Final Financial Statement 2021
MERIDIAN DEVELOPMENT CORPORATION
FINANCIAL STATEMENTS AND
REQUIRED SUPPLEMENTARY INFORMATION
YEAR ENDED SEPTEMBER 30, 2021
MERIDIAN DEVELOPMENT CORPORATION
TABLE OF CONTENTS
YEAR ENDED SEPTEMBER 30, 2021
INDEPENDENT AUDITORS’ REPORT 1
MANAGEMENT’S DISCUSSION AND ANALYSIS 3
FINANCIAL STATEMENTS
STATEMENT OF NET POSITION 9
STATEMENT OF ACTIVITIES 10
GOVERNMENTAL FUNDS BALANCE SHEET 11
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES – GOVERNMENTAL FUNDS 12
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION 13
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES TO THE STATEMENT OF
ACTIVITIES 14
NOTES TO FINANCIAL STATEMENTS 15
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES – BUDGET AND ACTUAL – GENERAL FUND 22
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION 23
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 24
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(1)
Independent Auditor’s Report
Members of the Board of Commissioners
Meridian Development Corporation
Meridian, Idaho
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities and each major
fund of Meridian Development Corporation (MDC), a component unit of the City of Meridian, Idaho, as
of and for the year ended September 30, 2021, and the related notes to the financial statements which
collectively comprise MDC’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the governmental activities and each major fund of MDC, as of September 30, 2021,
and the respective changes in financial position for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and budgetary comparison information as listed in the table of contents be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated November 19,
2021 on our consideration of MDC’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of MDC’s internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards in considering
MDC’s internal control over financial reporting and compliance.
Boise, Idaho
November 19, 2021
MERIDIAN DEVELOPMENT CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
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This section of the Meridian Development Corporation’s (MDC or Corporation) annual financial report
presents management’s discussion and analysis of MDC's financial performance during the year ended
September 30, 2021. Please use this information in conjunction with the information furnished in MDC's
financial statements.
Financial Highlights
Fiscal year 2021 is the eighteenth full year that MDC has collected property tax. Property tax is
MDC’s principal source of revenue. Property tax collections increased by $298,334 or 13.02%
from fiscal year 2020 to fiscal year 2021.
The total assets of MDC exceeded its liabilities and deferred inflows at September 30, 2021 by
$2,534,962. Of the total net position, $621,640 is net investment in capital assets. The
remaining net position of $1,913,322 is restricted to meet the Corporation’s on-going
obligations. This is a decrease of $2,110,898 from net position of $4,645,860 at September 30,
2020.
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 MDC using accounting methods
similar to those used by private sector companies. These statements are prepared using 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 Position – Reports all of MDC’s assets and liabilities with the difference between the
two reported as net position. Over time, increases or decreases in net position may serve as a useful
indicator of whether the financial position of the entity is improving or deteriorating.
Statement of Activities – Reports all of the Corporation’s revenues and expenses for the year by
function. MDC currently has two functions, the community development and public education and
marketing functions.
Fund Financial Statements
The Fund financial statements provide information about an entity’s major funds. Funds may be
required by law or may be established by the MDC Board of Commissioners.
Governmental Funds: Governmental fund financial 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 a short-term view of what resources will be available to meet needs.
MERIDIAN DEVELOPMENT CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
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Fund Financial Statements (continued)
MDC has three governmental funds:
General Fund: The general fund is the general operating fund of MDC. Income is derived primarily from
property tax.
10 Mile District: The 10 Mile District fund was established as of July 1, 2016. Income is derived
primarily from property tax.
Union Block District: The Union Block District fund was established as of June 22, 2020. Income is
derived primarily from property tax.
Notes to the Financial Statements
The notes provide additional information that is necessary to fully understand the data 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 financial
statements by including a comparison of the Corporation’s budget data for the year.
FINANCIAL ANALYSIS OF MERIDIAN DEVELOPMENT CORPORATION AS A WHOLE
Net Position
Net Position measures the difference between what the entity owns (assets) versus what the entity
owes (liabilities) and future revenues (deferred inflows). At September 30, 2021, MDC’s combined
assets exceeded liabilities and deferred inflows by $2,534,962.
