03.18.2021CouncilPacket
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for bandwidth services
* * *
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Agreement
GE
Initial Term
Network
Renewal Term
Services
Term
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City of Ammon
Year Ended September 30, 2020
Table of Contents
Management's Discussion and Analysis.....................................................................................................1
Independent Auditor's Report........................................................................................................................9
Financial Statements
Government-wide Statement of Net Position....................................................................................................11
Statement of Activities........................................................................................................................................12
Balance Sheet
Governmental Funds...........................................................................................................................................13
Reconciliation of Governmental Funds Balance Sheet
to the Statement of Net Position........................................................................................................................14
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds...........................................................................................................................................15
Reconciliation of the Governmental Funds Revenues, Expenditures,
and Changes in Fund Balance to the Statement of Activities.............................................................................16
Statement of Net Position
Proprietary Funds................................................................................................................................................17
Statement of Revenues, Expenses, and Changes in Fund Net Position
Proprietary Funds................................................................................................................................................18
Statements of Cash Flows
Proprietary Funds................................................................................................................................................19
Notes to Financial Statements.............................................................................................................................21
Required Supplementary Information
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget to Actual - Government Funds................................................................................................................45
Schedule of Employer's Share of Net Pension Liability and Schedule of Employer Contributions.....................48
Other Information
Nonmajor Governmental Funds
Special Revenue Funds........................................................................................................................................49
All Nonmajor Funds
Combining Balance Sheet....................................................................................................................................50
All Nonmajor Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance............................................51
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City of Ammon
Year Ended September 30, 2020
Annual Federal Compliance Section
Independent Auditor's Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards...................................................52
Independent Auditor's Report on Compliance for Each Major Federal Program
and Report on Internal Control over Compliance Required by Uniform Guidance............................................54
Schedule of Findings and Questioned Costs........................................................................................................56
Schedule of Expenditures of Federal Awards......................................................................................................59
Notes to Schedule of Expenditures of Federal Awards.......................................................................................60
Schedule of Prior Audit Findings..........................................................................................................................61
Ammon City Council 03/16/2021Page 24 of 118
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Independent Auditor's Report
Honorable Mayor and City Council
City of Ammon
Idaho Falls, Idaho
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, the discretely presented component unit, each major fund, and the aggregate remaining fund
information of the City of Ammon, Idaho (the "City"), as of and for the year ended September 30, 2020, and the
related notes to the financial statements, which collectively comprise the City's basic financial statements as
listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States; this includes the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States and the standards applicable
to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we
express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business-type activities, the discretely presented component
unit, each major fund, and the aggregate remaining fund information of the City of Ammon, Idaho as of
September 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof,
for the year then ended in accordance with accounting principles generally accepted in the United States.
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Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States require that the management's discussion and
analysis and budgetary comparison information and required supplementary information as listed in the table of
contents be presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States, which consisted of
inquiries of management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other knowledge
we obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The accompanying supplementary information, such as combining
nonmajor fund financial statements and the schedule of expenditures of federal awards, as required by Title 2
U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance), are presented for purposes of additional analysis and are
not a required part of the basic financial statements.
The combining nonmajor fund financial statements and schedule of federal awards are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records used to
prepare the basic financial statements. Such information has been subjected to the auditing procedures applied
in the audit of the basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States. In our opinion, the combining
nonmajor fund financial statements and schedule of federal awards as listed in the table of contents are fairly
stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 18, 2021, on our
consideration of the City's internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is
solely to describe the scope of our testing of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control over financial reporting and compliance.
Wipfli LLP
Idaho Falls, Idaho
March 18, 2021
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City of Ammon
Combining Statements of Net Position
Governmental
Business-Type ActivitiesActivities
SanitationNonmajorInternal Service
Water FundsSewer FundsFunds(Fiber Optic)TotalFunds
Assets
Current assets
Investments$4,092,195$9,650,341$2,720,441$17,695$16,480,672$177,098
Accounts Receivable660,184552,71242,972449,8041,705,672-
Inventory---146,980146,980-
Total current assets4,752,37910,203,0532,763,413614,47918,333,324177,098
Capital assets
Nondepreciable assets1,248,952196,395-339,3701,784,717-
Depreciable assets22,989,9778,918,810617,0551,286,18133,812,023179,479
Total capital assets24,238,9299,115,205617,0551,625,55135,596,740179,479
Total assets 28,991,30819,318,2583,380,4682,240,03053,930,064356,577
Deferred outflow of resources
Related to pensions64,35043,80646,26427,054181,474-
Liabilities and net position
Current
Accrued salaries and
benefits40,29116,83720,12330,722107,97338,610
Accrued interest payable25,046260,102--285,148-
Connection payable-400,400--400,400-
Deposits payable105,8601,1103,360-110,330-
Notes payable - current778,378605,676--1,384,054-
Total current 949,5751,284,12523,48330,7222,287,90538,610
Noncurrent
Pension liability196,462118,474132,25797,852545,045-
Interfund payable---499,400499,400-
Long-term debt8,110,00617,739,674--25,849,680-
Total noncurrent 8,306,46817,858,148132,257597,25226,894,125-
Total liabilities$9,256,043$19,142,273$155,740$627,974$29,182,030$38,610
Deferred inflow of resources
Related to pensions6,2252,1651,9956,19416,579-
Net position
Net investment in capital
assets15,350,545-617,0551,625,55117,593,151179,479
Restricted-1,068,523--1,068,523-
Unrestricted4,442,845(850,897)2,651,9427,3656,251,255138,488
Total net position 19,793,390217,6263,268,9971,632,916$24,912,929317,967
Adjustment to reflect the consolidation of internal service fund
activities related to enterprise funds194,291
Net position of business-type activities$25,107,220
The accompanying notes are integral to this financial statement
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City of Ammon
Combining Statements of Revenues, Expenses and Changes In Net Position
Governmental
Business-Type ActivitiesActivities
SewerSanitationNonmajorInternal Service
Water FundsFundsFunds(Fiber Optic)TotalFunds
Operating revenues
Charges for Services$3,356,165$3,364,724$633,347$353,468$7,707,704$574,014
Connection Fees466,337261,300--727,637-
Penalty Fees37,373--15437,527-
Miscellaneous Revenues2,11431,251-8,50041,8652,455
Total operating revenues 3,861,9893,657,275633,347362,1228,514,733576,469
Operating expenses
Power294,31913,653--307,972-
Treatment-892,648--892,648-
Operations and
Maintenance978,172294,582258,54294,9991,626,295192,216
Salaries and Benefits464,706234,928214,621206,0591,120,314311,959
Depreciation757,205342,169110,43877,9011,287,71338,357
Total operating expenses 2,494,4021,777,980583,601378,9595,234,942542,532
Income (loss) from
Operations 1,367,5871,879,29549,746(16,837)3,279,79133,937
Non-operating revenues (expenses)
Grants and Awards173,085--417,575590,660-
Investment Earnings77,206164,73151,0446,419299,4007,868
Interest Expense(232,858)(417,320)--(650,178)-
Total non-operating
revenues (expenses)17,433(252,589)51,044423,994239,8827,868
Capital contributions 1,913,9602,595,813--4,509,773-
Increase in net position 3,298,9804,222,519100,790407,1578,029,44641,805
Net position, beginning of
year 16,494,410(4,004,893)3,168,2071,225,75916,883,483276,162
Net position, end of year 19,793,390217,6263,268,9971,632,916$24,912,929317,967
Change in net position - enterprise
funds8,029,446
Adjustment to reflect the consolidation of internal service fund
activities related to enterprise funds17,324
Change in net position of business-type activities$8,046,770
The accompanying notes are integral to this financial statement
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Notes to Financial Statements
Note 1:Summary of Significant Accounting Policies
Introduction
_K" G6&#&76#; 4*#*"+"&*4 9G *K" N6*< 9G :++9& \[*K" bN6*<c\] K#D" ,""& )$")#$"' 6& #779$'#&7" F6*K #7798&*6&2
principles generally accepted in the United States (GAAP) as applied to government units. The Governmental
Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental
accounting and financial reporting principles. The significant accounting principles and policies utilized by the City
are described below:
Reporting Entity
The City is a municipal corporation governed by an elected Mayor and 6-member City Council which together
possess the final decision-making authority and is held primarily accountable for those decisions. The City Council
is responsible for approving the budget, establishing spending limitations, funding and deficits and borrowing
funds and/or issuing bonds to finance construction.
Discretely Presented Component Unit. In conformity with generally accepted accounting principles, the basic
financial statements of Ammon Urban Renewal Agency have been included in the financial reporting entity as a
discretely presented component unit, emphasizing their nature as a legally separate entity from the City. It is
presented as a separate column within the basic financial statements.
Ammon Urban Renewal Agency (the Agency). This component unit has a board, which is appointed by the Mayor
of the City with the advice and consent of the Ammon City Council. The Ammon Urban Renewal Agency
rehabilitates deteriorating or deteriorated areas. It has a fiscal year end of September 30. For financial reporting
purposes, the City of Ammon, Idaho, combines the general maintenance and operating accounts of the Agency
with all other funds which the management of the City has oversight responsibility and the governing authority to
significantly influence operations. A copy of the Agency audit may be obtained at the City office.
There are no other boards, councils, or component units for which the City of Ammon exercises authority.
Basis of Presentation
Government-Wide Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities)
display information about the reporting government as a whole. These statements include all nonfiduciary
activities of the City. Governmental activities, which are normally supported by taxes, intergovernmental
revenues, and other non-exchange transactions are reported separately from business-type activities, which rely
to a significant extent on fees and charges for support.
While separate government-wide and fund financial statements are presented, they are interrelated. The
governmental activities column incorporates data from governmental funds and internal service funds, while
,846&"44E*<)" #7*6D6*6"4 6&79$)9$#*" '#*# G$9+ *K" 29D"$&+"&*g4 "&*"$)$64" G8&'4= (")#$#*" G6&#&76#; 4*#*"+"&*4
are provided for governmental funds and proprietary funds.
