HomeMy Public PortalAbout2007-2008 annual final auditCITY OF MOAB, UTAH
INDEPENDENT AUDITORS' REPORT
BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2008
CITY OF MOAB, UTAH
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2008
Pages
INDEPENDENT AUDITORS' REPORT 1-2
MANAGEMENT'S DISCUSSION AND ANALYIS MDA-1 thru MDA-6
BASIC FINANCIAL STATEMENTS:
Government -wide Financial Statements:
Statement of Net Assets 3
Statement of Activities 4
Fund Financial Statements:
Balance Sheet — Governmental Funds 5
Reconciliation of Total Governmental Fund Balances to
Net Assets of Governmental Activities 6
Statement of Revenues, Expenditures, and Changes in
Fund Balance — Governmental Funds 7
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 8
Statement of Revenues, Expenditures, and Changes in
Fund Balances — Budget and Actual — General Fund 9-10
Statement of Net Assets — Proprietary Funds 11
Statement of Revenues, Expenses, and Changes in
Fund Net Assets — Proprietary Funds 12
Statement of Cash Flows — Proprietary Funds 13
Notes to the Financial Statements 14-35
SUPPLEMENTARY INFORMATION:
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet — Non -major Governmental Funds 36
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances — Non -major Governmental Funds 37
Impact Fee Schedule 38
LARSON & ROSENBERGER LLP
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
October 8, 2008
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, 2008, 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,
2008, and the respective changes in financial position and cash flows, where applicable, and the
budgetary comparison for the general fund thereof for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
SALT LAKE CITY OFFICE
9065 SOUTH 1300 EAST
SANDY, UTAH 24094
(801)313-1900
FAX (801) 313-1912
LOS ANGELES OFFICE
801 NORTH BRAND BLVD STE 1180
GLENDALE, CALIFORNIA 91203
(818) 334-8623
FAX (818) 241-7353
SPANISH FORK OFFICE
765 NORTH MAIN
SPANISH FORK, UTAH 84660
(801) 798-3545
FAX (801) 798-3678
1
MO/LB OFFICE
115 WEST 200 SOUTH 44
MOAB. UTAH 84532
(435) 259-9100
FAX (435) 259-1100
MEMBER ❑ F THE I N T E R N A T I O N A L ACCOUNTING GROUP ( T I R O) + W W W. L A R S C O. C O M
The Management's Discussion and Analysis on pages MDA-1 through MDA-6 is not a required part
of the basic financial statements but is supplementary information required by accounting principles
generally accepted in the United States of America. Additionally, the State of Utah requires the
information in the Impact Fee Schedule on page 38, but it is not a required part of the basic financial
statements. 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 October 8,
2008, 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. The
purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on the internal
control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Moab's basic financial statements. The combining non -major fund
financial statements on pages 36-37 are presented for purposes of additional analysis and are not a
required part of the basic financial statements. The combining non -major fund financial statements
have been subjected to the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
04 ,kwf gL4,47,, L_(_
Larson & Rosenberger, LLP
Certified Public Accountants
2
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Moab, we offer readers of the City of Moab financial
statements this narrative overview and analysis of the financial activities of the City for
the fiscal year ended June 30, 2008. It is designed to provide an overview of the City's
financial activity. It is also intended to assist the reader in focusing on significant
financial issues including identifying changes in the City's financial position (its ability
to address the next and subsequent years' challenges), identifying any material deviations
from the approved budget, and identifying individual fund issues or concerns. We
encourage readers to consider the information presented here in conjunction with the
Transmittal Letter and the City's financial statements.
FINANCIAL HIGHLIGHTS
• The total net assets of City of Moab increased by $1,274,217 to $21,182,275.
The governmental net assets increased by $637,613 and the business -type net
assets increased by $636,604.
• The total net assets of $21,182,275 are made up of $15,076,679 in capital
assets net of related debt and $6,105,596 in other net assets.
• The General Fund (the primary operating fund) had an increase in its fund
balance of $296,322, due to an increase in revenue and significant revenue
over expenditures.
REPORTING THE CITY AS A WHOLE
The discussion and analysis is intended to serve as an introduction to the City of Moab's
basic financial statements. The City of Moab's basic financial statements comprise three
components: 1) government -wide financial statements, 2) fund financial statements, and
3) notes to the financial statements. This report also includes other supplementary
information in addition to the basic financial statements.
The government -wide financial statements are designed to provide readers with a broad
overview of the City of Moab's finances, in a manner similar to a private -sector business.
• The statement of net assets presents information on all of the City of Moab'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 of Moab is improving or
deteriorating. However, other non -financial factors will need to be
considered.
• 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,
MDA-1
regardless of the timing of related cash flows. Thus, all of the current year's
revenues and expenses are taken into account regardless of when cash is
received or paid.
Both of the government -wide financial statements distinguish functions of the City of
Moab 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 government -wide financial statements can be found on pages 3-4 of this report.
REPORTING THE CITY'S MOST SIGNIFICANT FUNDS
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 of
Moab 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 three
categories: governmental funds, proprietary funds, and fiduciary funds.
• Governmental funds — These funds are used to account for the same functions
reported as governmental activities in the government -wide financial
statements. These fund statements focus on how money flows into and out of
these funds and the balances left at year-end that are available for spending.
These funds are reported using an accounting method called modified accrual
accounting, which measures cash and other financial assets that can be readily
converted to cash. The governmental fund statements provide a detailed
short-term view of the City's general government operations and the basic
services it provides. Governmental fund information helps interested persons
determine whether there are more or fewer financial resources that can be
spent in the near future to finance the City's programs. We describe the
relationship (or differences) between governmental activities (reported in the
Statement of Net Assets and the Statement of Activities) and governmental
funds in a reconciliation included with the fund financial statements.
The only major governmental fund (as determined by generally accepted
accounting principles) is the General Fund. The balance of the governmental
funds are determined to be non -major and are included in the combining
statements within this report.
• Proprietary funds — The only type of proprietary funds that the City of Moab
maintains are the Water and Sewer Enterprise Fund, and the Storm Drain
Enterprise Fund.
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As determined by generally accepted accounting principles, the Water and
Sewer enterprise fund meets the criteria for major fund classification.
• Fiduciary funds — These funds are used to account for resources held for the
benefit of parties outside the government. Fiduciary funds are not reflected in
the government -wide financial statements because the resources of those
funds are not available to support the City's own programs. The accounting
method used for these funds is much like that used for proprietary funds.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of a
government's financial position. In the case of the City of Moab, assets exceed
liabilities by $21,182,275.
The largest portion of the City of Moab's net assets (71.18%) reflects its investment
in capital assets (e.g., land, buildings, infrastructure assets, and machinery and
equipment), less any related debt used to acquire those assets that is still outstanding.
The City uses these capital assets to provide services to citizens; consequently, these
assets are not available for future spending. Although the City's investment in its
capital assets is reported net of related debt, it should be noted that the resources
needed to repay this debt must be provided from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
A summary financial information for June 30, 2007 and 2008 follow:
City of Moab
Net Assets
June 30, 2008 and 2007
Current and other assets
Capital assets
Total assets
Other liabilities
Long-term liabilities outstanding
Total liabilities
Net assets:
Invested in capital assets, net
of related debt
Restricted
Unrestricted
Total net assets
Governmental Activities
2008
$ 4,384,774
10,113,040
14,497,814
668,562
2,092,833
2,761,395
8,248,040
228,362
3,260,017
$ 11,736,419
2007
$ 3,731,946
9,718,155
13,450,101
410,873
1,940,422
2,351,295
Business -type Activities
2008 2007
$ 2,653,116 $ 2,210,817
6,943,120 7,028,139
9,596,236 9,238,956
113,899 314,223
36,481 115,481
150,380 429,704
Total
2008
$ 7,037,890
17,056,160
24,094,050
782,461
2,129,314
2,911,775
7,790,155 6,828,639 6,625,990 15,076,679
354,806 1,532,874 1,444,628 1,761,236
2,953,845 1,084,343 738,634 4,344,360
$ 11,098,806 $ 9,445,856 $ 8,809,252 $ 21,182,275
2007
$ 5,942,763
16,746,294
22,689,057
725,096
2,055,903
2,780,999
14,416,145
1,799,434
3,692,479
$ 19,908,058
City of Moab
Changes in Net Assets
June 30, 2008 and 2007
Governmental Activities
Business -type Activities Total
2008 2007 2008 2007 2008 2007
Revenues:
Program revenues:
Charges for services $ 1,340,937 $ 1,621,091 $ 1,270,875 $ 1,419,919 $ 2,611,812 $ 3,041,010
Operating grants and contribs 516,299 723,652 - - 516,299 723,652
Capital grants and contribs 460 41,650 189,243 160,441 189,703 202,091
General revenues:
General sales and use tax 1,427,015 1,293,975 - - 1,427,015 1,293,975
Franchise tax 229,883 222,599 - - 229,883 222,599
Highway tax 434,970 403,153 - - 434,970 403,153
Transient room tax 463,760 272,001 - - 463,760 272,001
Resort community tax 2,314,087 2,275,687 - - 2,314,087 2,275,687
Energy tax 68,095 57,887 - - 68,095 57,887
Unrestricted investment earnings 151,072 174,560 104,268 86,906 255,340 261,466
Other 97,810 184,047 - - 97,810 184,047
Gain(loss) on sale of assets (69,696) - - - (69,696)
Transfers - - - -
Total revenues 6,974,692 7,270,302 1,564,386 1,667,266 8,539,078 8,937,568
Expenses:
General government 1,630,300 1,670,428 - - 1,630,300 1,670,428
Public safety 1,707,655 2,030,682 - - 1,707,655 2,030,682
Highways and public works 1,286,433 1,391,382 - - 1,286,433 1,391,382
Sanitation 786,467 764,138 - - 786,467 764,138
Parks and recreation 904,724 654,680 - - 904,724 654,680
Community and economic development 21,500 26,500 - - 21,500 26,500
Water Utility - 511,532 698,444 511,532 698,444
Sewer Utility - 406,203 583,999 406,203 583,999
Storm Drain Utility - 10,047 - 10,047
Total expenses 6,337,079 6,537,810 927,782 1,282,443 7,264,861 7,820,253
Increase in net assets 637,613 732,492 636,604 384,823 1,274,217 1,117,315
Net assets - beginning 11,098,806 10,366,314 8,809,252 8,424,429 19,908,058 18,790,743
Net assets - ending $ 11,736,419 $ 11,098,806 $ 9,445,856 $ 8,809,252 $ 21,182,275 $ 19,908,058
FINANCIAL ANALYSIS OF GOVERNMENT'S FUNDS
The focus of the City's governmental funds is to provide information on near -term
inflows, outflows, and balances of spendable resources. Such information is useful in
assessing the City's financing requirements.