The following statement is condensed from the statement of net position.
2021 2020
ASSETS
CURRENT ASSETS 8,426,001$ 6,969,518$
CAPITAL ASSETS 672,384 672,384
Total Assets 9,098,385 7,641,902
LIABILITIES
CURRENT LIABILITIES 105,932 159,234
NONCURRENT LIABILITIES 3,516,171 366,970
Total Liabilities 3,622,103 526,204
DEFERRED INFLOWS 2,941,320 2,469,838
Total Liabilities and Deferred Inflows 6,563,423 2,996,042
NET POSITION
NET INVESTMENT IN CAPITAL ASSETS 621,640 502,028
RESTRICTED 1,913,322 4,143,832
2,534,962$ 4,645,860$
MERIDIAN DEVELOPMENT CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
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Changes in Net Position
During the year, MDC’s financial position decreased by $2,110,898. This compares with the prior year
increase in financial position of $1,930,951.
The following condensed financial information was derived from the government-wide statement of
activities and shows how MDC’s net position changed during the year.
2021 2020
GENERAL REVENUES
Property Tax 2,588,967$ 2,290,633$
Grant 356,841 172,688
Interest 23,984 15,642
Other Revenues 747 5,120
Total General Revenues 2,970,539 2,484,083
PROGRAM REVENUES - -
Total Revenues 2,970,539 2,484,083
EXPENSES
Community Development 5,070,180 532,407
Public Education and Marketing 7,251 12,628
Interest on Long-Term Debt 4,006 8,097
Total Expenses 5,081,437 553,132
CHANGE IN NET POSITION (2,110,898) 1,930,951
Net Position - Beginning of Year 4,645,860 2,714,909
NET POSITION - END OF YEAR 2,534,962$ 4,645,860$
From fiscal year 2020 to fiscal year 2021, MDC's property tax revenue increased by 13.02%.
FINANCIAL ANALYSIS OF MDC'S FUNDS
Governmental Funds
Fiscal year 2021 was the eighteenth full year that MDC received property tax revenue. At September
30, 2021 the funds’ balance was $5,369,818 as compared to $4,302,093 at September 30, 2020. Of the
funds’ balance, $2,937 is nonspendable and $5,401,206 is restricted. The funds’ balance increased in
fiscal year 2021 due to tax revenues being higher than in fiscal year 2020 and due to the tax revenues
exceeding normal operating expenditures.
MERIDIAN DEVELOPMENT CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
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Budgetary Highlights
There were no budgetary amendments or capital outlay expenditures for the year. Operating expenses
were under budget.
MDC does not have any employees and relies on professional service contracts for the administrator,
legal, and marketing, etc. 9% of actual operating expenditures were for professional service
contractors. MDC spent 30% of its operating budget.
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
$1,500,000
$1,600,000
$1,700,000
$1,800,000
MDC Actual Expenditures ‐FY21 Compared to FY20
FY21 FY20
MERIDIAN DEVELOPMENT CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
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Budgetary Highlights (continued)
Property tax revenue was budgeted to be $2,635,407; actual tax collected was $2,686,943.
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
FY21 Actual FY21 Budget FY20 Actual FY20 Budget FY19 Actual FY18 Actual
MDC Tax Increment Revenue
MERIDIAN DEVELOPMENT CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
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Capital Asset and Debt Administration
Capital Assets
At the end of fiscal year 2020, MDC’s total capital assets were $672,384. At the end of fiscal year 2021,
capital assets had not changed and were $672,384, including $672,384 in land, $180,160 in intangibles
and $180,160 in accumulated depreciation. Intangible assets include the Downtown Master Plan, the
3D Modelling, and the MDC website. See Note 3 for further detail of the capital assets.
Long-Term Debt
During Fiscal Year 2011, MDC took out a promissory note with Washington Trust Bank, totaling
$1,274,000. The note payable was incurred to complete the building to be sold as condominium and
office space units. The note was renewed on March 10, 2017 and matures on March 5, 2022. As of
September 30, 2021, the balance on the remaining note was $50,744. See Note 4 for further
explanation of the changes in long-term debt.
