In the Middle of Everything

COMPREHENSIVE ANNUAL FINANCIAL REPORT

Midvale City Corporation In the Middle of Everything

Midvale, Utah Fiscal Year Ended June 30, 2018

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INTRODUCTORY SECTION

Letter of Transmittal .....................................................................................................................................1-3 GFOA Certificate of Achievement .................................................................................................................. 4 Organizational Chart ....................................................................................................................................... 5 Elected and Appointed Officials ..................................................................................................................... 6

FINANCIAL SECTION

Independent Auditor’s Report ......................................................................................................................7-8 Management's Discussion and Analysis ..................................................................................................... 9-22

Basic Financial Statements:

Government-wide Financial Statements: Statement of Net Position ................................................................................................. 23 Statement of Activities ..................................................................................................... 24

Governmental Fund Financial Statements:

Balance Sheet - Governmental Funds ............................................................................... 25 Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Position ........................................................................ 26 Statement of Revenues, Expenditures, and Changes in

Fund Balances - Governmental Funds ................................................................ 27 Reconciliation of the Statement of Revenues, Expenditures, and

Changes in Fund Balances of Governmental Funds to the Statement of Activities ....................................................................................... 28

Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund ..................................................... 29

Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual – Redevelopment Agency .................................... 30

Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual – Municipal Building Authority .......................... 31

Proprietary Fund Financial Statements:

Statement of Net Position - Proprietary Funds ............................................................ 32-33 Statement of Revenues, Expenses and Changes in

Fund Net Position - Proprietary Funds ............................................................... 34 Statement of Cash Flows - Proprietary Funds ............................................................. 35-36

Notes to Financial Statements ................................................................................................... 37-72

REQUIRED SUPPLEMENTARY INFORMATION

Schedule of the Proportionate Share of Net Pension Liability ........................................................ 73 Schedule of Pension Contributions ................................................................................................. 74 Notes to Required Supplementary Information ............................................................................... 75

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SUPPLEMENTARY INFORMATION

Combining and Individual Fund Statements and Schedules: Combining Statement of Net Position – Nonmajor Proprietary Funds ........................................... 77 Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Nonmajor Proprietary Funds ............................................................ 78 Combining Statement of Cash Flows - Nonmajor Proprietary Funds ............................................. 79 Combining Statement of Net Position – Internal Service Funds ..................................................... 80 Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Internal Service Funds ........................................................................... 81 Combining Statement of Cash Flows – Internal Service Funds ...................................................... 82 Schedules of Revenues, Expenditures, and Changes in Fund Balances

Budget and Actual: Capital Projects Fund ......................................................................................... 83

STATISTICAL SECTION (UNAUDITED)

Net Position by Component .......................................................................................................................... 85 Changes in Net Position ........................................................................................................................... 86-87 Governmental Activities Tax Revenues by Source ....................................................................................... 88 Fund Balances of Governmental Funds ........................................................................................................ 89 Changes in Fund Balances of Governmental Funds ...................................................................................... 90 Assessed Value and Estimated Actual Value of Taxable Property ............................................................... 91 Property Tax Rates – Direct and Overlapping Governments ........................................................................ 92 Principal Property Tax Payers ....................................................................................................................... 93 Property Tax Levies and Collections ............................................................................................................ 94 Sales Taxpayers by Industry .......................................................................................................................... 95 Total Sales Taxes Revenue ............................................................................................................................ 96 Sales Taxes Rates .......................................................................................................................................... 97 Ratepayer Fees – Business-type Activities .................................................................................................... 98 Ratios of Outstanding Debt by Type ............................................................................................................. 99 Ratios of General Bonded Debt Outstanding .............................................................................................. 100 Direct and Overlapping Governmental Activities Debt .............................................................................. 101 Legal Debt Margin Information .................................................................................................................. 102 Pledged-Revenue Coverage ........................................................................................................................ 103 Demographic and Economic Statistics ........................................................................................................ 104 Principal Employers .................................................................................................................................... 105 Full-time Equivalent City Government Employees by Function ................................................................ 106 Operating Indicators .................................................................................................................................... 107 Capital Asset Statistics by Function ............................................................................................................ 108

GOVERNMENT COMPLIANCE SECTION

Independent Auditor’s Reports: Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .................................................. 109-110

Report on Compliance and on Internal Control Over Compliance as Required by

the State Compliance Audit Guide ........................................................................... 111-112

INTRODUCTORY SECTION

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7505 S. Holden Street Midvale, UT 84047

Phone (801) 567-7200

December 11, 2018

To the Honorable Mayor, Members of the City Council, and Citizens of Midvale City:

The Finance Department of Midvale City is pleased to present the Comprehensive Annual Financial Report (CAFR) for Midvale City Corporation for the year ended June 30, 2018.

Utah law requires that all local governments publish within six months of the close of the fiscal year a complete set of financial statements presented in conformity with Generally Accepted Accounting Principles (GAAP), and audited in accordance with Generally Accepted Auditing Standards by a firm of licensed Certified Public Accountants. This CAFR is hereby issued and submitted to you in accordance with these requirements.

The report consists of management’s representations concerning the finances of Midvale City. Management assumes full responsibility for the completeness and reliability of all of the information presented herein. To provide a reasonable basis for making these representations, management has established an internal control framework that is designed to both protect the assets of the City from loss, theft, or misuse and to allow for the compiling of sufficient reliable information for the preparation of the City’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s internal control procedures have been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. To the best of management’s knowledge and belief, this financial report is complete and reliable in all material respects.

Larson & Company, P.C., a firm of Certified Public Accountants, has audited Midvale City’s financial statements. The goal of an independent audit is to provide reasonable assurance that the City’s financial statements, for the fiscal year ended June 30, 2018, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.

GAAP require that the management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the independent auditor’s report.

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In addition to the basic financial statements, the CAFR includes a statistical section which provides a ten-year history of detailed information as a context for understanding the City’s overall financial health.

GOVERNMENT PROFILE

Midvale City was incorporated in 1909. The City is governed using a Mayor/Council form of government. Legislative powers are vested in the five-member Council, while executive powers lie with the Mayor. The Mayor is elected to serve the citizens at large; the Council Members are elected by voting districts. All elected officials serve four-year terms which are staggered every two years. The elections are on a non-partisan basis. The City Manager is responsible for day-to-day operations and managing the employees of the City.

With a current population of approximately 33,000, Midvale is one of the 25 largest cities in the state of Utah. It provides commuter access via Interstates 15 and 215, State Street, and Fort Union Boulevard. Utah Transit Authority provides bus and light-rail service, with two light-rail stations within its boundaries. The geographic area of the City is 5.8 square miles.

FACTORS AFFECTING FINANCIAL CONDITION

Midvale has a robust retail base. Sales tax revenue makes up 39% of General Fund revenues. Very little of the City’s operating revenue comes from property tax. While the stability of sales tax revenue is less predictable than property tax, the advantage to the City is the ability to keep property taxes as low as possible, and the flexibility to increase property tax as needed if or when sales tax revenue declines.

One of three Redevelopment Project Areas in the City, Bingham Junction, consists of 390 acres in the northwest corner of the City. The collaborative efforts of Midvale City, private developers, and the Redevelopment Agency of the City (RDA) have turned this former brownfield site into a successful model for redevelopment. Bingham Junction is substantially built-out with a mix of commercial, residential, and retail establishments.

The second project area, Jordan Bluffs, consists of 268 acres and is located in the southwest corner of the City. The Jordan Bluffs project area and surrounding property encompasses nearly 10% of Midvale City’s total area and represents a significant opportunity to redevelop the former smelter property into a successful project with a positive contribution to the community. In 2015, the RDA entered into an Option to Purchase Agreement with the current owners of this former Sharon Steel superfund site. The purpose of the agreement was to allow the Agency to perform due diligence and market the site for sale and development. In November of 2017 the option was transferred to Gardner Development and they purchased the property. Planned development of the site includes light industrial, commercial, and multi-family housing.

The third project is Main Street. The RDA is excited to be in the process of creating a new project area which will incorporate Midvale’s historic Main Street, as well as the surrounding residential and commercial areas. This area is an integral component to the vitality and history of

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Midvale. The Agency’s goal in creating this project area is to strengthen this part of the community by stabilizing the housing stock, upgrading infrastructure, improving parking, as well as rehabilitating and redeveloping commercial uses.

LONG-TERM FINANCIAL PLANNING

Midvale City uses a long-term strategic planning model to enhance the annual budget process and work towards maintaining and improving all infrastructure systems. It is the policy of the Council to maintain General Fund reserves at or above fifteen percent of operating revenue. Enterprise funds of the City have a capital reserve component built into utility rates.

ACKNOWLEDGEMENTS

The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Midvale City for its comprehensive annual financial report for the fiscal year ended June 30, 2017. This was the third consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

While the entire City Staff has contributed to the timely and efficient preparation of this report, special thanks is due to the Finance department. We also appreciate the professionalism of our auditors and their significant assistance in drafting the CAFR. Finally, thank you to our Mayor, City Council, and City Manager for their dedication to making Midvale City great.

Sincerely,

Laurie N. Harvey, CPA Administrative Services Director

Dalin W. Hackett, CPA Assistant Finance Director

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MIDVALE CITY CORPORATION Organizational Chart

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Justice Court

Human Resources/ Recorder

Midvale City Organization Chart January 2018

Midvale Citizens Justice Court Judge

Boards and Commissions Mayor City Council

Auxiliary Organizations

City Manager

Community Development

(Asst. City Manager)

Administrative Services

(Asst. City Manager) Public Works City Attorney

Public Safety/ Emergency

Management (Contracted)

Redevelopment Agency

(separate entity)

Water and Sewer Prosecution

Planning and Zoning Streets, Parks/ Storm Water Purchasing

City Engineer Sanitation

Economic Development

Buildings and Grounds

Business Licensing Fleet

Code Enforcement

Building Inspection

Communications/ Public Information

Officer

Information Technology

Finance

Municipal Building Authority

(separate entity)

MIDVALE CITY CORPORATION Elected and Appointed Officials

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Elected Officials

Mayor Robert Hale

Council Member District 1 Quinn Sperry

Council Member District 2 Paul Glover

Council Member District 3 Paul Hunt

Council Member District 4 Bryant Brown

Council Member District 5 Dustin Gettel

Appointed Officials

City Manager Kane Loader

Asst. City Manager, Administrative Svcs. Laurie Harvey

Asst. City Manager, Community Dev.

City Attorney

Redevelopment Agency Director

Public Works Director

City Engineer

City Recorder/HR Director

Treasurer

Justice Court Judge

Brian Berndt

Lisa Garner

Matt Dahl

Glen Kennedy

Keith Ludwig

Rori Andreason

Brandon Smith

George Vo-Duc

Midvale City Audit Committee

Council Member Quinn Sperry Council Member Bryant Brown Draper City Assistant Finance Director Jared Zacharias, CGFM

FINANCIAL SECTION

C E RT I F I E D P U B L I C A C C O U N T A N T S

INDEPENDENT AUDITOR’S REPORT

Honorable Mayor and Members of the City Council Midvale City Corporation, Utah

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Midvale City Corporation (the City), as of and for the year ended June 30, 2018, 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 of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Midvale City, Utah, as of June 30, 2018, and the respective changes in financial position, and, where applicable, cash flows thereof and the respective budgetary comparison for the general fund and for the major special revenue funds for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and pension schedules as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, budgetary comparison information, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and budgetary comparison information are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the budgetary comparison information are fairly stated in all material respects in relation to the basic financial statements as a whole.

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 11, 2018, 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 to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Larson & Company, PC

Spanish Fork, Utah December 11, 2018

russell

Larson

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Midvale City Corporation Management’s Discussion and Analysis

June 30, 2018

Midvale City Corporation’s management presents to the readers of its financial statements this narrative information. It contains an overview and analysis of the financial position and results of operations as of and for the twelve months ended June 30, 2018. As management of the City, we encourage readers to consider information contained in this discussion and the City’s financial statements, which follow this section.

FINANCIAL HIGHLIGHTS

The assets and deferred outflows of resources of Midvale City Corporation (Midvale)exceeded liabilities and deferred inflows of resources at the close of the current fiscal year by$109,967,046. This is an increase of $7,466,988 over the prior year. This is primarilyattributable to the recognition of land that was donated to the City by developers.

The Statement of Net Position shows a negative balance in Unrestricted Net Position forGovernmental Activities because the City funds certain long-term liabilities as they come duerather than when they are incurred. Specifically, proceeds from the Series 2010 RDA bondswere used for redevelopment expenses as opposed to capital assets, and debt service is paidannually from property tax increment revenue received each year. This is not uncommonwith governmental agencies.

• Net (expense)/revenues from governmental activities total $(12,655,426). This representsprogram costs not recovered through charges for services and grants, and therefore fundedprimarily by taxes.

• Net (expense)/revenues from business-type activities total $207,054. Business-type activitiesare self-sustaining; user fees are set at levels adequate to cover operating and capitalexpenses.

• General revenues for Governmental Activities increased by approximately $5.2 million. Thisis primarily attributable to the recognition of land that was donated to the City by developers.

• The City’s General Fund unassigned fund balance is $3,858,326. This is equal to 19% of theoriginal adopted budget ($20,344,000) for the General Fund for FY 2019. Utah state lawprohibits fund balances greater than twenty five percent or less than five percent of budgetedrevenue. The City Council has formally committed to maintain a General Fund unassignedfund balance greater than 15%.

• In December 2017, the Redevelopment Agency issued Cross-over Refunding Bonds, Series2017, which will defease the RDA Series 2010 bonds in May of 2020 (the cross-over date).The net present value savings realized from lower interest rates is $637,153.

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• In April of 2018, the City issued Series 2018 Water, Sewer, and Storm Water Revenue bondsin the amount of $6,225,000. The proceeds will be used to make improvements to the waterand sewer systems.

OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis serves as an introduction to Midvale City’s basic financial statements. The City’s financial statements comprise three components:

Government-wide financial statements Fund financial statements Notes to the financial statements.

This report also contains other supplementary information in addition to the basicfinancial statements that will help the reader gain a more in-depth understanding of the City.

Government-wide financial statements

The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all the assets and liabilities of the City, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or declining.

The statement of activities shows the changes in net assets that occurred during the most recent fiscal year. These changes were recorded on an accrual basis when the underlying event that causes the change occurs, regardless of when the cash transaction takes place. One example is the next debt interest payment when the fiscal year ends between interest payments. The statement of activities shows additional interest expense (an accrual) for the time period between the last interest payment and the end of the fiscal year.

Both of these government-wide financial statements distinguish between activities that are largely supported by taxes and intergovernmental revenues (governmental activities) and those whose operations are entirely or largely financed by user charges and fees (business type activities). The governmental activities for Midvale City include general government (council, mayor, administration, court); community and economic development; public safety; highways and public improvements; parks, recreation, and public property. The business type activities include water, sewer, storm water utility, solid waste, telecommunications, and street lighting.

The Redevelopment Agency of Midvale City and the Municipal Building Authority are legally separate from the City, but for all practical purposes function as a part of the City and are therefore blended as an integral part of the primary government.

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The government-wide financial statements are found as listed in the table of contents.

Fund financial statements

A fund is a set of closely related accounts that are used to maintain control over resources that have been segregated for specific activities or purposes. Midvale City, like other state and local governments uses fund accounting to demonstrate compliance with finance-related legal requirements. All the City’s funds can be categorized into one of two categories: governmental funds or proprietary funds.

Governmental funds account for essentially the same activities as the governmental activities in the government-wide financial statements, but with a narrower focus. Governmental funds concentrate on near-term inflows and outflows of financial resources and the balances of spendable resources available to the government at the end of the fiscal year. This information can be useful in evaluating the government’s short- term financing requirements.

Comparing similar information presented in the government-wide statements for the governmental activities with that presented in governmental funds statements can provide useful information because of the different focus of the two approaches. With the long-term focus of the government-wide statements, a reader may be able to better understand the long-term effects of the near term financing decisions. To aid in the comparison, both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balance show reconciliation between the governmental funds statements to the governmental activities in the government-wide statements.

Midvale City uses four different individual governmental funds: General Fund, Capital Projects Fund, Redevelopment Agency Fund, and Municipal Building Authority Fund. Information is shown separately for each of these funds, and each fund is deemed a major fund. The City adopts an annual appropriated budget for all its governmental funds. Budgetary comparison schedules have been provided to demonstrate compliance with these budgets. The basic governmental fund financial statements can be found as listed in the table of contents.

Proprietary funds include enterprise funds and internal service funds. Enterprise funds are used to report any activity for which a fee is charged to external users for goods or services. Internal Service Funds are used to report activities that provide goods or services to other funds or departments of the City.

The Enterprise Funds maintained by Midvale City include public utilities (water/sewer), storm water utility, street lighting, solid waste, and telecommunications service. Midvale City uses Internal Service Funds to account for its vehicle fleet activities and information technology equipment. Because the activities of the Internal Service Funds support primarily governmental rather than business-type activities, they have been included within the governmental activities column of the government-wide financial statements.

Proprietary funds present the same information as in the government-wide statements, except in more detail. The fund statements for proprietary funds provide separate information for

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each fund. The Street Lighting, Sanitation, and Telecommunications funds are combined, with separate information provided in the notes to the financial statements. The Internal Service Funds are presented in the proprietary fund financial statements. The City also adopts annual appropriated budgets for all of its proprietary funds. The basic proprietary fund financial statements can be found as listed in the table of contents.

Notes to the financial statements

Notes to the financial statements contain additional information important to a complete understanding of the information contained in the government-wide and fund financial statements. Notes to the financial statements are located after the statements for major funds as listed in the table of contents.

OTHER INFORMATION

Supplemental information follows the Notes to the financial statements. The information provided includes combining financial statements for the Street Lighting, Sanitation, and Telecommunications proprietary funds and for both Internal Service Funds. It also includes a schedule of revenues, expenditures, and changes in fund balances, and comparison of budget to actual for the Capital Projects Fund.

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GOVERNMENT-WIDE FINANCIAL ANALYSIS

This table shows a comparison of Net Position between governmental and business-type activities for the current year and the prior year:

As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of Midvale City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $109,697,046.

The largest component of Midvale City’s net position is its investment in capital assets. Capital assets represent the City’s investment in land and land improvements; curb, gutter, and sidewalk; roads and storm drains; water and sewer lines; streetlights and signals, bridges, buildings, and machinery and equipment. Midvale City uses these capital assets to provide services to citizens who live, work, pass through or benefit in other ways from the City. By their nature, these assets are not available for future spending. Further, even though these capital assets are reported net of any related debt, resources needed to repay the debt must come from other sources, as the assets themselves cannot be used to satisfy the related obligations.

The Statement of Net Position is comparable to a balance sheet for a private corporation. The intent of a balance sheet is to show “equity”, or assets minus liabilities. For governmental entities, assets and deferred outflows of resources, minus liabilities and deferred inflows of resources equal net position. Midvale City’s unrestricted net position for Governmental Activities is a negative number because funds borrowed by the RDA are used to reimburse developers for extraordinary costs of developing otherwise undevelopable land. In Midvale’s case, the project areas are former superfund sites which required development costs over and above normal development costs. While these costs do not create new financial assets for the City, the improvement to Midvale’s economy in the form of tax revenues derived from the resulting projects benefits the City for years to come.

2018 2017 2018 2017 2018 2017

Current and other assets 43,258,164$ 23,985,822$ 16,910,246$ 10,975,804$ 60,168,410$ 34,961,626$ Capital assets 112,365,606 108,333,605 43,050,885 42,226,838 155,416,491 150,560,443

Total Assets 155,623,770 132,319,427 59,961,131 53,202,642 215,584,901 185,522,069

Deferred outflows of resources 995,496 917,733 360,164 333,710 1,355,660 1,251,443

Current l iabil ities 4,788,711 4,762,207 3,195,105 2,713,952 7,983,816 7,476,159 Noncurrent l iabil ities 69,716,527 53,271,486 25,301,866 20,418,684 95,018,393 73,690,170

Total Liabil ities 74,505,238 58,033,693 28,496,971 23,132,636 103,002,209 81,166,329

Deferred inflows of resources 3,962,927 3,285,333 278,379 91,802 4,241,306 3,377,135 Net position:Net investment in capital assets 82,296,971 76,771,618 23,058,240 21,964,255 105,355,211 98,735,873 Restricted 6,034,643 9,125,162 - - 6,034,643 9,125,162 Unrestricted (10,180,513) (13,978,646) 8,487,705 8,347,659 (1,692,808) (5,630,987)

Total Net Position 78,151,101$ 71,918,134$ 31,545,945$ 30,311,914$ 109,697,046$ 102,230,048$

Governmental Activities Business-type Activities TotalMidvale City Corporation's Net Position

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ACTIVITIES, GOVERNMENTAL AND BUSINESS-TYPE

This table shows a comparison of revenues, expenses, and changes in Net Position between Governmental and Business-type Activities for the current year and the prior year. Governmental Activities net position increased by $6,232,967. Business-type Activities net position increased by $1,234,031.

Total revenues for Governmental Activities increased by $6,377,896, largely due to the recognition of land donated to the City by developers. Total revenues for Business-type Activities increased by $503,768 due to increased revenue from user fees.

2018 2017 2018 2017 2018 2017Revenues:Program revenues:

Charges for services 3,183,260$ 3,038,595$ 10,157,399$ 9,682,939$ 13,340,659$ 12,721,534$ Operating grants and

contributions 6,200,034 5,840,869 111,221 115,885 6,311,255 5,956,754 Capital grants and

contributions 1,793,150 1,158,697 - - 1,793,150 1,158,697 General revenues:

Property taxes 3,183,212 3,202,775 - - 3,183,212 3,202,775 Other taxes 10,463,878 10,325,114 - - 10,463,878 10,325,114 Unrestricted investment

earnings 416,810 153,422 77,838 43,866 494,648 197,288 Other 5,149,715 683,171 - - 5,149,715 683,171 Gain on sale of assets 524,778 134,298 - 524,778 134,298

Total revenues 30,914,837 24,536,941 10,346,458 9,842,690 41,261,295 34,379,631

Expenses:General government 5,212,705 4,556,352 - - 5,212,705 4,556,352 Public safety 7,290,047 7,013,851 - - 7,290,047 7,013,851 Highways and public

improvements 2,485,064 2,297,368 - - 2,485,064 2,297,368 Parks and recreation 1,384,148 992,330 - - 1,384,148 992,330 Redevelopment 3,296,665 3,671,182 - - 3,296,665 3,671,182 Community development 1,458,891 1,230,080 - - 1,458,891 1,230,080 Interest on long-term debt 2,704,350 2,008,336 - - 2,704,350 2,008,336 Water - - 4,361,331 4,354,475 4,361,331 4,354,475 Sewer - - 1,883,291 1,927,068 1,883,291 1,927,068 Storm Water - - 1,514,929 1,429,125 1,514,929 1,429,125 Sanitation - - 1,031,396 969,261 1,031,396 969,261 Telecom - - 889,011 864,343 889,011 864,343 Street Lighting - - 381,608 341,979 381,608 341,979 Gain on equity investment - - (99,139) 20,549 (99,139) 20,549

Total expenses 23,831,870 21,769,499 9,962,427 9,906,800 33,794,297 31,676,299

Increase (decrease) in net assetsbefore transfers 7,082,967 2,767,442 384,031 (64,110) 7,466,998 2,703,332

Transfers (850,000) (824,900) 850,000 824,900 - - Increase (decrease) in net position 6,232,967 1,942,542 1,234,031 760,790 7,466,998 2,703,332 Net position - beginning 71,918,134 69,975,592 30,311,914 29,551,124 102,230,048 99,526,716 Net position - ending 78,151,101$ 71,918,134$ 31,545,945$ 30,311,914$ 109,697,046$ 102,230,048$

Governmental Activities Business-type Activities TotalMidvale City Corporation's Changes in Net Position

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Total expenses for Governmental Activities increased by $2,062,371. A significant portion of this increase is in general government and interest on long-term debt. Total expenses for Business-type Activities increased by $55,627.

Governmental Activities

The charts below illustrate the reliance on tax revenues by the government funds. The percentage of “other” revenue represents a much larger portion (20%) of total revenues in FY 2018 because of the recognition of land that was donated to the City by developers.

The charts below illustrate consistency from FY 2017 to FY 2108 in percentage of governmental activity expenses for all categories. The category experiencing the largest change from the previous year is that of “redevelopment”. “Redevelopment” decreased by $374,517 in FY 2018 and represented 14% of total expenses. In FY 2017 “redevelopment” represented 17% of total expenses.

