03-05-2013 City Council Study Session Packet
City of Grand Island
Tuesday, March 5, 2013
Study Session Packet
City Council:
Linna Dee Donaldson
Scott Dugan
John Gericke
Peg Gilbert
Chuck Haase
Julie Hehnke
Vaughn Minton
Mitchell Nickerson
Bob Niemann
Mike Paulick
Mayor:
Jay Vavricek
City Administrator:
Mary Lou Brown
City Clerk:
RaNae Edwards
7:00 PM
Council Chambers - City Hall
100 East 1st Street
Grand Island Study Session - 3/5/2013 Page 1 / 220
City of Grand Island Tuesday, March 5, 2013
Call to Order
This is an open meeting of the Grand Island City Council. The City of Grand Island abides by the Open
Meetings Act in conducting business. A copy of the Open Meetings Act is displayed in the back of this room
as required by state law.
The City Council may vote to go into Closed Session on any agenda item as allowed by state law.
Invocation
Pledge of Allegiance
Roll Call
A - SUBMITTAL OF REQUESTS FOR FUTURE ITEMS
Individuals who have appropriate items for City Council consideration should complete the Request for
Future Agenda Items form located at the Information Booth. If the issue can be handled administratively
without Council action, notification will be provided. If the item is scheduled for a meeting or study
session, notification of the date will be given.
B - RESERVE TIME TO SPEAK ON AGENDA ITEMS
This is an opportunity for individuals wishing to provide input on any of tonight's agenda items to reserve
time to speak. Please come forward, state your name and address, and the Agenda topic on which you will
be speaking.
Grand Island Study Session - 3/5/2013 Page 2 / 220
City of Grand Island
Tuesday, March 5, 2013
Study Session
Item -1
Presentation by Almquist, Maltzahn, Galloway, & Luth for Fiscal
Year 2012 City Single Audit and General Purpose Financial
Statements and Electric and Water Audit Reports
Terry Galloway from Almquist, Maltzahn, Galloway & Luth will present the Fiscal Year 2012 City
Single Audit and General Purpose Financial Statements and Electric and Water Audit Reports.
Staff Contact: Jaye Monter
Grand Island Study Session - 3/5/2013 Page 3 / 220
To the Honorable Mayor and City Council
City of Grand Island
Grand Island, Nebraska
The City’s audit firm, Almquist Maltzahn Galloway & Luth, presented a list of Other Audit Findings or Issues
in their letter issued to the Council dated January 30, 2013. These are matters that the auditors believe should
be considered. Below is an excerpt from that letter with responses from the City.
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 City’s auditors. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a condition to our
retention.
In connection with our audit of the financial statements of the City of Grand Island as of September 30, 2012,
we noted certain matters that we believe you should consider. Our observations were formed as a by-product
of our audit procedures, which did not include a comprehensive review for the purpose of submitting detailed
recommendations.
1. We recommend that you transfer the excess reserve funds from the Fire Fund 810 to the General
Fund.
Response: The City is currently funding General Fund Firefighter employer contributions to the
defined contribution plans with the excess contributions in the Fire Reserve 810 Fund. In addition,
pending Council approval, the following funding uses are under consideration:
General Fund contributions in fiscal year 2013 for the two recent pre-84 Police retirees
as well as future pre-84 Police retirees;
Future pension disability payments for both Police Officers and Firefighters;
General Fund Police Officer employer contributions to the defined contribution plans.
2. We suggest you consider the benefits of hiring an Internal Auditor.
Response: The City will bring forward this recommendation during the 2014 budget process.
3. During our infrastructure testing, we noted the inspections on the streets were not completed this
year, which it is only required every three years. Please remember to complete this task by
September 30, 2014, to remain in compliance with generally accepted accounting principles.
Response: In 2012, Public Work’s Engineering personnel were tasked with higher priority
assignments and did not complete the annual inspection of one-third of the City’s pavement
Grand Island Study Session - 3/5/2013 Page 4 / 220
network. Public Works believes pavement assessments are an important tool for preserving and
improving the overall condition of our pavement network. Recently, Engineering and Streets
division staff have collaborated to develop a Request for Proposal for engineering services to
perform assessments on the entire pavement network and to assist in developing a budget for a
pavement management program. Data collected will be used to update the City’s Cartegraph
database software that will be utilized to develop performance curves, establish a prioritization
protocol and identify and plan cost effective preventive maintenance activities for the streets of
Grand Island.
4. During the audit of the infrastructure, we noted that bridges are not included in the Cartegraph
software and therefore are not included in the usual inspection process. We recommend adding the
bridges to the software and inspecting them in accordance with the above scheduled process.
Response: The City owned bridges are inspected biennially in accordance with National Bridge
Inspection Standards (NBIS) as required by Federal and State regulations. These standards are
vital for assuring that bridges are safe and operable, but the information collected from these
inspections is not useful for long term bridge preservation and for minimizing life cycle costs.
The Public Works Engineering Division’s current goal is to initiate a Systematic Preventive
Maintenance program this year for the 15 bridges owned by the City. This program will entail a
planned strategy of cost effective treatments to existing bridges that are intended to preserve or
maintain structural integrity and functionality, and to retard deterioration, thus maintaining or
extending the useful life of each structure. Public Works plans to initiate a Request for
Qualifications for engineering services to perform assessments on all bridge decks, predict the
remaining service life on each deck and quantify service life extensions from alternative
maintenance and repair options.
Cartegraph offers a module for activities associated with Systematic Preventive Maintenance for
bridges. However, due to the low number of bridges in our inventory, Public Works staff does not
believe it is necessary to immediately utilize the software for managing our bridge assets.
Jaye Monter
City Treasurer/Finance Director
February 25, 2013
Grand Island Study Session - 3/5/2013 Page 5 / 220
City of Grand IslandFinancial statements and supplementary informationAlmquist, Maltzahn, Galloway & Luth, P.C.Grand IslandStudy Session - 3/5/2013Page 6 / 220
Independent Auditors’ ReportAudit Report Page - 3In our opinion, based on our audit, the financial statements referred toabove present fairly, in all material respects, the respective financialposition of the governmental activities, the business-type activities, theaggregate discretely presented component units, each major fund, theaggregate remaining fund information, and the fiduciary funds of theCity of Grand Island, Nebraska, as of September 30, 2012, and therespective changes in financial position and cash flows, where applicable,thereof for the year then ended in conformity with accounting principlesgenerally accepted in the United States of America.Grand IslandStudy Session - 3/5/2013Page 7 / 220
Outstanding DebtThe City of Grand Island’s total debt decreased by $10,046,377 (18.8 percent) during the current fiscal year due to scheduled principal payments.City of Grand Island's Outstanding DebtYear Ended September 30, 2012 Year Ended September 30, 2011Governmental Business-type Governmental Business-typeActivitiesActivitiesTotalActivitiesActivitiesTotalGeneral Obligation Bonds 6,585,000$ -$ 6,585,000$ 8,625,000$ -$ 8,625,000$ Revenue Bonds - 24,585,000 24,585,000 - 31,225,000 31,225,000 Capital Lease 12,175,429 - 12,175,429 13,541,806 - 13,541,806 Total 18,760,429$ 24,585,000$ 43,345,429$ 22,166,806$ 31,225,000$ 53,391,806$ Audit Report Page -13Grand IslandStudy Session - 3/5/2013Page 8 / 220
Statement of Net AssetsCITY OF GRAND ISLAND, NEBRASKASTATEMENT OF NET ASSETSSeptember 30, 2012Primary GovernmentGovernmental Business-typeActivitiesActivitiesTotalNET ASSETSInvested in capital assets, net of related debt 302,474,017 206,902,208 509,376,225 Restricted for:Debt service 235,984 5,601,078 5,837,062 Landfill closure/post closure costs - 2,447,546 2,447,546 Perpetual care - permanent 586,596 - 586,596 Street improvements 2,562,959 - 2,562,959 Capital projects 494,923 - 494,923 Economic development 874,480 - 874,480 Other purposes 3,225,735 - 3,225,735 Unrestricted 16,755,883 59,174,277 75,930,160 Total net assets327,210,577$ 274,125,109$ 601,335,686$ Audit Report Page - 16Grand IslandStudy Session - 3/5/2013Page 9 / 220
Statement of Net Assets – Proprietary FundsAudit Report Page - 22LandfillFundNoncurrent assets:Restricted investments$ 4,010,872 Noncurrent liabilities:Closure/post closure liability3,054,567 Adjustment from Restrictedto Unrestricted Cash and Net Assets$ 956,305CITY OF GRAND ISLAND, NEBRASKASTATEMENT OF NET ASSETS - PROPRIETARY FUNDSSeptember 30, 2012Enterprise FundsGrand IslandStudy Session - 3/5/2013Page 10 / 220
Statement of Net Assets – Fiduciary FundsCITY OF GRAND ISLAND, NEBRASKASTATEMENT OF NET ASSETS - FIDUCIARY FUNDSSeptember 30, 2012Employee PensionReserve FundsASSETSCash 9,249$ Investments 5,125,906 Accounts receivable - Special assessments receivable - Total assets 5,135,155 LIABILITIESDue to other funds 512,914 Agency liabilities - Pension liability 1,160,256 Total liabilities 1,673,170 NET ASSETSHeld in trust for pension benefits 3,461,985$ Audit Report Page - 26Grand IslandStudy Session - 3/5/2013Page 11 / 220
Net Asset RestatementGovernmental net assets were increased $3,191,337 as ofSeptember 30, 2011, to reflect City infrastructure paid fordirectly by the State of Nebraska. Business-type net assetswere increased and discretely presented component unit netassets were decreased $8,854,061 to reclassify the landfillfrom a component unit to an Enterprise Fund.Audit Report Page- 45Grand IslandStudy Session - 3/5/2013Page 12 / 220
Budgetary Comparison Schedule – General FundTotal resources $ 33,534,563 $ 33,993,513 $ 458,950 CHARGES TO APPROPRIATIONS (OUTFLOWS)Total general government 3,871,383 3,631,009 (240,374)Total public safety17,945,715 16,835,984 (1,109,731)Public safety:CITY OF GRAND ISLAND, NEBRASKABUDGETARY COMPARISON SCHEDULE -GENERAL FUNDYear ended September 30, 2012Variances -Budget Actual Over (Original and (Under) FinalFinal)ActualBudgetRESOURCES (INFLOWS)Audit Report Page - 99Grand IslandStudy Session - 3/5/2013Page 13 / 220
Budgetary Comparison Schedule – General Fund, ContinuedEnvironment and leisure:Total environment and leisure 5,319,430 5,202,459 (116,971)Non-departmental2,517,321 2,112,995 (404,326)Total charges to appropriations 35,629,156 33,394,971 (2,234,185)Public works:Total public works 5,975,307 5,612,524 (362,783)CITY OF GRAND ISLAND, NEBRASKABUDGETARY COMPARISON SCHEDULE -GENERAL FUNDYear ended September 30, 2012Variances -Budget Actual Over (Original and (Under) FinalFinal)ActualBudgetRESOURCES (INFLOWS)CHARGES TO APPROPRIATIONS (OUTFLOWS), continuedAudit Report Page - 100Grand IslandStudy Session - 3/5/2013Page 14 / 220
OTHER FINANCING SOURCES (USES)Net transfers 2,730,796 1,557,487 (1,173,309)RESOURCES AND OTHER FINANCINGSOURCES (USES) OVER (UNDER)CHARGES TO APPROPRIATIONS$ 636,203 $ 2,156,029 $ 1,519,826 Budgetary Comparison Schedule – General Fund, ContinuedCITY OF GRAND ISLAND, NEBRASKABUDGETARY COMPARISON SCHEDULE -GENERAL FUNDYear ended September 30, 2012Variances -Budget Actual Over (Original and (Under) FinalFinal)ActualBudgetRESOURCES (INFLOWS)CHARGES TO APPROPRIATIONS (OUTFLOWS), continuedAudit Report Page- 100Grand IslandStudy Session - 3/5/2013Page 15 / 220
City of Grand IslandSeptember 30,Audit Report Page Reference 2012 2011 2010 2009 2008 2007 2006 20051) Unrestricted Net Assets/Total Net AssetsGovernment Wide Page 16 12.63% 12.77% 12.81% 11.93% 11.53% 11.44% 10.79% 9.33%Governmental Activities Page 16 5.12% 5.37% 5.92% 6.01% 6.39% 6.85% 8.39% 7.73%Business-Type Activities Page 16 21.59% 22.06% 21.56% 19.56% 18.32% 17.71% 14.21% 11.55%Grand IslandStudy Session - 3/5/2013Page 16 / 220
Audit Report Page Reference 2012 2011 2010 2009 2008 2007 2006 20052) Unassigned Fund Balance/General Fund ExpendituresPage 18 / 20 30.69% 17.96% 17.47% 14.54% 24.20% 25.45% 21.57% 41.99%City of Grand IslandSeptember 30,Grand IslandStudy Session - 3/5/2013Page 17 / 220
Audit Report Page Reference 2012 2011 2010 2009 2008 2007 2006 20053) Outstanding GO Debt/Valuation Page 13 0.76% 0.93% 1.06% 1.21% 1.11% 1.21% 1.37% 0.77%City of Grand IslandSeptember 30,Grand IslandStudy Session - 3/5/2013Page 18 / 220
AuditReport Page Reference 2012 2011 2010 2009 2008 2007 2006 20054) Debt Coverage Ratio Pages 23-24Electric 10.13 3.32 2.78 2.70 2.69 3.12 2.50 2.00 Water 14.05 4.58 4.57 4.76 4.48 5.18 4.67 3.30 Sewer 2.09 1.90 1.95 2.20 2.56 3.03 2.44 3.00 City of Grand IslandSeptember 30,Grand IslandStudy Session - 3/5/2013Page 19 / 220
Audit Report Page Reference 2012* 2011* 2010 2009 2008 2007 2006 20055) Top 5 Sources of Revenues -Governmental ActivitiesPage 9Sales Tax $ 300 $ 281 $ 311 $ 313 $ 311 $ 307 $ 296 $ 290 Property Taxes 161 137 149 134 125 121 116 117 Grants and Contributions 131 232 159 123 125 42 396 n/a State Allocation 89 86 89 92 134 91 83 88 Charges for Services 181 173 188 190 180 170 187 n/aCity of Grand IslandSeptember 30,* Per Capita based on 48,520 populationPrior to 2011 – Per Capita based on population 42,961Grand IslandStudy Session - 3/5/2013Page 20 / 220
Audit Report Page Reference 2012 2011 2010 2009 2008 2007 2006 20056) Cash, Investments & Treasurer Cash Page 18/20/55General Fund:OperatingReplacementTotal$9,197,089 $7,070,724 $5,609,657 $4,171,679 $6,326,814 $6,728,128 $9,974,038 $11,912,802 Business-type Activities (Excluding Depreciation/Amortization) Page 22/23/57OperatingReplacementRestrictedTotal$56,073,069 $50,408,234 $45,475,572 $42,611,808$25,218,637 $23,541,438 $16,469,141 $15,757,904City of Grand IslandSeptember 30,Grand IslandStudy Session - 3/5/2013Page 21 / 220
Audit Report Page Reference 2012 2011 2010 2009 2008 2007 2006 20057) Net Depreciable CapitalAssets/Original CostGovernmental Activities Page 55 62.33% 63.75% 64.82% 67.51% 70.47% 64.93% 67.52% 51.20%Business-type Activities Page 57 43.47% 45.44% 47.33% 48.80% 50.66% 51.93% 54.35% 56.26%Component Units Page 58 82.72% 49.76% 51.85% 54.97% 57.44% 59.79% 56.78% 60.20%City of Grand IslandSeptember 30,Grand IslandStudy Session - 3/5/2013Page 22 / 220
Audit Report PageReference 2012 2011 2010 2009 2008 2007 2006 20058) Operating Income/Total Operating RevenuePage 23Electric Fund 21.58% 16.82% 10.80% 12.67% 11.73% 16.78% 12.02% 5.72%Water Fund 47.49% 26.76% 27.63% 30.10% 28.06% 34.53% 33.08% 17.23%Sewer Fund 10.75% 8.90% 8.67% 13.49% 20.28% 27.90% 22.57% 36.50%Golf Fund 9.80% 5.37% 0.26% 7.05% 3.65% -28.07% -18.37% -13.17%City of Grand IslandSeptember 30,Grand IslandStudy Session - 3/5/2013Page 23 / 220
2012* 2011* 2010 2009 2008 2007 2006 20059) Levy RatesGeneral 0.272074 0.205189 0.207553 0.186935 0.166335 0.161090 0.206495 0.203996 Per Capita $ 138 $ 101 $ 114 $ 100 $ 86 $ 82 $ 100 $ 89 Debt Service 0.052351 0.067645 0.065287 0.063459 0.072390 0.077732 0.044128 0.047385 Per Capita $ 27 $ 33 $ 36 $ 34 $ 37 $ 40 $ 21 $ 21 Total Levy 0.324425 0.272834 0.272840 0.250394 0.238725 0.238822 0.250624 0.251381 City of Grand IslandSeptember 30,* Per Capita based on 48,520 populationPrior to 2011 – Per Capita based on population 42,961Grand IslandStudy Session - 3/5/2013Page 24 / 220
2012* 2011* 2010 2009 2008 2007 2006 200510) State AllocationsHighway Allocation $ 81 $ 72 $ 76 $ 76 $ 79 $ 75 $ 67 $ 69 State Aid - 7 9 9 9 9 9 9 Municipal Equalization 1 - - - - - - 3 City of Grand IslandSeptember 30,* Per Capita based on 48,520 populationPrior to 2011 – Per Capita based on population 42,961Grand IslandStudy Session - 3/5/2013Page 25 / 220
11) Governmental Expenses Page 99/100General Government $ 75 $ 79 $ 87 $ 87 $ 84 $ 90 $ 114 $ 88 Public Safety 347 367 434 410 410 531 434 363 Public Works 116 125 144 149 133 149 85 159 Environment and leisure 107 124 145 148 148 126 131 158 AuditReport Page Reference 2012* 2011* 2010 2009 2008 2007 2006 2005City of Grand IslandSeptember 30,* Per Capita based on 48,520 populationPrior to 2011 – Per Capita based on population 42,961Grand IslandStudy Session - 3/5/2013Page 26 / 220
QUESTIONSGrand IslandStudy Session - 3/5/2013Page 27 / 220
Best City in NebraskaGrand IslandStudy Session - 3/5/2013Page 28 / 220
CITY OF GRAND ISLAND, NEBRASKA
FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
September 30, 2012
Grand Island Study Session - 3/5/2013 Page 29 / 220
1
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS’ REPORT 3
MANAGEMENT’S DISCUSSION AND ANALYSIS 5
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements
Statement of Net Assets 16
Statement of Activities 17
Fund Financial Statements
Balance Sheet - Governmental Funds 18
Reconciliation of the Balance Sheet -
Governmental Funds to the Statement of Net Assets 19
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds 20
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances - Governmental Funds to the Statement of Activities 21
Statement of Net Assets - Proprietary Funds 22
Statement of Revenues, Expenses, and Changes in Fund Net Assets -
Proprietary Funds 23
Statement of Cash Flows - Proprietary Funds 24
Statement of Net Assets - Fiduciary Funds 26
Statement of Changes in Net Assets - Fiduciary Funds 27
Notes to Financial Statements 28
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedules
General Fund 99
Capital Projects Fund 101
Debt Service Fund 102
Note to Required Supplementary Information 103
RSI Disclosures for a Street System Based on a Percentage of
Roads in Good or Substandard Condition 104
Schedule of Funding Progress - Public Safety Employees
Retirement System 105
OTHER SUPPLEMENTARY INFORMATION
Combining Balance Sheet - Nonmajor Governmental Funds 106
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances - Nonmajor Governmental Funds 108
Combining Statement of Net Assets - Internal Service Funds 110
Grand Island Study Session - 3/5/2013 Page 30 / 220
2
TABLE OF CONTENTS, Continued
Page
OTHER SUPPLEMENTARY INFORMATION, continued
Combining Statement of Revenues, Expenses, and Changes in Fund Net
Assets - Internal Service Funds 111
Combining Statement of Cash Flows - Internal Service Funds 112
Combining Statement of Net Assets - Fiduciary Funds 113
Combining Statement of Changes in Net Assets - Fiduciary Funds 114
Combining Statement of Net Assets - Component Units 115
Combining Statement of Activities - Component Units 116
SINGLE AUDIT REPORTS
Schedule of Expenditures of Federal Awards 117
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 119
Independent Auditor’s Report on Compliance With Requirements That Could
Have a Direct and Material Effect on Each Major Program and on Internal
Control Over Compliance in Accordance With OMB Circular A-133 121
Schedule of Findings and Questioned Costs 123
Summary Schedule of Prior Audit Findings 124
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CITY OF GRAND ISLAND, NEBRASKA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
For The Year Ended September 30, 2012
5
MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Grand Island, we offer readers of the City of Grand Island
financial statements this narrative overview and analysis of the financial activities of the City of
Grand Island for the fiscal year ended September 30, 2012. For information on the Community
Redevelopment Authority component unit included in these financial statements, please see the
separate audit report for the Authority.
Financial Highlights
• The assets of the City of Grand Island exceeded its liabilities at the close of the most recent
fiscal year by $601,335,686 (net assets). Of this amount, $75,930,160 (unrestricted net
assets) may be used to meet the government’s ongoing obligations to citizens and creditors.
• As of the close of the current fiscal year, the City of Grand Island governmental funds
reported combined ending net assets of $327,210,577. Approximately 5.1 percent of this
total amount, $16,755,883 is unrestricted net assets.
• At the end of the current fiscal year, unassigned fund balance for the General Fund was
$10,679,717, or 30.7 percent of total General Fund expenditures.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Grand Island’s
basic financial statements. The City of Grand Island’s basic financial statements comprise three
components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes
to the financial statements. This report also contains required and other supplementary
information in addition to the basic financial statements themselves.
Government-wide financial statements. The government-wide financial statements are
designed to provide readers with a broad overview of the City of Grand Island’s finances in a
manner similar to a private-sector business.
The statement of net assets presents information on all of the City of Grand Island’s assets and
liabilities, with the difference between the two reported as net assets. Over time, increases or
decreases in net assets may serve as a useful indicator of whether the financial position of the
City of Grand Island is improving or deteriorating.
The statement of activities presents information showing how the government’s net assets
changed during the most recent fiscal year. All changes in net assets are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result in
cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Grand Island Study Session - 3/5/2013 Page 34 / 220
CITY OF GRAND ISLAND, NEBRASKA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED), Continued
For The Year Ended September 30, 2012
6
Both of the government-wide financial statements distinguish functions of the City of Grand
Island that are principally supported by taxes and intergovernmental revenues (governmental
activities) from other functions that are intended to recover all or a significant portion of their
costs through user fees and charges (business-type activities). The governmental activities of the
City of Grand Island include general government, public safety, highways and streets, sanitation,
economic development, and cultural activities and recreation. The business-type activities of the
City of Grand Island include the Electric, Water, Sewer, Landfill, and Golf Enterprise Funds.
The government-wide financial statements include not only the City of Grand Island itself
(known as the primary government), but also the legally separate Business Improvement
Districts, Grand Island Facilities Corporation, and Community Redevelopment Authority for
which the City of Grand Island is financially accountable. Financial information for these
component units is reported separately from the financial information presented for the primary
government itself.
The government-wide financial statements can be found on pages 16 and 17 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City of
Grand Island, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City of
Grand Island can be divided into three categories: governmental funds, proprietary funds, and
fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spendable resources, as well as on
balances of spendable resources available at the end of the fiscal year. Such information may be
useful in evaluating a government’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the government’s near-term
financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures, and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The City of Grand Island maintains 20 individual governmental funds. Information is presented
separately in the governmental fund balance sheet and in the governmental fund statement of
revenues, expenditures, and changes in fund balances for the General Fund, the Capital Projects
Fund, and the Debt Service Fund, all of which are considered to be major funds. Data from the
other 17 governmental funds are combined into a single, aggregated presentation. Individual
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CITY OF GRAND ISLAND, NEBRASKA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED), Continued
For The Year Ended September 30, 2012
7
fund data for each of these nonmajor governmental funds is provided in the form of combining
statements elsewhere in this report.
The City of Grand Island adopts an annual appropriated budget for its governmental funds. A
budgetary comparison statement has been provided for the General, Capital Projects, and Debt
Service Funds to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 18-21 of this report.
Proprietary funds. The City of Grand Island maintains two different types of proprietary funds.
Enterprise funds are used to report the same functions presented as business-type activities in the
government-wide financial statements. The City of Grand Island uses enterprise funds to account
for its Electric, Water, Sewer, Landfill, and Golf Funds. Internal service funds are an accounting
device used to accumulate and allocate costs internally among the City of Grand Island’s various
functions. The City of Grand Island uses internal service funds to account for its fleet of
vehicles, its management information systems, its employee health insurance, and its equipment
reserve. Because all four of these services predominantly benefit governmental rather than
business-type functions, they have been included within governmental activities in the
government-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail. The proprietary fund financial statements provide separate
information for the Electric, Water, Sewer, Landfill, and Golf Funds, all of which are considered
to be major funds of the City of Grand Island.
The basic proprietary fund financial statements can be found on pages 22-25 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the government. Fiduciary funds are not reflected in the government-wide
financial statements because the resources of those funds are not available to support the City of
Grand Island’s own programs. The accounting used for fiduciary funds is much like that used for
proprietary funds.
The basic fiduciary fund financial statements can be found on pages 26 and 27 of this report.
Notes to the financial statements. The notes provide additional information that is essential to
a full understanding of the data provided in the government-wide and fund financial statements.
The notes to the financial statements can be found on pages 28-98 of this report.
Other information. In addition to the basic financial statements and accompanying notes, this
report also presents certain required supplementary information concerning the City of Grand
Island’s budgetary comparison schedules and disclosures on the modified approach to reporting
infrastructure. Required supplementary information can be found on pages 99-105 of this report.
The combining statements referred to earlier in connection with nonmajor governmental funds,
internal service funds, fiduciary funds, and component units are presented immediately following
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CITY OF GRAND ISLAND, NEBRASKA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED), Continued
For The Year Ended September 30, 2012
8
the required supplementary information. Combining and individual fund statements and
schedules can be found on pages 106-116 of this report.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government’s financial
position. In the case of the City of Grand Island, assets exceeded liabilities by $601,335,686 at
the close of the most recent fiscal year.
Governmental Business-type Governmental Business-type
Activities Activities Total Activities Activities Total
Current and Other Assets 29,046,892$ 81,279,244$ 110,326,136$ 27,796,124$ 84,903,698$ 112,699,822$
Capital Assets 321,234,446 229,008,147 550,242,593 318,323,558 218,060,393 536,383,951
Total Assets 350,281,338 310,287,391 660,568,729 346,119,682 302,964,091 649,083,773
Long-term Liabilities 16,480,780 25,597,309 42,078,089 19,997,190 29,087,560 49,084,750
Other Liabilities 6,589,981 10,564,973 17,154,954 6,395,962 12,656,774 19,052,736
Total Liabilities 23,070,761 36,162,282 59,233,043 26,393,152 41,744,334 68,137,486
Net Assets:
Invested in Capital Assets,
Net of Related Debt 302,474,017 206,902,208 509,376,225 296,156,752 192,149,590 488,306,342
Restricted 7,980,677 8,048,624 16,029,301 6,567,684 9,577,902 16,145,586
Unrestricted 16,755,883 59,174,277 75,930,160 17,002,094 59,492,265 76,494,359
Total Net Assets 327,210,577$ 274,125,109$ 601,335,686$ 319,726,530$ 261,219,757$ 580,946,287$
September 30, 2012 September 30, 2011
Net Assets
By far, the largest portion of the City of Grand Island’s net assets (84.7 percent) reflects its
investment in capital assets (land, infrastructure, buildings, machinery, vehicles, and equipment),
less any related debt used to acquire those assets that is still outstanding. The City of Grand
Island uses these capital assets to provide services to citizens; consequently, these assets are not
available for future spending. Although the City of Grand Island’s investment in its capital assets
is reported net of related debt, it should be noted that the resources needed to repay this debt must
be provided from other sources, since the capital assets themselves cannot be used to liquidate
these liabilities.
An additional portion of the City of Grand Island’s net assets (2.7 percent) represents resources
that are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net assets ($75,930,160) may be used to meet the government’s ongoing obligations
to citizens and creditors.
At the end of the current fiscal year, the City of Grand Island is able to report positive balances in
all three categories of net assets, for the government as a whole as well as for its separate
governmental and business-type activities.
Grand Island Study Session - 3/5/2013 Page 37 / 220
CITY OF GRAND ISLAND, NEBRASKA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED), Continued
For The Year Ended September 30, 2012
9
Program Program Program Program
Function Revenues Expenses Revenues Expenses
General Government 5,274,824$ 7,455,579$ 4,508,527$ 6,478,817$
Public Safety 5,801,199 18,964,196 5,499,423 18,031,173
Public Works 2,467,177 7,596,259 1,138,320 6,083,824
Environment & Leisure 1,601,513 5,474,234 2,376,025 7,598,207
Non-Departmental - 457,028 - 391,057
Interest and Bond Fees - 507,849 - 1,157,611
Total 15,144,713 40,455,145 13,522,295 39,740,689
Interfund Transfers - 25,000 - -
15,144,713$ 40,480,145$ 13,522,295$ 39,740,689$
Expenses and Program Revenues - Governmental Activities
Year Ended September 30, 2012 Year Ended September 30, 2011
SOURCES OF REVENUE
Charges for Services 8,766,081$ 18.28 % 8,379,682$ 19.47 %
Operating Grants & Contributions 3,361,814 7.01 2,892,281 6.72
Capital Grants & Contributions 3,016,818 6.29 2,250,332 5.23
Property Taxes 7,796,069 16.25 6,635,024 15.41
Motor Vehicle Taxes 911,607 1.90 823,720 1.91
Payments in Lieu of Taxes 744,142 1.55 711,073 1.65
Occupation Taxes 1,472,789 3.07 1,352,108 3.14
Sales Tax 14,573,734 30.38 13,630,857 31.66
Franchise Taxes 1,595,471 3.33 1,841,648 4.28
State Allocation 4,327,699 9.02 4,191,584 9.74
Keno 281,867 0.59 272,123 0.63
Special Assessments 792,832 1.65 90,976 0.21
Miscellaneous 200,803 0.42 100,735 0.23
Interest 94,172 0.20 71,139 0.17
Gain (Loss) on Sale of Assets 28,294 0.06 (194,790) (0.45)
Total 47,964,192$ 100.00 % 43,048,492$ 100.00 %
Revenues by Source - Governmental Activities
Year Ended September 30, 2012 Year Ended September 30, 2011
Net assets increased $7,484,047 in the governmental funds during the year ended September 30,
2012.
Grand Island Study Session - 3/5/2013 Page 38 / 220
CITY OF GRAND ISLAND, NEBRASKA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED), Continued
For The Year Ended September 30, 2012
10
Business-type activities. Business-type activities increased the City of Grand Island’s net assets
by $12,905,352, accounting for 63.3 percent of the total growth in the government’s net assets
for the year ended September 30, 2012. Key elements of this increase are as follows:
Program Program Program Program
Function Revenues Expenses Revenues Expenses
Electric 61,755,537$ 56,468,284$ 57,373,551$ 55,209,338$
Water 8,219,569 3,900,297 5,318,334 3,353,572
Sewer 9,129,113 7,602,580 9,090,190 8,132,516
Landfill 2,409,746 1,421,775 2,293,091 2,359,375
Golf 678,156 611,681 598,599 566,468
Total 82,192,121$ 70,004,617$ 74,673,765$ 69,621,269$
Year Ended September 30, 2012 Year Ended September 30, 2011
Expenses and Program Revenues - Business-type Activities
SOURCES OF REVENUE
Charges for Services 80,379,025$ 96.95 % 73,408,115$ 97.61 %
Operating Grants & Contributions - - - -
Capital Grants & Contributions 1,813,096 2.18 1,265,650 1.68
Special Assessments 65,440 0.08 50,964 0.07
Interest 503,348 0.61 548,941 0.73
Interfund Transfers 25,000 0.03 - -
Gain (Loss) on Sale of Assets 124,060 0.15 (70,819) (0.09)
Total 82,909,969$ 100.00 % 75,202,851$ 100.00 %
Year Ended September 30, 2012 Year Ended September 30, 2011
Revenues by Source - Business-type Activities
Financial Analysis of the Government’s Funds
As noted earlier, the City of Grand Island used fund accounting to ensure and demonstrate
compliance with finance-related legal requirements.
Governmental Funds. The focus of the City of Grand Island’s governmental funds is to provide
information on near-term inflows, outflows, and balances of spendable resources. Such
information is useful in assessing the City of Grand Island’s financing requirements. In
particular, unassigned fund balance may serve as a useful measure of a government’s net
resources available for spending at the end of the fiscal year.
Grand Island Study Session - 3/5/2013 Page 39 / 220
CITY OF GRAND ISLAND, NEBRASKA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED), Continued
For The Year Ended September 30, 2012
11
As of the end of the current fiscal year, the City of Grand Island’s governmental funds reported
combined ending fund balances of $21,579,613. Approximately 49.4 percent of this total
amount ($10,663,430) constitutes unassigned fund balance, which is available for spending at
the government’s discretion. The remainder of fund balances is not available for new spending
because it has already been 1) placed in a nonspendable endowment for cemetery perpetual care
($586,596), 2) placed in a nonspendable trust for library expenditures ($38,288), 3) restricted for
street improvements ($2,562,959), 4) restricted for capital projects ($494,923), 5) restricted for
debt service ($235,984), 6) restricted for economic development ($874,480), 7) restricted for
Federal programs ($901,969), 8) restricted to fund housing loans ($949,884), 9) restricted for
community improvements ($534,104), 10) restricted for library expenses ($759,473), 11)
restricted for other donor purposes ($42,017), 12) assigned for budgetary stabilization
($967,744), 13) assigned to liquidate contracts and purchase orders of the prior period
($280,232), 14) assigned for a variety of other purposes ($1,687,530).