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Ammon City Council 03/16/2021Page 45 of 118
City of Ammon
Notes to Financial Statements
Note 1:Summary of Significant Accounting Policies(Continued)
Basis of Presentation(Continued)
The statement of net position presents the financial condition of the governmental and business-type activities of
the City at year-end. The statement of activities demonstrates the degree to which the direct expenses of a given
function are offset by program revenues. Direct expenses are those that are specifically associated with and are
clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients for goods
or services offered by the programs and (b) grants and contributions that are restricted to meeting the
operational or capital requirements of a particular program. Revenues that are not classified as program
revenues, including all taxes, are presented as general revenues.
_K" 4*#*"+"&* 9G &"* )946*69& )$"4"&*4 *K" $")9$*6&2 "&*6*<g4 #44"*4 #&' ;6#,6;6*6"4/ F6*K *K" '6GG"$"&7" $")9$*"' #4
net position (net investment in capital assets; restricted net position; or unrestricted net position). Net
investment in capital assets consists of capital assets, net of accumulated depreciation, and reduced by
outstanding debt. Restricted net position results when constraints placed on net position use are imposed by
third parties through constitutional provisions or enabling legislation.
The statement of activities demonstrates the degree to which the direct expenses of a given function are offset
by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program
revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods,
services, or privileges provided by a given function, and (2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function. Taxes and other items not included
among program revenues are reported as general revenues.
The City applies restricted resources first when an expense is incurred for a purpose for which both restricted and
unrestricted net position are available. Depreciation expense that can be specifically identified by function is
included in the direct expenses of each function. Interest on general long-term debt is considered an indirect
expense and is reported separately on the statement of activities.
Fund Financial Statements
_K" G8&' 4*#*"+"&*4 )$9D6'" 6&G9$+#*69& #,98* *K" N6*<g4 G8&'4= (")#$#*" 4*#*"+"&*4 G9$ "#7K G8&'
7#*"29$<h29D"$&+"&*#; #&' )$9)$6"*#$<h#$" )$"4"&*"'= _K" "+)K#464 9G G8&' G6&#&76#; 4*#*"+"&*4 64 9& +#V9$
funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as
other governmental funds.
Governmental Fund Types
Governmental funds are those funds through which most governmental functions typically are financed. The
measurement focus of governmental funds is on the sources, uses, and balance of current financial resources.
The City reports the following major governmental funds:
General Fund E _K64 G8&' 64 *K" N6*<g4 )$6+#$< 9)"$#*6&2 G8&'= ?* #7798&*4 G9$ #;; G6&#&76#; $"498$7"4 9G *K" 2"&"$#;
government, except those required to be accounted for in another fund. All general tax revenues and other
receipts that are not restricted by law or contractual agreement to some other fund are accounted for in this
fund. General operating expenditures, fixed charges, and capital improvement costs that are not paid through
other funds are paid from the General Fund.
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Ammon City Council 03/16/2021Page 46 of 118
City of Ammon
Notes to Financial Statements
Note 1:Summary of Significant Accounting Policies(Continued)
Basis of Presentation(Continued)
Street Funds i _K"4" G8&'4 #$" 84"' *9 #7798&* G9$ G8&'4 $"7"6D"' #&' "M)"&'"' G9$ *K" 79&4*$87*69& #&'
renovation of thoroughfares, arterial streets, and other improvements in the City.
Parks & Recreation Funds i _K"4" G8&'4 #$" 84"' *9 #7798&* G9$ G8&'4 $"7"6D"' #&' "M)"&'"' G9$ *K" N6*< )#$`4
and other recreational facilities of the City.
The City has five nonmajor governmental funds. These include the Building Fund, and Fiber Local Improvement
Districts #1, #2, #3, and #4.
Proprietary Fund Types
Proprietary funds are accounted for using the economic resources measurement focus and the accrual basis of
accounting. The accounting objectives are determinations of net income, financial position, and cash flow. All
assets and liabilities are included on the Statement of Net Position. The City reports the following major
proprietary funds:
Water Fund i _K64 G8&' #7798&*4 G9$ *K" )$9D6469& 9G F#*"$ 4"$D67"4 *9 *K" $"46'"&*4 9G *K" N6*<= :7*6D6*6"4 9G *K"
fund include administration, operations, and maintenance of the water system, and billing and collection
activities.
Wastewater Fund i _K64 G8&' #7798&*4 G9$ *K" )$9D6469& 9G F#4*"F#*"$ 4"$D67"4 *9 *K" $"46'"&*4 9G *K" N6*<=
Activities of the fund include administration, operations, and maintenance of the wastewater system,
administration of the debt related to providing wastewater services, and billing and collection activities.
Sanitation Fund i _K64 G8&' #7798&*4 G9$ *K" 9)"$#*69&4 9G 49;6' F#4*" 79;;"7*69& #&' '64)94#; 4"$D67"4= :;; 794*4
are financed through charges to sanitation customers.
The City has one nonmajor proprietary fund.
Fiber Optic Fund i _K64 G8&' #7798&*4 G9$ *K" 9)"$#*69&4 9G *K" N6*<g4 G6,"$ 9)*67 4<4*"+= :;; 794*4 F6;; ," G6&#&7"'
through charges to fiber optic customers.
Additionally, the City reports the following fund type:
Internal service funds account for data processing provided to other departments of the City on a cost
reimbursement basis.
During the course of operations, the City has activity between funds for various purposes. Any residual balances
outstanding at year end are reported as due from/to other funds and advances to/from other funds. While these
balances are reported in fund financial statements, certain eliminations are made in the preparation of the
government-wide financials statements. Balances between the funds included in governmental activities (i.e., the
governmental and internal service funds) are eliminated so that only the net amount is included as internal
balances in the governmental activities column. Similarly, balances between the funds included in business-type
activities (i.e., the enterprise funds) are eliminated so that only the net amount is included as internal balances in
the business-type activities column.
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Ammon City Council 03/16/2021Page 47 of 118
City of Ammon
Notes to Financial Statements
Note 1:Summary of Significant Accounting Policies(Continued)
Basis of Presentation(Continued)
Further, certain activity occurs during the year involving transfers of resources between funds. In fund financial
statements these amounts are reported at gross amounts as transfers in/out. While reported in fund financial
statements, certain eliminations are made in the preparation of the government-wide financial statements.
Transfers between the funds included in governmental activities are eliminated so that only the net amount is
included as transfers in the governmental activities column. Similarly, balances between the funds included in
business-type activities are eliminated so that only the net amount is included as transfers in the business-type
activities column.
Measurement Focus and Basis of Accounting
The government-wide and proprietary fund financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded at the time liabilities are incurred, regardless of when the related cash transaction takes place.
Nonexchange transactions, in which the City gives or receives value without directly receiving or giving equal
value in exchange, include property taxes, grants, entitlements, and donations. On an accrual basis, revenue from
property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements,
and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Under this method, revenues are recognized when
measurable and available (susceptible to accrual). "Measurable" means the amount of the transaction can be
determined and "available" means collectible within the current period or soon enough thereafter to pay
liabilities of the current period. For this purpose, the City considers all imposed nonexchange revenues reported
in the governmental funds to be available if the revenues are collected within 60 days after the end of the current
fiscal year.
Expenditures are recognized when the related fund liability is incurred, except for principal and interest on
general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures
to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental
funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing
sources.
Property taxes, sales taxes, franchise taxes, licenses, and interest associated with the current fiscal period are
considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period.
Entitlements are recorded as revenues when all eligibility requirements are met, including any time
requirements, and the amount is received during the period or within the availability period for this revenue
source (within 60 days of year end). Expenditure-driven grants are recognized as revenue when the qualifying
expenditures have been incurred and all other eligibility requirements have been met, and the amount is
received during the period or within the availability period for this revenue source (within 60 days of year end).
All other revenue items are considered to be measurable and available only when cash is received by the
government.
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Ammon City Council 03/16/2021Page 48 of 118
City of Ammon
Notes to Financial Statements
Note 1:Summary of Significant Accounting Policies(Continued)
Measurement Focus and Basis of Accounting(Continued)
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial
statements.
Amounts reported as program revenues include (1) charges to customers or applicants for goods, services, or
privileges provided, (2) operating grants and contributions, and (3) capital grants and contributions. Internally
dedicated resources are reported as general revenue rather than as program revenues. Likewise, general
revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a
proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise funds
are charges to customers for services. Operating expenses for enterprise funds include the cost of services,
administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as nonoperating revenues.
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.
Budgetary Control
Budgets are adopted on a basis consistent with generally accepted accounting principles. Annual appropriated
budgets are adopted for the General, Special Revenue, and Proprietary Funds. All annual appropriations lapse at
fiscal year end. The department heads submit the budget to the City Council and a public hearing is held prior to
adoption of the budget. Prior to October 1, the budget is enacted through passage of an appropriation ordinance.
The budget includes the General, Special Revenue, and Enterprise Funds. The level of control (level at which
expenditures should not exceed budget) is the fund. The legal level of control is the appropriation ordinance.
Encumbrances represent commitments related to unperformed contracts for goods or services. The City did not
have any encumbrances at September 30, 2020.
The General and Street Fund statements of revenues, expenditures, and changes in fund balance present a
comparison of budgetary data to actual results. These reports utilize the same basis of accounting for both
budgetary purposes and actual results.
Cash and Investments
The City considers all highly liquid investments with a maturity of three months or less when purchased to be
cash equivalents. Cash also includes amounts held in the local government investment pool and money market
accounts. State statutes authorize the City to invest in obligations of the U.S. Treasury, commercial paper,
corporate bonds, and repurchase agreements. Investments of the primary government consist of certificates of
deposits with original maturities of greater than three months, government agency bonds, corporate bonds, and
#+98&*4 K";' 6& *K" 4*#*"g4 '6D"$46G6"' ,9&' G8&'=
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Ammon City Council 03/16/2021Page 49 of 118
City of Ammon
Notes to Financial Statements
Note 1:Summary of Significant Accounting Policies(Continued)
Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinary
transaction between market participants at the measurement date. A three-tier hierarchy prioritizes the
inputs used in measuring fair value. These tiers include:
Level 1, defined as observable inputs such as quoted market prices in active markets;
Level 2, defined as inputs other than quoted market prices in active markets that are either directly or
indirectly observable; and
Level 3, defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity
to develop its own assumptions.