Charges for services

$3,183,260 10%

Operating grants

6,200,034 20%

Capital grants1,793,150 6%

Property taxes3,183,212 10%

Other taxes10,463,878 34%

Other6,091,303 20%

FY 2018 Revenue by typeCharges for

services$3,038,595 12%

Operating grants5,840,869 24%

Capital grants1,158,697 5%

Property taxes

3,202,775 13%

Other taxes10,325,114 42%

Other 970,891 4%

FY 2017 Revenue by type

General government

5,212,705 22%

Public safety7,290,047 31%

Highways and public

improvements2,485,064 10%

Parks and recreation

1,384,148 6%

Redevelopment3,296,665 14%

Community development

1,458,891 6%

Interest on long-term debt2,704,350 11%

FY 2018 Expenses by category

General government

4,556,352 21%

Public safety7,013,851 32%

Highways and public

improvements2,297,368 10%

Parks and recreation

992,330 5%

Redevelopment3,671,182 17%

Community development

1,230,080 6%

Interest on long-term debt2,008,336 9%

FY 2017 Expenses by category

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It is important to note that the largest component of expenses by category is public safety. The City contracts with Unified Police Department, composed of several communities including Midvale City, which function as one agency. Midvale is a member of the South Valley Fire Service Area, a separate taxing entity which provides fire service.

Business-type Activities

The following graphs display the business-type activities.

Business-type activities generally charge and receive only the amounts required to cover expenditures of operations plus reserves for future capital improvements.

The Telecommunications fund generates very little revenue from charges for services, and receives a sizeable transfer from the General Fund each year. The biggest expense for the Telecommunications fund is the pledge payment due to UTOPIA each year. UTOPIA is an interlocal agency, of which Midvale City is a member. The purpose of UTOPIA is to design, finance, build, operate and maintain an open, wholesale, public Telecommunication infrastructure that delivers high-speed connections to every home and business in the member communities. More information about UTOPIA can be found in the notes to the financial statements.

FINANCIAL ANALYSIS OF MIDVALE CITY’S FUNDS

Midvale City’s governmental funds provide information on the short-term resource inflows and outflows and account balances at the end of the fiscal year. The total fund balance is a measure of total available resources, and the unreserved portion of this total fund balance is a measure of the available spendable resources at June 30, 2018.

For the period ending June 30, 2018, the City’s governmental funds reported a combined fund balance amount of $37,195,327, an increase of $19,429,921 from the prior year. The increase is due to the issuance of the Series 2017 Tax Increment and Sales Tax Revenue Refunding bonds by the Redevelopment Agency (RDA) of Midvale City. The proceeds from this

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Business-type Activities FY 2018

FY 2018 Revenues

FY 2018 Expenses -

500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 5,000,000

Business-type Activities FY 2017

FY 2017 Revenues

FY 2017 Expenses

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issuance were $20,255,623. Bond proceeds were placed in escrow and will be used to refund the Series 2010B bonds on May 1, 2020 (the “Crossover Date”).

Of the total combined fund balance at year end, $3,858,326 is unassigned, or available for appropriation. Restricted fund balance of $27,944,273 consists of unexpended bond proceeds and debt service reserves. Assigned fund balance of $5,392,728 represents funds that have been assigned for specific purposes; $2,753,808 for capital projects, $2,597,306 for redevelopment, and $41,614 for activities of the Municipal Building Authority.

The General Fund is the main operating fund for Midvale City Corporation. At June 30, 2018, fund balance is $4,107,243 of which $248,917 is restricted for debt service on Excise Tax Revenue Bonds. The remaining $3,858,326 is unassigned and available for appropriations. A useful measure of liquidity is to compare the unassigned fund balance to expenditures (including operating transfers out) for the year. Unassigned fund balance is equal to 24.4% of total expenditures for FY 2018. The state of Utah requires that General Fund fund balance is maintained at between 5% and 25% of the upcoming fiscal year’s budgeted expenditures. The unassigned fund balance of $3,858,326 is equal to 19.0% of FY 2019 budgeted expenditures. The City Council has formally adopted a policy of maintaining unreserved fund balance greater than 15%.

The Capital Projects Fund has a total fund balance of $9,018,590 at June 30, 2018, which is a decrease of $828,148 from the previous year. This decrease is due to work performed on the city-wide road improvements project. The majority of the expenditures in the Capital Projects Fund in FY 2017 are for improvements to city streets.

The Redevelopment Agency (RDA) of Midvale City has a total fund balance of $23,415,130 at June 30, 2018, which is an increase of $20,469,436 from the previous year’s fund balance. This increase is due to the issuance of bonds. Series 2017 Tax Increment and Sales Tax Revenue Refunding bonds were issued in December of 2017. The proceeds from this issuance were $20,255,623. Bond proceeds were placed in escrow and will be used to refund the Series 2010B bonds on May 1, 2020 (the “Crossover Date”). Revenues from property taxes contributed by other government entities and interest income were sufficient to cover expenditures for debt service and operations. The agency manages development on the project area, generally between Midvale’s southern border and 7200 South, and 700 West to Midvale’s western border. Fiscal Year 2018 is the ninth year the agency has received property tax revenues. Contributions of property tax revenues from other participating agencies for FY 2018 totaled $5,620,425, an increase of $1,420,731. This revenue source will continue to grow as the Jordan Bluffs project area is developed and property values in all the project areas increase. Please refer to the Letter of Transmittal for more detail regarding the RDA and its project areas.

The Municipal Building Authority (MBA) owns several buildings leased by City funds and associated entities, as well as the city-wide street lighting system. The City’s General Fund and Enterprise funds pay rent to the MBA, and the MBA pays debt service costs for funds borrowed to construct the facilities.

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Information provided by the City’s proprietary funds is similar to the information found in the government-wide financial statements; however, the fund information provides more detail. Net investment in capital assets is $23,058,240, an increase of $1,093,985 over the previous year. Unrestricted net position of the City’s proprietary funds total $8,487,705, an increase of $140,046 from the previous year.

The City operates Internal Service Funds for fleet operations and information technology equipment. Departments utilizing City vehicles pay a pre-determined, monthly amount into the Fleet Fund for fuel, repairs and maintenance, and a reserve for replacement of retiring vehicles. The Information Technology Fund collects a set amount from each department based upon the number and type of computers in order to replace equipment at the end of its useful life. Detailed information for these funds is included with the Proprietary Funds. Total net position for the Fleet Fund and the Information Technology Fund as of June 30, 2018 was $3,080,209 and $36,159 respectively.

GENERAL FUND BUDGETARY HIGHLIGHTS

Midvale City amends its budget as needed throughout the year in order to refine estimates and appropriate grant monies received after the original budget has been finalized. Differences between the original and final amended budgets for FY 2018 reflect the following:

• Budgeted revenues from operations increased by $2,062,500 primarily due to grantsawarded during the fiscal year.

• Budgeted transfers out increased by $1,993,800 largely due to a grant awarded from theState of Utah for $1,500,000. The purpose of the grant is for road improvements. Thosefunds will be transferred to and accounted for in the Capital Improvement Projects Fund.

• Budgeted expenditures for operations increased by $301,500 primarily due to increases inpayroll costs.

CAPITAL ASSETS

Midvale City’s investment in capital assets is $155,416,491 ($105,355,211 net of related debt) as of June 30, 2018. Types of assets included in this category are land, land improvements, buildings, machinery and equipment, park and other recreation facilities, roads (including curb and gutter, sidewalk, and storm drain), street lights, traffic signals, water and waste water distribution and collection systems, and bridges.

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The chart below shows the various components of Capital Assets net of depreciation:

Additional information on the City’s capital assets can be found in Note 4 on pages 52-54 of this report.

DEBT ADMINISTRATION

Midvale City’s long-term debt, including compensated absences and unamortized premiums, is $97,922,777. This is well below the City’s state imposed legal debt capacity.

There were two new bond issuances during FY 2018. In December of 2017 the RDA issued Series 2017 Tax Increment and Sales Tax Revenue Refunding bonds in the amount of $17,670,000. Proceeds will be used to refund the RDA Series 2010B bonds on May 1, 2020 (the Crossover Date). In April of 2018, the City issued Series 2018 Water, Sewer, and Storm Water Revenue bonds in the amount of $6,225,000. Proceeds will be used to make improvements to the water and sewer systems. The balance of debt outstanding includes:

• General obligation bonds ($770,000), maturing September 2019• Excise tax revenue bonds ($300,000), maturing April 2019• 2007C Water and Sewer Revenue Bonds ($3,266,000) maturing October 2029• 2010 Water and Sewer Revenue Bonds ($5,895,000), maturing October 2030• 2010 RDA Revenue Bonds ($20,970,000), maturing May 2034

o Will be defeased by RDA Series 2017 bonds on crossover date of May 1, 2020• 2012 Water and Sewer Refunding Bonds ($998,000), maturing April 2027• 2013 Water, Sewer, Storm Water Revenue Bonds ($1,958,000), maturing October 2028• MBA Lease Revenue Bonds ($7,595,000), maturing October 2038• 2014 Water, Sewer, Storm Water Revenue Bonds ($2,328,000), maturing October 2029• 2015 RDA Revenue Bonds ($12,355,000), maturing May 2034• 2016 Water, Sewer, Storm Water Refunding Bonds ($4,490,000), maturing October

2032• 2017 Sales Tax Revenue Bonds ($8,185,000), maturing May 2032• 2017 RDA Refunding Bonds ($17,670,000), maturing May 2034

o Will defease 2010 RDA Revenue Bonds on crossover date of May 1, 2020• 2018 Water, Sewer, Storm Water Revenue Bonds ($6,225,000), maturing October 2043

2018 2017 2018 2017 2018 2017

Land and water rights 64,819,933$ 60,277,933$ 3,196,361$ 3,196,361$ 68,016,294$ 63,474,294$ Infrastructure 19,116,447 19,501,173 - - 19,116,447 19,501,173 Buildings 21,846,035 22,225,972 3,609,239 3,701,671 25,455,274 25,927,643 Improvements other than buildings 3,786,762 3,701,225 34,863,419 33,682,909 38,650,181 37,384,134 Machinery and equipment 2,361,233 2,410,826 124,197 74,829 2,485,430 2,485,655 Construction in progress 435,196 216,476 1,257,669 1,571,068 1,692,865 1,787,544

Total 112,365,606$ 108,333,605$ 43,050,885$ 42,226,838$ 155,416,491$ 150,560,443$

Governmental Activities Total

Midvale City Corporation's Capital Assets (net of depreciation)

Business-type Activities

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• Commitment to Salt Lake County for the relocation of flood channels ($60,000)• ($200,540) representing the balance due to the Utah Infrastructure Agency from related

notes receivable• Compensated absences including vacation ($442,609), payable to employees upon

termination of employment• Unamortized premiums and discounts on bonds ($4,214,629)

Additional information on the City’s long-term debt can be found in Note 4 on pages 59-64 of this report.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES

General Fund

The General Fund is the largest Midvale City fund. Most of the city’s operations are administered here. The total FY 2019 General Fund budget is $20,093,700, down slightly from the final FY 2018 budget of $21,014,500. The $920,800 difference is mostly due to grants.

Projected revenues match projected expenditures. The largest single revenue source is sales tax, which makes up 38% of total city revenues. Franchise fees, energy sales and use taxes, telecommunications taxes, and transient room taxes make up 15%. Property taxes, including motor vehicle fees, will contribute 13% of the total. Other components include Licenses and Permits (3%), Intergovernmental revenues (13%), Charges for services (9%), Fines and Forfeitures (5%), and miscellaneous revenue (4%).

The largest General Fund expenditure is for public safety. $8.6 million, 42% of total General Fund expenditures, is budgeted for police, dispatch, emergency management, and animal control services. The City contracts with Unified Police Department (UPD) for police services. The Mayor holds a position on the UPD board, and the City maintains its own precinct. The City contracts with Salt Lake County for animal control services. Fire service for Midvale City is provided by the Unified Fire Authority (UFA), a separate taxing entity. The Mayor also serves on the UFA board, which allows the City to maintain significant control of fire service provided to the City.

The City Council’s goal is to keep unrestricted fund balance (also known as the Rainy Day Fund) at a level greater than 15% of General Fund revenues. The state of Utah requires cities to maintain a fund balance of between 5% and 25% of General Fund revenues. The City’s Fund Balance is currently 19% of budgeted general fund revenues for FY 2019. The City’s Fleet Fund also has reserves that could be drawn upon in an emergency.

The single largest program cost increase for FY 2019 is public safety. The City’s contract with Unified Police Department (UPD) is increasing by eighteen percent, mostly due to the addition of six new officers to assist with policing the homeless shelter and vicinity. While it is anticipated that the state legislature will step in to cover the costs associated with the shelter, the

21

demands on public safety continue to put pressure on the budget. The contract with UPD for FY 2019 is $8,115,000, which represents 40% of the total General Fund Budget.

The FY 2019 budget provides for merit increases averaging 3% for employees. Because of a change in health insurance providers, health insurance premiums will not increase significantly. There are no additional Full-time Equivalent Employees (FTEs) in this year’s budget.

Water Fund

A great deal of work has been completed over the past several years on the City’s water system with the addition and replacement of infrastructure. We will soon be connecting our Union Jordan system directly into the Jordan Valley Water Conservancy District (JVWCD) system, and adding Midvale properties currently purchasing retail water from JVWCD to our customer base.

We have three different rates in Midvale City: Service Area 1 (original pre-1998 Midvale), Service Area 2 (Bingham Junction/Jordan Bluffs area), and Service Area 3 (Union Jordan area). Over the next few years, it is the City’s goal to merge rates of the three service areas resulting in only one water rate for all of Midvale. In working towards this goal, residents in areas 1 and 2 will experience a rate increase on average of about 6% in FY 2019. Residents in Area 3 will experience a rate decrease of 2% on average.

Sewer Fund

Sewer rates will increase by 3% in FY 2019. Sewer rates have increased over the past few years due to the aging infrastructure and the cost of treating waste water. A Sewer Master Plan has been completed and bonds were issued in FY 2018 to pay for infrastructure improvements. Bond proceeds will also pay for phosphorous and grit removal systems at South Valley Water Reclamation Facility.

Storm Water Utility Fund

Midvale City’s storm water utility fund manages operations and maintenance of the storm water system infrastructure. User rates are established at the level required to keep the system operating efficiently. Increasing federal and state regulations continue to burden the fund. Although, there is no rate increase for FY 2019, incremental increases over the next several years are anticipated as demands on this fund continue to grow.

Street Lighting Fund

Midvale’s Street Lighting Fund was established in January of 2013. The purpose of the Fund is to enhance city-wide street lighting and reduce energy costs. Bonds were issued through the City’s Municipal Building Authority in FY 2013 to provide funding for the purchase of existing street light poles from Rocky Mountain Power (providing annual savings of $168,000), retrofitting existing street lights, and adding and improving new street lights.

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The total project cost was estimated at $2.3 million, but came in significantly under budget at $1.7 million. Surplus bond funds were redirected to the City Hall/Justice Court and City Parks capital budgets. There is no rate increase for FY 2019.

Sanitation Fund

The purpose of the Sanitation fund is to provide collection of garbage and recycling for the residents of Midvale City. In FY 2018, the semi-annual bulky waste program was converted to a monthly bulky waste pickup, increasing costs by approximately $55,000 per year. In FY 2019, the tipping fee at Trans Jordan increased by 10%, adding about $20,000 in costs to the budget. There is a 10% rate increase for FY 2019.

Telecommunications Fund

This fund was established in FY 2012 in order to manage revenue and expenses from UTOPIA customers. UTOPIA (short for Utah Telecommunication Open Infrastructure Agency) was formed by 11 Utah cities as a way to provide critical telecommunications infrastructure to their residents. UTOPIA builds and manages a fiber-to-the premises network, offering today’s fastest technology connected directly to your home or office without having to share with your neighbors. UTOPIA’s open access model fosters competition among private-sector service providers who use the network to offer internet, television, telephone, and other services, giving customers the freedom to choose their own service providers. The user fees collected from UTOPIA users are paid directly to UTOPIA to provide infrastructure for the system.

The FY 2019 Telecommunications Fund budget is $905,700. The revenue for this budget is primarily a transfer from the General Fund in the amount of $850,000. UTOPIA/UIA has started repaying the City’s advance for operations, which allows the transfer from the General Fund to remain flat even though the debt service increases two percent each year. The FY 2019 pledge payment to service the original UTOPIA debt is $880,000. User fee revenue of $27,000 is projected, 95% of which will be paid directly to UTOPIA.

REQUESTS FOR INFORMATION

This financial report is designed to give its readers a general overview of Midvale City Corporation’s finances. Questions regarding any information contained in this report or requests for additional information should be addressed to the Director of Administrative Services, 7505 South Holden Street, Midvale, Utah 84047.

Midvale City Statement of Net Position

June 30, 2018

The accompanying notes are an integral part of this financial statement.

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Governmental Activities

Business-type Activities Total

ASSETSCurrent assets:

Cash, cash equivalents, and investments:Unrestricted 9,112,874$ 4,563,566$ 13,676,440$ Restricted 27,944,273 6,013,274 33,957,547

Receivables (net of allowance for uncollectibles):Accounts and taxes 5,084,902 1,153,893 6,238,795 Contracts - 211,095 211,095 Court fines 299,890 - 299,890 Due from other governments 581,129 - 581,129

Inventory 4,288 60,039 64,327 Prepaids and deposits 80,678 26,858 107,536

Noncurrent assests:Intangible assets - 4,590,893 4,590,893 Note receivable - 290,628 290,628 Land held for resale 150,130 - 150,130 Capital assets not being depreciated:

Water stock - 3,081,299 3,081,299 Land 64,819,933 115,062 64,934,995 Construction in progress 435,196 1,257,669 1,692,865

Capital assets, net of accumulated depreciation:Buildings 21,846,035 3,609,239 25,455,274 Improvements other than buildings 3,786,762 34,863,419 38,650,181 Equipment 2,361,233 124,197 2,485,430 Infrastructure 19,116,447 - 19,116,447

Total assets 155,623,770 59,961,131 215,584,901

Deferred outflows of resources:Deferred outflows related to pensions 995,496 360,164 1,355,660

Total deferred outflows of resources 995,496 360,164 1,355,660

LIABILITIESCurrent liabilities:

Accounts payable 710,546 1,345,487 2,056,033 Accrued liabilites 154,830 52,053 206,883 Accrued interest payable 508,116 253,698 761,814 Compensated absences 241,219 112,867 354,086 Bonds and notes payable 3,174,000 1,431,000 4,605,000

Noncurrent liabilites:Bonds and notes payable 68,069,709 24,805,459 92,875,168 Compensated absences 60,305 28,218 88,523 Net pension liability 1,172,178 411,941 1,584,119 Deposits held 414,335 56,248 470,583

Total liabilities 74,505,238 28,496,971 103,002,209

Deferred inflows of resources:Deferred revenue property taxes 3,057,020 - 3,057,020 Deferred revenue RDA 100,000 - 100,000 Deferred inflows related to pensions, net 805,907 278,379 1,084,286

Total deferred inflows of resources 3,962,927 278,379 4,241,306

NET POSITIONNet investment in capital assets 82,296,971 23,058,240 105,355,211 Restricted for:

Capital projects and redevelopment 6,034,643 - 6,034,643 Unrestricted (10,180,513) 8,487,705 (1,692,808)

Total net position 78,151,101$ 31,545,945$ 109,697,046$

Midvale City Statement of Activities

For the Year Ended June 30, 2018


24

Net (Expense) Revenuesand Changes in Net Position

Function/Programs ExpensesCharges for

Services

Operating Grants and

Contributions

Capital Grants and

ContributionsGovernmental

ActivitiesBusiness-type

Activities Total

Governmental activitiesGeneral government 5,212,705$ 1,402,981$ 83,126$ -$ (3,726,598)$ (3,726,598)$ Public safety 7,290,047 922,257 16,615 - (6,351,175) (6,351,175) Highways and public improvements 2,485,064 - - 1,793,150 (691,914) (691,914) Parks, recreation and public property 1,384,148 24,600 - - (1,359,548) (1,359,548) Redevelopment 3,296,665 - 6,035,293 - 2,738,628 2,738,628 Community development 1,458,891 833,422 65,000 - (560,469) (560,469) Interest and other fiscal charges 2,704,350 - - - (2,704,350) (2,704,350)

Total governmental activities 23,831,870 3,183,260 6,200,034 1,793,150 (12,655,426) (12,655,426)

Business-type activitiesWater 4,361,331 4,738,786 111,221 - 488,676 488,676 Sewer 1,883,291 2,228,967 - - 345,676 345,676 Storm water 1,514,929 1,824,476 - - 309,547 309,547 Sanitation 1,031,396 956,399 - - (74,997) (74,997) Telecommunications 889,011 27,264 - - (861,747) (861,747) Street lighting 381,608 381,507 - - (101) (101)

Total business-type activities 10,061,566 10,157,399 111,221 - 207,054 207,054

General Revenues:Taxes

Property taxes 3,183,212 - 3,183,212 Sales taxes 7,382,052 - 7,382,052 Telecommunications and franchise taxes 3,081,826 - 3,081,826

Gain on sale of assets/equity investment income 524,778 99,139 623,917 Interest income 416,810 77,838 494,648 Miscellaneous 607,715 - 607,715 Developer contributions 4,542,000 - 4,542,000

Transfers - net (850,000) 850,000 - Total general revenue and transfers 18,888,393 1,026,977 19,915,370

Change in net position 6,232,967 1,234,031 7,466,998 Net position - beginning 71,918,134 30,311,914 102,230,048 Net position - ending 78,151,101$ 31,545,945$ 109,697,046$

Program Revenues

Midvale City Balance Sheet – Governmental Funds

June 30, 2018


25

Municipal TotalCapital Redevelopment Building Governmental

General Projects Agency Authority FundsASSETSCash, cash equivalents, and investments

Unrestricted 2,055,451$ 3,022,874$ 2,606,253$ 40,355$ 7,724,933$ Restricted 248,917 6,264,782 20,817,824 612,750 27,944,273

Receivables, net:Accounts and other 95,935 - 102,647 1,259 199,841 Taxes 4,207,806 - 558,779 - 4,766,585 Court fines 299,890 - - - 299,890 Intergovernmental 581,129 - - - 581,129

Deposits 75,595 - 4,375 - 79,970 Land held for resale - - 150,130 - 150,130

Total assets 7,564,723$ 9,287,656 24,240,008$ 654,364$ 41,746,751$

LIABILITIESAccounts payable 133,502 266,191 157,088 - 556,781 Deposits held 411,460 2,875 - - 414,335 Accrued liabilities 141,417 - 9,011 - 150,428

Total liabilities 686,379 269,066 166,099 - 1,121,544

DEFERRED INFLOWS OF RESOURCESUnavailable revenue - property taxes 2,498,241 - 558,779 - 3,057,020 Unavailable revenue - fines/fees assessed 272,860 - 100,000 - 372,860

Total deferred inflows of resources 2,771,101 - 658,779 - 3,429,880

FUND BALANCESRestricted for:

Capital projects - 6,264,782 - - 6,264,782 Debt service 248,917 - 20,794,382 612,750 21,656,049 Redevelopment - - 23,442 - 23,442

Total restricted 248,917 6,264,782 20,817,824 612,750 27,944,273

Assigned to:Capital projects - 2,753,808 - - 2,753,808 Debt service - - - 41,614 41,614 Redevelopment - - 2,597,306 - 2,597,306

Total assigned - 2,753,808 2,597,306 41,614 5,392,728

Unassigned 3,858,326 - - - 3,858,326

Total fund balances 4,107,243 9,018,590 23,415,130 654,364 37,195,327

Total liabilities, deferred inflows ofresources, and fund balances 7,564,723$ 9,287,656$ 24,240,008$ 654,364$ 41,746,751$

Special Revenue

Midvale City Reconciliation of the Balance Sheet of Governmental Funds to The Statement of Net Position

June 30, 2018


26

Amounts reported for governmental activities in the Statement of Net Positionare different because:

Total Fund Balances - Total Governmental Funds (page 25) 37,195,327$

Capital assets used in governmental activities are not financial resources andtherefore, are not reported in the funds. The cost of the assets is $147,072,197less the accumulated depreciation of $36,498,724. 110,573,473

Interest on general obligation and lease revenue bonds is not accrued ingovernmental funds but rather is recognized as an expenditure when due. (508,116)

Long-term liabilities, including bonds payable, are not due and payable in thecurrent period and, therefore, are not reported in the funds. (71,532,825)

Pension liabilities and assets are not due and payable in the current period and,therefore, are not reported in the funds. (965,986)

Other assets are not available to pay for current period expenditures and,therefore, are either deferred or not applicable to funds. 272,860

Internal service funds are used by management to charge the costs of fleetmaintenance and computer equipment to individual funds. The assets andliabilities of internal service funds are included in governmental activities in theStatement of Net Position. 3,116,368

