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HomeMy WebLinkAbout2009-03-10 PreMayorTammy de Weerd City Council Members: Keith Bird Joe Borton Charles Rountree David Zaremba NOTICE OF PRE-COUNCIL MEETING MERIDIAN CITY COUNCIL NOTICE IS HEREBY GIVEN that the City Council of the City of Meridian will hold aPre-Council Meeting in the City Council Chambers, Meridian City Hall, 33 East Broadway Avenue, Meridian, Idaho, on Tuesday, March 10, 2009 at 6:00 P.M. The Meridian City Council will be discussing the following agenda items: Audit Report with Stacy Kiichenmann and Eide Bailly Annual Impact Fee Update The public is welcome to attend the meeting. DATED this 6th day of March, 2009 `\~~~~utiti~u~rr~~ ti~ Fo ~ = ~~~ - CITY ~ ~ ~.~~ p r ,s'~ . .~° . ~ ~ P ~s .,,, ~ `o ,,,. Meridian City Pre-Council Meeting Agenda -March 10, 2009 Page 1 of 1 All materials presented at public meetings shall become property of the City of Meridian. Anyone desiring accommodation for disabilities related to documents and/or hearings, please contact the City Clerk's Office at 88&4433 at least 48 hours prior to the public meeting. • • E IDIAN.- CITY OF MERIDIAN CITY COUNCIL PRE-COUNCIL MEETING AGENDA Tuesday, March 10, 2009 at 6:00 p.m. City Council Chambers 33 East Broadway Avenue, Meridian, Idaho `Although the City of Meridian no longer requires sworn testimony, all presentations before the Mayor and City Council are expected to be truthful and honest to best of the ability of the presenter. " 1. Roll-call Attendance: David Zaremba ~ Brad Hoaglun ~_ Charlie Rountree ~ Keith Bird ,~ Mayor Tammy de Weerd 2. Adoption of the Agenda: ~ppl~ ~/~ 3. Audit Report with Stacy Kilchenmann and Eide Bailly: ~'~(~ V ~ ~ u~ Y~~ 4. Annual Impact Fee Update ei~~v~ Meridian City Council Pre-Council Meeting Agenda -March 10, 2009 Page 1 of 1 All materials presented at public meetings shall become property of the City of Meridian. Anyone desiring accommodation for disabilities related to documents and/or hearing, please contact the City Clerk's Office at 888-4433 at least 48 hours prior to the public meeting. I~L~.S~ ~ ~~- -~~ ~u~.~ i ~ ~~ ~1c~..~~1.. ~ MayorTammy de Weerd City Council Members: E IDI~ Keith Bird 1~ .~~~ NOTICE OF PRE-COUNCIL MEETING MERIDIAN CITY COUNCIL Joe Borton Charles Rountree David Zaremba NOTICE IS HEREBY GIVEN that the City Council of the City of Meridian will hold aPre-Council Meeting in the City Council Chambers, Meridian City Hall, 33 East Broadway Avenue, Meridian, Idaho, on Tuesday, March 10, 2009 at 6:00 P.M. The Meridian City Council will be discussing the following agenda items: Audit Reporf with Stacy Kilchenmann and Eide Bailly Annual Impact Fee Update The public is welcome to attend the meeting. Fo ~ ~~ -CITY ~L w~~ ®:" ® ~r 18'~ , ~~ ~. '~ ,,,,,~~, coin ®®``,,,,, ~~~~i~rr-111 nl~l~`'`~ DATED this 6th day of March, 2009 Meridian City Pre-Council Meeting Agenda -March 10, 2009 Page 1 of 1 All materials presented at public meetings shall become property of the City of Meridian. Anyone desiring accommodation for disabilities related to documents and/or hearings, please contact the City Clerk's Office at 88814433 at least 48 hours prior to the public meeting. ! ~ E IDIAN:~-'- ~~ CITY OF MERIDIAN CITY COUNCIL PRE-COUNCIL MEETING AGENDA Tuesday, March 10, 2009 at 6:00 p.m. City Council Chambers 33 East Broadway Avenue, Meridian, Idaho "Although the City of Meridian no longer requires swrorn testimony, all presentations before the Mayor and City Council are expected to be truthful and honest to best of the ability of the presenter." 1. Roll-call Attendance: David Zaremba Brad Hoaglun Charlie Rountree Keith Bird Mayor Tammy de Weerd 2. Adoption of the Agenda: 3. Audit Report with Stacy Kilchenmann and Eide Bailly: 4. Annual Impact Fee Update Meridian City Council Pre-Council Meeting Agenda -March 10, 2009 Page 1 of 1 All materials presented at public meetings shall become property of the City of Meridian. Anyone desiring accommodation for disabilities related to documents andlor hearing, please contact the City Clerk's Office at 888-4433 at least 48 hours prior to the public meeting. Meridian City Council Pre-Council Meeting March 10.2009 A Pre-Council meeting of the Meridian City Council was called to order at 6:02 p.m., Tuesday, March 10, 2009, by Mayor Tammy de Weerd. Members Present: Mayor Tammy de Weerd, Keith Bird, Charlie Rountree, Brad Hoaglun, and David Zaremba. Others Present: Bill Nary, Tara Green, Stacy Kilchenmann. Item 1: Roll-call Attendance: Roll call. X David Zaremba X Brad Hoaglun X Charlie Rountree X Keith Bird X Mayor Tammy de Weerd Rountree: Okay. I'm going to go ahead and open the pre-Council meeting. It's March 10th, at 6:02. I will start with roll call attendance. Madam Clerk. Item 2: Adoption of the Agenda: Rountree: Very good. Thank you. The next item is the adoption of the agenda. I need a motion. Hoaglun: Move to adopt. Bird: Second. Rountree: It's been moved and seconded to adopt the agenda. All those in favor? Motion passes. MOTION CARRIED: ALL AYES. Item 3: Audit Report with Stacy Kilchenmann and Eide Bailly: Rountree: Next item on the agenda. Stacy. Audit report. Kilchenmann: Good evening. I'd like to introduce Bobby Lawrence. He's our audit -- he's representing Eide Bailly and he will be presenting the audit report. Be sure to ask him searching questions, because I know you read it really thoroughly. Lawrence: Thank you, Mr. President, Members of the Council. Again, Bobby Lawrence representing Eide Bailly on behalf of Kevin Smith here this evening, who couldn't be with you due to some personal reasons, so I just wanted to go over the reports and letters that we have issued and you have had in your packet and if I skip something you Meridian City Council -Pre-Council Meeting March 10, 2009 Page 2 of 11 have a question on, please, interrupt me and we can address it and if you need more detail we can address that as well. You also should have a handout there in front of you that I just brought with me this evening, as well as the bound audit report and two smaller letters. The first thing I will go over is the audit report. That's going to be your big bound copy there. And the most important thing in that packet is on page one and that's the auditor's opinion, and that's what we call an unqualified or a clean opinion, so it's always good to know that there were no -- nothing that we qualified the opinion on, no adjustments that weren't recorded and that kind of thing. The next item that I will draw your attention to, it starts on page three, it's called the Management Discussion Analysis, and this is really just a kind of management story of what's happening with the city and it's a really good read. It's tends to get easy to get lost in the numbers and the footnotes and all of stuff in the pages in the back, but this Management Discussion Analysis really gives that broad picture of what's happening and also that's why I want to bring up this chart here and this goes and compares 2004 to 2008, which 2004 was the first year that you implemented GASB 34, which required you to report all your activities as if you were an enterprise, so to speak, and so this is just a big picture look and this is what the MBNA tries to tell you is over time how is the city doing, is it improving it's financial condition or deteriorating? And so just want to draw your attention to the fact that, you know, all indicators, their net assets are increasing, assets are increasing, liability has increased slightly, expenses and revenues increased slightly as well. So, just kind of at a big picture level things are improving with the city as a whole. On to what we call the Government-wide Financial Statements on pages 20 through 23. This is what takes all your funds and, basically, converts them to enterprise accounting and so on here you have assets, you have debt, and that kind of thing. The one thing I did want to point out is on page 26 at your fund level accounting. The page there it shows capital outlay, which is things purchased of a capital nature and, of course, you had a lot of construction and progress on this -- this asset here and that's what caused your net fund balance to decrease for the year. So, again, nothing surprising there, but just wanted to point that out from a financial standpoint. Moving on to the notes, pages 37 through 39. This is -- in the recent economic environment kind of a critical note here. This is your cash and investment disclosure and, basically, this measures your exposure to risk in your investment cash pool and, you know, there is nothing in there that causes any kind of alarm or anything, but, you know, as a governance body you'll want to focus some attention on that. And the one thing I did want to point out, though, was a page 39, the top paragraph there, it does disclose that there is an amount that's uninsured and uncollateralized on your cash balance. Now, this is not unusual or rare by any means, but in this economic condition where, you know, some banks are struggling, you know, I just want to bring that to your attention that there is some exposure there. So, some companies have decided to do different things. One thing you can do is, you know, make sure either you'd move to an interest -- non-interest bearing account, which would be fully covered by FDIC insurance, at least until the end of 2009, and there is some other collateralization type things you could do and, of course, some entities decide to except that risk, so that's -- that's just to bring to your attention for your information. On page 51, this is the other auditor's report in the packet and this is our report based on government auditing standards, which are a little bit different than the normal auditing standards we are required to follow, and Meridian City Council -Pre-Council Meeting March 10, 2009 Page 3 of 11 there is a finding attached there in more detail on page 53 there, which is also included in your management letter, and if you have any other questions on that we can address that. We can move on to the next item, which is going to be the stapled letter. It starts with we have audited the financial statements and this is just a letter to those charged with governance and, basically, what this is is telling you that we audited the entity in accordance with government auditing standards and if we had any significant findings they would be in here. Now, in your case we don't have any, so this is just communicating that to you. You know, there was no significant adjustments, no disagreements with management. We are not aware that management was opinion shopping with other auditors or anything like that that we would be required to inform you of. There are a couple schedules attached to the back of this letter and this is what we call past adjustments. These are items that we noted during the audit and management has decided not to record these, based on, you know, maybe it's a timing issue, getting the books closed, or whatever, not significant dollar amounts to the financial statements as a whole. But, again, just making you aware of that fact. And, then, the other letter you have there is the management letter and just as an overview, there is three levels of conditions we can report to you on that. The highest level is a material weakness. The next level down is a significant deficiency. And the lower level is other comments or suggestions. We have nothing we are required to report to you as a material weakness or significant deficiency and we have included three comments there that are just things that during the course of the audit we threw out there for improved suggestions for your entity. The last thing I'd like to throw out there for your consideration is, again, due to this economic environment that we are in you really need to take a look at the entity and see where you might have risk in regard to fraud and misuse of assets. There is a last -- the two years there has been a change in auditing standards where we will actually go in and do a little more inquiry as regard to where could there be fraud within the organization and so we plan our audit according to those responses and we also consider the economy and environmental factors and right now with the economy in a down turn, foreclosures up, people losing their jobs, this creates heightened risk, because people now may have motivation they didn't have two years ago and so, you know, as you are setting policy as you're communicating with your department heads, you know, again, just that tone at the top, making sure everybody is aware of the standards they need to uphold. If there are concerns who they can talk to about them and this will just create an environment where something were to try to be perpetrated, it could be addressed sooner rather than later. And that's all I have for you, unless you have questions forme. De Weerd: Counsel, do you have any questions? Bird: Just another nice report. Rountree: Madam Mayor. Yeah, I have a question about the comment that Bobby made and I picked up on when I read the report in terms of our risk as it relates to our cash balance. Lawrence: Uh-huh. Meridian City Council -Pre-Council Meeting March 10, 2009 Page 4 of 11 Rountree: And you alluded to one potential remedy. Was that discussed at all with Stacy -- had you discussed that and are we going to be looking at something there -- because I -- we are not out of this crazy down tum at this point as far as banks go. Kilchenmann: Yes. Actually, we did discuss that and at that particular point in time our cash balance was so high, because we were paying the big bills on this building now kind of at the -- when the big rush came. So, we no longer have that much cash that's uninsured. We keep just a minimum balance. Rountree: Okay. Kilchenmann: So, we --our check runs have been about a million dollars, so we took -- that's pretty much what we keep in there. A million dollars for check writing and, then, when it's pay day, it goes up. So, most of it's in the -- removed to the pool. The investor is really having a problem finding any -- our agency bonds are being called and our certificates, you know, you don't want to go above the insured limit. The new insured limit runs out I think he said in May. I think it might be in May. So, we would have 10,000 CDs out there. That's the problem Bird: Yeah. Rountree: Are there any other instruments that are becoming available that would be insured or -- Kilchenmann: I can't think of any. Lawrence: There are sweep accounts you can get that are collateralized, you know, and that just --they'll usually adjust your yield down for that feature, obviously, but some places have gone to that option. Rountree: Keep looking. Zaremba: Madam Mayor? De Weerd: Mr. Zaremba. Zaremba: This is kind of a sideways question, but do we pay attention to the strength of the bank where we keep our funds in? Do we ever inspect their -- Kilchenmann: Actually, we did. We had a meeting with them -- oh, it's been a few months ago and talked about -- they did have a big loss in 2008 and they disclosed that loss and, then, their level of capitalization. So, we have -- we have discussed it with them. Zaremba: And you feel confident about their position? Meridian City Council -Pre-Council Meeting March 10, 2009 Page 5 of 11 Kilchenmann: I wouldn't say I feel confident. I think they could likely been purchased by a larger bank, but I feel confident in the level that we maintain in our checking account. Zaremba: Thank you. Hoaglun: Madam Mayor? De Weerd: Yes, Mr. Hoaglun. Hoaglun: A question. A couple of years ago GASB said that public entities have to look at the level of what their subsidizing their retirees -- OPEB, Other Post Employment Benefits. Is that something you have looked at? Do you we have any exposure there of our retirees. They are under PERSI, which is a state program, but -- Lawrence: But there is some exposure there. Remind me what phase you are, Stacy, on that. For 43? Do you recall? It's either next year or the year after. It follows the same implementation as 34. And so that is a liability that could be coming on and we are still in the process of figuring out