The General Fund is the chief operating fund of the City of Grand Island. At the end of the
current fiscal year, unassigned fund balance of the General Fund was $10,679,717, while total
fund balance reached $11,331,175. As a measure of the General Fund’s liquidity, it may be
useful to compare both unreserved fund balance and total fund balance to total fund
expenditures. Unassigned fund balance represents 30.7 percent of total General Fund
expenditures, while total fund balance represents 32.6 percent of that same amount.
The fund balance of the City of Grand Island’s General Fund increased by $1,488,756 during the
current fiscal year.
Proprietary funds. The City of Grand Island’s proprietary funds provide the same type of
information found in the government-wide financial statements, but in more detail.
Unrestricted net assets of the proprietary funds at the end of the year were as follows: Electric
Fund - $46,617,663, Water Fund - $3,339,585, Sewer Fund - $6,442,353, Landfill Fund -
$2,542,054, and Golf Fund - $232,622. The growth in net assets for the proprietary funds was as
follows: Electric Fund - $5,711,785, Water Fund - $4,341,415, Sewer Fund - $1,699,292,
Landfill Fund - $1,086,385, and Golf Fund - $66,475. Other factors concerning the finances of
these four funds have already been addressed in the discussion of the City of Grand Island’s
business-type activities.
Budgetary Highlights
There was no difference between the original budget and the final adopted budget for the City of
Grand Island.
Grand Island Study Session - 3/5/2013 Page 40 / 220
CITY OF GRAND ISLAND, NEBRASKA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED), Continued
For The Year Ended September 30, 2012
12
Capital Asset and Debt Administration
Capital Assets. The City of Grand Island’s investment in capital assets for its governmental and
business-type activities as of September 30, 2012, amounts to $550,242,593 (net of accumulated
depreciation). This investment in capital assets includes land, building and system
improvements, machinery and equipment, park facilities, roads, highways, and bridges.
• The Northwest Flood Control project is scheduled to take several years. It was originally
anticipated that the annual commitment would be fairly flat year over each year, typically
in the $375,000-$400,000 range. Instead, expenditures for the project started out slower
than anticipated and then billings by the Central Platte Natural Resources District ran
higher than the $375,000-$400,000 range. For 2012, expenditures were $164,585.
• The Grand Island Quiet Zone Improvement project developed improvements at the Union
Pacific Railroad crossings at Oak Street, Pine Street, Walnut Street, and Elm Street so
that train horns will not need to be activated for these crossings. “Silent” crossings will
be created at Oak Street and Pine Street by constructing concrete medians and concrete
curb to narrow the streets at the crossing approaches. Walnut Street will have an
Automated Horn System installed and concrete curb will be constructed to narrow the
street. The crossing at Elm Street will be closed at the completion of the project. Total
project cost in 2012 was $265,093; with reimbursements the net cost to the City was
$247,597.
• The Moores Creek Drain Extension project extended the last constructed segment of
Moores Creek Drainway to the south under Old Potash Highway with project costs of
$206,804. The Moores Creek Drainway is one portion of a series of open ditches,
detention cells and storm sewer that were proposed in a 1975 study to provide flood relief
to urbanized areas in western Grand Island. Future extensions of this drainway will be
constructed west and south beyond Engleman Road and Stolley Park Road.
• The Central Community College to Wood River (southwest drainage project) is in the
final construction stages, with 2012 totaling $197,334.
• The Handicap Ramp project consists of the ADA compliant curb ramps in the 2012
project which is adjacent to the streets in the 2011 Asphalt Resurfacing program. The
City is also required to have a planned schedule for upgrading public sidewalks to
conform to ADA requirements. The current schedule and budget will bring the City into
compliance in approximately 24 years. The 2012 project cost was $116,447.
Grand Island Study Session - 3/5/2013 Page 41 / 220
CITY OF GRAND ISLAND, NEBRASKA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED), Continued
For The Year Ended September 30, 2012
13
City of Grand Island's Capital Assets
(net of depreciation)
Year Ended September 30, 2012 Year Ended September 30, 2011
Governmental Business-type Governmental Business-type
Activities Activities Total Activities Activities Total
Land 5,822,921$ 7,237,086$ 13,060,007$ 5,552,803$ 7,237,086$ 12,789,889$
Infrastructure 255,408,309 - 255,408,309 248,646,166 - 248,646,166
Construction
in Progress 4,786,434 27,536,428 32,322,862 9,625,020 10,459,987 20,085,007
Land Improvements 9,737,923 30,772,992 40,510,915 7,961,964 30,752,016 38,713,980
Buildings 42,288,256 - 42,288,256 44,137,252 - 44,137,252
Machinery
and Equipment 1,252,116 - 1,252,116 1,096,790 - 1,096,790
Buildings,
Distribution
Systems, and
Equipment - 155,205,373 155,205,373 - 161,601,084 161,601,084
Office Furniture
and Equipment 256,404 3,484,681 3,741,085 285,881 3,472,141 3,758,022
Vehicles 1,682,083 4,771,587 6,453,670 1,017,682 4,538,079 5,555,761
Total 321,234,446$ 229,008,147$ 550,242,593$ 318,323,558$ 218,060,393$ 536,383,951$
Additional information on the City of Grand Island’s capital assets can be found in Note C4 on
pages 55-58 of this report.
Long-term debt. At the end of the current fiscal year, the City of Grand Island had total long-
term debt outstanding of $43,345,429. Of this amount, $6,585,000 comprises debt backed by the
full faith and credit of the government. The remainder of the City of Grand Island’s debt
represents bonds secured solely by specified revenue sources (i.e., revenue bonds) and capital
lease obligations.
City of Grand Island's Outstanding Debt
Year Ended September 30, 2012 Year Ended September 30, 2011
Governmental Business-type Governmental Business-type
Activities Activities Total Activities Activities Total
General Obligation
Bonds 6,585,000$ -$ 6,585,000$ 8,625,000$ -$ 8,625,000$
Revenue Bonds - 24,585,000 24,585,000 - 31,225,000 31,225,000
Capital Lease 12,175,429 - 12,175,429 13,541,806 - 13,541,806
Total 18,760,429$ 24,585,000$ 43,345,429$ 22,166,806$ 31,225,000$ 53,391,806$
The City of Grand Island’s total debt decreased by $10,046,377 (18.8 percent) during the current
fiscal year due to scheduled principal payments.
Additional information on the City of Grand Island’s long-term debt can be found in Note C6 on
pages 58-64 of this report.
Grand Island Study Session - 3/5/2013 Page 42 / 220
CITY OF GRAND ISLAND, NEBRASKA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED), Continued
For The Year Ended September 30, 2012
14
Modified Approach for Reporting Infrastructure Assets
The City of Grand Island uses the modified approach to report the entire infrastructure assets
recorded in the Governmental-type Funds. The City assesses its infrastructure assets every three
years. There were no significant changes in the assessed condition of infrastructure from the
prior assessment.
The City believes that the current assessed condition of the infrastructure assets is within the
condition levels set by the City’s governing body.
The City appropriates and spends an amount to maintain and preserve the infrastructure at the
level set by the governing board.
Economic Factors and Next Year’s Budgets and Rates
The City’s cash position improved in all of the Enterprise Funds and the City has been able to
keep up with the increasing costs of operations.
• Electric. No rate increase was included in the fiscal 2012-2013 budget. Included in the
fiscal 2012-2013 budget is funding for maintenance and replacement of aging, critical
equipment at the power plants and in the electrical transmission and distribution systems.
The utility also has capital improvement projects underway to meet expanding regulatory
requirements and to continue to meet projected growth of the community, including the
addition of an incremental 115kv transmission tie to the regional electric.
• Water. No rate increase was included in the fiscal 2012-2013 budget. The 2012-2013
budget is focused on meeting City obligations to cooperative projects, repair and upgrade
of critical facilities, and system improvements to meet continued growth. Also included
in the fiscal 2012-2013 budget are funds for installation of new water mains to serve a
portion of Merrick County that is experiencing groundwater contamination issues due to a
former solver supply facility located on Union Pacific property. This remediation project
is being funded by Union Pacific under a plan approved by the Nebraska Department of
Environmental Quality.
• Sanitary Sewer. The City had a sanitary sewer rate study completed and presented to
Council in April 2011. The rate study indicated the need for several yearly rate increases.
The study indicated an initial nine percent increase in 2012 followed by nine percent
increases in 2013 and 2014 and a five percent increase in 2015. The rate increases will
fund the $44 million failing infrastructure associated with the collection system and
address the head work rehabilitation at the wastewater treatment plant. Black & Veatch
was selected and contracted to begin the preliminary design in October of 2011. The first
project will be to replace the North interceptor. This project will likely take three years to
complete and cost between $12 million and $17 million, depending on the final capacity
Grand Island Study Session - 3/5/2013 Page 43 / 220
CITY OF GRAND ISLAND, NEBRASKA
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED), Continued
For The Year Ended September 30, 2012
15
needed. There is sufficient cash to start this project, but the larger portion will probably
require a bond issuance.
• The recession has had an impact on the City’s sales tax receipts which provide nearly 33
percent of the revenue in Governmental Activities. With the ever-increasing personnel
costs and growth in operating expenses, the City completed its third year of budgeting by
programs within the general fund to match available revenues to programs and prioritize
program expenditures for the fiscal 2013 budget process.
All of these factors were considered in preparing the City of Grand Island’s budget for the 2013
fiscal year.
Request for Information
This financial report is designed to provide a general overview of the City of Grand Island’s
finances for all those with an interest in the government’s finances. Questions concerning any of
the information provided in this report or requests for additional financial information should be
addressed to the Office of the Finance Director, City of Grand Island, 100 E. 1st St.,
P.O. Box 1968, Grand Island, NE 68802.
Grand Island Study Session - 3/5/2013 Page 44 / 220
CITY OF GRAND ISLAND, NEBRASKA
STATEMENT OF NET ASSETS
September 30, 2012
Primary Government
Governmental Business-type Component
Activities Activities Total Units
ASSETS
Current assets:
Cash and cash equivalents 2,975,957$ 4,020,677$ 6,996,634$ 321,693$
Investments 16,582,395 40,612,656 57,195,051 -
County treasurer cash 861,081 - 861,081 150,785
Receivables:
Special assessments 518,835 856,199 1,375,034 16,433
Accounts, net of allowance for doubtful accounts 870,294 7,207,534 8,077,828 -
Unbilled revenue - 3,023,670 3,023,670 -
Current portion of notes from redevelopers - - - 115,334
Current portion of capital lease receivable - - - 760,000
Interest 113,748 162,521 276,269 -
Property tax 365,371 - 365,371 28,278
Due from other governments 3,589,221 - 3,589,221 -
Due from other funds 512,914 - 512,914 -
Prepaid expenses - 429,840 429,840 -
Inventory 159,048 10,087,308 10,246,356 -
Total current assets 26,548,864 66,400,405 92,949,269 1,392,523
Noncurrent assets:
Restricted cash and cash equivalents 551,612 2,839,445 3,391,057 60,722
Restricted investments 125,694 8,600,291 8,725,985 -
Permanently restricted investments 529,620 - 529,620 -
Permanently restricted notes receivable 1,291,102 - 1,291,102 -
Notes from redevelopers - - - 520,068
Capital lease receivable - City of Grand Island - - - 2,325,000
Deferred charges - 839,655 839,655 -
Prepaid transmission - 2,175,599 2,175,599 -
Unamortized bond costs - 423,849 423,849 27,337
Capital assets:
Land, infrastructure, and construction in progress 266,017,664 90,352,343 356,370,007 676,012
Other capital assets, net of depreciation 55,216,782 138,655,804 193,872,586 54,419
Net capital assets 321,234,446 229,008,147 550,242,593 730,431
Total noncurrent assets 323,732,474 243,886,986 567,619,460 3,663,558
Total assets 350,281,338 310,287,391 660,568,729 5,056,081
LIABILITIES
Current liabilities:
Accounts payable 1,109,091 4,055,959 5,165,050 344,312
Accrued expenses 2,406,029 2,784,014 5,190,043 -
Deferred revenue 253,083 - 253,083 21,083
Current portion of long-term obligations 2,821,778 3,725,000 6,546,778 875,334
Total current liabilities 6,589,981 10,564,973 17,154,954 1,240,729
Noncurrent liabilities:
Compensated absences - noncurrent 542,129 550,153 1,092,282 -
Closure/post closure liability - 3,227,114 3,227,114 -
Noncurrent portion of long-term obligations 15,938,651 20,860,000 36,798,651 2,845,068
Unamortized bond premiums - 960,042 960,042 -
Total noncurrent liabilities 16,480,780 25,597,309 42,078,089 2,845,068
Total liabilities 23,070,761 36,162,282 59,233,043 4,085,797
NET ASSETS
Invested in capital assets, net of related debt 302,474,017 206,902,208 509,376,225 757,768
Restricted for:
Debt service 235,984 5,601,078 5,837,062 -
Landfill closure/post closure costs - 2,447,546 2,447,546 -
Perpetual care - permanent 586,596 - 586,596 -
Street improvements 2,562,959 - 2,562,959 -
Capital projects 494,923 - 494,923 -
Economic development 874,480 - 874,480 -
Other purposes 3,225,735 - 3,225,735 60,722
Unrestricted 16,755,883 59,174,277 75,930,160 151,794
Total net assets 327,210,577$ 274,125,109$ 601,335,686$ 970,284$
See notes to financial statements.
16
Grand Island Study Session - 3/5/2013 Page 45 / 220
CITY OF GRAND ISLAND, NEBRASKA
STATEMENT OF ACTIVITIES
For the year ended September 30, 2012
Operating
Charges for Grants and
Functions/Programs Expenses Services Contributions
Primary government:
Governmental activities:
General government 7,455,579$ 2,821,729$ 2,453,095$
Public safety 18,964,196 4,535,498 787,313
Public works 7,596,259 160,681 -
Environment and leisure 5,474,234 1,248,173 121,406
Non-departmental 457,028 - -
Interest and fees on long-term debt 507,849 - -
Total governmental activities 40,455,145 8,766,081 3,361,814
Business-type activities:
Electric 56,468,284 61,755,537 -
Water 3,900,297 7,160,722 -
Sewer 7,602,580 8,374,864 -
Landfill 1,421,775 2,409,746 -
Golf 611,681 678,156 -
Total business-type activities 70,004,617 80,379,025 -
Total primary government 110,459,762$ 89,145,106$ 3,361,814$
Component units:
Business Improvement Districts 230,623 47,597 -
Grand Island Facilities Corporation 757,031 749,312 -
Community Redevelopment Authority 1,453,894 - 223,086
Total component units 2,441,548$ 796,909$ 223,086$
See notes to financial statements.
17
Program Revenues
Grand Island Study Session - 3/5/2013 Page 46 / 220
Capital
Grants and Governmental Business-type Component
Contributions Activities Activities Total Units
-$ (2,180,755)$ (2,180,755)$
478,388 (13,162,997) (13,162,997)
2,306,496 (5,129,082) (5,129,082)
231,934 (3,872,721) (3,872,721)
- (457,028) (457,028)
- (507,849) (507,849)
3,016,818 (25,310,432) -$ (25,310,432)
- - 5,287,253 5,287,253
1,058,847 - 4,319,272 4,319,272
754,249 - 1,526,533 1,526,533
- - 987,971 987,971
- - 66,475 66,475
1,813,096 - 12,187,504 12,187,504
4,829,914$ (25,310,432) 12,187,504 (13,122,928)
19,500 (163,526)
- (7,719)
- (1,230,808)
19,500$ (1,402,053)
General revenues:
Taxes:
Property 7,796,069 - 7,796,069 620,417
Motor vehicle 911,607 - 911,607 2,517
Payments in lieu of taxes 744,142 - 744,142 -
Occupation 1,472,789 - 1,472,789 -
Sales tax 14,573,734 - 14,573,734 -
Franchise 1,595,471 - 1,595,471 -
State allocation 4,327,699 - 4,327,699 -
Keno 281,867 - 281,867 -
Special assessments 792,832 65,440 858,272 195,121
Miscellaneous 200,803 - 200,803 22,616
Interest income 94,172 503,348 597,520 4,827
Gain (loss) on sale of assets 28,294 124,060 152,354 -
Interfund transfers (25,000) 25,000 - -
Total general revenues 32,794,479 717,848 33,512,327 845,498
Change in net assets 7,484,047 12,905,352 20,389,399 (556,555)
Net assets - September 30, 2011:
As previously reported 316,535,193 252,365,696 568,900,889 10,380,900
Restatement of net assets 3,191,337 8,854,061 12,045,398 (8,854,061)
As restated 319,726,530 261,219,757 580,946,287 1,526,839
Net assets - September 30, 2012 327,210,577$ 274,125,109$ 601,335,686$ 970,284$
17
Net (Expenses) Revenues and Changes in Net Assets
Primary Government
Grand Island Study Session - 3/5/2013 Page 47 / 220
Other Total
Capital Debt Governmental Governmental
General Projects Service Funds Funds
ASSETS
Cash and cash equivalents 1,705,099$ 14,562$ 16,680$ 1,068,838$ 2,805,179$
Investments 6,758,084 81,137 92,942 6,280,293 13,212,456
County treasurer cash 733,906 - 125,706 1,469 861,081
Receivables:
Special assessments - - - 518,835 518,835
Accounts, net of allowance
for doubtful accounts 767,246 - - - 767,246
Notes receivable - 38,504 - 1,252,598 1,291,102
Interest 63,389 - - 50,359 113,748
Property tax 300,429 - 64,942 - 365,371
Due from other governments 2,591,646 148,698 - 848,877 3,589,221
Due from other funds 414,354 - - 11,910 426,264
Total assets 13,334,153$ 282,901$ 300,270$ 10,033,179$ 23,950,503$
LIABILITIES AND
FUND BALANCES
Liabilities:
Accounts payable 447,119$ 186,776$ -$ 104,880$ 738,775$
Accrued expenses 1,343,319 - 23,743 11,970 1,379,032
Deferred revenue 212,540 - 40,543 - 253,083
Total liabilities 2,002,978 186,776 64,286 116,850 2,370,890
Fund balances (deficit):
Nonspendable:
Cemetery perpetual care - - - 586,596 586,596
Library trust - - - 38,288 38,288
Restricted for:
Street improvements - - - 2,562,959 2,562,959
Capital projects 492,261 - - 2,662 494,923
Debt service - - 235,984 - 235,984
Economic development - - - 874,480 874,480
Federal programs - - - 901,969 901,969
Housing loans - - - 949,884 949,884
Community improvements - - - 534,104 534,104
Library expenses - - - 759,473 759,473
Other purposes - - - 42,017 42,017
Assigned for:
Budgetary stabilization - - - 967,744 967,744
Encumbrances 159,197 96,125 - 24,910 280,232
Other purposes - - - 1,687,530 1,687,530
Unassigned 10,679,717 - - (16,287) 10,663,430
Total fund balances 11,331,175 96,125 235,984 9,916,329 21,579,613
Total liabilities and
fund balances 13,334,153$ 282,901$ 300,270$ 10,033,179$ 23,950,503$
See notes to financial statements.
18
CITY OF GRAND ISLAND, NEBRASKA
BALANCE SHEET -
GOVERNMENTAL FUNDS
September 30, 2012
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CITY OF GRAND ISLAND, NEBRASKA
RECONCILIATION OF THE BALANCE SHEET -
GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET ASSETS
September 30, 2012
Total fund balances - governmental funds 21,579,613$
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 as assets in
governmental funds. The cost of the assets is $353,101,935,
and the accumulated depreciation is $32,251,123. 320,850,812
Internal service funds are used by management to charge the
costs of certain activities, such as information technology,
fleet services, and insurance, to individual funds. The
assets and liabilities of the internal service funds are
included in governmental activities in the statement of
net assets.4,053,729
Long-term liabilities, including bonds payable, are not due
and payable in the current period and therefore are not
reported as liabilities in the funds. Long-term
liabilities at year end consist of:
Noncurrent compensated absences (513,148)$
Capital lease obligations (12,175,429)
General obligation bonds payable (6,585,000) (19,273,577)
Total net assets - governmental activities 327,210,577$
See notes to financial statements.
19
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CITY OF GRAND ISLAND, NEBRASKA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - GOVERNMENTAL FUNDS
For the year ended September 30, 2012
Other Total
Capital Debt Governmental Governmental
General Projects Service Funds Funds
REVENUES
Taxes:
Property 6,517,810$ -$ 1,270,237$ 8,022$ 7,796,069$
Motor vehicle 905,396 - 6,183 28 911,607
Occupation 1,472,789 - - - 1,472,789
Sales tax 14,573,734 - - - 14,573,734
Franchise 1,595,471 - - - 1,595,471
Intergovernmental 1,377,919 701,174 - 6,173,497 8,252,590
Keno - - - 281,867 281,867
Special assessments - - - 792,832 792,832
Charges for services 8,364,895 - - 401,186 8,766,081
Interest income 39,566 - 3,293 21,133 63,992
Contributions 76,115 1,762,000 - 615,626 2,453,741
Sale of assets 112,976 - - - 112,976
Other revenue 171,725 12,109 - 16,969 200,803
Total revenues 35,208,396 2,475,283 1,279,713 8,311,160 47,274,552
EXPENDITURES
General government 3,657,854 - - 3,240,820 6,898,674
Public safety 18,149,368 - - 596,970 18,746,338
Public works 5,650,602 4,055,850 - - 9,706,452
Environment and leisure 5,202,827 564,406 - 118,369 5,885,602
Non-departmental 457,028 - - - 457,028
Principal payments on debt 1,366,377 - 2,040,000 - 3,406,377
Interest on long-term debt 311,819 - 188,780 - 500,599
Bond/loan fees 5,750 - 1,500 - 7,250
Total expenditures 34,801,625 4,620,256 2,230,280 3,956,159 45,608,320
Excess (deficiency) of
revenues over expenditures 406,771 (2,144,973) (950,567) 4,355,001 1,666,232
OTHER FINANCING
SOURCES (USES)
Transfers in 3,845,996 2,039,537 774,000 1,159,379 7,818,912
Transfers out (2,764,011) (62,904) (546,100) (3,774,121) (7,147,136)
Net transfers 1,081,985 1,976,633 227,900 (2,614,742) 671,776
Net change in fund balances 1,488,756 (168,340) (722,667) 1,740,259 2,338,008
Fund balances - September 30, 2011 9,842,419 264,465 958,651 8,176,070 19,241,605
Fund balances - September 30, 2012 11,331,175$ 96,125$ 235,984$ 9,916,329$ 21,579,613$
See notes to financial statements.
20
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CITY OF GRAND ISLAND, NEBRASKA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the year ended September 30, 2012
Total net change in fund balances - governmental funds 2,338,008$
Amounts reported for governmental activities in the statement of
activities are different because:
Capital outlays are reported in governmental funds as expenditures.
However, in the statement of activities, the cost of those assets
is allocated over their estimated useful lives as depreciation expense.
This is the amount by which capitalized capital outlay ($5,967,948)
exceeded depreciation expense ($2,972,378) during the period. 2,995,570
Losses on disposal of capital assets are not shown in the governmental
fund financial statements. However, in the statement of activities,
the loss is reported as a reduction to asset sales proceeds. (84,682)
Internal service fund capital activity is removed from the reconciliation,
since it is accounted for on the economic resource basis in the
fund financial statements.11,189
Internal service funds are used by management to charge the costs of
certain activities, such as insurance, information technology, and fleet
services, to individual funds. The net revenue (expense) of certain
internal service funds is reported with governmental activities in
the statement of activities.(1,116,762)
The change in noncurrent compensated absences is reported as an
expense in the statement of net assets. Noncurrent compensated
absences are not reported in the governmental funds. (65,653)
Repayment of bond principal is an expenditure in the governmental
funds, but the repayment reduces long-term liabilities in the
statement of net assets.3,406,377
Change in net assets of governmental activities 7,484,047$
See notes to financial statements.
21
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Electric Water Sewer
Fund Fund Fund
Operating revenues:
Sales:
Consumers 58,062,965$ 5,079,025$ 8,240,781$
Municipal and interdepartmental 1,828,136 96,285 -
Wholesale 1,288,128 - -
Total sales 61,179,229 5,175,310 8,240,781
Tap fees - 1,795,043 4,133
Other revenue 576,308 190,369 129,950
Total operating revenues 61,755,537 7,160,722 8,374,864
Operating expenses:
Cost of power 30,232,339 - -
Production - 1,259,225 -
Operation of system 1,774,133 890,135 3,146,713
Maintenance of system 2,247,237 - 448,041
Consumer accounting and collection 1,175,353 448,460 528,130
General office expense 1,347,574 174,847 557,842
Special services 1,073,931 102,950 37,177
Information technology - - -
Central garage - - -
Insurance 554,598 12,190 69,542
Miscellaneous 100,817 203,528 -
Closure costs - - -
Depreciation 9,905,761 663,944 2,587,687
Amortization 19,693 4,884 99,228
Total operating expenses 48,431,436 3,760,163 7,474,360
Operating income (loss)13,324,101 3,400,559 900,504
Nonoperating revenues (expenses):
Interest income 403,962 20,528 52,319
Intergovernmental/grants - - -
Allocated debt on participation power (6,320,655) - -
Interest expense (905,174) (56,416) (128,220)
Payments in lieu of taxes (811,019) (83,718) -
Gain on sale of assets 20,570 1,615 30,000
Special assessments - - 65,440
Contributions in aid of construction - 1,058,847 754,249
Total nonoperating revenues
(expenses)(7,612,316) 940,856 773,788
Excess (deficiency) of
revenues over expenditures 5,711,785 4,341,415 1,674,292
OTHER FINANCING SOURCES (USES)
Transfers in - - 25,000
Change in net assets 5,711,785 4,341,415 1,699,292
Net assets - September 30, 2011 -152,779,420 46,853,462 52,440,914
as previously reported
Restatement of net assets - - -
Net assets - September 30, 2011 -
as restated 152,779,420 46,853,462 52,440,914
Net assets - September 30, 2012 158,491,205$ 51,194,877$ 54,140,206$
Enterprise Funds
CITY OF GRAND ISLAND, NEBRASKA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES
IN FUND NET ASSETS - PROPRIETARY FUNDS
For the year ended September 30, 2012
See notes to financial statements.
23
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Internal
Landfill Golf Service
Fund Fund Total Funds
2,387,681 670,762$ 74,441,214$ -$
- - 1,924,421 8,880,803
- - 1,288,128 -
2,387,681 670,762 77,653,763 8,880,803
- - 1,799,176 -
22,065 7,394 926,086 -
2,409,746 678,156 80,379,025 8,880,803
- - 30,232,339 -
- - 1,259,225 -
1,037,202 478,766 7,326,949 -
140,651 36,124 2,872,053 -
44,738 - 2,196,681 -
225,869 71,500 2,377,632 -
97,543 450 1,312,051 -
- - - 982,100
- - - 1,234,790
30,600 3,000 669,930 7,799,875
- - 304,345 24,791
(685,152) - (685,152) -
530,324 21,841 13,709,557 74,093
- - 123,805 -
1,421,775 611,681 61,699,415 10,115,649
987,971 66,475 18,679,610 (1,234,846)
26,539 - 503,348 30,180
- - - 50,000
- - (6,320,655) -
- - (1,089,810) -
- - (894,737) -
71,875 - 124,060 -
- - 65,440 -
- - 1,813,096 -
98,414 - (5,799,258) 80,180
1,086,385 66,475 12,880,352 (1,154,666)
- - 25,000 37,904
1,086,385 66,475 12,905,352 (1,116,762)
- 291,900 252,365,696 5,170,491
8,854,061 - 8,854,061 -
8,854,061 291,900 261,219,757 5,170,491
9,940,446$ 358,375$ 274,125,109$ 4,053,729$
23
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CITY OF GRAND ISLAND, NEBRASKA
STATEMENT OF CASH FLOWS -
PROPRIETARY FUNDS
For the year ended September 30, 2012
Enterprise Funds
Electric Water
Fund Fund
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers 61,006,851$ 6,627,601$
Receipts from other funds - -
Payments to suppliers (27,406,355) (2,429,087)
Payments to employees (8,900,670) (606,441)
Net cash provided (used) by operating activities 24,699,826 3,592,073
CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES:
Payments in lieu of taxes (689,459) (54,683)
Transfer from (to) other funds - -
Net cash provided (used) by noncapital financing activities (689,459) (54,683)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Purchase of property and equipment (10,441,997) (6,844,939)
Proceeds from sale of property and equipment 841,614 5,382
Decrease in deferred charges 903,995 -
Intergovernmental receipts - -
Special assessment collections - -
Payment of allocated debt on participation power purchase (6,320,655) -
Proceeds from issuance of bonds payable 18,510,000 3,725,000
Premium received on the issuance of bonds 1,029,250 -
Payment of bond fees (270,408) (52,150)
Principal payments on capital debt (26,190,000) (1,095,000)
Interest paid on capital debt (1,013,645) (51,320)
Increase (decrease) in closure/post closure liability 3,549 -
Net cash used by capital and related financing activities (22,948,297) (4,313,027)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale and maturities of investment
securities 24,273,923 412,219
Purchase of investment securities (29,324,239) (518,031)
Interest received 448,143 20,479
Net cash provided (used) by investing activities (4,602,173) (85,333)
Increase (decrease) in cash and cash equivalents (3,540,103) (860,970)
Cash and cash equivalents - beginning of the year 6,288,826 1,689,261
Cash and cash equivalents - end of the year 2,748,723$ 828,291$
Composition of cash and cash equivalents:
Cash and cash equivalents 2,412,178$ 415,972$
Restricted cash and cash equivalents 336,545 412,319
Total cash and cash equivalents 2,748,723$ 828,291$
See notes to financial statements.
24
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Enterprise Funds Internal
Sewer Landfill Golf Service
Fund Fund Fund Total Funds
8,338,388$ 2,427,136$ 671,917$ 79,071,893$ -$
- - - - 8,876,455
(3,239,070) (333,512) (375,771) (33,783,795) (9,295,433)
(1,546,308) (556,804) (202,897) (11,813,120) (573,872)
3,553,010 1,536,820 93,249 33,474,978 (992,850)
- - - (744,142) -
25,000 - - 25,000 37,904
25,000 - - (719,142) 37,904
(5,329,129) (449,832) - (23,065,897) (62,904)
30,000 71,875 - 948,871 -
- - - 903,995 -
- - - - 50,000
253,627 - - 253,627 -
- - - (6,320,655) -
- - - 22,235,000 -
- - - 1,029,250 -
- - - (322,558) -
(1,590,000) - - (28,875,000) -
(128,220) - - (1,193,185) -
- (685,152) - (681,603) -
(6,763,722) (1,063,109) - (35,088,155) (12,904)
648,768 - - 25,334,910 (621,424)
- (697,509) (125,074) (30,664,853) -
47,627 27,839 - 544,088 30,180
696,395 (669,670) (125,074) (4,785,855) (591,244)
(2,489,317) (195,959) (31,825) (7,118,174) (1,559,094)
3,865,727 2,060,367 74,115 13,978,296 2,281,484
1,376,410$ 1,864,408$ 42,290$ 6,860,122$ 722,390$
777,070$ 373,167$ 42,290$ 4,020,677$ 722,390$
599,340 1,491,241 - 2,839,445 -
1,376,410$ 1,864,408$ 42,290$ 6,860,122$ 722,390$
24
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CITY OF GRAND ISLAND, NEBRASKA
STATEMENT OF CASH FLOWS -
PROPRIETARY FUNDS, Continued
For the year ended September 30, 2012
Enterprise Funds
Electric Water
Fund Fund
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)13,324,101$ 3,400,559$
Adjustments to reconcile operating income (loss) to net
cash provided (used) by operating activities:
Depreciation expense 9,905,761 663,944
Amortization expense 19,693 4,884
Change in assets and liabilities:
Accounts receivable (748,686) (533,121)
Inventories 1,102,538 (54,383)
Prepaid expenses (23,796) (736)
Prepaid transmissions 1,100,642 -
Accounts payable and accrued expenses 19,573 110,926
Net cash provided (used) by operating activities 24,699,826$ 3,592,073$
Supplemental cash flow information:
Acquisition of capital assets through developers'
aid of construction -$ 1,058,847$
Accounts payable incurred for capital asset purchases -$ 917,168$
See notes to financial statements.
25
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Enterprise Funds Internal
Sewer Golf Service
Fund Fund Total Funds
900,504$ 987,971$ 66,475$ 18,679,610$ (1,234,846)$
2,587,687 530,324 21,841 13,709,557 74,093
99,228 - - 123,805 -
(36,476) 17,390 (6,239) (1,307,132) (4,348)
- - - 1,048,155 (24,921)
- - - (24,532) -
- - - 1,100,642 -
2,067 1,135 11,172 144,873 197,172
3,553,010$ 1,536,820$ 93,249$ 33,474,978$ (992,850)$
754,249$ -$ -$ 1,813,096$ -$
-$ -$ -$ 917,168$ -$
25
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CITY OF GRAND ISLAND, NEBRASKA
STATEMENT OF NET ASSETS - FIDUCIARY FUNDS
September 30, 2012
Employee Pension Agency
Reserve Funds Funds
ASSETS
Cash 9,249$ 23,373$
Investments 5,125,906 130,241
Accounts receivable - 10,682
Special assessments receivable - 16,433
Total assets 5,135,155 180,729
LIABILITIES
Due to other funds 512,914 -
Agency liabilities - 180,729
Pension liability 1,160,256 -
Total liabilities 1,673,170 180,729
NET ASSETS
Held in trust for pension benefits 3,461,985$ -$
See notes to financial statements.
