ANNUAL COMPREHENSIVE FINANCIAL REPORT INTRODUCTION

March 3, 2023

Honorable Mayor McLean, Members of the Boise City Council, Residents of the City of Boise, and our Valued Employees

Ladies and Gentlemen:

The Department of Finance and Administration is pleased to present to you the accompanying Annual Comprehensive Financial Report (ACFR) of the City of Boise for the fiscal year ended September 30, 2022. State law requires that a complete set of financial statements, presented in conformance with generally accepted accounting principles (GAAP), audited by licensed independent certified public accountants be released to the public within nine months of fiscal year-end by submitting to the Idaho Legislative Council. This report is being issued to fulfill these statutory requirements.

Responsibility for both the accuracy of the information presented and the completeness and fairness of its presentation, including all disclosures, is vested in management of the city. Management believes that the data as presented is accurate in all material respects; that the report is presented in a manner designed to fairly set forth the financial activity of the city’s various funds; and that all disclosures necessary have been included to enable the reader to gain the maximum understanding of the city’s financial affairs.

Internal Controls

Management of the City of Boise has established a comprehensive internal control framework that is designed to provide reasonable, but not absolute assurance that assets are safeguarded against loss from unauthorized use or disposition and ensure that the financial records for preparing the financial statements and maintaining accountability for assets are reliable. The concept of reasonable assurance recognizes that the costs of the control should not exceed the benefits likely to be derived and that the evaluation of costs and benefits requires estimates and judgements by management. We believe that the City of Boise’s internal control framework fulfills this objective.

Independent Audit

In compliance with the laws of the State of Idaho, the City of Boise’s financial statements have been audited by Eide Bailly LLP, a firm of licensed independent certified public accountants, in accordance with generally accepted governmental auditing standards. The audit was performed to provide reasonable assurance that the financial statements 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 for significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor issued an unmodified (clean) opinion on the City of Boise’s financial statements for the fiscal year (FY) ended September 30, 2022. The independent auditors’ report is presented as the first component in the financial section of this report.

The independent audit of the financial statements also included a broader, federally mandated audit over expenditures of federal awards, designed to meet the special needs of federal grantor agencies. The standards governing these federal programs require the independent auditor report not only on the fair presentation of the financial statements but also on the government’s internal controls and compliance with legal requirements, with special emphasis on those involving the administration of federal awards. These reports are contained in the “Single Audit” section of this report.

The basic structure and contents of the ACFR are defined in GAAP and is set up in three distinct sections: introductory section, financial section, and statistical section. Management’s discussion and analysis (MD&A), included within the financial section, is included to provide an objective and clear analysis of the government’s financial activities for the year ended September 30, 2022. The city’s MD&A can be found immediately following the independent auditors’ report and should be read in conjunction with this transmittal letter.

Profile of City Government

The City of Boise, capital of the State of Idaho, was chartered in 1866 under the laws of the Territory of Idaho. Since 1961, the city has been governed through a mayor-council form of government. Pursuant to city code, the mayor is the chief executive officer (CEO) of the city and directs its operations, participating with a six-member city council in developing policy. The mayor and six members of the city council are elected at large by popular vote. The Boise City Council serves part-time, holding budget and policy-setting authority for the city. The Chief of Staff and Chief Operating Officer to the mayor and all department directors comprise the executive management team (EMT). This group recommends budget and operational priorities to the mayor and city council.

The City of Boise provides the following services: public safety (police and fire), parks and recreation, libraries and culture (arts and history), community services (planning and development services), airport, public works, parking and code enforcement, and general government services. Boise’s streets and sidewalks are owned and maintained by the Ada County Highway District. The city provides transportation services through a contract with Valley Regional Transit and animal control services through a contract with the Idaho Humane Society.

The financial report also includes two component units due to their close relationship with the city; The financial statements of the Harris Ranch Community Infrastructure District No. 1 and Boise Municipal Health Care Trust assets, liabilities, fund balance (net position), revenues, and expenditures (expenses) are blended into the city’s financial statements. Additional information about these entities can be found in the notes to the financial statements.

Economic Condition

The information presented in the financial statements is best understood when considered from the broader perspective of the specific environment within which the city operates. Based on the local economic factors and the strong financial position, we believe the city is poised to continue to transform our community.

Local Economy

Boise has an estimated population of 238,000 people, which makes it the 94th largest city in the United States. The larger Boise City-Nampa metropolitan area, which includes five counties, has a population of more than 750,000, making it the largest metro area in Idaho, containing the state’s three largest cities: Boise, Nampa, and Meridian. Boise is also the 3rd most populous metro area in the Pacific Northwest after Seattle and Portland.

Long-term financial planning

The city’s financial planning process includes a long-term financial forecast, which forecasts revenues, expenditures/expenses, and capital needs per current and future trends and economic data. Financial modeling is performed on the revenue and expense assumptions to ensure growth in fixed costs are sustainable in the event of worse than expected economic outcomes.