what that is. PERSI has gotten some information back to some entities on what they think the number is, but that hasn't necessarily been the right number for other entities, so -- but there is a potential there. Hoaglun: Yes, Madam Mayor and Bobby. It is very complex on Council Members on trying to figure out what that level is, so that's something we do want to pay attention to as we move forward, just so we aren't surprised by a bigger number than we thought we might have. Kilchenmann: Oh, no. Another standard. De Weerd: I'm glad you said that. Rountree: Thank you. De Weerd: Anything else from Council? Bird: No. Just another good report. Rountree: Yeah. Bird: Appreciate it. De Weerd: Okay. Thank you for being with us. Lawrence: As always thank you very much for the opportunity. It's a pleasure doing business with the City of Meridian. Meridian City Council -Pre-Council Meeting March 10, 2009 Page 6 of 11 Zaremba: Madam Mayor? De Weerd: Mr. Zaremba. Zaremba: Is a motion in order to accept the auditor's report? Is that necessary? Bird: Yeah. Nary: Yeah. I believe -- Madam Mayor, I believe that's the normal course. De Weerd: Uh-huh. Zaremba: Madam Mayor, I move that we accept the auditor's report. Rountree: Second. De Weerd: I have a motion and a second to accept the auditor's report. All those in favor say aye. Okay. All ayes. Motion carries. MOTION CARRIED: ALL AYES. Item 4: Annual Impact Fee Update. De Weerd: Okay. Our next item. If we could -- it was our annual impact fee update. I would imagine that's Stacy as well. Kilchenmann: Are we ready for the impact fee report? De Weerd: When you are. Kilchenmann: Okay. The impact fee committee met, I believe it was in October of this year, and Iput -- because of the harassment I have suffered for small font, I actually made -- a few of the items in your packet I just wanted to briefly go over and I am putting them in a font that I can actually read. So, the first one on the top is it's the City of Meridian ENR updated fee schedule. This is the only issue that was -- that was on the table when the impact fee committee met, was, basically, whether we would do an ENR increase, which by the -- the average of that was 4.43 percent, so you can just go down that middle column and it shows how much it would have increased, at least $3.77. The fire residential would have been 16.71. And one cent for commercial. And, then, the Parks and Recreation fee would have been $61.36. So, that was -- this is, basically -- again, we reviewed the report and the data and, then, this was the only item on the table. So, if you look at the second page, it's called impact fee history, updated as of August 31, 2008. And the decision of the committee after some discussion was not to change the fee. But pro -- in changing the fee some people had the feeling that we needed to keep up with inflation. We need to make the small increases along the Meridian City Council -Pre-Council Meeting March 10, 2009 Page 7 of 11 way. We don't want to have to go back like we did before and make large increases. And the other side of the table was, the economy is not doing well. This is not a time to do any kind of increase. So, when the committee voted, they made the decision to not change the fee. Then, the third set of paper, just the stapled together, is the report that we give the committee and review with them and that is the history of the fund for each department for the last year. So, if you go to the park one, which is the one on top, their fund balance at the end of 9/30/2008 -- and when I say fund balance, this is really their cash fund balance, was 2.1 million dollars and when we remove everything that has been has -- has been budgeted against that, it's -- we would come to the end of 2009, supposing that they can completed all their projects, being negative 642,000 dollars. This does include abig -- I think it's 1.9 million that is in our land purchase account. So, that's -- that's a big impact to the impact fee fund and it's been carrying through there for awhile, so it's not likely that we would expend that. And the second page for fire -- and to go back a little bit, for the park impact fees, my projection for this current year is that if they make it to 500,000 dollars they would be fortunate. So, we had originally budgeted 770,009, lowering that to $500,000. On the second page, the fire impact fee fund has actually done very well and they are earning -- they actually eam -- will eam more than the park impact fee fund. So, what's happened with their fund is that we made a payment to rural fire to repay our 33 percent in the training tower and so this next year we paid them -- I think we paid them in October and this next year we will start repaying for station five. So, their projected -- their fund balance was a million dollars at the end of 2008 and they're projected to have about a little over five 500,000 at the end of the current year. And, then, finally, police. Police is a much smaller fund, much smaller fee than we -- than the other projects. They're projected to end -- they didn't have anything budgeted and they're projected to end at about 300,000 dollars for the year. So, that's -- that's the essence of the information that we covered at the meeting and the action that was taken. So, are there any questions? De Weerd: Council, any questions? Zaremba: Madam Mayor? De Weerd: Mr. Zaremba. Zaremba: I guess this is more of a philosophical and maybe even a legal question, but the danger in not raising impact fees, at least for inflation, as you said some of the discussion was, then, some years down the line we need to make a big increase. My question is: Could we legally make a small increase this year and, then, waive collection of that difference so that the fee is actually going up, but we are not -- every year we move the fee up a little bit, whether we collect the difference or not? Kilchenmann: I'm not sure I understand. Zaremba: Understand what the question is? Kilchenmann: Yeah. Meridian City Council -Pre-Council Meeting March 10, 2009 Page 8 of 11 Zaremba: I guess what -- sensitive to the times on paper, our fee would go up, but what we actually collect from people would be the same as we are collecting now. Kilchenmann: Oh. You would say, well, this year it should have been 4.43 percent, next year we should have three percent, so we are going to do seven percent? Zaremba: No. Kilchenmann: Okay. Bill looks like he is understanding what you're saying. Nary: Madam Mayor, Members of the Council, you can't do that. There is no way for us to track that. What you're saying is is we will raise the fee, but we won't collect additional fee, and there is no way at the building department they are going to be able to keep track of that and, really, you're essentially misleading that public, because you're telling them that it's one fee, in a since you're collecting less. Nobody's harmed, but it really is misleading. And at some point you're going to make up the difference. You know, at some point you're going to say, okay, things are well, we can now charge the fee we actually approved and in the public's eyes, if you were a builder, it went up seven percent or eight percent or nine percent or whatever it is, by the time you actually start collecting it and it's not going to jive. So, I wouldn't recommend you do it. I think it would be incredibly confusing to the public if you did that, so -- Zaremba: Thank you. You did understand the question and I understand the answer. Kilchenmann: You can still vote to increase -- the Council can still vote to increase the fee and I believe Mr. Nary is going to review your options. Nary: Madam Mayor, Members of the Council, basically, the recommendation from the committee was to not add the inflationary amount here, the 4.43 percent. You have the ability to do that. It's already in the ordinance itself, you don't have to hold a public hearing for it if you want to increase it. If you don't want to increase it, then, which ever way you want to move to direct us to do that, we will bring a resolution back to either not increase the fees, so it is memorialized that was your decision, or to increase the fee because that's your decision. You certainly have the ability to hold a public hearing if you wish, you're not obligated to do that, because it's less than five percent and it's already included in ordinance. So, it's really your -- your decision on wanting to do that, but it was the recommendation of the committee not to, so -- Bird: Madam Mayor? De Weerd: Mr. Bird. Bird: And I would go along with the committee on this for this year. We -- while these fees aren't outrageous or four percent increase isn't outrageous, it still -- we need to do everything we can to keep the cost down so our builders and -- can get work and start Meridian City Council -Pre-Council Meeting March 10, 2009 Page 9 of 11 buying and getting permits. Building permits. So I'm not for raising the impact fee this year. Igo along with what the committee recommended. Rountree: Madam Mayor? De Weerd: Yes, Mr. Rountree. Rountree: I don't disagree with what Councilman Bird just said. However, I get concerned that we get further and further behind as it relates to the inflationary ability of these impact fees to do what they are intended. There isn't a date certain that any increase has to be made. I would like to see this item stay in a tickler file, even though I know it shouldn't be optimistic, if, in fact, the economy does turn around slightly that maybe we could look at it a portion of the inflationary increase at some point in time later in the fiscal year. But not just forget about it. Hoaglun: Madam Mayor? De Weerd: Mr. Hoaglun. Hoaglun: I agree with Councilman Bird that we don't want to be putting more fees on people when we are trying to get the economy moving again, but, at the same time, as the Councilman Rountree pointed out, we have got to keep a very close eye on this and not go too far down the road and if things are picking up, then, it looks like this is something that we can do, because, on the other hand, someone will have to pay for it, whether it's -- if it's not going to be the new development, then, it's the folks that have been here and if new development is causing some of these increases that are out there for need for services, then, they need to carry their fair share of that. So, it's something that, yes, I think for the time being we can keep from raising these fees, but we just want to keep a close watch on that. Nary: Madam Mayor? De Weerd: Mr. Nary. Nary: Madam Mayor, Members of the Council. Stacy, isn't it August when they have been meeting? Bird: Yeah. Nary: Or so? Kilchenmann: Well, this year we met early because of the new building. The year before we met probably -- well, we met several more times that November. But, yeah, we try to do it September, October. Meridian City Council -Pre-Council Meeting March 10, 2009 Page 10 of 11 Nary: So, I guess to answer Council Member Rountree's -- I mean not answer, but -- you certainly are not obligated to impose the fee now. We can certainly not -- we can continue this matter and not take any action at all, if that's your wish, or because they are going to probably be meeting again in, what, four months or so -- four or five months, they may be reviewing this same information and issue again. And, again, still looking at that. So, it's totally your direction, whatever you would like to do. We can certainly hold off on this for a period of time, wait until they reevaluate it, or do something else. De Weerd: Well, I guess I would like to suggest that you reconvene late this summer and see what the market conditions are. But I think in the interim, until then, those capital improvement plans need to be updated with realistic costs tied to it. I think that when they were -- when they were developed a couple of years ago, many of those costs were under -- under estimated. Kilchenmann: I think it's actually been like three years, now. So, we will take a look at that, what is involved in that data. De Weerd: Yeah. Because we saw that even after the first year, we saw how under calculated some of those prices were on those items. Kilchenmann: Uh-huh. De Weerd: And so I think those need to be updated, so that when the committee reconvenes, their dealing with updated and realistic numbers. Kilchenmann: Uh-huh. We can do that. De Weerd: Okay. If there is no further discussion on this item, Council, we are at the end of our pre-Council agenda. I would entertain a motion to adjourn. Zaremba: So moved. Rountree: Second. De Weerd: All those in favor say aye. All ayes. MOTION CARRIED: ALL AYES. MEETING ADJOURNED AT 6:50 P.M. Meridian City Council -Pre-Council Meeting March 10, 2009 Page 11 of 11 (AUDIO RECORDING ON FILE OF THESE PROCEEDINGS) ~~ a -~ ~{ 5 zap r ~/~/ MAYOR TAM Y De,:1N ERD DATE APPROVED ~; ``~~,~y~'®~~~MER~~~ ~% rye ,~ ~, ~~ C~' ~oW'~RgT '-. A~" ST SEAS., J,~YCEE L. OLMAN, CITY CLERK ~ o`~ G~~ '~~ o ';~,,'9~~ sr 1s~ , P,Z,```~~. • March b, 2009 Pre-Council MERIDIAN CITY COUNCIL MEETING March 10, 2009 APPLICANT ITEM NO. 3 REQUEST Audit Report with Stacy Kilchenmann and Eide Bailly AGENCY COMMENTS CITY CLERK: See afFached CITY ENGINEER: CITY PLANNING DIRECTOR: CITY ATTORNEY CITY POLICE DEPT: CITY FIRE DEPT: CITY BUILDING DEPT: CITY WATER DEPT: CITY SEWER DEPT: CITY PARKS DEPT: MERIDIAN SCHOOL DISTRICT: ADA COUNTY HIGHWAY DISTRICT: SANITARY SERVICE COMPANY CENTRAL DISTRICT HEALTH: NAMPA MERIDIAN IRRIGATION: SETTLERS IRRIGATION: IDAHO POWER: US WEST: INTERMOUNTAIN GAS: MERIDIAN POST OFFICE: OTHER: Contacted: Date: Phone: Emailed: Staff Initials: Materials presented at public meetings shall become property of the City of Meridian. r ~-"1 ~ EideBaillysM CPAs & BUSINESS ADVISORS February 23, 2009 Mayor and Members of the City Council City ofl~Ieridian, Idaho Meridian, Idaho We have audited the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of City of Meridian; Idaho (the City) for the year ended September 30, 2008, and have issued our report thereon dated February 23, 2009. Professional standards require that we provide you with the following information related to our audit. Our Responsibility under Auditing Standards Generally Accepted in the Untied States ofAmerica and Government Auditing Standards As stated in our engagement letter dated December 30, 2008, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your responsibilities. , As part of our audit, we considered the internal control of the City. Such considerations were solely for 'the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. As part of obtaining reasonable assurance about whether the fmancial statements are free of material misstatement, we performed test of the City's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our tests was not to provide an opinion on compliance with such provisions. Planned Scope and Timing of the Audit We performed the audit according to the planned scope and timing previously communicated to you in our meeting about planning matters on December 30, 2008. Significant Audit Findings Qualitative Aspects o. f Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the fmancial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2008. We noted no PEOPLE. PRINCIPLES. POSSIBILITIES. www.eidebailly.com 877 W. Main St., Ste. 8001 Boise, ID 83702-5858 1 Phone 208.344.71501 Fax 208.344.7435 1 EOE • transactions entered into by the governmental unit during the year for which there is a lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred. Accounting estimates are an integral part of the fmancial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The disclosures in the fmancial statements are neutral, consistent, and clear. Certain financial statement disclosures are particularly sensitive because of their significance to fmancial statement users. D~culties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. The attached schedule summarizes uncorrected misstatements of the fmancial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the fmancial statements taken as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated February 23, 2009. Management Consultations with Other Independent Accountants In some cases,. management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the governmental unit's fmancial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards. require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit's auditors. However, these discussions occurred in the normal. course of our professional relationship and our responses were not a condition to our retention. We presented management with our formal management letter and we discussed the following matters: Procurement through the bidding process, tracking of donated fixed assets and exposure to custodial risk related to cash balances. 