As of June 30, 2008, the City's governmental funds (General, Capital Projects, &
Special Revenue) reported combined fund equity of $4,235,041. This represents an
increase of $541,321 from last year's ending balances; this increase is due to carrying
over the aquatic center project to the next fiscal year.
The General Fund is the chief operating fund of the City. All activities that are not
required to be accounted for in separate funds either by state or local ordinance or by
a desire to maintain a matching of revenues and expenses are accounted for in this
fund. Taxes continue to be the largest source of revenue in the General Fund and
represent 78.55% of total general fund revenues.
As stated earlier, the City maintains an enterprise fund to account for the business -
type activities of the City. The fund statements included in this report provide the
same information for business -type activities as is provided in the government -wide
financial statements. However, the difference is that the fund statements provide
much more detail.
GENERAL FUND BUDGETARY HIGHLIGHTS
During the fiscal year, the General Fund budget was amended from an original budget
expenditure total of $6,587,345 to a final budget of $6,972,445. This increase was
made because of various minor adjustments to general fund department expenditures
comprised mainly of equipment purchases.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital assets — The City of Moab's investment in capital assets for its governmental
and business -type activities as of June 30, 2008, amounts to $17,056,160 (net of
accumulated depreciation). This investment in capital assets includes land, buildings
and systems, improvements, infrastructure (streets, sidewalks, curb and gutter, etc.),
and machinery and equipment.
Major capital asset events during this fiscal year included the following:
o North Area Trunk Sewer $37,892
o Municipal Building Project $71,946
o City Center/Center Street Project $397,162
o Ball Park Improvements $126,298
o Animal Shelter $551,537
Long-term debt — At June 30, 2008, the City had total bonded debt outstanding of
$1,979,481. All of this debt is revenue bond debt. The City of Moab has no general
obligation debt.
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ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES
• The unemployment rate for Grand County was 4.7% compared with a state
unemployment rate of 2.6% and a national rate of 4.6%. (Source: Utah Dept
of Workforce Services).
• Some capital improvements expected in the FY 2007-08 budget include:
o Moab Arts and Recreation Center Roof Project
o Reconstruction of 500 West
o Animal Shelter Improvements
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City of Moab's
finances for all those with an interest in the City's finances. Questions concerning any
information provided in this report or request for additional financial information should
be addressed to: City Recorder, City of Moab of Moab, 217 East Center Street, UT
84532.
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BASIC FINANCIAL STATEMENTS
City of Moab
Statement of Net Assets
June 30, 2008
Primary Government
Governmental Business -type
Activities Activities
Total
ASSETS
Cash and cash equivalents $ 2,915,639 $ 393,066 $ 3,308,705
Accounts receivable - (net of allowance) 573,444 115,725 689,169
Deposits 6,119 6,119
Note receivable 519,689 519,689
Restricted cash and cash equivalents 369,883 2,144,325 2,514,208
Capital assets (net of accumulated depreciation):
Land (Not being depreciated) 371,977 244,935 616,912
Buildings 4,158,974 175,135 4,334,109
Improvements 1,458,436 6,392,506 7,850,942
Machinery and equipment 777,179 112,146 889,325
Automobiles and trucks 1,037,752 398 1,038,150
Office equipment 418,192 418,192
Water shares (Not being depreciated) - 18,000 18,000
Infrastructure 1,890,530 - 1,890,530
Total assets 14,497,814 9,596,236 24,094,050
LIABILITIES
Accounts payable and accrued liabilities
Customer deposits
Compensated absences
Noncurrent liabilities:
Due within one year
Due in more than one year
Total liabilities
149,733
- 7,656
278,355 28,243
240,474 78,000
2,092,833 36,481
2,761,395
149,733
7,656
306,598
318,474
2,129,314
150,380 2,911,775
NET ASSETS
Invested in capital assets, net of related debt 8,248,040 6,828,639 15,076,679
Restricted for:
Class "C" roads 228,362 228,362
Bond requirements - 325,912 325,912
Impact fees - 1,206,962 1,206,962
Unrestricted 3,260,017 1,084,343 4,344,360
Total net assets $ 11,736,419 $ 9,445,856 $ 21,182,275
The Notes to the Financial Statements are an integral part of this statement. 3
Function/Programs
Primary government:
Governmental activities:
General government
Public safety
Highways and public works
Sanitation
Parks, recreation and public property
Community and economic development
Total governmental activities
Business -type activities:
Water Utility
Sewer Utility
Storm Drain Utility (Non -major)
Total business -type activities
Total primary government
Expenses
City of Moab
Statement of Activities
For the Year Ended June 30, 2008
Program Revenues
Charges for
Services
Operating Capital
Grants and Grants and
Contributions Contributions
Net (Expense) Revenues and Changes in Net Assets
Primary Government
Governmental Business -type
Activities Activities
$1,630,300 $ 49,592 $ 205,449 $ $ (1,375,259)
1,707,655 185,173 5,695 (1,516,787)
1,286,433 235,189 (1,051,244)
786,467 825,721 39,254
904,724 280,451 69,966 460 (553,847)
21,500 - (21,500)
6,337,079 1,340,937 516,299 460 (4,479,383)
511,532 531,930
406,203 728,134
10,047 10,811
26,981
162,262
927,782 1,270,875 189,243
$7,264,861 $ 2,611,812 $ 516,299 $ 189,703 (4,479,383)
General revenues:
General sales and use tax
Franchise tax
Highway tax
Transient room tax
Resort community tax
Energy tax
Unrestricted investment earnings
Miscellaneous
Gain (loss) on sale of assets
Total general revenues
Change in net assets
Net assets - beginning
Net assets - ending
1,427,015
229,883
434,970
463,760
2,314,087
68,095
151,072
97,810
(69,696)
47,379
484,193
764
Total
$ (1,375,259)
(1,516,787)
(1,051,244)
39,254
(553,847)
(21,500)
(4,479,383)
47,379
484,193
764
532,336 532,336
532,336 (3,947,047)
104,268
5,116,996 104,268
1,427,015
229,883
434,970
463,760
2,314,087
68,095
255,340
97,810
(69,696)
5,221,264
637,613 636,604 1,274,217
11,098,806 8,809,252 19,908,058
$ 11,736,419 $ 9,445,856 $ 21,182,275
The Notes to the Financial Statements are and integral part of this statement.
City of Moab
Balance Sheet
Governmental Funds
June 30, 2008
Capital Other Total
General Projects Governmental Governmental
Fund Fund Funds Funds
ASSETS
Cash and cash equivalents $1,582,429 $ 1,234,113 $ 99,097 $ 2,915,639
Receivables (net):
Garbage 70,958 - 70,958
Franchise tax 15,702 - 15,702
Sales and use tax 476,253 - 476,253
Other 9,473 - 1,058 10,531
Deposits 6,119 - 6,119
Notes receivable - 519,689 519,689
Restricted assets:
Cash and cash equivalents 228,362 141,521 369,883
Total assets $2,389,296 $ 1,895,323 $ 100,155 $ 4,384,774
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 8,212 $ - $ $ 8,212
Accrued Liabilities - 141,521 $ 141,521
Total liabilities 8,212 141,521 149,733
Fund Balances:
Fund balances reserved for:
Class "C" roads 228,362 - 228,362
Recreation - - 97,196 97,196
Youth city council - 2,959 2,959
Unreserved, reported in:
General fund 2,152,722 - 2,152,722
Capital projects funds - 1,753,802 1,753,802
Total fund balances 2,381,084 1,753,802 100,155 4,235,041
Total liabilities and fund balances $2,389,296 $ 1,895,323 $ 100,155 $ 4,384,774
The Notes to the Financial Statements are an integral part of this statement. 5
City of Moab
Reconciliation of Total Governmental Fund Balances to
Net Assets of Governmental Activities
June 30, 2008
Amounts reported for governmental activities in the statement of net assets are
different because:
Total fund balances - governmental fund types (page 5): $ 4,235,041
Capital assets used in governmental activities are not financial resources and, therefore,
are not reported in the funds. 10,113,040
Long-term liabilities, including bonds payable, are not due and payable in the current
period and therefore are not reported in the funds. (2,611,662)
Net assets of government activities (page 3): $ 11,736,419
The Notes to the Financial Statements are an integral part of this statement. 6
City of Moab
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2008
Capital Other Total
General Projects Governmental Governmental
Fund Fund Funds Funds
REVENUES
Taxes $ 4,937,810 $ $ $ 4,937,810
Licenses and permits 150,726 - - 150,726
Intergovernmental 240,884 205,449 69,966 516,299
Charges for services 920,272 - 185,900 1,106,172
Fines and forfeitures 84,039 - - 84,039
Contributions and donations - 460 - 460
Interest Income - 54,918 122 55,040
Miscellaneous revenue 151,804 44,005 - 195,809
Total revenues 6,485,535 304,832 255,988 7,046,355
EXPENDITURES
Current:
General government
Public safety
Highways and public works
Sanitation
Parks, recreation and public property
Community and economic development
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess revenues over (under)
expenditures
OTHER FINANCING SOURCES (USES)
Proceeds from debt issuance
Proceeds from sale of assets
Transfers in
Transfers out
Total other financing sources and uses
Excess of revenues and other sources
over (under) expenditures and other uses
Fund balances - beginning
Fund balances - ending
1,499,006
1,713,733
1,428, 354
786,467
527,957
21,500
455,481
1,499,006
- 1,713,733
- 1,428,354
- 786,467
354,579 882,536
- 21,500
- 455,481
63,000 63,000
48,200 - 48,200
5,977,017 566,681
354,579 6,898,277
508,518 (261,849) (98,591) 148,078
390,918
2,325
(605,439)
(212,196)
390,918
- - 2,325
513,883 91,556 605,439
- - (605,439)
513,883 91,556 393,243
296,322 252,034 (7,035) 541,321
2,084,762 1,501,768 107,190 3,693,720
$ 2,381,084 $ 1,753,802 $ 100,155 $ 4,235,041
The Notes to the Financial Statements are an integral part of this statement. 7
City of Moab
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, 2008
Amounts reported for governmental activities in the statement of activities are
different because:
Net changes in fund balances - total governmental funds $ 541,321
Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense.