Fiscal Year 2022 Budgetary Considerations
For fiscal year 2022, MDC will continue downtown rehabilitation efforts by purchasing properties for
redevelopment and parking and by participating in a variety of community downtown projects and
programs. MDC will partner with the City of Meridian for downtown decorations, help fund public art and
the split corridor lighting, and assist businesses with streetscape and façade improvements.
Property tax revenue is expected to be higher than the amount collected in fiscal year 2021.
Requests for Information
This report is designed to provide a general overview of Meridian Development Corporation’s finances
for our citizens and customers. If you have questions about this report or need additional financial
information contact the Finance Office: 101 South Capitol Boulevard, Suite 1700, Boise, ID 83702.
Phone 208-387-6400.
MERIDIAN DEVELOPMENT CORPORATION
STATEMENT OF NET POSITION
SEPTEMBER 30, 2021
See accompanying Notes to Financial Statements.
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ASSETS
CURRENT ASSETS
Cash and Cash Equivalents 5,418,947$
Other Receivables 3,122
Property Tax Receivable 2,941,320
Delinquent Property Taxes Receivable 59,675
Prepaid Expenses 2,937
Total Current Assets 8,426,001
NONCURRENT ASSETS
Capital Assets, Not Subject to Depreciation
and Amortization 672,384
Capital Assets, Subject to Depreciation
and Amortization 180,160
Less: Accumulated Depreciation (180,160)
Total Noncurrent Assets 672,384
Total Assets 9,098,385
LIABILITIES
CURRENT LIABILITIES
Accounts Payable 55,188
Note Payable, Current Portion 50,744
Total Current Liabilities 105,932
NONCURRENT LIABILITIES
Due to Developers 3,516,171
Total Noncurrent Liabilities 3,516,171
Total Liabilities 3,622,103
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues, Property Taxes 2,941,320
NET POSITION
Net Investment in Capital Assets 621,640
Restricted 1,913,322
Total Net Position 2,534,962$
MERIDIAN DEVELOPMENT CORPORATION
STATEMENT OF ACTIVITIES
YEAR ENDED SEPTEMBER 30, 2021
See accompanying Notes to Financial Statements.
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GENERAL REVENUES
General Property Tax Revenue 2,588,967$
Grant Revenues 356,841
Interest Earnings 23,984
Other Revenue 747
Total General Revenues 2,970,539
EXPENSES
Community Development 5,070,180
Public Education and Marketing 7,251
Debt Service Interest 4,006
Total Expenditures 5,081,437
CHANGE IN NET POSITION (2,110,898)
Net Position - Beginning of Year 4,645,860
NET POSITION - END OF YEAR 2,534,962$
MERIDIAN DEVELOPMENT CORPORATION
GOVERNMENTAL FUNDS BALANCE SHEET
SEPTEMBER 30, 2021
See accompanying Notes to Financial Statements.
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General 10 Mile Union Block
Fund District District Total
ASSETS
Cash and Cash Equivalents 5,105,154$ 313,793$ -$ 5,418,947$
Other Receivables - - 3,122 3,122
Interfund Receivable (Payable) 29,301 - (29,301) -
Property Tax Receivable 1,675,801 1,265,519 - 2,941,320
Deliquent Property Taxes Receivable 58,909 766 - 59,675
Prepaid Expenses 2,937 - - 2,937
Total Assets 6,872,102$ 1,580,078$ (26,179)$ 8,426,001$
LIABILITIES
Accounts Payable 45,690$ 1,352$ 8,146$ 55,188$
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues, Property Taxes 1,734,710 1,266,285 - 3,000,995
FUND BALANCE
FUND BALANCE
Nonspendable 2,937 - - 2,937
Unavailable - - (34,325) (34,325)
Restricted 5,088,765 312,441 - 5,401,206
Total Fund Balance 5,091,702 312,441 (34,325) 5,369,818
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 6,872,102$ 1,580,078$ (26,179)$ 8,426,001$
MERIDIAN DEVELOPMENT CORPORATION
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
GOVERNMENTAL FUNDS
YEAR ENDED SEPTEMBER 30, 2021
See accompanying Notes to Financial Statements.