Net Position - Governmental Activities (page 23) 78,151,101$

Midvale City Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds



27

Municipal TotalCapital Redevelopment Building Governmental

General Projects Agency Authority FundsREVENUESTaxes 13,099,474$ -$ 547,615$ -$ 13,647,089$ Licenses and permits 600,158 - - - 600,158 Intergovernmental 1,957,891 - 6,035,293 - 7,993,184 Charges for service 1,674,434 - - - 1,674,434 Fines and forfeitures 992,776 - - - 992,776 Interest income 81,503 112,286 211,493 11,528 416,810 Miscellaneous 5,530 - 220,881 381,308 607,719

Total revenues 18,411,766 112,286 7,015,282 392,836 25,932,170

EXPENDITURESCurrent:

General government 4,130,071 - - - 4,130,071 Public safety 7,168,010 - - - 7,168,010 Highways and public improvements 881,927 - - - 881,927 Parks, recreation, and public property 978,895 - - - 978,895 Redevelopment - - 3,311,665 - 3,311,665 Community development 1,458,891 - - - 1,458,891

Total current expenditures 14,617,794 - 3,311,665 - 17,929,459

Capital outlay:Capital outlay - 2,618,265 - 261 2,618,526

Debt service:Principal 805,000 - 1,561,000 465,000 2,831,000 Interest 395,818 - 1,910,111 214,156 2,520,085 Bond issuance costs - - 228,693 - 228,693

Total debt service 1,200,818 - 3,699,804 679,156 5,579,778

Total expenditures 15,818,612 2,618,265 7,011,469 679,417 26,127,763

Excess (deficiency) of revenuesover (under) expenditures 2,593,154 (2,505,979) 3,813 (286,581) (195,593)

OTHER FINANCING SOURCES (USES)Sale of assets 219,891 - - - 219,891 Issuance of debt - - 20,255,623 - 20,255,623 Transfers in - 1,677,831 210,000 - 1,887,831 Transfers out (2,737,831) - - - (2,737,831)

Total other financing sources (uses) (2,517,940) 1,677,831 20,465,623 - 19,625,514

Net change in fund balance 75,214 (828,148) 20,469,436 (286,581) 19,429,921

Fund balances at beginning of year 4,032,029 9,846,738 2,945,694 940,945 17,765,406

Fund balances at end of year 4,107,243$ 9,018,590$ 23,415,130$ 654,364$ 37,195,327$

Special Revenue

Midvale City Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of

Governmental Funds to the Statement of Activities For the Year Ended June 30, 2018


28

Amounts reported for governmental activities in the statement of activities(page 24) are different because:

Net change in fund balances - total governmental funds (page 27) 19,429,921$

Governmental funds report capital outlays as expenditures and do not reportcapital contributions, as they are not financial assets. However, in thestatement of activities the cost of capital outlays is allocated over theirestimated useful lives and reported as depreciation expense, and capitalcontributions are reported as assets and revenue. This is the amount by whichcapital outlays exceeded depreciation in the current period. (535,926)

The net effect of various miscellaneous transactions involving dontated capitalassets is to increase net position. 4,542,000

The issuance of long-term debt (e.g., bonds, leases) provides current financialresources to governmental funds, while the payment of the principal of long-term debt consumes the current financial resources of governmental funds.Neither transactions, however, has any effect on net position. Also,governmental funds report the effect of premiums, discounts, and similar itemswhen debt is first issued, whereas, these amounts are deferred and amortizedin the statement of activities. This amount is the net effect of these differencesin the treatment of long-term debt and related items. (17,297,589)

Some revenues in the statement of activities do not provide current financialresources and, therefore, are not reported as revenues in governmental funds. (17,818)

The net revenue of certain activities of the Internal Service Fund is reportedwith governmental activities. 112,379

Change in net position of governmental activities (page 24) 6,232,967$

Midvale City Statement of Revenues, Expenditures, and Changes in Fund Balance –

Budget to Actual – General Fund For the Year Ended June 30, 2018


29

Actual Variance withOriginal Final Amounts Final Budget

REVENUESTaxes 12,933,600$ 13,083,600$ 13,099,474$ 15,874$ Licenses and permits 571,000 571,000 600,158 29,158 Intergovernmental 1,955,600 3,780,500 1,957,891 (1,822,609) Charges for services 1,844,300 1,894,900 1,674,434 (220,466) Fines and forfeitures 1,042,000 1,042,000 992,776 (49,224) Interest income 12,000 12,000 81,503 69,503 Miscellaneous 22,500 59,500 5,530 (53,970)

Total revenues 18,381,000 20,443,500 18,411,766 (2,031,734) EXPENDITURESGeneral government:

City council 255,800 352,082 343,502 8,580 Court 780,300 780,300 760,103 20,197 General administration 604,500 665,400 654,308 11,092 Information technology 535,400 536,000 479,000 57,000 Finance 344,200 353,500 352,575 925 Recorder 317,000 303,600 297,482 6,118 City attorney 500,400 622,400 610,867 11,533 Non-departmental 311,600 306,600 304,874 1,726 Community and intergovernmental service 274,700 292,700 288,891 3,809 Employee services 334,700 49,200 38,469 10,731

Public safety:Police 7,326,800 7,374,000 7,168,010 205,990

Highways and public improvements 876,300 945,400 881,927 63,473 Parks, recreation and public property 1,035,500 1,087,200 978,895 108,305 Community development 1,402,500 1,532,800 1,458,891 73,909 Debt service:

Principal 805,000 805,000 805,000 - Interest 395,800 395,818 395,818 -

Total expenditures 16,100,500 16,402,000 15,818,612 583,388 Excess (deficiency) of revenues

over (under) expenditures 2,280,500 4,041,500 2,593,154 (1,448,346) OTHER FINANCING SOURCES (USES) - Proceeds from sale of assets 405,000 571,000 219,891 (351,109) Proceeds from bond issuance - - - - Transfers in - - - - Transfers out (2,685,500) (4,679,300) (2,737,831) 1,941,469

Net change in fund balance -$ (66,800)$ 75,214 142,014$ Fund balance at beginning of year 4,032,029

Fund balance at end of year 4,107,243$

Budgeted Amounts


Budget and Actual – Redevelopment Agency For the Year Ended June 30, 2018


30


REVENUESTaxes 5,350,000$ 6,168,000$ 547,615$ (5,620,385)$ Intergovernmental 414,200 414,200 6,035,293 5,621,093 Interest income 44,000 44,000 211,493 167,493 Miscellaneous - - 220,881 220,881

Total revenues 5,808,200 6,626,200 7,015,282 389,082

EXPENDITURESRedevelopment 3,514,500 4,332,500 2,573,859 1,758,641 Administration 791,800 1,031,100 966,499 64,601 Debt service

Principal 1,561,000 21,296,500 1,561,000 19,735,500 Interest 1,629,400 1,910,200 1,910,111 89

Total expenditures 7,496,700 28,570,300 7,011,469 21,558,831

Excess (deficiency) of revenues over (under) expenditures (1,688,500) (21,944,100) 3,813 (21,169,749)

OTHER FINANCING SOURCESProceeds from bond issuance 340,000 20,595,600 20,255,623 (339,977) Transfers in 100,000 210,000 210,000 -

Total other financing sources (uses) 440,000 20,805,600 20,465,623 (339,977)

Net change in fund balance (1,248,500)$ (1,138,500)$ 20,469,436 (21,509,726)$

Fund balance at beginning of year 2,945,694


Budgeted Amounts


Budget and Actual – Municipal Building Authority For the Year Ended June 30, 2018


31


REVENUESLease and other revenue 381,300$ 381,300$ 381,308$ 8$ Interest income 8,000 8,000 11,528 3,528

Total revenues 389,300 389,300 392,836 3,536

EXPENDITURESCapital outlay 300 300 260 40 Debt service

Principal 465,000 465,000 465,000 - Interest 214,200 214,200 214,156 44

Total expenditures 679,500 679,500 679,416 84

Excess (deficiency) of revenues over (under) expenditures (290,200) (290,200) (286,580) 3,620

OTHER FINANCING SOURCESProceeds from bond issuance - - - -

Total other financing sources (uses) - - - -

Net change in fund balance (290,200)$ (290,200)$ (286,580)$ 3,620$

Fund balance at beginning of year 940,945

Fund balance at end of year 654,365$

Budgeted Amounts

Midvale City Statement of Net Position – Proprietary Funds

June 30, 2018

(Continued)

32

.

Governmental Other Activities

Proprietary InternalWater Sewer Storm Water Funds Total Service Funds


Cash, cash equivalents, and investmentsUnrestricted 2,913,681$ 568,402$ 870,946$ 210,537$ 4,563,566$ 1,387,941$ Restricted (bond) 3,237,157 2,662,802 113,315 - 6,013,274 -

Receivables:Accounts, net 628,475 230,038 167,342 128,038 1,153,893 118,476 Contracts - - - 18,540 18,540 -

Inventory 60,039 - - - 60,039 4,288 Deposits 12,091 3,445 11,120 202 26,858 708

Total current assets 6,851,443 3,464,687 1,162,723 357,317 11,836,170 1,511,413

Noncurrent assets:Contracts receivable - - - 192,555 192,555 - Intangible asset - South Valley

Water Reclamation - 3,333,105 - - 3,333,105 - Investment in Trans-Jordan

Cities Landfill - - - 1,257,788 1,257,788 - Notes receivable, less allowance

for doubtful accounts - - - 290,628 290,628 - Due from other funds - - - - - - Net pension asset - - - - - - Capital assets:

Land 115,062 - - - 115,062 - Water stock 3,081,299 - - - 3,081,299 - Construction in progress 1,096,424 - 161,245 - 1,257,669 - Buildings, net 1,824,383 - 1,784,856 - 3,609,239 - Improvements, net 26,476,357 3,420,457 4,966,605 - 34,863,419 - Automobiles, net - - - - - 1,061,116 Machinery and equipment, net 40,575 78,623 4,999 - 124,197 731,017

Total noncurrent assets 32,634,100 6,832,185 6,917,705 1,740,971 48,124,961 1,792,133

Total assets 39,485,543 10,296,872 8,080,428 2,098,288 59,961,131 3,303,546

DEFERRED OUTFLOWS OF RESOURCESDeferred outflows related to pensions 144,366 71,525 135,345 8,928 360,164 19,484

Total deferred outflows of resources 144,366 71,525 135,345 8,928 360,164 19,484

Business-type Activities - Enterprise Funds

Midvale City Statement of Net Position – Proprietary Funds (Continued)

June 30, 2018


33




Accounts payable 1,241,448$ 7,822$ 7,792$ 88,425$ 1,345,487$ 153,765$ Accrued liabilities 21,815 10,206 18,633 1,399 52,053 4,402 Compensated absences 56,871 20,501 34,158 1,337 112,867 9,926 Accrued interest payable 193,630 32,484 27,584 - 253,698 - Notes payable - - 15,000 - 15,000 - Bonds payable 895,200 196,800 324,000 - 1,416,000 -

Total current liabilities 2,408,964 267,813 427,167 91,161 3,195,105 168,093

Noncurrent liabilities:Due to other funds - - - - - - Compensated absences 14,218 5,125 8,540 335 28,218 2,482 Deposits held 56,248 - - - 56,248 - Notes payable - - 15,000 200,540 215,540 - Bonds payable 15,772,400 4,009,600 3,962,000 - 23,744,000 - Unamortized bond premium/discount 641,322 204,597 - - 845,919 - Net pension liability 148,634 92,463 159,077 11,767 411,941 9,939

Total noncurrent liabilities 16,632,822 4,311,785 4,144,617 212,642 25,301,866 12,421

Total liabilities 19,041,786 4,579,598 4,571,784 303,803 28,496,971 180,514

DEFERRED INFLOWS OF RESOURCESDeferred inflows related to pensions 123,480 50,997 99,115 4,787 278,379 26,148

Total deferred inflows of resources 123,480 50,997 99,115 4,787 278,379 26,148

NET POSITIONNet investment in capital assets 18,562,335 1,750,885 2,745,020 - 23,058,240 1,792,133 Unrestricted 1,902,308 3,986,917 799,854 1,798,626 8,487,705 1,324,235

Total net position 20,464,643$ 5,737,802$ 3,544,874$ 1,798,626$ 31,545,945$ 3,116,368$


Midvale City Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds



34


Proprietary Internal ServiceWater Sewer Storm Water Funds Total Funds

OPERATING REVENUESCharges for services 4,540,074$ 2,158,794$ 1,732,746$ 1,365,170$ 9,796,784$ 718,500$ Connection fees 103,265 60,500 - - 163,765 - Other 95,447 9,673 91,730 - 196,850 300

Total operating revenues 4,738,786 2,228,967 1,824,476 1,365,170 10,157,399 718,800

OPERATING EXPENSESSalaries and wages 592,083 220,676 440,531 19,421 1,272,711 142,658 Employee benefits 277,402 102,812 224,334 7,131 611,679 40,025 Administration 684,212 297,373 392,878 347,014 1,721,477 123,913 Supplies 947 - - - 947 4,843 Repairs and maintenance 172,808 101,435 133,634 - 407,877 284,238 Waste disposal - - 12,324 925,908 938,232 - Purchase/treatment:

Water 1,053,794 - - - 1,053,794 - Sewer - 943,461 - - 943,461 -

Street lighting - - - 113,530 113,530 - Telecommunications - - - 889,011 889,011 - Depreciation 973,696 89,660 204,537 - 1,267,893 333,218

Total operating expenses 3,754,942 1,755,417 1,408,238 2,302,015 9,220,612 928,895

Operating income (loss) 983,844 473,550 416,238 (936,845) 936,787 (210,095)

NONOPERATING REVENUES (EXPENSES)Interest income 45,171 16,065 14,656 1,946 77,838 17,587 Interest expense (519,113) (69,689) (106,691) - (695,493) - Gain on equity investment - - - 99,139 99,139 - Intergovernmental subsidy 111,221 - - - 111,221 - Gain on disposal of equipment - - - - - 304,887 Bond issuance costs (87,276) (58,185) - - (145,461) -

Total nonoperating revenues (expenses) (449,997) (111,809) (92,035) 101,085 (552,756) 322,474

Income before transfers 533,847 361,741 324,203 (835,760) 384,031 112,379

Transfers in - - - 850,000 850,000 - Transfers out - - - - - -

Change in net position 533,847 361,741 324,203 14,240 1,234,031 112,379

Total net position - beginning 19,930,796 5,376,061 3,220,671 1,784,386 30,311,914 3,003,989

Total net position - ending 20,464,643$ 5,737,802$ 3,544,874$ 1,798,626$ 31,545,945$ 3,116,368$


Midvale City Statement of Cash Flows – Proprietary Funds


(Continued)

35



Cash flows from operating activitiesReceipts from customers 4,683,615$ 2,268,959$ 1,805,494$ 1,362,424$ 10,120,492$ 609,981$ Payments to suppliers (705,633) (1,290,374) (535,547) (2,205,325) (4,736,879) (123,026) Payments for interfund services (489,400) (197,100) (325,500) (65,200) (1,077,200) (151,796) Payments to employees (864,002) (314,927) (649,474) (23,957) (1,852,360) (178,873)

Net cash provided (used) byoperating activities 2,624,580 466,558 294,973 (932,058) 2,454,053 156,286

Cash flows from noncapital financing activities Decrease in contracts receivable - - - 30,690 30,690 - Decrease in notes receivable - - - 16,858 16,858 - Transfers (to) from other funds - - - 850,000 850,000 -

Net cash provided (used) bynoncapital financing activities - - - 897,548 897,548 -

Cash flows from capital and relatedfinancing activities

Purchase of capital assets (1,631,885) (60,051) (400,004) - (2,091,940) (360,954)

Proceeds from sale of capital assets - - - - - 306,696

Proceeds from issuance of debt 3,735,000 2,490,000 - - 6,225,000 -

Principal paid on capital debt (622,383) (6,106) (331,000) (29,669) (989,158) -

Interest and fees paid on capital debt (502,461) (52,419) (108,717) - (663,597) -

Intergovernmental bond interest subsidy 111,221 - - - 111,221 -

Net cash provided (used) by capital

and related financing activities 1,002,216 2,313,239 (839,721) (29,669) 2,591,526 (54,258)

Cash flows from investing activitesInterest received 45,171 16,065 14,656 1,946 77,838 17,587

Net cash provided by investing activities 45,171 16,065 14,656 1,946 77,838 17,587

Net increase (decrease) in cash andcash equivalents 3,671,967 2,795,862 (530,092) (62,233) 6,020,965 119,615

Cash and cash equivalents,beginning of year 2,478,871 435,342 1,514,353 272,770 4,701,336 1,268,326

Cash and cash equivalents, end of year 6,150,838$ 3,231,204$ 984,261$ 210,537$ 10,722,301$ 1,387,941$

Unrestricted cash 2,913,681$ 568,402$ 870,946$ 210,537$ 4,563,566$ 1,387,941$

Restricted cash 3,237,157 2,662,802 113,315 - 6,013,274 - 6,150,838$ 3,231,204$ 984,261$ 210,537$ 10,576,840$ 1,387,941$


Midvale City Statement of Cash Flows – Proprietary Funds (Continued)



36



Reconciliation of operating income (loss) to netcash provided (used) by operating activities

Operating income (loss) 983,844$ 473,550$ 416,238$ (936,845)$ 936,787$ (210,095)$ Adjustments to reconcile operating

income to net cash provided byoperating activities:

Depreciation 973,696 89,660 204,537 - 1,267,893 333,218 Changes in assets and liabilities:

Accounts receivable (55,171) 40,407 (18,982) (3,516) (37,262) (106,976) Inventory 34,898 - - - 34,898 (17) Deposits (137) (415) (4,769) (202) (5,523) (21) Contracts receivable - - - 540 540 - Accounts payable 675,914 (153,227) (322,211) 5,140 205,616 136,367 Accrued liabilities 11,729 16,583 20,160 2,825 51,297 3,810

Net cash provided (used) byoperating activities 2,624,580$ 466,558$ 294,973$ (932,058)$ 2,454,053$ 156,286$


Midvale City Notes to the Financial Statements

June 30, 2018

37

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reporting Entity

The basic financial statements of Midvale City Corporation (“the City”) have been prepared in conformitywith accounting principles (GAAP) generally accepted in the United States of America as applicable togovernmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing accounting and financial reporting principles.

Midvale City Corporation was incorporated in 1909. The City operates under a Mayor / Council form ofgovernment. As required by GAAP, these financial statements present the City and its component units,entities for which the City is considered to be financially accountable. The City is considered to befinancially accountable for an organization if the City appoints a voting majority of that organization orthere is a potential for that organization to provide specific financial benefits to or impose specificfinancial burdens on the City. The City is also considered to be financially accountable for an organizationif that organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates orcharges, or issue bonded debt without approval from the City). The component units discussed below areincluded as part of the City’s reporting entity as blended component units.

Component Units

The Midvale City Redevelopment Agency (RDA) was established to prepare and carry out plans toimprove, rehabilitate and redevelop blighted areas within the City. The RDA is governed by a board oftrustees composed of the City Mayor and members of the City Council. Although it is a legally separateentity from the City, the RDA is reported as if it were part of the primary government because of theCity’s ability to impose its will upon the operations of the RDA. The RDA is included in these financialstatements as the Redevelopment Agency Special Revenue Fund. Separate financial statements are notissued for the RDA.

The Midvale City Municipal Building Authority (MBA) was established to finance and constructmunicipal buildings that are then leased to the City. The MBA is governed by a five-member board oftrustees composed of the City Council. Although it is a legally separate entity from the City, the MBA isreported as if it were part of the primary government because of the City’s ability to impose its will uponthe operations of the MBA. The MBA is included in these financial statements as the Municipal BuildingAuthority Special Revenue Fund. Separate financial statements are not issued for the MBA.

Government-Wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and the statement ofactivities) report information on all of the non-fiduciary activities of the City and its component units. Forthe most part, the effect of interfund activity has been removed from these statements. Governmentalactivities, which normally are supported by taxes and intergovernmental revenues, are reported separatelyfrom business-type activities, which rely to a significant extent on fees and charges for support.

Midvale City Notes to the Financial Statements (Continued)

June 30, 2018

38

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Government-Wide and Fund Financial Statements (Continued)

The statement of activities demonstrates the degree to which the direct expenses of a given function orsegment are offset by program revenues. Direct expenses are those which are clearly identifiable with aspecific function or segment. Program revenues include 1) charges to customers or applicants whopurchase, use or directly benefit from goods, services or privileges provided by a given function orsegment and 2) grants and contributions that are restricted to meeting the operational or capitalrequirements of a particular function or segment. Taxes and other items not properly included amongprogram revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds,even though the latter are excluded from the government-wide financial statements. Major individualgovernmental funds and major individual enterprise funds are reported as separate columns in the fundfinancial statements.

Measurement Focus, Basis of Accounting and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focusand the accrual basis of accounting, as are the proprietary fund financial statements. Revenues arerecorded when earned and expenses are recorded when a liability is incurred, regardless of the timing ofrelated cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grantsand similar items are recognized as revenue as soon as all eligibility requirements imposed by the providerhave been met.

The use of financial resources to acquire capital assets are capitalized as assets in the government-widefinancial statements, rather than reported as an expenditure. Proceeds of long-term debt are recorded as aliability in the government-wide financial statements, rather than as another financing source. Amountspaid to reduce long-term debt of the City are reported as a reduction of the related liability, rather than anexpenditure in the government-wide financial statements.

Governmental fund financial statements are reported using the current financial resources measurementfocus and the modified accrual basis of accounting. Revenues are recognized as soon as they are bothmeasurable and available. Revenues are considered to be available when they are collectible within thecurrent period or soon enough thereafter to pay liabilities of the current period. Expenditures generallyare recorded when a liability is incurred, as under accrual accounting. However, debt-serviceexpenditures, as well as expenditures related to compensated absences and claims and judgments, arerecorded only when payment is due. Governmental funds do not report donated capital assets receivedunless the sale of those assets is imminent. The assets are reported in the government-wide financialstatements.


June 30, 2018

39


Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)

Sales taxes, use taxes, franchise taxes, and earned but unreimbursed state and federal grants associatedwith the current fiscal period are all considered to be susceptible to accrual and so have been recognizedas revenues of the current fiscal period. Property taxes are measurable as of the date levied (assessed) andare recognized as revenues when they become available. Available means when due, or past due, andreceived within the current period or collected soon enough thereafter (within 60 days) to be used to payliabilities of the current period. Justice Court fines assessed prior to year-end and collected within 60 daysare recognized as revenues in the current period. All other revenues are considered to be measurable andavailable only when cash is received by the City.

The City reports the following major governmental funds:

The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except for those required to be accounted for in another fund.

The Capital Projects Fund accounts for the financial resources to be used for the acquisition or construction of the major capital facilities of the government (other than those financed by enterprise funds).

The Redevelopment Agency Special Revenue Fund is used to account for financial resources legally restricted to be used for the revitalization of blighted areas within the City. The primary revenue source for the Redevelopment Agency is tax increment revenues from Midvale City and other participating taxing entities. Tax increment financing is a tool used to promote economic development by earmarking property tax revenue from increases in assessed values within a designated project area.

The Municipal Building Authority Special Revenue Fund is used to account for financial resources legally restricted to be used for the design and construction of capital assets for the benefit of the City. The primary revenue source for the Municipal Building Authority is lease revenue from the users of those assets. Midvale City is the major tenant as the lessee of City Hall and the Justice Court.

The City reports the following major proprietary funds:

The Public Utilities Fund accounts for the activities of the City’s water distribution system and sewer operations. The activities of the water and sewer operations are reported separately in this financial report.

The Storm Water Utility Fund accounts for the activities of the City’s storm water operations.

Additionally, the City reports the following funds types:

Internal Service Funds account for services provided to other departments or agencies of the government on a cost reimbursement basis. Midvale City operates two Internal Service Funds; Fleet Management and Information Technology Services.


June 30, 2018

40


Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)

The Street Lighting Fund (proprietary fund) accounts for the activities of the City’s street lighting services. The Telecom Fund (proprietary fund) accounts for the activities of the City’s UTOPIA operations. The Sanitation Fund accounts for the activities of the City’s sanitation collection operations.

As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments to the General Fund by various enterprise finds for the providing of administrative and billing services for such funds. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

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 all enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds includes the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Equity

Cash, Deposits and Investments

Cash includes cash on hand, demand deposits with banks and other financial institutions, and deposits in other types of accounts or cash management pools that have the general characteristics of demand deposit accounts. City policy allows for the investment of funds in time certificates of deposit with federally insured depositories, investment in the Utah Public Treasurer’s Investment Fund and other investments allowed by the State of Utah’s Money Management Act. Investments are reported at fair value. The State Treasurer’s Investment Fund operates in accordance with state laws and regulations. The reported value of the Fund is the same as the fair value of the Fund shares.

Cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Investments with maturities of three months or less when purchased meet this definition.

Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due to or due from other funds”.


June 30, 2018

41


Assets, Deferred Outflows, Liabilities, Deferred Inflows, and Equity (Continued)

Other receivables at June 30, 2018 consist of property tax, franchise tax, sales tax, grants, fines, andaccounts (billings for user charged services, including unbilled utility services). Taxes, grants and finesare deemed collectible in full. The allowance for doubtful proprietary account receivables at June 30,2018 is $8,000.

Inventory

Inventory represents mainly supplies and parts used for various water fund projects.

Prepaid Items

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded asprepaid items in both government-wide and fund financial statements.

Capital Assets

Capital assets, which include land, buildings, infrastructure and equipment, are reported in thegovernment-wide financial statements. Capital assets are defined by the City as assets with an individualcost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded athistorical cost or estimated historical cost if purchased or constructed. Donated capital assets, donatedworks of art and similar items, and capital assets received in a service concession arrangement arerecorded at estimated acquisition value as of the date of donation. The costs of normal maintenance andrepairs that do not add to the value of the asset or materially extend assets lives are not capitalized.

Property, plant, and equipment is depreciated using the straight-line method over the following estimateduseful lives:

Buildings 25 to 50 yearsInfrastructure 10 to 40 yearsImprovements other than buildings 20 to 30 yearsMachinery and equipment 5 to 30 years


June 30, 2018

42



Compensated Absences

For governmental funds amounts of vested or accumulated vacation leave and comp time that are notexpected to be liquidated with expendable available financial resources are reported as liabilities in thegovernment-wide statement of net assets and as expenses in the government-wide statement of activities.No expenditures are reported for these amounts in the fund financial statements. Vested or accumulatedvacation leave and comp time of proprietary funds is recorded as an expense and a liability of those fundsas the benefits accrue to the employees and are thus recorded in both the government-wide financialstatements and the individual fund financial statements. Sick pay amounts are charged to expenditureswhen incurred. At the end of the first full pay period in January, 50% of accrued sick leave in excess of480 hours will be contributed to the employee’s retirement health savings plan. After this contribution,employees may convert 25 percent of remaining accrued sick leave in excess of 240 hours to vacationleave. Employees may carry a maximum of 160 hours of vacation leave forward to the next calendar year;the balance of unused vacation leave is forfeited. Unused vacation leave and comp time is paid to theemployee upon termination.

Deferred Inflows and Outflows of Resources

Deferred inflows of resources represent an acquisition of net position that applies to a future period, andis therefore deferred until that time.

Governmental funds report revenue that is unavailable as deferred inflows of resources. Governmentalfunds report unavailable revenue from property taxes, court fines, and code enforcement liens. Theseamounts are deferred and recognized as revenue in the period that the amounts become available.

Deferred outflows of resources represent a consumption of net position that applies to a future period, andis therefore deferred until that time. Deferred outflows and inflows relating to pensions were the onlydeferred outflows and inflows of resources recorded at June 30, 2018.

Long-Term Obligations

In the government-wide financial statements and proprietary fund types in the fund financial statements,long-term debt and other long-term obligations are reported as liabilities in the applicable governmentalactivities, business-type activities, or proprietary fund type statement of net assets. Bond premiums, anddiscounts are deferred and amortized over the life of the applicable debt. In the fund financial statements,governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, duringthe current period. The face amount of debt issued and bond premiums are reported as other financingsources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether ornot withheld from the actual debt proceeds received, are reported as debt service expenditures.


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Fund Balance

Governmental fund balance is reported in five separate categories: Nonspendable, restricted, committed,assigned, and unassigned. When both restricted and unrestricted fund balance is available for use, it is theCity’s policy to use restricted fund balance first. When expenditures qualify for more than one unrestrictedfund balance classification, it is the City’s policy to use resources in the following order: Committed,assigned, and then unassigned.

Nonspendable fund balance cannot be spent because it is not in spendable form. An example ofnonspendable fund balance is inventory. Restricted fund balance has restrictions imposed by partiesoutside of the primary government. Committed fund balance represents funds restricted for a specific useby resolution of the Midvale City Council. Assigned fund balance is earmarked for certain purposeswithout formal resolution of the City Council. Finally, any remaining fund balance is unassigned andavailable for unrestricted use.

Restricted Assets

Restricted assets are comprised of cash restricted for future payments of principal and interest on debtservice as well as unexpended portions of bonds issued for capital construction purposes. When bothrestricted and unrestricted resources are available for use, it is the City’s policy to use restricted resourcesfirst, then unrestricted resources as they are needed.

Pensions

For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflowsof resources related to pensions, and pension expense, information about the fiduciary net position of theUtah Retirement Systems Pension Plan (URS) and additions to/deductions from URS's fiduciary netposition have been determined on the same basis as they are reported by URS. For this purpose, benefitpayments (including refunds of employee contributions) are recognized when due and payable inaccordance with the benefit terms. Investments are reported at fair value.


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2. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS

Explanation of Certain Differences between the Governmental Fund Balance Sheet and the Government-Wide Statement of Net Position

The governmental fund balance sheet includes a reconciliation between total governmental fund balancesand net position of governmental activities as reported in the government-wide statement of net position.This difference primarily results from the long-term economic focus of the statement of net assets versusthe current financial resources focus of the governmental fund balance sheets.

Capital related items:

When capital assets (property, plant and equipment) that are to be used in governmental activities are purchased or constructed, the cost of those assets are reported as expenditures in governmental funds. However, the statement of net position includes those capital assets among the assets of the City as a whole.

Long-term debt transactions:

Long-term liabilities applicable to the City’s governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities in the fund financials. All liabilities (both current and long-term) are reported in the statement of net position. Balances at June 30,2018 were:

Cost of capital assets 147,072,197$ Accumulated depreciation (36,498,724)

Total difference 110,573,473$

General obligation bonds 770,000$ Excise tax revenue bonds 300,000 Lease revenue bonds 46,235,000 Tax revenue bonds 20,540,000 Note payable 30,000 Bond issuance premiums 3,368,709 Compensated absences 289,116

Total difference 71,532,825$


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2. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS(CONTINUED)

Explanation of Certain Differences between Governmental Fund Operating Statements and the Statementof Activities

The governmental fund statement of revenues, expenditures, and changes in fund balances includes areconciliation between net changes in fund balances - total governmental funds and changes in net assetsof governmental activities as reported in the government-wide statement of activities. The first elementof this reconciliation states that capital outlays are reported in the governmental funds as expenditureswhile the government-wide statement of activities allocates these costs over the useful lives of the assetsas depreciation. While shown in the reconciliation as the net difference, the elements of this differenceare as follow:

3. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY

Budgetary Information

On or before the first regularly scheduled Council meeting in May, the City Recorder submits to the CityCouncil a proposed operating budget for the fiscal year commencing the following July 1. The operatingbudget includes proposed expenditures and the proposed sources of revenues.

Between May 1 and June 22, the City Council reviews and adjusts the proposed budget. On or before June22, a public hearing is held and the budget is legally adopted through passage of a resolution. If a propertytax increase is anticipated, adoption of the budget is delayed until August in order to comply with thestate’s truth-in-taxation requirements.

After the budget is adopted, the City Manager may transfer any unencumbered or unexpendedappropriation amount from one expenditure account to another within a department. The City Councilmay, by resolution, transfer any unencumbered or unexpended appropriation amount from one departmentin a fund to another department within the same fund.

When the City Council determines that an emergency exists, such as widespread damage from fire, flood,or earthquake, the Mayor’s declaration of an emergency allows for necessary spending for immediateneeds.

Formal budgetary integration is employed as a management control device during the year for the GeneralFund, Special Revenue Funds, and Capital Projects Funds. In the General Fund, budgets are adopted atthe functional level and budgetary control is exercised at the departmental level. For Special RevenueFunds, budgets are adopted, and control is exercised at the level of total expenditures for each individualfund. For Capital Projects Funds, budgets are adopted, and control is exercised at the project level.

Capital outlay 1,682,444$ Depreciation expense (2,218,370)

Net difference, as reported (535,926)$


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3. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (CONTINUED)

Budgetary Information (Continued)

Annual budgets for the General Fund, all Special Revenue Funds, and all Capital Projects Funds werelegally adopted by the City and are prepared on the modified-accrual method of accounting.

Encumbrances (commitments related to unperformed purchase orders or contracts for goods or services)are used only as an internal management control device during the year. The City does not have anyencumbrances outstanding at year end since appropriations lapse at year end. However, encumberedamounts are generally re-appropriated and honored as part of the following year’s budget.

Although Utah State law requires the initial preparation of budgets for all City funds (both governmentaland proprietary), it only requires the reporting of actual versus such budgets for governmental funds.

Tax Revenues

Property taxes are collected by the Salt Lake County Treasurer and remitted to the City in five to sixinstallments in November, December, and January of each fiscal year and a final settlement by March31st. Taxes are assessed on January 1st of each calendar year. Taxes are levied and are due and payableon November 1st and delinquent after November 30th of each year at which time they become liens if notpaid. An accrual of delinquent current and prior year’s property taxes beyond that which was receivedwithin 60 days after fiscal year end has not been made, as the amounts are not deemed to be material. Anaccrual for current year property taxes estimated to be collected the following November and Decemberis made each year and reported as a deferred inflow of resources.

Sales taxes are collected by the Utah State Tax Commission and remitted to the City monthly. An accrualhas been made for all taxes received by the State for the period ended June 30th and thus due and payableto the City.

Franchise taxes are charged to various utility companies doing business with the City including telephone,cable television, gas utility, and electric utility companies. The fees are remitted on a monthly, quarterly,semi-annual, or annual basis. An accrual has been made for fees due and payable to the City at June 30th.

4. DETAILED NOTES FOR ALL FUNDS

Cash and Investments

Deposits and investments for the City are governed by the Utah Money Management Act (Utah CodeAnnotated, Title 51, Chapter 7, “the Act”) and by rules of the Utah Money Management Council (“theCouncil”). Following are discussions of the City’s exposure to various risks related to its cashmanagement activities.


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4. DETAILED NOTES FOR ALL FUNDS (CONTINUED)

Custodial Credit Risk

Custodial credit risk for deposits is the risk that in the event of a bank failure, the City’s deposits may notbe recovered. The City’s policy for managing custodial credit risk is to adhere to the Money ManagementAct. The Act requires all deposits of the City to be in a qualified depository, defined as any financialinstitution whose deposits are insured by an agency of the federal government and which has been certified by the Commissioner of Financial Institutions as meeting the requirements of the Act and adhering to therules of the Council. At times during the year, the City’s bank balances may have exceeded the insuredlevels under FDIC guidelines.

Credit Risk

Credit risk is the risk that the counterparty to an investment will not fulfill its obligations. The City’spolicy for limiting the credit risk of investments is to comply with the Money Management Act.

The City invests with the Utah Public Treasurer’s Investment Fund (PTIF), an external pooled investmentfund managed by the Utah State Treasurer and subject to the Act and Council requirements. The PTIF isnot registered with the SEC as an investment company, and deposits in the PTIF are not insured orotherwise guaranteed by the State of Utah. The PTIF operates and reports to participants on an amortizedcost basis. The income, gains, and losses, net of administration fees, of the PTIF are allocated based uponthe participant’s average daily balances.

The City also has investments managed by Moreton Asset Management, LLC. Moreton AssetManagement is an SEC registered investment advisory firm and also appears on the certified investmentadvisor list by the MM Council. Some employees of Moreton Asset Management, LLC are also registeredrepresentatives of Moreton Capital Markets, LLC; a broker/dealer affiliate of Moreton AssetManagement. Moreton Capital Markets, LLC appears on the certified dealer list of the MM Council.

As with the PTIF, all investments managed by Moreton Asset Management must comply with the MMAct and rules of the MM Council. Securities in the City’s portfolio are registered in the name of the City,are held by a third-party custodian, and include corporate bonds, U.S. government bonds, and Agencybonds. The maximum final maturity of any security purchased does not exceed five years. Securitiespurchased are coordinated to mature with ongoing cash expenditures of the city. Nationally recognizedcredit rating agencies have ratings issued on the investments that range from AA+ to BBB+.

The City has investments held by a trustee in a money market mutual fund (MMMF). The mutual fundinvests exclusively in the United States government securities. The City also has investments in anovernight international sweep account.


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Credit Risk (Continued)

The City measures and records its investments using fair value measurement guidelines established byGenerally Accepted Accounting Principles. These guidelines recognize a three-tiered fair value hierarchyas follows:

The securities classified as Level 1 are valued as stated above. Money market funds classified as Level 2 use published fair value per share (unit) for each share and the State Treasurer’s Investment Fund uses the application of the June 30, 2018 fair value as calculated by the Utah State Treasurer, using the City’s average daily balance in the Fund. The City currently has no assets that qualify for Level 3 investments. The following table illustrates the investments by the appropriate levels.

As of June 30, 2018, the City had the following investments and maturities:

Level 1: Quoted prices for Identical Investments in active markets.Level 2: Obvservable Inputs other than quoted market prices.Level 3: Unobservable Inputs.

Investment Type Fair Value Level 1 Level 2PTIF 22,341,171$ -$ 22,341,171$ Corporate Bonds 2,723,655 - 2,723,655 U.S. Government Bonds 20,078,922 20,078,922 - Agency Bonds 1,214,142 1,214,142 - MMMF 533,016 533,016 - International Sweep 996,759 996,759 -

47,887,665$ 22,822,839$ 25,064,826$

Investment Type Fair Value Less than 1 1 to 5 6 to 10 More than 10PTIF 22,341,171$ 22,341,171$ -$ -$ -$ Corporate Bonds 2,723,655 578,950 2,144,705 - - U.S. Government Bonds 20,078,922 793,812 19,285,110 - - Agency Bonds 1,214,142 - 1,214,142 - - MMMF 533,016 533,016 - - - International Sweep 996,759 996,759 - - -

47,887,665$ 25,243,708$ 22,643,957$ -$ -$

Investment Maturities (in years)


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Credit Risk (Continued)

At June 30, 2018, the City had the following investments and quality ratings:

Interest Rate Risk

Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The City manages its exposure to declines in fair value by investing mainly in the PTIF and by adhering to the Money Management Act. The Act requires that the remaining term to maturity of investments may not exceed the period of availability of the funds to be invested.

The deposits and investments described above are included on the government-wide statement of net position as follows:

Investment Type Fair Value AAA AA+ to AA- A+ to A- BBB+ UnratedPTIF 22,341,171$ -$ -$ -$ -$ 22,341,171$ Corporate Bonds 2,723,655 - 301,151 1,441,847 980,657 - U.S. Government Bonds 20,078,922 - 20,078,922 - - - Agency Bonds 1,214,142 - 1,214,142 - - - MMMF 533,016 - - - - 533,016 International Sweep 996,759 - - - - 996,759

47,887,665$ -$ 21,594,215$ 1,441,847$ 980,657$ 23,870,946$

S&P Rating

Cash, cash equivalents, and investments 13,676,440$ Restricted cash, cash equivalends, and investments 33,957,547

47,633,987$


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Receivables

Receivables as of June 30, 2018 for the City’s individual major funds and non-major funds, in theaggregate, including the applicable allowances for uncollectible accounts, are as follows:

Governmental and Internal Service Funds

Business-type Funds

Land Held for Resale

Land acquired by the Redevelopment Agency (a special revenue fund) and held for resale is accounted for as land held for resale. The cost of land held for resale is held as inventory until the land is sold. Land transferred from infrastructure assets of the City is recorded at a nominal amount for accountability purposes. When the Redevelopment Agency sells land, the proceeds are recorded as revenue at an amount greater than or less than the carrying amount, the resulting gain/loss is accounted for as another financing source/use. Revenue on sale of land held for resale is recognized when measurable and available.

General RDA MBA Internal ServiceReceivables:

Taxes 4,207,806$ 558,779$ -$ -$ Accounts and other 95,935 2,647 1,259 118,476 Notes receivable - 100,000 - - Copurt fines 299,890 - - - Intergovernmental 581,129 - - -

Gross receivables 5,184,760 661,426 1,259 118,476 Less: allowance for

uncollectibles - - - -

Net total receivables 5,184,760$ 661,426$ 1,259$ 118,476$

Water Sewer Storm WaterNonmajor

Funds TotalReceivables:

Accounts 628,475$ 230,038$ 173,342$ 130,038$ 1,161,893$ Contracts - - - 18,540 18,540

Gross receivables 628,475 230,038 173,342 148,578 1,180,433 Less: allowance for

uncollectibles - - (6,000) (2,000) (8,000)

Net total receivables 628,475$ 230,038$ 167,342$ 146,578$ 1,172,433$


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Deferred Revenue

Governmental funds report deferred revenue in connection with receivables for revenues that are notconsidered to be available to liquidate liabilities of the current period. Governmental funds also deferrevenue recognition in connection with resources that have been received, but not yet earned. At the endof the current fiscal year, the various components of deferred revenue and unearned revenue reported inthe government funds were as follows:

Unavailable Unearned

Property taxes receivable (General Fund) 2,498,241$ - Property taxes receivable (RDA Fund) 558,779 - Court fines receivable (General Fund) 265,596 - Loans receivable (RDA Fund) 100,000 - Code enforcement liens receivable (General Fund) 7,264 -

Total deferred/unearned revenue for governmental funds 3,429,880$ -$


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Capital Assets

Capital asset activity for the year ended June 30, 2018 was as follows:

07/01/17 Increases Decreases 06/30/18Governmental activitiesCapital assets, not depreciated:

Land 60,277,933$ 4,542,000$ -$ 64,819,933$ Construction in progress 216,476 218,720 - 435,196

Total capital assets,not depreciated 60,494,409 4,760,720 - 65,255,129

Capital assets, depreciated:Buildings 25,369,628 141,971 - 25,511,599 Improvements other

than buildings 3,995,388 224,864 - 4,220,252 Infrastructure 49,506,199 1,063,495 - 50,569,694 Machinery and equipment 4,786,205 394,348 (307,396) 4,873,157

Total capital assets, depreciated 83,657,420 1,824,678 (307,396) 85,174,702

Accumulated depreciation:Buildings (3,143,656) (521,908) - (3,665,564) Improvements other

than buildings (294,163) (139,327) - (433,490) Infrastructure (30,005,026) (1,448,221) - (31,453,247) Machinery and equipment (2,375,379) (442,132) 305,587 (2,511,924)

Total accumulated depreciation (35,818,224) (2,551,588) 305,587 (38,064,225)

Total capital assets,depreciated (net) 47,839,196 (726,910) (1,809) 47,110,477

Net governmental capital assets 108,333,605$ 4,033,810$ (1,809)$ 112,365,606$


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Capital Assets (Continued)

07/01/17 Increases Decreases 06/30/18Business-type activtitiesCapital assets, not depreciated:

Water stock and rights 3,081,299$ -$ -$ 3,081,299$ Land 115,062 - - 115,062 Construction in progress 1,571,068 1,086,997 - 2,658,065

Total capital assets, not depreciated 4,767,429 1,086,997 - 5,854,426

Capital assets, depreciated:Buildings 4,174,626 - - 4,174,626 Improvements other than buildings

Water 34,117,781 544,887 - 34,662,668 Sewer 4,254,918 - - 4,254,918

Infrastructure 5,788,808 400,004 - 6,188,812 Machinery and equipment 180,973 60,051 - 241,024

Total capital assets, depreciated 48,517,106 1,004,942 - 49,522,048

Accumulated depreciation:Buildings (472,955) (92,432) - (565,387) Improvements other than buildings

Water (8,256,805) (912,958) - (9,169,763) Sewer (748,432) (86,029) - (834,461)

Infrastructure (1,473,361) (165,791) - (1,639,152) Machinery and equipment (106,143) (10,683) - (116,826)

Total accumulated depreciation (11,057,696) (1,267,893) - (12,325,589)

Total capital assets,depreciated (net) 37,459,410 (262,951) - 37,196,459

Net business-type capital assets 42,226,839$ 824,046$ -$ 43,050,885$


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Capital Assets (Continued)

In the government-wide financial statements depreciation was charged as follows by program or activity:

Investments in and Advances to Joint Ventures and Intangible Assets

South Valley Water Reclamation Facility

The Sewer fund has an investment in the South Valley Water Reclamation Facility (SVWRF), which is accounted for by the cost method. During 2013, the City, in discussion with other SVWRF members, changed the accounting for this investment from the equity method to the cost method. It was determined that no additional future capital contributions for expansion will be necessary, and no residual income will result from the investment. A prior period adjustment in the amount of $1,568,761 was recorded in 2013 to increase the investment in SVWRF in the Sewer fund, which brings the total investment to $3,333,105. This amount represents the City’s cumulative capital contributions.

SVWRF, a separate legal entity and political subdivision of the State of Utah, was formed pursuant to the provisions of the Interlocal Cooperation Act. SVWRF’s membership is comprised of two municipalities and three suburban sanitary improvement districts. In addition to the City, the members consist of West Jordan City, South Valley Sewer District, Sandy Suburban Improvement District and Midvalley Improvement District. SVWRF was formed to construct, operate and maintain a regional sewage treatment facility.

In August 2014, the Facility issued Sewer Revenue Refunding Bonds, Series 2014 for $15,700,000. Annual principal payments begin August 15, 2015, semi-annual interest payments begin on February 15, 2015, and are scheduled to be made February 15 and August 15 each year until maturity, at an interest rate of 2.00% to 5.00%. The bonds mature on August 15, 2030. The proceeds from the sale of the Series 2014 Bonds were used to partially refund the Series 2005 bonds. The obligated members for these bonds are the City of West Jordan and Midvale City. The Facility has pledged the payments of the Debt Service Assessments to service these bonds. As of June 30, 2018, the outstanding principal balance is $14,020,000.

Governmental activities:General government 283,967$ Public safety 96,221 Highways and public improvements 1,978,382 Parks, recreation, and public property 193,018

Total depreciation expense - governmental activities 2,551,588$

Business-type activities:Water 973,696$ Storm water 204,537 Sewer 89,660

Total depreciation expense - business-type activities 1,267,893$


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Investments in and Advances to Joint Ventures and Intangible Assets (Continued)

The total debt service for the issued bonds is for two entities’ (West Jordan and Midvale) obligation fortheir share of the expansion of the treatment plant related to phase 4C. These two entities are billedmonthly for principal and interest obligations for their share of debt service requirements. Midvale City’sshare of the principal balance at June 30, 2018 is $1,566,034.

The Midvale City Council approved by resolution recognition of the obligation for the 2005 sewer revenue bonds issued by SVWRF, and to appropriate and pay the debt service obligation. The Council alsoapproved (Resolution No. 2014-R-26) the issuance of the Series 2014 refunding bonds.

SVWRF is governed by its board of directors. Under the organization agreement, each of the five members is entitled to appoint one of SVWRF’s five directors. The management is under the Board of Directors,which elects officers and appoints the management staff.

The complete financial statements for South Valley Water Reclamation Facility for the year endedDecember 31, 2017 can be obtained from the South Valley Water Reclamation Facility at 7495 South1300 West, West Jordan, UT 84084.

Trans-Jordan Cities Landfill

At June 30, 2018, the Sanitation fund had a 5.19% ownership in the Trans-Jordan Cities Landfill, whichis accounted for by the equity method. In addition to Midvale City, the Trans-Jordan Cities Landfill isowned by the cities of Murray, Sandy, South Jordan, West Jordan, Draper, and Riverton which own8.32%, 29.52%, 14.35%, 21.33%, 10.26%, and 11.03% of the landfill, respectively. Trans-Jordan CitiesLandfill is a separate legal entity and political subdivision of the State of Utah and was formed pursuantto the provisions of the Interlocal Cooperation Act. The City has no firm commitment to make additionalequity investments in the Trans-Jordan Cities Landfill.

Trans-Jordan Cities Landfill was formed to construct, operate and maintain a refuse dumping facility.Trans-Jordan is governed by its Board of Directors. Under the organization agreement, the board ofdirectors is appointed by the members. The management is under the board of directors, which electsofficers and appoints the management staff. During the year ended June 30, 2018, the City contributedcapital of $0, recorded a $99,139 gain in equity of joint venture, and increased its participating interest bythe same amount, resulting in a corresponding increase in its investment of the facility.

The complete financial statements for Trans-Jordan Cities Landfill for the year ended June 30, 2018 canbe obtained from the Trans-Jordan Landfill offices, 10873 South 7200 West, South Jordan, UT 84095.