Capital outlay
Depreciation expense
Difference between proceeds from sale of assets and the actual gain(loss)
Repayment of the principal on capital leases is an expenditure in the governmental
funds, but the repayment reduces the liability in the statement of net assets.
The issuance of new debt in the form of a capital leases and a bond is shown as revenue
in the statement of revenues, expenditures and changes in fund balance, but the issuance
increases the long term liabilities in the statement of net assets.
Some expenses reported in the statement of activities do not require the use of
current financial resources and, therefore, are not reported as expenditures in
governmental funds:
Increase in Compensated Absences
881,400
(414,494)
(73,988)
119,285
(390,918)
(24,993)
Change in net assets of governmental activities $ 637,613
The Notes to the Financial Statements are an integral part of this statement. 8
City of Moab
Statement of Revenues, Expenditures and Changes in Fund Balance -- Budget and Actual
General Fund
For the Year Ended June 30, 2008
Taxes:
Sales and use taxes
Franchise taxes
Highway taxes
Transient room taxes
Resort community taxes
Energy taxes
Total Taxes
Budgeted Amounts
Original Final Variance with
Budget Budget Actual Final Budget
$ 1,172,760 $ 1,407,760 $ 1,427,015 $ 19,255
192,770 192,770 229,883 37,113
329,980 329,980 434,970 104,990
335,800 335,800 463,760 127,960
1,991,531 2,131,031 2,314,087 183,056
77,890 77,890 68,095 (9,795)
4,100,731 4,475,231 4,937,810 462,579
Licenses and permits:
Beer licenses 8,000 8,000 7,240 (760)
Flat business licenses 48,000 48,000 48,176 176
Building permits - city 45,000 45,000 55,679 10,679
Building permits - commercial 15,000 15,000 34,363 19,363
Plan check fees 2,500 2,500 3,852 1,352
Other licenses and permits 1,000 1,000 1,416 416
Total licenses and permits 119,500 119,500 150,726 31,226
Intergovernmental revenue:
Local grants
Federal grants
State grants
Total intergovernmental revenue
15,000
5,695
258,000
15,000
5,695
258,000
278,695 278,695
Charges for services:
Refuse collection charges 797,902 827,902
Swimming pool 32,000 32,000
Other 70,000 70,000
Total charges for services 899,902 929,902
Fines and forfeitures
Miscellaneous:
Interest
Other
Administration charges
Total Miscellaneous
67,100 67,100
15,000
5,695
220,189
(37, 811)
240,884 (37,811)
825,721
25,452
69,099
(2,181)
(6,548)
(901)
920,272 (9,630)
84,039 16,939
65,000 65,000 96,032 31,032
68,237 68,237 55,772 (12,465)
133,237 133,237 151,804 18,567
Total Revenues $ 5,599,165 $ 6,003,665 $ 6,485,535 $ 481,870
9
The Notes to The Financial Statements are an integral part of this statement.
City of Moab
Statement of Revenues, Expenditures and Changes in Fund Balance -- Budget and Actual (continued)
General Fund
For the Year Ended June 30, 2008
Budgeted Amounts
Original Final Variance with
Budget Budget Actual Final Budget
General Government:
Executive and central $ 142,250 $ 142,250 $ 141,145 $ (1,105)
Administrative 257,550 257,550 253,453 (4,097)
Recorder 287,393 290,093 273,356 (16,737)
General government 184,750 189,750 178,694 (11,056)
Planning 252,100 271,710 268,035 (3,675)
Engineering 156,975 156,975 142,709 (14,266)
Treasurer 150,032 152,882 149,906 (2,976)
Attorney 84,000 79,000 67,624 (11,376)
Film Commission 43,232 43,232 24,084 (19,148)
Total General government 1,558,282 1,583,442 1,499,006 (84,436)
Public Safety:
Police department
Building inspection
Animal control
Total public safety
1,597,199
63,000
140,720
1,600,139
65,200
148,220
1,800,919 1,813,559
1,493,363 (106,776)
35,443 (29,757)
184,927 36,707
1,713,733 (99,826)
Highways and public improvements:
Storm drains - - -
Streets 1,379,430 1,346,630 1,238,464 (108,166)
Safety 25,140 25,140 20,755 (4,385)
Class C road 387,000 387,000 169,135 (217,865)
Total highways and public improvements 1,791,570 1,758,770 1,428,354 (330,416)
Parks, recreation and public property 414,460 409,460 383,495 (25,965)
Sanitation 760,000 790,000 786,467 (3,533)
Swimming Pool 147,175 147,175 144,462 (2,713)
Community and economic development 21,500 21,500 21,500
Total expenditures - general fund 6,493,906 6,523,906 5,977,017 (546,889)
Excess (deficiency) of revenues over
(under) expenditures: (894,741) (520,241) 508,518 1,028,759
Proceeds from debt 385,930 385,930 390,918 4,988
Transfers out (93,439) (448,539) (605,439) (156,900)
Sale of equipment - 2,325 2,325
Total other financing sources (uses) 292,491 (62,609) (212,196) (149,587)
Net change in fund balance: (602,250) (582,850) 296,322 879,172
Fund Balance - beginning of year 2,084,762 2,084,762 2,084,762
Fund Balance - end of year $ 1,482,512 $ 1,501,912 $ 2,381,084 $ 879,172
The Notes to The Financial Statements are an integral part of this statement.
City of Moab
Statement of Net Assets
Proprietary Funds
June 30, 2008
Business -Type Activities - Enterprise Funds
Non -major
Water Sewer (Storm Drain)
Total
ASSETS
Current assets:
Cash and cash equivalents $ - $ 393,066 $ - $ 393,066
Due from other funds - 1,517,184 - 1,517,184
Accounts receivable (net) 57,881 47,070 10,774 115,725
Total current assets 57,881 1,957,320 10,774 2,025,975
Noncurrent assets:
Restricted cash and cash equivalents
Capital assets
Less: Accumulated depreciation
Total noncurrent assets
Total assets
LIABILITIES
Current liabilities:
Compensated absences
Customer deposits
Due to other funds
Current portion of bonds payable
Total current liabilities
1,240,557
5,722,142
(2,729,066)
4,233,633
903,768
7,059,288
(3,109,244)
2,144,325
12,781,430
(5,838,310)
4,853,812 9,087,445
4,291,514 6,811,132
10,774 11,113,420
14,122
7,656
1,507,174
78,000
14,121
1,606,952 14,121
10,010
28,243
7,656
1,517,184
78,000
10,010 1,631,083
Noncurrent liabilities:
Bonds payable 36,481 36,481
Total noncurrent liabilities 36,481 - 36,481
Total liabilities 1,643,433 14,121 10,010 1,667,564
NET ASSETS
Invested in capital assets, net of related debt 2,878,595 3,950,044 - 6,828,639
Restricted for bond requirements 325,912 - - 325,912
Restricted for impact fees 303,194 903,768 - 1,206,962
Unrestricted (859,620) 1,943,199 764 1,084,343
Total net assets $ 2,648,081 $ 6,797,011 $ 764 $ 9,445,856
The Notes to the Financial Statements are an integral part of this statement. 11
City of Moab
Statement of Revenues, Expenses, and Changes in Fund Net Assets
Proprietary Funds
For the Year Ended June 30, 2008
Business -Type Activities - Enterprise Funds
Non -major
Water Sewer (Storm Drain) Total
Operating revenues:
Charges for service $ 531,361 $ 656,811 $ 10,811 $ 1,198,983
Other operating income 569 71,323 - 71,892
Total operating revenues 531,930 728,134 10,811 1,270,875
Operating expenses:
Salaries and wages 145,027 71,434 2,466 218,927
Employee benefits 86,292 39,812 211 126,315
Contractual services 13,266 42,629 7,000 62,895
Materials and supplies 13,495 20,217 33,712
Special department supplies 35,584 17,024 370 52,978
Depreciation 161,957 163,954 325,911
Other expenses 55,911 46,039 - 101,950
Total operating expenses 511,532 401,109 10,047 922,688
Operating income 20,398 327,025 764 348,187
Nonoperating revenues (expenses):
Interest revenue 45,036 59,232 - 104,268
Interest expense - (5,094) - (5,094)
Impact fees 26,981 162,262 - 189,243
Total nonoperating revenues (expenses) 72,017 216,400 - 288,417
Change in net assets
Total net assets - beginning
Total net assets - ending
92,415 543,425 764 636,604
2,555,666 6,253,586
- 8,809,252
$ 2,648,081 $ 6,797,011 $ 764 $ 9,445,856
The Notes to the Financial Statements are an integral part of this statement. 12
Cash Flows From Operating Activities
Receipts from customers
Payments to suppliers
Payments to employees
Net cash provided (used) by
operating activities
Cash Flows From Capital and Related
Financing Activities
Purchases of capital assets
Principal paid on capital debt
Interest paid on capital debt
Increase/decrease in due to/from other funds
Impact fees collected
Net cash provided (used) by capital
and related financing activities
City of Moab
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2008
Business -Type Activities - Enterprise Funds
Non -major
Water Sewer (Storm Drain) Total
$ 529,755 $ 728,346 $ 37 $ 1,258,138
(113,512) (122,309) (7,370) (243,191)
(231,319) (111,246) (2,677) (345,242)
184,924 494,791 (10,010) 669,705
(232,419) (8,473)
(79,000) (208,668)
(5,094)
695,997 (706,007)
26,981 162,262
411,559 (765,980)
- (240,892)
- (287,668)
- (5,094)
10,010
- 189,243
10,010 (344,411)
Cash Flows From Investing Activities
Interest and dividends received 45,036 59,232 - 104,268
Net cash provided (used) by
investing activities 45,036 59,232 - 104,268
Net increase (decrease) in cash and
cash equivalents
Cash and cash equivalents - beginning
Cash and cash equivalents - ending
641,519 (211,957) 429,562
599,038 1,508,791 2,107,829
$ 1,240,557 $ 1,296,834 $ $ 2,537,391
Reconciliation of operating income to
net cash provided (used) by operating
activities:
Operating income $ 20,398 $ 327,025 $ 764 $ 348,187
Adjustments to reconcile operating
income to net cash provided (used) by
operating activities:
Depreciation expense 161,957 163,954 325,911
(Increase)/decrease in accounts receivable (2,175) 212 (10,774) (12,737)
Increase (decrease) in customer deposits 1,143 1,143
Increase (decrease) in compensated absences 3,601 3,600 7,201
Total adjustments 164,526 167,766 (10,774) 321,518
Net cash provided (used) by
operating activities $ 184,924 $ 494,791 $ (10,010) $ 669,705
The Notes to the Financial Statements are an integral part of this statement. 13
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
INDEX
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Financial Reporting Entity
B. Basis of Presentation
C. Measurement Focus and Basis of Accounting
D. Assets, Liabilities, and Equity
E. Revenues, Expenditures, and Expenses
NOTE 2. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. Fund Accounting Requirements
B. Deposits and Investments Laws and Regulations
C. Revenue Restrictions
D. Debt Restrictions and Covenants
E. Fund Equity Restrictions
F. Budgetary Basis of Accounting
NOTE 3. DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS
A. Cash and Investments
B. Restricted Assets
C. Accounts Receivable
D. Capital Assets
E. Accounts Payable
F. Long-term Debt
G. Interfund Transactions and Balances
H. Fund Equity
NOTE 4. OTHER NOTES
A. Employee Pension and Other Benefit Plans
B. Risk Management
C. Landfill Agreement
14
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City complies with generally accepted accounting principles (GAAP). GAAP includes all relevant
Governmental Accounting Standards Board (GASB) pronouncements. In the government -wide financial
statements and the fund financial statements for the proprietary funds, Financial Accounting Standards
Board (FASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before
November 30, 1989, have been applied unless those pronouncements conflict with or contradict GASB
pronouncements, in which case, GASB prevails. For enterprise funds, GASB Statement Nos. 20 and 34
provide the City the option of electing to apply FASB pronouncements issued after November 30, 1989.
