HomeMy Public PortalAbout2017-2018 Audit Issued financial statementsMoab City Corporation
ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2018
Moab City Corporation
TABLE OF CONTENTS
June 30, 2018
Beginning
on page
INDEPENDENT AUDITOR'S REPORT 1
MANAGEMENT DISCUSSION AND ANALYSIS 3
BASIC FINANCIAL STATEMENTS 13
Government -wide Financial Statements:
Statement of Net Position 15
Statement of Activities 16
Fund Financial Statements:
Balance Sheet - Governmental Funds 18
Statement of Revenues, Expenditures, and Changes
in Fund Balances - Governmental Funds 19
Reconciliation of the Balance Sheet of Governmental
Funds to the Statement of Net Position 20
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities 21
Statement of Net Position - Proprietary Funds 22
Statement of Revenues, Expenses and Changes in Fund
Net Position - Proprietary Funds 23
Statement of Cash Flows - Proprietary Funds 24
Notes to Financial Statements 26
REQUIRED SUPPLEMENTARY INFORMATION 47
Notes to Required Supplementary Information 49
Schedule of Revenues, Expenditures, and Changes
in Fund Balances - Budget and Actual - General Fund 50
Schedule of the Proportionate Share of the Net Pension Liability 51
Schedule of Contributions 52
COMBINING STATEMENTS
Combining Balance Sheet - Governmental Funds 53
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances - Governmental Funds 54
OTHER REPORTS
Report on Internal Control over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards 55
Independent Auditor's Report on Compliance and Report
on Internal Control over Compliance as Required by
the State Compliance Audit Guide 57
Independent Auditor's Report on Compliance for Each Major Program
and on Internal Control Required by the Uniform Guidance 59
Schedule of Findings and Questioned Costs 61
Schedule of Expenditures of Federal Awards 64
Notes to the Schedule of Expenditures of Federal Awards 65
��A L a r s o n
C E R T I F I E D P U B L I C A C C O U N T A N T S
I N D E P E N D E N T A U D I T O R ' S R E P O R T
H o n o r a b l e M a y o r
M e m b e r s o f t h e C i t y C o u n c i l
M o a b , U t a h
W e h a v e a u d i t e d t h e a c c o m p a n y i n g f i n a n c i a l s t a t e m e n t s o f t h e g o v e r n m e n t a l a c t i v i t i e s , t h e b u s i n e s s - t y p e
a c t i v i t i e s , e a c h m a j o r f u n d , a n d t h e a g g r e g a t e r e m a i n i n g f u n d i n f o r m a t i o n o f M o a b C i t y , U t a h ( h e r e i n
r e f e r r e d t o a s t h e " C i t y " ) , a s o f a n d f o r t h e y e a r e n d e d J u n e 3 0 , 2 0 1 8 , a n d t h e r e l a t e d n o t e s t o t h e
f i n a n c i a l s t a t e m e n t s , w h i c h c o l l e c t i v e l y c o m p r i s e t h e C i t y ' s b a s i c f i n a n c i a l s t a t e m e n t s a s l i s t e d i n t h e t a b l e
o f c o n t e n t s .
M a n a g e m e n t ' s R e s p o n s i b i l i t y f o r t h e F i n a n c i a l S t a t e m e n t s
M a n a g e m e n t i s r e s p o n s i b l e f o r t h e p r e p a r a t i o n a n d f a i r p r e s e n t a t i o n o f t h e s e f i n a n c i a l s t a t e m e n t s i n
a c c o r d a n c e w i t h a c c o u n t i n g p r i n c i p l e s g e n e r a l l y a c c e p t e d i n t h e U n i t e d S t a t e s o f A m e r i c a ; t h i s i n c l u d e s
t h e d e s i g n , i m p l e m e n t a t i o n , a n d m a i n t e n a n c e o f i n t e r n a l c o n t r o l r e l e v a n t t o t h e p r e p a r a t i o n a n d f a i r
p r e s e n t a t i o n o f f i n a n c i a l s t a t e m e n t s t h a t a r e f r e e f r o m m a t e r i a l m i s s t a t e m e n t , w h e t h e r d u e t o f r a u d o r
e r r o r .
A u d i t o r ' s R e s p o n s i b i l i t y
O u r r e s p o n s i b i l i t y i s t o e x p r e s s o p i n i o n s o n t h e s e f i n a n c i a l s t a t e m e n t s b a s e d o n o u r a u d i t . W e c o n d u c t e d
o u r a u d i t i n a c c o r d a n c e w i t h a u d i t i n g s t a n d a r d s g e n e r a l l y a c c e p t e d i n t h e U n i t e d S t a t e s o f A m e r i c a a n d
t h e s t a n d a r d s a p p l i c a b l e t o f i n a n c i a l a u d i t s c o n t a i n e d i n G o v e r n m e n t A u d i t i n g S t a n d a r d s , i s s u e d b y t h e
C o m p t r o l l e r G e n e r a l o f t h e U n i t e d S t a t e s . T h o s e s t a n d a r d s r e q u i r e t h a t w e p l a n a n d p e r f o r m t h e a u d i t t o
o b t a i n r e a s o n a b l e a s s u r a n c e a b o u t w h e t h e r t h e f i n a n c i a l s t a t e m e n t s a r e f r e e f r o m m a t e r i a l m i s s t a t e m e n t .
A n a u d i t i n v o l v e s p e r f o r m i n g p r o c e d u r e s t o o b t a i n a u d i t e v i d e n c e a b o u t t h e a m o u n t s a n d d i s c l o s u r e s i n
t h e f i n a n c i a l s t a t e m e n t s . T h e p r o c e d u r e s s e l e c t e d d e p e n d o n t h e a u d i t o r ' s j u d g m e n t , i n c l u d i n g t h e
a s s e s s m e n t o f t h e r i s k s o f m a t e r i a l m i s s t a t e m e n t o f t h e f i n a n c i a l s t a t e m e n t s , w h e t h e r d u e t o f r a u d o r
e r r o r . I n m a k i n g t h o s e r i s k a s s e s s m e n t s , t h e a u d i t o r c o n s i d e r s i n t e r n a l c o n t r o l r e l e v a n t t o t h e e n t i t y ' s
p r e p a r a t i o n a n d f a i r p r e s e n t a t i o n o f t h e f i n a n c i a l s t a t e m e n t s i n o r d e r t o d e s i g n a u d i t p r o c e d u r e s t h a t a r e
a p p r o p r i a t e i n t h e c i r c u m s t a n c e s , b u t n o t f o r t h e p u r p o s e o f e x p r e s s i n g a n o p i n i o n o n t h e e f f e c t i v e n e s s o f
t h e e n t i t y ' s i n t e r n a l c o n t r o l . A c c o r d i n g l y , w e e x p r e s s n o s u c h o p i n i o n . A n a u d i t a l s o i n c l u d e s e v a l u a t i n g
t h e a p p r o p r i a t e n e s s o f a c c o u n t i n g p o l i c i e s u s e d a n d t h e r e a s o n a b l e n e s s o f s i g n i f i c a n t a c c o u n t i n g
e s t i m a t e s m a d e b y m a n a g e m e n t , a s w e l l a s e v a l u a t i n g t h e o v e r a l l p r e s e n t a t i o n o f t h e f i n a n c i a l
s t a t e m e n t s .
W e b e l i e v e t h a t t h e a u d i t e v i d e n c e w e h a v e o b t a i n e d i s s u f f i c i e n t a n d a p p r o p r i a t e t o p r o v i d e a b a s i s f o r
o u r a u d i t o p i n i o n s .
O p i n i o n s
I n o u r o p i n i o n , t h e f i n a n c i a l s t a t e m e n t s r e f e r r e d t o a b o v e p r e s e n t f a i r l y , i n a l l m a t e r i a l r e s p e c t s , t h e
r e s p e c t i v e f i n a n c i a l p o s i t i o n o f t h e g o v e r n m e n t a l a c t i v i t i e s , t h e b u s i n e s s - t y p e a c t i v i t i e s , e a c h m a j o r f u n d ,
a n d t h e a g g r e g a t e r e m a i n i n g f u n d i n f o r m a t i o n o f M o a b C i t y , a s o f J u n e 3 0 , 2 0 1 8 , a n d t h e r e s p e c t i v e
c h a n g e s i n f i n a n c i a l p o s i t i o n a n d , w h e r e a p p l i c a b l e , c a s h f l o w s t h e r e o f f o r t h e y e a r t h e n e n d e d i n
a c c o r d a n c e w i t h a c c o u n t i n g p r i n c i p l e s g e n e r a l l y a c c e p t e d i n t h e U n i t e d S t a t e s o f A m e r i c a .
L a r s o n & C o m p a n y
7 6 5 N o r t h M a i n , S p a n i s h F o r k , U r a l s 8 4 6 6 0
M a i n : ( 8 0 1 ) 7 9 8 - 3 5 4 5 I F a x : ( 8 0 1 ) 7 9 8 - 3 6 7 8
w w w . l a r s c o . c o m
1
C P A M E R I C A
I N T E R N A T I O N A L
, �� G v w H a r m & l n l e m . 1 6 1 3 , 4
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and other required supplementary information as listed in the table of contents,
be presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board, who considers
it to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise Moab City's basic financial statements. The combining and individual nonmajor fund financial
statements as listed in the table of contents, are presented for purposes of additional analysis and are not
a required part of the basic financial statements. The schedule of expenditures of federal awards is
presented for the purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations
(CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of
Federal Awards, and is also not a part of the basic financial statements.
The combining and individual nonmajor fund financial statements and the schedule of expenditures of
federal awards are the responsibility of management and were derived from and relate directly to the
underlying accounting and other records used to prepare the basic financial statements. Such information
has been subjected to the auditing procedures applied in the audit of the basic financial statements and
certain additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the combining and individual nonmajor
fund financial statements and the schedule of expenditures of federal awards are fairly stated, in all
material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report dated November 7,
2018 on our consideration of Moab City's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering Moab City's internal control over financial
reporting and compliance.
6ij
t rj 1°
Larson & Company, PC
Spanish Fork, Utah
November 7, 2018
2
MANAGEMENT'S DISCUSSION AND ANALYSIS
3
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4
Moab City Corporation
Management's Discussion and Analysis
June 30, 2018
As management of Moab City Corporation (the City), we offer readers of the City's financial statements this
narrative overview and analysis of financial activities of the City for the fiscal year ended June 30, 2018.
FINANCIAL HIGHLIGHTS
*Total net position for the City as a whole increased by $514,647
*Total unrestricted net position for the City as a whole decreased by $3,646,534
*Total net position for governmental activities decreased by $717,481
*Total net position for business -type activities increased by $1,232,129
BASIC FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the basic financial statements of Moab
City Corporation. The basic financial statements comprise three components: (1) government wide financial
statements, (2) fund financial statements, and (3) notes to the financial statements.
Government -wide financial statements. The government -wide financial statements are designed to provide
readers with a broad overview of the City's finances, in a manner similar to a private -sector business.
The statement of net position presents information on all of the City's assets, deferred outflows, liabilities, and
deferred inflows, with the difference between the two reported as net position. Over time, increases or decreases
in net position may serve as a useful indicator of whether the financial position of the City is improving or
deteriorating.
The statement of activities presents information showing how the City's net position changed during the fiscal
year reported. All changes in net position are reported as soon as the underlying event giving rise to the change
occurs, regardless of the timing of related cash flows. Thus revenues and expenses are reported in this statement
for some items that will only result in cash flows in future fiscal periods.
Both of the government -wide financial statements distinguish functions of the City that are principally supported
by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to
recover all or a significant portion of their costs through user fees and charges (business -type activities). The
statement of activities is presented on two pages. The first page reports the extent to which each function or
program is self-supporting through fees and intergovernmental aid. The second page identifies the general
revenues of the City available to cover any remaining costs of the functions or programs.
5
Moab City Corporation
Management's Discussion and Analysis
June 30, 2018
Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. The City also uses fund accounting to
ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can be
divided into two categories: governmental funds and proprietary funds.
Governmental funds . These funds are used to account for the same functions reported as governmental activities
in the government -wide financial statements. Governmental fund financial statements focus on near -term inflows
and outflows of spendable resources, as well as on balances of spendable resources available at the end of the
fiscal year.
Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is
useful to compare the information presented for government funds with similar information presented for
governmental activities in the government -wide financial statements. By doing so, readers may better understand
the long-term impact of the government's near -term financing decisions. Both the government fund balance sheet
and the government fund statement of the revenues, expenditures, and changes in fund balances provide
reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains two major governmental funds, the general fund and the capital projects fund.
The City adopts an annual appropriated budget for all its funds A budgetary comparison schedule has been
provided to demonstrate legal compliance with the adopted budget for the general fund.
The basic governmental fund financial statements can be found later in this report; see Table of Contents.
Proprietary funds . The City maintains one type of proprietary fund. Enterprise funds are used to report the same
functions presented as business -type activities in the government -wide financial statements. The City uses three
enterprise funds to account for the operations of the water, sewer, and storm drain utilities.
Proprietary funds provide the same type of information as the government -wide financial statements, only in
more detail. The enterprise funds are considered major funds of the City.
The proprietary fund financial statements can be found later in this report; see Table of Contents.
Notes to the financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government -wide and fund financial statements. The notes to the
financial statements are reported later in this report; see Table of Contents.