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InterLocal Agreements

The City is a member of Valley Emergency Communications Center (the Center). The Center wasorganized June 30, 1988, as a joint enterprise between the City, Murray City, Salt Lake County, SandyCity, South Jordan City, West Jordan City and West Valley City. The primary purpose of the Center is tofund and operate a communications center which handles communications and other services for themembers, including police, fire, 911 service, dispatch and records services.

The Center is governed by a Board of Trustees consisting of one representative from each memberappointed by the governing body thereof. The Center’s activities are funded by a surcharge tax ontelephones within each member’s city and member assessments. The Board of Trustees sets assessmentsfor all member agencies in amounts sufficient to provide the funds required by the annual budget. TheCenter determines the 911 assessments for the telephone users within the member’s jurisdictions.

Separate audited financial statements for Valley Emergency Communications Center may be obtainedfrom the Finance Director at 5360 South 5885 West, West Valley City, UT 84118.

Utah Telecommunications Open Infrastructure Network

The City is one of 11 founding members of the Utah Telecommunications Open Infrastructure Network(UTOPIA), formed by an interlocal cooperative agreement organized under the laws of the State of Utah.UTOPIA was created to design, finance, build, operate and maintain an open, wholesale, publicTelecommunication infrastructure that delivers high-speed connections to every home and business in themember communities. UTOPIA is jointly owned by the members. No equity investment has beenrecorded by the City since UTOPIA continues to report a net assets deficit. As of June 30, 2018, the netposition deficit was $239,737,185.

The City is a pledging member and has pledged sales and use tax revenues to partially guarantee paymentof UTOPIA’s bonds. In return for the pledge, the City will be among the first cities to receive UTOPIA’sservices. In July 2008, UTOPIA issued $185,000,000 in revenue bonds. The first two years of bondpayments were made from a debt reserve fund. In December 2011, UTOPIA refinanced the bond. Fromthat point on, until the bonds are due in July 2026, net revenues from UTOPIA will reimburse the debtservice reserve fund for payments on the bond debt. To the extent that there are insufficient net revenuesto pay the debt service, the 11 pledged members are required to reimburse the UTOPIA debt service fundof any shortfall by their respective percentages up to a specific dollar amount. Any amount paid byPledging Members to UTOPIA to reimburse the debt service reserve fund will be a loan to be repaid byUTOPIA.

The City’s annual commitment increases by 2% each year, and ranges from $861,181 in Fiscal Year 2018to $1,329,152 in Fiscal Year 2040. Cumulative pledge payments made by the City to UTOPIA total$7,324,877. If or when the UTOPIA network is substantially built out and running successfully,repayment from UTOPIA of all or part of these pledge payments is possible. The City currently expensesits annual pledge payment.


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InterLocal Agreements (Continued)

Utah Infrastructure Agency

The City is one of eight member cities of the Utah Infrastructure Agency (UIA), formed by an interlocalcooperative agreement organized under the laws of the State of Utah. The UIA was established on July 6,2010, for the purpose of financing, constructing, equipping, and operating an open, wholesale, advancedcommunications infrastructure utility system throughout the City and interconnection with other membersof the UIA. The UIA has issued debt of approximately $31 million. The City pledged energy sales anduse tax revenue toward its share of any debt service fund shortfall. The anticipated pledge amount is6.60% of the annual debt service fund shortfall. Any bonds or debt issued or incurred by UIA will notconstitute debt of the City. As of June 30, 2018, the net position was $4,773,105.

Unified Police Department (UPD)

The UPD is a Police Department, run by the Salt Lake County Sherriff that serves the following Salt LakeCounty entities: City of Holladay, Riverton City, Herriman City, Taylorsville City, Midvale City, and theunincorporated areas of Salt Lake County. The UPD allows communities to have comprehensive policeservices at a lower cost. By combining a variety of police services such as SWAT, forensics, records,canine, and media services under one organization, communities can share the costs with othercommunities, saving local governments and reducing the tax burden of citizens.

The UPD is run by a Board of Directors consisting of elected officials from the communities served. Day-to-day operations are run by the Sheriff. In addition to managing shared services, the Sheriff overseeslocal precincts, each with its own Chief who is chosen by each respective community. Chiefs run eachlocal precinct and have authority over local operations such as Community Oriented Policing, traffic,patrol, and crossing guards. This flexible structure allows participating communities to take advantage ofthe cost savings and efficiencies of pooled services while retaining local control over precinct-leveloperations.

The annual budget for the UPD is formally adopted by the UPD Board of Directors, of which the MidvaleCity Mayor is a full member with full voting rights.


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Interfund Receivable, Payables and Transfers

At June 30, 2018, no interfund balances remained. Transfers were made which will not be repaid. Suchamounts for the fiscal year ended June 30, 2018 were as follows:

Fund Transferring Out Fund Receiving Transfer Purpose Amount

General Fund Capital Projects Fund Road improvements 665,131$ General Fund Capital Projects Fund Sidewalks, curb, gutter 100,000 General Fund Capital Projects Fund Infrastructure improvements 912,700 General Fund RDA Admin fee refund 210,000 General Fund Telecommunications UTOPIA pledge payment 850,000

2,737,831$

Fund Transfer Out Transfer InGeneral 2,737,831$ -$ Capital Projects - 1,677,831 RDA - 210,000 Telecommunications - 850,000

2,737,831$ 2,737,831$


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General Obligation Bonds

The City issues general obligation bonds to provide funds for the acquisition and construction of majorcapital facilities. General obligation bonds have been issued for governmental activities. Generalobligation bonds are direct obligations and are pledged by the full faith and credit of the City. These bondsgenerally are issued as serial bonds with equal amounts of principal maturing each year. Generalobligation bonds currently outstanding are as follows:

General obligation bond debt service requirements to maturity are as follows:

Original IssueAnnual Principal Interest Rate Final Due Date

Amount at 6/30/18

Public Safety Series 2005 3,370,000$ $20,000 to $395,000

3.00% to 5.00% 9/15/2019 770,000$

3,370,000$ 770,000$

Bond Description

Principal Interest Totals

375,000$ 25,965$ 400,965$ 395,000 8,295 403,295

770,000$ 34,260$ 804,260$

20202019


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Revenue Bonds

The City has issued bonds where the revenues and assets of the issuing fund are pledged as security forthe bonds.

Revenue bonds outstanding at June 30, 2018 by issue are as follows:

Build America Bonds (“BAB”) are federally taxable but the City receives a subsidy from the Internal Revenue Service equal to 32.6% of the interest paid.

Original IssueAnnual Principal Interest Rate Final Due Date

Amount at 6/30/18

23,750,000$ $900,000 to $1,730,000

4.01% to 6.25% 5/1/2034 20,970,000$

8,990,000 $235,000 to

$520,000 2.00% to

3.50% 10/1/2038 7,595,000

2,335,000 $225,000 to

$300,000 4.00% to

5.00% 4/15/2019 300,000

12,961,000 $606,000 to

$940,000 2.06% to

3.66% 5/1/2034 12,355,000

8,340,000 $155,000 to

$745,000 2.00% to

4.00% 5/1/2032 8,185,000

17,670,000 $925,000 to $1,675,000

4.00% to 5.00% 5/1/2034 17,670,000

5,050,000 $208,000 to

$303,000 2.00% 10/1/2029 3,266,000

6,595,000 $345,000 to

$565,000 4.01% to

6.09% 10/1/2030 5,895,000

1,537,000 $86,000 to $124,000 2.900% 4/1/2027 998,000

2,552,000 $143,000 to

$200,000 2.420% 10/1/2028 1,958,000

2,800,000 $153,000 to

$224,000 2.77% 10/1/2029 2,328,000

4,490,000 $230,000 to

$395,000 2.00% to

4.00% 10/1/2032 4,490,000

6,225,000 $155,000 to

$380,000 3.00% to

5.00% 10/1/2043 6,225,000

103,295,000$ 92,235,000$

Bond Description

Sales Tax RevenueSeries 2017

Water and Sewer Series 2010B (BAB)

MBA Revenue Series 2012

Water and Sewer Series 2007C

Water, Sewer, and Storm Water Series 2013

Water and Sewer Series 2012

RDA Revenue Series 2010B (BAB)


Excise Tax Series 2009

RDA Tax Revenue Series 2015



RDA Tax Revenue Series 2017


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Revenue Bonds (Continued)

On December 28, 2017, the City’s Redevelopment Agency (RDA) issued Tax Increment and Sales TaxRevenue Refunding Bonds (Series 2017 Bonds) totaling $17,670,000 to be used for the purpose ofrefunding the Series 2010B Bonds maturing on and after May 1, 2020 (the Cross-over Date), to providefor payment of interest on the Series 2017 Bonds to the Cross-over Date, and to pay costs of issuing theSeries 2017 Bonds. The bonds carry an interest rate of 3.05% and mature in May 2034.

On April 24, 2018, the City issued Water, Sewer, and Storm Water Revenue Bonds totaling $6,225,000to be used for financing improvements to the water and sewer systems. The bonds carry an interest rateof 3.62% and mature in April 2044.

Revenue bond debt service requirements to maturity are as follows:

The City has pledged sales tax revenue for the Redevelopment Agency (RDA) Revenue Bonds Series 2010B and Series 2017 Refunding Bonds, and to partially guarantee Series 2011 Revenue Bonds issued by Utah Telecommunications Open Infrastructure Network (UTOPIA). See Note 4 regarding Interlocal Agreements for more information on UTOPIA. The remaining principal and interest payments total $54,661,672 ($30,511,336 RDA assuming defeasance of 2010B by 2017 bonds on cross-over date of May 1, 2020, and $24,150,336 UTOPIA). The RDA bonds mature in 2034, and the UTOPIA bonds in 2040. For the current year, principal and interest paid totaled $2,732,499 ($1,871,318 RDA and $861,181 UTOPIA), and total sales tax revenues were $7,382,052. The RDA Revenue Bonds are primarily secured with Tax Increment from the RDA, which is sufficient to cover the debt service on the bonds, and we do

Principal Interest Totals

4,200,000$ 3,853,697$ 8,053,697$ 23,004,000 3,726,602 26,730,602 4,034,000 2,458,820 6,492,820 4,154,000 2,328,243 6,482,243 4,298,000 2,183,900 6,481,900

22,571,000 8,417,526 30,988,526 21,769,000 3,821,784 25,590,784 5,740,000 850,795 6,590,795

2039-2043 2,085,000 245,269 2,330,269 380,000 6,888 386,888

92,235,000$ 27,893,524$ 120,128,524$

*The RDA Series 2010B Bonds will be defeased by the RDA Series 2017 Refunding Bonds on the cross-over dateof May 1, 2020. The principal balance that will be defeased is $18,965,000.

2029-20332024-202820232022

2034-2038

2044

20192020*2021


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not anticipate using sales tax revenue to make these payments. We estimate that annual principal andinterest payments on the UTOPIA bonds will require 12% of pledged revenues. If the City is called uponto pay debt service on the RDA bonds, the total required would be 42% of pledged revenues.

The City has pledged Class C Road Funds received from the state of Utah for the 2009 Excise Tax Bonds.The remaining principal and interest payments total $315,000. These bonds mature in 2019. For thecurrent year, principal and interest paid totaled $319,500 and Class C Road Fund revenues were$1,018,459. We estimate that annual principal and interest payments on the bonds will require 31% ofpledged revenues.

The City has pledged energy sales and use tax revenue to guarantee that Utah Infrastructure Agency (UIA)fulfills its revenue requirement from the bond agreements. UIA is required by the Series 2017 A&B bondcovenants to have revenue equal to the operations expenses and capital costs in a fiscal year. In the eventthere is a shortfall, the eight pledging cities have agreed to lend energy sales and use tax revenues, limitedto a yearly maximum of $5,151,152. Midvale’s share of that pledge is 6.6%, or $339,976. This pledge isin place until the bonds mature in October of 2036. The total amount of the City’s pledge through maturityis $6.1 million. FY 2018 revenues from energy sales and use tax were $2,212,291. If the City is calledupon to make a pledge payment, the payment amount would require 15% of pledged revenues. UIA hasalways had sufficient revenue to service the debt, and it is unlikely the City’s pledge will be required.

The City has pledged water and sewer revenue for the following revenue bonds: Series 2007C, 2010Band 2012 revenue bonds. The remaining principal and interest payments total $13,189,198. The bondsmature by 2030. For the current year, principal and interest paid totaled $1,363,240, and water and sewerrevenues totaled $6,698,867. We estimate that annual principal and interest payments on the bonds willrequire 17% of pledged revenues.

The City has pledged storm water utility revenue, along with water and sewer revenue, for the Series2013, 2014, 2016, and 2018 revenue bonds. The remaining principal and interest payments total$20,969,377. The bonds mature by 2043. For the current year, principal and interest paid totaled $599,676,and revenue from water, sewer, and storm water utilities was $8,431,614. We estimate that annualprincipal and interest payments on the bonds will require 7% of pledged revenues.

The Redevelopment Agency (RDA) has pledged tax increment revenues to guarantee the 2010B, 2015,and 2017 RDA Revenue Bonds. The remaining principal and interest payments total $45,943,709. Thebonds mature in 2034. For the current year, principal and interest paid totaled $3,190,364. Tax incrementrevenues were $6,168,040. We estimate that annual principal and interest payments will require amaximum of 45% of pledged revenues.


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The Municipal Building Authority (MBA) has pledged lease revenue to guarantee 2012 MBA Revenuebonds. The remaining principal and interest payments total $9,920,990. The bonds mature in 2038. Forthe current year, principal and interest paid totaled $679,156. Lease revenues were $381,308. We estimatethat annual principal and interest payments on the bonds will require 100% of pledged revenues.

Notes Payable

The City entered into a note payable agreement with Salt Lake County for $300,000 during 2011, payableover 10 years with annual payments of $30,000. The note bears no interest. The note represents the City’sportion of a storm drain capital project completed during 2011. The City recorded $150,000 of theobligation in both the RDA and Storm Water Utility funds. The balance of the note payable as of6/30/2018 is $60,000; $30,000 payable by the RDA and $30,000 payable by the Storm Water Utility Fund.

The City entered into a service contract note payable with UIA, wherein the City will bill and collectconnection service fees from end users of UTOPIA located in the City on behalf of UIA. The City isentitled to 5% of the fee for administrative costs and the remaining 95% is due to UIA. The City becomesa signatory party to the end user agreement, along with UIA and the end user. The City is responsible forcollection of the user fees stipulated in the agreement should the end user default. At June 30, 2018, thenote payable balance for services fees collected was $200,540. During 2012, the City created an enterprisefund (telecom) to account for the activity of this service contract.


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Changes in Long-Term Liabilities

Long-term liability activity for the year ended June 30, 2018 was as follows:

Compensated absences for governmental activities are generally liquidated by the general fund.

07/01/17 Increases Decreases 06/30/18 Due in One YearGovernmental activitiesBonds payable:

Excise tax revenue 590,000$ -$ (290,000)$ 300,000$ 300,000$ Lease revenue 8,060,000 - (465,000) 7,595,000 465,000 Tax increment revenue 34,886,000 17,670,000 (1,561,000) 50,995,000 1,604,000 Sales tax revenue 8,340,000 - (155,000) 8,185,000 415,000 General obligation 1,130,000 - (360,000) 770,000 375,000 Add: unamortized premiums

and discounts 941,691 2,585,623 (158,605) 3,368,709 -

Total bonds payable 53,947,691 20,255,623 (2,989,605) 71,213,709 3,159,000

Note payable 45,000 - (15,000) 30,000 15,000 Compensated absences 364,508 226,664 (289,648) 301,524 241,219

Governmental activities,long-term liabilities 54,357,199$ 20,482,287$ (3,294,253)$ 71,545,233$ 3,415,219$

Business-type activitiesBonds payable:

Water and Sewer 20,166,000$ 6,225,000$ (1,231,000)$ 25,160,000$ 1,416,000$ Add: unamortized premiums

and discounts 552,676 332,332 (39,089) 845,919 -

Total bonds payable 20,718,676 6,557,332 (1,270,089) 26,005,919 1,416,000

Notes payable 275,209 - (44,669) 230,540 15,000 Compensated absences 94,234 104,337 (57,486) 141,085 112,867 Business-type activities,

long-term liabilities 21,088,119$ 6,661,669$ (1,372,244)$ 26,377,544$ 1,543,867$


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Other Information

Risk Management

The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;errors and omissions; injuries to employees; and natural disasters. The City participates in the Utah LocalGovernment Insurance Trust (Trust), a public entity risk pool to manage its risk of loss. The City pays anannual premium to the trust for its general insurance coverage. The Trust was created to be self-sustainingthrough member premiums and will reinsure through commercial companies for claims in excess of onemillion dollars for each insured event. As of June 30, 2018, there were no outstanding unpaid claims.Also, the City had no claim settlements during the three years ending June 30, 2018 which exceeded itsinsurance coverage.

The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presentlydeterminable, in the opinion of the City’s counsel the resolution of these matters will not have a materialadverse effect on the financial condition of the City.

Redevelopment Agency

In connection with the activities of the Redevelopment Agency (RDA), intergovernmental revenues fromproperty tax increments of other governmental entities totaling $5,620,425 were generated. The RDA wasnot required to pay any portion of this revenue to other taxing agencies.

During the year ended June 30,2018, funds expended by the RDA were limited to the categories ofredevelopment, administration costs, and debt service. Administrative costs totaled $730,211,disbursements to developers totaled $2,079,520, infrastructure and other capital improvements totaled$486,934, and debt service costs totaled $3,714,804.


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Employee Retirement Systems and Pension Plans

General Information about the Pension Plan

Plan Description

Eligible plan participants are provided with pensions through the Utah Retirement Systems. UtahRetirement Systems are comprised of the following Pension Trust Funds:

Defined Benefit Plans

• Public Employees Noncontributory Retirement System (Noncontributory System); is a multipleemployer, cost sharing, public employee retirement system.

• Tier 2 Public Employees Contributory Retirement System (Tier 2 Public Employees System) is amultiple employer cost sharing public employee retirement system;

The Tier 2 Public Employees System became effective July 1, 2011. All eligible employees beginning on or after July 1, 2011, who have no previous service credit with any of the Utah Retirement Systems, are members of the Tier 2 Retirement System.

The Utah Retirement Systems (Systems) are established and governed by the respective sections of Title 49 of the Utah Code Annotated 1953, as amended. The Systems' defined benefit plans are amended statutorily by the State Legislature. The Utah State Retirement Office Act in Title 49 provides for the administration of the Systems under the direction of the Utah State Retirement Board, whose members are appointed by the Governor. The Systems are fiduciary funds defined as pension (and other employee benefit) trust funds. URS is a component unit of the State of Utah. Title 49 of the Utah Code grants the authority to establish and amend the benefit terms.

URS issues a publicly available financial report that can be obtained by writing Utah Retirement Systems, 560 E. 200 S, Salt Lake City, Utah 84102 or visiting the website: www.urs.org.


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Benefits Provided

URS provides retirement, disability, and death benefits. Retirement benefits are as follows:

Contributions

As a condition of participation in the Systems, employers and/or employees are required to contribute certain percentages of salary and wages as authorized by statute and specified by the Utah State Retirement Board. Contributions are actuarially determined as an amount that, when combined with employee contributions (where applicable) is expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded actuarial accrued liability. Contribution rates as of June 30, 2018 are as follows:

Tier 2 rates include a statutory required contribution to finance the unfunded actuarial accrued liability of the Tier 1 plans.

SystemFinal Average

Salary

Years of Service Required and or Age Eligible for

BenefitBenefit Percent Per

Year of Service COLA**Noncontributory System Highest 3 years 30 years any age

25 years any age*20 years age 60* 2.0% per year all years Up to 4%10 years age 62*

4 years age 65Tier 2 Public Employee System Highest 5 years 35 years any age

20 years age 60* 1.5% per year all years Up to 2.5%10 years age 62*

4 years age 65*With actuarial reductions.**All post-retirement cost-of-living adjustments are non-compounding and are based on the original benefit except for Judges, which is a compounding benefit. The cost-of-living adjustments are also limited to the actual Consumer PriceIndex (CPI) increase for the year, although unused CPI increases not met may be carried forward to subsequent years.

Employee Paid Employer Employer 401(k)

Contributory System111 Local Government Div - Tier 2 N/A 15.11 1.58

Noncontributory System15 Local Government Div - Tier 1 N/A 18.47 N/A

Tier 2 DC Only211 Local Government N/A 6.69 10.00


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For the fiscal year ended June 30, 2018, the employer and employee contributions to the Systems wereas follows:

Contributions reported are the URS Board approved required contributions by System. Contributions in the Tier 2 Systems are used to finance the unfunded liabilities of the Tier 1 Systems.

Combined Pension Assets, Liabilities, Expense, and Deferred Outflows and Inflows of Resources Related to Pensions

At June 30, 2018, the City reported a net pension asset of $0 and a net pension liability of $1,584,120.

The net pension asset and liability was measured as of December 31, 2017, and the total pension liability used to calculate the net pension asset and liability was determined by an actuarial valuation as of January 1, 2017 and rolled- forward using generally accepted actuarial procedures. The proportion of the net pension asset and liability is equal to the ratio of the employer's actual contributions to the Systems during the plan year over the total of all employer contributions to the System during the plan year.

For the year ended June 30, 2018, the City recognized pension expense of $652,864.

Employer Contributions

Employee Contributions

Noncontributory System 510,283$ N/ATier 2 Public Employees System 228,677 -$ Tier 2 DC Only System 15,341 N/ATotal Contributions 754,301$ -$

Net Pension Asset

Net Pension Liability

Proportionate Share

Proportionate Share December 31, 2016

Change (Decrease)

Noncontributory System -$ 1,573,107$ 0.3590503% 0.3573643% 0.0016860%Tier 2 Public Employees System - 11,013.00 0.1249071% 0.1127146% 0.0121925%

Total net pension asset/liability -$ 1,584,120$

(Measurement Date): December 31, 2017


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At June 30, 2018, the City reported deferred outflows of resources and deferred inflows of resourcesrelating to pensions from the following sources:

The $382,811 reported as deferred outflows of resources related to pensions results from contributions made by the City prior to our fiscal year end, but subsequent to the measurement date of December 31, 2017.

These contributions will be recognized as a reduction to the net pension liability in the upcoming fiscal year. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actual experience 35,502$ 106,586$ Changes in assumptions 579,874 37,869 Net difference between projected and actual earnings on pension plan

investments 342,132 905,332 Changes in proportion and differences between contributions and

proportionate share of contributions 15,342 34,498 Contributions subsequent to the measurement date 382,811 -

Total 1,355,661$ 1,084,285$

Year Ended December 31,Net Deferred Outflows (Inflows) of Resources

2018 69,971$ 2019 114,469 2020 (109,151) 2021 (196,624) 2022 (2,355) Thereafter 12,255


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Actuarial Assumptions

The total pension liability in the December 31, 2017 actuarial valuation was determined using thefollowing actuarial assumptions, applied to all periods included in the measurement:

Mortality rates were developed from actual experience and mortality tables, based on gender, occupation and age, as appropriate, with adjustments for future improvement in mortality based on Scale AA, a model developed by the Society of Actuaries.

The actuarial assumptions used in the January 1, 2017 valuation were based on the results of an actuarial experience study for the five-year period ending December 31, 2016.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class and is applied consistently to each defined benefit pension plan. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Inflation 2.50 Percent

Salary increases 3.25 - 9.75 percent, average, including inflation

Investment rate of return 6.95 percent, net of pension plan investment expense,including inflation

Asset class:Target Asset

AllocationReal Return

Arithmetic BasisLong-Term expected portfolio

real rate of returnEquity securities 40.00% 6.15% 2.46%Debt securities 20.00% 0.40% 0.08%Real assets 15.00% 5.75% 0.86%Private equity 9.00% 9.95% 0.89%Absolute return 16.00% 2.85% 0.46%Cash and cash equivalents 0.00% 0.00% 0.00%

Totals 100.00% 4.75%

Inflation 2.50%

Expected arithmetic nominal return 7.25%

Expected Return Arithmetic Basis


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The 6.95% assumed investment rate of return is comprised of an inflation rate of 2.50% and a real returnof 4.45% that is net of investment expense.

Discount Rate

The discount rate used to measure the total pension liability was 6.95 percent. The projection of cashflows used to determine the discount rate assumed that employee contributions will be made at the currentcontribution rate and that contributions from all participating employers will be made at contractuallyrequired rates that are actuarially determined and certified by the URS Board. Based on those assumptions,the pension plan's fiduciary net position was projected to be available to make all projected future benefitpayments of current active and inactive employees. Therefore, the long-term expected rate of return onpension plan investments was applied to all periods of projected benefit payments to determine the totalpension liability. The discount rate does not use the Municipal Bond Index Rate. The discount rate wasreduced to 6.95 percent from 7.20 percent from the prior measurement period.