The city also prepares a five-year capital improvement plan that serves as a tool for efficient, transparent, and proactive planning of public improvement projects throughout the city. It specifies the capital improvement and construction projects to maintain or enhance the city’s capital assets in the governmental and enterprise funds. The Capital Improvement Fund is primarily supported by an annual transfer from the General Fund and allows for improvements to the city’s open space, public buildings, and technology infrastructure. The Airport, Geothermal, and Sewer capital plans are funded through dedicated revenue streams and the projects that they support must have a direct nexus to the associated revenue source.

Relevant Financial Policies

Financial policies serve as the framework for the financial operation of the city as well as the basis for budget development. The city has adopted a broad set of financial policies and regulations that are contained within our Business Operations Manual. These policies and regulations have been established by the city’s Department of Finance and Administration, reviewed by departmental chief administrative officers, and approved by the Boise City Council.

Major Initiatives and Accomplishments

In 2022, our community demonstrated a deep-rooted commitment to ensuring we create a city that protects people, welcomes all, and offers opportunity for everyone. The following initiatives and accomplishments are grouped by their applicable strategic priority area. Our strategic priorities set the course for our work in creating a city for everyone: A Safe and Healthy City for Everyone

 The Boise Police Department added a new position to help keep residents with substance use disorders out of the criminal justice system.

 We added a community liaison officer to serve the Asian American and Pacific Islander community.

 The department hired a mental health coordinator for the Main Library! to connect residents with resources, such as housing, shelter referrals, utility relief, navigating government benefits, and more.

A Home for Everyone

 Distributed more than $15 million in emergency assistance to more than 3,200 households preventing possible evictions and providing utility relief through a partnership with the Boise City/Ada County Housing Authorities.

 Purchased Sage Mobile Home Park, a 2-acre mobile home park located on the Boise Bench, to preserve existing affordable housing in our community.

 Broke ground on MODA Franklin, which will provide approximately 205 apartment homes at all price points for our residents.

 Actively working with our community and stakeholders to re-write Boise’s Zoning Code to ensure the future design and development of our city enables more walkable, dynamic spaces for everyone.

Movement for Everyone

 Adopted the Boise Pathways Master Plan outlining 112 miles of new pathways across the City of Boise.

 Installed pedestrian crosswalks at 23rd and Bannock and Boise Ave and Manitou, moving the city closer to our Vision Zero goals of keeping residents safe at crosswalks.

 Provided seed funding to the Living Independence Network Corporation (LINC) to purchase an adaptive training van to teach residents with mobility disabilities to drive –the only one of its kind in Idaho that could provide adaptive driver’s training to new drivers

A Clean City for All

 Completed the Geothermal System Strategic Plan and Cost of Service Study to determine appropriate service rates for customers and master plan to increase system use in downtown core.

 Convened Boise Climate and Business Leadership Summit to advance and support community’s climate goals and work.

Opportunity for Everyone

Micron Technology is moving forward with a record-breaking $15 billion expansion in Boise. The expansion is estimated to bring 2,000 new jobs to Micron and hundreds more jobs in supportive capacities.

Engaging Everyone

 The Office of Community Engagement hired a Language Access Program Manager to develop and implement a comprehensive language access plan, better serving our bi/multi-lingual residents.

 Completed an assessment of 28 city facilities, including Zoo Boise, our libraries, and the Boise Airport – we’re now working to move beyond ADA compliance standards with a plan to address all physical barriers by the end of 2028.

o The city partnered with its Cross Disability Advisory Taskforce to hear directly from people with lived experience about how we prioritize these updates to ensure a meaningful approach for the community. Residents had the opportunity to provide feedback on the plan as well.

 Made 10 park playgrounds more accessible and inclusive for people with disabilities through bonded rubber surfacing installation and updated equipment, as well as a communications board for non-verbal children to enjoy inclusive play.

Acknowledgments

The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Boise for its ACFR for the fiscal year ended September 30, 2021. This is the 27th consecutive year that the City of Boise has earned this distinction. To be awarded a Certificate of Achievement, the city must publish, in a prescribed format, a thorough and efficiently organized ACFR. This report satisfied both GAAP and applicable legal requirements. The Certificate of Achievement is valid for one year only. We believe that our most recent ACFR will continue to meet the Certificate of Achievement Program’s requirements and are submitting it to the GFOA to determine its eligibility for another certificate.

The Mayor and the Boise City Council have continued to demonstrate a commitment to allocate the resources needed to ensure its ability to account, audit, report, monitor, and control the financial operations and transactions of the City of Boise in a responsible and progressive manner. The Department of Finance and Administration would like to express appreciation to participating city staff in every department whose dedicated efforts resulted in a timely and successful completion of this year’s report.

Sincerely,

Lynda Lowry CFO & Director of Finance and Administration

Sabrina Meredith Controller