Other information. In addition to the basic financial statements and accompanying notes, this report also
presents certain required supplementary information concerning the City.
6
Moab City Corporation
Management's Discussion and Analysis
June 30, 2018
FINANCIAL ANALYSIS
Moab City Corporation's Net Position
Current and other assets
Net capital assets
Deferred outflows of resources
Total assets and deferred
outflows
Long-term debt outstanding
Other liabilities
Deferred inflows of resources
Total liabilities and
deferred inflows
Net position:
Net investment in
capital assets
Restricted
Unrestricted
Total net position
Governmental
Activities
Business -type
Activities
Current
Year
Total Total
Previous Current Previous Current Previous
Year Year Year Year Year
$ 7,124,845
15,580,786
1,609,185
8,204,068 6,011,013 5,906,417 13,135,857 14,110,485
15,634,107 22,229,529 10,607,735 37,810,315 26,241,842
1,039,279 157,205 101,529 1,766,390 1,140,808
$ 24,314,815
24,877,454 28,397,747 16,615,681 52,712,562 41,493,135
$ 4,567,000
2,647,982
1,125,745
4,839,000
2,955,926
390,959
13,420,000
267,850
109,977
2,920,000
289,697
38,192
17,987,000 7,759,000
2,915,832 3,245,623
1,235,722 429,151
8,340,727
8,185,885 13,797,826 3,247,889 22,138,554 11,433,774
11,013,786 10,795,107 8,809,529 7,687,735 19,823,315 18,482,842
837,403 673,837 3,152,901 495,759 3,990,304 1,169,596
4,122,898 5,222,625 2,637,491 5,184,298 6,760,389 10,406,923
$ 15,974,088 16,691,569 14,599,921 13,367,792 30,574,008 30,059,361
As noted earlier, net position may serve over time as a useful indicator of financial position. Total assets and
deferred outflows of resources exceeded total liabilities and deferred inflow of resources at the close of the year by
$30,574,008, an increase of $514,647 from the previous year. This change is equivalent to the net income for the
year, in private sector terms.
Total unrestricted net position at the end of the year is $6,760,389 which represents a decrease of $3,646,534 from
the previous year. Unrestricted net position are those resources available to finance day-to-day operations without
constraints established by debt covenants, enabling legislation, or other legal requirements.
The amount of current and other assets represent the amounts of cash and receivables on hand at the end of each
year. Other liabilities are the amounts of current and other liabilities due, at year end, for goods and services
acquired.
Changes in capital assets are the result of the difference, in the current year, of the cost of acquisition of capital
assets and any depreciation charges on capital assets. Change in long-term debt is the difference in the amount of
debt issued and that which has been paid during the year.
7
Moab City Corporation
Management's Discussion and Analysis
June 30, 2018
FINANCIAL ANALYSIS (continued)
Moab City Corporation's Change in Net Position
Governmental Business -type
Activities Activities
Total Total
Current Previous Current Previous Current Previous
Year Year Year Year Year Year
Program revenues:
Charges for services $ 1,946,448 2,028,166 2,973,742 2,149,899 4,920,190 4,178,065
Operating grants 754,720 661,964 754,720 661,964
Capital grants 60,000 441,205 1,623,591 441,205 1,683,591
General revenues:
Sales tax 2,113,744 1,939,516 2,113,744 1,939,516
Other taxes 6,822,742 6,247,900 6,822,742 6,247,900
Other revenues 264,167 223,900 110,679 58,632 374,846 282,532
Total revenues 11,901,821 11,161,446 3,525,626 3,832,122 15,427,447 14,993,568
Expenses:
General government 3,090,617 2,559,772 3,090,617 2,559,772
Public safety 2,891,911 2,946,128 2,891,911 2,946,128
Highways and improvements 3,399,151 2,517,022 3,399,151 2,517,022
Parks and recreation 3,613,104 2,970,750 3,613,104 2,970,750
Interest on long-term debt 38,667 31,019 38,667 31,019
Water 751,619 462,497 751,619 462,497
Sewer 1,127,732 1,156,101 1,127,732 1,156,101
Storm drain 7,350 - 7,350
Total expenses 13,033,449 11,024,691 1,879,351 1,625,948 14,912,801 12,650,639
Transfers in (out)
414,146 373,146 (414,146) (373,146)
Change in net position $ (717,482) 509,901 1,232,129 1,833,028 514,647 2,342,929
For the City as a whole, total revenues increased by $433,879 compared to the previous year, while total
expenses increased by $2,262,162 The total net change of $514,647 is, in private sector terms, the net income
for the year which is $1,828,282 less than the previous year.
Governmental activities revenues of $11,901,821 is an increase of $740,375 from the previous year. While
charges for service decreases slightly, tax revenues increased significantly. Governmental activities expenses of
$13,033,449 is an increase of $2,008,758 from the previous year. Expenses across all depaitinents increased,
with the exception of the public safety department.
Business -type activities revenue of $3,525,626 is a decrease of $306,496 from the previous year. Service
revenues increased by $823,843 while capital grants decreased by $1,182,386. Business -type activities
expenses of $1,879,351 is an increase of $253,403 from the previous year. This is due to an overall increase in
operation expenses.
8
Moab City Corporation
Management's Discussion and Analysis
June 30, 2018
BALANCES AND TRANSACTIONS OF INDIVIDUAL FUNDS
Some of the more significant changes in fund balances and fund net position and any restrictions on those
amounts is described below:
General Fund
The fund balance of $3,203,139 reflects a decrease of $190,879 from the previous year. Total revenues
increased by $319,114. Tax revenues increased by $749,070. All other revenues decreased by a total of
$429,957. Transfers in were made during the year amounting to $529,993.
Total expenditures increased by $765,512. General government expenditures increased by $487,955; public
safety expenditures increased by $45,816; streets and highways expenditures increased by $895,982; and parks
and recreation expenditures decreased by $664,240. Total transfers out amounted to $1,653,984.
The fund balance restricted for Class C roads is $530,992. The unassigned fund balance amounts to $2,922,147.
Water Fund
The change in net position (net income) was $315,419, which was after transfers out of $177,073. The amount of
$551,022 is restricted for construction. Unrestricted net position amounts to a deficit of $113,356.
Sewer Fund
The change in net position (net income) was $715,180, which included capital contributions of $102,207 and
was after transfers out of $192,073. The amounts of $36,000 and $2,565,879 are restricted for debt service and
construction, respectively. Unrestricted net position amounts to $1,527,184.
Storm Drain Fund
The change in net position (net income) was $201,530. Unrestricted net position amounts to $1,223,663.
GENERAL FUND BUDGETARY HIGHLIGHTS
Revenues for the current year, exclusive of transfers and fund balance appropriations, were originally budgeted
in the amount of $10,635,829. This amount was amended in the final budget to $10,717,851. Actual revenues,
excluding transfers, amounted to $10,809,357.
Expenditures for the current year, excluding transfers, were originally budgeted in the amount of $11,239,156.
This amount was amended in the final budget to $11,314,346. Actual expenditures amounted to $9,876,244.
Transfers in were oringnally budgeted for $444,146 and amended in the final budget to $529,993, which was
equal to actual transfers in. Transfers out were originally budgeted in the amount of $1,392,601 and amended to
$1,653,984 in the final budget, which was equal to the actual transfers out.
9
Moab City Corporation
Management's Discussion and Analysis
June 30, 2018
CAPITAL ASSETS AND DEBT ADMINISTRATION
Moab City Corporation's Capital Assets (net of depreciation)
Governmental Business -type
Activities Activities
Total Total
Current Previous Current Previous Current Previous
Year Year Year Year Year Year
Net Capital Assets:
Land and water rights $ 476,884 476,884 262,935 262,935 739,819 739,819
Buildings 9,289,779 9,592,047 9,289,779 9,592,047
Improvements other than
buildings 1,743,611 1,792,301 - - 1,743,611 1,792,301
Automobiles & Trucks 398,499 546,730 5,214 12,823 403,713 559,553
Machinery and equipment 745,439 786,424 564,998 518,369 1,310,436 1,304,794
Office equipment 63,894 87,739 63,894 87,739
Infrastructure 2,193,933 2,351,981 - - 2,193,933 2,351,981
Water system - 2,644,545 2,686,104 2,644,545 2,686,104
Sewer system - 3,138,278 3,233,424 3,138,278 3,233,424
Work in progress 668,747 15,613,560 3,894,080 16,282,307 3,894,080
Totals $ 15,580,786 15,634,107 22,229,529 10,607,735 37,810,315 26,241,842
The total amount of capital assets, net of depreciation, of $37,810,315 is an increase of $11,568,473 from the
previous year.
Governmental activities capital assets, net of depreciation, of $15,580,786 is a decrease of $53,321 from the
previous year.
Business -type activities capital assets, net of depreciation, of $22,229,529 is an increase of $11,621,794 from the
previous year.
Additional information regarding capital assets may be found in the notes to financial statements.
10
Moab City Corporation
Management's Discussion and Analysis
June 30, 2018
CAPITAL ASSETS AND DEBT ADMINISTRATION (continued)
Moab City Corporation's Outstanding Debt - Revenue Bonds
Current Previous
Year Year
Governmental activities:
2003 Sales Tax Revenue $ 1,140,000 1,221,000
2009 Sales Tax Revenue 3,427,000 3,618,000
Total governmental 4,567,000 4,839,000
Business -type activities:
2017 Wastewater Revenue 13,420,000 2,920,000
Total business -type 13,420,000 2,920,000
Total outstanding debt
$ 17,987,000 7,759,000
Additional information regarding the long-term liabilities may be found in the notes to financial statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
No significant economic changes that would affect the City are expected for the next year. Budgets have been
set on essentially the same factors as the current year being reported.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Moab City Corporation's finances for all
those with an interest in the City's finances. Questions concerning any information provided in this report or
requests for additional financial information should be addressed to: City Recorder, 217 East Center Street,
Moab, UT 84532.
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12
BASIC FINANCIAL STATEMENTS
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14
Moab City Corporation
STATEMENT OF NET POSITION
June 30, 2018
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES:
Assets:
Current assets:
Cash and cash equivalents
Accounts receivable, net
Other current assets
Total current assets
Non -current assets:
Restricted cash and cash equivalents
Capital assets:
Not being depreciated
Net of accumulated depreciation
Net pension assets
Total non -current assets
Total assets
Deferred outflows of resources - pensions
Total assets and deferred outflows of resources
LIABILITIES AND DEFERRED INFLOWS OF RESOURCES:
Liabilities:
Current liabilities:
Accounts payable
Accrued liabilities
Customer deposits
Accrued interest payable
Long-term debt outstanding, current portion
Total current liabilities
Non -current liabilities:
Compensated absences
Long-term debt outstanding, non -current portion
Net pension liability
Total non -current liabilities
Total liabilities
Deferred inflows of resources - pensions
Total liabilities and deferred inflows of resources
NET POSITION:
Net investment in capital assets
Restricted for:
Class C roads
Debt service
Construction
Unrestricted
Total net position
Total liabilities, deferred inflows of resources
and net position
Governmental Business -type
Activities Activities
Total
$ 5,022,214
1,126,051
30,959
2,600,026
257,834
7,622,239
1,383,885
30,959
6,179,224 2,857,860 9,037,083
943,040 3,152,901 4,095,941
1,145,631 15,876,495 17,022,127
14,435,155 6,353,034 20,788,188
2,581 252 2,833
16,526,407 25,382,682 41,909,089
22,705,631 28,240,542 50,946,172
1,609,185 157,205 1,766,390
$ 24,314,815 28,397,747 52,712,562
$ 401,137
173,093
21,375
274,000
18,976
3,575
420,113
173,093
3,575
21,375
274,000
869,605
22,551
892,156
451,296 88,898 540,195
4,293 ,000 13,420,000 17,713 ,000
1,601,081 156,400 1,757,481
6,345,377 13,665,299 20,010,676
7,214,982 13,687,850 20,902,832
1,125,745 109,977 1,235,722
8,340,727 13,797,826 22,138,554
11,013,786 8,809,529 19,823,315
533,298 533,298
304,105 36,000 340,105
3,116,901 3,116,901
4,122,898 2,637,491 6,760,389
15,974,088 14,599,921 30,574,008
$ 24,314,815 28,397,747 52,712,562
The notes to the financial statements are an integral part of this statement.
15
Moab City Corporation
STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2018
Net
(Expense)
Charges Operating Capital Revenue
for Grants and Grants and (To Next
Expenses Services Contributions Contributions Page)
FUNCTIONS/PROGRAMS:
Primary government:
Governmental activities:
General government $ 3,090,617 256,358 (2,834,259)
Public safety 2,891,911 78,661 36,251 (2,777,000)
Streets and public improvements 3,399,151 1,060,780 246,031 (2,092,339)
Parks, recreation and public property 3,613,104 550,649 472,439 - (2,590,016)
Interest on long-term debt 38,667 - - (38,667)
Total governmental activities
13,033,449 1,946,448 754,720 (10,332,281)
Business -type activities:
Water utility 751,619 1,197,071 17,875 463,327
Sewer utility 1,127,732 1,559,545 393,927 825,739
Storm drain utility 217,126 29,404 246,530
Total business -type activities 1,879,351 2,973,742 441,205 1,535,595
Total primary government $ 14,912,801 4,920,190 754,720 441,205 (8,796,685)
(continued on next page)
The notes to the financial statements are an integral part of this statement.