The City has elected not to apply those pronouncements. The accounting and reporting framework and the
more significant accounting policies are discussed in subsequent subsections of this Note.
1.A. FINANCIAL REPORTING ENTITY
Moab City is a political subdivision of the State of Utah. The City is governed by a mayor and an elected
board of five council members. The financial statements of Moab City may include those of separately
administered organizations that are controlled by or are dependent on the City (component units.) Control
or dependence is determined on the basis of financial interdependence, selection of governing authority,
designation of management ability to significantly influence operations and accountability for fiscal
matters. Using these criteria no potential component units are included in the City's financial statements.
The accounting policies of Moab City, Utah, conform to generally accepted accounting principles as
applicable to governmental units. The following is a summary of the more significant of such policies.
The City's financial reporting entity comprises the following:
Primary Government:
Component Units:
City of Moab
None
1.B. BASIS OF PRESENTATION
Government -wide Financial Statements:
The Statement of Net Assets and Statement of Activities display information about the reporting
government as a whole. They include all funds of the reporting entity except for fiduciary funds. The
statements distinguish between governmental and business -type activities. Governmental activities
generally are financed through taxes, intergovernmental revenues, and other non -exchange revenues.
Business -type activities are financed in whole or in part by fees charged to external parties for goods or
services.
Fund Financial Statements:
Fund financial statements of the reporting entity are organized into funds, each of which is considered to
be separate accounting entities. Each fund is accounted for by providing a separate set of self -balancing
accounts that constitute its assets, liabilities, fund equity, revenues, and expenditure/expenses. Funds are
organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on
major funds within the governmental and proprietary categories. A fund is considered major if it is the
primary operating fund of the City or meets the following criteria:
15
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
a. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or
enterprise fund are at least 10 percent of the corresponding total for all funds of that category
or type; and
b. Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental fund
or enterprise fund are at least 5 percent of the corresponding total for all governmental and
enterprise funds combined.
The funds of the financial reporting entity are described below:
Governmental Funds
General Fund
The General Fund is the primary operating fund of the City and always classified as a major
fund. It is used to account for all activities except those legally or administratively required to
be accounted for in other funds.
Special Revenue Funds
Special Revenue Funds are used to account for the proceeds of specific revenue sources that
are legally restricted to expenditures for certain purposes.
Capital Project Fund
The Capital Project Fund is used to account for resources designated for the acquisition or
construction of specific capital projects or items. The reporting entity includes only one
Capital Project Fund and it is used to account for the acquisition of capital assets with
transfers made from the General Fund.
Proprietary Fund
Enterprise Fund
Enterprise funds are used to account for business -like activities provided to the general
public. These activities are financed primarily by user charges and the measurement of
financial activity focuses on net income measurement similar to the private sector. The
reporting entity includes the Water and Sewer funds.
Major and Nonmajor Funds
The funds are further classified as major or non -major as follows:
Fund Brief Description
Major:
General See above for description.
Capital Projects Fund:
Community Development Fund Accounts for activity with the City's
Mill Creek Project Fund capital improvements.
Capital Project Fund
Sanitation Capital Project Fund
16
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Enterprise Funds:
Water and Sewer
Nonmajor:
Special Revenue Funds:
Recreation Fund
Arts and Recreation Center
Youth City Council
Enterprise Fund
Storm Drain
Accounts for revenues and expenditures of
water and sewer utilities.
Accounts for revenues and expenditures for
activities with the recreation, arts and
recreation center and youth city council.
Accounts for revenues and expenditures of
the storm drain utility
1.C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING
Measurement focus is a term used to describe "which" transactions are recorded within the various
financial statements. Basis of accounting refers to "when" transactions are recorded regardless of the
measurement focus applied.
Measurement Focus
On the government -wide Statement of Net Assets and the Statement of Activities, both governmental and
business -like activities are presented using the economic resources measurement focus as defined in item
b. below.
In the fund financial statements, the "current financial resources" measurement focus or the "economic
resources" measurement focus is used as appropriate:
a. All governmental funds utilize a "current financial resources" measurement focus. Only
current financial assets and liabilities are generally included on their balance sheets. Their
operating statements present sources and uses of available spendable financial resources during
a given period. These funds use fund balance as their measure of available spendable financial
resources at the end of the period.
b. The proprietary fund utilizes an "economic resources" measurement focus. The accounting
objectives of this measurement focus are the determination of operating income, changes in net
assets (or cost recovery), financial position, and cash flows. All assets and liabilities (whether
current or noncurrent) associated with their activities are reported. Proprietary fund equity is
classified as net assets.
c. Agency funds are not involved in the measurement of results of operations; therefore,
measurement focus is not applicable to them.
Basis of Accounting
In the government -wide Statement of Net Assets and Statement of Activities, both governmental and
business -like activities are presented using the accrual basis of accounting. Under the accrual basis of
17
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred
or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange
and exchange -like transactions are recognized when the exchange takes place.
In the fund financial statements, governmental funds and agency funds are presented on the modified
accrual basis of accounting. Under this modified accrual basis of accounting, revenues are recognized
when "measurable and available." Measurable means knowing or being able to reasonably estimate the
amount. Available means collectible within the current period or within sixty days after year end.
Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for
general obligation bond principal and interest which are reported when due.
All proprietary funds utilize the accrual basis of accounting. Under the accrual basis of accounting,
revenues are recognized when earned and expenses are recorded when the liability is incurred or economic
asset used.
1.D. ASSETS, LIABILITIES, AND EQUITY
Cash and Investments
For the purpose of the Statement of Net Assets, "cash, including time deposits" includes all demand,
savings accounts, and certificates of deposits of the City. For the purpose of the proprietary fund
Statement of Cash Flows, "cash and cash equivalents" include all demand and savings accounts, and
certificates of deposit or short-term investments with an original maturity of three months or less.
Investments of promissory note trustee accounts are not considered cash equivalents.
Investments are carried at fair value except for short-term U.S. Treasury obligations with a remaining
maturity at the time of purchase of one year or less. Those investments are reported at amortized cost. Fair
value is based on quoted market price. Additional cash and investment disclosures are presented in Notes
2.B. and 3.A.
Interfund Receivables and Payables
During the course of operations, numerous transactions occur between individual funds that may result in
amounts owed between funds. Those related to goods and services type transactions are classified as "due
to and from other funds." Short-term interfund loans are reported as "interfund receivables and payables."
Long-term interfund loans (noncurrent portion) are reported as "advances from and to other funds."
Interfund receivables and payables between funds within governmental activities are eliminated in the
Statement of Net Assets. See Note 3.G. for details of interfund transactions, including receivables and
payables at year-end.
Receivables
In the government -wide statements, receivables consist of all revenues earned at year-end and not yet
received. Allowances for uncollectible accounts receivable are based upon historical trends and the
periodic aging of accounts receivable. Major receivable balances for the governmental activities include;
sales taxes, garbage utilities, franchise taxes, and business licenses. Business -type activities report utilities
as their major receivables.