Sensitivity of the Proportionate Share of the Net Pension Asset and Liability to Changes in the DiscountRate

The following presents the proportionate share of the net pension liability calculated using the discountrate of 6.95 percent, as well as what the proportionate share of the net pension liability would be if it werecalculated using a discount rate that is 1-percentage-point lower (5.95 percent) or 1-percentage-pointhigher (7.95 percent) than the current rate:

Pension Plan Fiduciary Net Position

Detailed information about the pension plan’s fiduciary net position is available in the separately issued URS financial report.

Defined Contribution Savings Plans

The Defined Contribution Savings Plans are administered by the Utah Retirement Systems Board and are generally supplemental plans to the basic retirement benefits of the Retirement Systems, but may also be used as a primary retirement plan. These plans are voluntary tax-advantaged retirement savings programs authorized under sections 401(k), 457(b) and 408 of the Internal Revenue code. Detailed information regarding plan provisions is available in the separately issued URS financial report.

System1% Decrease

(5.95% )Discount Rate

(6.95% )1% Increase

(7.95% ) Noncontributory System 4,254,420$ 1,573,107$ (656,271)$ Tier 2 Public Employees System 129,669 11,013 (80,489)

4,384,089$ 1,584,120$ (736,760)$


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The City participates in the URS 401(k) and Roth IRA plans. Employee and employer contributions tothe URS Defined Contribution Savings Plans for fiscal year ended June 30, were as follows:

5. SUBSEQUENT EVENTS

Management has evaluated subsequent events through December 11, 2018, the date the financialstatements were available to be issued. There were no items noted that would require disclosuresubsequent to the year ended June 30, 2018.

401(k) Plan 2018 2017 2016Employer Contributions 49,678$ 32,471$ 19,351$ Employee Contributions 19,924 8,308 5,562

Roth IRA PlanEmployer Contributions N/A N/A N/AEmployee Contributions 3,152 2,810 1,405

REQUIRED SUPPLEMENTARY INFORMATION

Midvale City Schedule of the Proportionate Share of the Net Pension Liability

Last 10 Fiscal Years*

73

NoncontributoryRetirement

System

Tier 2 PublicEmployees

Retirement System

Proportion of the net pension liability (asset) 0.3590503% 0.1249071%Proportionate share of the net pension liability (asset) 1,573,107$ 11,013$ Covered payroll 2,824,864$ 1,222,311$ Proportionate share of the net pension liability (asset) as a percentage

of its covered payroll 55.69% 0.90%Plan fiduciary net position as a percentage of the total pension

liability (asset) 91.9% 97.4%

Proportion of the net pension liability (asset) 0.3573643% 0.1127146%Proportionate share of the net pension liability (asset) 2,294,716$ 12,573$ Covered payroll 2,977,824$ 924,344$ Proportionate share of the net pension liability (asset) as a percentage

of its covered payroll 70.06% 1.36%Plan fiduciary net position as a percentage of the total pension


Proportion of the net pension liability (asset) 0.3707456% 0.1077038%Proportionate share of the net pension liability (asset) 2,097,880$ (258)$ Covered payroll 3,082,556$ 695,834$ Proportionate share of the net pension liability (asset) as a percentage

of its covered payroll 68.06% -0.03%Plan fiduciary net position as a percentage of the total pension


Proportion of the net pension liability (asset) 0.3673148% 0.1159186%Proportionate share of the net pension liability (asset) 1,594,967$ (3,514)$ Covered payroll 3,126,027$ 568,393$ Proportionate share of the net pension liability (asset) as a percentage

of its covered payroll 51.02% -0.62%Plan fiduciary net position as a percentage of the total pension


* In accordance with paragraph 81.a of GASB 68, employers will disclose a 10-year history of their proportionate share ofthe net pension liability (asset) in the RSI section of the Comprehensive Annual Finance Report. This schedule presentsthis information from the date the information was required. Subsequent years will be added as the information becomesavailable.

2017

2016

2015

2018

Midvale City Schedule of Pension Contributions

Last 10 Fiscal Years*

74

As of fiscal year ended June 30,

Actuarial determined

contributions

Contributions in relation to the contractually

required contribution

Contribution deficiency (excess)

Covered payroll

Contributionsas a percentage

of coveredemployee payroll

Noncontributory System 2014 539,546$ 539,546$ -$ 3,271,588$ 16.49%2015 556,711 556,711 - 3,044,411 18.29%2016 558,513 558,513 - 3,129,703 17.85%2017 528,980 528,980 - 2,888,062 18.32%2018 510,283 510,283 - 2,765,409 18.45%

Tier 2 Public Employees System* 2014 71,643$ 71,643$ -$ 512,099$ 13.99%2015 91,568 91,568 - 612,905 14.94%2016 119,182 119,182 - 800,495 14.89%2017 166,245 166,245 - 1,079,233 15.40%2018 228,677 228,677 - 1,436,624 15.92%

Tier 2 Public Employees DC Only System* 2014 -$ -$ -$ -$ 0.00%2015 1,193 1,193 - 17,748 6.72%2016 2,484 2,484 - 37,128 6.69%2017 6,819 6,819 - 101,929 6.69%2018 15,341 15,341 - 230,754 6.65%

Paragraph 81.b of GASB 68 requires employers to disclose a 10-year history of contributions in the RSI section of their Comprehensive Annual Financial Report. Contributions as a percentage of covered-payroll may be different than the board-certified rate due to rounding and other administrative issues. This schedule presents this information from the date the information was required. Subsequent years will be added as the information becomes available.

*Contributions in Tier 2 include an amortization rate to help fund the unfunded liabilities in the Tier 1 systems. Tier 2 systems were created effective July 1, 2011.

Midvale City Notes to the Required Supplementary Information

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1. Changes in Assumptions

As a result of an experience study conducted as of December 31, 2016, the Board adopted recommendedchanges to several economic and demographic assumptions that are used in the actuarial valuation. Theassumption changes that had the largest impact on the Total Pension Liability (and actuarial accruedliability) include a decrease in the investment return assumption from 7.20% to 6.95%, a reduction in theprice inflation assumption from 2.60% to 2.50% (which also resulted in a corresponding decrease in thecost-of-living-adjustment assumption for the funds with a 4.00% annual COLA max), and the adoptionof an updated retiree mortality table that is developed using URS’s actual retiree mortality experience.There were changes to several other demographic assumptions, but those changes had a minimal impacton the Total Pension Liability (and actuarial accrued liability).

SUPPLEMENTARY INFORMATION

Midvale City Combining Statement of Net Position – Nonmajor Proprietary Funds

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Street Lighting Sanitation Telecom Total


Cash and cash equivalentsUnrestricted 22,452$ 169,929$ 18,156$ 210,537$

Receivables:Accounts 37,581 89,428 1,029 128,038 Contracts receivable - - 18,540 18,540

Deposits 65 137 - 202

Total current assets 60,098 259,494 37,725 357,317

Noncurrent assets:Contracts receivable - - 192,555 192,555 Notes receivable, net - - 290,628 290,628 Investment in Trans-Jordan

Cities Landfill - 1,257,788 - 1,257,788

Total noncurrent assets - 1,257,788 483,183 1,740,971

Total assets 60,098 1,517,282 520,908 2,098,288

DEFERRED OUTFLOWS OF RESOURCESDeferred outflows related to pensions 1,723 7,205 - 8,928

Total deferred outflows of resources 1,723 7,205 - 8,928


Accounts payable 4,175 84,250 - 88,425 Accrued liabilities 230 1,169 - 1,399 Compensated absences 430 907 - 1,337

Total current liabilities 4,835 86,326 - 91,161

Noncurrent liabilities:Due to other funds - - - - Notes payable - - 200,540 200,540 Compensated absences 108 227 - 335 Net pension liability 1,777 9,990 - 11,767

Total noncurrent liabilities 1,885 10,217 200,540 212,642

Total liabilities 6,720 96,543 200,540 303,803

DEFERRED INFLOWS OF RESOURCESDeferred inflows related to pensions 1,234 3,553 - 4,787

Total deferred inflows of resources 1,234 3,553 - 4,787

NET POSITIONUnrestricted 53,867 1,424,391 320,368 1,798,626

Total net position 53,867$ 1,424,391$ 320,368$ 1,798,626$

Midvale City Combining Statement of Revenues, Expenses, and Changes in Net Position –

Nonmajor Proprietary Funds For the Year Ended June 30, 2018

78


OPERATING REVENUESCharges for services 381,507$ 956,399$ 27,264$ 1,365,170$ Other - - - -

Total operating revenues 381,507 956,399 27,264 1,365,170

OPERATING EXPENSESSalaries and wages 5,619 13,802 - 19,421 Employee benefits 2,275 4,856 - 7,131 Administration 260,184 86,830 - 347,014 Street lighting 113,530 - - 113,530 Waste disposal - 925,908 - 925,908 Telecommunications - - 889,011 889,011

Total operating expenses 381,608 1,031,396 889,011 2,302,015

Operating income (loss) (101) (74,997) (861,747) (936,845)

NONOPERATING REVENUES (EXPENSES)Interest income 189 2,256 (499) 1,946 Gain/(Loss) on equity investment - 99,139 - 99,139

Total nonoperating revenues (expenses) 189 101,395 (499) 101,085

Income before transfers 88 26,398 (862,246) (835,760)

Transfers in - - 850,000 850,000

Change in net position 88 26,398 (12,246) 14,240

Total net position - beginning 53,779 1,397,993 332,614 1,784,386

Total net position - ending 53,867$ 1,424,391$ 320,368$ 1,798,626$

Midvale City Combining Statement of Cash Flows – Nonmajor Proprietary Funds


79


Cash flows from operating activitiesReceipts from customers 379,656$ 954,793$ 27,975$ 1,362,424$ Payments to suppliers (378,537) (937,777) (889,011) (2,205,325) Payments for interfund services - (65,200) - (65,200) Payments to employees (7,356) (16,601) - (23,957)

Net cash provided (used) by operating activities (6,237) (64,785) (861,036) (932,058)

Cash flows from noncapital financing activities Transfers (to) from other funds - - 850,000 850,000 Decrease in contracts receivable - - 30,690 30,690 Decrease in notes receivable - - 16,858 16,858 Loan from other fund - - - -

Net cash provided by noncapital financing activities - - 897,548 897,548

Cash flows from capital and related financing activitiesDecrease in notes payable - - (29,669) (29,669)

Net cash provided by capital and related financing activities - - (29,669) (29,669)

Cash flows from investing activitesInterest received 189 2,256 (499) 1,946

Net cash provided by investing activities 189 2,256 (499) 1,946

Net increase (decrease) in cash and cash equivalents (6,048) (62,529) 6,344 (62,233)

Cash and cash equivalents, beginning of year 28,500 232,458 11,812 272,770

Cash and cash equivalents, end of year 22,452$ 169,929$ 18,156$ 210,537$

Reconciliation of operating income (loss) to netcash provided (used) by operating activities

Operating income (loss) (101)$ (74,997)$ (861,747)$ (936,845)$ Changes in assets and liabilities:

Accounts receivable (2,081) (1,606) 171 (3,516) Deposits (65) (137) - (202) Contracts receivable - - 540 540 Accounts payable (4,758) 9,898 - 5,140 Accrued liabilities 768 2,057 - 2,825

Net cash provided (used) by operating activities (6,237)$ (64,785)$ (861,036)$ (932,058)$

Midvale City Combining Statement of Net Position – Internal Service Funds

June 30, 2018

80

Fleet IT TotalASSETSCurrent assets:

Cash and cash equivalentsUnrestricted 1,350,937$ 37,004$ 1,387,941$

Accounts receivable 118,476 - 118,476 Inventory 4,288 - 4,288 Deposits 708 - 708

Total current assets 1,474,409 37,004 1,511,413

Noncurrent assets:Net pension asset - - - Capital assets:

Automobiles, net 1,061,116 - 1,061,116 Machinery and equipment, net 731,017 - 731,017

Total noncurrent assets 1,792,133 - 1,792,133

Total assets 3,266,542 37,004 3,303,546

DEFERRED OUTFLOWS OF RESOURCESDeferred outflows related to pensions 19,484 - 19,484

Total deferred outflows of resources 19,484 - 19,484


Accounts payable 153,765 - 153,765 Accrued liabilities 4,402 - 4,402 Compensated absences 9,250 676 9,926

Total current liabilities 167,417 676 168,093

Noncurrent liabilities:Compensated absences 2,313 169 2,482 Net pension liability 9,939 - 9,939

Total noncurrent liabilities 12,252 169 12,421

Total liabilities 179,669 845 180,514

DEFERRED INFLOWS OF RESOURCESDeferred inflows related to pensions 26,148 - 26,148

Total deferred inflows of resources 26,148 - 26,148

NET POSITIONNet investment in capital assets 1,792,133 - 1,792,133 Unrestricted 1,288,076 36,159 1,324,235

Total net position 3,080,209$ 36,159$ 3,116,368$

Midvale City Combining Statement of Revenues, Expenses, and Changes in Net Position –

Internal Service Funds For the Year Ended June 30, 2018

81

Fleet IT TotalOPERATING REVENUESCharges for services 667,600$ 50,900$ 718,500$ Other 300 - 300

Total operating revenues 667,900 50,900 718,800

OPERATING EXPENSESSalaries and wages 115,488 27,170 142,658 Employee benefits 39,850 175 40,025 Administration 123,913 - 123,913 Supplies and equipment 4,843 27,883 32,726 Repairs and maintenance 256,355 - 256,355 Depreciation expense 333,218 - 333,218

Total operating expenses 873,667 55,228 928,895

Operating income (205,767) (4,328) (210,095)

NONOPERATING REVENUES (EXPENSES)Interest income 17,187 400 17,587 Gain on disposal of equipment 304,887 - 304,887

Total nonoperating revenues (expenses) 322,074 400 322,474

Income before transfers 116,307 (3,928) 112,379

Transfers in - - - Transfers out - - -

Change in net position 116,307 (3,928) 112,379

Total net position - beginning 2,963,902 40,087 3,003,989

Total net position - ending 3,080,209$ 36,159$ 3,116,368$

Midvale City Combining Statement of Cash Flows – Internal Service Funds


82

Fleet IT Total

Cash flows from operating activitiesReceipts from customers 560,903$ 49,078$ 609,981$ Payments to suppliers (123,026) - (123,026) Payments for interfund services (123,913) (27,883) (151,796) Payments to employees (152,373) (26,500) (178,873)

Net cash provided byoperating activities 161,591 (5,305) 156,286

Cash flows from noncapital financing activities Transfers from other funds - - - Transfers to other funds - - -

Net cash provided bynoncapital financing activities - - -

Cash flows from capital and relatedfinancing activities

Purchase of capital assets (360,954) - (360,954)

Proceeds from sale of capital assets 306,696 - 306,696

Net cash provided (used) by capital

and related financing activities (54,258) - (54,258)

Cash flows from investing activitesInterest received 17,187 400 17,587

Net cash provided by investing activities 17,187 400 17,587

Net increase (decrease) in cash andcash equivalents 124,520 (4,905) 119,615

Cash and cash equivalents,beginning of year 1,226,417 41,909 1,268,326

Cash and cash equivalents, end of year 1,350,937$ 37,004$ 1,387,941$

Reconciliation of operating income to netcash provided by operating activities

Operating income (205,767)$ (4,328)$ (210,095)$ Adjustments to reconcile operating

income to net cash provided byoperating activities:

Depreciation 333,218 - 333,218 Changes in assets and liabilities:

Accounts receivable (106,976) - (106,976) Inventory (17) - (17) Deposit (21) - (21) Accounts payable 138,189 (1,822) 136,367 Accrued liabilities 2,965 845 3,810

Net cash provided by operating activities 161,591$ (5,305)$ 156,286$

Midvale City Schedule of Revenues, Expenditures, and Changes in Fund Balance –

Budget and Actual – Capital Projects Fund (Major Fund) For the Year Ended June 30, 2018

83


REVENUESIntergovernmental -$ -$ -$ -$ Interest income 10,000 10,000 112,286 102,286

Total revenues 10,000 10,000 112,286 102,286

EXPENDITURESCapital outlay 1,904,400 13,634,900 2,618,265 11,016,635

Total expenditures 1,904,400 13,634,900 2,618,265 11,016,635

Excess (deficiency) of revenues over (under) expenditures (1,894,400) (13,624,900) (2,505,979) 11,118,921

OTHER FINANCING SOURCESTransfers in 1,735,500 3,619,300 1,677,831 (1,941,469)

Total other financing sources 1,735,500 3,619,300 1,677,831 (1,941,469)

Net change in fund balance (158,900)$ (10,005,600)$ (828,148) 9,177,452$

Fund balance at beginning of year 9,846,738


Budgeted Amounts

STATISTICAL SECTION (UNAUDITED)

This part of Midvale City Corporations’ Comprehensive Annual Financial Report presents detailed information as a context for better understanding the information in the financial statements, note disclosures, and required supplementary information. The statistical section consists of five main categories: Financial Trends (Pages 85-87) These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. Revenue Capacity (Pages 88-98) These schedules contain information to help the reader assess the City’s most significant local revenue sources. Debt Capacity (Pages 99-103) These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. Demographic and Economic Information (Pages 104-106) These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. Operating Information (Pages 107-108) These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs.

Midvale City Net Position by Component

(Accrual Basis of Accounting) Last Ten Fiscal Years

(Continued)

85

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Governmental activities:

Net investment in capital assets 84,340,131$ 89,697,605$ 87,926,416$ 85,367,188$ 83,516,093$ 74,464,507$ 80,565,863$ 84,160,627$ 76,771,618$ 82,296,971$ Restricted 3,169,169 7,998,445 1,445,511 812,835 10,410,955 3,752,036 883,082 1,521,186 9,125,162 6,034,643 Unrestricted 2,245,509 (23,082,921) (22,875,699) (21,580,118) (29,558,106) (12,477,730) (15,512,597) (15,706,221) (13,978,646) (10,180,513)

Total governmental activities net position 89,754,809 74,613,129 66,496,228 64,599,905 64,368,942 65,738,813 65,936,348 69,975,592 71,918,134 78,151,101

Business-type activities:Net investment in capital assets 13,280,548 17,787,365 18,600,675 18,887,512 18,958,384 19,014,743 20,418,787 21,102,883 21,964,255 23,058,240 Restricted 5,654,258 3,048,182 - - - - - - - - Unrestricted 2,076,866 4,210,196 7,520,161 7,664,189 9,277,452 9,653,167 8,657,672 8,448,241 8,347,659 8,487,705

Total business-type activities net position 21,011,672 25,045,743 26,120,836 26,551,701 28,235,836 28,667,910 29,076,459 29,551,124 30,311,914 31,545,945

Primary government:Net investment in capital assets 97,620,679 107,484,970 106,527,091 104,254,700 102,474,477 93,479,250 100,984,650 105,263,510 98,735,873 105,355,211 Restricted 8,823,427 11,046,627 1,445,511 812,835 10,410,955 3,752,036 883,082 1,521,186 9,125,162 6,034,643 Unrestricted 4,322,375 (18,872,725) (15,355,538) (13,915,929) (20,280,654) (2,824,563) (6,854,925) (7,257,980) (5,630,987) (1,692,808)

Total primary government net position 110,766,481$ 99,658,872$ 92,617,064$ 91,151,606$ 92,604,778$ 94,406,723$ 95,012,807$ 99,526,716$ 102,230,048$ 109,697,046$

Fiscal Year

Midvale City Changes in Net Position


86

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018ExpensesGovernmental activities:

General government 4,720,539$ 4,748,070$ 4,047,915$ 4,330,929$ 5,445,086$ 5,256,415$ 5,666,704$ 5,539,259$ 5,786,432$ 6,671,596$ Public safety (1) 9,957,777 10,691,659 10,803,353 5,518,046 5,714,868 6,050,012 6,383,475 6,610,764 7,013,851 7,290,047 Highways and public improvements 2,577,107 2,548,877 4,462,856 3,856,315 3,277,687 2,967,910 2,500,529 1,890,231 2,297,368 2,485,064 Parks, recreation and public property 743,423 688,832 678,459 762,234 764,440 715,784 813,033 931,303 992,330 1,384,148 Redevelopment 113,965 19,442,794 6,704,500 395,210 373,800 704,130 618,747 1,649,138 3,671,182 3,296,665 Interest on long-term debt 165,388 420,860 1,683,352 1,184,312 1,988,776 1,801,668 1,738,207 2,137,089 2,008,336 2,704,350

Total government activities expense 18,278,199 38,541,092 28,380,435 16,047,046 17,564,657 17,495,919 17,720,695 18,757,784 21,769,499 23,831,870

Business-type activities:Water (2) (5) 1,956,931 3,575,004 3,605,976 4,657,700 4,996,524 5,170,826 3,993,392 3,960,091 4,354,475 4,361,331 Sewer (5) 1,615,068 1,910,718 1,927,068 1,883,291 Storm water 552,194 592,986 751,607 758,040 1,243,205 1,366,964 1,181,903 1,315,614 1,429,125 1,514,929 Sanitation 787,229 808,256 937,858 930,805 956,355 951,112 918,913 932,441 969,261 1,031,396 Telecommunications (3) - - - 8,669 793,249 808,618 825,907 901,913 864,343 889,011 Ambulance (1) 630,758 614,002 621,180 28,122 - - - - - - Street lighting (4) - - - - 172,909 160,791 426,829 624,863 341,979 381,608 Equity investment income - - 562,280 170,218 (28,323) (33,824) (12,840) - - -

Total business-type activities 3,927,112 5,590,248 6,478,901 6,553,554 8,133,919 8,424,487 8,949,172 9,645,640 9,886,251 10,061,566 Total primary government expenses 22,205,311 44,131,340 34,859,336 22,600,600 25,698,576 25,920,406 26,669,867 28,403,424 31,655,750 33,893,436

Program revenuesGovernmental activities:

Charges for servicesGeneral government 1,236,915 1,245,583 1,618,907 1,824,036 2,159,882 2,656,868 2,722,837 2,743,920 2,247,640 2,236,403 Public safety 1,450,565 1,817,518 2,186,054 1,527,068 2,440,536 1,357,735 1,633,011 1,030,311 748,505 922,257 Highways and public improvements 13,854 12,501 14,819 20,741 78,263 - - - - - Parks, recreation and public property 32,700 44,050 55,675 37,938 40,200 60,625 67,300 61,950 42,450 24,600

Operating grants and contributions 1,085,982 1,390,277 2,007,000 742,079 810,028 4,683,624 4,281,630 5,965,959 5,840,869 6,200,034 Capital grants and contributions 12,702,979 6,734,782 1,856,668 1,274,142 1,828,838 793,079 837,135 1,848,430 1,158,697 1,793,150

Total governmental activities program revenues 16,522,995 11,244,711 7,739,123 5,426,004 7,357,747 9,551,931 9,541,913 11,650,570 10,038,161 11,176,444

Business-type activities:Charges for services

Water (2) (5) 2,336,492 4,343,079 4,698,773 5,143,264 5,697,802 5,658,012 4,267,495 4,284,361 4,550,934 4,738,786 Sewer (5) - - - - - - 1,503,752 1,737,379 1,961,362 2,228,967 Storm water 564,945 598,277 636,201 639,109 809,535 1,042,571 1,632,166 1,648,039 1,812,768 1,824,476 Sanitation 758,561 797,795 794,028 855,133 975,855 999,327 1,010,970 924,037 954,956 956,399 Telecommunications (3) - - - 17,975 15,429 15,816 33,421 17,230 21,390 27,264 Ambulance (1) 551,551 589,376 535,282 - - - - - - - Street lighting (4) - - - - 112,609 242,776 248,654 372,896 381,529 381,507

Operating grants and contributions - - - - 95,120 116,744 117,632 117,886 115,885 111,221 Capital grants and contributions - 3,591,288 164,317 197,734 - - - - - -

Total business-type activities program revenues 4,211,549 9,919,815 6,828,601 6,853,215 7,706,350 8,075,246 8,814,090 9,101,828 9,798,824 10,268,620 Total primary government program revenues 20,734,544$ 21,164,526$ 14,567,724$ 12,279,219$ 15,064,097$ 17,627,177$ 18,356,003$ 20,752,398$ 19,836,985$ 21,445,064$

Fiscal Year

Midvale City Changes in Net Position (Continued)


87

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Net (Expense)/RevenueGovernmental activities (1,755,204) (27,296,381) (20,641,312) (10,621,042) (10,206,910) (7,943,988) (8,178,782) (7,107,214) (11,731,338) (12,655,426) Business-type activities 284,437 4,329,567 349,700 299,661 (427,569) (349,241) (135,082) (543,812) (87,427) 207,054 Total primary government net (expense)/revenue (1,470,767) (22,966,814) (20,291,612) (10,321,381) (10,634,479) (8,293,229) (8,313,864) (7,651,026) (11,818,765) (12,448,372)

General revenuesand other changes in net positionGovernmental activities:

TaxesProperty taxes 3,732,753 4,873,443 5,885,344 4,182,241 3,255,513 1,081,837 1,145,102 1,178,525 3,202,775 3,183,212 Sales taxes 4,975,837 4,685,317 4,706,625 5,179,475 5,468,552 5,930,672 6,221,500 6,463,225 7,128,932 7,382,052 Telecomm and franchise taxes 2,322,687 2,294,430 2,400,689 2,440,941 2,641,707 2,832,277 2,764,227 2,883,419 3,196,182 3,081,826

Interest income 84,554 49,641 48,141 64,497 77,128 85,590 46,144 131,625 153,422 416,810 Gain on sale and disposal of assets 154,878 92,642 82,708 151,453 - - 2,598 391,405 134,298 524,778 Miscellaneous 73,551 164,228 60,371 26,634 196,880 124,783 370,476 1,018,859 683,171 607,715 Developer contributions - - - - - - - - - 4,542,000 Special item - tfr of public safety to other govt - - - (3,237,418) - - - - - -Transfers - net (5,000) (5,000) (659,467) (83,104) (963,213) (741,300) (917,100) (920,600) (824,900) (850,000)

Total governmental activities 11,339,260 12,154,701 12,524,411 8,724,719 10,676,567 9,313,859 9,632,947 11,146,458 13,673,880 18,888,393

Business-type activities:Interest income 154,036 33,234 65,926 48,100 31,167 40,015 47,647 40,667 43,866 77,838 Equity investment (loss) (338,460) (333,730) - - - - - 57,210 (20,549) 99,139 Capital contributions from other government 10,544,902 - - - - - - - - - Transfers - net 5,000 5,000 659,467 83,104 963,213 741,300 917,100 920,600 824,900 850,000

Total business-type activities 10,365,478 (295,496) 725,393 131,204 994,380 781,315 964,747 1,018,477 848,217 1,026,977 Total primary government 21,704,738 11,859,205 13,249,804 8,855,923 11,670,947 10,095,174 10,597,694 12,164,935 14,522,097 19,915,370

Changes in Net PositionGovernmental activities 9,584,056 (15,141,680) (8,116,901) (1,896,323) 469,657 1,369,871 1,454,165 4,039,244 1,942,542 6,232,967 Business-type activities 10,649,915 4,034,071 1,075,093 430,865 566,811 432,074 829,665 474,665 760,790 1,234,031 Total primary government 20,233,971$ (11,107,609)$ (7,041,808)$ (1,465,458)$ 1,036,468$ 1,801,945$ 2,283,830$ 4,513,909$ 2,703,332$ 7,466,998$

Notes:(1) Beginning in FY 2012, Midvale was annexed by the Salt Lake Valley Fire Service Area, a separate taxing entity. Fire and ambulance service are now provided by Unified Fire Authority.(2) Beginning in FY 2010, Midvale acquired the water service area previously served by Sandy City, doubling its water customer base.(3) The Telecommunications Fund was established in FY 2012 to improve fiber optic capabilities for businesses and residents.(4) The Street Lighting Fund was established in FY 2013 to provide street lights city-wide, and to switch all lighting to more efficient LED.(5) Water and Sewer were reported as one fund prior to 2015. In 2015, they were split into two separate funds.