The asset's or liability's fair value measurement within the hierarchy is based on the lowest level of any input
that is significant to the fair value measurement.
Inventories and Prepaid Items
Inventories are valued at cost using the first-in/first-out (FIFO) method. Prepaid items represent payments made
by the City for which benefits extend beyond September 30, 2020. The costs of governmental fund type inventory
and prepaid items are recorded as expenditures when purchased.
Receivables
Property taxes are recognized as revenue in the period for which the taxes are levied. The tax levy is used to
finance operations of the City's fiscal year ended September 30, 2020. All property taxes are considered due as
of the second Monday in January and are levied on the second Monday in September. Taxes are payable in two
installments on December 20 and June 20 of the following year. All taxes collected within 60 days of
September 30, 2020 are considered available to pay current liabilities. Amounts not collected are deferred and
recognized when they become available to the City.
The City's Water, Wastewater, Sanitation, and Fiber Funds' accounts receivable are reported at their gross
amount. The City estimates that the amount of uncollectible accounts would not be significant to the outstanding
balance, therefore no amounts have been accrued for bad debt.
Other receivables in the governmental and proprietary funds are also recorded at gross. No allowance for
uncollectible accounts has been provided since it is believed that the amount of such allowance would not be
material.
Capital Assets
Purchased or constructed capital assets, including property, plant, equipment, and infrastructure (roads, bridges,
and similar items) are reported at cost or estimated historical cost in the government-wide financial statements.
The City defines capital assets as assets with an initial cost of more than $5,000 and an estimated life in excess of
one year.
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City of Ammon
Notes to Financial Statements
Note 1:Summary of Significant Accounting Policies(Continued)
Capital Assets(Continued)
Donated capital assets are recorded at estimated aquisition value at the date of donation. Renewals and
betterments are capitalized. The costs of normal maintenance and repairs that do not add to the value of the
asset or materially extend the life of the asset are not capitalized. The City received donations of streets, water,
wastewater, and storm piping related to the annexation of 9 subdivisions for the year ended September 30, 2020.
Additions or improvements that significantly extend the useful life of an asset, or that significantly increase the
capacity of an asset are capitalized. Expenditures in the governmental funds for equipment, vehicles, real
property acquisitions, improvements, and infrastructure are recorded as capital outlay. Maintenance and repairs
of a routine nature are charged to expenses/expenditures as incurred and are not capitalized.
Capital assets are depreciated using the straight-line method over the following estimated useful lives:
Buildings30 years
Infrastructure15-60 years
Equipment3-15 years
Vehicles5-7 years
Capital assets not being depreciated include land, water rights, and construction in progress.
Compensated Absences
Governmental Accounting Standards Board codification specifies that a liability should be accrued for leave
benefits that meet the following conditions:
_K" "+);9<"$g4 9,;62#*69& $";#*6D" *9 "+);9<"" $62K*4 *9 $"7"6D" 79+)"&4#*69& G9$ G8*8$" #,4"&7"4 64
attributable to employee services already rendered
The obligation related to rights that vest or accumulate
Payment of the obligation is probable
The amount can be reasonably estimated
The City records a liability for accrued paid time off (PTO) when incurred in the government-wide and proprietary
financial statements. A liability for these amounts is reported in governmental funds only if they have matured,
for example, as a result of employee resignations and retirements. The City uses the vesting method to calculate
the compensated absence liability.
In proprietary funds, compensated absences are expended when earned. The entire amount of compensated
absences is reported as a liability.
Long-Term Obligations
In the government-wide financial statements and proprietary fund types in the fund statements, long-term debt
and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type
activities, or proprietary fund type statement of net position. Bonds payable are reported net of applicable bond
premium or discount.
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Ammon City Council 03/16/2021Page 51 of 118
City of Ammon
Notes to Financial Statements
Note 1:Summary of Significant Accounting Policies(Continued)
Long-Term Obligations(Continued)
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as
bond issuance costs, during the current period. The face amount of debt issued is reported as other financing
sources. Premiums received on debt issuances are reported as other financing sources while discounts are
reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds
received, are reported as debt service expenditures.
Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Financial Position will sometimes report a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of resources, represents a
consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of
resources (expense/expenditure) until then. The City has one item that qualifies for reporting in this category and
it occurs on the government-wide statement of net position. The City reports deferred outflows of resources
related to pensions for its proportionate shares of collective deferred outflows of resources related to pensions
and City contributions to pension plans subsequent to the measurement date of the collective net pension
liability (asset).
In addition to liabilities, the Statement of Financial Position will sometimes report a separate section for deferred
inflows of resources. This separate financial statement element, deferred inflows of resources, represents an
acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of
resources (revenue) until that time. The City has one type of item, which arises only under a modified accrual
basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is
reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues
from property taxes. This amount is deferred and recognized as an inflow of resources in the period that the
amounts become available. The City also reports deferred inflows of resources for its proportionate share of the
collective deferred inflows of resources related to pensions in the government-wide statement of net position.
Pension Plan
For purposes of measuring the net pension liability and pension expense, information about the fiduciary net
position of the Public Employee Retirement System of Idaho Base Plan (Base Plan) and additions to/deductions
G$9+ J#4" I;#&g4 G6'876#$< &"* )946*69& K#D" ,""& '"*"$+6&"' 9& *K" 4#+" ,#464 #4 *K"< #$" $")9$*"' ,< *K" J#4"
Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due
and payable in accordance with the benefit terms. Investments are reported at fair value.
Net Position
Net position represents the difference between assets and deferred outflows of resources and liabilities and
deferred inflows of resources. Net investment in capital assets consists of capital assets, net of accumulated
depreciation, reduced by the outstanding balance of any long-term debt used to build or acquire the capital
assets. Net position is reported as restricted when there are limitations imposed on its use through external
restrictions imposed by creditors, grantors, or laws or regulations of other governments, or imposed by law
through constitutional provisions or enabling legislation.
ZK"& ,9*K $"4*$67*"' #&' 8&$"4*$67*"' $"498$7"4 #$" #D#6;#,;" G9$ 84"/ 6* 64 *K" N6*<g4 )9;67< *9 84" "M*"$&#;;<
restricted resources first.
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Ammon City Council 03/16/2021Page 52 of 118
City of Ammon
Notes to Financial Statements
Note 1:Summary of Significant Accounting Policies(Continued)
Fund Balances
In the fund financial statements, governmental funds report aggregate amounts for five classifications of fund
balances based on the constraints imposed on the use of these resources. The nonspendable fund balance
7;#446G67#*69& 6&7;8'"4 #+98&*4 *K#* 7#&&9* ," 4)"&* ,"7#84" *K"< #$" "6*K"$ \[#\] &9* 6& 4)"&'#,;" G9$+ i )$")#6'
items or inventories or (b) legally or contractually required to be maintained intact.
The spendable portion of the fund balance comprises the remaining four classifications: restricted, committed,
assigned, and unassigned.
Restricted fund balance: This classification reflects the constraints imposed on resources either (a) externally
by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law
through constitutional provisions or enabling legislation.
Committed fund balance: These amounts can only be used for specific purposes pursuant to constraints
6+)94"' ,< *K" 9$'6&#&7"4 9G *K" N6*< N98&76; i *K" N6*<g4 K62K"4* ;"D"; 9G '"76469&E+#`6&2 #8*K9$6*<= _K94"
committed amounts cannot be used for any other purpose unless the City Council removes the specified use
by taking the same type of action that imposed the original commitment. This classification also includes
contractual obligations to the extent that existing resources in the fund have been specifically committed for
use in satisfying those contractual requirements.
Assigned fund balance: _K64 7;#446G67#*69& $"G;"7*4 *K" #+98&*4 79&4*$#6&"' ,< *K" N6*<g4 b6&*"&*c *9 ," 84"'
for specific purposes, but the amounts are neither restricted nor committed. The City Council has the
authority to assign amounts to be used for specific purposes. Assigned fund balances include all remaining
amounts (except negative balances) that are reported in governmental funds, other than the General Fund,
that are not classified as nonspendable and are neither restricted nor committed.
Unassigned fund balance: This fund balance is the residual classification for the General Fund. It is also
used to report negative fund balances in other governmental funds.
ZK"& ,9*K $"4*$67*"' #&' 8&$"4*$67*"' $"498$7"4 #$" #D#6;#,;" G9$ 84"/ 6* 64 *K" N6*<g4 )9;67< *9 84" "M*"$&#;;<
$"4*$67*"' $"498$7"4 G6$4*/ *K"& 8&$"4*$67*"' $"498$7"4 i 79++6**"'/ #4462&"'/ #&' 8ᅮ&"' i 6& 9$'"$ #4
needed.
Risk Management
The City is exposed to a considerable number of risks of loss, including: (a) damage to and loss of property and
contents; (b) employee torts; (c) professional liability, i.e. errors and omissions; (d) environmental damage; (e)
F9$`"$4g 79+)"&4#*69&/ 6="= "+);9<"" 6&V8$6"4^ #&' \[G\] +"'67#; 6&48$#&7" 794*4 9G "+);9<""4= N9++"$76#; )9;676"4
transferring the risks of loss, except for relatively small deductible amounts, are purchased for property and
content damage, employee torts, and professional liabilities. Settled claims resulting from these risks have not
exceeded commercial insurance coverage in any of the past three fiscal years.
29
Ammon City Council 03/16/2021Page 53 of 118
City of Ammon
Notes to Financial Statements
Note 1:Summary of Significant Accounting Policies(Continued)
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United
States 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 expenditures during the reporting period. Actual results could differ from
those estimates.
Subsequent Events
The City has evaluated subsequent events through March 18, 2021, which is the date the financial
statements were available to be issued. Effective October 1, 2020, the City turned over the operations of the
Fire Department to the Bonneville County Fire Protection District #1. All associated revenues and
expenditures will be taken over by that entity. There were no other subsequent-type events required to be
disclosed.