16
Moab City Corporation
STATEMENT OF ACTIVITIES (continued)
For the Year Ended June 30, 2018
Governmental Business -type
Activities Activities
Total
CHANGES IN NET POSITION:
Net (expense) revenue
(from previous page) $ (10,332,281) 1,535,595 (8,796,685)
General revenues:
Sales tax 2,113,744 2,113,744
Other taxes 6,822,742 6,822,742
Unrestricted investment earnings 126,171 110,679 236,851
Miscellaneous 137,995 - 137,995
Total general revenues 9,200,653 110,679 9,311,332
Transfers in (out) 414,146 (414,146)
Change in net position (717,482) 1,232,129 514,647
Net position - beginning 16,691,570 13,367,792 30,059,362
Net position - ending $ 15,974,088 14,599,921 30,574,008
The notes to the financial statements are an integral part of this statement.
17
Moab City Corporation
BALANCE SHEET - GOVERNMENTAL FUNDS
June 30, 2018
Capital Non -Major Total
General Projects Governmental Governmental
Fund Fund Funds Funds
ASSETS
Cash and cash equivalents $ 1,753,451 3,093,043 175,720 5,022,214
Accounts receivable, net of allowances 1,111,834 14,217 1,126,051
Other current assets 30,959 30,959
Restricted cash and cash equivalents 533,298 409,741 943,040
TOTAL ASSETS
$ 3,429,543 3,517,001 175,720 7,122,264
LIABILITIES
Accounts payable $ 158,520 226,663 15,954 401,137
Accrued liabilities 67,884 105,209 173,093
TOTAL LIABILITIES
FUND BALANCES:
Restricted for:
Class C roads
Debt service
Assigned for:
Capital projects
USU Set -aside
Recreation
Youth city council
Unassigned
TOTAL FUND BALANCES
226,403 331,872 15,954 574,230
533,298 533,298
304,105 304,105
2,669,841
2,356,023 - 2,356,023
525,000 525,000
156,538 156,538
3,227 3,227
2,669,841
3,203,139 3,185,128 159,766 6,548,033
TOTAL LIABILITIES AND FUND BALANCES $ 3,429,543 3,517,001 175,720 7,122,264
The notes to the financial statements are an integral part of this statement.
18
Moab City Corporation
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the Year Ended June 30, 2018
General
Fund
Capital
Projects
Fund
Non -Major Total
Governmental Governmental
Funds Funds
Revenues:
Taxes:
Sales $ 2,113,744 2,113,744
Other taxes 6,822,742 6,822,742
License and permits 255,916 255,916
Intergovernmental revenues 363,372 266,348 125,000 754,720
Charges for services 1,097,547 550,649 1,648,196
Fines and forfeitures 42,336 - - 42,336
Interest 60,285 63,288 2,599 126,171
Miscellaneous revenue 53,414 81,245 3,336 137,995
Total revenues 10,809,357 410,880 681,584 11,901,821
Expenditures:
General government 2,651,388 140,384 2,791,772
Public safety 2,816,610 108,622 2,925,231
Streets and public improvements 3,151,596 602,090 - 3,753,686
Parks, recreation and public property 1,256,650 623,513 1,582,717 3,462,880
Debt service:
Principal 272,000 272,000
Interest 40,185 - 40,185
Total expenditures 9,876,244 1,786,794 1,582,717 13,245,755
Excess (deficiency) of revenues over
(under) expenditures
Other financing sources and (uses):
Transfers in
Transfers (out)
Total other financing sources and (uses)
Net change in fund balances
Fund balances - beginning of year
Fund balance - end of year
933,112 (1,375,914) (901,133) (1,343,934)
529,993 700,000 953,984 2,183,977
(1,653,984) (115,847) - (1,769,831)
(1,123,991) 584,153 953,984 414,146
(190,879) (791,761) 52,851 (929,788)
3,394,018 3,976,889 106,914 7,477,821
$ 3,203,139 3,185,128 159,766 6,548,033
The notes to the financial statements are an integral part of this statement.
19
Moab City Corporation
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
June 30, 2018
Total Fund Balance for Governmental Funds $ 6,548,033
Total net position reported for governmental activities in the statement of net position
is different because:
Capital assets used in governmental funds are not financial resources and
therefore are not reported in the funds:
Capital assets, at cost 27,210,842
Less accumulated depreciation (11,630,056)
Net capital assets 15,580,786
Net pension assets are not financial resources and, therefore, are
not reported in the funds. 2,581
Deferred outflows of resources - pensions, a consumption of net position that
applies to future periods, is not shown in the funds statements. 1,609,185
Long-term liabilities, for funds other than enterprise funds, are recorded
in the government -wide statements but not in the fund statements.
General long-term debt
Interest accrued but not yet paid on long-term debt
Compensated absences
Net pension liability
Deferred inflows of resources - pensions
Total Net Position of Governmental Activities
(4,567,000)
(21,375)
(451,296)
(1,601,081)
(1,125,745)
$ 15,974,088
The notes to the financial statements are an integral part of this statement.
20
Moab City Corporation
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2018
Net Change in Fund Balances - Total Governmental Funds S (929,788)
Amounts reported for governmental activities in the statement of
activities are different because:
Governmental funds report capital outlays as expenditures. However,
in the statement of activities, assets with a material cost are
capitalized and the cost is allocated over their estimated useful
lives and reported as depreciation expenses.
Capital outlays 1,029,413
Depreciation expense (1,082,734)
Net (53,321)
The statement of activities show pension benefits, pension expenses, and non -employer
contributions related to GASB 68 that are not shown in the fund statements. 34,887
Repayment of debt principal is an expenditure in the governmental funds, but
the repayment reduces long-term liabilities in the statement of net position.
Long-term debt principal repayments
Accrued interest for long-term debt is not reported as expenditure for
the current period, while it is recorded in the statement of activities.
Change in accrued interest
Compensated absences expenses reported in the statement of activities do
not require the use of current financial resources and are not reported as
expenditures in governmental funds.
Change in compensated absence liability
272,000
1,519
(42,778)
Change in Net Position of Governmental Activities $ (717,482)
The notes to the financial statements are an integral part of this statement.
21
Moab City Corporation
STATEMENT OF NET POSITION - PROPRIETARY FUND
June 30, 2018
ASSETS AND DEFERRED OUTFLOWS
OF RESOURCES:
Assets:
Current assets:
Cash and cash equivalents
Accounts receivable, net
Due from other funds
Total current assets
Non -current assets:
Restricted cash and cash equivalents
Capital assets:
Not being depreciated
Net of accumulated depreciation
Net pension assets
Total non -current assets
Total assets
Deferred outflows of resources - pensions
Total assets and deferred outflows of resources
LIABILITIES AND DEFERRED INFLOWS
OF RESOURCES:
Liabilities:
Current liabilities:
Accounts payable
Customer security deposits
Due to other funds
Total current liabilities
Non -current liabilities:
Compensated absences
Long-term debt outstanding, non -current portion
Net pension liability
Total non -current liabilities
Total liabilities
Deferred inflows of resources - pensions
Total liabilities and deferred inflows of resources
NET POSITION:
Net investment in capital assets
Restricted for:
Debt service
Construction
Unrestricted
Total net position
Total liabilities, deferred inflows of resources
and net position
Water
Fund
Sewer
Fund
Storm Drain
Fund
Total
Proprietary
Funds
128,323
1,396,365
102,521
140,514
1,203,661
26,990
2,600,026
257,834
140,514
128,323 1,639,399 1,230,650 2,998,373
551,022
519,489
2,864,663
126
2,601,879
14,938,352
3,488,370
126
- 3,152,901
418,655 15,876,495
- 6,353,034
- 252
3,935,301 21,028,727 418,655 25,382,682
4,063,624 22,668,126 1,649,305 28,381,055
78,603 78,603
157,205
$ 4,142,227 22,746,729 1,649,305 28,538,261
$ 6,772
3,575
140,514
5,217
6,987
18,976
3,575
140,514
150,860
5,217
6,987
163,064
36,360 52,539
- 13,420,000
78,200 78,200
88,898
13,420,000
156,400
114,560 13,550,739
13,665,299
265,420 13,555,956
54,988 54,988
6,987 13,828,363
- 109,977
320,408 13,610,945
6,987 13,938,340
3,384,153
551,022
(113,356)
5,006,722
36,000
2,565,879
1,527,184
418,655 8,809,529
- 36,000
- 3,116,901
1,223,663 2,637,491
3,821,818 9,135,784 1,642,318 14,599,921
$ 4,142,227 22,746,729 1,649,305 28,538,261
The notes to the financial statements are an integral part of this statement.
22
Moab City Corporation
STATEMENT OF REVENUES, EXPENSES, AND CHANGES
IN NET POSITION - PROPRIETARY FUND
For the Year Ended June 30, 2018
Total
Water Sewer Storm Drain Proprietary
Fund Fund Fund Funds
Operating income:
Charges for sales and service $ 1,090,400 1,523,833 217,126 2,831,358
Connection fees 24,509 32,065 - 56,574
Other operating income 82,162 3,647 - 85,809
Total operating income 1,197,071 1,559,545 217,126 2,973,742
Operating expenses:
Personnel services 385,070 503,057 - 888,127
Utilities 54,498 123,422 - 177,920
Repair and maintenance 99,253 168,902 - 268,155
Professional and technical 29,725 107,412 - 137,137
Other supplies and expenses 5,435 17,007 22,441
Insurance expense 1,560 1,560
Depreciation expense 176,079 192,075 - 368,153
Total operating expense 751,619 1,111,875 1,863,494
Net operating income (loss) 445,452 447,670 217,126 1,110,248
Non -operating income (expense):
Impact fees 17,875 291,720 - 309,595
Interest income 29,166 81,513 - 110,679
Interest expense - (15,857) - (15,857)
Total non -operating income (expense) 47,041 357,376 404,417
Income (loss) before transfers
and capital contributions
492,492 805,046 217,126 1,514,664
Capital contributions - 102,207 29,404 131,611
Transfers out (177,073) (192,073) (45,000) (414,146)
Change in net position 315,419 715,180 201,530 1,232,129
Net position - beginning 3,506,399 8,420,605 1,440,788 13,367,792
Net position - ending $ 3,821,818 9,135,784 1,642,318 14,599,921
The notes to the financial statements are an integral part of this statement.
23
Moab City Corporation
STATEMENT OF CASH FLOWS
For the Year Ended June 30, 2018
Total
Water Sewer Storm Drain Proprietary
Fund Fund Fund Funds
Cash flows from operating activities:
Cash received from customers - service $ 1,118,128 1,545,160 204,297 2,867,585
Cash paid to suppliers (200,836) (440,867) 6,987 (634,716)
Cash paid to employees (377,194) (489,056) - (866,250)
Net cash provided (used) in operating activities 540,098 615,237 211,284 1,366,619
Cash flows from noncapital financing activities:
Transfers in (out) (177,073) (192,073) (45,000) (414,146)
Change in interfund balances 140,514 (140,514)
Change in customer deposits (150) - (150)
Net cash provided (used) in
noncapital financing activities (36,710) (332,587) (45,000) (414,296)
Cash flows from capital and related
financing activities:
Cash received from capital contributions - 102,207 29,404 131,611
Cash received from impact fees 17,875 291,720 - 309,595
Cash received from bond proceeds - 10,500,000 - 10,500,000
Cash payments for capital assets (348,828) (11,346,933) (294,186) (11,989,947)
Cash payments for bond interest - (15,857) - (15,857)
Net cash provided (used) in capital
and related financing activities (330,953) (468,864) (264,783) (1,064,600)
Cash flows from investing activities:
Cash received from interest earned 29,166 81,513 - 110,679
Net cash provided (used) in investing activities 29,166 81,513 110,679
Net increase (decrease) in cash 201,601 (104,700) (98,498) (1,597)
Cash balance, beginning 349,421 4,102,944 1,302,159 5,754,523
Cash balance, ending $ 551,022 3,998,244 1,203,661 5,752,926
Cash reported on the statement of net position:
Cash and cash equivalents $ - 1,396,365 1,203,661 2,600,026
Non -current restricted cash 551,022 2,601,879 - 3,152,901
Total cash and cash equivalents $ 551,022 3,998,244 1,203,661 5,752,926
The notes to the financial statements are an integral part of this statement.
24
Moab City Corporation
STATEMENT OF CASH FLOWS (continued)
For the Year Ended June 30, 2018
Reconciliation of Operating Income to Net Cash
Provided (Used) in Operating Activities:
Net operating income (expense)
Adjustments to reconcile operating income or (loss)
to net cash provided (used)in operating activities:
Total
Water Sewer Storm Drain Proprietary
Fund Fund Fund Funds
$ 445,452 447,670 217,126 1,110,248
Depreciation and amortization 176,079 192,075 - 368,153
Changes in assets and liabilities:
(Increase) decrease in receivables (78,943) (14,385) (12,829) (106,157)
(Increase) decrease in net pension assets (18) (18) - (36)
(Increase) decrease in deferred outflows (27,838) (27,838) - (55,677)
Increase (decrease) in payables (10,366) (24,124) 6,987 (27,502)
Increase (decrease) in compensated absences 9,580 15,706 - 25,286
Increase (decrease) in net pension liabilities (9,740) (9,740) (19,481)
Increase (decrease) in deferred inflows 35,892 35,892 71,785
Net cash provided (used) in operating activities $ 540,098 615,237 211,284 1,366,619
The notes to the financial statements are an integral part of this statement.