2 This information is intended solely for the use of the Mayor and the Members of City Council and management of the City of Meridian, Idaho and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, ~~~~ Boise, Idaho City of Meridian Adjustments Passed Year ended September 30, 2008 SCOPE: All known and projected misstatements and/or classification errors -General Fund Effect Debit (Credit) of misstatements and classification errors on: Net Description Asset Liability Revenue Expense Income Equity Reversed prior year misstatements To adjust the gas franchise account receivable as of 9/30/07 per the confirmation received from Intermountain Gas. To adjust accrued interest revenue under modified 60 day accrual. Current year misstatements None Noted Total (22,650) (22,650) 22,650 16,533 16,533 (16,533) - - (6,117) - (6,117) 6,117 (6,117) Cumulative Misstatement Errors - 4 City of Meridian Adjustments Passed Year ended September 30, 2008 SCOPE: All laiown and projected misstatements and/or classification errors -Capital Projects Fund Effect Debit (Credit) of misstatements and classification errors on: Net Description Asset Liability Revenue Expense Income Equity Reversed prior year misstatements To adjust accrued interest revenue under (6,554) (6,554) 6,554 modified 60 day accrual. To record accounts payable not accrued for at year end. (25,838) (25,838) 25,838 Current year misstatements None Noted Total - - (6,554) (25,838) (32,392) 32,392 (32,392) Cumulative Misstatement Errors - 5 t • • MANAGEMENT LETTER a SEPTEMBER 30, 2008 e a 0 CITY OF MERIDIAN, IDAHQ t 1 s 0 ~.e. ._~ ' ~ ~->a1 ~ EideBaillysM 1 CPAs & BUSINESS ADVISORS Mayor and Members of the City Council City of Meridian, Idaho Meridian, Idaho 1 In planning and performing our audit of the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Meridian as of and for the year ended September 30, 2008, in accordance with auditing standards generally accepted in the United States of America, we considered the City of Meridian's internal control over fmancial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Governmental Unit's internal control. Accordingly, we do not express an opinion on the effectiveness of the Governmental Unit's internal control. A control deficiency exists when the design or operation of a control does not allow management or employees, 1 in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or a combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal control. '~ A material weakness is a significant deficiency, or a combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control. Our consideration of internal control was for the limited purpose described in the first paragraph and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control that we consider to be material weaknesses, as defined above. This communication is intended solely for the information and use of management, the Members of City Council, and others within the organization, and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, ~ ~~~ Boise, Idaho February 23, 2009 PEOPLE. PRINCIPLES. POSSIBILITIES. www.eidebailly.com 877 W. Main St., Ste. 8001 Boise, ID 83702-5858 1 Phone 208.344.71501 Fax 208.344.7435 1 EOE 1 0 0 i~ OTHER CONDITIONS Procurement Condition: During the year a Council Member entered the City of Meridian into a contract to move a schoolhouse without going through the bidding process for public works construction in excess of $25,000 as required by state statute. The expenditure was not discovered until the work had been performed and the invoice was submitted to the City for payment. Recommendation: ' The City should follow the state statute and for all public works construction related expenditures in excess of $25,000, a minimum of three bids should be obtained prior to the work being performed. Management's Response: We agree that all City expenditures should be rocessed in accordance with the Ci 's urchasin P ty p g policy. Fixed Assets Condition: 1 The City has difficulty tracking fixed asset donations. Donations are not always communicated to the accounting personnel resulting in late recording of additions. ' Recommendation: We recommend that donation collection be centralized to ensure that all donations are processed timely. ' Management Response: We agree and continue to work to educate the Legal and other departments on the importance of notifying the Finance Department when the City accepts donated assets. Cash ' Condition: The City of Meridian has exposure to the custodial credit risk as there is a large amount of cash that is uncollateralized and uninsured as of year end. Recommendation: We recommend that the City of Meridian take steps to ensure that the City's exposure to custodial credit risk is ' reduced through insurance or collateralization. Management's Response: ' We agree and during FY09 we have worked to ke uninsured bank balances at the minimum needed to c v eP o er payable and payroll check runs. 1 1 • FINANCIAL STATEMENTS SEPTEMBER 30, 2008 CITY OF MERIDIAN, IDAHO 1 1 1 CITY OF MERIDIAN, IDAHO i Table of Contents Page INDEPENDENT AUDITORS' REPORT 1 MANAGEMENT'S DISCUSSION AND ANALYSIS 3 FINANCIAL SECTION BASIC FINANCIAL STATEMENTS Government-wide Financial Statements: Statement of Net Assets 20 Statement of Activities 22 Fund Financial Statements: Balance Sheet -Governmental Funds 24 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets ZS Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 26 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 27 Statement of Net Assets -Proprietary Fund 28 Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Fund 29 Statement of Cash Flows -Proprietary Fund 30 Notes to Financial Statements 32 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual -General Fund q.g Notes to Required Supplementary Information 50 OTHER INFORMATION Independent Auditors' 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 51 Schedule of Findings 53 re- ~ ~ Eid~~ lly ~ CPAs & BUSINESS ADVISORS INDEPENDENT AUDITORS' REPORT Mayor and Members of the City Council City of Meridian, Idaho Meridian, Idaho We have audited the accompanying financial statements of the governmental acti~~ities, the business-type activities, the discretely presented component unit, and each major fund of the City of Meridian, Idaho, as of and for the year ended September 30, 2008, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of City of Meridian, Idaho's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall fmancial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, and each major fund of the City of Meridian, Idaho, as of September 30, 2008, and the respective changes in fmancial position and where applicable, cash flows, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standurds, we have also issued our report dated February 23, 2009, on our consideration of City of Meridian, Idaho's internal control over fmancial 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 intemal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. PEOPLE. PRINCIPLES. POSSIBILITIES. www.eidebailly.com 877 W. Main St., Ste. 8001 Boise, ID 83702-58581 Phone 208.344.71501 Fax 208.344.7435 1 EOE 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 L~ The management's discussion and analysis and budgetary comparison information listed in the table of contents are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. ~~~~ Boise, Idaho February 23, 2009 2 ~ a o CITY OF MERIDIAN, IDAHO MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 This section of the Ci of Meridian's Ci 's ann ty ( ty ) ual financial report presents management s discussion and analysis of the City's financial performance during the year ended September 30, 2008. Please use this information in conjunction with the information furnished in the City's fmancial statements. Financial Highlights • The total assets of the City exceeded its liabilities at Se tember 30 2008 b $271 415 880. Of thi P ~ Y s amount $43,063,511 is unrestricted and available to meet the City's on-going obligations to citizens and creditors. • During fiscal year 2008 the City's total net assets increased $21,501,450 as compared to an increase of $27,354,248 during fiscal year 2007. Net assets of the governmental activities increased $14,863,422 and net assets of business type actiti~ities increased $6,638,028. • Total fund balance of governmental funds at September 30, 2008 was $23,336,871 compared to a total governmental fund balance at September 30, 2007 of $28,939,045. Of the September 30, 2008 balance, $2,169,687 is restricted for park, police, and fire impact fee capital expenditures, $3,386,023 is reserved for capital projects, $400,000 is reserved due to a long-term lease agreement, and $52,482 is reserved for public safety purchases. The remaining $17,328,679 is unreserved. • The City has $1,370,000 in long-term debt due to a capital lease and trust agreement with Wells Fargo Bank for the construction of the police station. The agreement was executed in fiscal year 2002 and has a term of ten years. Overview of the Financial Statements This annual report consists of five parts -management discussion and analysis, the government-wide financial statements, fund financial statements, notes to the financial statements, and required supplementary information. Government -Wide Financial Statements These statements report information about all of the operations of the City using accounting methods similar to those used by private sector companies. These statements are prepared usmg the flow of economic resources measurement focus and accrual basis of accounting. The current year's revenues and expenses are recorded as transactions occur rather than when cash is received or paid. The government-wide financial statements are divided into two categories: ' Statement of Net Assets -Reports all of the City's assets and liabilities with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. Statement of Activities -Reports all of the City's revenues and expenses for the year by function. Examples of ' functions are public safety, administration, and water and sewer activities. Revenues, such as property tax which cannot be traced to a specific function, are reported as General Revenues. ' Fund Financial Statements The Fund fmancial statements provide information about the City's major funds, not the City as a whole. The City uses a method of accounting, called fund accounting, to separate specific sources of funds and ' corresponding expenditures. Funds maybe required by law or maybe established by the City Council. ~ p ~ CITY OF MERIDIAN, IDAHO a MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 The City has the following funds: Governmental Funds: These funds encompass the City's basic services, public safety, community planning and development, administration, and parks and recreation. Governmental fund fmancial statements focus on short- term inflows and outflows of spendable resources, an accounting approach known as the flow of current financial resources measurement focus and the modified accrual basis of accounting. Information provided by these statements provides ashort-term view of what resources will be available to meet needs. The City has two governmental funds: General Fund -The general fund is the general operating fund of the City. It derives most of its income Q from property tax and funds the operations of the City. It includes the Special Services Fund, used to account for revenue and expenses of the community planning and development function and the Park Impact Fee Fund, used to account for the park impact fee revenue and park development costs. Capital Projects Fund -The Capital Projects Fund is used to account for financial resources to be used for the acquisition of major capital facilities. Proprietary Fund: User fees finance activities in these funds. The City of Meridian only has one type of propriety fund, the enterprise fund. The water and sewer utilities and all the activities necessary to support their operation are accounted for in this fund. Accounting for this fund is the same as a private business on a full accrual basis. Notes to the Financial Statements The notes provide additional information that is necessary to fully understand the date presented in the government-wide and fund financial statements. Required Supplementary Information This section has information that further explains and supports the information in the fmancial statements by including a comparison of the City's budget data for the year. U 1 it J o CITY OF MERIDIAN, IDAHO a MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 FINANCIAL ANALYSIS OF THE CITY OF MERIDIAN AS A WHOLE Q Net Assets Net assets measure the difference between what the City owns (assets) versus what the City owes (liabilities). At September 30, 2008 the City's combined assets exceeded liabilities by $271,415,880. In comparison at September 30, 2007 combined assets exceeded liabilities by $249,914,430. The largest portion of the City's net assets, 82%, is invested in capital assets net of related debt. Capital assets include land, building, equipment and machinery, and sewer and water utility infrastructure. The last few years the percentage of investment in fixed assets has increased as the City has undertaken several construction projects. In FY05 the City's investment in fixed assets was only 62%, increasing to 66% in FY06, and 74% in FY07. Assets restricted to a particular use are 2% of net assets. The City's restricted funds are principally the park, police and fire impact fee fund (portion of building permit collected for construction of new assets to retain existing service levels). The City has $400,000 held at Wells Fargo bank as required by the police building bond covenants. The City has established a reserved fund called the Capital Improvements Fund. The City puts excess funds generated from building permit sales into a fund marked specifically for general fund capital projects. Unrestricted net assets equal 16% of net assets as opposed to 24% last year. Although the City's net assets increased by $21.5 million, 9% from the prior year, more of the City's assets are in capital assets, as opposed to liquid fund balance. The 9% increase in net assets is less then the FY07 increase of 12% and the FY06 increase of 15%, reflective of the growth downturn. Some portion of the unrestricted net asset balance has been designated by the City Council for specific purposes. The table below has been condensed from the Statement of Net Assets. Primary Government Governmental Business -type Activities Activities Total 2008 2007 2008 2007 2008 2007 Current and Other Assets $ 44,428,780 $ 47,670,543 $ 28,954,406 $ 40,912,688 $ 73,383,186 $ 88,583,231 Capital Assets 56,791,974 36,925,722 166,974,685 149,548,030 223,768,859 186,473,752 Total Assets 101,220,754 84,596,265 195,929,091 190,460,718 297,149,845 275,056,983 Current Liabilities 21,165,271 19,073,557 2,726,605 3,898,242 23,891,876 22,971,799 Long-term Liabilities 1,731,458 2,062,105 110,631 108,649 1,842,089 2,170,754 Total Liabilities 22,896,729 21,135,662 2,837,236 4,006,891 25,733,965 25,142,553 Net Assets: Q Invested in Capital Assets Net of Related Debt 55,421,974 35,135,722 166,974,685 149,548,029 222,396,859 184,683,751 Restricted 5,955,710 5,835,549 - - 5,955,710 5,835,549 Unrestricted 16,946,341 22,489,332 26,117,170 36,905,798 43,063,511 59,395,130 Q Total Net Assets $ 78,324,025 $ 63,460,603 $ 193,091,855 $ 186,453,827 $ 271,415,880 $ 