26
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CITY OF GRAND ISLAND, NEBRASKA
STATEMENT OF CHANGES IN NET ASSETS - FIDUCIARY FUNDS
For the year ended September 30, 2012
Employee Pension
Reserve Funds
ADDITIONS
Transfers from other funds 173,372$
Interest and dividends 1,209,712
Other revenue 2,978
Total additions 1,386,062
DEDUCTIONS
Pension benefits 63,839
Transfer to other funds 163,910
Loss on investments 302,367
Total deductions 530,116
Change in net assets 855,946
Net assets - September 30, 2011 2,606,039
Net assets - September 30, 2012 3,461,985$
See notes to financial statements.
27
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28
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS
INDEX
Page
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Financial Reporting Entity 29
2. Basis of Presentation 31
3. Measurement Focus and Basis of Accounting 38
4. Assets, Liabilities, and Equity 40
5. Revenues, Expenditures, and Expenses 46
NOTE B – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
1. Fund Accounting Requirements 48
2. Deposit Laws and Regulations 48
3. Revenue Restrictions 48
4. Debt Restrictions and Covenants 48
5. Budgetary Data 49
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS
1. Cash and Investments 50
2. Restricted Assets 52
3. Accounts and Notes Receivable 52
4. Capital Assets 55
5. Accounts Payable 58
6. Long-term Debt 58
7. Interfund Transactions and Balances 65
8. Fund Equity 66
NOTE D – OTHER NOTES
1. Employee Pension and Other Benefit Plans 66
2. Risk Management 73
3. Commitments and Contingencies 76
4. Related-party Transactions 80
5. Major Customers 81
6. EPA Emissions Allowances 81
7. Conduit Debt 81
8. Subsequent Events 81
9. Union Contracts 82
10. Interlocal Agreements 82
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29
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Grand Island, Nebraska (City) are prepared in accordance
with generally accepted accounting principles (GAAP). The City’s reporting entity applies all
relevant Governmental Accounting Standards Board (GASB) pronouncements. Proprietary
funds and similar component units apply Financial Accounting Standards Board (FASB)
pronouncements and Accounting Principles Board (APB) opinions issued on or before
November 30, 1989, unless those pronouncements conflict with or contradict GASB
pronouncements, in which case GASB prevails.
The accounting and reporting framework and the more significant accounting principles and
practices are discussed in subsequent sections of this Note.
1. Financial Reporting Entity
The City of Grand Island, Nebraska, was incorporated in 1872. The City operates under a
Mayor-Council form of government with an elected part-time chief executive, Mayor, and an
elected legislative body, Council, composed of ten members. The Mayor is elected at large for a
four-year term, and the ten members of the City Council are elected, two from each of five
wards, on alternating four-year terms. The administration of the City government is performed
under the direction of the Mayor by the City Administrator. Services provided to residents
include public safety; highways and streets; planning and zoning; parks; recreation; urban
development; electric, water, and sanitary sewer systems; sanitary landfill; golf course; and
general administrative services.
The City’s financial reporting entity comprises the following:
Primary Government: City of Grand Island
Discretely Presented Component Units: Community Redevelopment
Authority of Grand Island
Business Improvement Districts
Grand Island Facilities Corporation
In determining the financial reporting entity, the City complies with the provisions of GASB
Statement No. 14 and Statement No. 39, and has included all organizations that make up the
City’s legal entity and all component units. Consistent with applicable guidance, the criteria used
by the City to include component units within its reporting entity are financial accountability and
the nature and significance of the relationship. The City includes organizations as component
units under the following financial accountability criteria:
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30
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
1. Financial Reporting Entity, continued
(1) Organizations for which the City Council appoints a voting majority of the
organization’s governing body and for which (a) the City is able to impose its will on
the organization or (b) there is a potential for the organization to provide specific
financial benefits to, or impose specific financial burdens on, the City.
(2) Organizations that are fiscally dependent on the City. Fiscal dependency is
established if the organization is unable to adopt its budget, levy taxes or set rates or
charges, or issue bonded debt without approval by the City.
Blended Component Units
Blended component units are separate legal entities that meet the component unit criteria
described above and whose governing body is the same or substantially the same as the City
Council, or the component unit provides services entirely to the City. These component units’
funds are blended into those of the City by appropriate activity type to compose the primary
government presentation. Currently, the City has no blended component units.
Discretely Presented Component Units
Discretely presented component units are separate legal entities that meet the component unit
criteria described above but do not meet the criteria for blending. The following are the
discretely presented component units:
Brief Description of Activities and Relationship
To The City:
Community Redevelopment Created in June 1997 to develop, finance, and
Authority of Grand Island maintain certain areas of the City in need of
improvement and development. The Mayor
appoints the five-member board. The CRA can
borrow money, issue bonds, and request a levy of
taxes under the City’s overall levy limits. The
CRA’s annual budget is subject to the City
Council’s approval. The component unit
information was obtained from separately audited
financial statements which can be obtained by
contacting the Community Redevelopment
Authority of Grand Island.
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31
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
1. Financial Reporting Entity, continued
Discretely Presented Component Units, continued
Brief Description of Activities and Relationship
To The City:
Business Improvement Districts BID #4 was created on July 23, 2002; and BID #6,
#7, and #8 were created during July 2008. The
BIDs account for funding held for improvement and
maintenance of public areas within the boundaries
of the Districts.
Grand Island Facilities Corporation Created in 2005 to provide for the construction and
issuance of bonds for the library addition. The City
Council appoints board members of this
Corporation.
Effective October 1, 2011, the Grand Island Area Solid Waste Agency (Landfill), formerly
accounted for as a discretely presented component unit, became an Enterprise Fund of the City.
2. Basis of Presentation
Government-wide Financial Statements
The Statement of Net Assets and Statement of Activities display information about the reporting
government as a whole. They include all funds of the reporting entity except for fiduciary funds.
The statements distinguish between governmental and business-type activities. Governmental
activities generally are financed through taxes, intergovernmental revenues, and other
nonexchange revenues. Business-type activities are financed in whole or in part by fees charged
to external parties for goods or services.
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32
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
2. Basis of Presentation, continued
Fund Financial Statements
Fund financial statements of the reporting entity are organized into funds, each of which is
considered to be a separate accounting entity. Each fund is accounted for by providing a separate
set of self-balancing accounts that constitute its assets, liabilities, fund equity, revenues, and
expenditures/expenses. Funds are organized into two major categories: governmental and
proprietary. An emphasis is placed on major funds within the governmental and proprietary
categories. A fund is considered major if it is the primary operating fund of the City or meets the
following criteria:
a. Total assets, liabilities, revenues, or expenditures/expenses of that individual
governmental or enterprise fund are at least 10 percent of the corresponding total for
all funds of that category or type; and
b. Total assets, liabilities, revenues, or expenditures/expenses of the individual
governmental fund or enterprise fund are at least five percent of the corresponding
total for all governmental and enterprise funds combined.
The funds of the financial reporting entity are described below:
Governmental Funds
General Fund
The General Fund is the primary operating fund of the City and always classified as a major fund.
It is used to account for all activities except those legally or administratively required to be
accounted for in other funds.
Special Revenue Funds
Special Revenue Funds are used to account for the proceeds of specific revenue sources that are
legally restricted to expenditures for certain purposes.
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33
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
2. Basis of Presentation, continued
Governmental Funds, continued
Capital Project Funds
Capital Project Funds are used to account for resources restricted for the acquisition or
construction of specific capital projects. The reporting entity includes one Capital Project Fund
to account for the acquisition of capital assets with transfers made from Governmental Funds and
another to account for the special assessments.
Debt Service Fund
The Debt Service Fund accounts for the accumulation of financial resources for the payment of
interest and principal on the general long-term debt of the City other than debt service payments
made by enterprise funds. Ad valorem taxes are used for the payment of principal and interest on
the City’s general obligation bonds.
Permanent Fund
The Permanent Fund accounts for assets held by the City pursuant to a trust agreement. The
principal portion of this fund type must remain intact, but the earnings may be used to achieve
the objectives of the fund.
Proprietary Funds
Enterprise Funds
Enterprise funds are used to account for business-like activities provided to the general public.
These activities are financed primarily by user charges and the measurement of financial activity
focuses on net income measurement similar to the private sector.
Internal Service Funds
The Internal Service Funds account for activities that provide goods and services to other funds,
departments or agencies of the primary government and its component units on a cost-
reimbursement basis.
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34
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
2. Basis of Presentation, continued
Fiduciary Funds (not included in government-wide statements)
Agency Funds
Agency funds account for assets held by the City in a purely custodial capacity. The reporting
entity includes three agency funds. Since agency funds are custodial in nature (i.e., assets equal
liabilities), they do not involve the measurement of results of operations. The agency funds are
as follows:
Fund Brief Description
Cafeteria Plan Accounts for voluntary employee contributions as a
tax-free reimbursement for medical and child care
expenses.
Other Agencies Accounts for the Tri-City Task Force and for the
collection and remittance of the City lodging tax to
Fonner Park.
BID Assessments Accounts for the collection of assessments for
Business Improvement Districts #4, #6, #7, and #8
and remittance of assessments to the Districts.
(Activity for these funds was transferred to a BID
component unit during the year ended September
30, 2004).
Trust Funds
Trust funds account for assets held by the City for the members and beneficiaries of defined
benefit pension plans and defined contribution pension plans. The reporting entity includes three
trust funds:
Police and Fire Pension Accounts for direct pension payments to police and
fire personnel who retired prior to 1984 under a
defined benefit plan.
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35
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
2. Basis of Presentation, continued
Fiduciary Funds (not included in government-wide statements), continued
Trust Funds, continued
Police Pension Reserve Accounts for the administration of reserves for
police.
Fire Pension Reserve Accounts for the administration of reserves for
firefighters.
Major and Nonmajor Funds
The funds are further classified as major or nonmajor as follows:
Fund Brief Description
Major:
Governmental:
General See above for description.
Capital Projects See above for description.
Debt Service See above for description.
Proprietary:
Enterprise:
Electric, Water, Sewer, Landfill,
and Golf See above for description.
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36
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
2. Basis of Presentation, continued
Major and Nonmajor Funds, continued
Fund Brief Description
Nonmajor:
Special Revenue:
Gas Tax Accounts for the City’s share of the State’s gasoline
tax from the State of Nebraska.
Enhanced 911 Accounts for the per-line telephone surcharge for
the Emergency Communications System.
PSC Wireless Accounts for the wireless E-911 fees distributed to
the City by the Public Service Commission.
Keno Accounts for the City’s share of the Hall County
Keno gaming proceeds.
Community Youth Council Accounts for the monies to implement a plan to
combat risks for the City’s youth.
Program Income Reuse Accounts for the repayment of loans from the
Department of Economic Development into the
City’s Economic Development Revolving Loan
Fund.
Economic Development Per the Local Option Economic Development
Program passed by the citizens in May 2003 the
City will set aside $750,000 per year for 10 years to
promote economic development. This division
reflects the transfer in and subsequent expenditure
of that portion of those funds to be used to provide
incentives for business recruitment and retention.
Funds are required to be segregated and
expenditures are to be recommended by the
Economic Development Corporation Executive
Board, reviewed by the Citizens’ Advisory Review
Committee, and finally submitted to the Mayor and
City Council for approval.
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37
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
2. Basis of Presentation, continued
Major and Nonmajor Funds, continued
Fund Brief Description
Nonmajor, continued:
Special Revenue, continued:
Housing Reuse Accounts for the proceeds received from Homestead
and deferred payment loans in accordance with the
“Program Reserve” plan under the Department of
Economic Development.
Community Development Accounts for the miscellaneous income not tied to
any specific grant and is used for administration.
Community Grants Accounts for grants received for housing
rehabilitation and the Senior Citizens Center.
Police Grants Accounts for non-personnel police grants.
Parking District #1 Accounts for the business occupation tax to pay for
maintenance and improvements of public property
within that district.
Parking District #2 Accounts for operational costs on the parking ramp
by using the ad valorem tax.
Local Assistance Accounts for various donations to fund-specific City
expenses, projects, and improvements.
Capital Projects:
Special Assessments Accounts for collections of special assessments for
the Debt Service or Capital Projects Fund.
Permanent:
Library Trust Accounts for monies donated by the Abbott Estate
to establish an endowment for the public library.
Cemetery Trust Accounts for the monies in a permanent care
endowment fund for the cemetery.
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38
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
2. Basis of Presentation, continued
Major and Nonmajor Funds, continued
Fund Brief Description
Nonmajor, continued:
Internal Service:
Information Technology Accounts for the operations of the Information
Technology Division of the Finance Department
and development of the City network.
Fleet Services Accounts for the performance of repair and
maintenance activities for the City’s equipment and
vehicle fleet.
Insurance Accounts for the property, liability, automobile,
workers’ compensation, and health insurance and
other programs for all City operations.
Equipment Reserve Established to provide continuity of capital
equipment replacement in the General Fund.
3. Measurement Focus and Basis of Accounting
Measurement focus is a term used to describe “which” transactions are recorded within the
various financial statements. Basis of accounting refers to “when” transactions are recorded
regardless of the measurement focus applied.
Measurement Focus
On the government-wide Statement of Net Assets and the Statement of Activities, both
governmental and business-like activities are presented using the economic resources
measurement focus as defined in item b, below.
In the fund financial statements, the “current financial resources” measurement focus or the
“economic resources” measurement focus is used as appropriate:
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39
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
3. Measurement Focus and Basis of Accounting, continued
Measurement Focus, continued
a. All governmental funds utilize a “current financial resources” measurement focus.
Only current financial assets and liabilities are generally included on their balance
sheets. Their operating statements present sources and uses of available spendable
financial resources during a given period. These funds use fund balance as their
measure of available spendable financial resources at the end of the period.
b. The proprietary funds utilize an “economic resources” measurement focus. The
accounting objectives of this measurement focus are the determination of operating
income, changes in net assets (or cost recovery), financial position, and cash flows.
All assets and liabilities (whether current or noncurrent) associated with their
activities are reported. Proprietary fund equity is classified as net assets.
c. Fiduciary funds are not involved in the measurement of results of operations;
therefore, measurement focus is not applicable to them.
Basis of Accounting
In the government-wide Statement of Net Assets and Statement of Activities, governmental and
business-like activities and the discretely presented component units are presented using the
accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized
when earned and expenses are recorded when the liability is incurred or economic asset used.
Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-
like transactions are recognized when the exchange takes place.
In the fund financial statements, governmental funds and fiduciary funds are presented on the
modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues
are recognized when “measurable and available.” Measurable means knowing or being able to
reasonably estimate the amount. Available means collectible within the current period or within
60 days after year end. Expenditures (including capital outlay) are recorded when the related
fund liability is incurred.
All proprietary funds and discretely presented component units utilize the accrual basis of
accounting. Under the accrual basis of accounting, revenues are recognized when earned and
expenses are recorded when the liability is incurred or the economic asset is used.
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40
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
4. Assets, Liabilities, and Equity
Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Investments
For the purpose of the Statement of Net Assets, “cash and cash equivalents” include all demand
accounts and savings accounts. For the purpose of the proprietary fund Statement of Cash Flows,
“cash and cash equivalents” include all cash on hand, demand accounts, savings accounts, and
equity in pooled cash which has an original maturity of three months or less. The County
Treasurer’s cash represents revenues collected not yet remitted to the City.
Investments are carried at fair value. Fair value is based on quoted market price. Additional
cash and investment disclosures are presented in Notes B2, C1, and D2.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use
restricted resources first, then unrestricted resources as they are needed.
Receivables
In the government-wide statements, receivables consist of all revenues earned at year end and not
yet received. Allowances for uncollectible accounts receivable are based upon historical trends
and the periodic aging of accounts receivable. Major receivable balances for the governmental
activities include special assessments and property taxes. Business-type activities report utility
billings and special assessments as their major receivables.
In the fund financial statements, receivables in governmental funds include revenue accruals such
as special assessments and property taxes since they are usually both measurable and available.
Proprietary fund receivables consist of all revenues earned at year end and not yet received.
Utility accounts receivable and special assessments compose the majority of proprietary fund
receivables. Allowances for uncollectible accounts receivable are based upon historical trends
and the periodic aging of accounts receivable.
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41
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
4. Assets, Liabilities, and Equity, continued
Due from Other Governments
The total due from other governments includes the following amounts:
Fund Amount Service
General $ 2,474,827 Sales Tax
General 61,147 Hall County reimbursements
General 44,837 Department of Justice grant
General 10,835 State DUI grant
Capital Projects 148,698 State reimbursements for
Capital Avenue Project
Gas Tax 421,640 Motor Vehicle/Gas Tax
Enhanced 911 13,000 Hall County 911 surcharge
PSC Wireless 12,497 State wireless fees
Local Assistance 10,185 Hotel occupation tax
Community grants 367,550 State reimbursements for
CDBG grant expenditures
Keno 24,005 Keno Proceeds
Total governmental funds $ 3,589,221
Inventory
All inventories are valued at cost using the first-in/first-out (FIFO) method.
Restricted Assets
Restricted assets include cash and investments that are legally restricted as to their use. The
primary restricted assets are related to debt service and proceeds of specific revenue sources that
are legally restricted to expenditures for certain purposes.
Deferred Charges
Deferred charges incurred consists of various plant maintenance costs that are being amortized
over the life of the scheduled maintenance repair life. In accordance with SFAS No. 71, the
maintenance costs which would be recognized during the current period are deferred and not
included in the determination of net income until such costs are recoverable.
Prepaid Transmission
The Electric Fund has made a long-term usage deposit for the availability of future transmission
service with a public power district. The unused deposit at September 30, 2012, is $2,175,599.
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42
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
4. Assets, Liabilities, and Equity, continued
Capital Assets
The accounting treatment over property, plant, and equipment (capital assets) depends on
whether the assets are used in governmental fund operations or proprietary fund operations and
whether they are reported in the government-wide or fund financial statements.
Government-wide Statements
In the government-wide financial statements, capital assets are capitalized and reported on the
Statement of Net Assets. The City has a $10,000 capitalization threshold. All capital assets are
valued at historical cost or estimated historical cost if actual is unavailable, except for donated
capital assets, which are recorded at their estimated fair value at the date of donation. The City
has elected the modified approach for reporting infrastructure.
Depreciation of general capital assets and all proprietary capital assets is recorded as an allocated
expense in the Statement of Activities, with accumulated depreciation reflected in the Statement
of Net Assets. Depreciation is provided over the assets’ estimated useful lives using the straight-
line method of depreciation. The ranges of estimated useful lives by type of asset are as follows:
Buildings 25-50 years
Improvements 10-50 years
Machinery and Equipment 3-20 years
Utility System 25-50 years
Prior to July 1, 1980, governmental funds’ infrastructure assets were not capitalized. These
assets (back to July 1, 1980) have been valued at estimated historical cost. The cost of normal
maintenance, preservation, and repairs that do not add to the value of the assets or materially
extend the assets’ lives are not capitalized.
The Electric and Water Departments capitalize interest costs as a component of production
capacity based on the weighted average rates paid for long-term borrowing. Total interest
incurred was:
Electric Water
Interest costs capitalized $ - $ -
Interest costs charged to expense 905,174 56,416
$ 905,174 $ 56,416
Fund Financial Statements
In the fund financial statements, capital assets used in governmental fund operations are
accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital
assets used in proprietary fund operations are accounted for the same as in the government-wide
statements.
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43
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
4. Assets, Liabilities, and Equity, continued
Unamortized Bond Discounts and Premiums/Deferred Charges
Bond discount fees and bond premiums for the Electric and Water Funds are deferred and
amortized over the life of the bonds using the effective interest method. The deferred charges of
various plant maintenance costs for the Electric Fund are being amortized over the life of the
scheduled maintenance repair life.
Defeasance costs for the sewer department are deferred and amortized over the shorter life of the
old bonds or new bonds using the outstanding bond method. The bond issuance costs and
premium for the sewer department are deferred and amortized over the life of the new bonds
using the straight-line method.
Deferred Revenues
Deferred revenues consist primarily of property taxes expected to be collected after 60 days.
Compensated Absences
The City’s policies regarding vacation time permit employees to accumulate earned but unused
vacation leave. A portion of the liability for these compensated absences is recorded as long-
term debt in the government-wide statements. The current portion of this obligation is estimated
based on historical trends. In the fund financial statements, governmental funds report only the
current compensated absence liability payable from expendable available financial resources,
while the proprietary funds report the total liability.
Long-term Debt
The accounting treatment of long-term debt depends on whether the assets are used in
governmental fund operations or proprietary fund operations and whether they are reported in the
government-wide or fund financial statements.
Government-wide Statements
All long-term debt to be repaid from governmental and business-type resources is reported as
liabilities in the government-wide statements. The long-term debt consists primarily of notes
payable, accrued compensated absences, and a closure/post closure liabilities.
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44
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
4. Assets, Liabilities, and Equity, continued
Long-term Debt, continued
Fund Financial Statements
Long-term debt for governmental funds is not reported as liabilities in the fund financial
statements. The debt proceeds are reported as other financing sources and payment of principal
and interest reported as expenditures. The accounting for proprietary funds is the same in the
fund financial statements as it is in the government-wide statements.
Equity Classifications
Government-wide Statements
Equity is classified as net assets and displayed in three components:
a. Invested in capital assets, net of related debt – Consists of capital assets, including
restricted capital assets, net of accumulated depreciation and reduced by the
outstanding balances of any bonds, mortgages, notes, or other borrowings that are
attributable to the acquisition, construction, or improvement of those assets.
b. Restricted net assets – Consists of net assets with constraints placed on their use
either by (1) external groups such as creditors, grantors, contributors, or laws or
regulations of other governments; or (2) law through constitutional provisions or
enabling legislation.
c. Unrestricted net assets – All other net assets that do not meet the definition of
“restricted” or “invested in capital assets, net of related debt.”
See Note C8 for additional disclosures.
Fund Financial Statements
Governmental fund equity is classified as fund balance. Proprietary fund equity is classified the
same as in the government-wide statements.
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45
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
4. Assets, Liabilities, and Equity, continued
Equity Classifications, continued
Fund Financial Statements, continued
Effective October 1, 2010, the City adopted GASB Statement No. 54, which redefined how fund
balances of the governmental funds are presented in the financial statements. Fund balances are
classified as follows:
Nonspendable-Amounts that cannot be spent either because they are not in a spendable
form or because they are legally or contractually required to be maintained intact.
Restricted-Amounts that can be spent only for specific purposes because of the City
Charter, City Code, state or federal laws or externally imposed conditions by grantors or
creditors.
Committed-Amounts that can be used only for specific purposes determined by a formal
action by City Council ordinance or resolution.
Assigned-Amounts that are designated by the Mayor for a specific purpose but are not
spendable until a budget ordinance is passed by the City Council.
Unassigned-All amounts not included in other spendable classifications.
The details of the fund balances are included in the Governmental Funds Balance Sheet (page
18). Restricted funds are used first as appropriate. Assigned Funds are reduced to the extent that
expenditure authority has been budgeted by the City Council or the Assignment has been
changed by the Mayor. Decreases to fund balance first reduce Unassigned Fund balance; in the
event that Unassigned Fund Balance becomes zero, then Assigned and Committed Fund
Balances are used in that order.
Net Asset Restatement
Governmental net assets were increased $3,191,337 as of September 30, 2011, to reflect City
infrastructure paid for directly by the State of Nebraska. Business-type net assets were increased
and discretely presented component unit net assets were decreased $8,854,061 to reclassify the
landfill from a component unit to an Enterprise Fund.
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
5. Revenues, Expenditures, and Expenses
Sales and Use Tax
The City presently levies a one-and-one-half percent sales tax on taxable sales within the City.
The sales tax is collected by the Nebraska Department of Revenue and remitted to the City in the
month following receipt. The Nebraska Department of Revenue receives the sales tax
approximately one month after collection by vendors. The sales tax is recorded in the General
Fund and used for budgeted General Fund appropriations. As of October 1, 2006, sales tax
collected on the sale of motor vehicles is reserved for street improvements as required by LB904.
Sales taxes collected by the State in September (which represents sales for August) and received
by the City in October have been accrued and are included under the caption “Due from other
governments.”
Property Taxes
The City has the power to levy taxes each year sufficient to pay any judgment existing against the
City, the interest on bonded debt, and the principal on bonded debt maturing during the fiscal
year or within six months thereafter, as well as taxes authorized by state law.
The tax levies for all political subdivisions in Hall County are certified by the County Board on
or before October 15. Real estate taxes are due on December 31 and attach as an enforceable lien
and become delinquent in two equal installments on May 1 and September 1. Personal property
taxes are due in the same manner as real estate taxes. Delinquent taxes bear 14 percent interest.
Property taxes levied for 2011-2012 are recorded as revenue when expected to be collected
within 60 days after September 30, 2012. Prior-year levies were recorded using these same
principles, and remaining receivables are re-evaluated annually. Property taxes expected to be
collected after 60 days are recorded as deferred revenue on the fund balance sheets.
The City-owned electric and water utilities may make payments in lieu of taxes. The electric
department pays five percent of its net operating revenues, excluding depreciation, and the water
department pays one percent of its gross revenues derived from within the City limits.
Operating Revenues and Expenses
Operating revenues and expenses for proprietary funds are those that result from providing
services and producing and delivering goods and/or services. It also includes all revenue and
expenses not related to capital and related financing, noncapital financing, or investing activities.
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47
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
5. Revenues, Expenditures, and Expenses, continued
Expenditures/Expenses
In the government-wide financial statements, expenses are classified by function for both
governmental and business-type activities.
In the fund financial statements, expenditures are classified as follows:
Governmental Funds – by Character and Function
Proprietary Fund – by Operating and Nonoperating
In the fund financial statements, governmental funds report expenditures of financial resources.
Proprietary funds report expenses relating to use of economic resources.
Contributions in Aid of Construction
Contributions in aid of construction are tap fees installed and contributed by developers. These
contributions are recorded at fair market value when the development is complete and are
considered imposed non-exchange transactions.
Allocated Debt on Participation Power Purchases
A portion of the monthly bill the Department pays for participation power from OPPD is the
Department’s allocated debt on the NC2 Project. Allocated debt of $6,320,655 is shown as a
nonoperating expense for the year ended September 30, 2012.
Interfund Transfers
Permanent reallocation of resources between funds of the reporting entity is classified as
transfers. For the purposes of the Statement of Activities, all interfund transfers between
individual governmental funds have been eliminated.
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48
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE B – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
By its nature as a local government unit, the City and its component units are subject to various
federal, state, and local laws and contractual regulations. An analysis of the City’s compliance
with significant laws and regulations and demonstration of its stewardship over City resources
follows:
1. Fund Accounting Requirements
The City complies with all state and local laws and regulations requiring the use of separate
funds. The legally required funds used by the City include: Special Revenue, Capital Projects,
Debt Service, Permanent, Agency, and Trust Funds.
2. Deposit Laws and Regulations
Custodial credit risk is the risk that, in the event of a bank failure, a government’s deposits may
not be returned to it. The City’s deposit policy for custodial credit risk requires compliance with
the provisions of state law.
State law requires collateralization of all deposits with federal depository insurance or with U.S.
Treasury and U.S. agency securities having an aggregate value at least equal to the amount of the
deposits. The City’s cash deposits, including certificates of deposit, are insured by the Federal
Deposit Insurance Corporation (FDIC) up to $250,000 for interest-bearing demand deposits, up
to $250,000 for interest-bearing time deposits/savings, and all non-interest-bearing deposits are
insured. Any cash deposits or certificates of deposit in excess of the FDIC limits are insured by
collateral held by the pledging institution in the City’s name.
3. Revenue Restrictions
The City has various restrictions placed over certain revenue sources from state or local
requirements. The primary restricted revenue sources are described in Note A2 for the various
funds.
4. Debt Restrictions and Covenants
Bonds Payable
The various bond ordinances relating to the bonds payable contain some restrictions or covenants
that are financial-related. These include covenants such as debt service coverage requirements
and required reserve account balances. The City is in compliance with the bond restrictions and
covenants.
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49
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE B – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY, continued
5. Budgetary Data
The City is required by state laws to adopt annual budgets for all fund types. Each budget is
presented on the cash basis of accounting, which is consistent with the requirements of the state
budget act.
The Nebraska Budget Act provides the prescribed budget practices and procedures that
governing bodies are required to follow. The amounts that may be budgeted for certain specific
funds are subject to various expenditure and/or tax levy limitations.
The City follows these procedures in establishing the budgetary data reflected in the
accompanying financial statements.
a. On or before August 1, the City prepares a budget for the fiscal year commencing
October 1. The budget includes proposed expenditures and resources available.
b. The budget is published with subsequent public hearings to obtain taxpayer
comments.
c. Prior to September 20, the City Council adopts the budget, which is then filed with
the appropriate state and county officials.
d. Total expenditures may not legally exceed total appropriations. Appropriations
lapse at year end and any revisions require board approval.
e. The County Clerk certifies a preliminary property tax levy for each fund of the City
which levied property taxes in the county the previous year based on the combined
valuation and amount required for the City the prior year. The preliminary levy
becomes the final levy unless the governing board passes, by a majority vote, a
resolution setting the levy at a different amount.
f. The property tax requirements resulting from the budget process are utilized by the
County Assessor to establish the tax levy. Taxes are levied annually on or before
October 15. Real property taxes and personal property taxes are due December 31
with the first half delinquent May 1 and the second half delinquent September 1.
g. Appropriations lapse at the end of the fiscal year, except for capital improvement
appropriations and certain encumbrances against operating budgets.
h. The City of Grand Island adopts a budget by resolution for all fund types.
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50
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS
The following notes present detail information to support the amounts reported in the basic
financial statements for various assets, liabilities, equity, revenues, and expenditures/expenses.
1. Cash and Investments
Deposits
The City’s policies regarding deposits of cash are discussed in Note A4. The table presented
below is designed to disclose how its deposits were insured or secured with collateral at
September 30, 2012. The categories of collateral are defined as follows:
Category 1 – Insured by FDIC or collateralized with securities held by the City (or public
trust) or by its agent in its name.
Category 2 – Uninsured but collateralized with securities held by the pledging financial
institution’s trust department or agent in the City’s name.
Category 3 – Uninsured and uncollateralized; or collateralized with securities held by the
pledging financial institution, or by its trust department or agent, but not in the City’s
name; or collateralized with no written or approved collateral agreement.
Total
Total Bank Category Category Category Carrying
Types of Deposits Balance 1 2 3 Value
Demand deposits $ 10,801,463 $ 6,455,823 $ 4,345,640 $ - $ 10,802,728
Reconciliation to Government-wide Statement of Net Assets:
Primary Government –
Unrestricted cash and cash equivalents $ 6,996,634
Restricted cash and cash equivalents 3,391,057
Component Units –
Unrestricted cash and cash equivalents 321,693
Restricted cash and cash equivalents 60,722
Employee Pension Funds Cash (not included in
government-wide statement) 9,249
Agency Fund Cash (not included in
government-wide statement) 23,373
$ 10,802,728
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51
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
1. Cash and Investments, continued
Investments
The City’s policies and applicable laws regarding investments are discussed in Notes A4 and B2.
The table presented below is designed to disclose the level of market risk and custodial credit
risk assumed by the City (or public trust) based upon whether the investments are insured or
registered and upon who holds the security at September 30, 2012. The categories of credit risk
are defined as follows:
Category 1 – Insured or registered, with securities held by the entity or its agent in the
entity’s name.
Category 2 – Uninsured and unregistered, with securities held by counterparty’s trust
department or agent in the entity’s name.
Category 3 – Uninsured and unregistered, with securities held by the counterparty or by
its trust department or agent, but not in the City’s name.
Category Category Category Carrying Fair
Type of Investment 1 2 3 Amount Value
Time Deposits $ 66,563,721 $ - $ - $ 66,563,721 $ 66,563,721
Publicly Traded Equities - 5,143,082 - 5,143,082 5,143,082
$ 71,706,803 $ 71,706,803
Reconciliation to Government-wide Statements of Net Assets:
Primary Government –
Unrestricted investments $ 57,195,051
Restricted investments 8,725,985
Permanently restricted investments 529,620
Employee Pension Funds (not included in
government-wide statements) 5,125,906
Agency Funds (not included in
government-wide statements) 130,241
$ 71,706,803
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
2. Restricted Assets
The restricted assets as of September 30, 2012, are as follows:
Business- Total
Governmental type Primary Component
Activities Activities Government Units
Type of Restricted Assets:
Cash and cash equivalents 551,612$ 2,839,445$ 3,391,057$ 60,722$
Investments 125,694 8,600,291 8,725,985 -
Permanently restricted
investments 529,620 - 529,620 -
Permanently restricted
notes receivable 1,291,102 - 1,291,102 -
2,498,028$ 11,439,736$ 13,937,764$ 60,722$
3. Accounts and Notes Receivable
Accounts receivable of the business-type activities consist of utilities receivables. Accounts
receivable of the governmental activities consist of telephone tax (13.5 percent), cable franchise
tax (13.9 percent), other franchise/occupation tax (2.2 percent), ambulance (27.7 percent), payroll
reimbursement (11.1 percent), administrative fees (12.3 percent), and other (19.3 percent)
receivables. Accounts receivable for the component units consists entirely of landfill receivables.
Receivables detail at September 30, 2012, is as follows:
Business- Total
Governmental type Primary Component
Activities Activities Government Units
Accounts receivable 1,031,794$ 7,580,354$ 8,612,148$ -$
Allowance for doubtful
accounts (161,500) (372,820) (534,320) -
Net accounts receivable 870,294$ 7,207,534$ 8,077,828$ -$
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
3. Accounts and Notes Receivable, continued
Notes receivable for the governmental funds consist of the following at September 30, 2012:
Note Balance
at September 30,
Note Held By:Due From 2012 Terms
Capital Projects Fund Heartland Shooting Park 10,000$ 0%; $5,000 due annually March
17, 2009, through March 17,
2013.
Capital Projects Fund Central Nebraska
Humane Society
28,504 0%; $100 due annually through
2013, then $10,000 due annually
beginning in 2014 until the loan
is paid in full.
Program Income Reuse Standard Iron 138,392 $250,000 is 0% loan due in 168
monthly installments.
Community Grants Fund Rehab Housing -
Various Homeowners
420,256 Forgivable over 5 or 10 years of
continued home ownership.