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General 10 Mile Union Block
Fund District District Total
REVENUES
General Property Tax Revenue 1,819,675$ 867,268$ -$ 2,686,943$
Grant Revenue 249,197 107,644 - 356,841
Interest Earnings 23,984 - - 23,984
Other Revenue (2,375) - 3,122 747
Total General Revenues 2,090,481 974,912 3,122 3,068,515
EXPENDITURES
Office and Operating Expense 459,355 1,199,267 33,019 1,691,641
Professional Services 159,004 14,848 4,428 178,280
Public Education and Marketing 7,251 - - 7,251
Debt Service:
Principal 119,612 - - 119,612
Interest 4,006 - - 4,006
Total Expenditures 749,228 1,214,115 37,447 2,000,790
NET CHANGE IN FUND BALANCES 1,341,253 (239,203) (34,325) 1,067,725
Fund Balance - Beginning of Year 3,750,449 551,644 - 4,302,093
FUND BALANCE - END OF YEAR 5,091,702$ 312,441$ (34,325)$ 5,369,818$
MERIDIAN DEVELOPMENT CORPORATION
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT
OF NET POSITION
SEPTEMBER 30, 2021
See accompanying Notes to Financial Statements.
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TOTAL FUND BALANCES FOR GOVERNMENTAL FUNDS 5,369,818$
Total net position reported for governmental activities in the statement of net position is
different because:
Land 672,384
Equipment and Intangibles, Net of $180,160
Accumulated Depreciation -
Note Payable (50,744)
Due to Brighton Homes (3,516,171)
59,675
Total Net Position as Shown on the Statement of Net Position 2,534,962$
Long-term liabilities that pertain to governmental funds, including bonds payable, are not
due and payable in the current period and, therefore, are not reported as fund liabilities. All
liabilities - both current and long-term - are reported in the statement of net position.
Some of the property taxes receivable are not available to pay for current period
expenditures and, therefore, are not reported in the funds.
Capital assets used in governmental funds are not financial resources and, therefore, are
not reported in the funds. Those assets consist of:
MERIDIAN DEVELOPMENT CORPORATION
RECONCILIATION OF THE STATEMENT OF REVENUREVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
YEAR ENDED SEPTEMBER 30, 2021
See accompanying Notes to Financial Statements.
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NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS 1,067,725$
The governmental funds report bond proceeds as financing sources, while repayment of bond
principal is reported as an expenditure. In the statement of net position, however, issuing debt
increases long-term liabilities and does not affect the statement of activities and repayment of
principal reduces the liability.
Payment of General Obligation Refunding Bond Principal 119,612
In the statement of activities, long-term liabilities representing reimbursements against
future tax receipts are recorded as expenses. (3,200,259)
The change in property taxes receivable to be collected subsequent to year-end, but not
available soon enough to pay for the current period’s expenditures are not recognized.(97,976)
Change in Net Position, as Reflected on the Statement of Activities (2,110,898)$
Amounts reported for governmental activities in the statement of activities are different
because:
MERIDIAN DEVELOPMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Meridian Development Corporation (MDC) is a separate and distinct legal entity of the
City of Meridian, Idaho (City) created by state statute. The Directors for MDC are appointed
by the Mayor and approved by the City Council. MDC provides urban renewal services for
the citizens of the City.
The financial statements of MDC have been prepared in conformity with accounting
principles generally accepted in the United States of America (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 more significant of the government's accounting policies are described
below.
The accounting and reporting policies of MDC relating to the funds included in the
accompanying basic financial statements conform to GAAP applicable to state and local
governments.
Financial Reporting Entity
MDC is included as a component unit in the City’s financial statements. These statements
present only the funds of MDC and are not intended to present the financial position and
results of operations of the City in conformity with GAAP.
Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the
statement of activities) report information on all of the nonfiduciary activities of the primary
government. The statement of activities demonstrates the degree to which the direct
expenses of a given function or segment are 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.
