and Property Tax Limitations
Other General Compliance Issues
Impact Fees and Other Development Fees
Justice Courts Compliance
Asset Forfeiture
Utah Retirement System Compliance
Uniform Building Code Standards
Fund Balance
48
The management of Moab City is responsible for the City's compliance with all compliance
requirements identified above. Our responsibility is to express an opinion on compliance with
those requirements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and
Government 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 material noncompliance with the requirements referred to above occurred. An audit
includes examining, on a test basis, evidence about the City’s compliance with those
requirements. We believe that our audit provides a reasonable basis for our opinion.
The results of our audit procedures disclosed immaterial instances of noncompliance with the
requirements referred to above, which are described in a the management letter dated October
14, 2010. We considered these instances of noncompliance in forming our opinion on
compliance, which is expressed in the following paragraph.
In our opinion,Moab City, Utah , complied, in all material respects, with the general compliance
requirements identified above and the requirements governing types of services allowed or un-
allowed; eligibility; matching, level of effort, or earmarking; reporting; and special tests and
provisions that are applicable to each of its major State assistance programs for the year ended
June 30,2010.
Larson & Rosenberger, LLP
Certified Public Accountants