25
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1-A. Reporting entity
Moab City Corporation (the City), is a municipal corporation located in Grand County, Utah. The City
operates under Mayor -Council form of government.
The accompanying financial statements present the City and its component units, entities for which the
City is considered to be financially accountable. The financial statements of the City have been prepared
in conformity with Generally Accepted Accounting Principles (GAAP) as applied to government units.
The Governmental Accounting Standards Board is the accepted standard setting body for establishing
governmental accounting and financial reporting principles. The more significant of the government's
accounting policies are described below.
1-B. Government -wide and fund financial statements
Government -wide Financial Statements
The government -wide financial statements, consisting of the statement of net assets and the statement of
changes in net assets report information on all of the non -fiduciary activities of the primary government
and its component units. For the most part, the effect of inter -fund activity has been removed from these
statements. Governmental activities , which normally are supported by taxes and intergovernmental
revenues, are reported separately from business -type activities , which rely to a significant extent on fees
and charges for support.
The statement of activities reports the expenses of a given function offset by program revenues directly
connected with the functional program. A function is an assembly of similar activities and may include
portions of a fund or summarize more than one fund to capture the expenses and program revenues
associated with a distinct functional activity. Direct expenses are those that are clearly identifiable with a
specific function or segment. Indirect expenses are not allocated. All expenses are included in the
applicable function. Program revenues include (1) charges to customers or applicants who purchase, use,
or directly benefit from goods, services, or privilege provided by a given function or segment and (2)
grants and contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among program revenues are
reported instead as general revenues .
Fund Financial Statements
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds,
if any, even though the latter are excluded from the government -wide financial statements. Major
individual governmental funds and major individual enterprise funds are reported as separate columns in
the fund financial statement.
26
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
1-C. Measurement focus, basis of accounting and financial statement presentation
The financial statements of the City are prepared in accordance with generally accepted accounting
principles (GAAP).
The government -wide statements are reported using the economic resources measurement focus and the
accrual basis of accounting, generally including the reclassification of internal activity (between or within
funds). However, internal eliminations do not include utility services provided to City departments or
payments to the general fund by other funds for providing administrative and billing services for such
funds. Reimbursements are reported as reductions to expenses. Proprietary and any fiduciary fund
financial statements are also reported using this same focus and basis of accounting although internal
activity is not eliminated in these statements. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property tax revenues
are recognized in the year for which they are levied while grants are recognized when the grantor
eligibility requirements are met.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. The City considers
revenues to be available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However,
debt service expenditures, as well as expenditures related to compensated absences and claims and
judgments, are recorded only when payment is due.
Property taxes, sales taxes, intergovernmental revenues, and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as revenues of the
current fiscal period. Only the portion of special assessments, if any, receivable within the current fiscal
period is considered to be susceptible to accrual as revenue of the current period. All other revenue items
are considered to be measurable and available only when cash is received by the government.
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating
income and expense reported in proprietary fund financial statements include those revenues and expenses
related to the primary, continuing operations of the fund. Principal operating revenues for proprietary
funds are charges to customers for sales or services. Principal operating expenses are the costs of
providing goods or services, including administrative expenses and depreciation of capital assets. Other
revenues and expenses are classified as non -operating in the financial statements.
Policy regarding use of restricted resources
When both restricted and unrestricted resources are available for use, it is the City's policy to use
restricted resources first, then unrestricted resources as needed. Restricted assets and liabilities payable
from restricted assets current in nature are reported with current assets and current liabilities. Restricted
assets, non -current reports assets restricted for acquisition or construction of non -current assets, or are
restricted for liquidation of long-term debt.
27
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
1-D. Fund types and major funds
Governmental funds
The City reports the following major governmental funds:
The general fund is the government's primary operating fund. It accounts for all financial resources of the
general government, except those required to be accounted for in another fund.
The capital projects fund accounts for financial resources used for the acquisition or construction of the
capital facilities of the City (other than those of the enterprise funds).
The City reports the following as non -major governmental funds:
The recreation fund accounts for the revenues and expenditures for the activities in relation to recreation.
The youth city council fund accounts for revenues and expenditures for activities with the youth city
council.
Proprietary funds
The City reports the following major proprietary funds:
The water fund is used to account for the activities of the water utility.
The sewer fund is used to account for the activities of the sewer utlitiy.
The storm drain fund is used to account for the revenues and expenses of the storm drain utility.
1-E. Assets, Liabilities, and Net Position or Equity
1-E-1. Deposit and Investments
Investments are reported at fair value. Deposits are reported at cost, which approximates fair value.
Investments of the City are accounts at the Utah Public Treasurers Investments Fund. Additional
information is contained in Note 3.
1-E-2. Cash and Cash Equivalents
The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term
investments with original maturities of three months or less from the date of acquisition.
1-E-3. Receivables and Payables
Accounts receivable other than intergovernmental receivables are from customers primarily for utility
services. Intergovernmental receivables are considered collectible. Customer accounts are reported net of
an allowance for uncollectible accounts. The allowance amount is estimated using accounts receivable
past due more than 90 days.
28
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
1-E-3. Receivables and Payables (continued)
During the course of operations, there may be transactions occur between funds that are representative of
lending/borrowing arrangements outstanding at year-end. These are reported as either due to or due from
other funds .
1-E-4. Restricted Assets
In accordance with certain revenue bond covenants, resources may be required to be set aside for the
repayment of such bonds, and, on occasion, for the repair and maintenance of the assets acquired with the
bond proceeds. These resources are classified as restricted assets on the balance sheet because of their
limited use. Most capital grant agreements mandate that grant proceeds be spent only on capital assets.
Unspent resources of this nature are also classified as restricted. The limited use resources described
above involve a reported restriction of both cash and net assets.
Unspent proceeds of bonds issued to finance capital assets are also reported as restricted cash.
1-E-5. Inventories and Prepaid items
Inventories, which mainly consist of immaterial amounts of expendable supplies for consumption, are not
reported. Such supplies are acquired as needed. Proprietary fund inventories, where material, are stated at
the lower of cost or market, using the first -in, first -out basis.
Prepaid items record payments to vendors that benefit future reporting and are reported on the
consumption basis. Both inventories and prepayments are similarly reported in government -wide and fund
financial statements.
1-E-6. Capital Assets
Capital assets includes property, plant, equipment, and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items), and are reported in the applicable governmental or business -type activities
columns in the government -wide financial statements. Capital assets are defined by the government as
assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of two years.
Such assets are recorded at historical cost or at estimated historical cost if purchased or constructed.
Donated capital assets are recorded at estimated fair market value at the date of donation. Infrastructure is
depreciated.
The cost of normal maintenance and repairs that does not add to the value of an asset or materially extend
the assets' life is not capitalized. Major outlays for capital assets and improvements are capitalized as
projects are constructed. Interest incurred during the construction phase of capital assets of business -type
activities is included as part of the capitalized value of the assets constructed.
29
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
1-E-6. Capital Assets (continued)
Upon retirement or disposition of capital assets, the cost and related accumulated depreciation are
removed from the respective accounts. Depreciation of capital assets is computed using the straight-line
method over their estimated useful lives.
Property, plant, and equipment of the primary government, as well as the component units if any, is
depreciated using the straight line method over the following estimated useful lives:
Assets Years
Buildings and structures 30-45
Infrastructure 30
Vehicles and equipment 5-15
1-E-7. Long-term Obligations
In the government -wide and proprietary fund financial statements, long-term debt and obligations are
reported as liabilities in the applicable governmental activities, business -type activities, or proprietary
fund statement of net assets.
The governmental fund financial statements recognize the proceeds of debt and premiums as other
financing sources of the current period. Issuance costs (if any) are reported as expenditures.
1-E-8. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position will sometimes include a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of resources,
represents a consumption of net position that applies to a future period(s) and so will not be recognized as
an outflow of resources (expense/expenditure) until then. The City reports deferred outflows of resources
related to pensions as required by GASB 68.
In addition to liabilities, the statement of net position will sometimes include a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to a future period(s) and so will not be recognized as
an inflow of resources (revenue) until then. The City also reports deferred inflows of resources related to
pensions as required by GASB 68.
1-E-9. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of
resources related to pensions, and pension expense, information about the fiduciary net position of the
Utah Retirement Systems Pension Plan (URS) and additions to/deductions from URS's fiduciary net
position have been determined on the same basis as they are reported by URS. For this purpose, benefit
payments (including refunds of employee contributions) are recognized when due and payable in
accordance with the benefit terms. Investments are reported at fair value.
30
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
1-E-10. Fund Equity
Government -wide Financial Statements
Equity is classified in the government -wide financial statements as net position and is displayed in three
components:
Net investment in capital assets - 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.
Restricted net position - Net position with constraints placed on the use either by (1) external groups
such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through
constitutional provisions or enabling legislation.
Unrestricted net position - All other net position that does not meet the definition of "restricted" or "net
investment in capital assets."
Fund Financial Statements
In the fund financial statements governmental fund equity is classified as fund balance. Governmental fund
balance is further classified as Nonspendable, Restricted, Committed, Assigned or Unassigned.
Descriptions of each follow:
Nonspendable fund balance - Amounts that cannot be spent because they are either (a) not in
spendable form, or (b) legally or contractually required to be maintained intact.
Restricted fund balance - Net fund resources that are subject to external constraints that have been
placed on the use of the resources either a) imposed by creditors (such as through a debt covenant),
grantors, contributors, or laws or regulations of the government or b) imposed by law through
constitutional provisions or enabling legislation.
Committed fund balance - Amounts that can only be used for specific purposes established by formal
action of the City Council, with is the City's highest level of decision making authority. Fund balance
commitments can only be removed or changed by the same type of action (for example resolution) of the
City Council. This classification also includes contractual obligations to the extent that existing
resources have been specifically committed for use in satisfying those contractual requirements.
Assigned fund balance - Amounts that the City intends to be used for a specific purpose but are neither
restricted nor committed. The City Recorder is authorized to assign amounts to a specific purpose in
accordance with the City's budget policy.
Unassigned fund balance - Residual classification of the General Fund. This classification represents
fund balance that has not been assigned to other funds and that has not been restricted, committed, or
assigned to specific purposes within the General Fund.
Proprietary fund equity is classified the same as in the government -wide statements.
31
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
1-F. Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and the accompanying notes.
Actual results may differ from those estimates.
NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
2-A. Budgetary data
Annual budgets are prepared and adopted by ordinance by total for each department, in accordance with
State law, by the Mayor and City Council on or before June 22 for the following fiscal year beginning
July 1. Estimated revenues and appropriations may be increased or decreased by resolution of the City
Council at any time during the year. A public hearing must be held prior to any proposed increase in a
fund's appropriations. Budgets include activities in the General Fund. The level of the City's budgetary
control (the level at which the City's expenditures cannot legally exceed appropriations) is established at
the department level. Each department head is responsible for operating within the budget for their
department. All annual budgets lapse at fiscal year end.
Utah State law prohibits the appropriation of unreserved General Fund balance to an amount less than 5%
of the General Fund revenues. The 5% reserve that cannot be budgeted is used to provide working capital
until tax revenue is received, to meet emergency expenditures, and to cover unanticipated deficits. Any
unreserved General Fund balance greater than 25% of the current year's actual revenues. The general fund
balance was under the legal allowable limit for the year ended June 30, 2018.
Once adopted, the budget may be amended by the City Council without hearing provided the budgeted
expenditures do not exceed budgeted revenues and appropriated fund balance. A public hearing must be
held if the budgeted expenditures will exceed budgeted revenues and any fund balance which is available
for budgeting. With the consent of the Mayor, department heads may reallocate unexpended appropriated
balances from one expenditure account to another within that department during the budget year. Budgets
for the General Fund are prepared on the modified accrual basis of accounting. Encumbrances are not
used.
2-B. Deficit fund balance or net position
None of the City's funds have deficit fund balances or net position. However, due the split of the sewer
fund from the water fund, the water fund carried a deficit unrestricted net position at year end.
32
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
NOTE 3 - DETAILED NOTES
3-A. Deposits and investments
Cash and investments as of June 30, 2018 consist of the following:
Fair Value
Cash on hand $ 675
Demand deposits - checking 417,427
Savings 105,636
Deposits - PTIF 11,194,441
Total cash $ 11,718,180
Cash and investments listed above are classified in the accompanying government -wide statement of net
position as follows:
Cash and cash equivalents (current) $ 7,622,239
Restricted cash and cash equivalents (non -current) 4,095,941
Total cash and cash equivalents $ 11,718,180
Cash equivalents and investments are carried at fair value in accordance with GASB Statement No. 72.
The Utah Money Management Act (UMMA) establishes specific requirements regarding deposits of public
funds by public treasurers. UMMA requires that city funds be deposited with a qualified depository which
includes any depository institution which has been certified by the Utah State Commissioner of Financial
Institutions as having met the requirements specified in UMMA Section 51, Chapter 7. UMMA provides
the formula for determining the amount of public funds which a qualified depository may hold in order to
minimize risk of loss and also defines capital requirements which an Institution must maintain to be eligible
to accept public funds. UMMA lists the criteria for investments and specifies the assets which are eligible
to be invested in, and for some investments, the amount of time to maturity.