18
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
In the fund financial statements, material receivables in governmental funds include revenue accruals such
as sales tax, franchise tax, and grants and other similar intergovernmental revenues since they are usually
both measurable and available. Non -exchange transactions collectible but not available are deferred in the
fund financial statements in accordance with modified accrual, but not deferred in the government -wide
financial statements in accordance with the accrual basis. Interest and investment earnings are recorded
when earned only if paid within 60 days since they would be considered both measurable and available.
Proprietary fund material receivables consist of all revenues earned at year-end and not yet received.
Utility accounts receivable and interest earnings compose the majority of proprietary fund receivables.
Allowances for uncollectible accounts receivable are based upon historical trends and the periodic aging
of accounts receivable.
Fixed Assets
The accounting treatment over property, plant, and equipment (fixed assets) depends on whether the assets
are used in governmental fund operations or proprietary fund operations and whether they are reported in
the government -wide or fund financial statements.
Election Not to Report Infrastructure Retroactively
Management of Moab City has elected not to report infrastructure retroactively. This is allowed by
provisions of GASB Statement 34 for all governments with less than $10 million in revenues. The City
began to report infrastructure prospectively during the fiscal year ended in 2004.
Government -wide Statements
In the government -wide financial statements, fixed assets are accounted for as capital assets. All fixed
assets are valued at historical cost, or estimated historical cost if actual is unavailable, except for donated
fixed assets which are recorded at their estimated fair value at the date of donation.
Depreciation of all exhaustible fixed assets is recorded as an allocated expense in the Statement of
Activities, with accumulated depreciation reflected in the Statement of Net Assets. Depreciation is
provided over the assets' estimated useful lives using the straight-line method of depreciation. The range
of estimated useful lives by type of asset is as follows:
Governmental Business -Type
Activities Activities
Description Estimated Lives Estimated Lives
Buildings and Improvements 30-45 years 30-45 years
Machinery and Equipment 10-15 years 10-15 years
Vehicles 5-10 years 5-10 years
Infrastructure 30 years 30 years
19
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Fund Financial Statements
In the fund financial statements, fixed assets used in governmental fund operations are accounted for as
capital outlay expenditures of the governmental fund upon acquisition. Fixed assets used in proprietary
fund operations are accounted for the same as in the government -wide statements.
Restricted Assets
Restricted assets consist of various cash balances that are restricted as to their use. Certain cash balances
are restricted by provisions of the bond resolutions. These include the bond, and emergency repairs
accounts in the enterprise funds. Customer deposits are also restricted in the enterprise funds. Amounts
are held in the agency fund for future burial and cemetery costs. Class C Road revenue not spent is
restricted in the general fund to be used for future roadwork.
Long-term Debt
The accounting treatment of long-term debt depends on whether the assets are used in governmental fund
operations or proprietary fund operations and whether they are reported in the government -wide or fund
financial statements.
All long-term debt to be repaid from governmental and business -type resources is reported as liabilities in
the government -wide statements. The long-term debt consists primarily of notes payable, accrued
compensated absences, and a court -assessed judgment.
Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. The
debt proceeds are reported as other financing sources and payment of principle and interest reported as
expenditures. The accounting for proprietary fund is the same in the fund statements as it is in the
government -wide statements.
Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay
benefits. No liability is reported for unpaid accumulated sick leave. The liability for these compensated
absences is recorded as long-term debt in the government -wide statements. The current portion of this
debt is estimated based on historical trends. In the fund financial statements, governmental funds report
only the compensated absence liability payable from expendable available financial resources, while the
proprietary funds report the liability as it is incurred.
20
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Equity Classifications
Government -wide Statements
Equity is classified as net assets and displayed in three components:
a. Invested in capital assets, net of related debt —Consists of capital assets including restricted
capital assets, net of accumulated depreciation and reduced by the outstanding balances of
any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition,
construction, or improvement of those assets.
b. Restricted net assets —Consists of net assets 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.
c. Unrestricted net assets —All other net assets that do not meet the definition of "restricted"
or "invested in capital assets, net of related debt."
Fund Statements
Governmental fund equity is classified as fund balance. Fund balance is further classified as reserved and
unreserved, with unreserved further split between designated and undesignated. Proprietary fund equity is
classified the same as in the government -wide statements. See Note 3.H. for additional disclosures.
1.E. REVENUES, EXPENDITURES, AND EXPENSES
Franchise taxes, licenses, interest and special assessments are susceptible to accrual. Sales taxes collected
and held by the state at year-end on behalf of the City are also recognized as revenue. Other receipts and
taxes become measurable and available when cash is received by the City and are recognized as revenue at
that time.
Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual
criteria are met. Expenditure -driven grants are recognized as revenue when the qualifying expenditures
have been incurred and all other grant requirements have been met.
The City does not levy property taxes. Sales taxes are collected by the Utah State Tax Commission and
are remitted to the City monthly.
Operating Revenues and Expenses
Operating revenues and expenses for proprietary funds are those that result from providing services and
producing and delivering goods and/or services. It also includes all revenue and expenses not related to
capital and related financing, noncapital financing, or investing activities.
Expenditures/Expenses
In the government -wide financial statements, expenses are classified by function for both governmental
and business -type activities.
21
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
In the fund financial statements, expenditures are classified as follows:
Governmental Funds —By Character:
Current (further classified by function)
Debt Service
Capital Outlay
Proprietary Fund —By Operating and Non -operating
In the fund financial statements, governmental funds report expenditures of financial resources.
Proprietary funds report expenses relating to use of economic resources.
Interfund Transfers
Permanent reallocation of resources between funds of the reporting entity are classified as interfund
transfers. For the purposes of the Statement of Activities, all interfund transfers between individual
governmental funds have been eliminated.
NOTE 2. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
By its nature as a local government unit, the City is subject to various federal, state, and local laws and
contractual regulations. An analysis of the City's compliance with significant laws and regulations and
demonstration of its stewardship over City resources follows.
2.A. FUND ACCOUNTING REQUIREMENTS
The City complies with all state and local laws and regulations requiring the use of separate funds. The
legally required funds used by the City include the following:
Fund
General Fund
Required By
State Law
2.B. DEPOSITS AND INVESTMENTS LAWS AND REGULATIONS
The City maintains a cash and investment pool that is available for use by all funds. In addition,
investments are separately held by several of the City funds. Deposits are not collateralized, nor are they
required to be by State statute.
The City follows the requirements of the Utah Money Management Act (Utah Code Annotated 1953,
Section 51, Chapter 7) in handling its depository and temporary investment transactions. This law
requires the deposit of City funds in a "qualified depository." The Act defines a "qualified depository" as
any financial institution whose deposits are insured by an agency of the federal government and which has
been certified by the Commissioner of Financial Institutions as meeting the requirements of the Utah
Money Management Act and adhering to the rules of the Utah Money Management Council.
22
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
The Utah Money Management Act also defines the types of securities allowed as appropriate temporary
investments for the City and the conditions for making investment transactions. Investment transactions
are to be conducted through qualified depositories or primary reporting dealers.
Deposits
Custodial Credit Risk is the risk that, in the event of a bank failure, the City's deposits may not be
returned to it. The City does not have a formal deposit policy for custodial credit risk. As of June 30,
2008, $915,540 of the City's bank balances of $1,115,540 were uninsured and uncollateralized.
At June 30, 2008, the carrying amount and the bank balance of the City's bank deposits was $712,898,
and $1,115,540 respectively.
Investments
Certain assets are restricted by provisions of the revenue bond resolutions. The resolutions also describe
how these restricted assets may be deposited and invested. Restricted cash may only be deposited in state
or national banks meeting certain minimum net worth requirements or invested in securities representing
direct obligations of or obligations guaranteed by the U.S. government, agencies of the U.S. government,
any state within the territorial United States of America, repurchase agreements or interest bearing time
deposits with state or national banks meeting certain minimum net worth requirements, or certain other
investments.
The Utah Public Treasurers' Investment Fund (UPTIF) is an external deposit and investment pool wherein
governmental entities are able to pool the moneys from several entities to improve investment efficiency
and yield. These moneys are invested primarily in money market securities and contain no withdrawal
restrictions. As such, the moneys invested in this fund are not insured and are subject to the same market
risks as any similar investment in money market funds.
Interest Rate Risk — Interest rate risk is the risk that changes in interest rates will adversely affect the fair
value of an investment. The City's policy for managing its exposure to fair value loss arising from
increasing interest rates is to comply with the State's Money Management Act. Section 51-7-11 of the Act
requires that the remaining term to maturity of investments may not exceed the period of availability of
the funds to be invested.
Credit Risk — The City follows the requirements of the Utah Money Management act (Section 61, chapter
7 of the Utah Code) in handling its depository and investing transactions. City funds are deposited in
qualified depositories as defined by the Act. The Act also authorizes the City to invest in the Utah Public
Treasurers' Investment Fund (UPTIF), trade commercial paper, bankers' acceptances, repurchase
agreements, corporate bonds, restricted mutual funds, and obligation of government entities within the
State of Utah. The UPTIF is invested in accordance with the Act. The State Money Management Council
provides regulatory oversight for the UPTIF. The degree of risk of the UPTIF depends upon the
underlying portfolio. The act and Council rules govern the financial reporting requirements of qualified
depositories in which public funds may be deposited and prescribe the conditions under which the
designation of a depository shall remain in effect. If a qualified depository should become ineligible to
hold public funds, public treasurers are notified immediately. The City considers the actions of the
Council to be necessary and sufficient for adequate protection of its investments. The City has no
investment policy that would further limit its investment choices. The UPTIF is unrated.
23
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
2.C. REVENUE RESTRICTIONS
The City has various restrictions placed over certain revenue sources from state or local requirements. The
primary restricted revenue sources include:
Revenue Source
Sales Tax
Water and Sewer
B & C Road Funds
Federal & State Grants
Legal Restrictions of Use
See Note 1.E.
Debt Service and Utility Operations
Eligible B & C Roads
Specific to Grant
For the year ended June 30, 2008, the City complied, in all material respects, with these revenue
restrictions.