Economic Development Fund Rogue Manufacturing 15,000 Forgivable if employment
objectives are met.
Economic Development Fund Hornady Manufacturing 41,666 Forgivable if employment
objectives and building
occupancy terms are met.
Economic Development Fund Medberry Fabrication 55,000 Forgivable if employment
objectives are met.
Economic Development Fund Standard Iron 75,000 Forgivable if employment
objectives are met.
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
3. Accounts and Notes Receivable, continued
Note Balance
at September 30,
Note Held By:Due From 2012 Terms
Economic Development Fund Hastings Foods 46,667 Forgivable if employment
objectives are met
Economic Development Fund Nova Tech 20,000 Forgivable if employment
objectives are met.
Economic Development Fund CNH America, LLC 146,000 Forgivable if employment
objectives are met.
Housing Reuse Loan Fund Rehab Housing -
Various Homeowners
131,313 0%; due upon sale of house.
Housing Reuse Loan Fund Housing Downpayment
Loans - Various
Homeowners
163,304 Forgivable over 5 to 10 years
of continued home ownership.
1,291,102$
The above notes are permanently restricted as revolving loan funds.
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
4. Capital Assets
Capital asset activity for the year ended September 30, 2012, was as follows:
Balance at Balance at
October 1, Restatement September 30,
2011 Additions Disposals and Reclass 2012
Governmental Activities:
Capital assets not being depreciated:
Land 5,552,803$ 270,118$ -$ -$ 5,822,921$
Infrastructure 245,454,829 52,975 - 9,900,505 255,408,309
Construction in progress 9,625,020 1,870,582 - (6,709,168) 4,786,434
Total capital assets not being
depreciated 260,632,652 2,193,675 - 3,191,337 266,017,664
Other capital assets being depreciated:
Land improvements 12,756,968 2,197,499 - - 14,954,467
Buildings 57,663,446 - - - 57,663,446
Machinery and equipment 6,153,965 541,628 (341,797) - 6,353,796
Office furniture and equipment 2,663,832 62,904 (207,320) - 2,519,416
Vehicles 6,247,806 972,242 (122,661) - 7,097,387
Total other capital assets at
historical cost 85,486,017 3,774,273 (671,778) - 88,588,512
Less accumulated depreciation for:
Land improvements (4,795,004) (421,540) - - (5,216,544)
Buildings (13,526,194) (1,848,996) - - (15,375,190)
Machinery and equipment (5,057,175) (333,547) 289,042 - (5,101,680)
Office furniture and equipment (2,377,951) (92,381) 207,320 - (2,263,012)
Vehicles (5,230,124) (275,914) 90,734 - (5,415,304)
Total accumulated depreciation (30,986,448) (2,972,378) * 587,096 - (33,371,730)
Other capital assets, net 54,499,569 801,895 (84,682) - 55,216,782
Governmental activities capital
assets, net 315,132,221$ 2,995,570$ (84,682)$ 3,191,337$ 321,234,446$
* Depreciation expense was charged to governmental activities as follows:
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
4. Capital Assets, continued
Governmental Activities, continued:
General Fund:
General government:
City Hall $ 228,480
Public safety:
Fire 160,363
Ambulance 45,922
Police 442,967
Emergency management 105,048
Total public safety 754,300
Public works:
Engineering 22,025
Street and alley 167,641
Total public works 189,666
Environment and leisure:
Library 249,383
Parks 218,210
Cemetery 23,679
Recreation 240,837
Water park and pools 97,553
Community Fieldhouse 171
Public information 30,181
Heartland Public Shooting Park 71,880
Heartland Events Center 700,255
Total environment and leisure 1,632,149
Total General Fund 2,804,595
Special Revenue Funds:
Enhanced 911 23,889
PSC Wireless 486
Community development 50,997
Downtown development 18,318
Total Special Revenue Funds 93,690
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
4. Capital Assets, continued
Governmental Activities, continued:
Internal Service Funds:
Information technology 64,677
Fleet services 9,416
Total Internal Service Funds 74,093
Total governmental activities depreciation expense $ 2,972,378
Balance at Balance at
October 1,September 30,
2011 Additions Disposals Reclass 2012
Business-type Activities:
Capital assets not being depreciated:
Land 6,983,571$ -$ -$ 253,515$ 7,237,086$
Construction in progress 10,459,987 17,076,441 - - 27,536,428
Total capital assets not being
depreciated 17,443,558 17,076,441 - 253,515 34,773,514
Other capital assets being depreciated:
Land improvements 56,184,022 1,835,964 - 4,878,040 62,898,026
Buildings, distribution systems,
and equipment 365,379,120 5,922,662 (1,236,114) 4,002,473 374,068,141
Office furniture and equipment 3,523,688 12,840 - 51,073 3,587,601
Vehicles 5,379,854 630,417 (438,760) 669,874 6,241,385
Total other capital assets at
historical cost 430,466,684 8,401,883 (1,674,874) 9,601,460 446,795,153
Less accumulated depreciation for:
Land improvements (27,691,070) (1,814,987) - (2,618,977) (32,125,034)
Buildings, distribution systems,
and equipment (206,060,697) (11,727,665) 645,406 (1,719,812) (218,862,768)
Office furniture and equipment (51,547) (300) - (51,073) (102,920)
Vehicles (1,077,873) (166,605) 208,456 (433,776) (1,469,798)
Total accumulated depreciation (234,881,187) (13,709,557) * 853,862 (4,823,638) (252,560,520)
Other capital assets, net 195,585,497 (5,307,674) (821,012) 4,777,822 194,234,633
Business-type capital assets, net 213,029,055$ 11,768,767$ (821,012)$ 5,031,337$ 229,008,147$
* Depreciation expense was charged to functions as follows:
Electric $ 9,905,761
Water 663,944
Sewer 2,587,687
Landfill 530,324
Golf 21,841
Total business-type activities depreciation expense $ 13,709,557
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
4. Capital Assets, continued
Balance at Balance at
October 1,September 30,
2011 Additions Disposals 2012
Business Improvement Districts:
Capital assets being depreciated:
Land improvements 45,873$ 19,914$ -$ 65,787$
Less accumulated depreciation:
Land improvements (9,175) (2,193) - (11,368)
Business Improvement
Districts, net 36,698$ 17,721$ -$ 54,419$
Community Redevelopment Authority:
Capital assets not being depreciated:
Land held for redevelopment 495,354$ -$ -$ 495,354$
Construction in progress - 180,658 - 180,658
Total capital assets 495,354$ 180,658$ -$ 676,012$
5. Accounts Payable
Payables in the general, capital projects, other governmental, and proprietary funds are primarily
composed of payables to vendors.
6. Long-term Debt
The reporting entity’s long-term debt is segregated between the amounts to be repaid from
governmental activities and amounts to be repaid from business-type activities.
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
6. Long-term Debt, continued
Changes in Long-term Debt
The following is a summary of changes in long-term debt for the year ended September 30, 2012:
Balance Balance Amounts Due
October 1,September 30, Within
2011 Additions Deductions 2012 One Year
Governmental Activities:
Bonds payable 8,625,000$ -$ (2,040,000)$ 6,585,000$ 1,045,000$
Capital Lease 13,541,806 - (1,366,377) 12,175,429 1,776,778
22,166,806$ -$ (3,406,377)$ 18,760,429$ 2,821,778$
Business-type Activities:
Bonds payable 31,225,000$ 22,235,000$ (28,875,000)$ 24,585,000$ 3,725,000$
Component Units:
GI Facilities Corporation 3,795,000 - (710,000) 3,085,000 760,000
CRA notes payable 774,447 - (139,045) 635,402 115,334
Total Component
Units 4,569,447$ -$ (849,045)$ 3,720,402$ 875,334$
Type of Debt
Governmental Activities
As of September 30, 2012, the governmental long-term liabilities consisted of the following:
Bonds payable:
Various purpose refunding bonds dated June 16, 2009, with
original issue amount of $2,970,000. Interest ranges from
1.00 to 3.25 percent with final maturity December 15, 2017.
Callable after June 16, 2014. $ 2,045,000
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
6. Long-term Debt, continued
Governmental Activities, continued
Bonds payable, continued:
Law enforcement center refunding bonds dated April 12,
2011, with original issue amount of $5,535,000. Interest
ranges from 0.45 to 2.90 percent with final maturity
September 1, 2014. 4,540,000
Total bonds payable 6,585,000
Capital Lease:
Capital lease refunding obligation due to the Heartland Events
Center dated September 20, 2011, with original issue amount
of $5,795,000. Interest ranges from 0.3 to 3.35 percent with
final maturity December 15, 2024. 5,730,000
Capital lease refunding obligation due to the Grand Island
Facilities Corporation dated May 19, 2011, with original issue
amount of $3,795,000. Interest ranges from 0.45 to 1.85
percent with final maturity October 25, 2015. 3,085,000
Capital lease obligation due to Wells Fargo dated July 1, 2009,
with original issue amount of $5,062,500 to finance the State
Fair building. The lease bears interest of 4.25 percent and is
due in 16 semi-annual principal and interest payments of
$376,556, commencing January 1, 2010 through July 1, 2017. 3,360,429
Total capital lease obligations 12,175,429
Total governmental activities long-term obligations $ 18,760,429
Current portion $ 2,821,778
Noncurrent portion 15,938,651
Total $ 18,760,429
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
6. Long-term Debt, continued
The Debt Service Fund is making the principal and interest payments on the bonds, and the
General Fund is paying the capital lease obligations.
Business-type Activities
As of September 30, 2012, the long-term debt payable from proprietary fund resources consisted
of the following:
Bonds payable:
Sewer system revenue and refunding bonds dated June 25,
2003, with original issue amount of $15,970,000. Interest
ranges from 2.00 to 3.45 percent with final maturity on
April 1, 2014. Callable after April 1, 2011. $ 3,050,000
Electric system revenue refunding bonds, Series 2012, due
serially to August 15, 2022. Interest ranges from 0.2 to 4.0
percent; secured by electric system revenues. 17,810,000
Water revenue refunding bonds, Series 2012, due serially to
July 2, 2027. Interest ranges from 0.4 to 3.1 percent; secured
by water system revenue and a deposit in the debt service
reserve account. 3,725,000
Total business-type activity bonds payable $ 24,585,000
Current portion $ 3,725,000
Noncurrent portion 20,860,000
Total $ 24,585,000
Component Units
Grand Island Facilities Corporation:
Library building bonds, Series 2005, dated November 1, 2005,
with original issue amount of $7,000,000. Interest ranges
from 2.85 to 3.80 percent with final maturity on November 1,
2015, callable after November 1, 2010. (The City has a
matching capital lease obligation to the Grand Island Facilities
Corporation as described on page 60). $ 3,085,000
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
6. Long-term Debt, continued
Component Units, continued
CRA notes payable:
The Authority borrowed $479,700 from Five Points Bank on
December 15, 1999, to finance the GI Cherry Park, LTD,
redevelopment project. The note is collateralized by a
promissory note from the redeveloper and a deed of trust on
the real estate included in the project, and the incremental tax
revenue increase by the redeveloped property will be used for
payment of the note. The note bears interest at 7.74 percent
with interest payments due semi-annually beginning June 15,
2001, and principal and interest payments due semi-annually
beginning June 15, 2001, through December 15, 2013. 83,216
The Authority borrowed $37,000 from Wells Fargo Bank on
September 3, 2002, to finance the RSF Limited redevelopment
project. The note is collateralized by a promissory note from
the redeveloper and a deed of trust on the real estate included
in the project, and the incremental tax revenue increase by the
redeveloped property will be used for payment of the note.
The note bears interest of 6.9 percent and payments are due
semi-annually through December 15, 2017. 18,706
The Authority borrowed $169,267 from Home Federal
Savings and Loan on September 1, 2003, to finance the
PROCON Development Company, LLC, redevelopment
project. The note is collateralized by a promissory note from
the redeveloper and a deed of trust on the real estate included
in the project, and the incremental tax revenue increase by the
redeveloped property will be used for payment of the note.
The note bears interest of 7.0 percent and payments are due
semi-annually beginning June 15, 2005, through
December 15, 2018. 99,281
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
6. Long-term Debt, continued
Component Units, continued
CRA notes payable, continued:
The Authority borrowed $668,000 from Lincoln Federal
Savings Bank on December 15, 2004. The funds were used to
finance the Walnut Housing, Ltd., redevelopment project. The
note is collateralized by a promissory note from the
redeveloper and a deed of trust on the real estate included in
the project, and the incremental tax revenue increase by the
redeveloped property will be used for payment of the note.
The note bears interest of 6.743 percent and payments are due
semi-annually beginning June 15, 2006, through December
15, 2019. 434,199
Total CRA notes payable 635,402
Total component units bonds and notes payable $ 3,720,402
Current portion $ 875,334
Noncurrent portion 2,845,068
Total $ 3,720,402
Annual debt service requirements to maturity, including principal and interest, for long-term debt
as of September 30, 2012, are as follows:
Year Ending Governmental Activities Business-type Activities Component Units
September 30,Principal Interest Principal Interest Principal Interest
2013 2,821,778$ 436,359$ 3,725,000$ 592,763$ 875,334$ 78,510$
2014 2,878,269 385,231 3,350,000 529,640 860,144 62,758
2015 2,925,898 325,498 1,950,000 462,363 845,309 47,474
2016 3,004,715 256,357 1,980,000 439,337 860,173 29,924
2017 2,274,769 186,459 1,905,000 415,508 80,374 17,462
2018-2022 3,380,000 409,516 10,305,000 1,351,312 199,068 19,384
2023-2027 1,475,000 73,014 1,370,000 122,478 - -
18,760,429$ 2,072,434$ 24,585,000$ 3,913,401$ 3,720,402$ 255,512$
Grand Island Study Session - 3/5/2013 Page 97 / 220
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
6. Long-term Debt, continued
Closure and Postclosure Care Costs
The City entered into an agreement with the Nebraska Department of Environmental Quality to
establish a Closure/Post Closure Care Account. The purpose of this account is to accumulate
sufficient monies to fund all related costs of closure and post closure of the ash disposal area at
the Platte Generating Station. The calculated amount of the Closure/Post Closure liability was
$172,547 at September 30, 2012. The amount on deposit in the Closure/Post Closure Care
Account was $336,545 at September 30, 2012.
State and federal laws and regulations require that the City of Grand Island place a final cover on
its landfill when closed and perform certain maintenance and monitoring functions at the landfill
site for 30 years after closure. In addition to operating expenses related to current activities of
the landfill, an expense provision and related liability are being recognized based on the future
closure and postclosure care costs that will be incurred near or after the date the landfill no longer
accepts waste. The recognition of these landfill closure and postclosure care costs is based on the
amount of the landfill used during the year. The estimated liability for landfill closure and
postclosure care costs has a balance of $3,054,567 as of September 30, 2012, which is based on
32.33 percent usage (filled) of the landfill. It is estimated that an additional $5,745,257 will be
recognized as closure and postclosure care expenses between the date of the balance sheet and
the date the landfill is expected to be filled to capacity. The estimated total current cost of the
landfill closure and postclosure care, $8,799,824, is based on the amount that would be paid if all
equipment, facilities, and services required to close, monitor, and maintain the landfill were
acquired as of September 30, 2012. However, the actual cost of closure and postclosure care
may be higher due to inflation, changes in technology, or changes in landfill laws and
regulations.
At September 30, 2012, funds of $4,010,872 are restricted to finance closure and postclosure of
the City’s landfill. These funds are presented on the City’s statement of net assets as “restricted
for landfill closure costs.” It is anticipated that future inflation costs will be financed in part from
earnings on funds reserved by the City. The remaining portion of anticipated future inflation
costs (including inadequate earnings on investments, if any) and additional costs that might arise
from changes in postclosure requirements (due to changes in technology or more rigorous
environmental regulations, for example) may need to be covered by charges to future landfill
users, taxpayers, or both.
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
7. Interfund Transactions and Balances
Operating transfers:
Transfers In Transfers Out
General Fund:
Gas Tax $ 2,530,000 $ -
Community Development - 110,000
Community Grants 754 -
Economic Development - 750,000
Debt Service 546,100 774,000
Capital Projects - 1,120,549
Fleet Services 25,000 -
Employee Pension Reserve Funds - 9,462
Electric 689,459 -
Water 54,683 -
Total General Fund 3,845,996 2,764,011
Capital Projects Fund:
General 1,120,549 -
Gas Tax 803,813 -
Information Technology - 62,904
Special Assessments 115,175 -
Total Capital Projects Fund 2,039,537 62,904
Debt Service Fund:
General Fund 774,000 546,100
Nonmajor Funds 1,159,379 3,774,121
Enterprise Funds (payments in lieu of taxes) - 744,142
Internal Service Funds 62,904 -
Fiduciary Funds:
Employee Pension Reserve Funds 173,372 163,910
Total Operating Transfers $ 8,055,188 $ 8,055,188
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
7. Interfund Transactions and Balances, continued
An interfund balance of $414,354 is due from the Fire Pension Fund to the General Fund for
current and prior year pension funding.
The Fire Pension Fund also owes various Special Revenue and Internal Service Funds a total of
$98,560.
8. Fund Equity
Restricted net assets for other purposes consist of the following:
Federal Projects $ 901,969
Housing Loans 949,884
Community Improvements 534,104
Library Expenses 797,761
Other Donor Purposes 42,017
$ 3,225,735
NOTE D – OTHER NOTES
1. Employee Pension and Other Benefit Plans
The City participates in six employee pension plans as follows:
Name of Plan Type of Plan
City General Plan Defined Contribution Plan
Police and Firefighters Plan Defined Benefit Plan
(Pre-1984)
Police Plan Defined Contribution Plan
Firefighters Plan Defined Contribution Plan
Pensioners Nonqualified Benefit Plan
Deferred Compensation Plan Qualified Deferred Compensation Plan
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
1. Employee Pension and Other Benefit Plans, continued
The Pensioners benefit plan is administered by the City and is included in the Fiduciary Fund
Types. All other plans are administered by outside trustees and are not included in these
financial statements.
City General Plan
The City of Grand Island has a contributory defined contribution employees’ pension plan in
which employees of the City participate. Changes in the plan effective January 1, 1991, allow
any new employee anticipating working a minimum of 1,000 hours, for one continuous year, to
participate in the plan immediately. City payroll totaled $21,661,508, of which $19,784,748 was
qualified under this pension plan. As of October 1, 1997, the plan requires the participants to
make only a six percent contribution, with the City being required to match the participants’
contributions. The participant can contribute an additional 10 percent with no City match. The
City applied for a private letter ruling from the Internal Revenue Service and received a favorable
ruling that the participant’s contribution to the plan is tax deferred.
All employees are fully vested in their own contributions and become vested in the City’s
contribution after five years’ participation in the plan as follows:
Vested
Year Percentage
1 60%
2 70%
3 80%
4 90%
5 100%
The employees and the City contributed $1,340,358 and $1,187,086, respectively, as required by
the plan for the fiscal year ending September 30, 2012.
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
1. Employee Pension and Other Benefit Plans, continued
Police and Firefighters Plan (Pre-1984)
The City of Grand Island, Nebraska Police Pension (Police Plan) and the City of Grand Island,
Nebraska Firefighters Plan (Firefighters Plan) are administered as follows:
(1) Employees who were hired prior to January 1, 1984, the date at which the Police and
Firefighters Plans were amended from defined benefit plans to their current status as
defined contribution plans, were assured of receiving retirement benefits under the
new plan at least as great as those under the old defined benefit plan.
(2) Employees hired after January 1, 1984, are covered by the defined contribution plan,
which is administered by a third party.
The employees hired prior to January 1, 1984, participate in both plans and will receive either
their benefit from the defined contribution plan or defined benefit plan, whichever is greater.
The City has funded their portion of the respective Plan, in addition to the employee’s portion,
with the assets being held by a third party administrator of the current defined contribution plan.
These assets are included in the total plan assets for the Police Retirement Plan and the
Firefighters Retirement Plan, when determining the pension benefit obligation.
Based on the actuarial valuation, it is anticipated that the participant accounts and
unallocated/forfeiture account are sufficient to provide the minimum defined benefits for the
remaining pre-1984 hires. Therefore, it is anticipated that no additional contribution will be
required. The respective Defined Benefit Plan is further described in the Police and Firefighters
Plan Section.
Police Plan
Plan Description
The Police Plan became effective November 18, 1965. Its provisions are covered by City
ordinance. The Police Plan covers all employees classified as police officers.
For the year ended September 30, 2012, the City’s payroll total and covered under the Plan was
$4,463,608.
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NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
1. Employee Pension and Other Benefit Plans, continued
Police Plan, continued
Plan Description, continued
As of January 1, 2011, the date of the last actuarial valuation of the defined benefit plan, there
were eight active employees in the Police Plan.
An employee with at least 25 years of service may retire as early as age 55; normal retirement
occurs at age 60 with a minimum of 21 years of service, if employed on or before November 18,
1965, otherwise 25 years.
Under the Police Plan, normal retirees employed on or before January 1, 1984, would not receive
an annuity benefit of less than 50 percent of regular pay. All current employees will receive a
benefit based on their defined contribution account. An employee is 100 percent vested in his or
her contributions, six percent of monthly compensation, and vests 40 percent after four years of
service, plus 10 percent for each year thereafter, up to 100 percent, in the City’s contributions, a
matching six percent.
Funding Status of Defined Benefit Plan
The projected retirement benefits at January 1, 2009, were determined through an actuarial
valuation. The actuarial valuation was performed using the Aggregate Actuarial Cost Method,
which determines the total cost of the projected pension benefits to all employees combined.
This total cost is then spread over the average future remaining years to retirement for the
employees. The cost is spread as a level percentage of compensation.
Significant actuarial assumptions used in the valuation included (a) a rate of return of seven
percent for pre-retirement and 5.5 percent for post-retirement per annum, and (b) projected
annual salary increases of four percent.
The pension benefit obligation, a standardized disclosure measure of the present value of pension
benefits, intended to help assess the funding status of pensions, is as follows:
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NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
1. Employee Pension and Other Benefit Plans, continued
Police Plan, continued
Funding Status of Defined Benefit Plan, continued
Fair value of plan assets at September 30, 2012 $ 3,655,253
Benefit obligation estimated at September 30, 2012* 3,253,269
Funded Status $ 401,984
Prepaid (accrued) benefit cost recognized
in the balance sheet $ -
* Increased by four percent per year from last actuarial calculation.
Contribution Required and Made
The actuarially determined recommended contribution under the defined benefit plan was $0, and
no contributions were made for the year ended September 30, 2012.
Contributions made under the defined contribution portion of the Police Plan for the year ended
September 30, 2010, were as follows:
Amount as a Percentage
of Covered Payroll
Employer $ 267,814 6%
Employee 267,814 6%
Total $ 535,628
* In addition, there were $1,573 of voluntary retirement contributions for the year ended
September 30, 2012.
Firefighters Plan
Plan Description
The Firefighters Plan became effective August 7, 1965. Its provisions are covered by City
ordinance. The Firefighters Plan covers all employees classified as Firefighters.
For the year ended September 30, 2012, the City’s payroll total and covered under the Plan was
$3,659,009.
As of January 1, 2011, the date of the last actuarial valuation of the defined benefit plan, there
was one active employee in the Firefighters Plan.
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NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
1. Employee Pension and Other Benefit Plans, continued
Firefighters Plan, continued
Plan Description, continued
An employee who has attained the age of 50 with 21 years of service may take early retirement
with benefits reduced by the actuarial equivalent of his or her normal retirement at age 55.
Under the Firefighters Plan, normal retirees employed prior to January 1, 1984, would not receive
an annuity benefit of less than 50 percent of regular pay. All current employees will receive a
benefit based on their defined contribution account. An employee is 100 percent vested in his or
her contributions, 6.5 percent of monthly compensation, and vests 40 percent after four years of
service plus 10 percent for each year thereafter, up to 100 percent, in the City’s contributions, 13
percent of monthly compensation.
Funding Status of Defined Benefit Plan
The projected retirement benefits at January 1, 2012, were determined through an actuarial
valuation. The actuarial valuation was performed using the Aggregate Actuarial Cost Method,
which determines the total cost of the projected pension benefits to all employees combined. This
total cost is then spread over the average future remaining years to retirement for the employees.
The cost is spread as a level percentage of compensation.
Significant actuarial assumptions used in the valuation included (a) a rate of return of seven
percent for pre-retirement and 5.5 percent for post-retirement per annum, and (b) projected
annual salary increases of five percent.
The pension benefit obligation, a standardized disclosure measure of the present value of pension
benefits, intended to help assess the funding status of pensions, is as follows:
Fair value of plan assets at September 30, 2012 $ 608,527
Benefit obligation estimated at September 30, 2012* 582,141
Funded Status $ 26,386
Prepaid (accrued) benefit cost
recognized in the balance sheet $ -
*Increased by five percent per year from last actuarial calculation.
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NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
1. Employee Pension and Other Benefit Plans, continued
Firefighters Plan, continued
Contribution Required and Made
The actuarially determined recommended contribution under the defined benefit plan was zero,
and no contributions were made for the year ended September 30, 2012.
Contributions made under the defined contribution portion of the Firefighters Plan for the year
ended September 30, 2012, were as follows:
Amount as a Percentage
of Covered Payroll
Employer $ 475,670 13.0%
Employee 237,835 6.5%
$ 713,505
* In addition, there were $4,239 of voluntary retirement contributions for the year ended
September 30, 2012.
Pensioners
The City provides pension benefits to police and firefighters who retired prior to January 1, 1984.
This plan is administered by the City and payments are funded and budgeted for annually. The
estimated benefit obligation at September 30, 2012, was $1,160,256. It is fully funded by the
excess in the defined benefit plans.
Three-year Trend Information for Public Safety Employees Retirement System
Annual Pension Percentage of APC Net Pension
Fiscal Year Ending Cost (APC) Contributed Obligation
9/30/10 $ - N/A -
9/30/11 - N/A -
9/30/12 - N/A -
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NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
1. Employee Pension and Other Benefit Plans, continued
Deferred Compensation Plan
The City has a deferred compensation plan created in accordance with Internal Revenue Code
Section 457. The plan is available to all City employees and elected officials. The plan permits
them to defer a portion of their salary until future years. The deferred compensation is not
available to employees until termination, retirement, death, unforeseeable emergency, or
permanent disability. Employees contributed $269,933 to the plan and the City contributed $0.
The employees also contributed $62,169 to a Roth 457 plan.
As of January 1, 1997, these funds were placed in trust, in accordance with IRS Code Section
457(g)(1). IRS Code Section 457(g)(1), applicable for plan year beginning January 1, 1997,
states that “a plan maintained by an eligible employer shall not be treated as an eligible deferred
compensation plan unless all assets and income of the plan are held in trust for the exclusive
benefit of participants and their beneficiaries.” The deferred compensation plan as placed in trust
is not subject to any creditors of the City.
2. Risk Management
Insurance
The City is exposed to various risks of loss related to torts; thefts of, damage to, or destruction of
assets; errors or omissions; injuries to employees; or acts of God. The City purchases insurance
and administers funds for its self-insured programs. The City maintains a workers’
compensation fund and a self-insured loss fund. The City provides first dollar coverage for all
workers’ compensation exposure, with insurance acting as an umbrella or excess coverage. The
City is self-insured for workers’ compensation claims up to $100,000 per occurrence and
$1,075,000 in the aggregate. The City is self-insured for health insurance claims up to $150,000
of individual claims or 125 percent of the anticipated group claims. The self-insurance programs
are administered within the Internal Service Fund. The City maintains outside insurance
coverage through various insurance policies on buildings and their contents, equipment and
property, and employee dishonesty. The maximum exposure would be the deductible amounts
for property and automobile physical damage as well as losses not covered by insurance, which is
estimated at $769,000.
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
2. Risk Management, continued
Insurance, continued
Settled claims in the past three years have not exceeded the commercial coverages. The City has
estimated unsubmitted claims on health insurance based on prior experience to be $851,600; the
amount represents two months of subsequent claims. Also accrued in the Insurance Fund is
$90,000 of estimated unsubmitted workers compensation claims at September 30, 2012. For all
of the reserve funds, a reserve of $2,810,579 is established in an internal service fund at
September 30, 2012.
Changes in the fund’s health insurance claims liability amount during the last three fiscal years
were:
Current Period
Beginning Claims and Charges Balance
of Fiscal Changes in and at Fiscal
Period Liability Estimates Reimbursements Period-End
2009-2010 $ 490,700 $ 6,969,989 $ (6,772,089) $ 688,600
2010-2011 $ 688,600 $ 6,572,631 $ (6,381,231) $ 880,000
2011-2012 $ 880,000 $ 7,799,875 $ (7,828,275) $ 851,600
Deposits and Investments
Custodial Credit Risk. For an investment, custodial credit risk is the risk that, in the event of the
failure of the counterparty, the City will not be able to recover the value of its investment or
collateral securities that are in the possession of an outside party. All of the underlying securities
for the City’s investments at September 30, 2012, are held by the counterparties not in the name
of the City. The underlying securities consist of cash, direct obligations of or guaranteed by the
full faith and credit of the U.S. Government, and other similar obligations of the U.S.
Government or its agencies.
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
2. Risk Management, continued
Deposits and Investments, continued
Interest Rate Risk. As a means of limiting its exposure to fair value losses arising from rising
interest rates, the City’s investment policy requires that market conditions and investment
securities be analyzed to determine the maximum yield to be obtained and to minimize the
impact of rising interest rates. The investment maturities are as follows:
Maturities by Month Amount
October 2012 $ 2,000,000
November 2012 10,030,949
December 2012 3,730,862
February 2013 2,788,520
March 2013 1,505,298
April 2013 5,664,214
May 2013 4,006,049
June 2013 2,052,584
August 2013 3,000,000
October 2013 6,173,310
November 2013 2,000,000
December 2013 2,000,000
February 2014 1,250,058
March 2014 2,393,013
June 2014 3,202,117
July 2014 300,500
August 2014 9,421,154
June 2015 245,000
August 2015 136,000
June 2016 245,000
June 2017 490,000
July 2017 245,000
June 2022 490,000
Money market accounts - no maturity dates 3,081,028
$ 66,450,656
Credit Risk. Credit risk is the risk that the issuer or other counterparty to an investment will not
fulfill its obligations. The City’s investments consist of certificates of deposit, money market
funds, and other securities backed by U.S. Government obligations, minimizing credit risk
associated with the City’s investment portfolio.
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
2. Risk Management, continued
Deposits and Investments, continued
Concentration of Credit Risk. The City’s investment policy places no limit on the amount that
may be invested in any one issuer. At September 30, 2012, the City’s investments in certificates
of deposit consisted of the following:
Financial Institution Amount
Five Points Bank $ 9,736,391
Wells Fargo Bank 4,932,026
Platte Valley State Bank 1,221,313
Home Federal Bank 11,698,810
NE Public Agency Investment Trust 5,954,861
Exchange Bank 6,425,981
Great Western Bank 3,119,519
Cornerstone Bank 23,361,755
$ 66,450,656
Foreign Currency Risk. This risk relates to adverse effects on the fair value of an investment
from changes in exchange rates. The City’s investments had no exposure to foreign currency risk
and the City held no investments denominated in foreign currency at September 30, 2012.
3. Commitments and Contingencies
Construction
The City is a party to numerous contracts relating to construction projects of the governmental
funds. The City intends to fund the construction through operations or long-term financing.
Contract Paid Through Obligation
Project Amount 9/30/2012 Pending
Walk to Walnut Construction Engineering 76,230$ 72,244$ 3,986$
US 30 Drainage Improvements 362,111 27,869 334,242
Central Community College to Wood River Drainage
Project (Engineering)86,900 51,900 35,000
Southwest Drainage 2011-D-1 Project Pipe 199,728 - 199,728
Southwest Outafall Drainage Project No. 2011-D-1 442,496 - 442,496
GI Quiet Zone Project No. 2012-QZ-1 250,605 235,243 15,362
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
3. Commitments and Contingencies, continued
Construction, continued
Contract Paid Through Obligation
Project Amount 9/30/2012 Pending
Asphalt Resurfacing - Various Locations 600,098 45,092 555,006
Capital Ave Widening - Webb to Broadwell 650,129 415 649,714
Downtown Historical Lighting (Grant)37,908 1,990 35,918
State and Capital Connector Trail 98,922 2,214 96,708
Groundwater Study Update 45,000 44,550 450
Geospatial Data Collection - Stormwater Grant 44,329 44,000 329
Sanitary Sewer District 528 and 530T 241,150 17,074 224,076
Aeration Basin Improvements 4,669,508 4,514,584 154,924
Rehabilation Services 1,963,075 634,670 1,328,405
Lift Station #7 Repairs 887,103 183,852 703,251
Platte Valley Industrial Park 1,262,909 411,512 851,397
Sanitary Sewer District 530T 172,550 2,384 170,166
Sanitary Sewer District 528 62,600 2,384 60,216
Transmission Line Construction 3,732,714 3,246,535 486,179
Low NOx Burners 3,437,792 1,777,655 1,660,137
PGS Control System Upgrade 197,843 159,644 38,199
Emission Monitoring at PGS 51,400 48,830 2,570
Air Quality Control Engineering 515,024 366,379 148,645
Turbine Generator Inspection and Repair 496,338 49,634 446,704
2013 Truck with Digger Derrick - Unit #59 203,969 - 203,969
Turbine Generator Parts 224,171 - 224,171
Turbine Generator Inspection and Repair 60,651 - 60,651
PGS Boiler Repair 145,600 - 145,600
PGS Chimney Repairs 59,994 - 59,994
PGS Fire Protection Upgrade 68,900 - 68,900
PGS Cooling Tower Reconditioning 132,235 - 132,235
PGS High Pressure Wash and Blast Clean 101,956 - 101,956
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
3. Commitments and Contingencies, continued
Construction, continued
Contract Paid Through Obligation
Project Amount 9/30/2012 Pending
PGS Coal Conveyor #4 Upgrade 127,721 - 127,721
Turbine Generator Rotor Repairs 108,794 - 108,794
Uranium Removal Equipment 9,821,284 2,130,969 7,690,315
Water Main Construction - Parkview Area 900,687 855,652 45,035
Water Main Project 458T - Platte Valley 778,524 513,461 265,063
Water Main Project 2011-W-4 4,109,998 1,551,803 2,558,195
Liquid Ortho-Polyphosphate 88,740 - 88,740
Water Main District 464/465 350,547 - 350,547
Total City Commitments 37,868,233$ 16,992,539$ 20,875,694$
Lease Commitments
Lessor Leased Property Term Amount
Hometown Leasing Copier March 2008-March 2013 $451/month
Hall County Regional Land for Jack Rabbit May 2006-April 2026 $18,202/year plus
Airport Authority Run golf course 3% annual increase
State of Nebraska Veteran’s Home Land May 1, 2009-April 30, 2108 $1/year
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
3. Commitments and Contingencies, continued
Lease Commitments, continued
Lease commitments as of September 30, 2012, are as follows:
Year ending September 30, Commitment
2013 $ 21,005
2014 19,312
2015 19,891
2016 20,488
2017 21,102
Thereafter 209,420
$ 311,218
Economic Development Program
The City has established an Economic Development Program effective November 2002. The
City will fund the program with $750,000 per year from the City’s General Fund beginning with
the fiscal year 2003-2004 and will continue for 10 years. A three percent fee will be retained by
the City for program administration.