249,914,430 r 0 • • CITY OF MERIDIAN, IDAHO MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 1 1 ~~ 1 I L_J Changes in Net Assets During the year the City's financial position improved by $21,501,450. The following condensed financial information was derived from the government-wide Statement of Activities and shows how the City's net assets changed during the year. Changes in Net Assets for Fiscal Year Ending September 30, 2008 Governmental Business-Tv oe Total Prima ry Activities Activities Govemment FY2008 FY2007 FY2008 FY2007 FY2008 FY2007 Revenues Program Revenues Charges for services $ 6,916,337 $ 6,700,702 $ 12,179,084 $ 11,156,836 $ 19,095,421 $ 17,857,538 Operating grants and contributions 187,000 417,587 4,577,125 5,319,851 4,764,125 5,737,438 Capital Grants and Contributions 3,896,461 4,222,477 6,318,732 8,592,670 10,215,193 12,815,147 General Revenue: Property taxes 15,975,455 13,518,716 15,975,455 13,518,716 Franchise fees 1,427,227 1,307,324 1,427,227 1,307,324 Sales tax and other governmental 4,027,232 3,807,371 4,027,232 3,807,371 Unrestricted Investment Earnings 869,966 1,406,745 1,141,833 2,228,460 2,011,799 3,635,205 Other Revenue (88,500) 27,279 204,203 212,695 115,703 239,974 Total Revenues 33,211,178 31,408,201 24,420,977 27,510,512 57,632,155 58,918,713 F~rpenses General Govemment Administration 3,305,739 2,636,606 3,305,739 2,636,606 Law Enforcement 8,681,734 7,603,612 8,681,734 7,603,612 Fire Department 6,333,494 5,231,012 6,333,494 5,231,012 Parks and Recreation 2,340,099 1,669,357 2,340,099 1,669,357 Community Planning and Devlp 2,860,661 3,403,632 2,860,661 3,403,632 Interest on long-term debt 73,942 91,450 73,942 91,450 Enterprise -sewer and water 12,535,036 10,928,796 12,535,036 10,928,796 Total Expenses 23,595,669 20,635,669 12,535,036 10,928,796 36,130,705 31,564,465 Excess of revenues over expenditures before transfers 9,615,509 10,772,532 11,885,941 16,581,716 21,501,450 27,354,248 Transfers - internal activities 5,247,913 616,501 (5,247,913) (616,501) - _ Increase in net assets 14,863,422 11,389,033 6,638,028 15,965,215 21,501,450 27,354,248 Net Assets, Beginning of Year 63,460,603 52,071,570 186,453,827 170,488,612 249,914,430 222.560,182 Net Assets, Ending of Year $ 78,324,025 $ 63,460,603 $ 193,091,855 $ 186,453,827 $ 271,415,880 $ 249,914,430 Governmental Charges for Services include; Building permits and filing fees Court fines Rural Fire District service reimbursement Park and Recreation Fees Business Type Charges for Services inc]ude; Water and Sewer sales Engineering review fees Business Type Operating Grants and Contributions include; Water and Sewer connection fees Governmental Capital Grants and Contributions include; Impact fees for Parks, Fire, and Police Park land donations Business Type Capital Grants and Contributions are developer donated water and sewer line ~ fi 0 0 0 CITY OF MERIDIAN, IDAHO Q MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 Governmental Activities: Governmental activities increased the City's net assets by $14,863,422. Revenues exceeded expectations by about $1.6 million dollars, partly due to property tax exceeding the budgeted amount. General government also had some expense savings, in particular significant salary savings from vacancies in the Police Department and salary savings from mid-year opening of a new fire station. In addition there was a $4.5 million dollar transfer in from the Enterprise Fund to go towards construction of a City Hall building. This was an unusual one-time occurrence. The Planning and Building departments are isolated in Development Services. Development Services is part of the general fund and in the audited financials is rolled into the general fund. By City Ordinance any excess of revenues over cost from these activities aze transferred to the Capital Improvement Fund. The Development Services continued to experience revenue declines as new development declined. There were no excess revenues available to transfer to the Capital Improvement Fund. Revenue in this program equal 54% of Charges for Services, and are primarily commercial and residential building permit sales. The City sold 606 residential building permits and 30 multi-family permits in FY08 compared to 849 residential and 16 multi-family the year before. This is a 29% decrease in residential building permit sales. T'he fund did come in at budget for two reasons. One, commercial building permit sales were slightly more then budget at $1.3 million dollars. Two, the City uses contracted building inspectors rather than employees so when building permit sales decrease the cost of conducting inspections also decreases. Residential, commercial and related building permit sales were 11% of total governmental activities revenue. When building permit sales decrease, impact fee revenues, part of capital grants and contributions, also decrease. Impact fees are chazged when the building permit is sold, they can be used only for construction or capital equipment related directly to maintaining current service levels for new growth. Impact fee revenues increased from $1.4 million in FY07 to $1.7 million in FY08. The park impact fee revenues decreased more significantly because they can only be collected on residential building permits while fire and police impact fees can be collected on both commercial and residential. Property tax is the single greatest source of governmental revenue. During the past decade property tax has shown substantial increases from year to year, for example it increased 27% from FY05 to FY06. The primary driver for substantial increases in property tax is the utilization of new construction in the property tax levy formula, followed to a lesser extent by annexations. New construction value for tax year 2005 was $695 million. The new construction value used for FY08 was still robust at $679,756,216. As a consequence property tax revenue increased 18% between FY07 and FY08. The City also annexed properties with a taxable value of ~ $103,970,136. Governmental capital grants and contributions increased slightly. This category is principally impact fees collected for parks, police, and fire, donations and grants. As discussed above impact fee revenues continued to decrease with the decline in new building. However the City received several donations for park land and development including $1.2 million for the Meridian Youth Baseball Complex. 0 o fl O CITY OF MERIDIAN, IDAHO MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 FY08 Governmental Activities Revenue Franchise Fees 4% 47% crating ontributions 1% iital ~tributions Public Safety (Fire and Police) is by far the largest governmental function: 64% of total governmental expenses. Public Safety costs increased 17% from FY07 to FY08. The Police Department filled some open positions and the Fire Department opened a new fire station, Station #5. O Community Planning and Development expenses were 12% of governmental expenses. Included in Community Planning and Development are building inspections, building administration, Planning Department, and economic development. In addition to the cost of building inspections decreasing, the functions code enforcement and street lights were moved from the Development Services fundto the General Fund. Administration includes several general support functions, Information Technology, Accounting and Finance, Human Resources, City Clerk, Mayor's Office and City Council. One half of Human Resources, Information Technology, and Finance costs are transferred to the enterprise fund since these functions support all funds. c 0 e Interest Development Fees Intergovernmental 3% Charges for services q ~ o/ CITY OF MERIDIAN, IDAHO MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 !r-' L~ 0 0 u Ci [l ~I r. 1 n FY08 Governmental Activities Expense Planning and Parks and Development Administration 12% 14/0 Recreation _ 10% Fire Police 27% 37% Business-Type Activities: Business-type activities, the provision of water and sewer services, increased net assets by $6.6 million in FY08 compared to an increase in net assets in FY07 of $15.9 million. Capital assets net of depreciation increased $17.4 million. Unrestricted net assets decreased $10.8 million compared to a decrease last year of $10.4 million. Business activities have three principal sources of revenue. First is operating revenue from selling water and sewer services, second is from fees that new homes pay to connect to the utility system and third is "donated" revenue, the value of the developer connected lines. Developer contributions are not a cash inflow. Operating revenue is available to pay operating costs, donated lines are not. Total propriety revenue for FY08 as compared to FY07 and FY06 is as follows: FY08 % of Total FY07 % of Total l+'Y06 % of Total Charge for Service $ 11,768,336 48% $ 10,434,108 38% $ 9,241,116 29% Connection Fees 4,577,125 19% 5,289,653 19% 9,240,851 29% Interest Income 1,141,833 5% 2,228,460 8% 2,075,172 6% Other 614,951 3% 965,621 4% 1,846,470 6% 18,102,245 18,917,842 22,403,609 Donated Lines 6,318,732 26% 8,592,670 31% 9,906,020 31% $ 24,420,977 $ 27,510,512 $ 32,309,629 Overall business revenue has been trending downward. Between FY07 and FY06 it decreased close to $5 million dollars and from FY07 to FY08 decreased $3 million dollars. Discounting the contributed lines internally generated revenue decreased 4% from FY07 to FY08. Sewer and water sales increased 13% while connection revenue decreased 14%. Sewer and Water sales increased due to a rate increase and a very slight increase in the number of accounts. Connection revenue decreased as the construction of new homes and corresponding utility connections continued to drop ofF. 9 CITY OF MERIDIAN, IDAHO MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 Charges for service revenue are matched to the operating costs of providing water and sewer service. Connection revenue is the revenue that the business fund directs toward new construction and toward reimbursing developers for lines. Interest income is largely directed toward construction. Interest income decreased dramatically as interest rates fell and at the same time investment balances fell as the money was used for asset construction. Isolating the income related just to water and sewer sales and comparing it to the applicable costs result in an operating income of negative $125,000. The same income for the prior period was $500,000. From FY08 to FY07 sewer and water sales increased 13% while operating expenses increased 15%. Most of the operating increased can be attributed to personnel and depreciation. Several construction projects reached completion in the last couple of years increasing depreciation. T'he table below compares operating expenses for FY08, FY07, and FY06. Personnel services Services and Charges Depreciation Supplies Heat, lights and power FY08 % Change FY07 % Change FY06 $ 4,414,471 11% $ 3,978,372 -3% $ 4,081,610 1,860,306 3,995,452 1,468,973 795,834 $ 12,535,036 -1% 1,876,779 25% 3,189,795 10% 1,341,445 46% 546,414 $ 10,932,805 -1% 1,900,598 12% 2,859,699 -10% 1,489,842 9% 500,189 $ 10,831,938 Although internally the City accounts for operating sales and expenses, and construction revenue and costs separately there are no existing restrictions directing sources of revenue to one particular purpose. The combination of declining revenue from new growth, significant increase in infrastructure, and rising operating costs has resulted in the unrestricted fund balance dropping approximately $10 million dollars from FY07 to FY08. Additionally the City has about $14 million in projects that have been budgeted but not yet constructed. Matching those projects against the unrestricted fund balance would reduce the unrestricted fund to about $12 million. The City is analyzing increasing operating revenue to cover increased depreciation and operating costs and to increase the unrestricted fund balance. The Sewer Division expenses are more than the Water Division with Water spending $4.5 million in personnel and operating in FY08 and Sewer spending $5.6 million. Public Works and Administrative costs were about $2.3 million. 10 • CITY OF MERIDIAN, IDAHO MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 Business -Type Activities Operating Expense by Division $4,000,000 $3,500,000 p FY08 $3,000,000 ^ FY07 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 - ,;~ - PW/Billing PW/MUBS Water Water WW~P WWTP Personnel Operations Personnel Operations Personnel Operating The following graph shows the distribution of operating cost by category for both Water and Wastewater. Public Works administration, engineers and inspectors and the Utility Billing Department expenses are split equally and allocated to the two utilities. The general fund allocation is for half the cost of the City's Finance, Human *, Resources, and Information Technology Departments. Business -Type Activities FY08 Operating Expense Categories Heat, lights and power Personnel Su lies pp ° 6 ° services 12% 35% Depreciation 32% Services and Charges 15% 11 1 ! • CITY OF MERIDIAN, IDAHO MANAGEMENT'S DISCUSSION AND ANALYSIS SEIPTEMBER 30, 2008 r 1 FY08 FY07 FY06 FY05 FY04 FINANCIAL ANALYSIS OF THE CITY'S FUNDS Governmental Funds The general fund is the principal fund used for the City's major operations including public safety, planning and development, parks, and City administration. The total general fund balance at September 30, 2008 was $21,461,305 a decrease of $4,839,750 from the prior year fund balance of $26,301,055. The governmental fund balance is distributed among reserved and unreserved balances as follows: 1 A few large capital projects were completed, North Black Sewer Trunk ($3.7 million dollars), WWTP Tertiary Filter, and Eagle, Overland and Broadway water lines. Approximately $3 million dollars was added to the construction in progress balance of $33.8 million. Waste Water projects make up $29.7 million dollars of the $33.8 million with $23.8 million in the Waste Water Treatment Plant expansion project. The largest project in Water is the Water office and shop building for $2.2 million and the Black Cat Water Main at $630,000. Deprecation expense increased from $3,189,975 in FY07 to $3,995,452 in FY08. The last few years the proprietary fund has budgeted and planned for several large projects to serve Meridian's growing population. Projects have been funded with connection fee revenue that accumulated during Meridian's rapid growth. As discussed above basically all the available fund balance has now been directed toward specific projects. Although most projects take several years from budget to completion, the graph below illustrates the increase in dollars actually spent for construction. Developer contributed capital is water and sewer lines. Business Activities Capital Acquisitions City Capital $25, 000, 000 Expenditures ®Developer Contributed $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 12 • • CITY OF MERIDIAN, IDAHO MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 Total Governmental FUND BALANCES General Capital Projects Funds Reserved for Impact Fee Improvements $ 2,169,687 $ - $ 2,169,687 1 Reserved for Capital Improvements 1,510,457 1,875,566 3,386,023 Reserved for Debt Service 400,000 - 400,000 Designated for Public Safety Purchases 52,482 - 52,482 Unreserved 17,328,679 - 17,328,679 TOTAL FUND BALANCES $ 21,461,305 $ 1,875,566 $ 23,336,871 The reserve for impact fee improvements can only be spent on Police, Fire, and Police capital projects that sustain the level of service existing when the fees were adopted. The balance increased about 10% from FY07. Most of the balance has been budgeted for Parks and Fire projects. Although income was lower then anticipated the Parks Department did not spend $1.2 million dollars of the $3.7 million budgeted for park development. The Capital Improvement fund balance appears to have not changed much from the prior year; $3,386,023 this year-end as compared to $3,460,064 at the end of FY07. However this fund is used for the City Hall construction. There were transfers into the fund from the general fund for $11.9 million, and $4.5 million from the enterprise fund. The fund expended $22.7 million toward City Hall construction. Historically the Capital Improvement Fund has increased through transfers from the Development Services Fund. The City has designated that any building permit revenues left after Building and Planning Department costs be set aside for capital construction projects. Due to the construction slow down no excess revenue was available for transfer. The $400,000 reserved for debt service is required by bond covenants in the bond issued to build the Police Station. The amount is held by Wells Fargo Bank, the bonding trustee. Designated for Public Safety Purchases is the fund that was previously used to purchase fire trucks. The City has decided to use it to save for public safety construction or large capital projects. General fund revenue was higher then anticipated in FY08. As discussed above building growth from 2006 and the first part of 2007 still impacted the new construction portion of the property tax calculation. Requested annexations also were high for the 2008 property tax calculation. There were considerable savings on the expenditure side in addition to previously discussed salary savings in public safety and savings in contracted building inspectors. In spite of higher revenues and lower expenditures the unrestricted fund balance decreased due to the $ 11.9 million dollar transfers to the CIP fund for the City Hall construction. At the end of FY08 the unrestricted balance was $17.3 million compared to $23 million at the end of FY07. The City is well positioned to meet its obligations and cover a four month operating reserve of $7.25 million dollars. General Fund Budgetary highlights In total, actual revenues were 7% more than the original revenue budget. Property tax, state sales tax revenue sharing revenue, and franchise fees for gas and electricity all exceeded the original budgeted amounts. Only two revenue sources fell short of budget, intergovernmental and charges for services. Intergovernmental was short 2% of the categories final budget due to the reimbursements from the Rural Fire District being less then budget. 