2.D. DEBT RESTRICTIONS AND COVENANTS
General Obligation Debt
No debt in excess of total revenue for the current year shall be created by any city unless the proposition
to create such debt shall have been submitted to a vote of qualified electors. Cities shall not contract for
debt to an amount exceeding four percent of the fair market value of taxable property in their jurisdictions.
For the year ended June 30, 2008, the City had no outstanding general obligation debt.
Other Long-term Debt
Cities may incur a larger indebtedness for the purpose of supplying such city water, sewer, or electricity
when such public works are owned and controlled by the municipality. The additional indebtedness shall
not exceed four percent for first and second class cities and eight percent for third class cities. For the year
ended June 30, 2008, the City had $2,754,386 of such indebtedness.
Notes Payable
The various loan agreements relating to the notes payable issuances contain some restrictions or covenants
that are financial related. These include covenants such as debt service coverage requirement and required
reserve account balances. The following schedule presents a brief summary of the most significant
requirements and the Authority's level of compliance thereon as of June 30, 2008.
Requirement Level of Compliance
a. Note Payable Coverage:
1. Net water operating revenues (excluding depreciation) must equal 1.25 (1.20 for the
1996 Bonds) times the annual debt service plus the unfunded portion of the Debt Service
Reserve Requirement to be due and payable for the forthcoming year on the 1993 Water
Revenue Bonds, Series A & B and the 1996 Sewer Revenue Bond.
b. Reserve Account Requirement:
Various escrows are set up as reserves to make the annual debt payments. Minimum
balances are required to be kept in each of the escrows.
24
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
2.E. FUND EQUITY RESTRICTIONS
Deficit Prohibition
Utah Code 10-6-116(4) indicates that only the "fund balance in excess of 5% of total revenues of the
general fund may be utilized for budget purposes." The remaining 5% must be maintained as a minimum
fund balance. The maximum in the general fund may not exceed 18% of the total estimated revenue of the
general fund. (10-6-116(2)) The City exceeded the limitations allowed by law.
Appropriations in the final budgets may not be made for any fund in excess of the estimated expendable
revenues for the budgeted year. In other words, deficits in any fund are illegal. The City had no funds in
the deficit position at year end.
2.F. BUDGETARY BASIS OF ACCOUNTING
While the City is reporting financial position, results of operations and changes in fund balance on the
basis of generally accepted accounting principles (GAAP), the budgetary basis as provided by law is
based upon accounting for certain transactions on a basis of cash receipts, disbursements and
encumbrances. The Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and
Actual presented for the general fund is presented on the budgetary basis to provide a meaningful
comparison of actual results with the budget.
NOTE 3. DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS
The following notes present detail information to support the amounts reported in the basic financial
statements for its various assets, liabilities, equity, revenues, and expenditures/expenses.
3.A. CASH AND INVESTMENTS
As of June 30, 2008 the government had the following investments and maturities:
Fair Value
Investment Maturity in Years
Less
Than 1
1-5 6-10
More
Than 10
Investments in Public
Treasurers' Investment Fund $5,109,362 $ 5,109,362 $ $ $
Total Fair Value $ 5,109,362 $ 5,109,362 $ - $ - $
25
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Reconciliation to Government -wide Statement of Net Assets:
Investments $ 5,109,362
Cash on hand 652
Deposits (overdraft) 712,898
Total $ 5,822,912
Government -wide Statement of Net Assets
Cash and Cash Equivalents $ 3,308,704
Restricted Cash and Cash Equivalents 2,514,208
$ 5,822,912
3.B. RESTRICTED ASSETS
The restricted assets as of June 30, 2008, are as follows:
Type of Restricted Asset Cash/Time Deposits Investments Accrued Int. Total
Business -Type Activities:
Bond Requirements $ 325,912 $ - $ - $ 325,912
Customer Deposits 7,656 - - 7,656
Impact Fees 1,206,962 - - 1,206,962
Total 1,540,530 - - 1,540,530
Governmental Activities:
Class "C" Roads 228,362 - - 228,362
Total 228,362 228,362
Grand Totals $ 1,768,892 $ $ - $ 1,768,892
3.C. ACCOUNTS RECEIVABLE
Accounts receivable for the business -type activities consist of utilities receivable from the water and sewer
utilities. Accounts receivable of the governmental activities consist of sales tax, garbage utilities, franchise
taxes, and business licenses. Receivables detail at June 30, 2008, is as follows:
Governmental Activities Business -Type Activities Total
Accounts Receivable $ 573,444 $ 121,225 $ 694,669
Allowance for
Doubtful Accounts - (5,500) (5,500)
Net Accounts Receivable $ 573,444 $ 115,725 $ 689,169
26
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
3.D. CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2008, was as follows:
Balance at Balance at
July 1, 2007 Additions Disposals June 30, 2008
Govemmental Activities:
Land $ 371,977 $ - $ $ 371,977
Buildings 4,797,699 55,664 (46,670) 4,806,693
Improvements Other Than Bldgs 1,655,106 303,628 - 1,958,734
Machinery & Equipment 1,115,445 26,086 (95,570) 1,045,961
Autos & Trucks 1,297,739 399,322 (153,116) 1,543,945
Office Equipment 410,710 35,998 (12,669) 434,039
Infrastructure 2,235,391 60,702 - 2,296,093
Totals at historical cost 11,884,067 881,400 (308,025) 12,457,442
Less Accum. Depreciation
Buildings (614,841) (79,548) 46,670 (647,719)
Improvements Other Than Bldgs (436,755) (63,543) (500,298)
Machinery & Equipment (314,365) (29,142) 74,725 (268,782)
Autos & Trucks (476,798) (135,549) 106,154 (506,193)
Office Equipment (9,443) (14,859) 8,455 (15,847)
Infrastructure (313,710) (91,853) - (405,563)
Total Accum. Depreciation (2,165,912) (414,494) 236,004 (2,344,402)
Governmental Activities
capital assets, net $ 9,718,155 $ 466,906 $ (72,021) $ 10,113,040
Business -type activities:
Land $ 244,935 $ - $ - $ 244,935
Water Shares 18,000 - - 18,000
Sewage Plant 1,426,706 - 1,426,706
Improvements 10,152,957 223,944 10,376,901
Machinery & Equipment 520,140 16,947 - 537,087
Autos & Trucks 164,714 - - 164,714
Office Furniture 13,088 - - 13,088
Totals at historical cost 12,540,540 240,891 12,781,431
Less Accum. Depreciation
Sewage Plant (1,216,817) (34,753) (1,251,570)
Improvements (3,727,389) (257,007) (3,984,396)
Machinery & Equipment (396,275) (28,665) - (424,940)
Autos & Trucks (159,081) (5,236) - (164,317)
Office Furniture (12,838) (250) (13,088)
Total Accum. Depreciaiton (5,512,400) (325,911) (5,838,311)
Business -type activities
capital assets, net $ 7,028,140 $ (85,020) $ - $ 6,943,120
27
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Depreciation expense was charged to governmental activities as follows:
General Government $ 75,214
Public Safety 121,166
Highways and Streets 156,677
Parks, Recreation and Public Property 61,437
Total depreciation expense $ 414,494
Depreciation on capital assets acquired under a capital lease:
Equipment $ 637,450
Accumulated Amortization 152,991
Net Book Value $ 484,459
Amortization of capital leases is included in depreciation expense.
3.E. ACCOUNTS PAYABLE
Payables in the general fund and non -major governmental funds are composed of
payables that have to do with the building inspector and a parking escrow.
3.F. LONG-TERM DEBT
The reporting entity's long-term debt is segregated between the amounts to be repaid
from governmental activities and amounts to be repaid from business -type activities.
28
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Governmental Activities:
As of June 30, 2008, the City had $2,611,662 governmental long-term debt detailed as
follows:
Compensated Absences
Sales Tax Revenue Bond
$ 278,355
1,865,000
Capital Leases
2007 Dodge Chargers - Wells Fargo
Original Amt $75,118, Pmts $27,326 51,172
2006 F353 - Wells Fargo
Original Amt $27,485, Pmts $9,886 9,514
2 - 2006 Ford F 150 Trucks
Original Amt $44,207, Pmts $15,960 14,736
2008 Equipment - Zions Bank
Original Amt $305,385, Pmts $109,753 305,385
2008 Vehicles - Zions Bank
Original Amt $87,500, Pmts $31,089 87,500
Total Governmental Long -Term Debt $ 2,611,662
Business -type Activities:
As of June 30, 2008, the long-term debt payable from proprietary fund resources
consisted of the following:
Compensated Absences: $ 28,243
Water Revenue Bonds:
Water Revenue Bonds, Series A, Dated 1993
0%, (original amount $765,000)
Water Revenue Bonds Series A, Dated 1993
0%, (Original amount $764,000)
$ 43,240
71,241
Total Business -type debt $ 142,724
29
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Changes in Long-term Debt
The following is a summary of changes in long-term debt for the year ended June 30,
2007:
Type of Debt
Governmental Activities:
Compensated Absences
Capital Leases Payable
Sales Tax Revenue Bonds
Due Within One Year
Total Governmental Debt
Business -type Activities:
Compensated Absences
Revenue Bonds Payable
Due Within One Year
Total Enterprise Fund Debt
Balance
July 1, 2007
$ 253,362
75,422
1,865,000
119,285
$ 2,313,069
$ 21,042
115,481
286,668
Balance
Additions Deductions June 30, 2008
$ 24,993
392,885
240,474
$ 658,352
$
7,201
78,000
$ 423,191 $ 85,201
$ - $ 278,355
(175,474) 292,833
(65,000) 1,800,000
(119,285) 240,474
$ (359,759) $ 2,611,662
$ -
(79,000)
(286,668)
$ 28,243
36,481
78,000
$ (365,668) $ 142,724
The revenue bonds are payable only from the net revenues of the water and sewer systems,
as defined in the bond ordinances. The ordinances further provide that the City establish
certain accounts and reserves for bond payment and that all revenues of the system are to
be used for operation and maintenance costs of the systems, principal and interest on the
bonds, and establishment of the defined debt repayment reserves and capital facilities
replacement account.