UMMA enables the State Treasurer to operate the Public Treasurer's Investment Pool (PTIF). PTIF is
managed by the Utah State Treasurer's investment staff and comes under the regulatory authority of the
Utah Money Management Council. This council is comprised of a select group of financial professionals
from units of local and state government and financial institutions doing business in the state. PTIF
operations and portfolio composition is monitored at least semi-annually by the Utah Money Management
Council. PTIF is unrated by any nationally recognized statistical rating organizations. Deposits in PTIF are
not insured or otherwise guaranteed by the State of Utah. Participants share proportionally in any realized
gains or losses on investments which are recorded on an amortized cost basis. The balance available for
withdrawal is based on the accounting records maintained by PTIF. The fair value of the investment pool is
approximately equal to the value of the pool shares. The City maintains monies not immediately needed for
expenditure in PTIF accounts.
Deposit and Investment Risk
The City maintains no investment policy containing any specific provisions intended to limit the City's
exposure to interest rate risk, credit risk, and concentration of credit risk other than that imposed by
UMMA. The City's compliance with the provisions of UMMA addresses each of these risks.
33
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
3-A. Deposits and investments (continued)
Fair Value of Investments
The City measures and records its investments using fair value measurement guidelines established by
generally accepted accounting principles. These guidelines recognize a three -tiered fair value hierarchy, as
follows: Level 1--Quoted prices for identical investments in active markets; Level -- Observable inputs
other than quoted market prices; and, Level3--Unobservableinputs. At June 30, 2018 the City had
$11,194,441 invested in the PTIF, which uses a Level fair value measurement.
Interest rate risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. All deposits and investments of the City are available immediately.
Credit risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligations. Custodial
credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a
government will not be able to recover its deposits. At June 30, 2018, the City's bank balance of demand
and bank trust deposits total $580,713 and the book balance is $523,063. Of these deposits, $355,636 is
covered by FDIC insurance; $225,077 is uninsured and uncollateralized.
Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g.,
broker -dealer) to a transaction, a government will not be able to recover the value of its investment or
collateral securities that are in the possession of another party. This risk is addressed through the policy of
investing excess monies only in PTIF.
Concentration of credit risk
Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a
single issuer. PTIF falls under the constraints of UMMA in limiting concentrations of investments.
3-B. Receivables
The allowance policy is described in Note 1-E-3. Receivables as of year end for the City's funds are shown
below:
Capital Water and
General Projects Sewer Storm Drain
Fund Fund Funds Fund Total
Customers $ 104,654 14,217 245,278 26,990 391,139
Intergovernmental receivables 999,358 - 999,358
Other receivables 7,822 - 7,822
Total receivables 1,111,834 14,217 245,278 26,990 1,398,319
Allowance for uncollectibles (14,434) (14,434)
Total receivables, net of allowances $ 1,111,834 14,217 230,844 26,990 1,383,885
34
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
3-C. Capital Assets
Capital asset activity for the governmental activities was as follows:
Beginning Ending
Governmental activities Balance Additions Retirements Balance
Capital assets, not being depreciated:
Land and rights $ 476,884 476,884
Construction in progress - 668,747 668,747
Total capital assets, not being depreciated 476,884 668,747 1,145,631
Capital assets, being depreciated:
Buildings 12,282,319 4,825 12,287,144
Improvements other than buildings 4,205,191 169,256 - 4,374,447
Autos and trucks 2,413,449 2,413,449
Machinery and equipment 2,283,321 159,794 2,443,115
Office equipment 569,041 26,791 - 595,832
Infrastructure 3,951,223 - 3,951,223
Total capital assets, being depreciated 25,704,544 360,666 - 26,065,210
Less accumulated depreciation for:
Buildings 2,690,272 307,093 - 2,997,365
Improvements other than buildings 2,412,890 217,946 - 2,630,836
Autos and trucks 1,866,719 148,231 - 2,014,949
Machinery and equipment 1,496,897 200,780 - 1,697,676
Office equipment 481,302 50,637 - 531,939
Infrastructure 1,599,242 158,048 1,757,290
Total accumulated depreciation 10,547,321 1,082,734 11,630,056
Total capital assets being depreciated, net 15,157,223 (722,068) 14,435,155
Governmental activities capital assets, net $ 15,634,107
(53,321) 15,580,786
Depreciation expense was charged to functions/programs of the primary government governmental
activities was follows:
Governmental activities:
General government $ 341,207
Public safety 84,964
Highways and public improvements 252,727
Parks, recreation and public property 403,836
Total $ 1,082,734
35
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
3-C. Capital Assets (continued)
Capital asset activity for the business -type activities was as follows:
Beginning Ending
Business -type activities Balance Additions Retirements Balance
Capital assets, not being depreciated:
Land and water shares $ 262,935 262,935
Construction in progress 3,894,080 11,719,480 15,613,560
Total capital assets, not being depreciated 4,157,015 11,719,480 - 15,876,495
Capital assets, being depreciated:
Water system 6,315,028 104,848 6,419,876
Sewer system 7,363,970 36,511 7,400,481
Machinery and equipment 1,389,823 129,108 1,518,931
Autos and trucks 235,132 235,132
Total capital assets, being depreciated 15,303,954 270,467 15,574,421
Less accumulated depreciation for:
Water system 3,628,925 146,407 3,775,332
Sewer system 4,130,546 131,658 4,262,204
Machinery and equipment 871,454 82,480 953,934
Autos and trucks 222,309 7,609 229,918
Total accumulated depreciation 8,853,234 368,153 9,221,387
Total capital assets being depreciated, net
Business -type activities capital assets, net
6,450,720 (97,686) - 6,353,034
$ 10,607,735 11,621,794 22,229,529
Depreciation expense was charged to functions/programs of the primary government business -type
activities was follows:
Business -type activities:
Water $ 176,079
Wastewater 192,075
Total $ 368,153
36
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
3-D. Long-term debt
Long-term debt activity for the governmental activities was as follows:
Due
Original % Beginning Ending Within
Principal Rate Balance Additions Reductions Balance One Year
2003 Sales Tax Revenue
Matures 2030 $ 2,050,000 2.50 $ 1,221,000 81,000 1,140,000 83,000
2009 Sales Tax Revenue
Matures 2036 4,764,000 0.00 3,618,000 191,000 3,427,000 191,000
Total governmental activity
long-term liabilities $ 4,839,000 272,000 4,567,000 274,000
Bond debt service requirements to maturity for governmental activities are as follows:
Principal Interest Total
2019 274,000 28,500 302,500
2020 276,000 26,425 302,425
2021 278,000 24,300 302,300
2022 280,000 22,125 302,125
2023 282,000 19,900 301,900
2024-2028 1,446,000 64,125 1,510,125
2029-2033 1,169,000 8,050 1,177,050
2034-2036 562,000 562,000
Total $ 4,567,000 193,425 4,760,425
Long-term debt activity for the business -type activities was as follows:
Due
Original % Beginning Ending Within
Principal Rate Balance Additions Reductions Balance One Year
2017 Wastewater Revenue
Matures 2039 $14,200,000 1.15 $ 2,920,000 10,500,000 - 13,420,000
Total business -type activity
long-term liabilities $ 2,920,000 10,500,000 13,420,000
The 2017 Wastewater Revenue Bonds were issued during the 2017 fiscal year. As of June 30, 2018,
$13,420,000 of the total issued amount of $14,200,000 had been advanced to the City. The remaining
amount of $780,000 will be advanced to the City as fixture construction costs occur. The requirements to
maturity in the schedule following represent required payments should the entire issue amount be advanced
to the City.
37
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
3-D. Long-term debt (continued)
Bond debt service requirements to maturity for business -type activities are as follows:
Principal Interest Total
2019 varies
2020 635,000 163,300 798,300
2021 643,000 155,998 798,998
2022 650,000 148,603 798,603
2023 657,000 141,128 798,128
2024-2028 3,402,000 590,504 3,992,504
2029-2033 3,605,000 390,323 3,995,323
2034-2038 3,818,000 178,148 3,996,148
2039 790,000 9,085 799,085
Total $ 14,200,000 1,777,089 15,977,089
Other long-term liabilities:
Increase
Compensated absences: Beginning (Decrease) Ending
Governmental $ 408,518 42,778 451,296
Business -type 63,613 25,285 88,898
Total $ 472,131 68,064 540,195
Net pension liability:
Governmental $ 1,800,484 (199,403) 1,601,081
Business -type 175,881 (19,481) 156,400
Total $ 1,976,365 (218,884) 1,757,481
3-E. Interfund transfers
Transfers In Transfers Out
General fund $ 529,993 1,653,984
Capital projects fund 700,000 115,847
Recreation fund 953,984 -
Water fund 177,073
Sewer fund 192,073
Storm drain fund 45,000
Total $ 2,183,977 2,183,977
Transfers are used to move unrestricted general fund revenues to finance various programs that the
government must account for in other funds in accordance with budgetary authorizations, including
amounts provided as subsidies or matching funds for various grant programs.
38
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
NOTE 4 - OTHER INFORMATION
4-A. Risk management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; and natural disasters. The City participates in the Utah Local Government Trust, a
public agency insurance mutual, which provides coverage for property damage and general liability. The
City is subject to a minimal deductible for claims. There have been no significant reductions in insurance
coverage from coverage in the prior year. Amounts of settlements have not exceeded insurance coverage
in any of the past three fiscal years.
4-B. Landfill agreement
Moab City entered into an agreement with the Grand County Solid Waste Management Special Service
District No. 1 and Grand County in which the City agreed to guarantee the performance of closure and
post -closure care at the Klondike and Moab Landfills. Should the escrow moneys set aside by the District
not cover all costs associated with the closure and post -closure of the landfill, Moab would be liable for
one half of the uncovered costs. Total closure and post -closure costs are currently estimated to be no more
than $175,400 for the Klondike Landfill and for the Moab Landfill.
4-C. Rounding Convention
A rounding convention to the nearest whole dollar has been applied throughout this report, therefore the
precision displayed in any monetary amount is plus or minus $1. These financial statements are computer
generated and the rounding convention is applied to each amount displayed in a column, whether detail
item or total. As a result, without the overhead cost of manually balancing each column, the sum of
displayed amounts in a column may not equal the total displayed. The maximum difference between any
displayed number or total and its actual value will not be more than $1.
4-D. Subsequent Events
In preparing these financial statements, the City has evaluated events and transactions for potential
recognition or disclosure through November 7, 2018, the date the financial statements were available to
be used.
39
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
4-E. Pension Plans
General Information about the Pension Plan
Plan description:
Eligible plan participants are provided with pensions through the Utah Retirement Systems. The Utah
Retirement Systems are comprised of the following Pension Trust funds:
Public Employees Noncontributory Retirement System (Noncontributory System) is a multiple
employer, cost sharing, public employee retirement system;
The Public Safety Retirement System (Public Safety System) is a mixed agent and cost -sharing,
multiple -employer public retirement system;
Tier 2 Public Employees Contributory Retirement System (Tier 2 Public Employees System) is a
multiple employer cost sharing public employer retirement system;
Tier 2 Public Safety and Firefighter Contributory Retirement System (Tier 2 Public Safety and
Firefighters System) is a multiple employer, cost sharing, public employee retirement system.
The Tier 2 Public Employees System became effective July 1, 2011. All eligible employees beginning on
or after July 1, 2011, who have no previous service credit with any of the Utah Retirement Systems, are
members of the Tier 2 Retirement System.
The Utah Retirement Systems (Systems) are established and governed by the respective sections of Title
49 of the Utah Code Annotated 1953, as amended. The Systems' defined benefit plans are amended
statutorily by the State Legislature. The Utah State Retirement Office Act in Title 49 provides for the
administration of the Systems under the direction of the Board, whose members are appointed by the
Governor. The Systems are fiduciary funds defined as pension (and other employee benefit) trust funds.
URS is a component unit of the State of Utah. Title 49 of the Utah Code grants the authority to establish
and amend the benefit terms.
URS issues a publicly available financial report that can be obtained by writing Utah Retirement Systems,
560 E. 200 S., Salt Lake City, Utah 84102 or visiting the website: www.urs.org.
40
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
4-E. Pension Plans (continued)
Benefits provided:
URS provides retirement, disability, and death benefits. Retirement benefits are as follows:
Years of service required
Final Average and/or age eligible for Benefit percentage
System Salary benefit per year of service Cola **
Noncontributory System Highest 3 Years 30 years any age 2.0% per year all years Up to 4%
25 years any age*
20 years age 60*
10 years age 62*
4 years age 65
Public Safety System Highest 3 Years
20 years an age
10 years age 60
4 years age 65
2.5% per year up to 20
years; 2.0% per year over
20 years
Up to 2.5 % to
4% depending
on employer
Tier 2 Public Highest 5 Years
Employees System
35 years any age
20 years any age 60*
10 years age 62*
4 years age 65
1.5% per year all years Up to 2.5%
Tier 2 Public Safety
and Firefighter System
Highest 5 Years 35 years any age 1.5% per year all years Up to 2.5%
20 years any age 60*
10 years age 62*
4 years age 65
* with actuarial reductions
** All past -retirement cost -of -living adjustments are non -compounding and are based on the original benefit except
for Judges, which is a compounding benefit. The cost -of -living adjustments are also limited to the actual Consumer
Price Index (CPI) increase for the year, although unused CPI increases not met may be carried forward to subsequent
years.