Note 2:Cash and Investments
Deposits with Financial Institutions
Custodial credit risk-deposits. In the case of deposits, this is the risk that in the event of a bank failure, the City's
deposits may not be returned to it. The City has reduced its concentration of credit risk by using several financial
institutions. The formal policy as of September 30, 2020 was to limit deposits with any one bank or credit union
to the maximum FDIC/SPIC insurable amount. As of September 30, 2020, $1,534,328, including the money
market, was not insured or collateralized.
Investments
The government utilizes a pooled investment concept for all its funds to maximize its investment program.
Investment income from this internal pooling is allocated to the respective funds based upon the sources of funds
6&D"4*"'= _K" 7#$$<6&2 D#;8" 9G *K" N6*<g4 6&D"4*+"&*4 #* <"#$ "&' F#4 a0-/AOQ/0Q. #&' *K" G#6$ D#;8" F#4
$23,957,270. The amount not covered by insurancewas $11,521,341!
The City invests in the Local Government Investment Pool (LGIP) through the Idaho State Treasurer. All funds are
6&D"4*"' ,< *K" ?'#K9 (*#*" _$"#48$"$g4 9GG67" 6& #779$'#&7" F6*K ("7*69&4 PQE>0>. #&' PQE>0>.: 9G *K" ?'#K9
N9'"= :;; 6&D"4*+"&*4 G9$ *K" TC?I #$" 79;;#*"$#;6d"' F6*K 4"78$6*6"4 K";' ,< *K" TC?Ig4 4#G"`"")6&2 #2"&* 6& *K"
TC?Ig4 &#+"= _K" 6&D"4*+"&*4 K";' ,< *K" TC?I #$" 7#$$6"' #* 794*/ FK67K 64 &9* +#*"$6#;;< '6GG"$"&* *K#& G#6$ D#;8"
\['"*"$+6&"' ,< *K" ?'#K9 (*#*" _$"#48$"$g4 9GG67"\]= _K" 6&D"4*+"&*4 #$" 48,V"7* *9 $64` G$9+ +#$`"* #&' 6&*"$"4*
rate fluctuations. The City has included this in cash.
:;; 9G *K" N6*<g4 6&D"4*+"&*4 *K#* #$" +"#48$"' 9$ '647;94"' #* G#6$ D#;8" G#;; F6*K6& T"D"; 0 9G *K" G#6$ D#;8"
hierarchy.
The City invests in the Diversified Bond Fund (DBF) through the Idaho State Treasurer. Amounts held by the DBF
were held in the following investments: corporate securities, mortgage-backed securities, asset-backed securities,
commercial mortgage-backed securities, U.S. Government agency securities, U.S. Treasury securities money
market funds, and accrued interest. The City had $113,326 invested in the DBF at September 30, 2020.
30
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City of Ammon
Notes to Financial Statements
Note 2:Cash and Investments(Continued)
_K" 6&D"4*+"&*4 K";' ,< *K" 5JB #$" 7#$$6"' #* G#6$ D#;8" \['"*"$+6&"' ,< *K" ?'#K9 (*#*" _$"#48$"$g4 9GG67"\]=
These investments are subject to risk from market and rate fluctuations. The weighted average duration was 2.88
years at September 30, 2020.
_K" N6*<g4 6&D"4*+"&* #7798&*4/ 6&7;8'6&2 29D"$&+"&* #2"&76"4/ 79++"$76#; )#)"$/ 79$)9$#*" ,9&'4/ 7"$*6G67#*"4
of deposit, and money market funds, are held with Moreton Asset Management. The money market funds are
included as cash in the financial statements. The weighted average duration was 1.79 years. As of September 30,
2020, the City had the following investments held with Moreton Asset Management showing the distribution by
maturity and rating:
Remaining Maturity (in Years)
12 Months1-55-10 Total Fair
Investment Typeor LessYearsYears Value Rating
State DBF Fund$-113,326$113,326AAA
Corporate Bonds$3,482,8527,420,72110,903,573AA-/A+/A/A-/BBB+
Agency Bonds$504,443504,443AAA
Certificates of Deposit1,340,02911,095,89912,435,928NA/NR/A-1+/A-2/A-3/D
Total Investments5,327,32418,629,946-23,957,270
Plus cash4,067,191
Total cash and investments$28,024,461
Interest rate risk. Interest rate risk is the risk that changes in market interest rates will adversely affect the fair
value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair
value to changes in market interest rates. The City manages its exposure to declines in fair values by limiting the
weighted average maturity of its investment portfolio.
Credit risk. Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical
$#*6&2 9$2#&6d#*69&= I$"4"&*"' #,9D" 64 *K" #7*8#; $#*6&2 #4 9G <"#$E"&' G9$ "#7K 6&D"4*+"&* *<)"= _K" N6*<g4
investment policy requires investments to be in conformity with Idaho Statue Title 50 Chapter 10 section 13.
Concentration of credit risk. The City's investment policy does not allow for an investment in any one issuer that is
in excess of 5 percent of the City's total investments. The City utilizes a pooled investment concept for all its
funds to maximize its investment program. Investment income from this internal pooling is allocated to the
respective funds based upon the sources of funds invested.
Custodial credit risk-investments. For an investment, this 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 investments or collateral securities that are in
the possession of an outside party. The City has a deposit policy to minimize custodial credit risk.
Foreign Currency Risk. The City has no foreign currency risk for investments at year end.
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City of Ammon
Notes to Financial Statements
Note 3:Capital Assets
Capital asset balances and activity for the year ended September 30, 2020, were as follows:
BalanceDecreases andBalance
Governmental Activities:09/30/19IncreasesTransfers09/30/20
Capital assets, not being depreciated:
Land918,686--918,686
Construction in progress727,699196,446(727,699)196,446
Total capital assets, not being depreciated$1,646,385$196,446$(727,699)$1,115,132
Capital assets, being depreciated:
Buildings and improvements2,869,087300,720(24,108)3,145,699
Infrastructure41,964,6814,822,812727,69947,515,192
Machinery and equipment4,140,538228,737(66,683)4,302,592
Total capital assets, being depreciated48,974,3065,352,269636,90854,963,483
Accumulated depreciation:
Buildings and improvements(1,321,125)(116,042)24,108(1,413,059)
Infrastructure(29,449,314)(1,058,393)-(30,507,707)
Machinery and equipment(2,547,159)(307,995)63,282(2,791,872)
Total accumulated depreciation(33,317,598)(1,482,430)87,390(34,712,638)
Total capital assets, being depreciated, net$15,656,708$3,869,839$724,298$20,250,845
Governmental activities capital assets, net17,303,0934,066,285(3,401)21,365,977
BalanceDecreases andBalance
Business-type Activities:09/30/19IncreasesTransfers09/30/20
Capital assets, not being depreciated:
Land and water rights414,826148,588-563,414
Construction in progress125,5721,095,731-1,221,303
Total capital assets, not being depreciated$540,398$1,244,319$-$1,784,717
Capital assets, being depreciated:
Buildings and improvements8,384,131--8,384,131
Infrastructure27,508,9586,031,956-33,540,914
Machinery and equipment5,701,521551,624(244,380)6,008,765
Total capital assets, being depreciated41,594,6106,583,580(244,380)47,933,810
Accumulated depreciation:
Buildings and improvements(2,627,381)(247,877)-(2,875,258)
Infrastructure(7,203,308)(654,904)-(7,858,212)
Machinery and equipment(3,247,765)(384,932)244,380(3,388,317)
Total accumulated depreciation(13,078,454)(1,287,713)244,380(14,121,787)
Total capital assets, being depreciated, net$28,516,156$5,295,867$-$33,812,023
Business-type activities capital assets, net29,056,5546,540,186-35,596,740
32
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City of Ammon
Notes to Financial Statements
Note 3:Capital Assets(Continued)
Depreciation expense was charged to the governmental functions as follows:
Governmental activities:
General government32,937
Fire protection129,641
Building7,109
Parks and recreation85,281
Highway and streets1,189,105
Capital assets held by the government's internal service funds which are charged to the various
functions based on their usage of the assets:38,357
Total depreciation expense, governmental activities1,482,430
Business-Type activities:
Water757,205
Wastewater342,169
Sanitation110,438
Fiber Optic77,901
Total depreciation expense, business-type activities1,287,713
Note 4:Lease Agreements
The City has a lease agreement with Cat Financial to lease a Caterpillar 305E2CR for 5 years beginning June 20,
2016, through June 20, 2020. The lease calls for annual payments of $7,701 with a $40,000 payment on June 20,
2021, if the City elects to retain the equipment when the lease ends on May 31, 2021. The lease is subject to non-
appropriation.
The City has a lease agreement with Cat Financial to lease a Caterpillar 924K for 5 years beginning June 20, 2016,
through June 20, 2020. The lease calls for annual payments of $13,398 with a $75,000 payment on June 20, 2021,
if the City elects to retain the equipment when the lease ends on May 31, 2021. The lease is subject to non-
appropriation.
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City of Ammon
Notes to Financial Statements
Note 5:Pension Plan
Plan Description
The City contributes to the Base Plan which is a cost sharing multiple-employer defined benefit pension plan
administered by Public Employee Retirement System of Idaho (PERSI or System) that covers substantially all
employees of the State of Idaho, its agencies and various participating political subdivisions. The cost to
administer the plan is financed through the contributions and investment earnings of the plan. PERSI issues a
publicly available financial report that includes financial statements and the required supplementary information
for PERSI. That report may be obtained on the PERSI website at www.persi.idaho.gov.
Responsibility for administration of the Base Plan is assigned to the Board comprised of five members appointed
by the Governor and confirmed by the Idaho Senate. State law requires that two members of the Board be active
Base Plan members with at least ten years of service and three members who are Idaho citizens not members of
the Base Plan except by reason of having served on the Board.
Pension Benefits
The Base Plan provides retirement, disability, death, and survivor benefits of eligible members or beneficiaries.