Electric Department
Purchased Power Agreements:
The Electric Department entered into a participation power agreement with Omaha Public Power
District (OPPD) on January 15, 2004, to obtain up to approximately 33 MW of energy after the
new OPPD Nebraska City Unit #2 is constructed and operational. The project was completed in
May 2009 and was financed through a bond issuance by OPPD. The Department’s commitment
to the project is approximately $45,000,000. The Department has also entered into an agreement
with the Public Power Generating Agency to obtain approximately 15 MW of energy at a cost of
approximately $22,000,000. The project was completed in May 2011.
The Department entered into a coal supply agreement with Arch Coal Sales Company, Inc., on
November 22, 2010, to obtain approximately 250,000 tons of coal from January 1, 2012, to
December 31, 2012, and a supplemental agreement on September 11, 2012 to obtain
approximately 45,000 more tons of coal by December 31, 2012. On September 11, 2012, the
Department also entered into an agreement to obtain approximately 325,000 tons of coal from
January 1, 2013, to December 31, 2013. The Department received 233,677 tons from January 1,
2012, through September 30, 2012, leaving 61,323 tons under contract for the remainder of
calendar year 2012 and 325,000 tons under contract for calendar year 2013.
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
3. Commitments and Contingencies, continued
Electric Department, continued
Purchased Power Agreements, continued:
The Department’s operations are subject to stringent federal, state, and local laws and regulations
relating to improving and maintaining environmental quality. Current studies have determined
that a substantial capital investment will be required to bring the Department into compliance
with environmental regulations including mercury emissions. Environmental expenditures
related to current operations are factored into the strategic planning process of the Department
and are considered when determining future energy rates. Financing of these expenditures is
expected to be through available cash reserves and bonded debt.
The Department currently has generation capacity of approximately 273 MW from coal-fired and
gas/oil-fired electric generating stations. The peak load of the Department during the fiscal year
ended September 30, 2012, was approximately 170.7 MW in August 2012.
The Department is party to an agreement with the Department of Energy (DOE) pursuant to
which the Department may purchase up to 9,168 KW of power to be transmitted through DOE
and Nebraska Public Power District (NPPD) facilities. Such power is sold to the Department at
standard DOE wholesale firm power service rates. The agreement expires on December 31,
2020.
4. Related-party Transactions
The Electric Fund remits five percent of net operating revenues, excluding depreciation expense,
to the General Fund annually as payments in lieu of taxes. The City provides certain
administrative services to the Electric Department for which the Department pays fees to the
General Fund. The Electric Fund made payments in the amount of $811,019 for the year ended
September 30, 2012.
The Water Fund remits one percent of net operating revenues, excluding depreciation, to the
General Fund annually as payments in lieu of taxes. The City provides certain administrative
services to the Water Department for which the Water Department pays administrative fees to the
General Fund. These fees are included in special services expense and amount to $83,718 for the
year ended September 30, 2012.
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
5. Major Customers
The City has one customer that was billed $4,249,265 for electricity, $743,261 for water and
$2,659,215 for sewer for the year ended September 30, 2012. This represents 6.9 percent of total
electric billing, 14.4 percent of total water billing, and 32.3 percent of total sewer billing,
respectively, for the year ended September 30, 2012. This customer maintains a current status on
monthly billings.
The City has three sanitary landfill customers that had a combined total billing of $1,621,729 for
the year ended September 30, 2012. This represents 67.9 percent of total sanitary landfill billings
for the year ended September 30, 2012. These customers maintain current status on monthly
billings.
6. EPA Emissions Allowances
As of September 30, 2012, the City had 6,904 SO2 Emissions Allowances. The EPA has granted
these allowances, which can be used to offset plant emissions. The allowances can be bought
and sold. If each allowance was sold for $0.65 (the September 30, 2012, market value), the City
would recognize revenue of $4,488.
The City will receive an additional 2,932 credits per year until 2042.
7. Conduit Debt
On June 10, 2008, the City issued $7,000,000 of Solid Waste Disposal Facilities Revenue Bonds
for the acquisition, construction, and equipping of certain industrial solid waste disposal facilities
for the Micrology Grand Island, LLC, project at the JPS Swift & Co. beef processing plant.
These bonds are limited obligations of the City, payable solely out of the lease rental payments
required to be paid by the Company pursuant to and in accordance with the agreement and as
provided in the indenture, and are secured as provided in the indenture. The bonds and the
interest thereon shall never constitute an indebtedness of the City, within the meaning of any
State constitutional provision or statutory limitation, and shall not give rise to a pecuniary
liability of the City or a charge against its general credit or taxing powers.
8. Subsequent Events
Management has evaluated subsequent events through January 30, 2013, the date on which the
financial statements were available for issue.
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NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
9. Union Contracts
The City is subject to the following union contracts:
• Grand Island Fraternal Order of Police #24. This agreement commenced on October 1,
2011, and terminates on September 30, 2013.
• Grand Island International Association of Firefighters Local #647. This agreement
commenced on October 1, 2011, and terminates on September 30, 2012.
• Grand Island International Brotherhood of Electrical Workers (IBEW) (Wastewater
Treatment Plant) Local #1597. This agreement commenced on October 1, 2011, and
terminates September 30, 2012.
• Grand Island Nebraska Public Employees Local #251. This agreement commenced
October 1, 2011, and terminates September 30, 2014.
• Grand Island IBEW (Utilities Department) Local #1597. This agreement commenced
October 1, 2011, and terminates September 30, 2012.
• Grand Island IBEW (AFL - CIO) Local #1597. This agreement commenced October 1,
2011, and terminates September 30, 2012.
• Grand Island IBEW (Finance Department and Information Technology Department) Local
#1597. This agreement commenced October 1, 2011, and terminates September 30,
2012.
10. Interlocal Agreements
The City has the following interlocal agreements in effect as of September 30, 2012:
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Interlocal
Agreement for Drug
Court Office Space
Central Nebraska Drug
Court
October 1, 2010 Perpetual Provides terms for the
Drug Court use of
administration and
office space at the
Law Enforcement
Center.
Interlocal
Agreement for
Household
Hazardous Waste
Facility
Cities of Alda, Ashton,
Aurora, Burwell, Cairo,
Central City, Doniphan,
Grand Island, Hampton,
Loup City, Ord, Spalding,
Spencer, St. Paul, Wood
River, and Counties of
Hall, Hamilton, and
Howard
2008 Five years Grand Island to
submit an application
to the NE Dept. of
Environmental
Quality for funding
the operation of a
Household Hazardous
Waste Facility.
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Interlocal
Agreement for
Cooperative Public
Safety Services
SCPETR – South
Central Planning,
Exercise, and
Training Region
Cities and Villages of
Adams, Buffalo, Clay,
Dawson, Franklin,
Frontier, Gosper, Hall,
Hamilton, Harlan,
Kearney, Lincoln,
Nuckolls, Phelps, and
Webster Counties
June 1, 2007 Five years To establish,
maintain, and operate
a public safety
Training Exercise and
Training Program
within the
jurisdictions of the
participating agencies.
Interlocal
Agreement for
Pioneer Consortium
for Library Services
Cities of Bellevue, Gretna,
Holdrege, Lincoln,
Omaha, St. Paul, and
Grand Island
2010 Continue through
April 30, 2010, with
renewal every year as
long as at least two
parties desire to renew
the Agreement.
To support an open
source unified catalog
of library resources,
materials requests,
and activities.
Cornhusker Army
Ammunition Plant
Fire Protection
City of Grand Island,
Wood River Rural Fire
District, Cairo Rural Fire
District, Grand Island
Suburban Fire Protection
District #3
April 1, 1990 One year renewable
upon mutual agreement.
May be terminated by
any party giving notice
to each of the other
parties at least thirty
days prior to the notice
of termination dates
applicable.
Cooperation in
providing fire and
ambulance protection
services to CAAP as
outlined in agreement.
C.A.N.D.O. Project
(Grant from the
Commission on
Law Enforcement
and Criminal
Justice)
Adams County Sheriff,
Buffalo County Sheriff,
Hall County Sheriff,
Phelps County Sheriff,
Kearney County Sheriff,
Hastings P.D., Kearney
P.D., Grand Island P.D.,
Holdrege P.D., Minden
P.D.
July 3, 1989 Remains in effect until
the C.A.N.D.O. project
is terminated by mutual
consent of the majority
of participating
members.
The Interlocal
Agreement is for the
administration of the
C.A.N.D.O. funds
allocated by the
Nebraska Crime
Commission.
Central District
Health Department
City of Grand Island, Hall
County, Hamilton County,
and Merrick County
October 1, 2002 Automatically renews for
successive terms of three
years until terminated by
giving the other parties
notice 90 days prior of
intended termination.
Joint effort to provide
cooperative health
department services.
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CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Interlocal
Agreement for
Passenger Air
Service
Development
Hall County Airport
Authority, City of Hastings,
City of Grand Island
April 18, 2000 Terminates upon
termination or expiration
of the KHG passenger air
service development
contract with the
Authority.
Cooperative effort to
fund contract with
Kiehl Hendrickson
Group (KHG) to
provide ongoing air
service development
for Central Nebraska.
Interlocal
Agreement for Law
Enforcement
Security at the
Airport
City of Grand Island and
Hall County Airport
Authority
April 1, 2009 Remains in effect until
September 30, 2012,
with up to five additional
one-year terms.
Agreement provides
uniformed officers at
the Central Nebraska
Regional Airport for
security purposes.
Interlocal
Agreement for
Infrastructure
Construction for
Army Aviation
Support Facility
City of Grand Island and
Hall County Airport
Authority
August 8, 2007 Remains in effect until
90 days after the
completion of the water
and sewer improvements
and payments tendered.
Agreement provides
for the Airport to
oversee the upgrade
of the Airport’s
infrastructure
Cooperative
Agreement Flood
Control Plan for
Prairie/Silver
Drainage Areas
Central Platte Natural
Resources District, City of
Grand Island, Hall County
February 19, 1982 Remains in effect forever
unless amended or
canceled upon written
consent of all parties.
Agreement outlines
areas of
responsibility and
cooperation in
developing and
carrying out a flood
control plan for the
Prairie/Silver
drainage areas.
Cooperative
Agreement for
maintaining wet
meadow habitats
on the City’s Well
Field
Central Platte Natural
Resources District and City
of Grand Island
November 24,
1997
Agreement in effect until
December 31, 2009.
Either party may cancel
at any time with 30 days’
notice.
Cooperative
agreement for
CPNRD to install a
well to flood existing
drainage ways at the
City’s well field to
demonstrate and
evaluate the potential
of wetland
enhancement.
Interlocal
Agreement for
Riverway
Hike/Bike Trail
City of Grand Island and
Central Platte Natural
Resources District
September 23,
2003
Perpetual unless City of
Grand Island notifies
CPNRD that hike/bike
trail will not be
constructed or not used
as a hike/bike trail.
Agreement will terminate
30 days from said notice.
Cooperative
agreement for
construction of a
hike/bike trail.
Grand Island Study Session - 3/5/2013 Page 118 / 220
85
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Interlocal
Agreement for Hall
County
Bookmobile
Grand Island Library
Board, Hall County
July 1, 1999 Expires five years from
date of commencement
Agreement for
Library to provide
library services to
inhabitants of Hall
County, as well as
furnishing
bookmobile services.
Joint City/NRD
Ground Water
Dewatering Plan
City of Grand Island and
Central Platte Natural
Resources District
December 21,
1998
Remains in effect during
the term of study update.
Agreement is to
update the September
2000 Grand Island
Dewatering System
Study
Interlocal
Cooperation
Agreement for
Wood River/Warm
Slough Food
Control Project
Central Platte Natural
Resources District, City
of Grand Island, Hall
County, Merrick County
February 17, 1997 Continues until
December 31, 2050, or
until terminated (as
provided) and
automatically renews for
an additional 25 years
commencing on
January 1, 2051.
Interlocal Agreement
authorizes CPNRD to
execute
Project/Cooperation
Agreement with the
Department of the
Army to commence
and proceed with the
Wood River/Warm
Slough Flood Control
Project.
Interlocal
Agreement for
Riverway
Hike/Bike
Development
City of Grand Island,
College Park
October 26, 2004 Perpetual. However, in
the event that GI notifies
College Park that the
hike/bike trail will not be
constructed or in the
event that the trail will
not be used as a hike/bike
trail, then this agreement
will terminate 30 days
from the date of said
notice.
Provides for
encroachment on
property owned by
College Park for a
hike/bike trail that is
being extended over
their property by the
City of Grand Island.
Interlocal
Agreement for
Improvements to
Engleman Road
between U.S. Hwy
30 & Airport Road.
City of Grand Island, Hall
County
July 26, 2011 Terminates upon
completion and payment
of the City’s portion
Asphalt Maintenance
Resurfacing Project
on Engleman Road
from U.S. Hwy 30 to
Airport Road.
Grand Island Study Session - 3/5/2013 Page 119 / 220
86
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Interlocal
Agreement to
provide
Administration
Services for the
CRA
City of Grand Island,
Community
Redevelopment
Authority
June 22, 2010 For the period beginning
July 1, 2005, and ending
September 30, 2006;
thereafter, the Agreement
shall automatically renew
for successive one-year
terms beginning each
October 1 until
terminated by either
party upon 30 days’
written notice to the
other party.
City agrees to provide
administrative services to
the CRA. The CRA will
reimburse the City for
10% of the Director’s
annual salary in return.
Interlocal
Agreement -
Community
Redevelopment
Authority
City of Grand Island,
Community
Redevelopment
Authority
October 10, 1995 May be automatically
renewed for successive
one-year terms beginning
each October 1. May be
terminated by either
party upon 30 days’ prior
written notice to the
other party.
Agreement provides for
reimbursement by the
Authority to the City for
certain services provided
by the Downtown
Development Director, as
Director of the Authority.
Interlocal
Agreement for
Pedestrian Lighting
City of Grand Island,
Community
Redevelopment
Authority
July 30, 2003 Ends upon payment by
the Authority and receipt
by the City of the cost of
the pedestrian lighting
units.
CRA agreed to provide
funding in the amount of
$150,000, and the City
agreed to be responsible
for designing, bidding,
contract administration,
repairing, maintaining,
and operating said
pedestrian lighting units.
Public Power
Generation Agency
Interlocal
Agreement
City of Grand
Island/Grand Island
Utilities; City of
Hastings/Hastings
Utilities; Municipal
Energy Agency of
Nebraska; Heartland
Consumer Power District
September 1,
2005
Remains in effect for life
of the project until
decommissioning of the
power generating
facility.
Cooperative agreement
between public power
entities for the
construction of a power
generation facility.
NorthWestern
Energy Rate
Negotiation
City of Grand Island,
City of Kearney, City of
North Platte, and Village
of Alda
September 24,
2007
Remains in effect until
negotiations with
NorthWestern Energy
are settled.
Cooperative agreement
between parties to
negotiate natural gas rate
increase.
Interlocal
Agreement for
Ambulance Service
City of Grand Island,
Hall County
July 8, 2008 June 30, 2013 Contract for City of
Grand Island to provide
ambulance service for
Hall County.
Interlocal
Agreement for
Ambulance Service
City of Grand Island,
Hamilton County
August 6, 1969 Continues indefinitely.
Can be terminated by
either party with six
months’ notice.
Contract for City of
Grand Island to provide
ambulance service for
Hamilton County.
Grand Island Study Session - 3/5/2013 Page 120 / 220
87
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of Agreement Parties to Agreement Date Effective Term Synopsis
Interlocal Agreement for
Building Inspection
Services
City of Grand Island,
Hall County
November 24,
1980
Perpetual unless
terminated by either
party with 30 days’
notice.
Joint agreement provides
building inspection
services by Hall County
in the extra-territorial
jurisdiction exercised by
the City and located
within Hall County.
Interlocal Agreement for
Civil
Defense/Communications
Center
City of Grand Island,
Hall County
April 28, 2008 Perpetual. Can be
terminated effective on
the 30th day of June in
any year, provided
written notice of such
termination is
delivered to the other
party prior to the first
day of March of that
year.
Creates a joint Civil
Defense/Communications
Center.
Interlocal Agreement for
Participation in Planning
Grant from NDEC (Hope
Harbor)
City of Grand Island,
Hall County, Buffalo
County, Kearney
County, Howard
County, Hamilton
County, Merrick
County, City of
Kearney, City of
Hastings
9/30/04,
10/11/04, and
10/18/04 (see
individual
Agreements)
Will remain in full
force and effect until
such time as it is
amended or terminated
pursuant to provisions
herein.
For the purpose of
administration of
planning block grant
from NDEC to be used to
pay for creation of plan
to address homelessness
in GI and Hope Harbor
service area.
Interlocal Agreement for
City/County Geographic
Information System
City of Grand Island,
Hall County
December 10,
1996
Term of 10 years.
May be terminated at
any time upon written
agreement by the City
and the County.
For the establishment,
sharing, and maintenance
of a City/County GIS.
Interlocal Agreement for
Lottery (Keno)
City of Grand Island,
Hall County
March 23, 1993 Agreement will expire
December 31, 2003,
shall automatically
renew for an additional
five years. Agreement
extended to
December 31, 2008,
with an additional five
years. Agreement
extended to
December 31, 2013,
with an additional five
years.
For the implementation
and conduct of lottery
games.
Grand Island Study Session - 3/5/2013 Page 121 / 220
88
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of Agreement Parties to Agreement Date Effective Term Synopsis
Interlocal Agreement for
Juvenile Attention
Services
City of Grand Island,
Hall County
April 26, 2011 May be terminated by
30 days written notice.
For temporary
safekeeping of juvenile
offenders taken into
custody by the City.
Interlocal Agreement
regarding Combined
Purchasing
City of Grand Island,
Hall County
March 12, 1996 None Stated. The City and County
agreed to combine their
purchasing efforts to
mutually benefit both
entities.
Interlocal Agreement for
Improvements to Shady
Bend Road
City of Grand Island,
Hall County
February 16,
2009
City and County agree to
share in the
improvements to Shady
Bend Road between
Bismark Road and
Gregory Avenue for
Asphalt Overlay Paving.
Interlocal Agreement for
Improvements to
Schimmer Drive
City of Grand Island,
Hall County
June 1, 2004 City and County agree to
share in the
improvements to
Schimmer Drive to attain
cost savings through a
single bidding process.
Interlocal Agreement for
Juvenile Accountability
Intake Probation Officer
City of Grand Island,
State of Nebraska
Department of
Probation
Administration, Hall
County
October 8, 2002 The County or City
may terminate the
agreement or reduce
the consideration upon
30 days’ written
notice.
Provides for a juvenile
intake probation officer
and Assistant to Hall
County Juvenile Services
for pre- and post-
adjudicated juveniles.
Interlocal Agreement for
Joint Services of
Consultant for Cable
Franchise Renewal
City of Grand Island,
City of Kearney
February 28,
2006
Remains in effect until
each of the respective
parties’ cable
television franchises
have been renewed.
Agreement may be
terminated at any time
with or without cause
upon 30 days’ prior
written notice given to
the non-terminating
party by the
terminating party.
Establishes a joint
agreement with Brian T.
Grogan, attorney at law,
of the firm Moss and
Barnett, to assist each of
the respective parties in
the review and
assessment of needs and
negotiations for the
renewal of each of the
parties’ respective cable
franchises.
Grand Island Study Session - 3/5/2013 Page 122 / 220
89
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Interlocal
Agreement for
Quiet Zone
Improvements
City of Grand Island and
Community
Redevelopment
Authority (CRA)
March 11, 2008 Perpetual unless
terminated by either
party with 90 days’
written notice.
Agreement with CRA to
focus and deal with noise
issues associated with the
UPRR – study and
installation of wayside
horns.
Interlocal
Agreement for
Internet Access and
Email Access
City of Grand Island,
Hall County
September 26,
2000
90 days or unless
terminated by either
party. Either party shall
have the right to
terminate this agreement
upon written notice
delivered to the non-
terminating party. May
be extended for an
additional term of 90
days upon mutual
agreement.
The County permits the
Police Department access
to the internet via the
County’s LAN, so as to
provide internet access as
well as internet and
intranet e-mail.
Interlocal
Agreement for
Nebraska Storm
Water
Communities
Cooperative
City of Grand Island,
City of Beatrice, City of
Columbus, City of
Fremont, City of
Hastings, City of
Kearney, City of
Lexington, City of
Norfolk, City of North
Platte, City of Scottsbluff
2007 Continues indefinitely,
any party may withdraw
by giving 30 days’
written notice to each
party.
Cooperative to facilitate
obligations under the
laws regarding the
management of storm
water.
Memorandum of
Understanding for
Byrne Justice
Assistance Program
(JAG) Award
City of Grand Island,
Hall County
April 22, 2005,
Renewed
February 14,
2006
This Memorandum of
Understanding provides
that the City be
designated as the fiscal
agent for disbursement of
funds and allocation for
the use of the funds.
Agreement for
Keeping of
Prisoners
City of Grand Island,
Hall County
May 29, 1973 Continues indefinitely,
unless either party causes
this agreement to be
terminated by giving the
other party 30 days’
notice.
The County agrees to
permit the City to deliver
City prisoners to the
County Jail for detention
for a daily consideration.
Grand Island Study Session - 3/5/2013 Page 123 / 220
90
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Interlocal
Cooperation
Agreement to
transfer jurisdiction
of a roadway.
City of Grand Island,
Hall County
October 6, 1986 Continues until
terminated by either
party with 30 days’
notice.
The County and City
agree to divide snow
removal and mowing
responsibilities for
former U.S. Highway
281, commencing at the
junction of Broadwell
and extending north to
the new alignment of
U.S. 281.
Memorandum of
Understanding
regarding Joint
City/County
Facilities
City of Grand Island,
Hall County
November 26,
2002
The Memorandum of
Understanding supports
the work of the Joint
City/County Facilities
Committee, and
expresses commitment on
the part of each to further
cooperative efforts for
government offices.
Interlocal
Agreement for
development of
Hike/Bike Trails
City of Grand Island,
Museum Board of the
Hall County Nebraska
Museum
September 25,
2003
Perpetual; in the event
that GI notifies MBHC
that hike/bike trail will
not be constructed or
used, will terminate 30
days from notice. GI
will have five years from
date of agreement to
commence construction;
or agreement will
automatically terminate.
Allows GI to extend
hike/bike trail across
property of MBHC.
Interlocal
Agreement for
development of
Hike/Bike Trails
City of Grand Island,
Central Community
College
September 25,
2003
Perpetual; in the event
that GI notifies CCC that
hike/bike trail will not be
constructed or used, will
terminate 30 days from
notice.
Allows GI to extend
hike/bike trail across
property of CCC.
Grand Island Study Session - 3/5/2013 Page 124 / 220
91
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Interlocal
Agreement for
adopting a Load
Weight Surcharge
City of Grand Island,
Grand Island Area Solid
Waste Agency
February 8, 2000 Five years commencing
February 8, 2000.
Agreement to impose a
load weight surcharge
applicable to any hauler
entering Solid Waste
Facility to be used
exclusively for repairs
and maintenance of
Husker Highway.
Interlocal
Agreement for
Joint City/County
Health Department
City of Grand Island,
Hall County
July 11, 2000 Takes effect October 1,
2000, and shall
automatically renew for
successive terms of three
years unless terminated
by either party with 90
days’ notice.
Outlines new terms for
joint operation of Health
Department.
Interlocal
Agreement for Law
Enforcement
Records
Management and
Computer-Aided
Dispatch
City of Grand Island,
Hall County
August 6, 2001,
renewed
February 7, 2006
Two Years. Shall renew
automatically for no
more than five terms of
one year each unless
written notice of the non-
renewal is provided by
the non-renewing party
to the other party not less
than 90 days prior to the
expiration of the then-
current term.
City contracts with the
County to provide City
internet and e-mail
services, law enforcement
records management and
computer-aided dispatch
data services, and
software sublicenses.
Interlocal
Agreement for the
Provision of
Temporary Funds
for the Purchase of
Enhanced 911
Equipment and
Facilities
City of Grand Island,
Hall County
October 22, 2002 Shall terminate upon
final and complete
repayment of the funds
to the City and the
County.
Allows for joint
purchasing of the
equipment for the 911
Center.
Interlocal
Agreement for
Aerial Photography
City of Grand Island,
Hall County
March 2, 2011 Expires on June 30,
2013, may be extended
for an additional 3 years
Agreement to provide
aerial digital orthophotos
and other digital
photographic products to
the County
Grand Island Study Session - 3/5/2013 Page 125 / 220
92
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Lease Agreement
for Public Safety
Building
City of Grand Island,
Hall County
September 7,
1976
99 years. Lease may be
amended in writing by
both parties.
Lease agreement
provides for Police
Department to lease
space in the Public Safety
Building.
Interlocal
Agreement for
Regional Planning
Commission
City of Grand Island,
Hall County (Villages of
Alda, Cairo, Doniphan,
Parkview, and Wood
River)
October 25, 1967 Creates Regional
Planning Commission.
Interlocal
Agreement to
Establish Fund for
Payment for
Accrued and
Unfunded
Employee Benefit
Liabilities
City of Grand Island,
Hall County (Department
of Health, Regional
Planning Commission,
Emergency
Management)
July 28, 1997 Remains in full force and
effect so long as the
parties continue to
participate.
Establishes a trust fund
for payment of accrued or
unfunded employee
benefit liabilities.
Interlocal
Agreement for
Widening County
Bridges on Locust
Street
City of Grand Island,
Hall County
January 9, 2001 Remains in effect until
construction of the
bridges has been
completed and accepted
by the Department of
Roads and City has paid
County all funds for the
City’s share.
Agreement allows
widening of county
bridges to accommodate
South Locust Street
improvements.
Interlocal
Cooperation
Agreement
regarding South
Locust/I-80
Interchange
Environmental
Impact
City of Grand Island,
Hall County, Nebraska
Game and Parks
Commission, Nebraska
Department of Roads
March 13, 1996 25 years, unless
terminated as provided.
Requires limitations on
the development of the I-
80 Interchange at South
Locust to mitigate any
adverse environmental
impacts.
Interlocal
Agreement
regarding Utility
Poles
City of Grand Island,
Hall County
October 10, 1988 Allows for movement of
City Utility poles to
accommodate culvert
construction by Hall
County.
Grand Island Study Session - 3/5/2013 Page 126 / 220
93
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Lease Agreement
for Law
Enforcement
Training Center
City of Grand Island,
State of Nebraska
April 15, 1979 Rental period shall mean
six months’ period of
time commencing July 1,
1981, and thereafter a 12
months’ period of time
commencing July 1 of
any given year and
ending with June 30 of
the next year.
Allows use of facility for
training of Police Officers.
Mutual
Assistance
Agreement
City of Grand Island,
Grand Island Suburban
Fire Protection District
No. 3
October 10, 1985 Can be terminated by
either party upon 60
days’ notice.
Both parties will render
mutual firefighting
assistance to each other.
Mutual Aid
Agreement
City of Grand Island,
City of Hastings
April 13, 1982 During civil defense
disaster, either party can
request aid and assistance
of the other.
Mutual
Assistance
Agreement
City of Grand Island,
Hall County Airport
Authority
November 10,
1980
May be terminated by
either party upon 60
days’ written notice.
Parties agree to render
mutual assistance to one
another on all extra alarm
fires within the City limits
of each party.
Mutual Aid
Assistance
Agreement
City of Grand Island,
Village of Doniphan
March 3, 1980 May be terminated by
either party upon 60
days’ written notice
Parties agree to render
mutual assistance to one
another on all extra alarm
fires within the City limits
of each.
Mutual
Assistance
Agreement
City of Grand Island,
City of Aurora
October 17, 1977 May be terminated by
either party upon 60
days’ written notice.
Parties agree to render
mutual assistance to one
another on all extra alarm
fires within the City limits
of each party.
Mutual
Assistance
Agreement
City of Grand Island,
City of Central City
August 11, 1977 May be terminated by
either party upon 60
days’ written notice.
Parties agree to render
mutual assistance to one
another on all extra alarm
fires within the City limits
of each party.
Mutual
Assistance
Agreement
City of Grand Island,
Village of Cairo
July 25, 1977 May be terminated by
either party upon 60
days’ written notice.
Parties agree to render
mutual assistance to one
another on all extra alarm
fires within the City limits
of each party.
Grand Island Study Session - 3/5/2013 Page 127 / 220
94
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Mutual
Assistance
Agreement
City of Grand Island,
Village of Alda
July 11, 1977 May be terminated by
either party upon 60
days’ written notice.
Parties agree to render
mutual assistance to one
another on all extra alarm
fires within the City limits
of each party.
Fire Department
Mutual
Assistance
Agreement
City of Grand Island,
United States of America
(Cornhusker Army
Ammunition Plant)
September 15,
1975
May be terminated by
either party upon 60
days’written notice.
Parties agree to render
mutual assistance to one
another on all extra alarm
fires within the City limits
of each party.
Mutual
Assistance
Agreement
City of Grand Island,
City of Saint Paul
August 1, 1977 May be terminated by
either party upon 60
days’ written notice.
Parties agree to render
mutual assistance to one
another on all extra alarm
fires within the City limits
of each party.
Interlocal
Agreement
Central Platte Natural
Resources District
(NRD), Loup NRD,
Lower Elkhorn NRD,
Upper Big Blue NRD,
Loup Public Power
District, Nebraska Public
Power District, Central
Nebraska Power &
Irrigation District, Twin
Platte NRD, North Platte
NRD, Twin Loups
Reclamation District,
Upper Loup NRD, Upper
Elkhorn NRD, Lower
Platte North NRD, Tri-
Basin NRD, Southern
Public Power District,
Dawson Public Power
District, Middle Loup
Public Power &
Irrigation District, North
Loup River Public Power
& Irrigation District,
Farwell Irrigation
District, Sargent
Irrigation District, South
Platte NRD, Lewis and
Clark NRD, Papio-
Missouri River Natural
Resources District, City
of Lexington, City of
Grand Island
October 10, 2002 Any party may withdraw
upon written notification
to the Chairman of the
Coalition.
Creates Nebraska Habitat
Conservation Coalition,
which provides the
authority for
representation of the
parties in matters related
to critical habitat.
Grand Island Study Session - 3/5/2013 Page 128 / 220
95
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Transmission
Service Agreement
City of Grand Island,
Nebraska Public Power
District
May 9, 1998 Remains in effect unless
terminated by either
party upon 30 days’
notice.
Allows City to enter into
transmission service
transactions with NPPD.
Interlocal
Cooperation
Agreement
City of Grand Island,
Nebraska State Patrol
September 3, 2002 Remains in full force for
one year. Agreement
may be terminated by
either party upon 30
days’ written notice.
City and NSP agree to
jointly retain and pay an
engineer to prepare
preliminary designs and
cost estimates for law
enforcement firearms
training facility at former
Cornhusker Army
Ammunition Plant.
Interlocal
Agreement for
Cooperative Law
Enforcement
Services
Counties of Adams,
Buffalo, Dawson, Hall
and Phelps; Cities of
Aurora, Grand Island,
Hastings, Holdrege and
Kearney
September 25,
2001; renewed
September 12,
2006
Five-year term beginning
August 1, 2001, may be
terminated at any time
upon mutual consent of
majority of the member
parties, or any party can
withdraw with 60-day
written notice.
Creates South Central
Area Law Enforcement
Services (SCALES);
alliance among the parties
to promote cooperation,
provide for joint
acquisition of equipment
and materials, and allow
for cooperative sharing
and utilization of
investigative resources.
Interlocal
Agreement for
Cooperative Public
Safety Service
Counties of Adams,
Buffalo, Chase, Clay,
Dawson, Dundy,
Frontier, Furnas, Gosper,
Hall, Hamilton, Harlan,
Hayes, Hitchcock,
Kearney, Nuckolls,
Phelps, Red Willow, and
Webster and the cities
and villages within said
counties.
July 27, 2010 The agreement has a term
of five years
commencing on July 1,
2004. May be terminated
at any time, with or
without cause, upon the
mutual consent of a
majority of the member
parties.
Agreement establishes the
CNRI-Central Nebraska
Radio Interoperability
Group and sets parameters
for the maintenance and
operation of such.
Grand Island Study Session - 3/5/2013 Page 129 / 220
96
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Interlocal
Agreement for the
Co-Located
City/County Public
Safety Center
City of Grand Island,
County of Hall
March 28, 2006 Either party may
terminate agreement
effective on the first day
of October in any year
after 2011, provided
written notice of such
termination is delivered
to the other party not less
than 360 days before said
termination is to become
effective.
Agreement provides the
terms for the shared use of
the public safety center
building.