Contributions:
As a condition of participation in the Systems, employers and/or employees are required to contribute
certain percentages of salary and wages as authorized by statute and specified by the URS Board.
Contributions are actuarially determined as an amount that, when combined with employee contributions
(where applicable) is expected to finance the costs of benefits earned by employees during the year, with
an additional amount to finance any unfunded actuarial accrued liability.
41
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
4-E. Pension Plans (continued)
Contribution rates are as of June 30, 2018 are as follows:
Utah Retirement Systems
Employer Employer
Employee Contribution Rate for
Paid Rate 401(k) Plan
Contributory System
111 - Local Government Div - Tier 2 N/A 15.11 1.58
Noncontributory System
15 - Local Government Div - Tier 1 N/A 18.47 N/A
Public Safety System
Contributory
122 - Tier 2 DB Hybrid Public Safety N/A 22.57 1.26
Noncontributory
43 - Other Div A with 2.5% COLA N/A 34.04 N/A
Tier 2 DC Only
211 - Local Government N/A 6.69 10.00
222 - Public Safety N/A 11.83 12.00
Tier 2 rates include a statutory required contribution to finance the unfunded actuarial accrued liability of
the Tier 1 plans.
For the fiscal year ended June 30, 2018, the employer and employee contributions to the Systems were as
follows:
Employer Employee
System Contributions Contributions
Noncontributory System $ 402,915 N/A
Public Safety System 170,152
Tier 2 Public Employees System 198,725
Tier 2 Public Safety and Firefighter 59,366
Tier 2 DC Only System 9,367 N/A
Total Contributions $ 840,525
Contributions reported are the URS Board approved required contributions by System. Contributions in the
Tier 2 Systems are used to finance the unfunded liabilities in the Tier 1 Systems.
Pension Assets, Liabilities, Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
At June 30, 2018, we reported a net pension asset of $2,833 and a net pension liability of $1,757,480.
42
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
4-E. Pension Plans (continued)
Noncontributory System
Public Safety System
Tier 2 Public Employees System
Tier 2 Public Safety and Firefighter
Total
(Measurement Date): December 31, 2017 Proportionate
Net Pension Net Pension Proportionate Share Change
Asset Liability Share 12/31/2016 (Decrease)
$ $ 1,191,815 0.2720231% 0.2051978% 0.0668253%
556,312 0.3546422% 0.3205798% 0.0340624%
9,353 0.1060867% 0.0734958% 0.0325909%
2,833 0.2448621% 0.2801501%-0.0352880%
$ 2,833 $ 1,757,480
The net pension asset and liability was measured as of December 31, 2017, and the total pension liability
used to calculate the net pension asset and liability was determined by an actuarial valuation as of January
1, 2017 and rolled -forward using generally accepted actuarial procedures. The proportion of the net pension
asset and liability is equal to the ratio of the employer's actual contributions to the Systems during the plan
year over the total of all employer contributions to the System during the plan year.
For the year ended June 30, 2018, we recognize pension expense of $802,036.
At June 30, 2018, we reported deferred outflows of resources and deferred inflows of resources relating to
pensions from the following sources:
Difference between expected and actual experience
Changes in assumptions
Net difference between projected and actual earnings on pension
plan investments
Changes in proportion and differences between contributions
and proportionate share of contributions
Contributions subsequent to the measurement date
Total
Deferred
Outflows
of Resources
Deferred
Inflows
of Resources
$ 28,413
651,741
360,312
289,765
436,158
$ 163,298
36,701
948,436
87,288
$ 1,766,389 $ 1,235,723
$436,158 reported as deferred outflows of resources related to pensions results from contributions made by
us prior to our fiscal year end, but subsequent to the measurement date of December 31, 2016. These
contributions will be recognized as a reduction of the net pension liability in the upcoming fiscal year.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be recognized in pension expense as follows:
Year Ended December 31,
2018
2019
2020
2021
2022
Thereafter
Net Deferred
Outflows (Inflows)
of Resources
$ 140,078
203,285
(58,194)
(205,697)
(2,345)
17,383
43
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
4-E. Pension Plans (continued)
Actuarial assumptions:
The total pension liability in the December 31, 2017, actuarial valuation was determined using the
following actuarial assumptions, applied to all periods included in the measurement:
Inflation
Salary increases
Investment rate of return
2.50 Percent
3.25 - 9.75 percent, average, including inflation
6.95 percent, net of pension plan investment
expense, including inflation
Mortality rates were developed from actual experience and mortality tables, based on gender, occupation
and age, as appropriate, with adjustments for future improvement in mortality based on Scale AA, a model
developed by the Society of Actuaries.
The actuarial assumptions used in the January 1, 2017, valuation were based on the results of an actuarial
experience study for the five year period ending December, 31, 2016.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best- estimate ranges of expected future real rates of return (expected returns, net of
pension plan investment expense and inflation) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real rates of
return by the target asset allocation percentage and by adding expected inflation.
The target allocation and best estimates of arithmetic real rates of return for each major asset class are
summarized in the following table:
Assets class
Equity securities
Debt securities
Real assets
Private equity
Absolute return
Cash and cash equivalents
Totals
Inflation
Expected Return Arithmetic Basis
Target Asset
Allocation
Real Return
Arithmetic
Basis
Long Term expected
portfolio real
rate of return
40%
20%
15%
9%
16%
0%
6.15%
0.40%
5.75%
9.95%
2.85%
0.00%
2.46%
0.08%
0.86%
0.89%
0.46%
0.00%
100.00%
4.75%
2.50%
Expected arithmetic nominal return
7.25%
The 6.95% assumed investment rate of return is comprised of an inflation rate of 2.50%, a real return of
4.45% that is net of investment expense.
44
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
4-E. Pension Plans (continued)
Discount rate:
The discount rate used to measure the total pension liability was 6.95 percent. The projection of cash flows
used to determine the discount rate assumed that employee contributions will be made at the current
contribution rate and that contributions from all participating employers will be made at contractually
required rates that are actuarially determined and certified by the URS Board. Based on those assumptions,
the pension plan's fiduciary net position was projected to be available to make all projected future benefit
payments of current active and inactive employees. Therefore, the long-term expected rate of return on
pension plan investments was applied to all periods of projected benefit payments to determine the total
pension liability. The discount rate does not use the Municupal Bond Index Rate. The discount rate was
reduced to 6.95 percent from 7.20 percent from the prior measurement period.
Sensitivity of the proportionate share of the net pension asset and liability to changes in the discount
rate:
The following presents the proportionate share of the net pension liability calculated using the discount
rate of 6.95 percent, as well as what the proportionate share of the net pension liability would be if it were
calculated using a discount rate that is 1-percentage-point lower (5.95 percent) or 1-percentage-point
higher (7.95 percent) than the current rate:
System
Noncontributory System
Public Safety System
Tier 2 Public Employees System
Tier 2 Public Safety and Firefighter
Total
1% Decrease
(5.95%)
Discount Rate
(6.95%)
1 % Increase
(7.95%)
$ 3,223,227
1,401,657
110,131
25,090
$ 1,191,815
556,312
9,353
(2,833)
$ (497,203)
(128,830)
(68,361)
(24,167)
$ 4,760,105 $ 1,754,647
$ (718,561)
Pension plan fiduciary net position:
Detailed information about the pension plan's fiduciary net position is available in the separately issued
URS financial report.
Defined Contribution Savings Plan:
The Defined Contribution Savings Plans are administered by the Utah Retirement Systems Board and are
generally supplemental plans to the basic retirement benefits of the Retirement Systems, but may also be
used as a primary retirement plan. These plans are voluntary tax -advantaged retirement savings programs
authorized under sections 401(k), 457(b) and 408 of the Internal Revenue code. Detailed information
regarding plan provisions is available in the separately issued URS financial report.
The City participates in the following Defined Contribution Savings Plans with the Utah Retirement
Systems:
- 401(k) Plan
- 457(b) Plan
- Roth IRA Plan
- Traditional IRA Plan
45
Moab City Corporation
NOTES TO FINANCIAL STATEMENTS
June 30, 2018
4-E. Pension Plans (continued)
Employee and employer contributions to the Utah Retirement Contribution Savings Plans for fiscal year
ended June 30, were as follows:
2018 2017 2016
401(k) Plan
Employer Contributions $ 58,700 $ 47,117 $ 37,659
Employee Contributions 62,027 39,929 48,623
457 Plan
Employer Contributions -
Employee Contributions 26,153 35,528 53,660
Roth IRA Plan
Employer Contributions N/A N/A N/A
Employee Contributions 4,980 2,027 6,952
Traditional IRA Plan
Employer Contributions N/A N/A N/A
Employee Contributions 650 650 650
46
REQUIRED SUPPLEMENTARY INFORMATION
(Unaudited)
47
This page intentionally left blank.
48
Moab City Corporation
Notes to Required Supplementary Information
June 30, 2018
Budgetary Comparison Schedules
The Budgetary Comparison Schedule presented in this section of the report is for the City's General Fund.
Budgeting and Budgetary Control
The budget for the General Fund is legally required and is prepared and adopted on the modified accrual
basis of accounting.
Original budgets represent the revenue estimates and spending authority authorized by the City Council
prior to the beginning of the year. Final budgets represent the original budget amounts plus any
amendments made to the budget during the year by the Council through formal resolution. Final budgets
do not include unexpended balances from the prior year because such balances automatically lapse to
unreserved fund balance at the end of each year.
Current Year Excess of Expenditures over Appropriations
For the year ended June 30, 2018, expenditures within all departments were under the appropriated
budget.
Changes in Assumptions Related to Pensions
As a result of an experience study conducted as of December 31, 2016, the Board adopted recommended
changes to several economic and demographic assumptions that are used in the actuarial valuation. The
assumption changes that had the largest impact on the Total Pension Liability (and actuarial accrued
liability) include a decrease in the investment return assumption form 7.20% to 6.95%, a reduction in the
price inflation assumption from 2.60% to 2.50% (which also resulted in a corresponding decrease in the
cost -of -living -adjustment assumption for the funds with a 4.00% annual COLA max), and the adoption of
an updated retiree morality table that is developed using URS's actual retiree mortality experience. There
were changes to several other demographic assumptions, but those changes had minimal impact on the
Total Pension Liability (and actuarial accrued liability).
49
Moab City Corporation
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended June 30, 2018
Budgeted Budgeted Variance with
Original Final Actual Final Budget
Revenues
Taxes $ 8,869,165 8,869,165 8,936,486 67,321
Licenses and permits 258,250 293,250 255,916 (37,334)
Intergovernmental revenues 317,814 317,814 363,372 45,558
Charges for services 1,023,500 1,058,500 1,097,547 39,047
Fines and forfeitures 80,000 80,000 42,336 (37,664)
Interest 50,000 50,000 60,285 10,285
Miscellaneous revenue 37,100 49,122 53,414 4,292
Total revenues 10,635,829 10,717,851 10,809,357 91,506
Expenditures
General government 3,060,133 2,915,716 2,651,388 264,328
Public safety 3,322,179 3,397,582 2,816,610 580,972
Highways and public improvements 3,544,657 3,602,981 3,151,596 451,385
Parks, recreation and public property 1,312,187 1,398,067 1,256,650 141,417
Total expenditures 11,239,156 11,314,346 9,876,244 1,438,102
Excess (deficiency) of revenues
over (under) expenditures
(603,327) (596,495) 933,112 1,529,607
Other financing sources and (uses)
Transfers in 444,146 529,993 529,993
Transfers out (1,392,601) (1,653,984) (1,653,984)
Total other financing sources and (uses) (948,455) (1,123,991) (1,123,991)
Net change in fund balances (1,551,781) (1,720,485) (190,879) 1,529,606
Fund balances - beginning of year 3,394,018 3,394,018 3,394,018
Fund balances - end of year $ 1,842,237 1,673,533 3,203,139 1,529,606
50
Moab City Corporation
SCHEDULE OF THE PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
June 30, 2018
Last 10 Fiscal Years*
2017 2016 2015 2014
Noncontributory Retirement System
Proportion of the net pension liability (asset) 0.2720231% 0.2051978% 0.2179161% 0.2429667%
Proportionate share of the net pension liability (asset) $1,191,815 $1,317,621 $1,233,075 $1,055,019
Covered employee payroll $2,116,310 $1,658,246 $1,878,267 $2,145,537
Proportionate share of the net pension liability (asset) as a
percentage of its covered -employee payroll 56.32% 79.46% 65.65% 49.20%
Plan fiduciary net position as a percentage of the total
pension liability 91.90% 87.30% 87.80% 90.20%
Public Safety System
Proportion of the net pension liability (asset) 0.3546422% 0.3205798% 0.3147178% 0.3437599%
Proportionate share of the net pension liability (asset) $ 556,312 $ 650,545 $ 563,739 $ 432,307
Covered employee payroll $ 464,620 $ 485,395 $ 518,613 $ 567,252
Proportionate share of the net pension liability (asset) as a
percentage of its covered -employee payroll 119.73% 134.02% 108.70% 76.20%
Plan fiduciary net position as a percentage of the total
pension liability 90.20% 86.50% 87.10% 90.50%
Tier 2 Public Employees Retirement System
Proportion of the net pension liability (asset) 0.1060867% 0.0734958% 0.0396361% 0.0260780%
Proportionate share of the net pension liability (asset) $ 9,353 $ 8,198 $ (87) $ (790)
Covered employee payroll $1,036,381 $ 602,722 $ 256,204 $ 128,012
Proportionate share of the net pension liability (asset) as a
percentage of its covered -employee payroll 0.90% 1.36% -0.03% -0.06%
Plan fiduciary net position as a percentage of the total
pension liability 97.40% 95.10% 100.20% 103.50%
Tier 2 Public Safety and Firefighters Retirement
Proportion of the net pension liability (asset) 0.2448621% 0.2801501% 0.2137309% 0.1428958%
Proportionate share of the net pension liability (asset) $ (2,833) $ (2,432) $ (3,123) $ (2,114)
Covered employee payroll $ 258,591 $ 231,468 $ 127,224 $ 59,035
Proportionate share of the net pension liability (asset) as a
percentage of its covered -employee payroll -1.10% -1.05% -2.45% -3.60%
Plan fiduciary net position as a percentage of the total
pension liability 103.00% 103.60% 110.70% 120.50%
* In accordance with paragraph 81.a of GASB 68, employers will need to disclose a 10-year history of their
proportionate share of the Net Pension Liability (Asset) in their RSL The 10-year schedule will need to be built
prospectively. The schedule above is only for the last four years.