MERIDIAN DEVELOPMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Measurement 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. 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.
The governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting. Revenues are
recognized as soon as they are both measurable and available. Revenues are considered to
be available when they are collectible within the current period or soon enough thereafter to
pay liabilities of the current period. 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 claims
and judgments, are recorded only when payment is due. MDC reports the following major
governmental funds:
General Fund - MDC is a general fund. General funds are used for all financial resources
except those required to be accounted for in another fund.
10 Mile District Fund - The 10 Mile District fund was established as of July 1, 2016.
Union Block District Fund – the Union Block District fund was established as of June 22,
2020.
Capital Assets
Capital assets are reported in the government-wide financial statements. Capital assets are
defined by the government as assets with an initial, individual cost of more than $500 and
an estimated useful life in excess of one year. All material fixed assets are valued at cost.
Donated fixed assets are valued at their estimated fair value on the date donated. Capital
assets are depreciated on the straight-line basis with the half-year convention over useful
lives of 3 to 30 years.
Property Taxes Receivable
Property taxes are recognized as revenue when the amount of taxes levied is measurable,
and proceeds are available to finance current period expenditures.
Available tax proceeds include property tax receivables expected to be collected within sixty
days after year-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.
MERIDIAN DEVELOPMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deferred Inflow of Resources and Unavailable Revenue
Unavailable revenue is considered a deferred inflow of resources in accordance with the
modified accrual basis of accounting for the fund financial statements. Deferred inflows of
resources are measurable but do not represent available expendable resources for the fund
financial statements for the fiscal year ended September 30, 2021. Since MDC is on a
September 30 fiscal year end, property taxes levied during September for the succeeding
year’s collection are recorded as unavailable revenues at the MDC’s year-end and
recognized as revenue in the following fiscal year. Ada County bills and collects taxes for
MDC.
Risk Management
As a component unit of the City, MDC is exposed to various risks of loss related to theft of,
damage to, or destruction of assets. The City, and MDC as a component unit, participates in
a public entity risk pool, Idaho Counties Risk Management Pool (ICRMP), for property and
liability insurance. The City's and MDC’s exposure to loss from its participation in ICRMP is
limited to the extent of their deductible only.
Fund Balances
The governmental fund financial statements present fund balances based on classifications
that comprise a hierarchy that is based primarily on the extent to which the MDC is bound to
honor constraints on the specific purposes for which amounts in the respective
governmental funds can be spent. The classifications used in the governmental fund
financial statements are as follows:
Nonspendable – Includes amounts that cannot be spent because they are either not
spendable in form or are legally or contractually required to be maintained intact. All
amounts reported as nonspendable at September 30, 2021 by MDC are nonspendable
in form. This includes prepaid expenses of $2,937. MDC has not reported any amounts
that are legally or contractually required to be maintained intact.
Restricted – This fund balance is constrained for a specific purpose and legally restricted
by external parties, such as state or federal agencies. MDC had $5,401,206 in restricted
fund balance at September 30, 2021.
Committed – This fund balance constraint is self-imposed by the board of directors.
Formal action is required by the board of directors to commit funds and must occur prior
to year-end; however, the actual dollar amount may be determined in the subsequent
period.
Assigned – This fund balance is intended for a specific purpose and the authority to
“assign” is delegated to the administrator. Formal action is not necessary to impose,
remove, or modify an assigned fund balance.
MERIDIAN DEVELOPMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Unassigned – This is the remaining fund balance that has no internal or external
restrictions. Unassigned amounts are available for any purpose. Although there is
generally no set spending plan, there is a need to maintain a certain funding level. The
unassigned fund balance is commonly used for emergency expenditures or reserves
needed to ensure cash flow.
MDC has a policy regarding minimum fund balance for a stabilization arrangement to
reserve 8% of the current year budget of tax revenues in order to ensure there is sufficient
cash flow to maintain services between property tax receipts (the Resolution).
Pooled Cash
MDC follows the practice of pooling cash of all funds to maximize investment earnings.