J"&"G6*4 #$" ,#4"' 9& +"+,"$4g <"#$4 9G 4"$D67"/ #2"/ #&' K62K"4* #D"$#2" 4#;#$<= 1"+,"$4 ,"79+" G8;;< D"4*"'
in their retirement benefits with five years of credited service (5 months for elected or appointed officials).
Members are eligible for retirement benefits upon attainment of the ages specified for their employment
classification. The annual service retirement allowance for each month of credited service is 2.0% (2.3% for
police/firefighters) of the average monthly salary for the highest consecutive 42 months.
The benefit payments for the Base Plan are calculated using a benefit formula adopted by the Idaho Legislature.
The Base Plan is required to provide a 1% minimum cost of living increase per year provided the Consumer Price
Index increases 1% or more. The PERSI Board has the authority to provide higher cost of living increases to a
maximum of the Consumer Price Index movement or 6%, whichever is less; however, any amount above the 1%
minimum is subject to review by the Idaho Legislature.
Member and Employer Contributions
Member and employer contributions paid to the Base Plan are set by statute and are established as a percent of
covered compensation. Contribution rates are determined by the PERSI Board within limitations, as defined by
state law. The Board may make periodic changes to employer and employee contribution rates (expressed as
percentages of annual covered payroll) that are adequate to accumulate sufficient assets to pay benefits when
due.
The contribution rates for employees are set by statute at 60% of the employer rate for general employees and
72% for police and firefighters. As of June 30, 2020, it was 7.16% and 8.81% for police and firefighters. The
employer contribution rate is set by the Retirement Board and was 11.94% for general employees and 12.28% for
)9;67" #&' G6$"G62K*"$4= _K" N6*<g4 79&*$6,8*69&4 F"$" a--P/Q.. G9$ *K" <"#$ "&'"' (")*"+,"$ -./ 0.0.=
34
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City of Ammon
Notes to Financial Statements
Note 5:Pension Plan(Continued)
Pension Liabilities, Pension Expense (Revenue), and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
At September 30, 2020, the City reported a liability for its proportionate share of the net pension liability. The net
pension liability was measured as of June 30, 2020, and the total pension liability used to calculate the net
)"&469& ;6#,6;6*< F#4 '"*"$+6&"' ,< #& #7*8#$6#; D#;8#*69& #4 9G *K#* '#*"= _K" N6*<g4 )$9)9$*69& 9G *K" &"* )"&469&
;6#,6;6*< F#4 ,#4"' 9& *K" N6*<g4 4K#$" 9G 79&*$6,8*69&4 6& *K" J#4" I;#& )"&469& );#& $";#*6D" *9 *K" *9*#;
79&*$6,8*69&4 9G #;; )#$*676)#*6&2 I%@(? J#4" I;#& "+);9<"$4= :* k8&" -./ 0.0./ *K" N6*<g4 )$9)9$*69& F#4 =.QQ-Q.
percent.
For the year ended September 30, 2020, the City recognized pension expense of $750,124. At September 30,
2020, the City reported deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
DeferredDeferred
Outflows ofInflows of
ResourcesResources
Differences between expected and actual experience$140,372$-
Changes in assumptions or other inputs30,384-
Net difference between projected and actual earnings on pension plan investments205,92958,664
City contributions subsequent to the measurement date95,515-
Total$472,200$58,664
$95,515 reported as deferred outflows of resources related to pensions resulting from Employer contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year
ending September 30, 2021.
The average of the expected remaining service lives of all employees that are provided with pensions through the
System (active and inactive employees) determined at July 1, 2018, the beginning of the measurement period
ended June 30, 2019, is 4.8 years and 4.8 years for the measurement period June 30, 2020.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions
will be recognized in pension expense as follows:
Year Ended September 30,
2021$5,802
202275,681
2023102,718
2024$133,820
35
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City of Ammon
Notes to Financial Statements
Note 5:Pension Plan(Continued)
Actuarial Assumptions
Valuations are based on actuarial assumptions, the benefit formulas, and employee groups. Level percentages of
payroll normal costs are determined using the Entry Age Normal Cost Method. Under the Entry Age Normal Cost
Method, the actuarial present value of the projected benefits of each individual included in the actuarial
D#;8#*69& 64 #;;97#*"' #4 # ;"D"; )"$7"&*#2" 9G "#7K <"#$g4 "#$&6&24 9G *K" 6&'6D6'8#; ,"*F""& "&*$< #2" #&'
assumed exit age. The Base Plan amortizes any unfunded actuarial accrued liability based on a level percentage of
payroll. The maximum amortization period for the Base Plan permitted under Section 59-1322, Idaho Code, is 25
years.
The total pension liability in the June 30, 2020, actuarial valuation was determined using the following actuarial
assumptions, applied to all periods included in the measurement:
Inflation3.00%
Salary increases3.75%
Salary inflation3.75%
Investment rate of return 7.05%, net of investment expenses
Cost-of-living adjustments1%
19$*#;6*< $#*"4 F"$" ,#4"' 9& *K" @I i 0... 79+,6&"' *#,;" G9$ K"#;*K< +#;"4 9$ G"+#;"4 #4 #))$9)$6#*" F6*K
the following offsets:
Set back 3 years for teachers
No offset for male fire and police
Forward one year for female fire and police
Set back one year for all general employees and all beneficiaries
An experience study was performed for the period July 1, 2013, through June 30, 2017, which reviewed all
economic and demographic assumptions other than mortality. The Total Pension Liability as of June 30, 2020, is
based on the results of an actuarial valuation date of July 1, 2020.
The long-term expected rate of return on pension plan investments was determined using the building block
approach and a forward-looking model in which best estimate rates or expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for each major asset
class. These ranges are combined to produce the long-term expected rate of return by weighing the expected
future real rates of return by the target asset allocation percentage and by adding expected inflation.
Even though history provides a valuable perspective for setting the investment return assumption, the System
relies primarily on an approach which builds upon the latest capital market assumptions. Specifically, the System
uses consultants, investment managers and trustees to develop capital market assumptions in analyzing the
(<4*"+g4 #44"* #;;97#*69&= _K" #448+)*69&4 #&' *K" (<4*"+g4 G9$+#; )9;67< G9$ #44"* #;;97#*69& #$" 4K9F& ,";9F=
_K" G9$+#; #44"* #;;97#*69& )9;67< 64 49+"FK#* +9$" 79&4"$D#*6D" *K#& *K" 78$$"&* #;;97#*69& 9G (<4*"+g4 #44"*4=
36
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City of Ammon
Notes to Financial Statements
Note 5:Pension Plan(Continued)
The best-estimate range for the long-term expected rate of return is determined by adding expected inflation to
expected long-term real returns and reflecting expected volatility and correlation. The capital market
assumptions are as of 2020.
Long-TermLong-Term
Expected NominalExpected Real
TargetRate of ReturnRate of Return
Asset Class Allocation(Arithmetic)(Arithmetic)
Core Fixed Income30.00%2.80%0.55%
Broad US Equities%55.00%8.55%6.30
Developed Foreign Equities%15.00%8.70%6.45
Assumed Inflation - Mean%2.25%2.25
Assumed Inflation - Standard Deviation%1.50%1.50
Portfolio Arithmetic Mean Return%6.85%4.60
Portfolio Standard Deviation%12.33%12.33
Portfolio Long-Term (Geometric) Expected Rate of Return%6.25%3.89
Assumed Investment Expenses%0.40%0.40
Portfolio Long-Term (Geometric) Expected Rate of Return, Net of Investment
Expenses5.85%3.49%
Discount Rate
The discount rate used to measure the total pension liability was 7.05%. The projection of cash flows used to
determine the discount rate assumed that contributions from plan members will be made at the current
79&*$6,8*69& $#*"= J#4"' 9& *K"4" #448+)*69&4/ *K" )"&469& );#&4g &"* )946*69& F#4 )$9V"7*"' *9 ," #D#6;#,;" *9
make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of
return on pension plan investments was applied to all period of projected benefit payments to determine the
total pension liability. The long-term expected rate of return was determined net of pension plan investment
expense but without reduction for pension plan administrative expense.
.$&0,(,#,(E "2 (G$ J'=4"E$%R0 =%"="%(,"&/($ 0G/%$ "2 (G$ &$( =$&0,"& 4,/@,4,(E (" <G/&-$0 ,& (G$ +,0<"*&( %/($D
_K" G9;;9F6&2 )$"4"&*4 *K" %+);9<"$g4 )$9)9$*69&#*" 4K#$" 9G *K" &"* )"&469& ;6#,6;6*< 7#;78;#*"' 846&2 *K"
'64798&* $#*" 9G Q=.O )"$7"&*/ #4 F";; #4 FK#* *K" %+);9<"$g4 )$9)9$*69&#*" 4K#$" 9G *K" &"* )"&469& ;6#,6;6*<
would be if it were calculated using a discount rate that is 1-percentage-point lower (6.05 percent) or 1-
percentage-point higher (8.05 percent) than the current rate:
1% Decrease1% Decrease1% Decrease
(6.05%)(7.05%)(8.05%)
Employer's proportionate share of the net pension liability (asset)$3,684,408$1,796,636$235,756
37
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City of Ammon
Notes to Financial Statements
Note 5:Pension Plan(Continued)
Pension plan fiduciary net position
5"*#6;"' 6&G9$+#*69& #,98* *K" )"&469& );#&g4 G6'876#$< &"* )946*69& 64 #D#6;#,;" 6& *K" 4")#$#*";< 6448"' I%@(?
financial report. PERSI issues a publicly available financial report that includes financial statements and the
required supplementary information for PERSI. That report may be obtained on the PERSI website at
www.persi.idaho.gov.
Payables to the pension plan
At September 30, 2020, the City reported payables to the defined benefit pension plan of $0 for legally required
employer contributions and $0 for legally required employee contributions which had been withheld from
employee wages but not yet remitted to PERSI.
Note 6:Interfund Balances and Activity
Interfund receivable and payable balances in the fund financial statements on September 30, 2020, are as
follows:
FundReceivablePayable
General Fund1,937,354-
LID #1 Fund-613,732
LID #4 Fund-824,222
Fiber optic fund-499,400
Total1,937,3541,937,354
The City loaned funds to support the creation and infrastructure for the LID funds until the loans can be
converted into bonds or are repaid. The General fund also loaned money to the Fiber optic fund to cover
infrastructure costs that will be reimbursed as additional users are brought onto the system. No repayment terms
have been set for the repayments of LID #4 and the fiber optic fund as of the date of these financials.