13 CITY OF MERIDIAN, IDAHO MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 The reimbursement is based on a percentage of actual Meridian Fire Department costs and those costs were less then originally anticipated. The City also budgeted a CDBG grant in the Planning Department and only a small amount of the grant total was expended. Charges for services were short 5% of the categories final budget due to the continued decline in park impact fees and a decline in Planning Department fees. 1 1 r General Fund Revenue $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 ,, ~`~'08 ~`~'08 FyoB ~`yo~ ~``y'os ~`~'os ~~t4a/ F~ha~e ag ~hage4 a~ A~t4a~ A~t4a~ ~t d9,et The City anticipated that all general fund revenue sources related to building and development would be less then they were in FY07. Building Department revenue includes residential building permits, plumbing permits gas permits, electrical permits, fire inspection permits, and commercial building permits. These revenues were 12% of the total general fund budget. Although they were 8% below the prior year they came in at almost exactly the budgeted amount. This was due to stronger commercial building permit sales then expected. Planning revenues originally budgeted to be $400,000 were 42% less at $230,634. The other general fund revenue source impact fees, as discussed previously fell short of budget for the park impact fee. They were budgeted to be $1,262,000 and ended with an actual of $1,039,104. 14 CITY OF MERIDIAN, IDAHO MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 The graphs below illustrate the decline in residential and commercial development. 1 1 1 ~~ City of Meridian -New Commercial Building Permits Revenue 1 1 $350,000 _ __ m~ FY2005 $300,000 - ~ FY2006 _ .~,, . _ _:. _~: _ ~ .. ~ FY2007 $250,000 - - _ _ . . _, ~ FY2008 $200,000 -_= ~\ . _ ,,.~ a y -~ ~ w~ _- ~ - ~ ,. _ _.x. ~ v ~ . $150,000 ~~~. .~ . ~ ~~~~`,~. _ J .... ~ ~~~. $100,000 ~~ - - -= e --~~>>-- ~-- _,~~"~`~ ,.:~ >, $50,000 •s : ~_ _.., - ---- - -- =~_ ~; $0 - _ _ - - - - _ - - - - ---- - _ ___ Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Total Governmental personnel and operating costs were increased 14% from FY07 to FY08. General Government, Police, and Fire all increased. 15 CITY OF MERIDIAN, IDAHO MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 $30,000,000 $25,000,000 ~' $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 1 FY08 General Fund Budgetary Comparison Personnel and Operating Expense O FY08 Actual ^ FY08 Final Budget D FY07 Actual gahi~h's A%ce Fi~e Aa~ks ~`°~e'oa Total t~a~~°b Se~~ce s Administration increased 26%. Administration added two full time positions (IT and Administration) that are split with the enterprise fund, and Legal added apart-time position. In general existing personnel and operating increased slightly across the board plus the costs of street lights were moved from the Development Services Fund to the General Fund. The Police Department while under budget increased personnel and operating $1.1 million from FY07 to FY08. The Police Department requested 6 additional positions in the FY08 budget and during FY08 filled several officer positions that had been. vacant. They also instituted some changes to their step pay plan. The increase in fuel cost had a negative impact on operating expenses. Also impacting operating was the purchase of new radios due to regulatory change. The Fire Department increased $1 million dollars from FY07 to FY08. The Fire Department opened their fifth ~. fire station toward the end of the year. This involved adding 12 new positions. For the first year of operations the Rural Fire District reimbursed us for Fire Station #5 personnel expense. The new station also increases operating costs. The Parks Department increased $433,000 or 31% from FY07 to FY08. They added three full time positions, and three seasonal positions. Park maintenance cost increased as two new parks were added. They also had a loss of sale on assets due to a piece of land deeded to the City in prior year by mistake. The City recorded a gain last year and a loss this year as the result of this exchange. 16 CITY OF MERIDIAN, IDAHO MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 ,' Although Administration, Public Safety, and Parks increased $600,000 plus, Development Services decreased $600,000. Development Services decreased because the building inspector cost decreased. Building inspectors are contract positions so when the number of building permits decreases the cost of inspections decreases. Police and Fire capital expenditures were for vehicles and equipment while the majority of Parks capital expenditures were for park development. The Police Department did not spend $250,000 budgeted toward a firing range and did not spend all of their vehicle money. The Parks department did move two parks out of construction in progress but during FY08 spent 1.2 million of the $3.7 million they budgeted for capital projects. 1 ~J r 1 f7 C~ General Fund FY08 Capital Outlay Budget to Actual (excludes CIP Fund) $4,000,000 $3,500,000 $3,000,000 ^ Final FY08 Budget ®FY08 Actual $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 J The $11.9 million operating transfer out shown in the Budget to Actual report is a transfer to the Capital Improvement Fund from the General Fund for City Hall construction. The operating transfers in are for transfers from the Enterprise Fund for shared Human Resources, Information Technology, and Finance Department costs. There were numerous amendments made to the original FY08 general fund budget. Most of the changes were small and were offset by donations or grants. The largest amendments were for the City Hall project, transfers in from the general fund to the capital improvement fund as discussed above. 17 CITY OF MERIDIAN, IDAHO MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2008 Capital Asset and Debt Administration Capital Assets At the end of fiscal year 2008 the City had $223.8 million invested in capital assets (net of accumulated depreciation). During fiscal year 2008 the City's total investment in net assets increased 20%. 53% of that increase was due to governmental activities and 47% due to business activities. See table below: Capital Assets as of September 30, 2008 (net of depreciation) Governmental Business -type Total Primary Activities Activities Government 2008 2007 2008 2007 2008 2007 Land $13,043,410 $12,923,993 $ 947,113 $ 867,113 $ 13,990,523 $ 13,791,106 Buildings and Improvements other than buildings 8,632,286 8,080,353 13,430,333 13,327,848 22,062,619 21,408,201 Sewer and Water Lines - - 107,106,174 92,673,658 107,106,174 92,673,658 Equipment 3,025,205 2,761,690 11,610,507 12,164,135 14,635,712 14,925,825 Construction in Progress 32,091,073 13,159,686 33,880,558 30,515,276 65,971,631 43,674,962 TOTALS $56,791,974 $ 36,925,722 $ 166,974,685 $ 149,548,030 $ 223,766,659 $ 186,473,752 The City's investment in capital assets includes land, buildings, sewer and water lines, buildings, automobiles and equipment and street lights. Sidewalks, bridges, and roads belong to the Ada County Highway District. Major capital asset events in the general government funds in FY08 included: • $17 million added to construction in progress for City Hall • $22.8 million in construction in progress in total at 9/30/08 • $1.1 million added to construction in progress for park development • Two City parks completed and moved out of construction in progress Major capital asset events in the business-type funds in FY08 included: • Sewer trunk and sewer main expansion for $4.4 million • New Water Administrative and Maintenance Campus additions of $728,000 • $2.3 million in donated waterlines • $3.1 million in donated sewer lines • $4.8 for Waste Water Treatment Plant expansion • $29.7 million in construction in progress for Wastewater Treatment Plant expansion The City booked $1,158,218 in depreciation expense for governmental City functions and $3,995,452 for business-type activities. 18 CITY OF MERIDIAN, IDAHO ' MANAGEMENT'S DISCUSSION AND ANALYSIS SEIPTEMBER 30, 2008 Long-Term Debt The City has a capital lease and trust agreement with We11s Fargo Bank. This agreement was entered into, as the result of a judicial review on August of 2001 in the amount of $4,000,000 for the purpose of constructing a police station. At September 30, 2008 the long-term balance was $930,000. FY09 Budgetary Considerations The City of Meridian bases the budget on a revenue analysis and projection. The City starts the budget process in the spring of the year for the next fiscal year. The residential building slow down that marked FY07 worsened in FY08 and the City predicted it would continue to worsen into FY09. The City planned a conservative budget for FY09. The City has to closely monitor the Development Service Fund whose revenue streams are completely dependent on building activity. Part of the Development Service Fund costs will drop with revenue, the costs incurred for contracted building inspections. Some programs that were in the Development Services Fund were moved to the general fund in the FY08 budget. In the FY09 budget the City budgeted $500,000 from the general fund to cover costs for the Planning Department that may not be covered by building permit sales. Some of those costs are fixed and have the potential of being moved permanently to the general fund or cut back. Population and commercial growth in the last decade have allowed the City to build and staff five fire stations in partnership with the Rural Fire District, build a new Police station and increase the number of sworn officers to 80, develop numerous neighborhood parks as well as partner with community groups to build a large park with a state of the art universally accessible playground and youth baseball. The City has been saving for years to build anew City Hall to house most of its departments and was able to realize that goal in FY09. The general fund's primary source of revenue, property tax still recognized a significant amount of new construction since property tax is paid in arrears. However statutory limitations on property tax collections and decreases in income generated by growth will likely mean that the increase into FY10 will be slight. The City also predicted that sales tax revenue sharing would decrease in FY09. The lack of growth and the sluggish economy will make it challenging to meet general government service needs. During the last few periods the proprietary fund has supported development by aggressively building out infrastructure and undertaking a major Wastewater Treatment Plant expansion. Fund balances accumulated for those projects have now been spent or budgeted. For FY09 the fund is looking at rate changes to support increased costs caused by regulatory changes, maintenance of a larger system, and replacement of aging infrastructure. Requests for Information This report is designed to provide a general overview of the City of Meridian's finances for our citizens and customers. If you have questions about this report or need additional financial information, contact: City of Meridian, Finance Office 33 E. Broadway Ave. Meridian, Idaho 83642 Phone: (208} 888-4433 19 d Primary Government Governmental Business-type Component Activities Activities Total Unit LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable Accrued payroll and taxes Accrued vacation, current portion Interest payable Deferred revenue Customer deposits Capital leases -current portion Total current liabilities NONCURRENT LIABILITIES Accrued vacation -less current portion Capital leases -less current portion , TOTAL LIABILITIES NET ASSETS Invested in capital assets, net of related debt Restricted for: Impact funds Capital improvements Police center debt service Unrestricted Total net assets $ 2,295,190 $ 2,375,766 $ 4,670,956 $ 58,857 616,704 148,761 765,465 - 89,051 12,292 101,343 - 19,408 - .19,408 - 17,173,310 - 17,173,310 1,244,398 531,608 189,786 721,394 - 440,000 - 440,000 14,058 21,165,271 2,726,605 23,891,876 1,317,313 801,458 110,631 912,089 - 930,000 - 930,000 473,644 22,896,729 2,837,236 25,733,965 1,790,957 55,421,974 166,974,685 222,396,659 684,36] 2,169,687 - 2,169,687 - 3,386,023 - 3,386,023 - 400,000 - 400,000 - 16,946,341 26,117,170 43,063,511 1,037,160 $ 78,324,025 $193,091,855 $ 271,415,880 $ 1,721,521 21 L '~ Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Business-type Component Activities Activities Total Unit $ (2,535,681) $ - $ (2,535,681) $ - (7,805,113) - (7,805,113) - (4,291,858) - (4,291,858) - 1,220,822 - 1,220,822 - 889,901 - 889,901 - (73,942) - (73,942) - (12,595,871) - (12,595,871) - - 10,539,905 10,539,905 - (12,595,871) 10,539,905 (2,055,966) - - - - (337,478) 15,975,455 - 15,975,455 1,065,359 1,427,227 - 1,427,227 - 4,027,232 - 4,027,232 - 953,352 1,282,178 2,235,530 17,124 (83,386) (140,345) (223,731) - 127,131 231,066 358,197 - (215,631) (26,863) (242,494) - 5,247,913 (5,247,913) - - 27,459,293 (3,901,877) 23,557,416 1,082,483 14,863,422 6,638,028 21,501,450 745,005 63,460,603 186,453,827 249,914,430 976,516 $ 78,324,025 $ 193,091,855 $ 271,415,880 $ 1,721,521 23 • CITY OF MERIDIAN, IDAHO BALANCE SHEET -GOVERNMENTAL FUNDS SEPTEMBER 30, 2008 ASSETS Cash and cash equivalents Investments Receivables Accounts Property taxes Assessments Due from other funds Due from other governmental units Grants Interest Prepaid items Restricted assets Cash and cash equivalents Investments Total assets General $ 1,478,625 15,798,622 Capital Projects $ 3,399,270 64,872 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable Accrued payroll and taxes Due to other funds Accrued vacation Deferred revenue Customer deposits Total liabilities FUND BALANCES Reserved for police, fire & park improvements Reserved for capital improvements Reserved for police center debt service Designated for fire truck purchases Unreserved Total fund balances Total liabilities and fund balances Total Governmental Funds $ 4,877,895 15,863,494 872,128 - 872,128 17,672,045 - 17,672,045 1,516,312 - 1,516,312 113,757 142 113,899 922,079 - 922,079 1,095,752 - 1,095,752 1,495,176 - 1,495,176 $ 40,964,496 $ 3,464,284 $ 44,428,780 $ 706,472 $ 1,588,718 $ 2,295,190 616,704 - 616,704 17,648,407 - 17,648,407 531,608 - 531,608 19,503,191 1,588,718 21,091,909 2,169,687 - 2,169,687 1,510,457 1,875,566 3,386,023 400,000 - 400,000 52,482 - 52,482 17,328,679 - 17,328,679 21,461,305 1,875,566 23,336,871 $ 40,964,496 $ 3,464,284 $ 44,428,780 See Notes to Financial Statements 24 • CITY OF MERIDIAN, IDAHO RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS SEPTEMBER 30, 2008 Fund balance -total governmental funds $ 23,336,871 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. 