Except when required by trust or other agreements, all cash is deposited to and disbursed
from a single bank account. Investment earnings are allocated periodically to the
participating funds based upon each fund’s average equity balance in the total cash.
NOTE 2 DEPOSITS – CUSTODIAN CREDIT RISK
Cash and Cash Equivalents
As of September 30, 2021, the account balance of the checking account was $279,330. As
of September 30, 2021, the account balance of the money market account was $5,351,317.
$5,380,647 was uninsured and uncollateralized as of September 30, 2021. Cash is held in
the custody of Washington Trust Bank in MDC’s name.
MERIDIAN DEVELOPMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
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NOTE 3 CAPITAL ASSETS
Changes to capital assets are as follows:
Balance Balance
10/1/2020 Additions Deletions Transfers 9/30/2021
GOVERNMENTAL ACTIVITIES
Capital Assets, not
Depreciated Land 672,384$ -$ -$ -$ 672,384$
Total Capital Assets,
not Depreciated 672,384 - - - 672,384
CAPITAL ASSETS, DEPRECIATED
Equipment 1,843 - (1,843) - -
Intangibles 180,160 - - - 180,160
Total Capital Assets,
Depreciated 182,003 - (1,843) - 180,160
Less: Accumulated
Depreciation
Equipment (1,843) - 1,843 - -
Intangibles (180,160) - - - (180,160)
Total Accumulated (182,003) - 1,843 - (180,160)
Depreciation
Total Net Capital Assets,
Depreciated - - - - -
GOVERNMENTAL ACTIVITIES
CAPITAL ASSETS, NET 672,384$ -$ -$ -$ 672,384$
MERIDIAN DEVELOPMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
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NOTE 4 CHANGES IN LONG-TERM DEBT
MDC has a promissory note with an outstanding balance as of September 30, 2021 for
$50,744 that matures on March 5, 2022 with a fixed interest rate of 3.51% collateralized by
real property.
The following is a summary of changes in debt of MDC for the year ended September 30,
2021.
10/1/2020 Issued Retired 9/30/2021
GOVERNMENTAL ACTIVITIES
Note Payable - Building 170,356$ -$ (119,612)$ 50,744$
Current Portion of Note Payable 50,744$
Maturities of the note payable are as follows for the year ended September 30:
Years Ending,Principal Interest Total
2022 50,744$ 449$ 51,193$
Totals 50,744$ 449$ 51,193$
NOTE 5 RELATED PARTY TRANSACTIONS
MDC partners with the City of Meridian for various downtown improvements. During the
fiscal year, MDC reimbursed the City of Meridian $16,891 for costs related to joint projects.
In addition, during the year, MDC received $274,463 from the City of Meridian in the form of
a grant issued through the governor’s public safety grant initiative.
NOTE 6 LINE OF CREDIT
Washington Trust Bank extended a revolving line of credit to MDC that provides for
available borrowings up to $100,000. The agreement matures on June 30, 2022 and is
unsecured. Borrowings under the line of credit bear variable interest rates at 5.5% per
annum. There were no amounts outstanding on the line as of September 30, 2021.
Borrowings under the line of credit are subject to certain covenants and restrictions on
indebtedness and dividend payments.
MERIDIAN DEVELOPMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
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NOTE 7 NET POSITION
MDC had net position consisting of two components – net investment in capital assets and
restricted net position.
The net investment in capital assets component of net position consists of capital assets
that are owned by MDC, net of accumulated depreciation, and reduced by the outstanding
balance of bonds, mortgages, notes, or other borrowings that are attributable to the
acquisition, construction, or improvement of those assets.
As of September 30, 2021, MDC had net investment in capital assets calculated as follows:
Capital Assets, Net of Accumulated Depreciation 672,384$
Current Portion of Outstanding Long-Term Obligations (50,744)
Noncurrent Portion of Outstanding Long-Term Obligations -
Total Net Investment in Capital Assets 621,640$
The restricted component of net position consists of assets that are restricted for use either
externally imposed by creditors, grantors, contributors, or laws and regulation of other
governments or imposed by law through constitutional provision or enabling legislation.