Repayment terms for the LID #1 loan from the general fund are set at annual principal and interest payments of
$44,624 for 20 years. Interest for this loan is set at 3% per annum. The second payment was made during the
2020 fiscal year.
In the statement of net position, amounts reported in fund balance sheets as interfund balances have been
eliminated within the governmental activities columns.
Interfund transfers at September 30, 2020, were as follows:
FundTransfer InTransfer Out
Major fund -
General fund-576,284
Parks and recreation576,284-
Total576,284576,284
The General fund transferred $531,284 to the Parks fund to assist cash flows within the City, and an additional
$45,000 to the Parks fund as matching funds for a project grant received this year.
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City of Ammon
Notes to Financial Statements
Note 7:Long-Term Obligations
Compensated Absences - The City's benefits include a provision for compensated absences. The liability for this
benefit is liquidated by the fund in which the employee is paid from.
The following is a summary of the changes in long-term obligations for the year ended September 30, 2020 for
the governmental activities:
Balance atBalance atDue Within
October 1, 2019AdditionsPaymentsSeptember 30, 2020One Year
Compensated absences$98,092$-$(14,603)$83,489$83,489
Fiber Bond #2570,000-(17,238)552,76218,100
Premium on Fiber Bond27,067-(818)26,249860
Fiber Bond #3-783,196-783,19642,481
Total$695,159$783,196$(32,659)$1,445,696$144,930
Governmental Funds:
The City entered into a $570,000 bond through Neighborly Securities, Inc. on November 9, 2018. The bond, part
of the Fiber optic LID #2, requires annual payments for 20 years of $45,738 and has an interest rate of 5%. This
bond carries a premium in the amount of $27,067 that will be amortized over the life of the bond.
In June 2020, the City entered into a bond agreement with Washington Federal Bank to finance the LID #3 in the
amount of $783,196. The bond requires annual payments for 15 years of $65,038 and has an interest rate of
2.88%.
The following is a schedule of principal and interest payments on long-term debt to maturity:
Year Ended September 30,PrincipalInterest TotalPremium
202160,58250,194$110,776$860
202262,71048,066110,776902
202364,91945,857110,776948
202467,21243,564110,776995
202569,59241,184110,7761,045
2026-2030386,968166,911553,8796,061
2031-2035461,79092,089553,8797,736
2036-2039162,18520,768182,9537,702
Total1,335,958508,633$1,844,591$26,249
Business-Type Enterprise Funds:
The City entered into a $15,000,000 loan with the Department of Environmental Quality (DEQ) for improvements
to the water system on March 8, 2008. This loan was closed for $14,287,000 on January 5, 2012, and the City
began repaying the loan. The loan is secured by a revenue bond in the amount of $14,287,000. Within five years
9G )$9V"7* 79+);"*69&/ *K" N6*< 64 $"S86$"' *9 "4*#,;64K # $"4"$D" #7798&* 6& #& #+98&* "S8#; *9 > <"#$g4 )#<+"&*
of principal and interest and the City has established this reserve as of the year ended September 30, 2014, for
$955,302. The loan requires biannual payments of principal and interest at 3.00% to be amortized over 20 years
from the completion of the project. The required payments are $477,651 due bi-annually in January and July.
39
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City of Ammon
Notes to Financial Statements
Note 7:Long-Term Obligations(Continued)
On July 8, 2020, this bond was paid off by a refunding bond in the amount of $8,888,384 through LPMorgan
Chase Bank, NA. The new interest rate is 1.21% per year for 11 years, and created a cash flow savings of $930,308
for the City. The required principal and interest payments are $431,752 due bi-annually in November and May.
_K" N6*< "&*"$"' 6&*9 # a>O/.../... ;9#& F6*K *K" 5")#$*+"&* 9G %&D6$9&+"&*#; X8#;6*< \[5%X\] *9 G8&' *K" N6*<g4
portion of the regionalization project (Eastern Idaho Regional Wastewater Authority) on April 24, 2008. The loan
was increased to $25,000,000 as confirmed by judicial review. This loan was closed for $23,213,934 on April 24,
2013, and the City began repaying the loan.
The City is required to establish at the time of the issuance of the bond a reserve fund in an amount equal to 1
<"#$g4 )#<+"&* 9G )$6&76)#; #&' 6&*"$"4* #&' *K" N6*< "4*#,;64K"' # $"4"$D" 6& *K" #+98&* 9G a>/.PR/O0- #4 9G *K"
year ended September 30, 2014. The loan requires biannual payments of principal and interest at 2.25% to be
amortized over 30 years from the completion of the project. The required payments are $534,261 due in October
and April.
The following is a schedule of principal and interest payments on long-term debt to maturity:
Year Ended September 30,PrincipalInterestTotal
2021$1,384,054$547,971$1,932,025
20221,440,815491,2101,932,025
20231,465,363466,6621,932,025
20241,489,380442,6451,932,025
20251,515,818416,2071,932,025
2026-20307,977,3311,682,7959,660,126
2031-20355,161,8261,044,2876,206,113
2036-20404,815,876526,7345,342,610
2041-20421,983,27154,4622,037,733
Total$27,233,734$5,672,973$32,906,707
Following is a summary of the changes in long-term debt for the year ended September 30, 2020 for the
enterprise funds:
Beginning BalanceEnding BalanceDue Within
Governmental activities:October 1, 2019IncreaseDecreaseSeptember 30, 2020One Year
Revenue Bond - Water$9,508,881$-$(9,508,881)$-$-
Refunding Bond - Water-8,888,384-8,888,384778,378
Revenue Bond - Sewer19,037,206-(691,856)18,345,350605,676
Total$28,546,087$8,888,384$(10,200,737)$27,233,734$1,384,054
The City has pledged future water customer revenues, net of specified operating expenses, to repay the
$8,888,384 water revenue refunding bond. Annual principal and interest payments are expected to require less
than 100% of net revenues.
The City has pledged future wastewater customer revenues, net of specified operating expenses, to repay the
$18,345,350 wastewater revenue bond. Annual principal and interest payments are expected to require less than
100% of net revenues.
40
Ammon City Council 03/16/2021Page 64 of 118
City of Ammon
Notes to Financial Statements
Note 8:Deficit Fund Balance
The Fiber Optic Local Improvement District #1 is in a deficit of $522,119 at September 30, 2020. This amount is
expected to be repaid through the collections in the LID over time. The Fiber Optic Local Improvement District #4
is in a deficit of $833,803 at September 30, 2020. This amount is expected to be repaid through the collections in
the LID over time. The Parks Department is in a deficit of $13,845 at September 30, 2020. This amount is
expected to be repaid through transfers and fees over time.
Note 9:Fund Balance
According to Governmental Accounting Standards, fund balances are to be classified into five major
classifications; Nonspendable Fund Balance, Restricted Fund Balance, Committed Fund Balance, Assigned Fund
Balance, and Unassigned Fund Balance. The City's net position at September 30, 2020 is broken out as follows:
Parks andNon-Major
Governmental Funds GeneralStreetrecreationGovernmentalTotal
Nonspendable
Prepaid expenses$26,599$-$-$-$26,599
Restricted for:
East Hills15,826---15,826
Development commitments-110,780-2,151112,931
Committed for:
Street projects-1,327,258--1,327,258
Assigned For
Asset replacement---335,360335,360
Fire department278,031---278,031
Other---184,348184,348
Unassigned10,380,608-(13,845)(1,355,922)9,010,841
Total$10,701,064$1,438,038$(13,845)$(834,063)$11,291,194
Internal
Business-type Funds WaterWastewaterSanitationFiberservice FundTotal
Net investment in capital
assets$15,350,545$-$617,055$1,625,551$179,479$17,772,630
Restricted for:
Bond Reserve-1,068,523---1,068,523
Committed for:
Assigned For
Bond reserve863,504----863,504
Unassigned3,579,341(850,897)2,651,9427,365138,4885,526,239
Total$19,793,390$217,626$3,268,997$1,632,916$317,967$25,230,896
41
Ammon City Council 03/16/2021Page 65 of 118
City of Ammon
Notes to Financial Statements
As of September 30, 2020, the City had restricted street funds for the following projects:
Projects:2020
Snowcrest Development$63,073
Hawk's Landing47,707
Developer Deposits2,151
Total$112,931
Note 10:Jointly Governed Organization
The City is participating in a joint venture with the City of Shelley, Bingham County, and Bonneville County for a
treatment plant for wastewater. The City entered into a joint powers agreement to provide joint financing,
design, acquisition, construction, management, and operation of a regional wastewater treatment and disposal
facility.
A separate legal entity, Eastern Idaho Regional Wastewater Authority (EIRWWA), was created. It is governed by a
board made up of representatives from each of the members of the joint powers agreement. Capitalized assets
acquired by the members of the joint powers agreement for EIRWWA during the construction phase are donated
to the Authority as that phase becomes operational.
The Board of the EIRWWA assesses and collects from each participating member discharge/hookup fees,
operation and maintenance fees, and fees to pay for costs in excess of defined equivalent residential unit (ERU)
allocations each year.
Each member must collect, as a minimum, discharge/hookup fees, and operation and maintenance fees
established by the board and remit them to the Authority. Each member may also establish its own operation
and maintenance fees and discharge/hookup fees in addition to those determined by the board as well as debt
service fees.
In the event of federal, state, or local court action concerning the facility, each member will assume responsibility
for such litigation in a direct proportion to the percentage of use of the system. If the facility needs to expand in
the future and the EIRWWA does not have adequate funds in their reserve fund accumulated from the
discharge/hookup fees, each member of the joint powers agreement will pay additional funds necessary to
construct the complete next phase of the development of the facility.