Interlocal
Cooperation
Agreement
City of Grand Island,
Hall County School
District No. 40-0002
September 13,
2011.
Five-year term. May be
terminated earlier by
either party in writing by
July 1 of each year
preceding
commencement of the
next fiscal year for the
City on October 1.
Agreement for the City to
provide five Youth
Services School Resources
Officers (Police Officers)
and Crossing Guards to
the School District.
Interlocal
Agreement
City of Grand Island,
Grand Island Public
Schools
October 23, 2003 10 years, or until
development of the
facilities is completed,
whichever occurs first.
Upon expiration of initial
term, the term shall
extend automatically for
successive consecutive
terms of one year, if
development is not
complete, but either party
may terminate by
providing written notice
to other party not less
than 90 days prior to the
end of initial term or
renewal term.
Agreement for City to
construct two softball
fields on GIPS property
adjacent to Senior High
School and lease to Grand
Island Public Schools.
Grand Island Study Session - 3/5/2013 Page 130 / 220
97
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements, continued
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Interlocal
Agreement
City of Grand Island,
Grand Island Public
School System
July 14, 2003 Five-year term. Extends
automatically for
successive consecutive
terms of one year. Either
party may terminate by
providing written notice.
Joint agreement for the
purchasing of utilities
from GI Utilities.
Interlocal
Agreement
City of Grand Island,
Grand Island Public
Schools
October 23, 2003 10 years, or until
development of the
facilities is completed,
whichever occurs first.
Upon expiration of initial
term, the term shall
extend automatically for
successive consecutive
terms of one year, if
development is not
complete, but either party
may terminate by
providing written notice
to other party not less
than 90 days prior to the
end of initial term or
renewal term.
Agreement for City to
construct recreational
facilities on GIPS property
located adjacent to
Shoemaker Elementary
School. GIPS will be
responsible for
management,
programming, operations,
maintenance, repair, and
replacement of recreation
facilities.
Interlocal
Agreement
City of Grand Island,
State of Nebraska
August 25, 1997
Provides assurance by the
City of Grand Island to the
State of Nebraska for
continuance of a special
fund for paying
closure/postclosure care
costs of the Platte
Generating Station Fossil
Fuel Combustion Ash
Disposal Area.
Memorandum of
Agreement
City of Grand Island,
Nebraska Department of
Environmental Quality
August 3, 1983 Remains in effect until
renegotiated. Either
party may terminate by
giving 180 days’ notice
to the other party.
City and State agree to
implement Pretreatment
Program for priority
pollutants.
Grand Island Study Session - 3/5/2013 Page 131 / 220
98
CITY OF GRAND ISLAND, NEBRASKA
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012
NOTE D – OTHER NOTES, continued
10. Interlocal Agreements
Name of
Agreement Parties to Agreement Date Effective Term Synopsis
Intergovernmental
Agreement
City of Grand Island,
Nebraska Department of
Environmental Quality
October 1, 2007 Remains in effect until
June 30, 2009. Either
party may terminate by
giving 10 days’ written
notice of intent to
terminate.
Storm Water Management
Plan Program.
Fire Protection
Agreement
City of Grand Island,
State of Nebraska
September 14,
1998
Commences October 1,
1998, for a one-year
term. May be
automatically renewed
for up to four additional
one-year terms unless
either party provides 30-
day written notice to the
other of intent not to
renew.
Agreement by the City to
provide fire protection at
Nebraska Law
Enforcement Training
Center.
Interlocal
Agreement
City of Grand Island,
State of Nebraska
October 8, 2002 Agreement for City to
utilize Nebraska’s wireless
communications network.
Interlocal
Agreement
City of Grand Island,
Village of Alda
February 10, 2009 25 years from date of
initial delivery of water
and shall automatically
renew for an additional
15 years.
Agreement for City to
supply water to Village of
Alda.
Interlocal
Agreement
City of Grand Island
and various first class
cities
October 26, 2010 Effective until
January 31, 2059.
Federal Highway
Transportation Funding
L200.
Interlocal
Agreement
Platte River Coalition
Various Cities and
NRD’s
May 20, 2003 Indefinite term, two-
thirds of the Board can
terminate when
completion of its
purposes and objects
have been completed.
Nebraska agencies to
provide direction and
funding for analysis for
Platte River Recovery
Implementation Program.
Grand Island Study Session - 3/5/2013 Page 132 / 220
REQUIRED SUPPLEMENTARY INFORMATION
Grand Island Study Session - 3/5/2013 Page 133 / 220
CITY OF GRAND ISLAND, NEBRASKA
BUDGETARY COMPARISON SCHEDULE -
GENERAL FUND
Year ended September 30, 2012
Variances -
Budget Actual Over
(Original and (Under) Final
Final) Actual Budget
RESOURCES (INFLOWS)
Taxes:
Property 6,682,989$ 6,617,388$ (65,601)$
Motor vehicle 847,018 842,091 (4,927)
Occupation 1,348,766 1,467,660 118,894
Sales tax 13,831,456 14,556,054 724,598
Franchise 1,870,647 1,629,162 (241,485)
Intergovernmental 1,578,741 1,290,763 (287,978)
Charges for services 6,938,671 7,158,172 219,501
Interest income 120,000 53,479 (66,521)
Contributions 40,000 8,300 (31,700)
Sale of property 92,000 111,021 19,021
Other 184,275 259,423 75,148
Total resources 33,534,563 33,993,513 458,950
CHARGES TO APPROPRIATIONS (OUTFLOWS)
General government:
City Administrator's office 310,600 225,762 (84,838)
Economic development 350,000 355,750 5,750
Mayor's office 21,852 15,174 (6,678)
Council 75,365 72,007 (3,358)
City clerk 106,978 111,533 4,555
Finance 1,969,113 1,870,506 (98,607)
Legal 311,447 282,591 (28,856)
City Hall 291,655 288,462 (3,193)
One stop building 10,000 11,236 1,236
Human resources 424,373 397,988 (26,385)
Total general government 3,871,383 3,631,009 (240,374)
Public safety:
Building inspection 834,760 782,418 (52,342)
Fire services 7,556,920 6,810,242 (746,678)
Police 8,219,281 7,981,280 (238,001)
Law Enforcement Center 246,137 224,828 (21,309)
Emergency management 335,420 304,213 (31,207)
Local emergency planning 15,560 10,318 (5,242)
Communication 737,637 722,685 (14,952)
Total public safety 17,945,715 16,835,984 (1,109,731)
99
Grand Island Study Session - 3/5/2013 Page 134 / 220
CITY OF GRAND ISLAND, NEBRASKA
BUDGETARY COMPARISON SCHEDULE -
GENERAL FUND, Continued
Year ended September 30, 2012
Variances -
Budget Actual Over
(Original and (Under) Final
Final) Actual Budget
CHARGES TO APPROPRIATIONS (OUTFLOWS), continued
Public works:
Engineering 910,411 845,410 (65,001)
Streets and transportation 5,064,896 4,767,114 (297,782)
Total public works 5,975,307 5,612,524 (362,783)
Environment and leisure:
Planning 199,302 209,221 9,919
CRA division 34,216 24,548 (9,668)
Library 1,721,671 1,704,836 (16,835)
Parks 1,409,513 1,358,749 (50,764)
Cemetery 445,622 421,060 (24,562)
Recreation 369,869 382,399 12,530
Aquatics 578,373 554,896 (23,477)
Public information 180,088 164,669 (15,419)
Heartland Shooting Park 380,776 382,081 1,305
Total environment and leisure 5,319,430 5,202,459 (116,971)
Non-departmental 2,517,321 2,112,995 (404,326)
Total charges to appropriations 35,629,156 33,394,971 (2,234,185)
Resources over (under) charges
to appropriations (2,094,593) 598,542 2,693,135
OTHER FINANCING SOURCES (USES)
Transfers in 4,402,100 4,321,498 (80,602)
Transfers out (1,671,304) (2,764,011) (1,092,707)
Net transfers 2,730,796 1,557,487 (1,173,309)
RESOURCES AND OTHER FINANCING
SOURCES (USES) OVER (UNDER)
CHARGES TO APPROPRIATIONS 636,203$ 2,156,029$ 1,519,826$
100
Grand Island Study Session - 3/5/2013 Page 135 / 220
CITY OF GRAND ISLAND, NEBRASKA
BUDGETARY COMPARISON SCHEDULE -
CAPITAL PROJECTS FUND
Year ended September 30, 2012
Variances -
Budget Actual Over
(Original and (Under) Final
Final) Actual Budget
RESOURCES (INFLOWS)
Intergovernmental -$ 329,869$ 329,869$
Contributions 80,000 17,210 (62,790)
Total resources 80,000 347,079 267,079
CHARGES TO APPROPRIATIONS (OUTFLOWS)
Capital projects 740,000 87,239 (652,761)
Drainage projects 1,166,941 655,054 (511,887)
Street construction 51,000 127,223 76,223
Bonded street and sewer projects 656,000 702,873 46,873
Public works projects 251,000 296,013 45,013
Parks and recreation 379,600 513,457 133,857
Total charges to appropriations 3,244,541 2,381,859 (862,682)
Resources over (under) charges to
appropriations (3,164,541) (2,034,780) 1,129,761
OTHER FINANCING SOURCES (USES)
Transfers in 3,174,600 2,039,537 (1,135,063)
RESOURCES AND OTHER FINANCING
SOURCES (USES) OVER (UNDER)
CHARGES TO APPROPRIATIONS 10,059$ 4,757$ (5,302)$
101
Grand Island Study Session - 3/5/2013 Page 136 / 220
CITY OF GRAND ISLAND, NEBRASKA
BUDGETARY COMPARISON SCHEDULE -
DEBT SERVICE FUND
Year ended September 30, 2012
Variances -
Budget Actual Over
(Original and (Under) Final
Final) Actual Budget
RESOURCES (INFLOWS)
Property tax 1,287,442$ 1,399,310$ 111,868$
Motor vehicle tax 7,500 6,183 (1,317)
Interest income 920 3,293 2,373
Bond proceeds 720,000 - (720,000)
Total resources 2,015,862 1,408,786 (607,076)
CHARGES TO APPROPRIATIONS
(OUTFLOWS)
Principal payments 1,275,000 2,040,000 765,000
Interest expense 376,793 202,145 (174,648)
Fiscal agent fees 45,000 15,486 (29,514)
Total charges to appropriations 1,696,793 2,257,631 560,838
Resources over (under) charges to
appropriations 319,069 (848,845) (1,167,914)
OTHER FINANCING SOURCES (USES)
Transfers in - 774,000 774,000
Transfers out (1,148,100) (546,100) 602,000
Net transfers (1,148,100) 227,900 1,376,000
RESOURCES AND OTHER FINANCING
SOURCES (USES) OVER (UNDER)
CHARGES TO APPROPRIATIONS (829,031)$ (620,945)$ 208,086$
102
Grand Island Study Session - 3/5/2013 Page 137 / 220
CITY OF GRAND ISLAND, NEBRASKA
BUDGETARY COMPARISON SCHEDULES -
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
Year ended September 30, 2012
Note A - Explanation of Differences between Budgetary Inflows and Outflows and
GAAP Revenue and Expenditures
General Capital Projects Debt Service
Fund Fund Fund
Sources/inflows of resources:
Actual amounts of resources (budgetary basis) from
the budgetary comparison schedules 33,993,513$ 347,079$ 1,408,786$
Differences - budget to GAAP:
Cash to accrual adjustments 1,214,883 2,128,204 (129,073)
Total revenues as reported on the statement of
revenues, expenditures, and changes in fund
balances - governmental funds 35,208,396$ 2,475,283$ 1,279,713$
Uses/outflows of resources:
Actual amounts (budgetary basis) "total charges
to appropriations" from the budgetary
comparison schedules 33,394,971$ 2,381,859$ 2,257,631$
Differences - budget to GAAP:
Cash to accrual adjustments 1,406,654 2,238,397 (27,351)
Total expenditures as reported on the statement
of revenues, expenditures, and changes in
fund balances - governmental funds 34,801,625$ 4,620,256$ 2,230,280$
Net transfers:
Actual amounts (budgetary basis) from the
budgetary comparison schedules 1,557,487$ 2,039,537$ 227,900$
Differences - budget to GAAP:
Cash to accrual adjustments (475,502) (62,904) -
Total net transfers as reported on the statement
of revenues, expenditures, and changes in
fund balances - governmental funds 1,081,985$ 1,976,633$ 227,900$
103
Grand Island Study Session - 3/5/2013 Page 138 / 220
CITY OF GRAND ISLAND, NEBRASKA
RSI DISCLOSURES FOR A STREET SYSTEM BASED ON A PERCENTAGE
OF ROADS IN GOOD OR SUBSTANDARD CONDITION
Year ended September 30, 2012
Condition Rating of the City’s Street System
Percentage of Lane-Miles in
Good or Better Condition
Main arterial 81.30 %
Arterial 60.37 %
Collector 60.48 %
Stop sign protected 52.02 %
Secondary 65.20 %
Overall system 65.19 %
Percentage of Lane-Miles in
Substandard Condition
Main arterial 0.92 %
Arterial 2.26 %
Collector 4.13 %
Stop sign protected 1.77 %
Secondary 2.12 %
Overall system 2.13 %
(in Thousands)
2012
Overall System:
Needed 4,108$ based on estimated 50-year life cycle cost
Actual 3,323
Difference 785$
104
Note: The condition of road pavement is measured using the CartéGraph pavement management system,
which is based on a weighted average of six distress factors found in pavement surfaces. The CartéGraph
pavement management system uses a measurement scale that is based on a condition index ranging from
zero for a failed pavement to 100 for a pavement in perfect condition. The condition index is used to
classify roads in good or better condition (75-100), fair condition (50-75), and substandard condition (less
than 50). It is the City’s policy to maintain and preserve the infrastructure assets at a 75 percent condition
level. (The condition level was 80.31 percent at September 30, 2012). No more than 10 percent should
be in a substandard condition. Condition assessments are determined every year based on actual
assessments of approximately 1/3 of the City's infrastructure, thereby completing a condition assessment
on the whole City within three years.
2012
2012
Comparison of Needed-to-Actual Maintenance/Preservation
Grand Island Study Session - 3/5/2013 Page 139 / 220
Unfunded
Unfunded Liability as
Actuarial Actuarial Actuarial a Percentage
Actuarial Value of Accrued Accrued Funded Covered of Covered
Date Assets Liability Liability Ratio Payroll Payroll
1/1/2003 14,129,258$ 8,153,323$ -$ 100% 1,642,439$ N/A
1/1/2007 16,588,243 7,438,691 - 100% 886,241 N/A
1/1/2008 8,430,020 7,793,480 - 100% 1,065,254 N/A
1/1/2011 3,910,756 3,535,849 - 100% 609,189 N/A
CITY OF GRAND ISLAND, NEBRASKA
PUBLIC SAFETY EMPLOYEES RETIREMENT SYSTEM
(POLICE OFFICERS AND FIREFIGHTERS)
SCHEDULE OF FUNDING PROGRESS -
Year ended September 30, 2012
105
Grand Island Study Session - 3/5/2013 Page 140 / 220
OTHER SUPPLEMENTARY INFORMATION
Grand Island Study Session - 3/5/2013 Page 141 / 220
Library Cemetery Enhanced
Trust Trust Gas Tax 911
ASSETS
Cash and cash equivalents 1,186$ 13,309$ 325,818$ 89,857$
Investments 37,102 573,287 1,815,501 500,691
County treasurer cash - - - -
Receivables:
Special assessments - - - -
Notes - - - -
Interest - - - -
Due from other funds - - - 3,340
Due from other governments - - 421,640 13,000
Total assets 38,288$ 586,596$ 2,562,959$ 606,888$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable -$ -$ -$ -$
Accrued expenses - - - 8,160
Total liabilities - - - 8,160
Fund balances (deficit):
Nonspendable:
Cemetery perpetual care - 586,596 - -
Library trust 38,288 - - -
Restricted for:
Street improvements - - 2,562,959 -
Economic development - - - -
Federal programs - - - -
Housing loans - - - -
Equipment purchases - - - -
Community improvements - - - -
Library expenses - - - -
Other purposes - - - -
Assigned for:
Budgetary stabilization - - - 19,282
Encumbrances - - - -
Other purposes - - - 579,446
Unassigned - - - -
Total fund balances (deficit)38,288 586,596 2,562,959 598,728
Total liabilities and fund
balances 38,288$ 586,596$ 2,562,959$ 606,888$
106
Permanent Funds Special Revenue Funds
CITY OF GRAND ISLAND, NEBRASKA
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
September 30, 2012
Grand Island Study Session - 3/5/2013 Page 142 / 220
PSC Community Program Income Housing Community
Wireless Keno Youth Council Reuse Fund Reuse Fund Development
8,766$ 77,616$ 8,691$ 18,185$ 95,026$ 42,251$
34,007 432,483 48,427 101,325 529,498 64,119
- - - - - -
- - - - - -
- - - 138,392 294,617 -
- - - - - -
- - - - - 6,051
12,497 24,005 - - - -
55,270$ 534,104$ 57,118$ 257,902$ 919,141$ 112,421$
-$ -$ -$ -$ -$ -$
- - 1,271 - - 2,539
- - 1,271 - - 2,539
- - - - - -
- - - - - -
- - - - - -
- - - 257,902 - -
- - - - - -
- - - - 919,141 30,743
2,662 - - - - -
- 534,104 - - - -
- - - - - -
- - - - - -
- - 22,031 - - 40,884
- - - - - -
52,608 33,816 - - 38,255
- - - - - -
55,270 534,104 55,847 257,902 919,141 109,882
55,270$ 534,104$ 57,118$ 257,902$ 919,141$ 112,421$
106
Special Revenue Funds
Grand Island Study Session - 3/5/2013 Page 143 / 220
CITY OF GRAND ISLAND, NEBRASKA
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS, Continued
September 30, 2012
Special Revenue Funds
Police Parking Parking
Grants District #1 District #2
ASSETS
Cash and cash equivalents 846$ 14,599$ 28,835$
Investments 4,709 81,351 109,046
County treasurer cash - - 1,469
Receivables:
Special assessments - 2,486 -
Notes - - -
Interest - - -
Due from other funds - - -
Due from other governments - - -
Total assets 5,555$ 98,436$ 139,350$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 21,842$ 6,748$ 421$
Accrued expenses - - -
Total liabilities 21,842 6,748 421
Fund balances (deficit):
Nonspendable:
Cemetery perpetual care - - -
Library trust - - -
Restricted for:
Street improvements - - -
Economic development - - -
Federal programs - - -
Housing loans - - -
Equipment purchases - - -
Community improvements - - -
Library expenses - - -
Other purposes - - 9,265
Assigned for:
Budgetary stabilization - 54,500 90,800
Encumbrances - 24,910 -
Other purposes - 12,278 38,864
Unassigned (16,287) - -
Total fund balances (deficit)(16,287) 91,688 138,929
Total liabilities and fund
balances 5,555$ 98,436$ 139,350$
107
Grand Island Study Session - 3/5/2013 Page 144 / 220
Capital
Special Revenue Funds Projects Fund Total Nonmajor
Local Economic Community Special Governmental
Assistance Development Grants Assessments Funds
126,935$ 33,056$ 28,531$ 155,331$ 1,068,838$
740,052 184,189 158,982 865,524 6,280,293
- - - - 1,469
- - - 516,349 518,835
- 399,333 420,256 - 1,252,598
- - - 50,359 50,359
- - 2,519 - 11,910
10,185 - 367,550 - 848,877
877,172$ 616,578$ 977,838$ 1,587,563$ 10,033,179$
-$ -$ 75,869$ -$ 104,880$
- - - - 11,970
- - 75,869 - 116,850
- - - - 586,596
- - - - 38,288
- - - - 2,562,959
- 616,578 - - 874,480
- - 901,969 - 901,969
- - - - 949,884
- - - - 2,662
- - - - 534,104
759,473 - - - 759,473
32,752 - - - 42,017
84,947 - - 655,300 967,744
- - - - 24,910
- - - 932,263 1,687,530
- - - - (16,287)
877,172 616,578 901,969 1,587,563 9,916,329
877,172$ 616,578$ 977,838$ 1,587,563$ 10,033,179$
107
Grand Island Study Session - 3/5/2013 Page 145 / 220
Library Cemetery Enhanced
Trust Trust Gas Tax 911
REVENUES
Intergovernmental -$ -$ 4,287,276$ -$
Keno - - - -
Property tax - - - -
Motor vehicle tax - - - -
Special assessments - - - -
Charges for services - 25,860 - 253,127
Interest income 5,811 2,863 - -
Contributions - - - -
Other revenue - - - -
Total revenues 5,811 28,723 4,287,276 253,127
EXPENDITURES
General government - - - -
Public safety - - - 335,519
Public works - - - -
Environment and leisure - - - -
Total expenditures - - - 335,519
Excess (deficiency) of
revenues over expenditures 5,811 28,723 4,287,276 (82,392)
OTHER FINANCING SOURCES (USES)
Transfers in - - - -
Transfers out - - (3,333,812) -
Net transfers - - (3,333,812) -
Net change in fund balances 5,811 28,723 953,464 (82,392)
Fund balances - September 30, 2011 32,477 557,873 1,609,495 681,120
Fund balances - September 30, 2012 38,288$ 586,596$ 2,562,959$ 598,728$
108
Permanent Funds Special Revenue Funds
CITY OF GRAND ISLAND, NEBRASKA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS
For the year ended September 30, 2012
Grand Island Study Session - 3/5/2013 Page 146 / 220
PSC Community Program Income Housing Community
Wireless Keno Youth Council Reuse Fund Reuse Fund Development
-$ -$ 1,250$ -$ 359,468$ -$
- 281,867 - - - -
- - - - - -
- - - - - -
- - - - - -
102,777 - - - - 2,365
- 987 350 585 2,076 440
- - 5,205 - - -
72 - - - - -
102,849 282,854 6,805 585 361,544 2,805
- - - 575 - 34,974
89,941 - - - - -
- - - - - -
- - 15,126 - 32,563 -
89,941 - 15,126 575 32,563 34,974
12,908 282,854 (8,321) 10 328,981 (32,169)
- - - - - 266,951
- - - (1,882) (5,923) (142,428)
- - - (1,882) (5,923) 124,523
12,908 282,854 (8,321) (1,872) 323,058 92,354
42,362 251,250 64,168 259,774 596,083 17,528
55,270$ 534,104$ 55,847$ 257,902$ 919,141$ 109,882$
108
Special Revenue Funds
Grand Island Study Session - 3/5/2013 Page 147 / 220
CITY OF GRAND ISLAND, NEBRASKA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS, Continued
For the year ended September 30, 2012
Special Revenue Funds
Police Parking Parking
Grants District #1 District #2
REVENUES
Intergovernmental 92,876$ -$ -$
Keno - - -
Property tax - - 8,022
Motor vehicle tax - - 28
Special assessments - 37,995 -
Charges for services - 6,510 10,547
Interest income - 596 721
Contributions - - -
Other revenue 4,513 - -
Total revenues 97,389 45,101 19,318
EXPENDITURES
General government - 49,565 16,725
Public safety 147,204 - -
Public works - - -
Environment and leisure - - -
Total expenditures 147,204 49,565 16,725
Excess (deficiency) of
revenues over expenditures (49,815) (4,464) 2,593
OTHER FINANCING SOURCES (USES)
Transfers in - - -
Transfers out - - -
Net transfers - - -
Net change in fund balances (49,815) (4,464) 2,593
Fund balances - September 30, 2011 33,528 96,152 136,336
Fund balances - September 30, 2012 (16,287)$ 91,688$ 138,929$
109
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Capital
Special Revenue Funds Projects Fund Total Nonmajor
Local Economic Community Special Governmental
Assistance Development Grants Assessments Funds
-$ -$ 1,432,627$ -$ 6,173,497$
- - - - 281,867
- - - - 8,022
- - - - 28
- - - 754,837 792,832
- - - - 401,186
- 3,532 - 3,172 21,133
35,421 - 575,000 - 615,626
- - 12,384 - 16,969
35,421 3,532 2,020,011 758,009 8,311,160
- 1,399,334 1,739,647 - 3,240,820
24,306 - - - 596,970
- - - - -
14,399 - 56,281 - 118,369
38,705 1,399,334 1,795,928 - 3,956,159
(3,284) (1,395,802) 224,083 758,009 4,355,001
- 750,000 142,428 - 1,159,379
- - (174,901) (115,175) (3,774,121)
- 750,000 (32,473) (115,175) (2,614,742)
(3,284) (645,802) 191,610 642,834 1,740,259
880,456 1,262,380 710,359 944,729 8,176,070
877,172$ 616,578$ 901,969$ 1,587,563$ 9,916,329$
109
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CITY OF GRAND ISLAND, NEBRASKA
COMBINING STATEMENT OF NET ASSETS - INTERNAL SERVICE FUNDS
September 30, 2012
Information Fleet Equipment
Technology Services Insurance Reserve Total
ASSETS
Current assets:
Cash and cash equivalents 52,365$ 6,117$ 628,716$ 35,192$ 722,390$
Investments 291,785 34,087 3,503,285 196,096 4,025,253
Receivables:
Accounts, net of allowance for
doubtful accounts - 103,048 - - 103,048
Due from other funds 51,162 35,488 - - 86,650
Inventory - 159,048 - - 159,048
Total current assets 395,312 337,788 4,132,001 231,288 5,096,389
Noncurrent assets:
Capital assets:
Buildings and equipment 1,235,206 269,036 - - 1,504,242
Less accumulated depreciation (915,793) (204,815) - - (1,120,608)
Net capital assets 319,413 64,221 - - 383,634
Total assets 714,725 402,009 4,132,001 231,288 5,480,023
LIABILITIES
Current liabilities:
Accounts payable - 1,904 368,412 - 370,316
Accrued expenses 49,708 24,279 953,010 - 1,026,997
Total current liabilities 49,708 26,183 1,321,422 - 1,397,313
Noncurrent liabilities:
Compensated absences - noncurrent 17,588 11,393 - - 28,981
Total liabilities 67,296 37,576 1,321,422 - 1,426,294
NET ASSETS
Invested in capital assets,
net of related debt 319,413 64,221 - - 383,634
Unrestricted 328,016 300,212 2,810,579 231,288 3,670,095
Total net assets 647,429$ 364,433$ 2,810,579$ 231,288$ 4,053,729$
110
Internal Service Funds
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CITY OF GRAND ISLAND, NEBRASKA
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES
IN FUND NET ASSETS - INTERNAL SERVICE FUNDS
For the year ended September 30, 2012
Information Fleet Equipment
Technology Services Insurance Reserve Total
Operating revenues:
Charges for services 945,567$ 1,335,871$ 6,554,168$ -$ 8,835,606$
Other revenue 550 8,745 35,902 - 45,197
Total operating revenues 946,117 1,344,616 6,590,070 - 8,880,803
Operating expenses:
Information technology 982,100 - - - 982,100
Central garage - 1,234,790 - - 1,234,790
Insurance and benefits - - 7,799,875 - 7,799,875
Building maintenance - - - 24,791 24,791
Depreciation 64,677 9,416 - - 74,093
Total operating expenses 1,046,777 1,244,206 7,799,875 24,791 10,115,649
Operating income (loss) (100,660) 100,410 (1,209,805) (24,791) (1,234,846)
Nonoperating revenues (expenses):
Interest income 2,439 255 26,258 1,228 30,180
Intergovernmental - - - 50,000 50,000
Total nonoperating revenues
(expenses) 2,439 255 26,258 51,228 80,180
Excess (deficiency) of
revenues over expenditures (98,221) 100,665 (1,183,547) 26,437 (1,154,666)
OTHER FINANCING SOURCES (USES)
Transfers in 62,904 (25,000) - - 37,904
Change in net assets (35,317) 75,665 (1,183,547) 26,437 (1,116,762)
Net assets - September 30, 2011 682,746 288,768 3,994,126 204,851 5,170,491
Net assets - September 30, 2012 647,429$ 364,433$ 2,810,579$ 231,288$ 4,053,729$
111
Internal Service Funds
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CITY OF GRAND ISLAND, NEBRASKA
COMBINING STATEMENT OF CASH FLOWS -
INTERNAL SERVICE FUNDS
For the year ended September 30, 2012
Information Fleet Equipment
Technology Services Insurance Reserve Total
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from other funds 946,117$ 1,321,049$ 6,609,289$ -$ 8,876,455$
Payments to suppliers (616,292) (1,044,645) (7,609,705) (24,791) (9,295,433)
Payments to employees (362,205) (211,667) - (573,872)
Net cash provided (used) by operating activities (32,380) 64,737 (1,000,416) (24,791) (992,850)
CASH FLOWS FROM NONCAPITAL AND RELATED
FINANCING ACTIVITIES:
Transfers from other funds 62,904 (25,000) - - 37,904
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Purchase of capital assets (62,904) - - - (62,904)
Intergovernmental receipts - - - 50,000 50,000
Net cash provided (used) by capital and
related financing activities (62,904) - - 50,000 (12,904)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (purchase) sale of investment securities (67,815) (33,960) (446,198) (73,451) (621,424)
Interest received 2,439 255 26,258 1,228 30,180
Net cash used by investing activities (65,376) (33,705) (419,940) (72,223) (591,244)
Increase (decrease) in cash and cash equivalents (97,756) 6,032 (1,420,356) (47,014) (1,559,094)
Cash and cash equivalents - beginning of the year 150,121 85 2,049,072 82,206 2,281,484
Cash and cash equivalents - end of the year 52,365$ 6,117$ 628,716$ 35,192$ 722,390$
Reconciliation of operating income (loss) to net
cash provided (used) by operating activities:
Operating income (loss)(100,660)$ 100,410$ (1,209,805)$ (24,791)$ (1,234,846)$
Adjustments to reconcile operating income (loss) to net
cash provided (used) by operating activities:
Depreciation expense 64,677 9,416 - - 74,093
Change in assets and liabilities:
Accounts receivable - (23,567) 19,219 - (4,348)
Inventories - (24,921) - - (24,921)
Accounts payable and accrued expenses 3,603 3,399 190,170 - 197,172
Net cash provided (used) by operating activities (32,380)$ 64,737$ (1,000,416)$ (24,791)$ (992,850)$
112
Internal Service Funds
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CITY OF GRAND ISLAND, NEBRASKA
COMBINING STATEMENT OF NET ASSETS - FIDUCIARY FUNDS
September 30, 2012
Employee Pension Reserve Funds
Police and Police Fire Total Employee
Fire Pension Pension Pension Pension Funds
ASSETS
Cash 8,794$ 40$ 415$ 9,249$
Investments 1,514,997 224 3,610,685 5,125,906
Accounts receivable - - - -
Special assessments receivable - - - -
Total assets 1,523,791 264 3,611,100 5,135,155
LIABILITIES
Due to other funds - - 512,914 512,914
Agency liabilities - - - -
Pension liability 1,160,256 - - 1,160,256
Total liabilities 1,160,256 - 512,914 1,673,170
NET ASSETS
Held in trust for pension benefits 363,535 264 3,098,186 3,461,985$
113
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Total
Cafeteria Other BID Agency
Plan Agencies Assessments Funds
761$ 22,552$ 60$ 23,373$
4,239 125,663 339 130,241
- 10,682 - 10,682
- - 16,433 16,433
5,000 158,897 16,832 180,729
- - - -
5,000 158,897 16,832 180,729
- - - -
5,000 158,897 16,832 180,729
-$ -$ -$ -$
Agency Funds
113
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CITY OF GRAND ISLAND, NEBRASKA
COMBINING STATEMENT OF CHANGES IN NET ASSETS - FIDUCIARY FUNDS
For the year ended September 30, 2012
Employee Pension Reserve Funds
Police and Police Fire Total Employee
Fire Pension Pension Pension Pension Funds
ADDITIONS
Transfers from other funds 173,022$ 350$ -$ 173,372$
Interest and dividends - - 1,209,712 1,209,712
Other revenue - 248 2,730 2,978
Total additions 173,022 598 1,212,442 1,386,062
DEDUCTIONS
Pension benefits 63,489 350 - 63,839
Transfers to other funds - - 163,910 163,910
Loss on investments - - 302,367 302,367
Total deductions 63,489 350 466,277 530,116
Change in net assets 109,533 248 746,165 855,946
Net assets - September 30, 2011 254,002 16 2,352,021 2,606,039
Net assets - September 30, 2012 363,535$ 264$ 3,098,186$ 3,461,985$
114
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CITY OF GRAND ISLAND, NEBRASKA
COMBINING STATEMENT OF NET ASSETS - COMPONENT UNITS
September 30, 2012
Business Grand Island Community
Improvement Facilities Redevelopment
Districts Corporation Authority Total
ASSETS
Current assets:
Cash and cash equivalents 195,905$ -$ 125,788$ 321,693$
County treasurer cash - - 150,785 150,785
Receivables:
Special assessments 16,433 - - 16,433
Current portion of notes from redevelopers - - 115,334 115,334
Current portion of capital lease receivable - 760,000 - 760,000
Property tax - - 28,278 28,278
Total current assets 212,338 760,000 420,185 1,392,523
Noncurrent assets:
Restricted cash - - 60,722 60,722
Restricted investments - - - -
Notes from redevelopers - - 520,068 520,068
Capital lease receivable - City of Grand Island - 2,325,000 - 2,325,000
Unamortized bond discount - 27,337 - 27,337
Capital assets:
Land, infrastructure, and construction in progress - - 495,354 495,354
Construction in progress - - 180,658 180,658
Other capital assets, net of depreciation 54,419 - - 54,419
Net capital assets 54,419 - 676,012 730,431
Total noncurrent assets 54,419 2,352,337 1,256,802 3,663,558
Total assets 266,757 3,112,337 1,676,987 5,056,081
LIABILITIES
Current liabilities:
Accounts payable - - 344,312 344,312
Deferred revenue - property taxes - - 21,083 21,083
Current portion of long-term obligations - 760,000 115,334 875,334
Total current liabilities - 760,000 480,729 1,240,729
Noncurrent liabilities:
Noncurrent portion of long-term obligations - 2,325,000 520,068 2,845,068
Total liabilities - 3,085,000 1,000,797 4,085,797
NET ASSETS
Invested in capital assets, net of related debt 54,419 27,337 676,012 757,768
Restricted for:
Redevelopers - - 60,722 60,722
Unrestricted 212,338 - (60,544) 151,794
Total net assets 266,757$ 27,337$ 676,190$ 970,284$
115
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CITY OF GRAND ISLAND, NEBRASKA
COMBINING STATEMENT OF ACTIVITIES - COMPONENT UNITS
For the year ended September 30, 2012
Program Revenues
Operating
Charges for Grants and
Functions/Programs Expenses Services Contributions
Landfill:
Landfill and transfer station -$ -$ -$
Business Improvement Districts:
Business Improvement District #4 34,239 - -
Business Improvement District #6 14,665 - -
Business Improvement District #7 60,177 - -
Business Improvement District #8 121,542 47,597 -
Total Business Improvement Districts 230,623 47,597 -
Grand Island Facilities Corporation:
Library construction project 757,031 749,312 -
Community Redevelopment Authority:
General government 61,502 - -
Community development 1,341,427 - 223,086
Interest on long-term debt 50,965 - -
Total Community Redevelopment Authority 1,453,894 - 223,086
Total Component Units 2,441,548$ 796,909$ 223,086$
116
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Program Revenues
Capital Business Grand Island Community
Grants and Improvement Facilities Redevelopment
Contributions Landfill Districts Corporation Authority Total
-$ -$ -$
- - (34,239)$ (34,239)
- - (14,665) (14,665)
- - (60,177) (60,177)
19,500 - (54,445) (54,445)
19,500 - (163,526) (163,526)
- - - (7,719)$ (7,719)
- - - - (61,502)$ (61,502)
- - - - (1,118,341) (1,118,341)
- - - - (50,965) (50,965)
- - - - (1,230,808) (1,230,808)
19,500$ - (163,526) (7,719) (1,230,808) (1,402,053)
General revenues:
Taxes:
Property - - - 620,417 620,417
Motor vehicle - - - 2,517 2,517
Special assessments - 195,121 - - 195,121
Miscellaneous - - - 22,616 22,616
Interest income - 123 - 4,704 4,827
Total general revenues - 195,244 - 650,254 845,498
Change in net assets - 31,718 (7,719) (580,554) (556,555)
Net assets - September 30, 2011 -
as previously reported 8,854,061 235,039 35,056 1,256,744 10,380,900
Restatement of net assets (8,854,061) - - - (8,854,061)
Net assets - September 30, 2011 -
as restated - 235,039 35,056 1,256,744 1,526,839
Net assets - September 30, 2012 -$ 266,757$ 27,337$ 676,190$ 970,284$
116
Component Units
Net (Expenses) Receipts and Changes in Net Assets
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SINGLE AUDIT REPORTS
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CITY OF GRAND ISLAND, NEBRASKA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year ended September 30, 2012
Federal
Federal Grantor CFDA
and Program Title Number Expenditures
Department of Homeland Security:
Passed through the State of Nebraska:
Homeland Security Cluster:
Emergency Management Performance Grants 97.042 130,904$
Homeland Security Grant Program 97.067 11,442
Total Homeland Security Cluster 142,346$
Department of Transportation:
Passed through Nebraska Office of Highway Safety:
Highway Safety Cluster:
State and Community Highway Safety 20.600 3,281
Alcohol Impaired Driving 20.601 492
Occupant Protection Incentive Grant 20.602 4,000
Total Highway Safety Cluster 7,773
Passed through Nebraska Department of Roads:
Highway Planning and Construction Cluster:
Highway Planning and Construction 20.205 67,602
ARRA - Highway Planning and Construction 20.205 1,098
Total Highway Planning and Construction Cluster 68,700
Total Department of Transportation 76,473
Department of Justice:
Direct Programs:
Public Safety Partnership and Community Policing Grant 16.710 219,491
Bulletproof Vest Partnership Program 16.607 6,536
Edward Byrne Memorial Justice Assistance Grant 16.738 6,159
Equitable Sharing Program 16.922 5,488
Passed through Nebraska Crime Commission:
Crime Victim Assistance 16.575 46,110
Total Department of Justice 283,784
Department of Energy
Direct Programs:
Energy Efficiency and Conservation Block Grant 81.128 86,937
Executive Office of the President:
Passed through Nebraska State Patrol:
High Intensity Drug Trafficking Area Program 95.001 72,710
117
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CITY OF GRAND ISLAND, NEBRASKA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS, Continued
Year ended September 30, 2012
Federal
Federal Grantor CFDA
and Program Title Number Expenditures
Department of Housing and Urban Development:
Community Development Block Grant 14.228 1,271,712 *
Total Expenditures of Federal Awards 1,933,962$
*Major Program
The City passed $600,000 of CDBG grant proceeds through to South Central Economic Development
District during the year ended September 30, 2012.