Fiscal Year

Midvale City Governmental Activities Tax Revenues by Source


88

Telecom-Fiscal Uniform Franchise and munications Transient TotalYear Property Tax Vehicle Tax Sales Tax Energy Tax Tax Room Tax Tax Revenues

2009 3,312,965$ 419,788$ 4,975,837$ 1,592,661$ 632,245$ 97,781$ 11,031,277$ 2010 (1) 4,462,590 410,853 4,685,317 1,634,850 568,987 90,593 11,853,190 2011 (1) 5,465,626 419,718 4,706,625 1,771,680 538,696 90,313 12,992,658 2012 (1)(2) 4,106,264 75,976 5,179,478 1,757,034 583,628 100,277 11,802,657 2013 (1) 3,131,952 123,561 5,468,552 1,991,717 550,450 99,540 11,365,772 2014 1,081,836 113,950 5,930,672 2,102,495 495,776 120,057 9,844,786 2015 1,145,102 113,980 6,221,500 2,086,631 429,025 134,591 10,130,829 2016 1,178,525 126,648 6,463,225 2,192,132 425,164 139,475 10,525,169 2017 (3) 3,202,775 417,806 7,128,932 2,205,528 407,915 164,934 13,527,890 2018 3,183,212 333,097 7,382,052 2,212,291 356,013 180,425 13,647,090

Notes:(1) Prior to Fiscal Year 2014, the Midvale Redevelopment Agency (RDA) recorded property tax revenues received from other participating taxing

entities as "property tax revenue". The Utah State Auditor now requires these revenues to be recorded as "contributions from othergovernments". Property taxes for prior years which represent "contributions from other governments" are as follows:2013- $2,009,800; 2012- $1,512,800; 2011- $1,356,300; 2010- $972,900; 2009 and prior- $0.

(2) In Fiscal Year 2012, Midvale was annexed into the Salt Lake Valley Fire Service Area (SLVFSA). SLVFSA has taxing authority, andproperty taxes paid by Midvale business and residents for fire protection service are now paid directly to SLVFSA.

(3) In Fiscal Year 2017, Midvale increased it's property tax rate.

Midvale City Fund Balances of Governmental Funds (Modified Accrual Basis of Accounting)

Last Ten Fiscal Years

89

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018General Fund

Nonspendable -$ -$ 27,185$ -$ -$ -$ -$ -$ -$ -$ Restricted for debt service - - 246,058 432,514 246,375 246,375 252,465 247,011 247,544 248,917 Unassigned - - 2,239,008 2,687,317 2,718,289 2,714,040 2,752,356 2,407,701 3,784,485 3,858,326 Reserved 2,377,532 930,353 - - - - - - - - Unreserved 1,593,432 1,315,312 - - - - - - - -

Total General Fund 3,970,964$ 2,245,665$ 2,512,251$ 3,119,831$ 2,964,664$ 2,960,415$ 3,004,821$ 2,654,712$ 4,032,029$ 4,107,243$

All Other Governmental FundsNonspendable -$ -$ 150,130$ 150,130$ 150,130$ 150,130$ 150,130$ -$ -$ -$ Restricted for capital projects - - 12,471 - 9,605,336 3,466,803 - - 8,267,104 6,264,782 Restricted for redevelopment - - 1,238,411 380,321 512,928 32,305 387 5,348,949 140,597 23,442 Restricted for debt service - - - - - - 630,230 1,577,544 1,585,165 21,407,132 Assigned for special revenue funds - - 844,948 1,211,914 911,341 951,388 2,109,836 2,705,141 2,160,877 2,638,920 Assigned for capital projects - - - 308,816 1,677,626 3,387,910 2,020,096 1,710,787 1,579,634 2,753,808 Reserved - land held for resale 150,130 150,130 - - - - - - - - Reserved for capital projects 641,507 221,220 - - - - - - - - Reserved for redevelopment - 7,777,225 - - - - - - - - Unreserved for special revenue fund (260,403) 1,470,546 - - - - - - - - Unreserved for capital projects (250,763) 82,745 - - - - - - - -

Total Other Governmental Funds 280,471$ 9,701,866$ 2,245,960$ 2,051,181$ 12,857,361$ 7,988,536$ 4,910,679$ 11,342,421$ 13,733,377$ 33,088,084$

Total Governmental FundsNonspendable -$ -$ 177,315$ 150,130$ 150,130$ 150,130$ 150,130$ -$ -$ -$ Restricted - - 1,496,940 812,835 10,364,639 3,745,483 883,082 7,173,504 10,240,410 27,944,273 Assigned - - 844,948 1,520,730 2,588,967 4,339,298 4,129,932 4,415,928 3,740,511 5,392,728 Unassigned - - 2,239,008 2,687,317 2,718,289 2,714,040 2,752,356 2,407,701 3,784,485 3,858,326 Reserved 3,169,169 9,078,928 - - - - - - - - Unreserved 1,082,266 2,868,603 - - - - - - - -

Total Governmental Funds 4,251,435$ 11,947,531$ 4,758,211$ 5,171,012$ 15,822,025$ 10,948,951$ 7,915,500$ 13,997,133$ 17,765,406$ 37,195,327$

Note: The City implemented the requirements of GASB Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions in Fiscal Year 2011.

Fiscal Year

Midvale City Changes in Fund Balances of Governmental Funds

(Modified Accrual Basis of Accounting) Last Ten Fiscal Years

90

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Revenues:Taxes (1) 11,031,277$ 11,853,190$ 12,992,658$ 11,802,657$ 11,365,772$ 9,844,786$ 10,130,829$ 10,525,169$ 13,527,890$ 13,647,089$ Licenses and permits 740,881 639,496 678,288 633,944 887,225 887,041 929,422 974,711 583,437 600,158 Intergovernmental 1,850,677 3,661,920 2,727,839 1,545,056 2,638,866 5,476,703 5,118,765 7,814,389 6,999,567 7,993,184 Charges for services 822,645 935,130 1,327,862 1,524,669 1,591,402 2,088,987 1,891,997 1,924,706 1,717,633 1,674,434 Fines and forfeitures 1,170,508 1,545,026 1,869,305 1,251,170 1,245,081 1,257,733 1,528,308 1,236,006 974,651 992,776 Interest income 51,826 41,375 39,896 54,934 70,770 78,952 46,144 131,625 153,422 416,810 Miscellaneous 122,066 173,475 60,371 26,634 196,880 138,886 370,476 1,018,859 683,172 607,719

Total Revenues 15,789,880 18,849,612 19,696,219 16,839,064 17,995,996 19,773,088 20,015,941 23,625,465 24,639,772 25,932,170

Expenditures:General government 3,019,359 2,898,937 2,808,285 3,015,559 3,371,860 3,832,807 3,826,386 4,095,809 3,966,525 4,130,071 Public safety (2) 9,558,312 10,296,054 10,510,333 5,372,135 5,635,904 6,008,069 6,392,114 6,581,069 6,904,536 7,168,010 Highways and public improvements 1,003,184 988,186 893,110 1,032,937 871,110 1,068,817 812,797 784,451 759,449 881,927 Parks, recreation, and public property 646,397 633,633 623,840 706,112 706,933 658,193 736,565 841,194 892,240 978,895 Redevelopment (3) 113,965 19,698,602 6,704,500 395,210 373,800 719,130 3,565,775 1,654,141 2,208,413 3,311,665 Community and economic development 1,349,225 1,215,552 1,118,182 1,200,441 1,132,468 1,264,073 1,281,767 1,324,787 1,230,080 1,458,891 Capital outlay - noncapitalized - - - - 457,688 31,591 446,139 12,420 1,690,088 1,296,156 Capital outlay - capitalized 1,751,950 1,080,495 1,170,661 813,417 2,260,847 7,344,480 4,350,028 10,419,056 7,468,225 1,322,370 Pledge pmt - interlocal guarantee agreement (4) - 400,710 539,465 835,000 - - - - - - Debt service principal 284,797 260,000 510,000 1,442,765 1,340,000 1,370,000 1,670,000 1,745,000 1,995,000 2,831,000 Debt service interest 158,925 244,318 1,669,842 1,225,831 1,752,279 1,837,612 1,771,647 1,874,301 1,993,689 2,520,085 Bond issuance costs - 665,550 - - 217,950 2,000 - 257,080 145,321 228,693

Total Expenditures 17,886,114 38,382,037 26,548,218 16,039,407 18,120,839 24,136,772 24,853,218 29,589,308 29,253,566 26,127,763

Excess of revenue over (under) expenditures (2,096,234) (19,532,425) (6,851,999) 799,657 (124,843) (4,363,684) (4,837,277) (5,963,843) (4,613,794) (195,593)

Other financing sources (uses):Proceeds from sale of assets 4,863 2,340 7,308 148,261 2,947,359 246,013 2,934,626 12,976 8,435 219,891 Proceeds from capital lease/note payable - - 302,765 - - - - - - - Proceeds from bond issuance 2,453,699 27,260,746 - - 8,990,000 - - 12,961,000 9,146,632 20,255,623 Discount on bond issuance - - - - (90,890) - - - - - Special item - public safety transfer (2) - - - (1,469,898) - - - - - - Contribution from other government - - 19,875 - - - - - - - Transfers in 491,040 1,419,994 2,087,344 2,950,816 5,076,001 3,608,583 1,173,956 2,346,242 11,344,438 1,887,831 Transfers out (496,040) (1,454,559) (2,754,613) (2,016,035) (6,146,614) (4,349,883) (2,304,756) (3,274,742) (12,117,438) (2,737,831)

Total other financing sources (uses) 2,453,562 27,228,521 (337,321) (386,856) 10,775,856 (495,287) 1,803,826 12,045,476 8,382,067 19,625,514

Net change in Fund Balance 357,328$ 7,696,096$ (7,189,320)$ 412,801$ 10,651,013$ (4,858,971)$ (3,033,451)$ 6,081,633$ 3,768,273$ 19,429,921$

Debt service as a percentageof non-capital expenditures: 2.8% 1.4% 8.6% 17.5% 19.5% 19.1% 16.8% 18.9% 18.3% 21.6%

Notes:(1) Beginning in FY 2014, the Utah State Auditor's Office required classification of tax increment revenue received by a Redevelopment Agency from other taxing entities as "Intergovernmental Revenue" instead of "Property Taxes".

Property taxes reported for prior years which represent "contributions from other governments" are as follows: 2013 - $2,009,800; 2012 - $1,512,800; 2011 - $1,356,300; 2010 - $972,900; 2009 and prior - $-0-(2) Beginning in FY 2012, the Salt Lake Valley Fire Service Area (SLVFSA) began providing fire service to Midvale City. SLVFSA is a taxing entity and collects property tax directly from Midvale residents to provide services.(3) In FY 2010, Midvale's Redevelopment Agency (RDA) issued bonds of approximately $27 million and disbursed those funds to developers in FY 2010 and FY 2011.(4) Midvale City is one of 11 founding members of the Utah Telecommunications Open Infrastructure Network (UTOPIA). Beginning in FY 2013, pledge payments to UTOPIA are paid from the Telecommunications Enterprise Fund.

Fiscal Year

Midvale City Assessed Value and Estimated Actual Value of Taxable Property

Last Ten Calendar Years

91

AssessedEstimated Estimated Estimated Estimated value as a

Assessed Market Assessed Market Assessed Market Assessed Market percentage of DirectYear Value Value Value Value Value Value Value Value market value Tax Rate

2008 968,137,313 1,760,249,660 680,332,960 680,332,960 113,504,849 113,504,849 1,761,975,122 2,554,087,469 68.99% 0.0019382009 909,472,845 1,653,586,991 592,302,840 592,302,840 116,423,486 116,423,486 1,618,199,171 2,362,313,317 68.50% 0.0022622010 897,467,110 1,631,758,382 578,865,750 578,865,750 112,242,240 112,242,240 1,588,575,100 2,322,866,372 68.39% 0.0026692011 893,696,503 1,624,902,733 580,113,670 580,113,670 111,594,979 111,594,979 1,585,405,152 2,316,611,382 68.44% 0.0027012012 876,577,808 1,593,777,833 579,327,580 579,327,580 111,077,083 111,077,083 1,566,982,471 2,284,182,496 68.60% 0.0006872013 939,637,475 1,708,431,773 590,548,960 590,548,960 119,788,367 119,788,367 1,649,974,802 2,418,769,100 68.22% 0.0006582014 1,039,080,432 1,889,237,148 630,681,800 630,681,800 143,089,908 143,089,908 1,812,852,140 2,663,008,856 68.08% 0.0006232015 1,116,706,717 2,030,375,849 673,315,410 673,315,410 151,815,849 151,815,849 1,941,837,976 2,855,507,108 68.00% 0.0006092016 1,245,409,487 2,264,380,886 784,756,880 784,756,880 154,083,626 154,083,626 2,184,249,993 3,203,221,392 68.19% 0.0013982017 1,333,498,303 2,424,542,369 924,171,610 924,171,610 189,086,848 189,086,848 2,446,756,761 3,537,800,827 69.16% 0.001166

Note: Taxable value is 55% of market value for primary residential property and 100% for all other property

Sources: Utah State Tax Commission (233b List of Final Values) and Salt Lake County Auditor

TotalPersonal and

Primary Residential non-residential Centrally assessedSecondary or

Midvale City Property Tax Rates – Direct and Overlapping Governments


92

Total RateS.S.L. Valley Central Jordan Total Mid Sandy

Unified Mosquito Utah Valley Total Direct and Valley Suburban CottonwoodCalendar General G.O. Total School Fire Service Salt Lake Abatement Water Cons Water Cons Overlapping Overlapping Improvement Improvement Improvement

Year Operations Bond Direct Rate District (1) Area (2) County (3) District District District (4) Rates Rates District (5) District (6) District (7)2008 0.001700 0.000238 0.001938 0.006150 - 0.002431 0.000022 0.000286 0.000384 0.009273 0.011211 0.000796 0.000807 0.0001932009 0.001983 0.000279 0.002262 0.007180 - 0.002842 0.000025 0.000400 0.000400 0.010847 0.013109 0.000885 0.000901 0.0002192010 0.002381 0.000288 0.002669 0.008060 - 0.003176 0.000050 0.000421 0.000410 0.012117 0.014786 0.000913 0.000936 0.0002292011 0.002409 0.000292 0.002701 0.008165 - 0.003300 0.000052 0.000436 0.000424 0.012377 0.015078 0.000949 0.000967 0.0002372012 0.000687 - 0.000687 0.008418 0.002079 0.003420 0.000054 0.000455 0.000443 0.014869 0.015556 0.000985 0.001026 0.0002442013 0.000658 - 0.000658 0.008111 0.002192 0.003342 0.000021 0.000446 0.000424 0.014536 0.015194 0.000945 0.001035 0.0002362014 0.000623 - 0.000623 0.007823 0.002097 0.003751 0.000020 0.000422 0.000399 0.014512 0.015135 0.000904 0.000945 0.0002262015 0.000609 - 0.000609 0.007859 0.002000 0.003502 0.000019 0.000405 0.000400 0.014185 0.014794 0.000871 0.000885 0.0002152016 0.001168 0.000230 0.001398 0.007227 0.001888 0.003278 0.000018 0.000400 0.000372 0.013183 0.014581 0.000816 0.000800 0.0001992017 0.000979 0.000187 0.001166 0.007117 0.001812 0.003104 0.000017 0.000400 0.000400 0.012850 0.014016 0.000773 0.000758 0.000189

Note: Midvale City operates on a fiscal year beginning July 1 and ending June 30. Property taxes are generally paid in November. Property tax revenue for FY 2017 is based upon the calendar year 2016 rate. The same is true for all fiscal years.

(1) - School District includes Canyons School District and Jordan/Canyons School District debt service area. Prior to 2010, Midvale was served by the Jordan School District.(2) - Midvale City merged with the Unified Fire Service Area in 2012. Prior to that time, Midvale City provided fire service.(3) - Salt Lake County tax rate listed includes Salt Lake County Library, county assessing & collecting levy, and multicounty assessing & collecting levy.(4) - Jordan Valley Water Conservancy District is a taxing entity in 8 of 9 taxing areas within Midvale City(5) - Mid Valley is a taxing entity in 1 of 9 taxing areas within Midvale City(6) - Sandy Suburban is a taxing entity in 2 of 9 taxing areas within Midvale City(7) - Cottonwood is a taxing entity in 1 of 9 taxing areas within Midvale City

Source: Utah State Tax Commission

City Direct Rate Overlapping Rates - all Midvale taxing areas Overlapping Rates - some Midvale taxing areas

Midvale City Principal Property Tax Payers Current and Nine Years Ago

93

Percentage of Percentage ofTotal City Total City

Taxable Taxable Taxable TaxableTaxpayer Assessed Value Rank Assessed Value Assessed Value Rank Assessed ValueFORT UNION SHOPPING CENTER LLC 94,536,220$ 1 3.86% -$ O.COM LAND, LLC 48,817,800 2 2.00%ARBOR GARDNER BINGHAM JUNCTION OFFICE 5, LC 45,127,700 3 1.84%FLSMIDTH USA, INC 42,216,400 4 1.73%PCCP JSP SPRINGS LLC 39,009,245 5 1.59% 26,044,040 4 1.48%SAN MORITZ APARTMENTS LLC 35,133,560 6 1.44%VIEW 8, LC 25,068,400 7 1.02%TALAVERA AT THE JUNCTION, LLC 22,436,205 8 0.92%RIVER MEADOWS LLC 21,890,825 9 0.89%JSP RIDGE I LLC; ET AL 20,089,960 10 0.82%DDR FORT UNION I & II LLC 45,576,100 1 2.59%DDR MIDVALLEY WEST LLC 36,054,720 2 2.05%ARBOR GARDNER BINGHAM JUNCTION HOLDINGS LC 35,007,100 3 1.99%RIVERWALK INVESTMENT HOLDINGS LLC 21,157,100 5 1.20%JAMES CAMPBELL COMPANY LLC 16,977,800 6 0.96%MSB UNION WOODS LLC 15,111,300 7 0.86%BRIGHTON PLACE HOLDINGS, LLC 14,803,140 8 0.84%VALLEY GREEN HOLDINGS LLC 14,571,900 9 0.83%880 EAST CANYON/2102 ROYAL FARMS INVESTMENT GROUP INC 14,343,340 10 0.81%

394,326,315$ 16.12% 239,646,540$ 13.60%

Source: Salt Lake County

Calendar Year 2017 Calendar Year 2008

Midvale City Property Tax Levies and Collections


94

Collections inTaxes Percentage Subsequent Percentage

Calendar Year Levied Amount of Levy Years Amount of Levy

2008 3,414,708$ 3,187,518$ 93.35% 203,019$ 3,390,537$ 99.29%2009 3,471,447 3,240,302 93.34% 177,457 3,417,759 98.45%2010 3,933,658 3,659,843 93.04% 231,126 3,890,969 98.91%2011 3,957,062 3,750,888 94.79% 168,657 3,919,545 99.05%2012 1,101,334 934,447 84.85% 38,983 973,430 88.39%2013 983,298 944,775 96.08% 25,251 970,026 98.65%2014 1,124,593 1,079,909 96.03% 18,235 1,098,144 97.65%2015 1,175,963 1,124,808 95.65% 20,075 1,144,883 97.36%2016 2,487,950 2,475,394 99.50% 26,762 2,502,156 100.57%2017 2,673,585 2,591,313 96.92% - 2,591,313 96.92%

Source: Salt Lake County Treasurer

Note: Property tax collections ma be higher than the amount levied and budgeted due to new growth and the collection of personal property tax.

Total Collections to DateYear of the LevyCollected within the

Midvale City Sales Taxpayers by Industry


95

Category 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Retail salesApparel/accessories 139142 128,325$ 134,677$ 142,637$ 140,976$ 140,947$ 144,672$ 174,423$ 162,381$ Auto sales and services 343271 385,455 424,975 476,623 498,464 570,713 647,366 942,626 1,000,134 Bldg materials, hardware 227342 221,765 269,515 355,521 467,259 410,886 360,367 441,842 434,463 Eating & drinking establishments 537784 569,860 605,271 655,212 730,231 782,303 910,302 1,015,571 1,061,026 Groceries 598136 624,324 675,174 756,369 791,644 816,004 854,755 905,885 849,487 General merchandise 357648 403,426 494,850 510,475 506,733 488,733 497,656 504,178 526,831 Home furnishings/equipment 314014 321,084 328,016 265,166 286,501 346,166 383,493 385,372 324,795 Miscellaneous retail 732611 774,483 804,291 929,551 965,856 964,588 1,009,948 1,020,958 1,005,730 Total retail 3,249,948 3,428,722 3,736,769 4,091,554 4,387,664 4,520,340 4,808,559 5,390,855 5,364,847

OtherWholesale trade 640997 616,603 684,564 689,570 749,354 729,746 722,490 799,404 759,449 Services 511953 526,249 571,188 615,503 659,199 685,306 684,684 903,143 894,916 Utility/communication 414177 450,932 468,064 504,128 525,515 538,699 558,343 584,132 583,360 Manufacturing 164687 167,996 225,458 215,432 201,939 226,271 201,273 210,250 233,724 Miscellaneous other 466058 137,566 296,970 165,744 304,964 393,035 253,139 230,343 333,220 Total other 2,197,872 1,899,346 2,246,244 2,190,377 2,440,971 2,573,057 2,419,929 2,727,272 2,804,669

Grand Total 5,689,488$ 5,447,820$ 5,328,068$ 5,983,013$ 6,281,931$ 6,828,635$ 7,093,397$ 7,228,488$ 8,118,127$ 8,169,516$

Note: Utah state law requires pooling and redistributing (based upon population) fifty percent of each municipality's "point of sale" sales tax revenue. Midvale City loses approximately nine percent of its "point of sale" sales tax revenue to other municipalities. See "Total Sales Tax Revenue" table

Sales Tax Revenue by category is not available for fiscal years prior to 2010.