During the fiscal year ended September 30, 2010, the facility began accepting flow from the City of Shelley,
Bonneville County, and Bingham County. As per the joint powers agreement, the City of Ammon distributed the
capitalized assets acquired during the construction of the treatment plant to the Authority ($9,564,999). The
initial capitalization of the EIRWWA as of September 30, 2010, was $27,863,728. During the fiscal year ended
September 30, 2012, the City connected to the treatment plant and distributed the capitalized assets acquired
during the construction of the Eastern Interceptor line of $17,480,587 and contributed an additional $809,659
during the year ended September 30, 2013.
42
Ammon City Council 03/16/2021Page 66 of 118
City of Ammon
Notes to Financial Statements
Note 10:Jointly Governed Organization(Continued)
The costs of the operations of the EIRWWA are being allocated based on the users of the system. Currently, this
results in 70% being allocated to the City of Ammon. The City of Ammon paid $858,774 for flow charges and
$771,528 for the capacity replacement fees the City collected for EIRWWA during the 2019-2020 fiscal year.
The Eastern Idaho Regional Wastewater Authority has a fiscal year end of September 30. Financial statements are
available at:
EIRWWA
618 E 1250 N
Shelley, ID 83274
Note 11:Ammon Urban Renewal Agency
Reporting Entity. The component unit in the government-wide financial statements includes the financial data of
*K" :++9& W$,#& @"&"F#; :2"&7< \[:2"&7<\]/ *K" N6*<g4 9&;< '647$"*";< )$"4"&*"' 79+)9&"&* 8&6*= ?* 64 $")9$*"'
in a separate column to emphasize that it is legally separate from the City in accordance with state urban renewal
law.
Summary of Significant Accounting Policies. The basis of accounting for the government-wide financial
statements is the accrual basis of accounting.
Cash and Investments. :* (")*"+,"$ -./ 0.0./ *K" 7#$$<6&2 #+98&* #&' ,#&` ,#;#&7" 9G *K" :2"&7<g4 '")946*4
was $26,730. The entire balance was covered by federal depository insurance.
Bonds Payable. The Agency issued $2,935,000 of Multi-mode Variable Rate Revenue Allocation (Tax Increment)
Bonds, Series 1999A in July 1999. The payment on these bonds is interest only, until maturity at August 1, 2024.
The interest rate on these bonds is variable. The Agency exercised their optional redemption rights and
redeemed $2,670,000 of these bonds since original issue bringing the principal remaining balance to $265,000.
Restricted Fund Balance. A portion of the fund balance of the Debt Service Reserve Fund was created to
segregate a portion of fund balance for debt service, including both principal and interest payments.
Notes Payable. On January 28, 1998, the Agency entered into a Limited Recourse Promissory Note (Phase I Note,
Series 1997A Project Note) payable in the amount of $917,150 to CPI / Ammon Limited Partnership. The note
bears interest at 9.0%. The principal balance on the note at September 30, 2020, is $917,150. Future debt service
payments on the note are not specified.
On January 28, 1998, the Agency entered into a Limited Recourse Promissory Note (Phase I Note, Bond Project
Series 1997B Project) payable in the amount of $46,915 to CPI / Ammon Limited Partnership. The note bears
interest at 5.88%. The principal balance on the note at September 30, 2020, is $46,915. Future debt service
payments on the note are not specified.
The recourse of CPI / Ammon Limited Partnership for payment on these notes is limited solely to the funds in the
Revenue Allocation Fund, after payment of interest and principal on the bonds and payments to fund the
:'+6&64*$#*6D" B8&'= _K" :2"&7<g4 9,;62#*69& *9 +#`" $"D"&8" #;;97#*69& )#<+"&*4 *9 NI? f :++9& T6+6*"'
Partnership terminates with taxes collected and paid to the Agency for the calendar year beginning January 1,
2024. Interest accrued on these notes through September 30, 2020, was approximately $5,683,206.
43
Ammon City Council 03/16/2021Page 67 of 118
City of Ammon
Notes to Financial Statements
Note 11:Ammon Urban Renewal Agency(Continued)
Changes in General Long-Term Debt. A summary of the changes in the General Long-term Debt is as follows:
Series 1999ANotes
BondsPayable
Balance at October 1, 2019545,000964,065
Principal payment280,000
Balance at September 30, 2020265,000964,065
Letter-of-Credit. The Agency entered into an irrevocable direct-pay letter-of-credit dated July 21, 1999, with
Wells Fargo Bank in order to secure and facilitate payment of principal and interest on the Series 1999 Bonds (the
J9&'4\]= _K" #2$""+"&* #+98&* 64 &9* *9 "M7""' *K" 98*4*#&'6&2 )$6&76)#; #+98&* 9G *K" J9&'4 #&' LO '#<4g
interest calculated at 12% per annum. The letter-of-credit has been extended until August 1, 2021. The letter-of-
credit fee is due in advance on August 1 of each year and is equal to 2% of the outstanding principal of the Bonds
);84 LO '#<4g 6&*"$"4*= _K" ;"**"$E9GE7$"'6* G""4 6&78$$"' G9$ *K" <"#$ "&'"' (")*"+,"$ -./ 0.0./ F#4 a>>/LA>=
Economic Dependency. The Agency receives approximately 82% of its tax revenue from three entities.
Property Tax Revenue. Current property tax revenue is not meeting original expectations. When the Series 1999
Bonds and other notes payable were entered into, property tax revenue was expected to have increased
significantly enough to make the principal payments as well as the interest. The required interest payments are
being made on the bonds as well as principal payments as cash flows permit, the Agency currently expects to pay
the Bonds in full, however, will not be able to make the entire principal balance on the Note Payable in 2024 if
property tax revenues do not increase significantly. The Agency does not expect to be able to pay any interest
accrued on the Note Payable.
44
Ammon City Council 03/16/2021Page 68 of 118
Required Supplemental Information
Ammon City Council 03/16/2021Page 69 of 118
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Ammon City Council 03/16/2021Page 70 of 118
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Ammon City Council 03/16/2021Page 71 of 118
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Ammon City Council 03/16/2021Page 74 of 118
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Ammon City Council 03/16/2021Page 75 of 118
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Annual Federal Compliance Section
Ammon City Council 03/16/2021Page 78 of 118
Independent Auditor's Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards
Honorable Mayor and City Council
City of Ammon
Ammon, Idaho
We have audited, in accordance with auditing standards generally accepted in the United States and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States, the financial statements of the governmental activities, the business-type activities,
the discretely presented component unit, each major fund, and the aggregate remaining fund information of City
of Ammon (the "City") as of and for the year ended September 30, 2020, and the related notes to the financial
statements, which collectively comprise City of Ammon's basic financial statements, and have issued our report
thereon dated March 18, 2021.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered City's internal control over
financial reporting ("internal control") as a basis for designing audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of
expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an
opinion on the effectiveness of City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies in internal
79&*$9;/ 487K *K#* *K"$" 64 $"#49&#,;" )9446,6;6*< *K#* # +#*"$6#; +644*#*"+"&* 9G *K" N6*<g4 G6&#&76#; 4*#*"+"&*4
will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet important
enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not
been identified. We did identify a certain deficiency in internal control, described in the accompanying schedule
of findings and questioned costs as item 2020-001 that we consider to be a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and
grant agreements, noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit, and
accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance
or other matters that are required to be reported under Government Auditing Standards.
52
Ammon City Council 03/16/2021Page 79 of 118
City's Response to Finding
City of Ammon's response to the finding identified in our audit is described in the accompanying schedule of
findings and responses. We did not audit City of Ammon's response and, accordingly, we express no opinion on
the response.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance, and
the results of that testing, and not to provide an opinion on the effectiveness of City's internal control or on
compliance. This report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the City's internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
Wipfli LLP
March 18, 2021
Idaho Falls, Idaho
53
Ammon City Council 03/16/2021Page 80 of 118
Independent Auditor's Report on Compliance for Each Major Federal Program and on
Internal Control Over Compliance Required by the Uniform Guidance
Honorable Mayor and City Council
City of Ammon
Ammon, Idaho
Report on Compliance for Each Major Federal
We have audited City of Ammon's compliance with the types of compliance requirements described in the OMB
Compliance Supplement that could have a direct and material effect on each of each of its major federal
programs for the year ended September 30, 2020. City of Ammon's major federal programsare identified in the
summary of auditor's results section of the accompanying schedule of findings and questioned costs.
Management's Responsibility
Management is responsible for compliance with federal and state statutes, regulations, and the terms and
conditions of its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of City of Ammon's major federal programs
based on our audit of the types of compliance requirements referred to above. We conducted our audit of
compliance in accordance with auditing standards generally accepted in the United States; the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of
the United States; the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable
assurance about whether noncompliance with the types of compliance requirements referred to above that
could have a direct and material effect on a major federal program occurred. An audit includes examining, on a
test basis, evidence about City of Ammon's compliance with those requirements and performing such other
procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal
program. However, our audit does not provide a legal determination on City of Ammon's compliance.
Unmodified Opinionon Each Major Federal Program
In our opinion, the Citycomplied, in all material respects, with the types of compliance requirements referred to
above that could have a direct and material effect on each of its major federal programs for the year ended
September 30, 2020.
54
Ammon City Council 03/16/2021Page 81 of 118
Report on Internal Control Over Compliance
Management of the City of Ammon is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing our audit
of compliance, we considered City of Ammon's internal control over compliance with the types of requirements
that could have a direct and material effect on each major federal program to determine the auditing procedures
that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major
federal program and to test and report on internal control over compliance in accordance with the Uniform
Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, we do not express an opinion on the effectiveness of City of Ammon's internal control
over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance
does not allow management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a
timely basis. A material weakness in internal control over compliance is a deficiency, or combination of
deficiencies, in internal control over compliance, such that there is a reasonable possibility that material
noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected
and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of compliance requirement of a
federal program that is less severe than a material weakness in internal control over compliance, yet important
enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that
might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant
deficiencies may exist that have not been identified. We did identify certain deficiencies in internal control over
compliance, described in the accompanying schedule of findings and questioned costs as item 2020-002 that we
consider to be a material weakness.