118
NOTE A - BASIS OF PRESENTATION
The accompanying schedule of expenditures of federal awards includes the federal grant activity of
the City of Grand Island, Nebraska, and is presented on the cash basis of accounting. The
information in this schedule is presented in accordance with the requirements of OMB Circular A-
133, Audits of States, Local Governments, and Non-Profit Organizations.
The reporting entity for the Schedule of Expenditures of Federal Awards is the same as that defined
in Note A to the financial statements.
NOTE B - FEDERAL LOAN PROGRAMS
The Revolving Loan Program is a Community Development Block Grant (CDBG) program whereby
funds are made available to the City to loan to low- and moderate-income families for a variety of
purposes. These funds, once issued, are repaid to the City, who in turn reloans the funds to another
low- to moderate-income family. The balance of loans outstanding as of September 30, 2012, is
$131,313.
Passed through Nebraska Department of Economic Development:
NOTE C - PASS-THRU GRANTS TO SUBRECIPIENTS
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123
CITY OF GRAND ISLAND, NEBRASKA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year ended September 30, 2012
1. A summary of auditors’ results:
(i) An unqualified opinion was issued on the financial statements of the City of Grand
Island, Nebraska, as of September 30, 2012.
(ii) The audit did not disclose any significant deficiencies in the internal control of the
City of Grand Island, Nebraska.
(iii) The audit did not disclose any noncompliance which is material to the financial
statements of the City of Grand Island, Nebraska.
(iv) The audit did not disclose any significant deficiencies in the internal control over
major programs for the City of Grand Island, Nebraska.
(v) An unqualified opinion was issued on compliance for major programs.
(vi) The audit did not disclose any audit findings which we are required to report under
§___.510(a).
(vii) Major Program: CFDA #14.228 – Community Development Block Grant.
(viii) The dollar threshold used to distinguish between Type A and Type B programs was
$300,000.
(ix) The City of Grand Island, Nebraska, qualified as a low-risk auditee under
§___.530.
2. Findings relating to the financial statements which are required to be reported in accordance
with GAGAS.
None
3. Findings and questioned costs for Federal awards which shall include audit findings as
defined in §___.510(a).
None
Grand Island Study Session - 3/5/2013 Page 166 / 220
124
CITY OF GRAND ISLAND, NEBRASKA
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
Year ended September 30, 2012
Program Findings for the year ended September 30, 2011
None noted.
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CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
FINANCIAL STATEMENTS
September 30, 2012 and 2011
Grand Island Study Session - 3/5/2013 Page 168 / 220
1
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS’ REPORT 2
BASIC FINANCIAL STATEMENTS
Statements of Net Assets 4
Statements of Revenues, Expenses, and Changes in Net Assets 5
Statements of Cash Flows 6
Notes to Financial Statements 8
OTHER SUPPLEMENTARY INFORMATION
Operating Statistics 24
Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements
Performed in Accordance With Government Auditing Standards 25
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Grand Island Study Session - 3/5/2013 Page 170 / 220
Grand Island Study Session - 3/5/2013 Page 171 / 220
2012 2011
ASSETS
Current assets:
Cash and cash equivalents 2,412,178$ 5,958,118$
Investments 31,229,938 21,905,458
Receivables:
Accounts, net of allowance for doubtful accounts of
$347,345 at September 30, 2012, and $361,375 at
September 30, 2011 5,454,558 4,831,304
Unbilled revenue 2,387,719 2,262,287
Interest 28,128 72,309
Inventory 9,754,647 10,857,185
Prepaid expenses 416,945 393,149
Total current assets 51,684,113 46,279,810
Noncurrent assets:
Restricted cash and cash equivalents 336,545 330,708
Restricted investments 2,236,335 6,510,499
Unamortized bond costs 252,225 70,719
Deferred charges 839,655 1,743,650
Prepaid transmission 2,175,599 3,276,241
Capital assets:
Construction in progress 13,199,346 6,679,188
Land and land improvements 6,068,304 6,068,304
Distribution and collection systems 274,326,517 271,682,812
Buildings and equipment 27,748,808 27,706,594
Less accumulated depreciation (196,203,205) (186,712,321)
Net capital assets 125,139,770 125,424,577
Total noncurrent assets 130,980,129 137,356,394
Total assets 182,664,242 183,636,204
LIABILITIES
Current liabilities:
Accounts payable 2,485,397 2,491,415
Accrued expenses 672,638 806,498
Compensated absences - current 826,205 815,174
Accrual for payments in lieu of taxes 811,019 689,459
Current portion of long-term obligations 1,875,000 4,610,000
Total current liabilities 6,670,259 9,412,546
Noncurrent liabilities:
Compensated absences - noncurrent 435,189 395,240
Closure/post closure liability 172,547 168,998
Noncurrent portion of long-term obligations 15,935,000 20,880,000
Unamortized bond premiums 960,042 -
17,502,778 21,444,238
Total liabilities 24,173,037 30,856,784
NET ASSETS
Invested in capital assets, net of related debt 109,637,207 125,905,187
Restricted for:
Debt service 2,236,335 6,511,584
Unrestricted 46,617,663 20,362,649
Total net assets 158,491,205$ 152,779,420$
4
CITY OF GRAND ISLAND, NEBRASKA
STATEMENTS OF NET ASSETS
September 30,
See notes to financial statements.
ELECTRIC DEPARTMENT
Grand Island Study Session - 3/5/2013 Page 172 / 220
2012 2011
Operating revenues:
Electric energy sales:
Residential 19,287,844$ 17,783,245$
Commercial and industrial 38,775,121 34,256,264
Municipal and interdepartmental 1,828,136 1,936,424
Wholesale 1,288,128 2,818,760
Total sales 61,179,229 56,794,693
Other revenue 576,308 578,858
Total operating revenues 61,755,537 57,373,551
Operating expenses:
Cost of power 30,232,339 29,569,667
Operation of system 1,774,133 1,799,692
Maintenance of system 2,247,237 1,454,554
Consumer accounting and collection 1,175,353 1,226,200
Employee benefits and payroll 1,091,355 1,329,466
General office salaries and expense 256,219 294,382
Special services 1,073,931 1,161,334
Insurance 554,598 705,440
Miscellaneous 100,817 303,560
Depreciation 9,905,761 9,850,659
Amortization 19,693 26,923
Total operating expenses 48,431,436 47,721,877
Operating income 13,324,101 9,651,674
Nonoperating revenues (expenses):
Investment income 403,962 425,196
Gain on disposal of capital assets 20,570 19,739
Allocated debt on participation power purchases (6,320,655) (5,345,260)
Payments in lieu of taxes (811,019) (689,459)
Interest expense (905,174) (1,452,742)
Total nonoperating revenues
(expenses)(7,612,316) (7,042,526)
Change in net assets 5,711,785 2,609,148
Net assets, beginning of year 152,779,420 150,170,272
Net assets, end of year 158,491,205$ 152,779,420$
See notes to financial statements.
5
ELECTRIC DEPARTMENT
CITY OF GRAND ISLAND, NEBRASKA
STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
For the years ended September 30,
Grand Island Study Session - 3/5/2013 Page 173 / 220
2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers 61,006,851$ 57,063,003$
Cash paid to suppliers for goods and services (27,406,355) (25,853,086)
Cash paid to employees for services (8,900,670) (8,841,685)
Net cash provided by operating activities 24,699,826 22,368,232
NONCAPITAL FINANCING ACTIVITIES:
Payments in lieu of taxes (689,459) (654,280)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Purchase of property and equipment (10,441,997) (7,379,440)
Proceeds on sale of capital assets 841,614 145,460
Decrease in deferred charges 903,995 908,995
Increase in fly ash liability 3,549 1,591
Payment of allocated debt on participation power purchase (6,320,655) (5,345,260)
Proceeds from issuance of bonds payable 18,510,000 -
Premium received on the issuance of bonds 1,029,250 -
Payment of bond fees (270,408) -
Principal payments on long-term debt (26,190,000) (4,425,000)
Interest paid (1,013,645) (1,476,250)
Net cash used in capital and related financing activities (22,948,297) (17,569,904)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments redeemed 24,273,923 18,432,851
Investments purchased (29,324,239) (20,283,939)
Interest received 448,143 454,666
Net cash used by investing activities (4,602,173) (1,396,422)
Net increase (decrease) in cash and cash equivalents (3,540,103) 2,747,626
Cash and cash equivalents - beginning of year 6,288,826 3,541,200
Cash and cash equivalents - end of year 2,748,723$ 6,288,826$
Cash and cash equivalents consist of:
Cash and cash equivalents 2,412,178$ 5,958,118$
Restricted cash and cash equivalents 336,545 330,708
Total cash and cash equivalents 2,748,723$ 6,288,826$
6
CITY OF GRAND ISLAND, NEBRASKA
STATEMENTS OF CASH FLOWS
See notes to financial statements.
ELECTRIC DEPARTMENT
For the years ended September 30,
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2012 2011
Reconciliation of operating income to net cash provided
by operating activities:
Operating income 13,324,101$ 9,651,674$
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation 9,905,761 9,850,659
Amortization 19,693 26,923
Change in assets and liabilities:
Accounts receivable (748,686) (310,548)
Inventories 1,102,538 937,589
Prepaid expenses (23,796) (27,684)
Prepaid transmissions 1,100,642 1,255,722
Accounts payable and accrued expenses 19,573 983,897
Net cash provided by operating activities 24,699,826$ 22,368,232$
Supplemental cash flow information:
Acquisition of capital assets through developers' aid of
construction -$ -$
Accounts payable incurred for capital asset purchases -$ -$
See notes to financial statements.
7
CITY OF GRAND ISLAND, NEBRASKA
STATEMENTS OF CASH FLOWS, Continued
For the years ended September 30,
ELECTRIC DEPARTMENT
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8
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS
INDEX
Page
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Financial Reporting Entity 9
2. Measurement Focus and Basis of Accounting 10
3. Assets, Liabilities, and Equity 11
4. Revenues, Expenditures, and Expenses 14
NOTE B – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
1. Deposit Laws and Regulations 15
2. Debt Restrictions and Covenants 15
3. Budgetary Data 15
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS
1. Cash and Cash Equivalents 15
2. Investments 16
3. Restricted Assets 17
4. Capital Assets 18
5. Long-term Debt 19
6. Payments to the City of Grand Island 20
NOTE D – OTHER NOTES
1. Pension Plan 20
2. Risk Management 21
3. Fair Value of Financial Investments 21
4. Power Supply 21
5. Commitments 22
6. EPA Emissions Allowances 23
7. Subsequent Events 23
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9
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS
September 30, 2012 and 2011
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Grand Island, Nebraska, Electric Department
(Department), are prepared in accordance with generally accepted accounting principles
(GAAP). The Department’s reporting entity applies all relevant Governmental Accounting
Standards Board (GASB) pronouncements and Financial Accounting Standards Board (FASB)
pronouncements and Accounting Principles Board (APB) opinions issued on or before
November 30, 1989, unless those pronouncements conflict with or contradict GASB
pronouncements, in which case GASB prevails.
The financial statements referred to above present only the Department and do not purport to,
and do not, present fairly the financial position of the City of Grand Island, Nebraska, as of
September 30, 2012 and 2011, and the changes in financial position for the years then ended in
conformity with accounting principles generally accepted in the United States of America.
1. Financial Reporting Entity
The City of Grand Island, Nebraska, Electric Department is a public utility accounted for as an
enterprise fund by the City of Grand Island, Nebraska (City). The City Council has the authority
to set rates and charges, incur debt, and significantly influence operations. The Department
utilizes the Federal Energy Regulatory Commission System of Accounts.
In determining the financial reporting entity, the Department complies with the provisions of
GASB Statement No. 14 and Statement No. 39, and has included all organizations that make up
the Department’s legal entity and all component units. Consistent with applicable guidance, the
criteria used by the Department to include component units within its reporting entity are
financial accountability and the nature and significance of the relationship. The Department
includes organizations as component units under the following financial accountability criteria:
(1) Organizations for which the Department appoints a voting majority of the
organization’s governing body and for which (a) the Department is able to impose its
will on the organization or (b) there is a potential for the organization to provide
specific financial benefits to, or impose specific financial burdens on, the Department.
(2) Organizations which are fiscally dependent on the Department. Fiscal dependency is
established if the organization is unable to adopt its budget, levy taxes or set rates or
charges, or issue bonded debt without approval by the Department.
The Department is an enterprise fund of the City of Grand Island, Nebraska, and has determined
that it has no component units for reporting purposes.
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10
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
2. Measurement Focus and Basis of Accounting
Measurement focus is a term used to describe “which” transactions are recorded within the
various financial statements. Basis of accounting refers to “when” transactions are recorded
regardless of the measurement focus applied.
Measurement Focus
The Department utilizes the “flow of economic resources” measurement focus and uses the
accrual basis of accounting. The accounting objectives of this measurement focus are the
determination of operating income, changes in net assets (or cost recovery), financial position,
and cash flows. All assets and liabilities (whether current or noncurrent) associated with their
activities are reported.
Basis of Accounting
Under the accrual basis of accounting, revenues are recognized when earned and expenses are
recorded when the liability is incurred or economic asset used. Revenues, expenses, gains,
losses, assets, and liabilities resulting from exchange and exchange-like transactions are
recognized when the exchange takes place.
The Department’s accounting records are maintained in accordance with accounting principles
generally accepted in the United Sates of America for regulated utilities and generally follow the
Uniform System of Accounts for Public Utilities and License prescribed by the Federal Energy
Regulatory Commission (FERC). The Department prepares its financial statements as a
business-type activity in conformity with applicable pronouncements of the Governmental
Accounting Standards Board (GASB). In reporting financial activity, applicable Financial
Accounting Standards Board Statements and Interpretations, Accounting Principles Board
Opinions, and Accounting Research Bulletins are applied, except for those that conflict with or
contradict Government Accounting Standards Board pronouncements.
The Department first applies unrestricted net assets when an expense or outlay is incurred for
purposes for which both restricted and unrestricted net assets are available.
Under the provisions of Statement of Financial Accounting Codification Standards regarding
Accounting for the Effects of Certain Types of Regulation, the Department prescribes rate making
recovery for certain transactions. This method includes the philosophy that debt service
requirements, as opposed to depreciation or amortization, are a cost for rate making purposes.
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11
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
3. Assets, Liabilities, and Equity
Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
For purposes of the Statements of Cash Flows, the Department considers cash on hand and in the
bank, as well as cash and equity in pooled cash held by the City, which are readily convertible to
known amounts of cash and have original maturities of three months or less, to be cash and cash
equivalents.
The Department participates in a cash management pool, managed by the City. The
Department’s interest in this pool consists of $15,232,640 and $9,358,535 of investments and
$2,733,723 and $6,272,741 of cash and cash equivalents at September 30, 2012 and 2011,
respectively.
Investments and Investment Income
Investments in debt securities are carried at fair value. Fair value is determined using quoted
market prices. Investments in nonnegotiable certificates of deposit and guaranteed investment
contracts are carried at cost.
Investment income consists of interest income and the net change for the year in the fair value of
investments carried at fair value.
Receivables
Billings for the electric revenues are generally rendered on a monthly basis. Accounts receivable
are stated at the amount billed to customers, with credit extended on an unsecured basis. The
Department provides an allowance for doubtful accounts, which is based upon a review of
outstanding receivables, historical collection information and existing economic conditions.
Accounts receivable are ordinarily due 21 days after the issuance of the invoice. Delinquent
receivables are written off based on individual credit evaluation and specific circumstances of
the customer. Estimated sales which have not been billed are accrued and recorded in the period
to which they relate as unbilled revenues.
Inventories
Fuel, materials, and supplies inventories are stated at cost, which does not exceed market. Cost
is generally determined on a weighted-average basis.
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12
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
3. Assets, Liabilities, and Equity, continued
Restricted assets
Restricted assets include cash and investments that are legally restricted as to their use. The
restricted assets are related to debt service reserve accounts and the fly ash liability.
Capital assets
Utility plant additions and replacements are generally stated at cost. Costs of labor, materials,
supervision, and other expenses incurred in making repairs and minor replacements and in
maintaining the plant in efficient operating condition are charged to expense. Plant accounts are
charged with the costs of betterments and replacements of plant, except minor replacements, and
the accumulated provision for depreciation is charged with retirements, together with removal
costs, less salvage. Contributed assets are capitalized at their fair market value at the date of
contribution. Depreciation of property, plant, and equipment is computed at an overall
composite rate of approximately 3.23 percent in 2012 and 3.23 percent in 2011.
Costs related to studies expected to result in construction and/or acquisition of additional utility
plant are deferred pending completion. Upon completion, such costs are capitalized as part of
the cost of the plant to be constructed or acquired. If a project is terminated, costs of studies
related thereto are charged to expense in accordance with the rate-making treatment adopted.
The Department capitalizes interest costs as a component of productive capacity, based on the
weighted-average rates paid for long-term borrowing. Total interest incurred was:
2012 2011
Interest costs capitalized $ - $ -
Interest costs charged to expense 905,174 1,452,742
Total interest incurred $ 905,174 $ 1,452,742
Unamortized Bond Discounts and Premiums
Bond discount fees and premiums for the Department are deferred and amortized over the life of
the bonds using the effective interest method.
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13
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
3. Assets, Liabilities, and Equity, continued
Deferred Charges
Deferred charges incurred consist of various plant maintenance costs that are being amortized
over the life of the scheduled maintenance repair life. In accordance with SFAS Codification
Standards, the maintenance costs which would be recognized during the current period are
deferred and not included in the determination of net income until such costs are recoverable.
Prepaid Transmission
The Department has made a long-term usage deposit for the availability of future transmission
service with a public power district. The unused deposit at September 30, 2012 and 2011, is
$2,175,599 and $3,276,241, respectively.
Compensated Absences
All regular full-time employees earn sick leave and vacation leave. Employees accrue vacation
leave at variable rates based on years of service. Sick leave accrues at a rate of eight hours per
month of service. Union employees are eligible to receive annually one-half of their total accrued
sick pay in excess of 960 hours at their current rate. Non-union employees are no longer eligible
to receive one-half of their total accrued sick pay in excess of 960 hours. The final such payment
for the non-union employees was made on September 30, 2010.
Compensated absences of the Department are summarized below:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
September 30, 2012 $ 1,210,414 $ 143,623 $ (92,643) $ 1,261,394 $ 826,205
September 30, 2011 $ 1,205,365 $ 93,370 $ (88,321) $ 1,210,414 $ 815,174
Long-term Debt
The long-term debt consists of bonds payable.
Net Asset Classifications
Net Assets are classified into three components:
a. Invested in capital assets, net of related debt – Consists of capital assets, including
restricted capital assets, net of accumulated depreciation and reduced by the
outstanding balances of any bonds, mortgages, notes, or improvement of those assets.
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14
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
3. Assets, Liabilities, and Equity, continued
Net Asset Classifications, continued
b. Restricted net assets – Consists of net assets with constraints placed on their use
either by (1) external groups such as creditors, grantors, contributors, or laws or
regulations of other governments; or (2) law through constitutional provisions or
enabling legislation.
c. Unrestricted net assets – All other net assets that do not meet the definition of
“restricted” or “invested in capital assets, net of related debt.”
4. Revenues, Expenditures, and Expenses
Revenues and Expenses
As an enterprise fund, the Department distinguishes operating revenues and expenses from
nonoperating items. Operating revenues and expenses generally result from providing services
and producing and delivering goods in connection with the Department’s principal ongoing
operations. The principal operating revenues of the Department are charges to customers for
sales and services. Operating expenses 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 nonoperating revenues and expenses.
Contributions in Aid of Construction
Contributions in aid of construction are development projects constructed and contributed by
developers. These contributions are recorded at fair value when the development is complete
and are considered imposed non-exchange transactions.
Allocated Debt on Participation Power Purchases
Portions of the monthly bills the Department pays for participation power from OPPD and
PPGA, are the Department’s allocated debt on the NC2 and PPGA Projects. Allocated debt of
$6,320,655 and $5,345,260 are shown as nonoperating expenses for the years ended September
30, 2012 and 2011.
NOTE B – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
By its nature as a local governmental unit, the Department is subject to various federal, state, and
local laws and contractual regulations. An analysis of the Department’s compliance with
significant laws and regulations and demonstration of its stewardship over Department resources
follows:
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15
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE B – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY, continued
1. Deposit Laws and Regulations
Custodial credit risk is the risk that, in the event of a bank failure, a government’s deposits may
not be returned to it. The Department’s deposit policy for custodial credit risk requires
compliance with the provisions of state law.
State law requires collateralization of all deposits with federal depository insurance or with U.S.
Treasury and U.S. agency securities having an aggregate value at least equal to the amount of the
deposits. The Department’s cash deposits, including certificates of deposit, are insured by the
Federal Deposit Insurance Corporation (FDIC) up to $250,000 for interest-bearing demand
deposits, up to $250,000 for interest-bearing time deposits/savings, and all non-interest-bearing
deposits are insured. Any cash deposits or certificates of deposit in excess of the FDIC limits are
insured by collateral held by the pledging institution in the Department’s name.
2. Debt Restrictions and Covenants
Bonds Payable
The various bond ordinances relating to the bonds payable contain some restrictions or covenants
that are financial-related. These include covenants such as debt service coverage requirements
and required reserve account balances. The Department is in compliance with the bond
restrictions and covenants.
3. Budgetary Data
An appropriated budget is adopted each fiscal period for the Department on the cash basis, which
is consistent with State of Nebraska budget guidelines. Budgets are approved by the City
Council.
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS
The following notes present detail information to support the amounts reported in the basic
financial statements for the Department’s various assets, liabilities, equity, revenues, and
expenditures/expenses.
1. Cash and Cash Equivalents
Deposits
State law requires collateralization of all deposits with federal depository insurance or with U.S.
Treasury and U.S. agency securities having an aggregate value at least equal to the amount of the
deposits. The Department has been allocated a portion of the City’s pooled cash. Of the pooled
funds, none were uninsured and uncollateralized at September 30, 2012 and 2011.
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16
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
1. Cash and Cash Equivalents, continued
Deposits, continued
The Department held certificates of deposit at September 30, 2012 and 2011, with a stated value
of $15,997,298 and $12,546,923, respectively. At September 30, 2012 and 2011, the
Department’s deposits were not exposed to custodial credit risk.
Summary of Carrying Values
The carrying values of pooled cash and deposits at September 30, 2012 and 2011, are included in
the statement of net assets as follows:
2012 2011
Petty cash $ 15,000 $ 15,000
Equity in pooled cash 2,397,178 5,943,118
Equity in pooled investments 15,232,640 9,358,535
Equity in pooled cash – restricted 336,545 329,623
Certificates of deposit 15,997,298 12,546,923
Restricted cash – bond reserves - 1,085
$ 33,978,661 $ 28,194,284
2. Investments
The Department is authorized by statute to invest in securities based upon the prudent person
investment criteria. The Department follows a policy of investing in direct obligations of and
other obligations guaranteed as to principal by the U.S. Treasury and U.S. agencies and
instrumentalities, bank certificates of deposit, and certain guaranteed investment contracts.
At September 30, 2012 and 2011, the Department had the following investments and maturities:
Fair Less More
Value than 1 1 - 5 6 - 10 than 10
Certificates of deposit 2,236,335$ 382,586$ 1,361,000$ 490,000$ -$
U.S. Government securities - - - - -
2,236,335$ 382,586$ 1,361,000$ 490,000$ -$
Guaranteed investment contracts 5,150,000$ -$ 5,150,000$ -$ -$
U.S. Government securities 1,360,499 1,360,499 - - -
6,510,499$ 1,360,499$ 5,150,000$ -$ -$
2012
Maturities in Years
2011
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17
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
2. Investments, continued
Interest Rate Risk. As a means of limiting its exposure to fair value losses arising from rising
interest rates, the Department’s investment policy requires that market conditions and investment
securities be analyzed daily to determine the maximum yield to be obtained and to minimize the
impact of rising interest rates.
Credit Risk. Credit risk is the risk that the issuer or other counterparty to an investment will not
fulfill its obligations. Excluding investments restricted for debt service, the Department limits its
investments to certificates of deposit, money market funds, and other securities backed by U.S.
Government obligations, which minimizes credit risk associated with the Department’s
investment portfolio. At September 30, 2012 and 2011, the Department’s investment in a
guaranteed investment contract was not rated by a nationally recognized statistical rating
organization.
Custodial Credit Risk. For an investment, custodial credit risk is the risk that, in the event of the
failure of the counterparty, the Department will not be able to recover the value of its investment
or collateral securities that are in the possession of an outside party. All of the underlying
securities for the Department’s investments at September 30, 2012 and 2011, are held by the
counterparties in other than the Department’s name. The guaranteed investment contracts are not
subject to custodial credit risk.
Concentration of Credit Risk. The Department’s investment policy places no limit on the
amount that may be invested in any one issuer. At September 30, 2012 and 2011, the
Department’s investment in JP Morgan guaranteed investment contracts of $0 and $5,150,000
constituted 0 percent and 79 percent, respectively, of its total investments.
3. Restricted Assets
The restricted assets as of September 30, 2012 and 2011, are as follows:
2012 2011
Restricted cash and cash equivalents $ 336,545 $ 330,708
Restricted investments 2,236,335 6,510,499
$ 2,572,880 $ 6,841,207
Restricted cash and cash equivalents of $336,545 and $329,623 for the years ended September
30, 2012 and 2011, respectively, are restricted for fly ash disposal closure/post-closure care.
Also, restricted cash for the year ended September 30, 2011, includes $1,085 restricted for debt
service. For both years, the restricted investments represent the debt service reserve for the
electric bonds.
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18
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
4. Capital Assets
The major classes of property, plant, and equipment at September 30, 2012 and 2011, are shown
below:
Adjustments
Beginning and Ending
Balance Additions Retirements Reclass Balance
Construction work-in-progress 6,679,188$ 10,190,960$ -$ (3,670,802)$ 13,199,346$
Land and land rights 3,647,573 - - - 3,647,573
Production plant 192,710,267 - - 390,815 193,101,082
Transmission plant 17,440,721 - - - 17,440,721
Distribution plant 78,972,545 - (1,027,097) 3,279,987 81,225,435
General plant 10,265,873 251,038 (208,824) - 10,308,087
Plant acquisition adjustment 2,166,508 - - - 2,166,508
Non-utility property - land 254,223 - - - 254,223
Total property, plant, and
equipment 312,136,898 10,441,998 (1,235,921) - 321,342,975
Less accumulated depreciation (186,712,321) (9,905,761) 414,877 - (196,203,205)
Net property, plant, and
equipment 125,424,577$ 536,237$ (821,044)$ -$ 125,139,770$
2012
Adjustments
Beginning and Ending
Balance Additions Retirements Reclass Balance
Construction work-in-progress 2,930,700$ 7,562,808$ -$ (3,814,320)$ 6,679,188$
Land and land rights 3,647,573 - - - 3,647,573
Production plant 192,212,871 - - 497,396 192,710,267
Trasmission plant 17,440,721 - - - 17,440,721
Distribution plant 76,660,452 - (1,004,831) 3,316,924 78,972,545
General plant 10,142,767 361,681 (238,575) - 10,265,873
Plant acquisition adjustment 2,166,508 - - - 2,166,508
Non-utility property - land 254,223 - - - 254,223
Total property, plant, and
equipment 305,455,815 7,924,489 (1,243,406) - 312,136,898
Less accumulated depreciation (177,434,298) (9,850,659) 572,636 - (186,712,321)
Net property, plant, and
equipment 128,021,517$ (1,926,170)$ (670,770)$ -$ 125,424,577$
2011
Grand Island Study Session - 3/5/2013 Page 186 / 220
19
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
5. Long-term Debt
Long-term debt at September 30, 2012 and 2011, is shown below:
2012 2011
Electric System Revenue Bonds, 2001
Series, due serially to August 15, 2016,
interest from 3.80 percent to 5.125
percent, secured by the Electric System
revenues. The bonds were paid in full
during the year ended September 30,
2012. $ - $ 25,490,000
Electric System Revenue Refunding
Bonds, 2012 Series, due serially to
August 15, 2022, interest from 0.2
percent to 4.0 percent, secured by the
Electric System revenues. 17,810,000 -
17,810,000 25,490,000
Less current maturities 1,875,000 4,610,000
Noncurrent portion $ 15,935,000 $ 20,880,000
Long-term debt activity for 2012 and 2011 is summarized as follows:
Amounts Due
Beginning Principal Ending Within
Balance Additions Payments Balance One Year
2012 25,490,000$ 18,510,000$ (26,190,000)$ 17,810,000$ 1,875,000$
2011 29,915,000$ -$ (4,425,000)$ 25,490,000$ 4,610,000$
The following is a summary of debt service requirements for the next five years and thereafter:
Principal Interest Total
2013 $ 1,875,000 $ 420,413 $ 2,295,413
2014 1,705,000 412,912 2,117,912
2015 1,725,000 395,863 2,120,863
2016 1,750,000 374,300 2,124,300
2017 1,675,000 352,425 2,027,425
2018-2022 9,080,000 1,085,300 10,165,300
$ 17,810,000 $ 3,041,213 $ 20,851,213
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20
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
5. Long-term Debt, continued
The indentures under which the Department’s revenue bonds were issued provide for the
creation and maintenance of certain accounts. These accounts at September 30, 2012 and 2011,
are shown in Note C3. There are a number of other limitations, restrictions, and covenants
contained in the indentures under which the Department’s revenue bonds were issued.