Fiscal Year

Midvale City Total Sales Taxes Revenue


96

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Midvale City Point of Sale revenue 5,689,488$ 5,447,820$ 5,328,068$ 5,983,013$ 6,281,931$ 6,828,635$ 7,093,397$ 7,228,488$ 8,118,228$ 8,169,550$ Less 50% of Point of sale (2,844,748) (2,723,912) (2,664,037) (2,991,510) (3,140,968) (3,414,320) (3,546,702) (3,614,247) (4,059,114) (4,084,775)plus portion of statewide pool 2,184,605 2,024,852 2,106,655 2,251,695 2,397,638 2,598,910 2,767,016 2,957,289 3,170,136 3,380,453Total distribution 5,029,345 4,748,760 4,770,686 5,243,198 5,538,601 6,013,225 6,313,711 6,571,530 7,229,250 7,465,228Admin fee and other deductions (53,512) (63,443) (64,065) (63,724) (70,052) (82,556) (92,211) (108,304) (100,318) (83,176)Net distribution 4,975,833$ 4,685,317$ 4,706,621$ 5,179,474$ 5,468,549$ 5,930,669$ 6,221,500$ 6,463,226$ 7,128,932$ 7,382,052$

Point of sale revenue lost to statewide pool 660,143$ 699,060$ 557,382$ 739,815$ 743,330$ 815,410$ 779,686$ 656,958$ 888,978$ 704,322$


Fiscal Year

Midvale City Sales Taxes Rates

Direct and Overlapping Governments Last Ten Fiscal Years

97

Midvale City County Option Mass Botanical, Cultural, Total SalesYear Direct Rate State of Utah Salt Lake County Transportation Transit Zoo (ZAP) Tax Rate

2009 1.00% 4.70% 0.25% 0.25% 0.55% 0.10% 6.85%2010 1.00% 4.70% 0.25% 0.25% 0.55% 0.10% 6.85%2011 1.00% 4.70% 0.25% 0.25% 0.55% 0.10% 6.85%2012 1.00% 4.70% 0.25% 0.25% 0.55% 0.10% 6.85%2013 1.00% 4.70% 0.25% 0.25% 0.55% 0.10% 6.85%2014 1.00% 4.70% 0.25% 0.25% 0.55% 0.10% 6.85%2015 1.00% 4.70% 0.25% 0.25% 0.55% 0.10% 6.85%2016 1.00% 4.70% 0.25% 0.25% 0.55% 0.10% 6.85%2017 1.00% 4.70% 0.25% 0.25% 0.55% 0.10% 6.85%2018 1.00% 4.70% 0.25% 0.25% 0.55% 0.10% 6.85%

Source: Utah State Tax Commission - www.tax.utah.gov/sales/rates.html

Midvale City Ratepayer Fees – Business-type Activities


98

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Culinary water 1,381,576$ 3,332,267$ 3,554,708$ 3,844,077$ 4,170,018$ 3,893,407$ 3,966,808$ 4,087,429$ 4,390,444$ 4,540,074$ Sewer 675,356 788,238 906,459 1,070,048 1,149,418 1,277,764 1,448,267 1,632,358 1,917,097 2,158,794 Storm water 553,239 579,076 622,543 628,209 797,642 1,030,112 1,531,045 1,561,721 1,719,035 1,732,746 Street Lighting - - - - 112,605 239,401 245,793 371,086 379,598 379,360 Sanitation 765,949 767,204 781,411 838,744 963,334 982,645 995,788 906,863 932,126 931,339 Ambulance 548,285 586,824 535,282 - - - - - - - Telecommunications - - - 9,250 15,339 15,683 15,291 17,121 21,288 27,193

Total 3,924,405$ 6,053,609$ 6,400,403$ 6,390,328$ 7,208,356$ 7,439,012$ 8,202,992$ 8,576,578$ 9,359,588$ 9,769,506$

Note:In FY 2010, Midvale City began supplying water service to its residents and businesses previously served by Sandy City, effectively doubling its customer base

Midvale City Ratios of Outstanding Debt by Type


99

General Excise Tax Sales Tax RDA* MBA** Lease Total Percentage ofFiscal Obligation Revenue Revenue Revenue Revenue Notes Revenue Notes Primary personal PerYear Bonds Bonds Bonds Bonds Bonds Payable Leases Bonds Payable Leases Government income Capita

2009 3,580,469 2,451,721 - - - - - 10,262,015 - 191,610 16,485,815 3.22% 590 2010 3,314,029 2,439,851 - 27,258,935 - - - 20,451,064 - 151,755 53,615,634 10.67% 1,826 2011 3,037,589 2,202,981 - 27,248,071 - 135,000 152,765 20,907,842 135,000 110,391 53,929,639 10.20% 1,908 2012 2,751,148 1,961,111 - 26,472,207 - 120,000 - 20,205,620 289,737 67,461 51,867,284 9.38% 1,812 2013 2,454,709 1,709,241 - 25,666,343 8,901,441 105,000 - 21,971,398 297,076 22,966 61,128,174 10.60% 2,021 2014 2,148,269 1,447,371 - 24,835,479 8,904,937 90,000 - 23,961,176 314,024 - 61,701,256 10.24% 2,006 2015 1,826,829 1,185,501 - 23,954,615 8,673,433 75,000 - 22,980,954 287,867 - 58,984,199 8.95% 1,859 2016 1,495,049 898,631 - 36,004,751 8,436,929 60,000 - 21,812,732 284,547 - 68,992,639 9.78% 2,115 2017 1,143,949 611,761 9,137,669 35,068,887 7,985,425 45,000 - 20,718,676 275,209 - 74,986,576 10.69% 2,270 2018 777,509 309,891 8,928,894 53,673,494 7,523,921 30,000 - 26,005,919 230,540 - 97,480,168 13.22% 2,935

*Redevelopment Agency**Municipal Building Authority

Notes:Outstanding bond amounts include related unamortized premiums/discounts.Detail regarding the City's outstanding debt can be found in the notes to the financial statements. See "Demographic and Economic Statistics" for personal income and per capita data.

Government Activities Business-type Activities

Midvale City Ratios of General Bonded Debt Outstanding


100

Percentage ofGeneral Estimated Estimated Actual

Fiscal Obligation Actual Value Value PerYear Bonds of Property of Property Population Capita

2009 3,580,469$ 2,554,087,469$ 0.14% 27,935 128$ 2010 3,314,029 2,362,313,317 0.14% 29,363 113 2011 3,037,589 2,322,866,372 0.13% 28,269 107 2012 2,751,148 2,316,611,382 0.12% 28,621 96 2013 2,454,709 2,284,182,496 0.11% 30,245 81 2014 2,148,269 2,418,769,100 0.09% 30,764 70 2015 1,826,829 2,663,008,856 0.07% 31,725 58 2016 1,495,049 2,855,507,108 0.05% 32,613 46 2017 1,143,949 3,203,221,392 0.04% 33,035 35 2018 777,509 3,537,800,827 0.02% 33,208 23

Note:Outstanding bond amounts include related unamortized premiums/discounts.

Midvale City Direct and Overlapping Governmental Activities Debt

June 30, 2018

101

Estimated AmountPercentage ApplicableApplicable to

Governmental Unit (Jurisdiction) Outstanding debt to Midvale City Midvale CityDirect:Midvale City Corporation 10,046,294$ 100.0% 10,046,294.0$ Redevelopment Agency of Midvale City 53,673,494 100.0% 53,673,494 Midvale City Municipal Building Authority 7,523,921 100.0% 7,523,921 Total Direct Debt 71,243,709

Overlapping:Canyons School District 322,990,000 11.5% 37,143,850

Central Utah Water Conservancy District 206,900,000 1.6% 3,310,400

Salt Lake County 202,110,000 2.5% 5,052,750

Sandy Suburban Improvement District 6,473,000 63.0% 4,077,990 Total Overlapping Debt 49,584,990

Total Direct and Overlapping Debt 120,828,699$

Notes:Direct debt amounts include related unamortized premiums/discounts.

Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of Midvale City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident and therefore responsible for repaying the debt of each overlapping government.

Midvale City Legal Debt Margin Information


102

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Debt limit 109,226,463$ 100,273,797$ 100,395,381$ 99,850,679$ 94,948,029$ 96,330,467$ 107,740,919$ 118,013,060$ 128,944,591$ 142,351,695$

Net debt applicable to limit (3,515,000) (3,255,000) (2,985,000) (2,705,000) (2,415,000) (2,115,000) (1,800,000) (1,470,000) (1,130,000) (770,000)

Additional Debt Incurring Capacity 105,711,463$ 97,018,797$ 97,410,381$ 97,145,679$ 92,533,029$ 94,215,467$ 105,940,919$ 116,543,060$ 127,814,591$ 141,581,695$

Total net debt applicable to the limit as a percentage of debt limit 3.22% 3.25% 2.97% 2.71% 2.54% 2.20% 1.67% 1.25% 0.88% 0.54%

Legal Debt Margin Calculation for Fiscal Year 2017

Estimated fair market value as of 12/31/2016 (1) 3,558,792,367$

Legal debt margin Debt limitation available for general purposes - 4% 142,351,695 Total General Obligation debt outstanding 770,000 Additional Debt Incurring Capacity 141,581,695$

(1) Assessed value for debt - incurring capacity includes the FMV of motor vehicles as part of the FMV of the taxable property in the City


Midvale City Pledged-Revenue Coverage


103

RDASales Tax Water/Sewer Storm Water Total B&C

Fiscal Tax Increment Debt Net Net Net Debt Road Fund DebtYear Revenue Revenue Total Service Coverage Revenue Revenue Revenue Service Coverage Revenue Service Coverage

2009 4,975,837 - 4,975,837 - n/a 951,409 n/a 951,409 525,721 1.81 764,695 - n/a2010 4,685,317 1,097,874 5,783,191 - n/a 1,707,450 n/a 1,707,450 606,460 2.82 771,643 97,093 7.952011 4,706,625 1,548,870 6,255,495 1,434,122 4.36 2,238,452 n/a 2,238,452 1,248,038 1.79 821,582 324,300 2.532012 5,179,478 1,771,440 6,950,918 2,244,324 3.10 2,226,625 n/a 2,226,625 1,583,042 1.41 802,977 320,300 2.512013 5,468,552 2,073,445 7,541,997 2,243,724 3.36 2,503,899 n/a 2,503,899 1,569,745 1.60 828,838 321,100 2.582014 5,930,672 2,463,319 8,393,991 2,246,860 3.74 2,295,817 (167,727) 2,128,090 1,621,461 1.31 793,079 321,500 2.472015 6,221,500 3,185,596 9,407,096 2,255,861 4.17 1,954,426 667,351 2,621,777 1,841,478 1.42 837,135 311,500 2.692016 6,463,225 3,816,394 10,279,619 2,417,716 4.25 1,904,113 619,483 2,523,596 2,006,953 1.26 844,929 326,500 2.592017 7,128,932 4,658,617 11,787,549 2,594,694 4.54 2,157,726 688,930 2,846,656 1,971,009 1.44 1,158,697 315,500 3.672018 7,382,052 6,168,040 13,550,092 3,948,090 3.43 2,631,971 620,775 3,252,746 1,962,916 1.66 1,018,459 319,500 3.19

Required coverage 1.25 1.25 2.00

Note: Storm Water net revenue was not pledged revenue for bonds issued prior to Fiscal Year 2014.

Redevelopment Agency (RDA) Property Tax/Sales Tax Revenue Bonds Water, Sewer, Storm Water Revenue Bonds Excise Tax Revenue Bonds

Midvale City Demographic and Economic Statistics


104

Median UnemploymentFiscal Household Median Personal Income Per RateYear Population Income Age Income Capita (Percentage)

2009 27,935 44,501$ 29.7 511,648,947$ 18,316$ 7.92010 29,363 44,382 29.9 502,422,374 17,111 8.32011 28,269 44,116 29.7 528,728,113 18,703 7.62012 28,621 44,966 31.1 553,047,343 19,323 5.52013 30,245 46,029 30.9 576,446,464 19,059 4.72014 30,764 47,452 30.9 602,273,191 19,577 3.92015 31,725 48,008 30.3 658,848,428 20,767 4.02016 32,613 51,077 31.0 705,267,157 21,625 3.32017 33,035 50,614 30.8 701,442,593 21,233 3.52018 33,208 54,464 30.6 737,492,670 22,208 3.3

Sources:Personal Income: https://tax.utah.gov/econstats/federal-returnsPopulation - https://www.census.govUnemployment rate - http://www.economagic.com/em-cgi/data.exe/blsla/lauct/494971000000003Median Household Income - https://www.census.govMedian Age source http://factfinder.census.gov

Midvale City Principal Employers

Current and Nine Years Ago

105

Percentage Percentageof total City of total City

Employer Employees Labor Force Employer Employees Labor ForceOVERSTOCK COM INC 1000-1999 9.6% THE CANYONS SCHOOL DISTRICT 500-999 5.5%CHG COMPANIES, INC. 500-999 4.8% REYNOLDS SAND & GRAVEL, LLC 100-249 1.4%IHC SUPPLY CHAIN CENTER 500-999 4.8% EDWARDS LIFESCIENCES LLC 100-249 1.4%FLSMIDTH CENTRY 250-499 2.4% UTAH TRANSIT AUTHORITY 100-249 1.4%MOLINA HEALTHCARE, INC. 250-499 2.4% HARMONS 100-249 1.4%SOFI LENDING CORP. 250-499 2.4% EXPRESS SERVICES INC 100-249 1.4%TEKSYSTEMS INC 250-499 2.4% WAL MART 100-249 1.4%TOPGOLF USA MIDVALE, LLC 250-499 2.4% APEX STAFFING, LLC 100-249 1.4%ABM AVIATION, INC. 100-249 1.2% UTAH MEDICAL PRODUCTS INC 100-249 1.4%CAST & CREW PRODUCTION PAYROLL INC 100-249 1.2% QWEST CORPORATION 100-249 1.4%CLEARSOURCE 100-249 1.2%ENTERPRISE RENT A CAR 100-249 1.2%EREPLACEMENTPARTS.COM 100-249 1.2%EXTRA SPC STORAGE 100-249 1.2%GLOBAL PAYMENTS INC 100-249 1.2%GREENWOOD MEDICAL CTR 100-249 1.2%HARMONS 100-249 1.2%HILLCREST HIGH 100-249 1.2%JORDAN VALLEY SPECIAL SCHOOL 100-249 1.2%MOLINA HEALTHCARE OF UTAH INC 100-249 1.2%PHC OF UTAH, INC. 100-249 1.2%PREMIER GROUP STAFFING LLC 100-249 1.2%PROGRESSIVE CASUALTY INS CO 100-249 1.2%QWEST CORP 100-249 1.2%RED BELL REAL ESTATE LLC 100-249 1.2%SAVAGE SERVICES 100-249 1.2%SIMPLE FINANCE 100-249 1.2%SKY CHEFS, INC. 100-249 1.2%SMITHS FOOD AND DRUG CTRS 100-249 1.2%SOFI 100-249 1.2%STAKER & PARSON COMPANIES 100-249 1.2%TSUNAMI 100-249 1.2%UNISHIPPERS 100-249 1.2%UTAH MEDICAL PRODUCTS INC 100-249 1.2%UTAH TRANSIT AUTHORITY 100-249 1.2%WAL MART 100-249 1.2%WASATCH FRONT WASTE & RECYCLING DIS 100-249 1.2%WINCO FOODS 100-249 1.2%ZAGG INCORPORATED 100-249 1.2%ZB N A 100-249 1.2%

Midvale City total labor force 20,825 18,102

Sources:https://jobs.utah.gov/jsp/firmfind/#/downloadhttp://www.economagic.com/em-cgi/data.exe/blsla/lauct494971000000006

2018 2009

Midvale City Full-time Equivalent City Government Employees by Function

Last Ten Years

106

Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

General GovernmentLegislative 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5Executive 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5Administrative 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 2.0 3.0Emergency Management 1.0 1.0 1.0 0.0 0.0Attorney 3.0 4.0 4.0 4.0 3.0 3.0 4.0Finance 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0Utility Billing 1.0 2.0 2.0 2.0 2.0 2.0 2.0 2.5 2.0 2.0Recorder 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 2.0Human Resources 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 2.0Justice Court 10.0 9.0 9.0 9.0 10.0 9.0 9.5 9.0 7.5 8.5Information Technology 1.5 1.5 1.5 2.5 2.5 3.0 3.0 3.0 3.0 3.0 Total General Government 23.5 26.5 27.5 28.5 29.5 26.0 26.5 29.5 27.5 31.5

Community DevelopmentAdministrative 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0Business Licensing 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0Economic Development 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0Planning and Zoning 2.0 2.0 2.0 2.0 2.0 2.5 2.5 2.0 2.0 3.0Building 3.0 3.0 3.0 3.0 3.0 3.0 3.0 4.0 3.0 4.0Code Enforcement 2.0 2.0 2.0 2.0 2.0 1.0 2.0 2.0 2.0 2.0Engineering 2.0 2.0 2.0 3.0 3.0 3.0 3.0 4.0 4.0 6.0Redevelopment Agency 1.0 1.0 1.0 1.0 1.0 2.0 2.0 2.0 3.0 4.0 Total Community Development 14.0 14.0 14.0 15.0 15.0 15.5 16.5 18.0 18.0 23.0

Public WorksAdministrative 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 3.0Facilities Maintenance 2.0 3.0 2.0 1.0 1.0 1.0 1.0 2.0 1.0 2.0Parks/cemetery 2.0 1.0 2.0 2.0 2.0 1.0 1.0 1.0 2.0 2.0Fleet 2.0 2.0 2.0 1.0 1.0 1.0 1.0 1.5 2.0 2.0Street/Storm Drain Maintenance 9.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0Water/Sewer 7.0 7.0 7.0 8.0 9.0 9.0 9.0 10.0 11.0 11.0 Total Public Works 24.0 23.0 23.0 22.0 23.0 22.0 22.0 24.5 26.0 28.0

Public SafetyCrossing Guards 8.0 8.0 7.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0Police 47.0 55.0 54.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Fire 53.5 52.5 53.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Public Safety 108.5 115.5 115.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total full-time equivalent employees 170.0 179.0 179.5 65.5 67.5 63.5 65.0 72.0 71.5 82.5

Note: Midvale City began contracting with the Unified Police Department in 2011 for provision of police services.The Salt Lake Valley Fire Service Area (SLVFSA), a separate taxing entity, annexed Midvale City in 2011. Fire service is now provided by SLVFSA.

Fiscal Year

Midvale City Operating Indicators Last Ten Fiscal Years

107

Function 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

General GovernmentResidential Building permits issued 93 77 49 161 138 226 178 89 48 94

Number of units (1) 499 551 62 602 162 433 385 229 115 115Construction cost (1) $72,023,379 $71,720,312 $9,080,176 $49,687,216 $25,722,428 $71,592,496 $59,789,782 $40,547,273 $19,908,000 $19,296,600

WaterResidential water connections 2,660 5,532 5,567 5,618 5,705 5,885 5,995 6,056 6,075 6,100Non-residential water connections 647 989 1,012 1,079 1,086 1,180 1,147 1,225 1,300 1,304Billed consumption (thousand gallons) 871,743 1,319,950 1,509,469 1,571,863 1,651,199 1,522,137 1,485,905 1,681,979 1,635,284 1,651,219Billed consumption per capita (thousand gallons) 31 45 53 55 55 49 47 52 50 50

Purchased from JVWCD (thousand gallons) 51,762 34,436 22,324 53,948 54,447 54,319 55,678 49,347 27,854 74,543Purchased from Sandy City (thousand gallons) 62,146 482,636 665,178 708,000 709,417 640,987 624,264 642,691 620,474 626,296Water from city wells (thousand gallons) 757,835 802,878 821,967 809,915 887,335 826,831 805,963 989,941 986,956 950,380Percent purchased 13% 39% 46% 48% 46% 46% 46% 41% 40% 42%

SewerResidential sewer connections 1,927 1,937 1,957 2,027 2,099 2,297 2,307 2,348 2,362 2,385Non-residential sewer connections 486 525 542 563 579 492 559 591 604 601

SanitationNumber of residential users 5,693 5,805 5,803 5,822 5,906 6,037 6,167 6,243 6,274 6,292Number of residential cans in service 6,951 7,077 7,130 7,133 7,199 7,333 7,331 7,548 7,629 7,694

Note: (1) Source is http://webdna.bebr.utah.edu

Source: Midvale City Corporation

Fiscal Year

Midvale City Capital Asset Statistics by Function


108

Function 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Public worksStreets (miles) 67 68 69 69 70 70 70 70 70 70Streetlight poles 1,021 1,372 1,372 1,381 1,384

Parks and recreationDeveloped park acreage 24 24 24 24 24 71 78 78 78Undeveloped park acreage 15.7 15.7 15.7 15.7 15.7 5.7 2.78 2.78 2.8Cemeteries 1 1 1 1 1 1 1 1 1 1Cultural arts centers 1 1 1 1 1 1 1 1 1 1Museums 1 1 1 1 1 1 1 1 1 1

WaterWater mains (miles) 93 93 93.5 96.5 97 97.4 97.4 97.4 97.7 98.1Maximum daily capacity (million gallons) 8.8 8.8 8.8 8.8 8.8 8.8 8.8 9.6 9.7 9.8Storage capacity (million gallons) 1.6 4 4 6.5 6.5 6.5 6.5 6.5 6.5 6.5Wells 5 5 5 5 5 5 5 5 5 5

SewerSewer lines (miles) 42 43 43 44 44 45 45 45 45 46

Note: Information regarding park acreage prior to 2010 and streetlight poles prior to 2014 is not available

Source: Midvale City Corporation

Fiscal Year

GOVERNMENT COMPLIANCE SECTION

C E RT I F I E D P U B L I C A C C O U N T A N T S

109

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 AUDITINGSTANDARDS

The Honorable Mayor, and Members of the City Council Midvale City Corporation, Utah

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Midvale City Corporation, Utah (herein referred to as the “City”), as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated December 11, 2018.

Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the 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 control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control 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 were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards

.

110

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.



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111

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER COMPLIANCE AS REQUIRED BY THE

STATE COMPLIANCE AUDIT GUIDE

The Honorable Mayor, and Members of the City Council Midvale City, Utah

Report on Compliance with General State Compliance Requirements

We have audited Midvale City’s (herein referred to as the “City”) compliance with the applicable general state compliance requirements described in the State Compliance Audit Guide, issued by the Office of the Utah State Auditor, that could have a direct and material effect on the City for the year ended June 30, 2018.

General state compliance requirements were tested for the year ended June 30, 2018 in the following areas:

Budgetary Compliance Restricted Taxes and Related Revenues Fund Balance Open and Public Meetings Act Justice Courts Public Treasurer’s Bond Utah Retirement Systems

Management’s Responsibility

Management is responsible for compliance with the general state requirements referred to above.

Auditor’s Responsibility

Our responsibility is to express an opinion on the City’s compliance based on our audit of the compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the State Compliance Audit Guide. Those standards and the State Compliance Audit Guide require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the compliance requirements referred to above that could have a direct and material effect on the City occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance with general state compliance requirements. However, our audit does not provide a legal determination of the City’s compliance.

Opinion on General State Compliance Requirements

In our opinion, Midvale City, complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on the City for the year ended June 30, 2018.

112

Other Matters

The results of our auditing procedures disclosed no instances of noncompliance, which were required to be reported in accordance with the State Compliance Audit Guide.

Report on Internal Control Over Compliance

Management of the City is responsible for establishing and maintaining effective internal control over compliance with the compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s internal control over compliance with the compliance requirements that could have a direct and material effect on the City to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance with general state compliance requirements and to test and report on internal control over compliance in accordance with the State Compliance Audit Guide, but not for the purpose of expressing an opinion on the effectiveness of the internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a general state compliance requirement on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a general state compliance requirement will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a general state compliance requirement that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control and compliance and the results of that testing based on the requirements of the State Compliance Audit Guide. Accordingly, this report is not suitable for any other purpose.



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