51
Moab City Corporation
SCHEDULE OF CONTRIBUTIONS
June 30, 2018
Last 10 Fiscal Years*
As of
fiscal
year Actuarial
ended Determined
June 30, Contributions
Contributions in
relation to the
contractually Contribution
required deficiency
contribution (excess)
Covered
employee
payroll
Contributions
as a percentage
of covered
employee
payroll
Noncontributory Retirement 2014
2015
2016
2017
2018
System
$ 373,502
366,950
311,453
349,063
402,915
$ 373,502 $
366,950
311,453
349,063
402,915
- $2,218,242
- 2,031,635
- 1,712,251
1,888,219
2,197,705
16.84%
18.06%
18.19%
18.49%
18.33%
Public Safety System 2014
2015
2016
2017
2018
171,445
144,696
131,264
150,874
170,152
171,445
144,696
131,264
150,874
170,152
617,222
- 506,159
- 481,965
- 467,586
- 499,858
27.78%
28.59%
27.24%
32.27%
34.04%
Tier 2 Public Employees
Retirement System**
2014
2015
2016
2017
2018
14,676
24,084
71,331
107,879
198,725
14,676
24,084
71,331
107,879
198,725
- 104,905
- 161,205
- 480,471
- 723,538
- 1,315,187
13.99%
14.94%
14.85%
14.91%
15.11%
Tier 2 Public Safety and
Firefighter System**
2014
2015
2016
2017
2018
9,427
17,359
42,971
57,774
59,366
9,427
17,359
42,971
57,774
59,366
- 45,213
- 76,979
- 190,912
- 256,776
- 263,029
20.85%
22.55%
22.51%
22.50%
22.57%
Tier 2 Public Employees DC
Only System**
2014
2015
2016
2017
2018
1,378
2,915
5,495
9,367
1,378
2,915
5,495
9,367
20,512
43,531
- 77,713
140,012
0.00%
6.72%
6.70%
7.07%
6.69%
Tier 2 Public Safety and
Firefighter DC Only
System**
2014
2015
2016
2017
2018
3,336
3,700
950
3,336
3,700
950
33,558
31,279
8,030
9.94%
11.83%
11.83%
0.00%
0.00%
* Paragraph 81.b of GASB 68 requires employers to disclose a 10-year history of contributions in RSI. The 10-year
schedule will need to be built prospectively. The schedule above is only for the past five years.
** Contributions as a percentage of covered -payroll may be different than the board certified rate due to rounding and
other administrative issues.
52
ASSETS
Cash and cash equivalents
TOTAL ASSETS
LIABILITIES
Accounts payable
TOTAL LIABILITIES
Moab City Corporation
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2018
Youth Total
City Non -Major
Recreation Council Governmental
Fund Fund Funds
$ 172,493 3,227 175,720
$ 172,493 3,227 175,720
$ 15,954 - 15,954
15,954 15,954
FUND BALANCES:
Assigned for:
Recreation 156,538 156,538
USU Set -aside - 3,227 3,227
TOTAL FUND BALANCES
TOTAL LIABILITIES AND FUND BALANCES
156,538 3,227 159,766
$ 172,493 3,227 175,720
The notes to the financial statements are an integral part of this statement.
53
Moab City Corporation
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended June 30, 2018
Youth Total
City Non -Major
Recreation Council Governmental
Fund Fund Funds
Revenues:
Intergovernmental revenues $ 125,000 - 125,000
Charges for services 550,649 550,649
Interest 2,538 60 2,599
Miscellaneous revenue 3,336 3,336
Total revenues 681,524 60 681,584
Expenditures:
Parks, recreation and public property
Total expenditures
1,582,717 1,582,717
1,582,717 1,582,717
Excess (deficiency) of revenues over
(under) expenditures (901,193) 60 (901,133)
Other financing sources and (uses):
Transfers in 953,984 953,984
Total other financing sources and (uses) 953,984 953,984
Net change in fund balances 52,791 60 52,851
Fund balances - beginning of year 103,747 3,167 106,914
Fund balance - end of year $ 156,538 3,227 159,766
The notes to the financial statements are an integral part of this statement.
54
��A L a r s o n
C E R T I F I E D P U B L I C A C C O U N T A N T S
I N D E P E N D E N T A U D I T O R ' S R E P O R T O N I N T E R N A L C O N T R O L O V E R F I N A N C I A L
R E P O R T I N G A N D O N C O M P L I A N C E A N D O T H E R M A T T E R S B A S E D O N A N A U D I T O F
F I N A N C I A L S T A T E M E N T S P E R F O R M E D I N A C C O R D A N C E W I T H G O V E R N M E N T A U D I T I N G
S T A N D A R D S
T h e H o n o r a b l e M a y o r , a n d
M e m b e r s o f t h e C i t y C o u n c i l
M o a b C i t y , U t a h
W e h a v e a u d i t e d , i n a c c o r d a n c e w i t h t h e a u d i t i n g s t a n d a r d s g e n e r a l l y a c c e p t e d i n t h e U n i t e d S t a t e s o f
A m e r i c a a n d t h e s t a n d a r d s a p p l i c a b l e t o f i n a n c i a l a u d i t s c o n t a i n e d i n G o v e r n m e n t A u d i t i n g S t a n d a r d s
i s s u e d b y t h e C o m p t r o l l e r G e n e r a l o f t h e U n i t e d S t a t e s , t h e f i n a n c i a l s t a t e m e n t s o f t h e g o v e r n m e n t a l
a c t i v i t i e s , t h e b u s i n e s s - t y p e a c t i v i t i e s , e a c h m a j o r f u n d , a n d t h e a g g r e g a t e r e m a i n i n g f u n d i n f o r m a t i o n o f
M o a b C i t y , U t a h ( h e r e i n r e f e r r e d t o a s t h e " C i t y " ) , a s o f a n d f o r t h e y e a r e n d e d J u n e 3 0 , 2 0 1 8 , a n d t h e
r e l a t e d n o t e s t o t h e f i n a n c i a l s t a t e m e n t s , w h i c h c o l l e c t i v e l y c o m p r i s e t h e C i t y ' s b a s i c f i n a n c i a l s t a t e m e n t s
a n d h a v e i s s u e d o u r r e p o r t t h e r e o n d a t e d N o v e m b e r 7 , 2 0 1 8 .
I n t e r n a l C o n t r o l o v e r F i n a n c i a l R e p o r t i n g
I n p l a n n i n g a n d p e r f o r m i n g o u r a u d i t o f t h e f i n a n c i a l s t a t e m e n t s , w e c o n s i d e r e d t h e C i t y ' s i n t e r n a l c o n t r o l
o v e r f i n a n c i a l r e p o r t i n g ( i n t e r n a l c o n t r o l ) t o d e t e r m i n e t h e a u d i t p r o c e d u r e s t h a t a r e a p p r o p r i a t e i n t h e
c i r c u m s t a n c e s f o r t h e p u r p o s e o f e x p r e s s i n g o u r o p i n i o n s o n t h e f i n a n c i a l s t a t e m e n t s , b u t n o t f o r t h e
p u r p o s e o f e x p r e s s i n g a n o p i n i o n o n t h e e f f e c t i v e n e s s o f t h e C i t y ' s i n t e r n a l c o n t r o l . A c c o r d i n g l y , w e d o
n o t e x p r e s s a n o p i n i o n o n t h e e f f e c t i v e n e s s o f t h e C i t y ' s i n t e r n a l c o n t r o l .
A d e f i c i e n c y i n i n t e r n a l c o n t r o l e x i s t s w h e n t h e d e s i g n o r o p e r a t i o n o f a c o n t r o l d o e s n o t a l l o w
m a n a g e m e n t o r e m p l o y e e s , i n t h e n o r m a l c o u r s e o f p e r f o r m i n g t h e i r a s s i g n e d f u n c t i o n s , t o p r e v e n t , o r
d e t e c t a n d c o r r e c t , m i s s t a t e m e n t s o n a t i m e l y b a s i s . A m a t e r i a l w e a k n e s s i s a d e f i c i e n c y , o r a
c o m b i n a t i o n o f d e f i c i e n c i e s , i n i n t e r n a l c o n t r o l s u c h t h a t t h e r e i s a r e a s o n a b l e p o s s i b i l i t y t h a t a m a t e r i a l
m i s s t a t e m e n t o f t h e e n t i t y ' s f i n a n c i a l s t a t e m e n t s w i l l n o t b e p r e v e n t e d , o r d e t e c t e d a n d c o r r e c t e d o n a
t i m e l y b a s i s . A s i g n i f i c a n t d e f i c i e n c y i s a d e f i c i e n c y , o r a c o m b i n a t i o n o f d e f i c i e n c i e s , i n i n t e r n a l c o n t r o l
t h a t i s l e s s s e v e r e t h a n a m a t e r i a l w e a k n e s s , y e t i m p o r t a n t e n o u g h t o m e r i t a t t e n t i o n b y t h o s e c h a r g e d
w i t h g o v e r n a n c e .
O u r c o n s i d e r a t i o n o f i n t e r n a l c o n t r o l w a s f o r t h e l i m i t e d p u r p o s e d e s c r i b e d i n t h e f i r s t p a r a g r a p h o f t h i s
s e c t i o n a n d w a s n o t d e s i g n e d t o i d e n t i f y a l l d e f i c i e n c i e s i n i n t e r n a l c o n t r o l t h a t m i g h t b e m a t e r i a l
w e a k n e s s e s o r s i g n i f i c a n t d e f i c i e n c i e s a n d t h e r e f o r e , m a t e r i a l w e a k n e s s e s o r s i g n i f i c a n t d e f i c i e n c i e s m a y
e x i s t t h a t w e r e n o t i d e n t i f i e d . G i v e n t h e s e l i m i t a t i o n s , d u r i n g o u r a u d i t w e d i d n o t i d e n t i f y a n y d e f i c i e n c i e s
i n i n t e r n a l c o n t r o l t h a t w e c o n s i d e r t o b e m a t e r i a l w e a k n e s s e s . H o w e v e r , m a t e r i a l w e a k n e s s e s m a y e x i s t
t h a t h a v e n o t b e e n i d e n t i f i e d .
C o m p l i a n c e a n d O t h e r M a t t e r s
A s p a r t o f o b t a i n i n g r e a s o n a b l e a s s u r a n c e a b o u t w h e t h e r t h e C i t y ' s f i n a n c i a l s t a t e m e n t s a r e f r e e f r o m
m a t e r i a l m i s s t a t e m e n t , w e p e r f o r m e d t e s t s o f i t s c o m p l i a n c e w i t h c e r t a i n p r o v i s i o n s o f l a w s , r e g u l a t i o n s ,
c o n t r a c t s , a n d g r a n t a g r e e m e n t s , n o n c o m p l i a n c e w i t h w h i c h c o u l d h a v e a d i r e c t a n d m a t e r i a l e f f e c t o n
t h e d e t e r m i n a t i o n o f f i n a n c i a l s t a t e m e n t a m o u n t s . H o w e v e r , p r o v i d i n g a n o p i n i o n o n c o m p l i a n c e w i t h
t h o s e p r o v i s i o n s w a s n o t a n o b j e c t i v e o f o u r a u d i t , a n d a c c o r d i n g l y , w e d o n o t e x p r e s s s u c h a n o p i n i o n .
T h e r e s u l t s o f o u r t e s t s d i s c l o s e d n o i n s t a n c e s o f n o n c o m p l i a n c e o r o t h e r m a t t e r s t h a t a r e r e q u i r e d t o b e
r e p o r t e d u n d e r G o v e r n m e n t A u d i t i n g S t a n d a r d s
L a r s o n & C o m p a n y
7 6 5 N o r t h A l a i n , S p a n i s h F o r k , [ r a h 8 4 6 6 0
M a i n : ( 8 0 1 ) 7 9 8 - 3 5 4 5 I F a x : ( 8 0 7 9 8 - 3 6 7 8
w w w . l a r s c o . c o m
5 5
M e m b e r n ��
C P A M E R I C A
I N T E R N A T I O N A L
, �� C r o n e H o n M 1 a l h I n i r r r a l i u r n 9
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity's internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
el 6/Iitliall/ 1°.