The 2012 bonds are not subject to optional redemption prior to maturity.
6. Payments to the City of Grand Island
The Department is exempt from federal and state income taxes and local property taxes. City
ordinances provide for payments in lieu of taxes. The annual payment in lieu of taxes,
amounting to $811,019 and $689,459 for 2012 and 2011, respectively, are set at five percent of
the net operating revenues of the Department, excluding depreciation. The Department does pay
sales tax.
The City provides certain administrative services to the Department for which the Department
pays fees to the City. These fees are included in special services expense and amount to
$1,042,772 and $1,022,618 for the years ended September 30, 2012 and 2011, respectively.
NOTE D – OTHER NOTES
1. Pension Plan
The City has a defined contribution employees’ pension plan in which employees of the
Department participate. The plan requires any new employee working a minimum of 1,000
hours to participate in the plan. The plan requires participants to contribute six percent of
participant earnings in order for the pension plan to meet Internal Revenue Service guidelines for
tax deferred pension plans. The Department is required to match the participants’ contributions.
As of October 1, 1997, participants can elect to contribute an additional four percent of their
earnings with no Department match.
All participants are fully vested in their own contributions and become vested in the
Department’s contribution at varying rates depending on their date of employment. Full vesting
in the Department’s contributions occurs after five years of participation in the plan. The
participants’ and Department’s contributions were $540,479 and $540,479, respectively, for the
year ended September 30, 2012, and $530,912 and $530,912, respectively, for the year ended
September 30, 2011.
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21
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE D – OTHER NOTES, continued
2. Risk Management
The Department participates in the City’s self-insurance program administered by the City’s Risk
Management Division (Division). The City is exposed to various risks of loss related to torts;
theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and
natural disasters. On behalf of the City, the Division purchases insurance and administers funds
for its self-insured program. The Division maintains a workers’ compensation fund and a self-
insured loss fund. The Division provides first dollar coverage for all workers’ compensation
exposure with insurance acting as an umbrella or excess coverage. The maximum exposure
would be the deductible amounts for property and automobile physical damage, as well as losses
not covered by insurance. The department has had no claims or judgments exceeding this
commercial coverage in any of the past three fiscal years. Budgeted premium amounts charged
to the Department are placed in the appropriate fund maintained by the Division. Premium
expense for the Department was approximately $760,000 and $679,000 for the years ended
September 30, 2012 and 2011.
3. Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of each class of
financial instruments for which it is practicable to estimate that value:
• Cash, accounts receivable, and accounts payable – The carrying amount approximates
fair value because of the short maturity of these instruments.
• Investments – The fair values of investments are based on quoted market prices for those
investments as shown in Note C2.
• Long-term debt – The Department’s long-term debt at September 30, 2012, had a
principal balance of $17,810,000 with interest at 0.4 percent to 4.0 percent due serially.
The estimated fair value is not practical to determine.
Fair value estimates are made at a specific point in time, based on relevant market information
and information about the financial instrument. These estimates are subjective in nature and
involve uncertainties and matters of significant judgment and, therefore, cannot be determined
with precision. Changes in assumptions could significantly affect the estimates.
4. Power Supply
The Department currently has generation capacity of approximately 273 MW from coal-fired and
gas/oil-fired electric generating stations. The peak load of the Department during the fiscal year
ended September 30, 2012, was approximately 170.7 MW in August 2012.
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22
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE D – OTHER NOTES, continued
4. Power Supply, continued
The Department is party to an agreement with the Department of Energy (DOE) pursuant to
which the Department may purchase up to 9,168 KW of power to be transmitted through DOE
and Nebraska Public Power District (NPPD) facilities. Such power is sold to the Department at
standard DOE wholesale firm power service rates. The agreement expires on December 31,
2020.
5. Commitments
Purchased Power Agreements
The Department entered into a participation power agreement with Omaha Public Power District
(OPPD) on January 15, 2004, to obtain approximately 33 MW of energy after the new OPPD
Nebraska City Unit #2 is constructed and operational. The project was completed in May 2009
and was financed through a bond issuance by OPPD. The Department’s commitment to the
project is approximately $45,000,000. The Department has also entered into an agreement with
the Public Power Generating Agency to obtain approximately 15 MW of energy at a cost of
approximately $22,000,000. This project was completed in May 2011.
The Department entered into a coal supply agreement with Arch Coal Sales Company, Inc., on
November 22, 2010, to obtain approximately 250,000 tons of coal from January 1, 2012, to
December 31, 2012, and a supplemental agreement on September 11, 2012 to obtain
approximately 45,000 more tons of coal by December 31, 2012. On September 11, 2012, the
Department also entered into an agreement to obtain approximately 325,000 tons of coal from
January 1, 2013, to December 31, 2013. The Department received 233,677 tons from January 1,
2012, through September 30, 2012, leaving 61,323 tons under contract for the remainder of
calendar year 2012 and 325,000 tons under contract for calendar year 2013.
Regulatory Compliance
In 1997, the Department entered into an agreement with the Nebraska Department of
Environmental Quality to establish a closure/post closure care account. The purpose of this
account is to accumulate sufficient monies to fund all related costs of closure and post closure of
the fly ash disposal area at the Platte Generating Station. The calculated amount of the
closure/post closure liability was $172,547 and $168,998 for the years ended September 30, 2012
and 2011. The amount on deposit in the closure/post closure care account was $336,545 and
$329,623 at September 30, 2012 and 2011.
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23
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE D – OTHER NOTES, continued
5. Commitments, continued
Regulatory Compliance, continued
The Department’s operations are subject to stringent federal, state, and local laws and regulations
relating to improving and maintaining environmental quality. Current studies have determined
that a substantial capital investment will be required to bring the Department into compliance
with environmental regulations including mercury emissions. Environmental expenditures
related to current operations are factored into the strategic planning process of the Department
and are considered when determining future energy rates. Financing of these expenditures is
expected to be through available cash reserves and bonded debt.
Construction Commitments
At September 30, 2012, the Department has a contractual commitment to Kiewit Power
Engineers for air quality control engineering. The Department had paid $366,379 of the
contracted amount, leaving a balance of $148,645. The project is expected to be completed
during the year ending September 30, 2013.
6. EPA Emissions Allowances
As of September 30, 2012, the City had 6,904 SO2 Emissions Allowances. The EPA has granted
these allowances, which can be used to offset plant emissions. The allowances can be bought
and sold. If each allowance was sold for $0.65 (the September 30, 2012, market value), the City
would recognize revenue of $4,488.
The City will receive an additional 2,932 credits per year until 2042.
7. Subsequent Events
Management has evaluated subsequent events through January 18, 2013, the date on which the
financial statements were available for issue.
Grand Island Study Session - 3/5/2013 Page 191 / 220
OTHER SUPPLEMENTARY INFORMATION
Grand Island Study Session - 3/5/2013 Page 192 / 220
2012 2011
Total net kilowatt hours generated 499,577,200 565,450,300
Additional kilowatt hours used at plant 4,443,964 4,536,804
Net kilowatt hours produced 495,133,236 560,913,496
Kilowatt hours purchased from WAPA, NPPD, OPPD, MEAN & TENASKA 314,623,200 261,002,900
Kilowatt hours sold to NPPD, MEAN & TENASKA 43,120,000 73,219,100
Total kilowatt hours available for sale 766,636,436 748,697,296
Kilowatt hours sold, as metered 732,196,064 715,049,181
Line loss 34,440,372 33,648,115
Line loss percentage 4.49%4.49%
Monthly average number billed by class:
Residential 20,278 20,152
Commercial 4,308 4,280
Industrial 92 87
Total 24,678 24,519
KWH Revenue KWH Revenue
Total KWH and revenue by class:
Residential 216,200,092 19,600,354$ 216,330,992 18,094,643$
Commercial 182,384,334 16,546,105 178,453,418 15,095,933
Industrial 333,611,638 23,660,053 320,264,771 20,828,569
Total 732,196,064 59,806,512$ 715,049,181 54,019,145$
Average revenue per KWH sold 0.0817$ 0.0755$
2012 2011
24
CITY OF GRAND ISLAND, NEBRASKA
ELECTRIC DEPARTMENT
OPERATING STATISTICS
For the years ended September 30,
(Unaudited)
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Grand Island Study Session - 3/5/2013 Page 195 / 220
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
FINANCIAL STATEMENTS
September 30, 2012 and 2011
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1
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS’ REPORT 2
BASIC FINANCIAL STATEMENTS
Statements of Net Assets 4
Statements of Revenues, Expenses, and Changes in Net Assets 5
Statements of Cash Flows 6
Notes to Financial Statements 8
OTHER SUPPLEMENTARY INFORMATION
Operating Statistics 21
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 22
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Grand Island Study Session - 3/5/2013 Page 199 / 220
2012 2011
ASSETS
Current assets:
Cash and cash equivalents 415,972$ 1,588,750$
Investments 2,737,801 2,520,270
Receivables:
Accounts, net of allowance for doubtful accounts of
$25,475 at September 30, 2012, and $26,399 at
September 30, 2011 864,454 401,726
Unbilled revenue 299,452 229,059
Interest 9,082 9,033
Special assessments 53,018 68,729
Inventory 332,661 278,278
Prepaid expense 12,895 12,159
Total current assets 4,725,335 5,108,004
Noncurrent assets:
Restricted cash and cash equivalents 412,319 100,511
Restricted investments 300,500 412,219
Unamortized bond costs 50,839 3,573
Capital assets:
Construction in progress 7,332,221 597,960
Distribution and collection systems 53,012,679 51,290,121
Buildings and equipment 3,255,768 3,230,954
Less accumulated depreciation (12,784,034) (12,141,603)
Net capital assets 50,816,634 42,977,432
Total noncurrent assets 51,580,292 43,493,735
Total assets 56,305,627 48,601,739
LIABILITIES
Current liabilities:
Accounts payable 1,068,537 383,364
Accrued expenses 274,172 230,823
Current portion of long-term obligations 220,000 350,000
Total current liabilities 1,562,709 964,187
Noncurrent liabilities:
Compensated absences, noncurrent 43,041 39,090
Noncurrent portion of long-term obligations 3,505,000 745,000
3,548,041 784,090
Total liabilities 5,110,750 1,748,277
NET ASSETS
Invested in capital assets, net of related debt 47,142,473 41,886,005
Restricted for:
Debt service 712,819 512,730
Unrestricted 3,339,585 4,454,727
Total net assets 51,194,877$ 46,853,462$
4
CITY OF GRAND ISLAND, NEBRASKA
STATEMENTS OF NET ASSETS
September 30,
See notes to financial statements.
WATER DEPARTMENT
Grand Island Study Session - 3/5/2013 Page 200 / 220
2012 2011
Operating revenues:
Sale of water:
Consumers 5,079,025$ 4,115,419$
Municipal and interdepartmental 96,285 83,499
Total sales 5,175,310 4,198,918
Tap fees 1,795,043 6,434
Other revenue 190,369 212,019
Total operating revenues 7,160,722 4,417,371
Operating expenses:
Production 1,259,225 876,200
Operation 890,135 840,525
Consumer accounting and collection 448,460 441,217
Employee benefits and payroll 167,984 152,177
General office expense 6,863 6,573
Special services 102,950 95,643
Insurance 12,190 9,009
Miscellaneous 203,528 170,729
Depreciation 663,944 640,932
Amortization 4,884 2,410
Total operating expenses 3,760,163 3,235,415
Operating income 3,400,559 1,181,956
Nonoperating revenues (expenses):
Interest income 20,528 27,654
Gain on sale of assets 1,615 -
Contribution in aid of construction 1,058,847 900,963
Payments in lieu of taxes (83,718) (54,683)
Interest expense (56,416) (63,474)
Total nonoperating revenues
(expenses)940,856 810,460
Change in net assets 4,341,415 1,992,416
Net assets, beginning of year 46,853,462 44,861,046
Net assets, end of year 51,194,877$ 46,853,462$
See notes to financial statements.
5
WATER DEPARTMENT
CITY OF GRAND ISLAND, NEBRASKA
STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
For the years ended September 30,
Grand Island Study Session - 3/5/2013 Page 201 / 220
2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers 6,627,601$ 4,470,018$
Cash paid to suppliers for goods and services (2,429,087) (2,004,468)
Cash paid to employees for services (606,441) (584,582)
Net cash provided by operating activities 3,592,073 1,880,968
NONCAPITAL FINANCING ACTIVITIES:
Payments in lieu of taxes (54,683) (56,792)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Purchase of property and equipment (6,844,939) (1,113,486)
Proceeds on sale of capital assets 5,382 2,003
Proceeds from the issuance of bonds payable 3,725,000 -
Payment of bond fees (52,150) -
Principal payments on long-term debt (1,095,000) (335,000)
Interest paid (51,320) (67,285)
Net cash used in capital and related financing activities (4,313,027) (1,513,768)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments redeemed 412,219 550,985
Investments purchased (518,031) (412,219)
Interest received 20,479 31,319
Net cash provided (used) by investing activities (85,333) 170,085
Net increase (decrease) in cash and cash equivalents (860,970) 480,493
Cash and cash equivalents - beginning of year 1,689,261 1,208,768
Cash and cash equivalents - end of year 828,291$ 1,689,261$
Cash and cash equivalents consist of:
Cash and cash equivalents 415,972$ 1,588,750$
Restricted cash and cash equivalents 412,319 100,511
Total cash and cash equivalents 828,291$ 1,689,261$
6
CITY OF GRAND ISLAND, NEBRASKA
STATEMENTS OF CASH FLOWS
See notes to financial statements.
WATER DEPARTMENT
For the years ended September 30,
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2012 2011
Reconciliation of operating income to net cash provided
by operating activities:
Operating income 3,400,559$ 1,181,956$
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation 663,944 640,932
Amortization 4,884 2,410
Change in assets and liabilities:
Accounts receivable (533,121) 52,647
Inventories (54,383) 228
Prepaid expenses (736) (1,528)
Accounts payable and accrued expenses 110,926 4,323
Net cash provided by operating activities 3,592,073$ 1,880,968$
Supplemental cash flow information:
Acquisition of capital assets through developers' aid of
construction 1,058,847$ 900,963$
Accounts payable incurred for capital asset purchases 917,168$ 329,752$
See notes to financial statements.
7
CITY OF GRAND ISLAND, NEBRASKA
STATEMENTS OF CASH FLOWS, Continued
For the years ended September 30,
WATER DEPARTMENT
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8
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
NOTES TO FINANCIAL STATEMENTS
INDEX
Page
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Financial Reporting Entity 9
2. Measurement Focus and Basis of Accounting 10
3. Assets, Liabilities, and Equity 11
4. Revenues, Expenditures, and Expenses 14
NOTE B – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
1. Deposit Laws and Regulations 14
2. Debt Restrictions and Covenants 15
3. Budgetary Data 15
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS
1. Cash and Cash Equivalents 15
2. Restricted Assets 16
3. Capital Assets 17
4. Long-term Debt 18
5. Payments to the City of Grand Island 19
NOTE D – OTHER NOTES
1. Pension Plan 20
2. Risk Management 20
3. Subsequent Events 20
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9
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
NOTES TO FINANCIAL STATEMENTS
September 30, 2012 and 2011
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Grand Island, Nebraska, Water Department (Department),
are prepared in accordance with generally accepted accounting principles (GAAP). The
Department’s reporting entity applies all relevant Governmental Accounting Standards Board
(GASB) pronouncements and Financial Accounting Standards Board (FASB) pronouncements
and Accounting Principles Board (APB) opinions issued on or before November 30, 1989, unless
those pronouncements conflict with or contradict GASB pronouncements, in which case GASB
prevails.
The financial statements referred to above present only the Department and do not purport to,
and do not, present fairly the financial position of the City of Grand Island, Nebraska, as of
September 30, 2012 and 2011, and the changes in financial position for the years then ended in
conformity with accounting principles generally accepted in the United States of America.
1. Financial Reporting Entity
The City of Grand Island, Nebraska, Water Department is a public utility accounted for as an
enterprise fund by the City of Grand Island, Nebraska (City). The City Council has the authority
to set rates and charges, incur debt, and significantly influence operations. The Department
utilizes the National Association of Regulatory Utility Commissioners Uniform System of
Accounts.
In determining the financial reporting entity, the Department complies with the provisions of
GASB Statement No. 14 and Statement No. 39, and has included all organizations that make up
the Department’s legal entity and all component units. Consistent with applicable guidance, the
criteria used by the Department to include component units within its reporting entity are
financial accountability and the nature and significance of the relationship. The Department
includes organizations as component units under the following financial accountability criteria:
(1) Organizations for which the Department appoints a voting majority of the
organization’s governing body and for which (a) the Department is able to impose its
will on the organization or (b) there is a potential for the organization to provide
specific financial benefits to, or impose specific financial burdens on, the Department.
(2) Organizations which are fiscally dependent on the Department. Fiscal dependency is
established if the organization is unable to adopt its budget, levy taxes or set rates or
charges, or issue bonded debt without approval by the Department.
The Department is an enterprise fund of the City of Grand Island, Nebraska, and has determined
that it has no component units for reporting purposes.
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10
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
2. Measurement Focus and Basis of Accounting
Measurement focus is a term used to describe “which” transactions are recorded within the
various financial statements. Basis of accounting refers to “when” transactions are recorded
regardless of the measurement focus applied.
Measurement Focus
The Department utilizes the “flow of economic resources” measurement focus and uses the
accrual basis of accounting. The accounting objectives of this measurement focus are the
determination of operating income, changes in net assets (or cost recovery), financial position,
and cash flows. All assets and liabilities (whether current or noncurrent) associated with their
activities are reported.
Basis of Accounting
Under the accrual basis of accounting, revenues are recognized when earned and expenses are
recorded when the liability is incurred or economic asset used. Revenues, expenses, gains,
losses, assets, and liabilities resulting from exchange and exchange-like transactions are
recognized when the exchange takes place.
The Department’s accounting records are maintained in accordance with accounting principles
generally accepted in the United States of America for regulated utilities and generally follow the
Uniform System of Accounts for Public Utilities and License prescribed by the Federal Energy
Regulatory Commission (FERC). The Department prepares its financial statements as a
business-type activity in conformity with applicable pronouncements of the Governmental
Accounting Standards Board (GASB). In reporting financial activity, applicable Financial
Accounting Standards Board Statements and Interpretations, Accounting Principles Board
Opinions, and Accounting Research Bulletins are applied, except for those that conflict with or
contradict Governmental Accounting Standards Board pronouncements.
The Department first applies unrestricted net assets when an expense or outlay is incurred for
purposes for which both restricted and unrestricted net assets are available.
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11
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
3. Assets, Liabilities, and Equity
Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
For purposes of the Statements of Cash Flows, the Department considers cash on hand and in the
bank, as well as cash and equity in pooled cash held by the City, which are readily convertible to
known amounts of cash and have original maturities of three months or less, to be cash and cash
equivalents.
The Department participates in a cash management pool, managed by the City. The
Department’s interest in this pool consists of $2,737,801 and $2,520,270 of investments and
$825,291 and $1,689,261 of cash and cash equivalents at September 30, 2012 and 2011,
respectively.
Investments and Investment Income
Investments in nonnegotiable certificates of deposits are carried at cost. Investment income
consists of interest income from nonnegotiable certificates of deposit and cash and cash
equivalents.
Receivables
Billings for the sale of water are generally rendered on a monthly basis. Accounts receivable are
stated at the amount billed to customers, with credit extended on an unsecured basis. The
Department provides an allowance for doubtful accounts, which is based upon a review of
outstanding receivables, historical collection information and existing economic conditions.
Accounts receivable are ordinarily due 21 days after the issuance of the invoice. Delinquent
receivables are written off based on individual credit evaluation and specific circumstances of
the customer. Estimated sales which have not been billed are accrued and recorded in the period
to which they relate as unbilled revenues.
Inventories
Materials and supplies inventories are stated at cost, which does not exceed market. Cost is
generally determined on a weighted-average basis.
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12
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
3. Assets, Liabilities, and Equity, continued
Restricted assets
Restricted assets include cash and investments that are legally restricted as to their use. The
restricted assets are related to debt service reserve accounts.
Capital assets
Utility plant additions and replacements are generally stated at cost. Costs of labor, materials,
supervision, and other expenses incurred in making repairs and minor replacements and in
maintaining the plant in efficient operating condition are charged to expense. Plant accounts are
charged with the costs of betterments and replacements of plant, except minor replacements, and
the accumulated provision for depreciation is charged with retirements, together with removal
costs, less salvage. Contributed assets are capitalized at their fair market value at the date of
contribution. Depreciation of property, plant, and equipment is computed at an overall
composite rate of approximately 1.19 percent in 2012 and 1.20 percent in 2011.
Costs related to studies expected to result in construction and/or acquisition of additional utility
plant are deferred pending completion. Upon completion, such costs are capitalized as part of
the cost of the plant to be constructed or acquired. If a project is terminated, costs of studies
related thereto are charged to expense in accordance with the rate-making treatment adopted.
The Department capitalizes interest costs as a component of productive capacity, based on the
weighted-average rates paid for long-term borrowing. Total interest incurred was:
2012 2011
Interest costs capitalized $ - $ -
Interest costs charged to expense 56,416 63,474
Total interest incurred $ 56,416 $ 63,474
Unamortized Bond Discount
Bond discount fees for the Department are deferred and amortized over the life of the bonds
using the “bonds outstanding” method.
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13
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
3. Assets, Liabilities, and Equity, continued
Compensated Absences
All regular full-time employees earn sick leave and vacation leave. Employees accrue vacation
leave at variable rates based on years of service. Sick leave accrues at a rate of eight hours per
month of service. Union employees are eligible to receive annually one-half of their total
accrued sick pay in excess of 960 hours at their current rate. Non-union employees are no longer
eligible to receive one-half of their total accrued sick pay in excess of 960 hours. The final such
payment for the non-union employees was made on September 30, 2010.
Compensated absences of the Department are summarized below:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
September 30, 2012 $ 119,711 $ 14,205 $ ( 9,163) $ 124,753 $ 81,712
September 30, 2011 $ 119,212 $ 9,323 $ ( 8,824) $ 119,711 $ 80,621
Long-term Debt
The long-term debt consists of bonds payable.
Net Asset Classifications
Net Assets are classified into three components:
a. Invested in capital assets, net of related debt – Consists of capital assets, including
restricted capital assets, net of accumulated depreciation and reduced by the
outstanding balances of any bonds, mortgages, notes, or improvement of those assets.
b. Restricted net assets – Consists of net assets with constraints placed on their use
either by (1) external groups such as creditors, grantors, contributors, or laws or
regulations of other governments; or (2) law through constitutional provisions or
enabling legislation.
c. Unrestricted net assets – All other net assets that do not meet the definition of
“restricted” or “invested in capital assets, net of related debt.”
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14
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
4. Revenues, Expenditures, and Expenses
Revenues and Expenses
As an enterprise fund, the Department distinguishes operating revenues and expenses from
nonoperating items. Operating revenues and expenses generally result from providing services
and producing and delivering goods in connection with the Department’s principal ongoing
operations. The principal operating revenues of the Department are charges to customers for
sales and services. Operating expenses 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 nonoperating revenues and expenses.
Contributions in Aid of Construction
Contributions in aid of construction are development projects constructed and contributed by
developers. These contributions are recorded at fair value when the development is complete
and are considered imposed non-exchange transactions.
NOTE B – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
By its nature as a local governmental unit, the Department is subject to various federal, state, and
local laws and contractual regulations. An analysis of the Department’s compliance with
significant laws and regulations and demonstration of its stewardship over Department resources
follows:
1. Deposit Laws and Regulations
Custodial credit risk is the risk that, in the event of a bank failure, a government’s deposits may
not be returned to it. The Department’s deposit policy for custodial credit risk requires
compliance with the provisions of state law.
State law requires collateralization of all deposits with federal depository insurance or with U.S.
Treasury and U.S. agency securities having an aggregate value at least equal to the amount of the
deposits. The Department’s cash deposits, including certificates of deposit, are insured by the
Federal Deposit Insurance Corporation (FDIC) up to $250,000 for interest-bearing demand
deposits, up to $250,000 for interest-bearing time deposits/savings, and all non-interest-bearing
deposits are insured. Any cash deposits or certificates of deposit in excess of the FDIC limits are
insured by collateral held by the pledging institution in the Department’s name.
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15
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE B – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY, continued
2. Debt Restrictions and Covenants
Bonds Payable
The various bond ordinances relating to the bonds payable contain some restrictions or covenants
that are financial-related. These include covenants such as debt service coverage requirements
and required reserve account balances. The Department is in compliance with the bond
restrictions and covenants.
3. Budgetary Data
An appropriated budget is adopted each fiscal period for the Department on the cash basis, which
is consistent with State of Nebraska budget guidelines. Budgets are approved by the City
Council.
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS
The following notes present detail information to support the amounts reported in the basic
financial statements for the Department’s various assets, liabilities, equity, revenues, and
expenditures/expenses.
1. Cash and Cash Equivalents
Deposits
State law requires collateralization of all deposits with federal depository insurance or with U.S.
Treasury and U.S. agency securities having an aggregate value at least equal to the amount of the
deposits. The Department has been allocated a portion of the City’s pooled cash. Of the pooled
funds, none were uninsured and uncollateralized at September 30, 2012 and 2011.
The Department held certificates of deposit at September 30, 2012 and 2011, with a stated value
of $300,500 and $412,219, respectively. At September 30, 2012 and 2011, the Department’s
deposits were not exposed to custodial credit risk.
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16
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
1. Cash and Cash Equivalents, continued
Summary of Carrying Values
The carrying values of pooled cash and deposits at September 30, 2012 and 2011, are included in
the statement of net assets as follows:
2012 2011
Equity in pooled cash $ 415,972 $ 1,588,750
Equity in pooled investments 2,737,801 2,520,270
Equity in pooled cash – restricted 412,319 100,511
Certificates of deposit – restricted 300,500 412,219
$ 3,866,592 $ 4,621,750
2. Restricted Assets
The restricted assets as of September 30, 2012 and 2011, are as follows:
2012 2011
Restricted cash and cash equivalents $ 412,319 $ 100,511
Restricted investments 300,500 412,219
$ 712,819 $ 512,730
The restricted cash at September 30, 2012 consists of $111,951 of bond proceeds restricted for
the water construction project and $225,000 restricted for the Uranium removal system. The
balance of the restricted cash and cash equivalents at September 30, 2012 and 2011, of $75,368
and $100,511, respectively, represent the bond and interest sinking fund. The restricted
investments represent the debt service reserve for the water bonds.
Grand Island Study Session - 3/5/2013 Page 212 / 220
17
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
3. Capital Assets
The major classes of property, plant, and equipment at September 30, 2012 and 2011, are shown
below:
Adjustments
Beginning and Ending
Balance Additions Retirements Reclass Balance
Construction work-in-progress 597,960$ 8,456,820$ -$ (1,722,559)$ 7,332,221$
Source of supply plant 6,564,752 - - - 6,564,752
Pumping plant 1,017,096 - - - 1,017,096
Water treatment plant 93,156 - - - 93,156
Transmission and distribution plant 43,615,117 - - 1,722,559 45,337,676
General plant 3,230,954 50,092 (25,279) - 3,255,767
Total property, plant, and
equipment 55,119,035 8,506,912 (25,279) - 63,600,668
Less accumulated depreciation (12,141,603) (663,944) 21,513 - (12,784,034)
Net property, plant, and
equipment 42,977,432$ 7,842,968$ (3,766)$ -$ 50,816,634$
2012
Adjustments
Beginning and Ending
Balance Additions Retirements Reclass Balance
Construction work-in-progress 362,156$ 2,304,149$ -$ (2,068,345)$ 597,960$
Source of supply plant 6,449,996 - - 114,756 6,564,752
Pumping plant 1,017,096 - - - 1,017,096
Water treatment plant 93,156 - - - 93,156
Transmission and distribution plant 41,689,791 - (28,263) 1,953,589 43,615,117
General plant 3,219,692 11,262 - - 3,230,954
Total property, plant, and
equipment 52,831,887 2,315,411 (28,263) - 55,119,035
Less accumulated depreciation (11,526,932) (640,932) 26,261 - (12,141,603)
Net property, plant, and
equipment 41,304,955$ 1,674,479$ (2,002)$ -$ 42,977,432$
2011
Grand Island Study Session - 3/5/2013 Page 213 / 220
18
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
4. Long-term Debt
Long-term debt at September 30, 2012 and 2011, is shown below:
2012 2011
Revenue bonds:
Water Revenue Refunding Bonds,
Series 1999, due annually to July 1,
2014, interest from 3.55 percent to
4.85 percent, secured by Water
System revenue. The bonds were
refinanced during the year ended
September 30, 2012. $ - $ 1,095,000
Water Revenue Refunding Bonds,
Series 2012, due annually to July 2,
2027, interest from 0.4 percent to 3.1
percent, secured by Water System
revenue. 3,725,000 -
Total revenue bonds 3,725,000 1,095,000
Less current maturities 220,000 350,000
Noncurrent portion $ 3,505,000 $ 745,000
Long-term debt activity for 2012 and 2011 is summarized as follows:
Amounts Due
Beginning Principal Ending Within
Balance Additions Payments Balance One Year
2012 1,095,000$ 3,725,000$ (1,095,000)$ 3,725,000$ 220,000$
2011 1,430,000$ -$ (335,000)$ 1,095,000$ 350,000$
Grand Island Study Session - 3/5/2013 Page 214 / 220
19
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE C – DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS, continued
4. Long-term Debt, continued
The following is a summary of debt service requirements for the next five years and thereafter:
Principal Interest Total
2013 $ 220,000 $ 69,571 $ 289,571
2014 225,000 67,737 292,737
2015 225,000 66,500 291,500
2016 230,000 65,038 295,038
2017 230,000 63,082 293,082
2018-2022 1,225,000 266,013 1,491,013
2023-2027 1,370,000 122,477 1,492,477
$ 3,725,000 $ 720,418 $ 4,445,418
The indentures under which the Department’s revenue bonds were issued provide for the
creation and maintenance of certain accounts. These accounts at September 30, 2012 and 2011,
are shown in Note C2. There are a number of other limitations, restrictions, and covenants
contained in the indentures under which the Department’s revenue bonds were issued.
The bonds maturing on and after July 2, 2017, are subject to redemption at the option of the City
prior to maturity at any time after June 26, 2017, in whole or in part, at par plus accrued interest
to the date fixed for redemption.
5. Payments to the City of Grand Island
The Department is exempt from federal and state income taxes and local property taxes. City
ordinances provide for payments in lieu of taxes. The annual payment in lieu of taxes,
amounting to $83,718 and $54,683 for 2012 and 2011, respectively, are set at one percent of the
gross revenues of the Department. The Department does pay sales tax.
The City provides certain administrative services to the Department for which the Department
pays fees to the City. These fees are included in special services expense and amount to $92,895
and $83,100 for the years ended September 30, 2012 and 2011, respectively.
Grand Island Study Session - 3/5/2013 Page 215 / 220
20
CITY OF GRAND ISLAND, NEBRASKA
WATER DEPARTMENT
NOTES TO FINANCIAL STATEMENTS, Continued
September 30, 2012 and 2011
NOTE D – OTHER NOTES
1. Pension Plan
The City has a defined contribution employees’ pension plan in which employees of the
Department participate. The plan requires any new employee working a minimum of 1,000
hours to participate in the plan. The plan requires participants to contribute six percent of
participant earnings in order for the pension plan to meet Internal Revenue Service guidelines for
tax deferred pension plans. The Department is required to match the participants’ contributions.
As of October 1, 1997, participants can elect to contribute an additional four percent of their
earnings with no Department match.
All participants are fully vested in their own contributions and become vested in the
Department’s contribution at varying rates depending on their date of employment. Full vesting
in the Department’s contributions occurs after five years of participation in the plan. The
participants’ and Department’s contributions were $36,564 and $36,564, respectively, for the
year ended September 30, 2012, and $35,016 and $35,016, respectively, for the year ended
September 30, 2011.
2. Risk Management
The Department participates in the City’s self-insurance program administered by the City’s Risk
Management Division (Division). The City is exposed to various risks of loss related to torts;
theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and
natural disasters. On behalf of the City, the Division purchases insurance and administers funds
for its self-insured program. The Division maintains a workers’ compensation fund and a self-
insured loss fund. The Division provides first dollar coverage for all workers’ compensation
exposure with insurance acting as an umbrella or excess coverage. The maximum exposure
would be the deductible amounts for property and automobile physical damage, as well as losses
not covered by insurance. The department has had no claims or judgments exceeding this
commercial coverage in any of the past three fiscal years. Budgeted premium amounts charged
to the Department are placed in the appropriate fund maintained by the Division. Premium
expense for the Department was approximately $40,000 and $37,000 for the years ended
September 30, 2012 and 2011.
3. Subsequent Events
Management has evaluated subsequent events through January 18, 2013, the date on which the
financial statements were available for issue.
Grand Island Study Session - 3/5/2013 Page 216 / 220
OTHER SUPPLEMENTARY INFORMATION
Grand Island Study Session - 3/5/2013 Page 217 / 220
2012 2011
Average number of consumers billed during the year 15,899 15,765
Gallons of Water (in thousands)
Pumped 5,452,496 4,526,177
Less:
Used at plant 274 131
Turbine cooling water 912,195 711,966
Net water for sale 4,540,027 3,814,080
Sold (in thousands)4,304,337 3,744,687
Unaccounted for (in thousands)235,690 69,393
Percent of net water for sale unaccounted for 5.19%1.82%
21
CITY OF GRAND ISLAND, NEBRASKA
OPERATING STATISTICS
For the years ended September 30,
WATER DEPARTMENT
(Unaudited)
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