MDC had a restricted net position as of September 30, 2021 of $1,913,322.
NOTE 8 COMMITMENTS AND CONTINGENCIES
On February 8, 2017, amended on March 13, 2018, MDC entered into an Owner
Participation Agreement with Ten Mile Crossing, Inc., Brighton Corporation, SCS Brighton
LLC, Brighton Investments LLC, SCS Investments LLC, and SBG Ten Mile Office No. 1,
LLC (the Developers) to carry out the approved urban renewal plan. This agreement
contemplates that the Developers will develop the property by constructing private
improvements. Eligible public improvements are to be constructed in phases and
reimbursed from future tax increment revenues. As of September 30, 2021, the Developers
have incurred life-to-date eligible expenses and requested reimbursements totaling
$5,071,911. Of this amount, $1,199,267 was paid by MDC in fiscal year 2021 and $356,473
was paid by MDC in prior fiscal years. The remaining amount of $3,516,171 is to be paid,
contingent upon the future receipt of tax increment.
MERIDIAN DEVELOPMENT CORPORATION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
BUDGET AND ACTUAL – GENERAL FUND
YEAR ENDED SEPTEMBER 30, 2021
See accompanying Notes to Required Supplementary Information.
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Budgeted Amounts Variance
Actual with
Original Final Amounts Final Budget
REVENUES
General Property Tax Revenue 2,635,407$ 2,635,407$ 2,686,943$ 51,536$
Grant Revenue - - 356,841 356,841
Interest Earnings 14,000 14,000 23,984 9,984
Other Revenue 100,000 100,000 747 (99,253)
Total Revenues 2,749,407 2,749,407 3,068,515 319,108
EXPENDITURES
Office and Operating Expense 6,144,104 6,144,104 1,691,641 4,452,463
Professional Services, Surveys,
and Studies 233,000 233,000 178,280 54,720
Public Education and Marketing 16,000 16,000 7,251 8,749
Debt Service
Principal 215,924 215,924 119,612 96,312
Interest 7,693 7,693 4,006 3,687
Total Expenditures 6,616,721 6,616,721 2,000,790 4,615,931
NET CHANGE IN FUND BALANCES (3,867,314) (3,867,314) 1,067,725 4,935,039
Fund Balance - Beginning of Year 3,995,314 3,995,314 4,302,093 306,779
FUND BALANCE - END OF YEAR 128,000$ 128,000$ 5,369,818$ 5,241,818$
MERIDIAN DEVELOPMENT CORPORATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
SEPTEMBER 30, 2021
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NOTE 1 BUDGETS AND BUDGETARY ACCOUNTING
MDC follows these procedures in establishing the budgetary data reflected in the financial
statements:
Prior to September 1, the members of the Board of Directors and the contract
administrator 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 GAAP for the funds. All annual
appropriations lapse at fiscal year-end. Revisions that alter the total expenditure
appropriation of any fund must be approved by the board of commissioners. State law does
not allow fund expenditures to exceed fund appropriations.
Formal budgetary integration is employed as a management control device during the year.
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Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards
Members of the Board of Commissioners
Meridian Development Corporation, a component unit of the City of Meridian, Idaho
Meridian, Idaho
We have audited, 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, the financial statements of the governmental
activities, and each major fund of Meridian Development Corporation (MDC), a component unit of the
City of Meridian, Idaho as of and for the year ended September 30, 2021, and the related notes to the
financial statements, which collectively comprise Meridian Development Corporation’s basic financial
statements, and have issued our report thereon dated November 19, 2021.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered MDC's internal control
over financial reporting (internal control) as a basis for designing the audit procedures that are appropriate
in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of MDC’s internal control. Accordingly, we do not
express an opinion on the effectiveness of MDC’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting that might be material weaknesses or significant deficiencies. Given these limitations,
during our audit we did not identify any deficiencies in internal control that we consider to be material
weaknesses. However, material weaknesses may exist that have not been identified.
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Compliance and Other Matters
As part of obtaining reasonable assurance about whether MDC's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
financial statements. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Boise, Idaho
November 19, 2021