30
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Annual Debt Service Requirements
The annual debt service requirements to maturity, including principal and interest, for
long-term debt as of June 30, 2008, are as follows:
Capital Leases:
June 30
Governmental
Activities
2009 $ 194,013
2010 168,167
2011 140,841
2012
Thereafter
Total Commitment 503,021
Less Interest Portion 34,714
Net Capital Lease $ 468,307
Bonds and Notes Payable:
Business -type Activities Governmental Activities
Year Ending
June 30 Principal Interest Principal Interest
2009 78,000 - 65,000 46,625
2010 36,481 66,000 45,000
2011 - - 68,000 43,350
2012 - - 70,000 41,650
2013 71,000 39,900
2014-2018 - - 385,000 171,875
2019-2023 - - 435,000 121,250
2024-2028 491,000 64,125
2029-2030 - - 214,000 8,050
Total $ 114,481 $ - $ 1,865,000 $ 581,825
31
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
3.G. INTER -FUND TRANSACTIONS AND BALANCES
Operating Transfers
The City had the following inter -fund transactions for the year ended June 30, 2008:
FUND TRANSFERS OUT TRANSFERS IN
General Fund $ 605,439 $ -
Recreation - 91,556
Community Development 28,000
Millcreek Project 80,000
Captial Projects 405,883
TOTALS $ 605,439 $ 605,439
Due to/from other funds
The City had the following inter -fund transactions for the year ended June 30, 2008:
Fund
Water Fund
Sewer Fund
Storm Drain Fund
Due From
Other Funds
1,517,184
Due To
Other Funds
$ 1,507,174
10,010
$ 1,517,184 $ 1,517,184
32
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
3.H. FUND EQUITY
Restricted Fund Equity
Government Business -Type
Activities Activities
Totals
Net Assets
Invested in capital assets, net of related debt $ 8,248,040 $ 6,828,639 $ 15,076,679
Restricted for:
Class "C" roads 228,362 - 228,362
Bond requirements - 325,912 325,912
Impact fees - 1,206,962 1,206,962
Unrestricted 3,260,017 1,084,343 4,344,360
Total net assets 11,736,419
9,445,856 21,182,275
NOTE 4. OTHER NOTES
4A. EMPLOYEE PENSION AND OTHER BENEFIT PLANS
The City participates in the following employee pension systems:
Local Governmental - Cost Sharing Defined Benefits Pension Plans
Plan Description
The City of Moab contributes to the Local Governmental Contributory Retirement
System and Local Governmental Noncontributory Retirement System, Public Safety
Retirement System for employers with Social Security coverage, cost -sharing multiple -
employer defined benefit pensions plans administered by the Utah Retirement Systems
(Systems). Utah Retirement Systems provide refunds, retirement benefits, annual cost of
living adjustments, and death benefits to plan members and beneficiaries in accordance
with retirement statutes.
The Systems are established and governed by the respective sections of Chapter 49 of the
Utah Code Annotated 1953, as amended. The Utah State Retirement Office Act, in
Chapter 49, provides for the administration of the Utah Retirement Systems and Plans
under the direction of the Utah State Retirement 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 Local Governmental
Contributory Retirement System, Local Governmental Noncontributory Retirement
System, and Public Safety Retirement System for employers with Social Security
coverage. 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.
33
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
Funding Policy
In the Local Governmental Noncontributory Retirement System, Moab City is required to
contribute 11.62% of their annual covered salary. In the Public Safety Noncontributory
Retirement System for employers with Social Security coverage, Moab City is required to
contribute 22.61% of their annual covered salary. The contribution rates are the
actuarially determined rates. The contribution requirements of the Systems are
authorized by statute and specified by the Board.
Moab City's contributions to the various systems for the years ending June 30, 2008, 2007,
and 2006 were as follows:
Employer Paid Total
Contributory System: for employee Employer Employer
Local Government Division Contributions Contributions Contributions
2008 $ - $ - $ -
2007
2006 1,800 2,711 4,511
Noncontributory System:
Local Government Division
2008
2007
2006
$
$ 183,919 $ 183,919
162,836 162,836
152,457 152,457
Public Safety System:
Other Division A Noncontributory
2008 $ - $ 108,375 $ 108,375
2007 96,588 96,588
2006 - 73,063 73,063
The contributions were equal to the required contributions for each year.
457 Deferred Compensation Plan
The Utah Retirement Systems (URS) have adopted Governmental Accounting Standards
Board Statement 32, "Accounting and Financial Reporting for Internal Revenue Code
Section 457 Deferred Compensation Plans." This resulted in reporting the 457 Plans as a
"Trust Fund" of URS rather than previously reported as an "Agency Fund" of Moab City.
The assets and income of the 457 Plan are held in trust for the exclusive benefit of the
participants or their beneficiaries and are not the assets of the employer.
34
CITY OF MOAB, UTAH
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008
4.B. 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; injuries to employees; and natural disasters.
The City has purchased comprehensive general liability insurance through the Utah Local
Governments' Trust. The City pays premiums to the Trust for its general insurance
coverage, automobile liability, and personal injury protection. The Trust is self
sustaining through member premiums. The City is subject to a minimal deductible for
claims.
4.C. 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 $249,031 for the Klondike Landfill and for the Moab Landfill.
35
SUPPLEMENTARY INFORMATION
City of Moab
Combining Balance Sheet for Nonmajor Funds
June 30, 2008
ASSETS
Cash and cash equivalents
Accounts receivable
Total assets
Special Revenue Funds Total
Arts and Nonmajor
Recreation Recreation Youth City Governmental
Fund Center Council Funds
$ 94,120 $ 2,018 $ 2,959 $ 99,097
1,058 - - 1,058
$ 95,178 $ 2,018 $ 2,959 $ 100,155
LIABILITIES AND FUND BALANCES
Liabilities:
Total liabilities
FUND BALANCES
Fund balances reserved for:
Recreation 95,178 2,018 97,196
Youth city council - - 2,959 2,959
Total fund balances 95,178 2,018 2,959 100,155
Total Liabilities and fund balance $ 95,178 $ 2,018 $ 2,959 $ 100,155
The Notes to the Financial Statements are an integral part of this statement. 36
City of Moab
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Non -major Governmental Funds
For the Year Ended June 30, 2008
Special Revenue Funds Total
Arts and Nonmajor
Recreation Recreation Youth City Governmental
Fund Center Council Funds
REVENUES
Intergovernmental revenues $ 69,966 $ - $ $ 69,966
Charges for service 185,900 - 185,900
Interest income - - 122 122
Total 255,866 - 122 255,988
EXPENDITURES
Parks, recreation and public property 354,579 - 354,579
Total 354,579 - 354,579
Excess of revenues over
(under) expenditures (98,713) - 122 (98,591)
OTHER FINANCING SOURCES (USES)
Transfers in 91,556 - 91,556
Total other financing sources (uses) 91,556 - 91,556
Excess of revenues and other sources
over (under) expenditures and other uses (7,157) - 122 (7,035)
Fund balances - beginning
Fund balances - ending
102,335 2,018 2,837 107,190
$ 95,178 $ 2,018 $ 2,959 $ 100,155
The Notes to the Financial Statements are an integral part of this statement. 37
City of Moab
Schedule of Impact Fees Collected and Spent
and Capital Facilities Budget for 2009 thru 2014
June 30, 2008
Water Sewer
Capactiy Treatment
Fiscal Facilities Facilities
Year Impact Fee Impact Fee
1999 Collected 3,693 11,273
Spent -
2000 Collected 75,308 145,686
Spent (9,072) -
2001 Collected 57,159 204,373
Spent (6,568) (456)
2002 Collected 14,818 43,139
Spent (5,050) (775)
2003 Collected 22,592 38,769
Spent (8,405) (10,762)
2004 Collected 22,323 39,889
Spent (10,000) (10,000)
2005 Collected 32,839 71,930
Spent - -
2006 Collected 23,864 122,490
Spent (2,173) (4,707)
2007 Collected 46,553 113,888
Spent (2,894) (225,589)
2008 Collected 29,981 162,262
Spent - (118,304)
Ending Balance $ 284,969 $ 583,107
Capital Facilities Budget - 2009 thru 2014
Project 2009 2010 2011 2012 2013 2014
Water Projects - 1,200,000 -
Sewer Projects - - - 1,600,000
38
CITY OF MOAB, UTAH
INDEPENDENT AUDITORS' REPORT IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS,
INDEPENDENT AUDITORS' REPORT
ON LEGAL COMPLIANCE AND
MANAGEMENT LETTER
JUNE 30, 2008
CITY OF MOAB, UTAH
TABLE OF CONTENTS
JUNE 30, 2008
GOVERNMENT AUDITING STANDARDS REPORT
Independent Auditors' Report on Compliance and on
Internal Control Over Financial Reporting Based on an
Audit of Basic Financial Statements Performed
in Accordance With Government Auditing Standards
Pages
1-2
STATE COMPLIANCE REPORT
Independent Auditors' Report on Legal Compliance with
Applicable Utah State Laws and Regulations 3-4
MANAGEMENT LETTER
Management Letter and comments on findings 5-10
GOVERNMENT AUDITING STANDARDS REPORT
..
..
LARSON & ROSENBERGER LLP
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ON
INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN
AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
October 8, 2008
Honorable Mayor and
City Council Members
City of Moab, Utah
We have audited the accompanying basic financial statements of the City of Moab, Utah
(herein referred to as the "City"), as of and for the year ended June 30, 2008, and have issued
our report thereon dated October 8, 2008. 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.
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.
SALT LAKE CITY OFFICE
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SPANISH FORK, UTAH 84660
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MOAB. UTAH 84532
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FAX (43S) 259-1100
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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 management 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
above is 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 and is not intended to be and
should not be used by anyone other than these specified parties.