56,791,974 Some of the property taxes receivable are not available to pay for current-period expenditures and therefore are deferred in the funds. 475,097 Long-term debt is not due and payable in the current period and therefore is not reported in the funds. (1,370,000) Accrued vacation is not due andpayable in the current period and therefore is not reported in the funds. (890,509) Interest on long-term debt is not due and payable in the current period and therefore is not reported in the funds. (19,408) Net assets of governmental activities $ 78,324,025 See Notes to Financial Statements 25 ~i 1 • CITY OF MERIDIAN, IDAHO STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2008 REVENUES Taxes Licenses and permits Intergovernmental Franchise fees Fines and forfeitures Charges for services Interest Miscellaneous Total revenues General Capital Projects Total Governmental Funds EXPENDITURES General government Public safety Pazks and recreation Community planning and development Debt service Principal Interest Capital outlay Total expenditures EXCESS OF REVENUES OVER(UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Operating transfer in Operating transfer out Unrealized gain (loss) on investments Proceeds from sale of capital assets Total other financing sources (uses) NET CHANGE IN FUND BALANCES FUND BALANCE, BEGINNING OF YEAR FUND BALANCE, END OF YEAR $ 15,679,069 $ - $ 15,679,069 3,568,959 - 3,568,959 5,633,548 - 5,633,548 1,427,227 - 1,427,227 485,960 - 485,960 3,040,777 - 3,040,777 890,296 63,056 953,352 280,282 - 280,282 31,006,118 63,056 31,069,174 3,207,377 2,005 3,209,382 14,168,659 - 14,168,659 1,814,092 200,000 2,014,092 2,850,218 - 2,850,218 420,000 - 420,000 78,400 - 78,400 2,134,313 17,002,972 19,137,285 24,673,059 17,204,977 41,878,036 6,333,059 (17,141,921) (10,808,862) 747,913 16,376,031 17,123,944 (11,876,031) - (11,876,031) (86,851) 3,465 (83,386) 42,161 - 42,161 (11,172,808) 16,379,496 5,206,688 (4,839,749) (762,425) (5,602,174) 26,301,054 2,637,991 28,939,045 $ 21,461,305 $ 1,875,566 $ 23,336,871 See Notes to Financial Statements 26 ~ • • CITY OF MERIDIAN, IDAHO RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2008 Net change in fund balances -total governmental funds $ (5,602,174) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlay as expenditures. However, in the statement of ' activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays ($19,137,286) exceeded depreciation ($1,158,218) and the loss on sale of assets ' ($257,451). 17,721,617 Capital assets contributed by developers are not a source of financial resources and thus, are not recognized in the governmental funds. 2,144,635 Some property tax revenue in the statement of activities that does not provide current fmancial resources is not reported as revenue in the funds. 296,389 Repayment of long-term debt principal is an expenditure in the governmental funds, but the repayment reduces long-term debt in the statement of net assets. 420,000 In the statement of activities, accrued vacation is measured by the amounts earned during the year. In governmental funds, however, expenditures for these items are measured by the amount of financial resources used. This is the amount by which benefits earned exceeded benefits paid in the current year. (121,504) Interest expense accrued but not paid reported in the statement of activities does not require the use of current financial resources and therefore is not reported as expenditures in governmental funds. 4,459 Change in net assets of governmental activities $ 14,863,422 See Notes to Financial Statements 27 • CITY OF MERIDIAN, IDAFIO STATEMENT OF NET ASSETS -PROPRIETARY FUND SEPTEMBER 30, 2008 Enterprise Fund Water and Sewer ASSETS CURRENT ASSETS Cash and cash equivalents $ 2,039,370 Investments 24,714,529 Receivables Accounts (net of $30,000 allowance for uncollectibles) 2,004,827 Interest 192,467 Prepaid items 3,213 Total current assets 28,954,406 NONCURRENT ASSETS Capital assets Land 947,113 Construction in progress ~ 33,880,559 Buildings and improvements other than buildings 22,648,926 Sewer and water lines 123,873,030 Machinery and equipment 17,568,666 Less accumulated depreciation (31,943,609) $ 195,929,091 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable $ 2,375,766 Accrued payroll and taxes 148,761 Accrued vacation, current portion 12,292 Customer deposits 189,786 Total current liabilities 2,726,605 NONCURRENT LIABILITIES Accrued vacation -less current portion 110,631 NET ASSETS Invested in capital assets, net of related debt 166,974,685 Unrestricted 26,117,170 Total net assets 193,091,855 TOTAL LIABILTTIES AND NET ASSETS $ 195,929,091 See Notes to Financial Statements 28 • CITY OF MERIDIAN, IDAHO STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS - PROPRIETARY FUND YEAR ENDED SEPTEMBER 30, 2008 Enterprise Fund Water and Sewer OPERATING REVENUES Charges for services Water revenues Sewer revenues Sale of meters Latecomers fees Engineering fees Miscellaneous Total operating revenues OPERATING EXPENSES Personnel services Other services and charges Depreciation Supplies Heat, lights and power Total operating expenses OPERATING LOSS NONOPERATING REVENUES (EXPENSES) Interest revenue Connection assessment fees and donations Loss on sale of fixed assets Net increase in fair value of investments Total nonoperating revenues (expenses) INCOME BEFORE CONTRIBUTIONS AND TRANSFERS Donated waterlines and sewerlines Operating transfers out CHANGE IN NET ASSETS NET ASSETS, BEGINNING OF YEAR NET ASSETS, END OF YEAR $ 5,356,614 6,411,722 201,737 209,011 231,066 12,410,150 4,414,471 1,860,306 3,995,452 1,468,973 795,834 12,535,036 (124,886) 1,282,178 4,577,125 (26,863) (140,345) 5,692,095 5,567,209 6,318,732 (5,247,913) 6,638,028 186,453,827 $ 193,091,855 See Notes to Financial Statements 29 • • CITY OF MERIDIAN, IDAHO STATEMENT OF CASH FLOWS -PROPRIETARY FUND YEAR ENDED SEPTEMBER 30, 2008 Enterprise Fund Water and Sewer CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users $ 12,232,618 Payments to suppliers (5,308,807) Payments to employees (4,401,580) NET CASH PROVIDED BY OPERATING ACTIVITIES 2,522,231 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Operating transfer to general fund (5,247,913) NET CASH USED BY NONCAPITAL FINANCING ACTIVITIES (5,247,913) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Connection assessment fees ' 4,577,125 Proceeds from sale of capital assets 445 Acquisition of capital assets (15,130,684) NET CASH USED BY CAPTTAL AND RELATED FINANCING ACTIVITIES (10,553,114) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments (29,588,547) Sale of investments 32,950,000 Interest received 1,300,694 NET CASH PROVIDED BY INVESTING ACTIVITIES 4,662,147 NET DECREASE IN CASH (8,616,649) CASH, BEGINNING OF YEAR 10,656,019 CASH, END OF YEAR $ 2,039,370 See Notes to Financial Statements 30 i • I/ITY OF MERIDIAN, IDAHO STATEMENT OF CASH FLOWS -PROPRIETARY FUND YEAR ENDED SEPTEMBER 30, 2008 Enterprise Fund Water and Sewer RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating loss $ (124,886) Adjustments to reconcile operating loss to net cash provided by operating activities Depreciation 3,995,452 Changes in assets and liabilities Accounts receivable (177,532) Due from other governments - Prepaid items (1,148) Accounts payable (1,229,056) Accrued payroll and taxes 12,891 Customer deposits 46,510 NET CASH PROVIDED BY OPERATING ACTIVITIES $ 2,522,231 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Developer and customer contributed sewer and water lines $ 6,318,732 See Notes to Financial Statements 31 ~ p • CITY OF MERIDIAN, IDAHO NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2008 n r NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES City of Meridian, Idaho (the City) was incorporated August, 1903. The City operates under a mayor and council form of government and provides the following services as authorized by its charter: public safety (police and fire), community planning and development, parks and recreation, and general administrative services. 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 (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The significant accounting policies are described below. The accounting and reporting policies of the City relating to the funds included in the accompanying basic financial statements conform to generally accepted accounting principles applicable to state and local governments. Generally accepted accounting principles for local governments include those principles prescribed by the GASB, the American Institute of Cerrified Public Accountants in the publication entitled Audits of State and Local Governmental Units and by the Financial Accounting Standards Board (when applicable). As allowed in Section P80 of GASB's Codification of Governmental Accounting and Financial Reporting Standards, the City has elected not to apply to its proprietary activities Financial Accounting Standards Board Statements and Interpretations, Accounting Principles Board Opinions, and Accounting Research Bulletins of the Committee of Accounting Procedure issued after November 30, 1989. Financial R ortin Entity eP g As required by generally accepted accounting principles, these basic financial statements present the City in conformance with GASB Statement No. 39, "Determining Whether Certain Organizations are Component Units. " Under Statement No. 39, component units are organizations that are included in the reporting entity because of the significance of their operational or financial relationships with the City. The component unit column in the combined financial statements is the financial data of the City's single component unit, the Meridian Development Corporation (MDC). MDC is a separate and distinct legal entity created by state statute. The directors of MDC are appointed by the Mayor and approved by the City Council. MDC provides urban development services for the citizens of the City. Complete financial statements can be obtained from the City of Meridian Division of Financial Management, 33 East Broadway Avenue, Meridian, Idaho. The City contributes to the multi-employer Public Employer Retirement System of Idaho (the System). The System is administered by the State of Idaho and the City is not the major participant in the plan; therefore, the plans financial statements are not included in this report. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the nonfiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and mtergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. (continued on next page) 32 NOTES TO FINANCIAL STATEMENTS The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges 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. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. MEASURElVIENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund fmancial 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. For this purpose, the government 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, franchise taxes, licenses, 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 receivable due 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. The City reports the following major governmental funds: General Fund -The General Fund is the general operating fund of the City. It is used for all financial resources except those required to be accounted for in another fund. Capital Projects Fund- The Capital Projects Fund is used to account for fmancial resources to be used for the acquisition or construction of maj or capital facilities (other than those financed by proprietary funds). r (continued on next page) 33 ~ o 0 0 i~ NOTES TO FINANCIAL STATEMENTS The City reports the following maj or proprietary fund: Enterprise Fund -The Enterprise Fund is used to account for operations financed and operated in a manner similar to private business when the intent of the governing body is that costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges, or the governing body has decided that periodic determination of revenues earned, expenditures incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. As a general rule, the effect of inter-fund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between various functions of the government when elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Propnetary funds distinguished operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and products and delivering goods in connection v~~ith a proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise funds are charges for services to customers for sales and services. The Water and Sewer Funds also recognizes as operating revenue the portion of hook-on fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. Cash and Cash Equivalents For purposes of the statement of cash flows, the proprietary funds consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Investments Idaho Code provides authorization for the investment of funds as well as specific direction as to what constitutes an allowable investment. City policy is consistent with this direction. The City currently invests in interest bearing bank accounts, certificates of deposit and U.S. Government and U.S. Government Agency bonds. Property Taxes Receivable and Deferred Revenue Within the governmental fund financial statement, property taxes are recognized as revenue when the amount of taxes levied is measurable, and proceeds are available to finance current period expenditures. (continued on next page) 34 NOTES TO FINANCIAL STATEMENTS Available tax proceeds include property tax receivables expected to be collected within sixty days after yeaz end. Property taxes attach as liens on properties on January 1, and are levied in September of each year. Tax notices are sent to taxpayers during November, with tax payments scheduled to be collected on or before December 20. Taxpayers may pay all or one half of their tax liability on or before December 20, and if one half of the amount is paid, they may pay the remaining balance by the following June 20. Since the City is on a September 30 fiscal year end, property taxes levied during September for the succeeding year's collection are recorded as deferred revenue at the City's year end and recognized as revenue in the following fiscal year. Ada County bills and collects taxes for the City. Customer Services Receivable Amounts owed to the City for customer services are due from area residents and businesses and relate to water, sewer and trash services provided by the City. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported iri 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 more than $5,000 and an estimated useful life in excess of three years. All material fixed assets are valued at cost. Donated fixed assets are valued at their estimated fair value on the date donated. Public domain fixed assets consisting of roads, bridges, streets and sidewalks, and lighting systems are also reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Depreciation is recorded by use of the straight-line method. The book value of each asset is reduced by equal amounts over its estimated useful life as follows: Estimated Useful Life (Years) Buildings 30 Sewer plant 25 Sewer and water lines 50 Improvements other than buildings 10-50 Equipment 5-20 Public domain infrastructure 40 Maintenance, repairs and minor renewals are charged to operations as incurred. When an asset is disposed of, accumulated depreciation is deducted from the original cost, and any gain or loss arising from its disposal is credited or chazged to operations. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest costs incurred during construction of capital assets of business-type activities are capitalized when they are material. There were no interest costs included as part of the costs of capital assets under construction in the current year. (continued on next page) 35 i~ 0 u 1 1 1 1 NOTES TO FINANCIAL STATEMENTS Compensated Absences Payable The City provides vacation and sick leave to its full-time employees. Earned vacation is paid to employees when taken or paid to employees or beneficiaries upon the employees' termination, retirement or death. The City does not pay earned sick pay upon the employees' termination, retirement or death for non-union employees. The fire department union members are paid 10% of their sick leave accrual upon the employees' termination, retirement or death. The amount of unused vacation accumulated by City employees is accrued as expense when incurred in the Proprietary Fund, which use the accrual basis of accounting. In the Governmental Funds, only the amount that normally would be liquidated with expendable available financial resources is accrued as current year expenditures. Unless it is anticipated that compensated absences will be used in excess of a normal year's accumulation, no additional expenditures are accrued. Capital Leases The City is the lessee under a capital lease and trust agreement with Wells Fargo Bank for the law enforcement building. Under the terms of the agreement the City constructed the project on behalf of the lessor. The lease requires annual payments. The City will acquire the asset at the end of the lease for a bargain purchase price of $1. Risk Management The City is exposed to various risks of loss related to theft of, damage to, or destruction of assets. The City participates in a public entity risk pool, Idaho Counties Risk Management Pool (ICRMP), for liability, medical and disability insurance. The City's exposure to loss from its participation in ICRMP is limited only to the extent of their deductible. Equity In the fund financial statements, reservations of fund balance represent amounts that are not appropriable or are legally segregated for a specific purpose. Reservations of retained earnings are limited to enabling legislation or outside third-party restrictions. Designations of fund balance represent tentative management plans that are subject to change. The proprietary fund's contributed capital represents equity acquired through capital grants and capital contributions from developers, customers or other funds. It is the government's policy to first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available, unless otherwise required. The City has established reserves to account for the resources received from impact fees to be used for future police, fire and park development. The City has also established a reserve for the police center and has designated funds for future fire truck purchases. In the government-wide financial statements, restrictions of net assets are limited to enabling legislation or outside third-party restrictions. As of September 30, 2008, $5,955,710 of the restricted net assets were restricted due to enabling legislation. Encumbrances Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is not employed by the City. (continued on next page) 36 ~ 4 d NOTES TO FINANCIAL STATEMENTS Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. NOTE 2 -CASH AND INVESTMENTS Cash and investments as of September 30, 2008 are classified in the accompanying financial statements as follows: Cash and cash equivalents $ 6,917,265 Cash and cash equivalents -restricted 1,095,752 Total cash and cash equivalents $ 8,013,017 ~r ~' Investments $ 40,578,023 Investments -restricted 1,495,176 Total investments $ 42,073,199 Investments Authorized by the State of Idaho and the City of Meridian's Investment Policy Investment types that are authorized for the City of Meridian by the Idaho Code and the City's investment policy are as follows: 1. Local and State Agency Bonds 2. U. S. Agency Bonds 3. U. S. Agency Securities 4. Certificates of Deposit Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely impact the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. One of the ways the City manages its exposure to interest rate risk is by purchasing a combination of long and short-term investments. The City keeps funds needed for operations in short-term liquid investments while maintaining a stable longer-term investment portfolio with duration matched to expected completion of capital projects. Generally, overall portfolio duration is maintained between 3 and 3.5, but the City has no specific limitations. Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City's investment policy requires a rating of A or better by Standard & Poor's or other nationally recognized rating agency. The ratings of investments subject to credit risk are as follows: (continued on next page) 37 ~ o 0 NOTES TO FINANCIAL STATEMENTS Investments subject to credit risk: Agency Bonds Idaho Local Government Investment Pool (LGIP) ~ Money Market Fund Total deposits and investments subject to duration measurement Concentration of Credit Risk Fair Value Rating $ 18,351,172 AAA 16,142,574 AAAf 1,833,254 Not rated $ 36,327,000 Fair Value Duration (in years) Deposit and investments subject to duration measurement: Agency Bonds $ 18,351,172 3.7 Certificates of Deposit 7,579,452 3.5 Total deposits and investments subject to duration measurement 25,930,624 3.6 1 Deposits and investments not subject to duration measurement: Idaho Local Government Investment Pool (LGIP) 16,142,574 Money Market Fund 1,833,254 Other Cash and Cash Equivalents 6,179,763 Total deposits and investments not subject to duration measurement 24,155,591 Total deposits and investments $ 50,086,215 @~..J 1 ii 0 0 a The City's investment policy has no limitations on the amount that can be invested in any one issuer. Investments in any one issuer (other than State investment pools) that represents 5% or more of total City investments are as follows: Issuer Investment Type Reported Amount Percentage Federal Home Loan Bank U.S. Agency Bond $ 7,285,784 17% Federal Home Loan Mortgage Corporation U.S. Agency Bond 9,149,283 22% Idaho Banking Company Certificate of Deposit 3,021,150 7% Custodial Credit Risk 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 or will not be able to recover collateral securities that are in possession of an outside party. The 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. The City does not have a policy restricting the amount of deposits and investments subject to custodial credit risk. (continued on next page) 3 g ~ Q ~ NOTES TO FINANCIAL STATEMENTS At year end, the carrying amount of the City's deposits was $8,013,018 and the bank balance was $8,491,754. Of the bank balance, $202,603 was covered by federal depository insurance, $1,833,254 was insured under the U.S. Treasury guarantee program and $6,455,897 was uninsured and uncollateralized. All cash is held in Bank of the Cascades, Wells Fargo National Bank, Washington Federal Savings Bank and Charles Schwab & Co located in Ada County, Idaho. The City minimizes exposure to custodial credit risk by requiring that investments, to the extent possible, be ' identified as to City of Meridian ownership and be held in the City's name. All commercial paper, agency bonds and money market funds are held in custody by Charles Schwab & Co. in the City's name. 1 1 1 Investment in State Investment Pools The City is a voluntary participant in the State of Idaho Local Government Investment Pool (LGIP) and the State of Idaho Diversified Bond Fund (DBF). Both the LGIP and the DBF are regulated by State of Idaho code under the oversight of the Treasurer of the State of Idaho. The fair value of the City's investment in the pools is reported in the accompanying financial statements at amounts based on the City's pro-rata share of the fair market value provided by the fund for the entire portfolio. NOTE 3 -DUE FROM OTHER GOVERNMENTAL LfiTTS The following summarizes the intergovernmental receivables at September 30, 2008: State of Idaho State Liquor Dispensary State Tax Commission Idaho Transportation Department Meridian Rural Fire District Boise Fire Department Ada County Other Governmental Agencies TOTAL DUE FROM OTHER GOVERNMENTAL UNITS $ 98,178 816,174 11,053 312,785 870 234,190 43.063 $ 1,516,312 ' (continued on next page) 39 • NOTES TO FINANCIAL STATEMENTS NOTE 4 -CAPITAL ASSETS Changes to capital assets are as follows: Governmental Activities: Capital assets, not depreciated: Land Construction in progress Total capital assets, not depreciated Capital assets, depreciated: Buildings Improvements other than buildings Equipment Total capital assets, depreciated Less accumulated depreciation for: Buildings Improvements other than Balance Balance Oct. 1, Sept. 30, 2007 Additions Deletions 2008 $ 12,923,993 $ 335,475 $ 216,058 $ 13,043,410 13,159,686 18,931,387 - 32,091,073 26,083,679 19,266,862 216,058 45,134,483 6,531,630 - - 6,531,630 4,639,920 1,038,470 - 5,678,390 6,507,247 1,048,035 396,416 7,158,866 17,678,797 2,086,505 396,416 19,368,886 1,579,907 223,520 - 1,803,427 buildings 1,511,290 263,017 - 1,774,307 Equipment 3,745,557 671,681 283,577 4,133,661 Total accumulated depreciation 6,836,754 1,158,218 283,577 7,711,395 Total net capital assets, depreciated 10,842,043 928,287 112,839 11.657,491 Governmental activities capital assets, net $ 36,925,722 $ 20,195,149 $ 328,897 $ 56,791,974 (continued on next page) 40 • NOTES TO FINANCIAL STATEMENTS Balance Balance Oct. 1, Sept. 30, 2007 Additions Deletions 2008 Business-type activities Capital assets, not depreciated: Land $ 867,113 $ 80,000 $ - $ 947,113 Construction in progress 30,515,275 11,876,966 8,511,683 33,880,558 Total capital assets, not depreciated 31,382,388 11,956,966 8,511,683 34,827,671 Capital assets, depreciated: Buildings and improvements other than buildings 21,912,400 736,527 22,648,927 Sewer and water lines 107,050,063 16,822,967 - 123,873,030 Machinery and equipment 17,172,284 444,639 48,257 17,568,666 Total capital assets, depreciated 146,134,747 18,004,133 48,257 164,090,623 Less accumulated depreciation for: Buildings and improvements other than buildings 8,584,552 634,042 - 9,218,594 Sewer and water lines 14,376,405 2,390,451 - 16,766,856 Machinery and equipment 5,008,149 970,959 20,949 5,958,159 Total accumulated depreciation 27,969,106 3,995,452 20,949 31,943,609 Total net capital assets, depreciated 118,165,641 14,008,681 27,308 132,147,014 Business-type activities capital assets, net $ 149,548,029 $ 25,965,647 $ 8,538,991 $ 166,974,685 (continued on next page) 41 1 Q NOTES TO FINANCIAL STATEMENTS Depreciation expense was charged to functions/programs of the City as follows: Governmental activities: General government Public safety $ gg 787 738434 Community planning and development 11,311 Parks and recreation 319,686 Total depreciation expense -governmental activities $ 1,158,218 Business-type activities: Water and Sewer $ 3,995,452 Total depreciation expense -business-type activities $ 3,995,452 NOTE 5 - INT'ERFUND BALANCES AND TRANSFERS The following transfers were made for the purpose of funding operations: Transfer In: Capital General Projects Fund Fund Total Transfer out: - General fund $ $ 11,876,031 $ 11,876,031 Enterprise fund 747,913 4,500,000 5,247,913 Total transfers $ 747,913 $ 16,376,031 $ 17,123,944 The transfers from the general fund and the enterprise fund to the capital projects fund was to cover the expenditures related to the construction of the new City Hall. The transfer from the enterprise fund to the general fund was related to personnel costs that were paid by the general fund during FY2008. As of September 30, 2008, there were no internal balances due to or from other funds. NOTE 6 -CHANGES Ili' LONGTERM DEBT The City is the lessee under a capital lease and trust agreement with Wells Fargo Bank for the law enforcement building. Under the terms of the agreement the City constructed the project on behalf of the lessor. The lease requires annual payments. At the end of the lease, the City has the option to purchase the facility for $1. The lease has a term often years with annual principal payments of $405,000 to $475,000 and interest rates of 4.0% to 4.5%. (continued on next page) 42 'J n 1 ~~ ,i J NOTES TO FINANCIAL STATEMENTS The following is a summary of changes in long-term debt of the City for the year ended September 30, 2008. Due Balance Within Oct.l, Debt Debt Sept. 30, One 2007 Issued Retired 2008 Year Governmental activities: Capital leases Building $1,790,000 $ - $ 420,000 $1,370,000 $ 440,000 Accrued vacation 769,006 121,503 - 890,509 89,051 Governmental activities long-term liabilities $ 2,559,006 $ 121,503 $ 420,000 $ 2,260,509 $ 529,051 Business-type activities: Accrued vacation $ 120,721 $ 2,202 $ 122,923 $ 12,292 The future minimum lease obligation and the net present value of the minimum lease payments as of September 30, 2008 are as follows: Fiscal Year 2009 2010 2011 TOTALS Principal $ 440,000 455,000 475,000 $ 1,370,000 Interest $ 60,550 41,850 21,375 $ 123,775 Total $ 500,550 496,850 496,375 $ 1,493,775 The City leases the law enforcement building under anon-cancelable capital lease. The cost and accumulated depreciation by funds/account activity group are as follows at September 30, 2008: Accumulated Cost Depreciation Governmental activities NOTE 7 -LEASE AGREEMENTS $ 3,582,021 $ 726,344 The City leases land, office equipment, and a tower under operating leases. The various lease agreements cover various periods starting February 1, 1999 through August 30, 2013 and the minimum annual payments range from $1,363 to $14,532. Total rental expense in FY08 for all operating leases was approximately $60,090. (continued on next page) 43 ~J 1 1 ~J t L_' 1 L~ NOTES TO FINANCIAL STATEMENTS Future minimum annual lease payments for operating leases with remaining lease terms in excess of one year are as follows: 2009 $ 60,087 2010 60,087 2011 48,690 2012 36,368 2013 21,754 Total minimum obligations $ 226,986 NOTE 8 -DEFINED BENEFIT PENSION PLA1~1 Public Employee Retirement System of Idaho (PERSI) -The PERSI Base Plan, a cost sharing multiple-employer public retirement system, was created by the Idaho State Legislature. It is a defined benefit plan requiring that both the member and the employer contribute. The Plan provides benefits based on members' years of service, age, and compensation. In addition, benefits are provided for disability, death, and survivors of eligible members or beneficiaries. The authority to establish and amend benefit provisions is established in Idaho Code. Designed as a mandatory system for eligible state and school district employees, the legislation provided for other political subdivisions to participate by contractual agreement with PERSI. Financial reports for the Plan are available on the PERSI website or in print upon request. After 5 years of credited service, members become fully vested in retirement benefits earned to date. Members are eligible for retirement benefits upon attainment of the ages specified for their employment classification. For each month of credited service, the annual service retirement allowance is 2.0% (2.3% police/firefighter) of the average monthly salary for the highest consecutive 42 months. The contribution requirements of the City of Meridian and its employees are established and may be amended by the PERSI Board of Trustees. For the year ended September 30, 2008, the required contribution rate as a percentage of covered payrolls for members was 6.23% for general members and 7.65% for police/firefighters. The employer rate as a percentage of covered payroll was 10.39% for general members and 10.73% for police/firefighter members. For PERSI's year ended June 30, 2008, the required contribution rates, as determined by PERSI, are as follows: General Member ' Police and Fire Member Employee Employer 6.23% 10.39% 7.65% 10.73% Contributions required and paid for