City of Ammon's response to the internal control over compliance finding identified in our audit is described in
the accompanying schedule of findings and responses. City of Ammon's response was not subjected to the
auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of
internal control over compliance and the results of that testing based on the requirements of the Uniform
Guidance. Accordingly, this report is not suitable for any other purpose.
Wipfli LLP
March 18, 2021
Idaho Falls, Idaho
55
Ammon City Council 03/16/2021Page 82 of 118
City of Ammon
Schedule of Findings and Questioned Costs
Year Ended September 30, 2020
Section I - Summary of Auditor's Results
Financial Statements
Type of auditor's report issued on whether the financial
statements were prepared in accordance with GAAP:
Unmodified
Internal control over financial reporting:
Material weakness(es) identified?X Yes No
Significant deficiency(ies) identified? YesX None Reported
Noncompliance material to financial
statements noted? YesX No
Federal Awards
Internal control over major programs:
Material weakness(es) identified?X Yes No
Significant deficiency(ies) identified? YesX None Reported
Type of auditor's report issued on compliance
for major programs:Unmodified
Any audit findings disclosed that are
required to be reported in accordance
with Title 2 US Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit
Requirement for Federal Awards (Uniform Guidance)X Yes No
Identification of major programs
CFDA Number(s)Federal Program or Cluster
21.019COVID-19 - Coronavirus Relief Fund
Dollar threshold used to distinguish between
Type A and Type B programs: $750,000
Auditee qualified as low-risk auditee? YesX No
56
Ammon City Council 03/16/2021Page 83 of 118
City of Ammon
Schedule of Findings and Questioned Costs (Continued)
1.Audit Findings in Relation to Financial Statements
2020-001INTERNAL CONTROLS OVER REVENUE RECOGNITION
Criteria or Specific Requirement: Under GAAP reporting requirements, an organization should
match revenues and expenditures where applicable. For federal expenditures, this may require
the recording of additional accounts receivable amounts for future reimbursement requests.
Condition: The City did not appropriately report revenues and receivable balances in line with
grant funds expended for the year. Some requests had been made near or after year end, or were
made during the time of fieldwork, but these were not identified as cutoff AR balances.
Context: The City has received significant additional funding in the current year as a result of
COVID related funding sources in addition to their grants in process. Some of these dollars came
without any application process, and the deadlines for expenditures were tight. The City focused
its attention of appropriately spending and tracking these dollars, and requesting reimbursement
after all appropriate support had been gathered. They did not, however, identify the need to
record offsetting receivables for expected reimbursements.
Effect: The City's revenues and accounts receivable balances were understated by more than
$800,000.
Cause: Focus was on the expenditure side without recognition of the GAAP requirement to match
associated reimbursement expectations.
Auditor's Recommendation:We recommend that the City create a process to oversee all federal
grants to monitor use and tracking. Further that this process would allow a year-end
reconciliation of receipts and expenditures to ensure proper recording of receivables and
revenues for any items not already recorded.
View of Responsible Officials: The City now has a spreadsheet to track grants and federal funds.
The Controller is now aware of this requirement and intends to document earlier.
57
Ammon City Council 03/16/2021Page 84 of 118
City of Ammon
Schedule of Findings and Questioned Costs (Continued)
2.Audit Findings and Questioned Costs in Relation to Federal Awards
2020-002AWARENESS OF FEDERAL SPENDING
Federal Program Information:
Funding agency:Department of Treasury
Title:Coronavirus Relief Fund
CFDA number:21.019
Award year and number:2020
Criteria or Specific Requirement: An organization should have procedures in place to recognize
the amount of federal dollars being spent, and to prepare a Schedule of Federal Awards
necessary to be compliant with Uniform Guidance requirements.
Condition: The City did not realize they had spent enough federal dollars to necessitate a single
audit under Uniform Guidance requirements. This was discovered during the audit process even
after discussions about grant spending and a general discussion of how much the City might have
spent in the course of the year.
Context: The City has not historically received significant funding through grants and federal
dollars. Due to COVID 19 as well as seeking additional grant funding for City projects, they spent
over $800,000 in federal dollars in this fiscal year.
Questioned Costs: None
Effect: The City would not have completed the required single audit, and would not have
appropriately recorded the reimbursement revenue associated with the majority of their grant
expenditures.
Cause: There was no mechanism in City procedures which tracked and maintained all grant
information such that they could see how much has been spent across all City departments.
Repeat:No
Auditor's Recommendation:We recommend the City create a process for tracking all grants and
grant expenditures to more easily identify when a single audit is necessary and be able to create
an accurate Schedule of Federal Expenditures.
View of Responsible Officials: The City now has a spreadsheet to track grants and federal funds.
The Controller is now aware of this requirement and intends to document earlier.
58
Ammon City Council 03/16/2021Page 85 of 118
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59
Ammon City Council 03/16/2021Page 86 of 118
City of Ammon
Notes to Schedule of Expenditures of Federal and State Awards
Year Ended September 30, 2020
Note 1: General
_K" #779+)#&<6&2 47K"'8;" 9G "M)"&'6*8$"4 9G G"'"$#; #&' 4*#*" #F#$'4 \[*K" b(7K"'8;"c\] 6&7;8'"4 *K" G"'"$#;
grant activity of City of Ammon under programs of the federal governments for the year ended September 30,
2020. The information in this schedule is presented in accordance with requirements of the Title 2 U.S. Code of
Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards \[bW&6G9$+ C86'#&7"c". Because the schedule presents only a selected portion of the operations
of City of Ammon, it is not intended to and does not present the financial position, changes in net assets or cash
flows of City of Ammon.
Note 2: Basis of Accounting
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are
recognized following the cost principles contained in the Uniform Guidance wherein certain types of expenditures
are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented
where available.
Note 3: Indirect Cost Rate
City of Ammon has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform
Guidance.
Note 4: Sub-Recipients
City of Ammon does not have any sub-recipients of federal awards.
60
Ammon City Council 03/16/2021Page 87 of 118
City of Ammon
Summary Schedule of Prior Audit Findings
Year Ended September 30, 2020
NONE
61
Ammon City Council 03/16/2021Page 88 of 118
Ammon City Council 03/16/2021Page 89 of 118
Ammon City Council 03/16/2021Page 90 of 118
Ammon City Council 03/16/2021Page 91 of 118
CITY OF AMMON
BONNEVILLE COUNTY, IDAHO
RESOLUTION 2021-005R
(Surplus Property)
A RESOLUTION RELATING TO SURPLUS PERSONAL PROPERTY;
DECLARING CERTAIN PERSONAL PROPERTY SURPLUS; AUTHORIZING
AND DIRECTING THE DISPOSAL OF SURPLUS PROPERTY; PROVIDING
FOR RELATED MATTERS; AND PROVIDING FOR AN EFFECTIVEDATE.
WHEREAS, the City Ordinances of the City of Ammonprovides for declaration of surplus personal
property by resolution; and
WHEREAS, the City Council has determined that thesurplus property listed in Section 4 is no
longer needed by the City; and
WHEREAS, the City Council has deemed it unnecessaryto maintain ownership of said surplus
personal property; and
WHEREAS, Section 1-13-13 of the City Code providesfor a method of disposal of surplus
property; and
NOW THEREFORE, be it hereby resolved by the Mayorand City Council of the City of Ammon,
Bonneville County, Idaho as follows:
Section 1.That the City Council does hereby findthat the surplus property listed in section 4 of this
resolution is no longer needed for the day to dayoperations of the City.
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examination by any interested party.
Section 3.Pursuant to the provisions of Section 1-13-13of the Codified Ordinances of the City of
Ammon, State of Idaho, the surplus property listedin Section 4 of this resolution shall be disposedof as
provided for in section 1-13-13 of the Ammon CityCode.
Section 4.The following items are hereby declaredsurplus property and shall be disposed of as
directed by Section 3 of this resolution:
City Property/AssetsVINEstimated Surplus Value
EATON 9E-30 3-Phase, 480v UPSN/A$500.00
Total of Surplus Property$500.00
____________________________________
Sean Coletti, Mayor
___________________________________
Kristina Buchan, City Clerk
Resolution 2021-005RSurplus PropertyPage1of1
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10-4-1: Ordinance and Map May Be Amended
10-4-2: Petition to Planning Commission
10-4-3: Amendments to be in Harmony with Land Use Plan
10-4-4: Public Hearing Notice
10-4-5: Reconsideration
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Ammon City Council
March 18, 2021
Mayor Coletti and City Councilmembers:
Proposed Changes to the
City of AmmonPersonnel Policy Manual
Staff Presenting:
Micah Austin, City Administrator
Recommendation
-Discuss the proposed changes to the Personnel Policy Manual
Summary of Analysis
1.The current Personnel Policy Manual was adopted on December 20, 2018 by Resolution
2018-020R. Prior to that update, the policy was amended four times since 2012.
2.The proposed updates to the Personnel Policy Manual will be presented at the March 18, 2021
meeting by the City Administrator.
3.Highlighted Updates from the proposed Personnel Policy Manual:
a.Updates.
i.Incorporated the Drug and Alcohol Free Policy into the main portion of the
Personnel Policy Manual rather than as an appendix. Various minor updates
were made to this policy, including updates to the drug and alcohol testing
policy.
ii.Incorporated the Technology Use Policy into the main portion of the Personnel
Policy Manual rather than as an appendix. Various minor updates were made to
this policy.
iii.Incorporated the Vehicle, Equipment Use, and Driving Safety Policy into the
main portion of the Personnel Policy Manual rather than as an appendix.
Various minor updates were made to this policy.
iv.Clarified Bereavement Leave is limited to 40 hours.
v.Various formatting updates throughout the policy.
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vii.New title page.
b.New Policies
i.Added a new Social Media Policy as Section 3-6.
ii.Revised and clarified the travel/training reimbursement and expense policy.
Financial Impact
-No financial impacts are anticipated from these proposed changes.
Motion
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Attachments:
1.The proposed Personnel Policy Manual will be presented at the meeting.
2135 South Ammon Rd., Ammon, Idaho 83406City Hall: (208) 612-4000
www.cityofammon.usPage|1
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