Larson & Rosenberger, LLP
Certified Public Accountants
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STATE COMPLIANCE REPORT
LARSON & ROSENBERGER LLP
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT ON LEGAL COMPLIANCE WITH
APPLICABLE UTAH STATE LAWS AND REGULATIONS
October 8, 2008
Honorable Mayor and
City Council Members
City of Moab, Utah
We have audited the basic financial statements of the City of Moab, Utah, as of and for the
year ended June 30, 2008, and have issued our report thereon dated October 8, 2008. As part
of our audit, we have audited the City of Moab'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, 2008. The City received the following major State assistance programs from the
State of Utah:
B and 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
Other General Compliance Requirements
Uniform Building Code Standards
Impact Fees and Other Development Fees
Asset Forfeiture
The management of the City of Moab 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.
SALT LAKE CITY OFFICE
9065 SOUTH 1300 EAST
SANDY, UTAH 84094
1801)313-1900
FAX (801) 313-11112
LOS ANGELES OFFICE
801 NORTH BRAND BLVD STE 1180
GLENDALE, CALIFORNIA 91203
(818) 334-8623
FAX (818) 241-7353
SPANISH FORK OFFICE
765 NORTH MAIN
SPANISH FORK, UTAH 84660
(801) 798-3545
FAX (801) 798-3678
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MOAB OFFICE
115 WEST 200 SOUTH 44
MOAB. UTAH 84532
(435) 259-9100
FAX (43S) 259-1100
MENDER OF TFIE I N T E R N A T I O N A L ACCOUNTING GROUP ( T I A G) + W W W. L A R E C O. C O M
We conducted our audit in accordance with generally accepted auditing standards,
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 the management letter. We considered
these instances of noncompliance in forming our opinion on compliance, which is expressed
in the following paragraph.
In our opinion, the City of Moab, 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, 2008.
Larson &Rosenberger, LLP
Certified Public Accountants
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MANAGEMENT LETTER
LARSON & ROSENBERGER LLP
CERTIFIED PUBLIC ACCOUNTANTS
October 8, 2008
The Honorable Mayor and
Members of the City Council
City of Moab, Utah
Mayor and Council Members:
We have audited the financial statements of the governmental activities and the business -type
activities, of Moab City for the year ended June 30, 2008, and have issued our report thereon
dated October 8, 2008. Professional standards require that we provide you with the following
information related to our audit.
Our Responsibility under U.S. Generally Accepted Auditing Standards and Government
Auditing Standards
As stated in our engagement letter dated June 30, 2008, our responsibility, as described by
professional standards, is to express opinions about whether the financial statements prepared by
management with your oversight are fairly presented, in all material respects, in conformity with
U.S. generally accepted accounting principles. Our audit of the financial statements does not
relieve you or management of your responsibilities.
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. In
accordance with the terms of our engagement letter, we will advise management about the
appropriateness of accounting policies and their application. The significant accounting policies
used by Moab City are described in Note 1 to the financial statements. No new accounting
policies were adopted and the application of existing policies was not changed during year. We
noted no transactions entered into by the governmental unit during the year for which there is a
lack of authoritative guidance or consensus. There are no significant transactions that have been
recognized in the financial statements in a different period than when the transaction occurred.
Accounting estimates are an integral part of the financial statements prepared by management and
are based on management's knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive because
of their significance to the financial statements and because of the possibility that future events
affecting them may differ significantly from those expected.
SALT LAKE CITY OFFICE
9065 SOUTH 1300 EAST
SANDY, UTAH 84094
(801)313-1900
FAX (801) 313-1912
LOS ANGELES OFFICE
801 NORTH BRAND BLVD STE 1180
GLENDALE, CALIFORNIA 01203
(818) 334-8623
FAX (818) 241-7353
SPANISH FORK OFFICE
765 NORTH MAIN
SPANISH FORK, UTAH 84660
(801) 798-3545
FAX (801) 798-3878
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MOAB OFFICE
115 WEST 200 SOUTH 44
MOAB, UTAH 84532
(435) 259-9100
FAX (435) 259-1100
MEMBER OF THE INTERNATIONAL ACCOUNTING GROUP ( T I A G) + W W W. L A R S C❑. C❑ M
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and
completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified
during the audit, other than those that are trivial, and communicate them to the appropriate level
of management. Management has corrected all such misstatements.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a
financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction,
that could be significant to the financial statements or the auditor's report. We are pleased to
report that no such disagreements arose during the course of our audit.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation
involves application of an accounting principle to the governmental unit's financial statements or
a determination of the type of auditor's opinion that may be expressed on those statements, our
professional standards require the consulting accountant to check with us to determine that the
consultant has all the relevant facts. To our knowledge, there were no such consultations with
other accountants.
Issues Discussed Prior to Retention of Auditors
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the governmental unit's
auditors. However, these discussions occurred in the normal course of our professional
relationship and our responses were not a condition to our retention.
Internal Control Findings — Current Year
Segregation of Duties — Significant Deficiency
Finding:
Proper segregation of duties is a key effective internal control because it can aid in
reducing the risk of mistakes and inappropriate actions, and can help fight fraud through
discouraging collusion. We noted during our audit that the City lacks proper segregation
of duties which results in weaknesses in internal controls
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Recommendation:
We recommend that to the extent possible, the City segregate duties to serve as a check
and balance to maintain the best control system possible. Due to the limited number of
staff at the City we also recommend that the Mayor and Council provide oversight on the
financial operations of the City.
Client Response:
The Mayor and all Council Members will, continue to, along with the Recorder and
Treasurer, review all financial matters and promptly investigate anything unusual.
Year end adjusting entries — Significant Deficiency
Finding:
Management does not currently record all year-end or closing journal entries, specifically
revenue and grant accruals; debt adjustments including correct allocation of principal
payments and interest accruals; and depreciation expense. Management relies on Auditors
to propose journal entries to adjust necessary accounts, funds, and financial statements.
Recommendation:
It is recommended that the client develop a system or improve the current system for
financial reporting to ensure that all necessary entries are made in a timely and accurate
manner. This can be accomplished through additional training of Management or through
work with the Auditors.
Client Response:
Management will work with the Auditors to post closing journal entries in the future.
Drafting of financial statements — Significant Deficiency
Finding:
Management does not currently draft the City's basic financial statements and related
footnotes. The Auditor, with oversight from Management, drafts the financial statements
and footnotes. Management then reviews, approves, and accepts responsibility for the
financial statements.
Recommendation:
Management should work both independently and with the Auditors to receive the
training that will enable them to draft the financial statements and related footnotes,
should that be their desire.
Client Response:
Management will consider the possibility of drafting the financial statements and work
with the Auditor toward a viable solution.
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State Compliance Findings — Current Year
Public Treasurer's fidelity bond
Finding:
Every public treasurer shall secure a fidelity bond, based on the previous year's budgeted
gross revenues, which includes all funds collected or handled by the public treasurer, in
the amount set forth by the state (Utah Code 51-7-15). The City's fidelity bond was
underfunded based on the previous year's budgeted gross revenue.
Recommendation:
We recommend that the City increase there fidelity bond to become compliant with State
requirements.
Client Response:
Management is aware of the issue and has taken immediate action to correct the problem.
General fund balance
Finding:
Municipalities may accumulate fund balances in any fund. However, the fund balance
amounts must be within certain limits. For municipalities, Utah Code 10-6-116(4)
indicates that only the "fund balance in excess of 5% of total revenues of the general fund
may be utilized for budget purposes." The maximum in the general fund may not exceed
18% of the total estimated revenue of the general fund. The city exceeded the 18% limit
in unreserved general fund balance.
Recommendation:
We recommend that the City monitor its general fund balance more closely, and make any
necessary adjustments or transfers to appropriate capital project funds to ensure that it
stays within the legal limits
Client Response:
Management is aware of the requirement and will take appropriate action in the future.
Status of Internal Control Findings — Prior Year
Year end adjusting entries — Significant Deficiency
Finding:
Management does not currently record all year-end or closing journal entries, specifically
revenue and grant accruals; debt adjustments including correct allocation of principal
payments and interest accruals; and depreciation expense. Management relies on Auditors
to propose journal entries to adjust necessary accounts, funds, and financial statements.
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Recommendation:
It is recommended that the client develop a system or improve the current system for
financial reporting to ensure that all necessary entries are made in a timely and accurate
manner This can be accomplished through additional training of Management or through
work with the Auditors.
Status:
See current year findings.
Drafting of financial statements — Si,enificant Deficiency
Finding:
Management does not currently draft the City's basic financial statements and related
footnotes. The Auditor, with oversight from Management, drafts the financial statements
and footnotes. Management then reviews, approves, and accepts responsibility for the
financial statements.
Recommendation:
Management should work both independently and with the Auditors to receive the
training that will enable them to draft the financial statements and related footnotes.
Status:
See current year findings.
Status of State Compliance Findings — Prior Year
Public Treasurer's fidelity bond
Finding:
Every public treasurer shall secure a fidelity bond, based on the previous year's budgeted
gross revenues, which includes all funds collected or handled by the public treasurer, in
the amount set forth by the state (Utah Code 51-7-15). The City's fidelity bond was
underfunded based on the previous year's budgeted gross revenue.
Recommendation:
We recommend that the City increase there fidelity bond to become compliant with State
requirements.
Status:
See current year findings.
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General fund balance
Finding:
Municipalities may accumulate fund balances in any fund. However, the fund balance
amounts must be within certain limits. For municipalities, Utah Code 10-6-116(4)
indicates that only the "fund balance in excess of 5% of total revenues of the general fund
may be utilized for budget purposes." The maximum in the general fund may not exceed
18% of the total estimated revenue of the general fund. The city exceeded the 18% limit
in unreserved general fund balance.
Recommendation:
We recommend that the City monitor its general fund balance more closely, and make any
necessary adjustments or transfers to appropriate capital project funds to ensure that it
stays within the legal limits.
Status:
See current year findings.
This information is intended solely for the use of Moab City and management of Moab City and
is not intended to be and should not be used by anyone other than these specified parties.
Very truly yours,
Larson & Rosenberger, LLP
Certified Public Accountants
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