Larson & Company, PC
Spanish Fork, Utah
November 7, 2018
56
d Larson
J■ CERTIFIED PUBLIC ALCO UM iiN jY
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON
INTERNAL CONTROL OVER COMPLIANCE AS REQUIRED BY THE
STATE COMPLIANCE AUDIT GUIDE
The Honorable Mayor, and
Members of the City Council
Moab City, Utah
Report on Compliance with General State Compliance Requirements
We have audited Moab City's (herein referred to as the "City") compliance with the applicable general
state compliance requirements described in the State Compliance Audit Guide, issued by the Office of the
Utah State Auditor, that could have a direct and material effect on the City for the year ended June 30,
2018.
General state compliance requirements were tested for the year ended June 30, 2018 in the following
areas:
Budgetary Compliance
Fund Balance
Utah Retirement Systems
Restricted Taxes and Related Revenues
Open and Public Meetings Act
Public Treasurer's Bond
Management's Responsibility
Management is responsible for compliance with the general state requirements referred to above.
Auditor's Responsibility
Our responsibility is to express an opinion on the City's compliance based on our audit of the compliance
requirements referred to above. We conducted our audit of compliance in accordance with auditing
standards generally accepted in the United States of America; the standards applicable to financial audits
contained in Government Auditing Standards issued by the Comptroller General of the United States; and
the State Compliance Audit Guide. Those standards and the State Compliance Audit Guide require that
we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the
compliance requirements referred to above that could have a direct and material effect on the City
occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those
requirements and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance with general state
compliance requirements. However, our audit does not provide a legal determination of the City's
compliance.
Opinion on General State Compliance Requirements
In our opinion, Moab City, complied, in all material respects, with the compliance requirements referred to
above that could have a direct and material effect on the City for the year ended June 30, 2018.
Larson & Company
765 North Main, Spanish Fork, Urah 84660
Main: (801) 798-3545 I Fax: (801) 798-3678
www.larsco.com
57
Member of
CPAMERICA
INTERNATIONAL
44. cr.., Nm+alh International.
Other Matters
The results of our auditing procedures disclosed no instances of noncompliance, which are required to be
reported in accordance with the State Compliance Audit Guide.
Report on Internal Control Over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over
compliance with the compliance requirements referred to above. In planning and performing our audit of
compliance, we considered the City's internal control over compliance with the compliance requirements
that could have a direct and material effect on the City to determine the auditing procedures that are
appropriate in the circumstances for the purpose of expressing an opinion on compliance with general
state compliance requirements and to test and report on internal control over compliance in accordance
with the State Compliance Audit Guide, but not for the purpose of expressing an opinion on the
effectiveness of the internal control over compliance. Accordingly, we do not express an opinion on the
effectiveness of the City's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a general state compliance requirement
on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination
of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material
noncompliance with a general state compliance requirement will not be prevented, or detected and
corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or
a combination of deficiencies, in internal control over compliance with a general state compliance
requirement that is less severe than a material weakness in internal control over compliance, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control and compliance and the results of that testing based on the requirements of the
State Compliance Audit Guide. Accordingly, this report is not suitable for any other purpose.
cf 61t/l/frj)4,/ '°e‘
Larson & Company, PC
Spanish Fork, Utah
November 7, 2018
58
�%�% L a r s o n
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C E R T I F I E D P U B L I C A C C O U N T A N T S
I N D E P E N D E N T A U D I T O R ' S R E P O R T O N C O M P L I A N C E F O R E A C H M A J O R P R O G R A M
A N D O N I N T E R N A L C O N T R O L O V E R C O M P L I A N C E R E Q U I R E D B Y T H E U N I F O R M G U I D A N C E
H o n o r a b l e M a y o r , C i t y C o u n c i l ,
a n d M a n a g e m e n t
M o a b C i t y
M o a b , U t a h
R e p o r t o n C o m p l i a n c e f o r E a c h M a j o r F e d e r a l P r o g r a m
W e h a v e a u d i t e d M o a b C i t y , U t a h ' s c o m p l i a n c e w i t h t h e t y p e s o f c o m p l i a n c e r e q u i r e m e n t s d e s c r i b e d i n t h e
O M B C o m p l i a n c e S u p p l e m e n t t h a t c o u l d h a v e a d i r e c t a n d m a t e r i a l e f f e c t o n e a c h o f M o a b C i t y ' s m a j o r
f e d e r a l p r o g r a m s f o r t h e y e a r e n d e d J u n e 3 0 , 2 0 1 8 . M o a b C i t y ' s m a j o r f e d e r a l p r o g r a m s a r e i d e n t i f i e d i n
t h e s u m m a r y o f a u d i t o r ' s r e s u l t s s e c t i o n o f t h e a c c o m p a n y i n g s c h e d u l e o f f i n d i n g s a n d q u e s t i o n e d c o s t s .
M a n a g e m e n t ' s R e s p o n s i b i l i t y
M a n a g e m e n t i s r e s p o n s i b l e f o r c o m p l i a n c e w i t h t h e r e q u i r e m e n t s o f l a w s , r e g u l a t i o n s , c o n t r a c t s , a n d
g r a n t s a p p l i c a b l e t o i t s f e d e r a l p r o g r a m s .
A u d i t o r ' s R e s p o n s i b i l i t y
O u r r e s p o n s i b i l i t y i s t o e x p r e s s a n o p i n i o n o n c o m p l i a n c e f o r e a c h o f M o a b C i t y ' s m a j o r f e d e r a l p r o g r a m s
b a s e d o n o u r a u d i t o f t h e t y p e s o f c o m p l i a n c e r e q u i r e m e n t s r e f e r r e d t o a b o v e . W e c o n d u c t e d o u r a u d i t o f
c o m p l i a n c e i n a c c o r d a n c e w i t h a u d i t i n g s t a n d a r d s g e n e r a l l y a c c e p t e d i n t h e U n i t e d S t a t e s o f A m e r i c a ; t h e
s t a n d a r d s a p p l i c a b l e t o f i n a n c i a l a u d i t s c o n t a i n e d i n G o v e r n m e n t A u d i t i n g S t a n d a r d s , i s s u e d b y t h e
C o m p t r o l l e r G e n e r a l o f t h e U n i t e d S t a t e s ; a n d t h e a u d i t r e q u i r e m e n t s o f T i t l e 2 U . S . C o d e o f F e d e r a l
R e g u l a t i o n s P a r t 2 0 0 , U n i f o r m A d m i n i s t r a t i v e R e q u i r e m e n t s , C o s t P r i n c i p l e s , a n d A u d i t R e q u i r e m e n t s f o r
F e d e r a l A w a r d s ( U n i f o r m G u i d a n c e ) . T h o s e s t a n d a r d s a n d t h e U n i f o r m G u i d a n c e r e q u i r e t h a t w e p l a n a n d
p e r f o r m t h e a u d i t t o o b t a i n r e a s o n a b l e a s s u r a n c e a b o u t w h e t h e r n o n c o m p l i a n c e w i t h t h e t y p e s o f
c o m p l i a n c e r e q u i r e m e n t s r e f e r r e d t o a b o v e t h a t c o u l d h a v e a d i r e c t a n d m a t e r i a l e f f e c t o n a m a j o r f e d e r a l
p r o g r a m o c c u r r e d . A n a u d i t i n c l u d e s e x a m i n i n g , o n a t e s t b a s i s , e v i d e n c e a b o u t M o a b C i t y ' s c o m p l i a n c e
w i t h t h o s e r e q u i r e m e n t s a n d p e r f o r m i n g s u c h o t h e r p r o c e d u r e s a s w e c o n s i d e r e d n e c e s s a r y i n t h e
c i r c u m s t a n c e s .
W e b e l i e v e t h a t o u r a u d i t p r o v i d e s a r e a s o n a b l e b a s i s f o r o u r o p i n i o n o n c o m p l i a n c e f o r e a c h m a j o r f e d e r a l
p r o g r a m . H o w e v e r , o u r a u d i t d o e s n o t p r o v i d e a l e g a l d e t e r m i n a t i o n o f M o a b C i t y ' s c o m p l i a n c e .
O p i n i o n o n E a c h M a j o r F e d e r a l P r o g r a m
I n o u r o p i n i o n , M o a b C i t y , c o m p l i e d , i n a l l m a t e r i a l r e s p e c t s , w i t h t h e t y p e s o f c o m p l i a n c e r e q u i r e m e n t s
r e f e r r e d t o a b o v e t h a t c o u l d h a v e a d i r e c t a n d m a t e r i a l e f f e c t o n e a c h o f i t s m a j o r f e d e r a l p r o g r a m s f o r t h e
y e a r e n d e d J u n e 3 0 , 2 0 1 8 .
L a r s o n 8 c C o m p a n y
7 6 5 N o r t h p l a i n , S p a n i s h F o r k , U r a h 8 4 6 6 0
M a i n : ( 8 0 1 ) 7 9 8 - 3 5 4 5 I F a x : ( R O I ) 7 9 8 - 3 6 7 8
w w w . l a r s c o . c o m
5 9
M e m b e r o f
C P A M E R k C A
I N T ': g N A i I O N A [
- , i t , G y v e H o w h 4 A e n w t i o n d -
Report on Internal Control Over Compliance
Management of Moab City, is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing our
audit of compliance, we considered Moab City's internal control over compliance with the types of
requirements that could have a direct and material effect on each major federal program to determine the
auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance for each major federal program and to test and report on internal control over compliance in
accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the
effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the
effectiveness of Moab City's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a deficiency,
or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility
that material noncompliance with a type of compliance requirement of a federal program will not be
prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over
compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type
of compliance requirement of a federal program that is less severe than a material weakness in internal
control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over compliance
that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal
control over compliance that we consider to be material weaknesses. However, material weaknesses may
exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing
of internal control over compliance and the results of that testing based on the requirements of the Uniform
Guidance. Accordingly, this report is not suitable for any other purpose.
Larson & Company, PC
Spanish Fork, Utah
November 7, 2018
60
Moab City
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2018
SUMMARY OF AUDIT RESULTS
1. The independent auditor's report expresses an unqualified opinion on the basic financial
statements of the Moab City.
2. No reportable conditions related to the audit of the financial statements are reported in the
Auditors' Report on Internal Controls and Compliance with Laws and Regulations.
3. No instances of noncompliance material to the financial statements of Moab City were
disclosed during the audit.
4. No material weaknesses relating to the audit of the major federal award program is reported
in the Report on Compliance with Requirements Applicable to Each Major Program and
Internal Control over Compliance in Accordance with Uniform Guidance.
5. The independent auditor's report on compliance for the major federal award programs for
the Moab City, expresses an unqualified opinion.
6. The audit disclosed no audit findings that are required to be reported under 2 CFR section
200.516(a).
7. The programs tested as a major programs include:
Capitalization Grants for Clean Water State Revolving Funds 66.458
8. The threshold for distinguishing Types A and B programs is $750,000 of federal awards
expended.
9. Moab City was determined not to be a low -risk auditee.
61
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62
Moab City
Schedule of Findings and Questioned Costs (continued)
For the Year Ended June 30, 2018
FINANCIAL STATEMENT FINDINGS
No findings noted during current audit
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No findings noted during current audit
SUMMARY OF PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
FINANCIAL STATEMENT FINDINGS
No findings noted during prior audit.
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No findings noted during prior audit
63
Moab City
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2018
Federal Grantor/Pass-Thru/
Grantor/Program Title
Federal CFDA Pass -Through Amount of
Number Grantors Contract Expenditures
Indirect Assistance:
Environmental Protection Agency (EPA):
Division of Water Quality (pass -through entity)
* Capitalization Grants for Clean Water State Revolving Funds 66.458 CS-49000115 $ 3,300,000
Total Enviommental Protection Agency: 3,300,000
TOTAL EXPENDITURES OF FEDERAL AWARDS $ 3,300,000
* Major Program
64
Moab City
Notes to the Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2018
1. GENERAL
The accompanying schedule of expenditures of federal awards (the schedule) includes the
grant activity of Moab City (the City) under programs of the federal government for the year
ended June 30, 2018. The information in this schedule is presented in accordance with the
requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance). The City reporting entity is defined in Note 1 to the basic financial statements. All
federal awards received directly from federal agencies as well as federal awards passed -
through other government agencies are included on the schedule of expenditures of federal
awards. Because the schedule presents only a selected portion of the operations of Moab City,
it is not intended to and does not present the financial position, changes in net position, or cash
flows of Moab City.
2. BASIS OF ACCOUNTING
The accompanying schedule of expenditures of federal awards is presented using the modified
accrual basis of accounting for expenditures in governmental fund types and on the accrual
basis for expenses in proprietary fund types, which is described in Note 1 to the basic financial
statements. Such expenditures are recognized following the cost principles contained in the
Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to
reimbursement.
Pass -through entity identifying numbers are presented where available.
3. NON -CASH ASSISTANCE
The City did not receive any non -cash assistance
4. LOANS OUTSTANDING
The City has $4,008,148 in federal loans outstanding through the Utah Division of
Water Quaility.
4. DE MINIMIS INDIRECT COST RATE
The City has elected not to use the 10% de minimis indirect cost rate.
65