the last three years were $1,537,725, $1,364,374 and $1,206,438 for the year ended September 30, 2008, 2007 and 2006, respectively. r (continued on next page) 44 NOTES TO FINANCIAL STATEMENTS NOTE 9 - OTHER COMNIITMENTS The City has the following commitments at September 30, 2008: Commitment Purpose of Agreement Amount ACRD Cooperative water and sewer roadway projects $ 11,584 Boise City Prosecutorial and police legal advisor 241,380 Brown & Calwell Stormwater pollution prevention plan review 17,257 Brown Construction Blackcat water main improvements 40,522 Carollo Engineering Waste Water Treatment Plant expansion 604,682 CH2m Hill Waste Water Treatment Plant expansion 235,772 Civil Survey Engineering consulting services for water and sewer projects 195,518 DC Engineering Waste Water biosolids SCADA programming 85,697 Ewing Company , Waste Water biosolids upgrade 21,068 HDR Engineering Waste Water reuse project 92,503 Hydro Logic Ground water monitoring and geologic consulting services 194,514 Indigo Netowork Maintenance for wireless network infrastructure 6,340 JC Contractors JUB Engineering Waste Water Treatment Plant expansion & N Blackcat lift station N Blackcat lift station and sewer trunk 496,963 698,405 LandCrroup Settlers Village Square design 19,662 McLeran Well Drilling Well rehabs 23,734 Mercer Health Broker for employee benefits 35,000 MR Miller Fire Mile Creek restoration 39,740 MSSB Enterprises Water main UPRR crossing 71,700 Murray, Smith & Assoc Well and Stormwater analysis 60,198 Parametrix Water and sewer improvements 49,991 Paul Construction Settlers Village Square construction 566,489 Pharmer Engineering Waste Water DAFT system 16,770 Primel and Development Cooperative reimbursement agreement N Blackcat sewer trunk 563,531 Pro Power Clean City Hall janitorial interim contract 20,000 Senske Lawn & Tree Care Lawn & tree maintenance contract 49,280 Star Construction Superior Construction Well #27 bypass pipeline Well #14 water main modifications 36,981 8,794 Transportation & Civil Solutions Linder and Ustick intersection improvements 10,330 TV Drilling & Pump Test well #28 88,609 Virtus Enterprises Economic Development Coordinator agreement 84,150 Petra contracts City Hall construction contracts 3,397,942 NOTE 10 -CONTINGENT LIABILITIES The City has been named as a defendant in various legal actions, the results of which are not presently determinable. However, in the opinion of the City Attorney, the amount of losses that might be sustained, if any, would not materially affect the City's financial position. ' (continued on next page} 45 i ~ • 1 1 1 1 1 NOTES TO FINANCIAL STATEMENTS Under the terms of federal and state grants, periodic audits are required and certain costs may be questioned as not being appropriate expenditures under the terms of the grants. Any disallowed claims, including amounts already collected, could become a liability of the City. City management believes disallowances, if any, will not be material. NOTE 11-COMPONENT UNIT The Meridian Development Corporation (MDC) is created by and exists under the Idaho Urban Renewal Law of 1965, as amended, and is a separate and legal entity. The following is a summary of the disclosures required for a fair presentation of the component unit in the City's fmancial statements. Cash At year end, the bank balance and carrying amount of deposits, reported as cash was $1,041,788, of which $941,788 was uninsured and uncollateralized and exposed to custodial credit risk. All cash is held in a financial institution located in Idaho. Capital Assets Changes to capital assets are as follows: Governmental Activities: Capital assets, not depreciated: CIP Land Balance Oct. 1, 2007 Additions Deletions Balance Sept. 30, 2008 $ - $ 33,388 $ - $ 33,388 684,184 454,491 - 1,13 8,675 Total capital assets, not depreciated 684,184 487,879 - 1,172,063 Governmental activities capital assets, net $ 684,184 $ 487,879 $ - $ 1,172.063 Long-teYnz debt MDC has a $500,000 promissory note with the Bank of the Cascades to use to acquire property for redevelopment and public parking. The note was issued October 16~`, 2007 and has a maturity date of November 1~`, 2017. The i note has an interest rate of 5.115 °.lo and requires monthly payments. The following is a summary of changes in long-term debt of MDC for the year ended September 30, 2008. I (continued on next page) 46 D ~ NOTES TO FINANCIAL STATEMENTS Note Payable Building Governmental activities long-term liabilities Fiscal Year 2009 2010 2011 2012 2013 2014 - 2017 Totals Related Party Balance Balance Oct. 1, Sept. 30, 2007 Debt Issued Debt Retired 2008 $ - $ 500,004 $ 12,298 $ 487,702 $ - $ 500,000 $ 12,298 $ 487,702 Principal Interest Total $ 14,058 $ 22,597 $ 36,655 16,138 23,849 39,987 16,983 23,004 39,987 17,810 22,177 39,987 18,805 21,182 39,987 403,908 77,119 481,027 $ 487,702 $ 189,928 $ 677,630 MDC contracts with the City of Meridian to provide accounting services. Pursuant to their agreement MDC pays the City of Meridian $7,500 per year. As of September 30, 2008 total expenditures were $7,500. MDC also partners with the City for various downtown improvements. As of September 30, 2008 total expenditures were $20,000. 47 ~ ~ 1 1 1 e 1 ~J 1 CITY OF MERIDIAN, IDAHO REQUIRED SUPPLEMENTARYINFORMATION n 1 r ~ e CITY OF MERIDIAN, IDAHO SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL -GENERAL FUND YEAR ENDED SEPTEMBER 30, 2008 REVENUES Taxes Licenses and permits Intergovernmental Franchise fees Fines and forfeitures Charges for services Interest Miscellaneous Total revenues EXPENDITURES General government Public safety Police Fire Parks and recreation Community planning and development Debt service Budgeted Amounts Variance Actual With Original Final Amounts Final Budget $ 14,591,019 $ 14,591,019 $ 15,679,069 $ 1,088,050 3,564,000 3,564,000 3,568,959 4,959 5,492,990 5,732,579 5,633,548 (99,031) 1,250,000 1,250,000 1,427,227 177,227 400,000 400,000 485,960 85,960 3,208,150 3,219,496 3,040,777 (178,719) 525,000 525,000 890,296 365,296 13,000 112,348 280,282 167,934 29,044,159 29,394,442 31,006,118 1,611,676 3,347,865 3,563,845 3,207,377 356,468 9,459,674 9,491,533 8,237,304 1,254,229 6,490,929 6,596,472 5,931,355 665,117 1,970,588 2,000,918 1,814,092 186,826 3,749,237 4,011,641 2,850,218 1,161,423 Principal 405,000 405,000 420,000 (15,000) Interest 94,600 94,600 78,400 16,200 Capital outlay General government 6,241,616 290,978 60,771 230,207 Public safety Police 872,500 821,789 319,572 502,217 Fire 553,535 582,735 508,300 74,435 Parks and recreation 3,909,591 3,703,781 1,233,379 2,470,402 Community planning and development 203,848 203,848 12,291 191,557 Total expenditures 37,298,983 31,767,140 24,673,059 7,094,081 EXCESS (DEFICIENCI'~ OF REVENUES OVER (UNDER) EXPENDITURES 1 (8,254,824) (2,372,698} 6,333,059 8,705,757 See Notes to Required Supplementary Information 48 r hl L~ u 1 1 -1 CITY OF MERIDIAN, IDAHO SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL -GENERAL FUND YEAR ENDED SEPTEMBER 30, 2008 Budgeted Amounts Original Final OTHER FINANCING SOURCES (USES) Variance With Final Budget Operating transfer in 816,375 826,625 747,913 (78,712) Operating transfer out (642) (11,872,876) (11,876,031} (3,155) Unrealized (loss) on investments - - (86,851) (86,851) Proceeds from sale of capital assets - - 42,161 42,161 Total Other Financing Sources (Uses) 815,733 (11,046,251) (11,172,808) (126,557) EXCESS (DEFICIENCY) OF REVEI~'UES AND OTHER SOURCES (USES) OVER (UNDER) EXPENDITURES (7,439,091) (13,418,949) (4,839,749) 8,579,200 FUND BALANCE, BEGINNING OF YEAR 26,301,054 26,301,054 26,301,054 - FUND BALANCE, END OF YEAR $ 18,861,963 $ 12,882,105 $ 21,461,305 $ 8,579,200 See Notes to Required Supplementary Information 49 Actual Amounts ~ p !~ CITY OF MERIDIAN, IDAHO NOTES TO REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2008 Budgets and Budgetary Accounting The City follows these procedures in establishing the budgetary data reflected in the financial statements: Prior to September 1, the Finance Officer, Mayor and City Council prepare a proposed operating budget for the fiscal year commencing on October 1. The operating budget includes proposed expenditures and the means of financing them. Public hearings are conducted at City Hall to obtain taxpayer comments. Prior to October 1, the budget is legally enacted through passage of an ordinance. Budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for the general fund. Budgets for enterprise funds are not legally required but are adopted on a non-GAAP basis. All annual appropriations lapse at fiscal year end. Revisions that alter the total expenditure appropriation of any fund must be approved by the City Council. State law does not allow fund expenditures to exceed fund appropriations. The budget presented in the report has been amended. Formal budgetary integration is employed as a management control device during the year for all funds. 1 t 50 ~ ~ 1 e 1 fl 1 1 CITY OF MERIDIAN, IDAHO OTHER INFORMATION ~ ~ 1 ~ EideBaillys<" CPAs 6t BUSINESS ADVISORS INDEPENDE~>\'T AUDITORS' REPORT ON INTERNAL CONTROL OVER FIl~TA1\'CIA.L REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT A UDITING STANDARDS Mayor and Members of the City Council City of Meridian, Idaho Meridian, Idaho We have audited the accompanying fmancial statements of the governmental activities, the business-type activities, the discretely presented component unit, and each major fund of City of Meridian, Idaho, as of and for the year ended September 30, 2008, which collectively comprise the City of Meridian, Idaho's basic financial statements and have issued our report thereon dated February 23, 2009. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over- Financial Reporting In planning and performing our audit, we considered City of Meridian, Idaho's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of Meridian, Idaho's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Meridian, Idaho's internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allover management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the City of Meridian, Idaho's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the City of Meridian, Idaho's financial statements that is more than inconsequential will not be prevented or detected by the City of Meridian, Idaho's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the City of Meridian, Idaho's internal control. PEOPLE. PRINCIPLES. POSSIBILITIES. www.eidebailly.com 877 W. Main St., Ste. 800 I Boise, ID 83702-58581 Phone 208.344.7150 I Fax 208.344.7435 1 EOE 51 Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material wealrnesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material wealrnesses, as defined above. However, we noted other matters involving the internal control over financial reporting that we have reported to management of City of Meridian, Idaho, in a separate letter dated February 23, 2009. Compliance and Other Matters As part of obtaining reasonable assurance about whether City of Meridian, Idaho's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance with state statutes related to procurement that are required to be reported under Government Auditing Standards. See finding OS-O1. This report is intended solely for the information and use of the audit committee, management, City Council and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. ~~~~ ~~ Boise, Idaho February 23, 2009 52 ~ a CITY OF MERIDIAN, IDAHO SCHEDULE OF FINDINGS SEPTEMBER 30, 2008 Finding 08-01 Criteria: Per State Statute 67-2805: Procurement - $25 to 100K - (a} The solicitation for bids for the public works construction to be performed shall be supplied to no fewer than three (3) owner-designated licensed public works contractors by written means, either by electronic or physical delivery. The solicitation shall describe the construction work to be completed in sufficient detail to allow an experienced public works contractor to understand the construction project the political subdivision seeks to build. (b) The solicitation for bids shall describe the electronic or physical delivery method or methods authorized to submit a bid, the date and time by which a bid proposal must be received by the clerk, secretary or other authorized official of the political subdivision, and shall provide a reasonable time to respond to the solicitation, provided that except in the event of an emergency, such time shall not be less than three (3) business days. Condition: The City of Meridian did not abide by the procurement state statutes regarding obtaining bids for public works construction in excess of $25,000. Cause: During the year a Council Member entered the City of Meridian into a contract to move a schoolhouse without going through the bidding process for public works construction in excess of $25,000 as required by state statute. The expenditure was not discovered until the work had been performed and the invoice was submitted to the City for payment. Effect: The City of Meridian is not in compliance with state statutes regarding procurement of public works construction. Management's Response: We agree that all City expenditures should be processed in accordance with the City's purchasing policy. V 53 • CITY OF MERIDIAN ENR UPDATED FEE SCHEDULE as of 08/31 /2008 12/4/2007 COUNCIL 4.43% TOTAL-FEE. with ENR IMPACT FEE Ado ted Fee #07-1342 ENR Lnflation inflation increase Police Fees Residential (per dwelling unit) $85.00 $ 3.77 $88.77 Nonresidential (per square foot) $0.06 $ 0.00 $0.06 Fire Fees Residential (per dwelling unit) $377.00 $ 16.71 $393.71 Nonresidential (per square foot) $0.25 $ 0.01 $0.26 Parks & Recreation Fees Residential (per dwelling unit) $1,384.00 $ 61.36 $1,445.36 Nonresidential (per square foot) $0.00 NA NA Total Fees Residential (per dwelling unit) $1,846.00 $81.84 $1,927.84 Nonresidential (per square foot) $0.31 $ 0.01 $ 0.32 * Source: City of Meridian and Impact Fee Study Team 2006 *'" approved by Council ord#06-1255 August 2007 ENR Cost Index 8007 August 2008 ENR Cost Index 8362 Change 355 Change 4.43% 2000 6130 6160 -6202 6201 6233 '6238';6225 6233.6224 `6259 'i6266' 6283 6221 2.67%'. 2001 6281 6272 6279. 6286 6288 6318:6404.6389 6391 6397 '6410 6390 6342 € 1.94%'. 2002 6462 6462 .6502 6480 6512 6532,6605 6592 6589'6579 6578' 6563 6538 3.09%. 2003 6581 ~ 6640 6627 6635 6642 :6694'6695 6733 6741'6771. 6794 6782 6695 2.39% 2004 6825 6862 -6957 7017. 7065 :7109 7126:7188 7298 7314< 7312 7308 7115 :6.28%!. 2005'7297 7298 7309 7355 _ _~. 7398 7415 7422:7479 7540:=7563 __ __r 7630 7647 7446 4.65%! 2006 7660 7689 7692 7695 F 7691 7700 7721;7722 7763 !'7883? _ ~7911 7888 7751 4.10%'. 2007 7880 7880 7856 7865 _.. 7942 .7939..7959.8007 8049=8045 _ 8091 8089.5 7967 2.78%' 2008: 8090 8094 8109 8126 _... 8141 8185 8293 8362 8557 8217 3.14%. 3/10/2009 1 of 1 CommitteeUpdateDEC2008.xlsfees with ENR • d' 00 O O O O N N ^ 0 ° ° ° ° ° ° o o o o o o o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ~ o ~ o ~ o ~ M M N N r- r- s .~ ~~% ~E'i ~~ ~~ s 4'~i,, ~°~s ~~o s6,~ ~ ~~ i~~o ~~ ~ ~~ s°'s ~o ~,~ `~~~ ~+~ ~o i ~ s~o~ ss 6-~ 0~2 ~~~ 0 `~~o s~ ~ ~~ a~ a~ ~~~ °~l • • March 6, 2009 Pre-Council MERIDIAN CITY COUNCIL MEETING March 10, 2009 APPLICANT ITEM NO. 4 REQUEST Annual Impact Fee Update AGENCY COMMENTS CITY CLERK: See a#fached CITY ENGINEER: CITY PLANNING DIRECTOR: CITY ATTORNEY CITY POLICE DEPT: CITY FIRE DEPT: CITY BUILDING DEPT: CITY WATER DEPT: CITY SEWER DEPT: CITY PARKS DEPT: MERIDIAN SCHOOL DISTRICT: ADA COUNTY HIGHWAY DISTRICT: SANITARY SERVICE COMPANY CENTRAL DISTRICT HEALTH: NAMPA MERIDIAN IRRIGATION: SETTLERS IRRIGATION: IDAHO POWER: US WEST: INTERMOUNTAIN GAS: MERIDIAN POST OFFICE: OTHER: Contacted: Date: Phone: Emailed: Staff Initials: Materials presented. at public meetings shall become property of the City of Meridian. • • Page 1 of 1 Tara Green From: Stacy Kilchenmann Sent: Friday, March 06, 2009 7:20 AM To: Tara Green; Jaycee Holman Subject: Agenda Addition Follow Up Flag: Follow up Flag Status: Green Attachments: CommitteeUpdateDEC2008.x1s Can we add the annual impact fee update right after the audit report Tuesday? 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