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CITY OF LARAMIE, WYOMING FINANCIAL REPORT June 30, 2009 ---PAGE BREAK--- TABLE OF CONTENTS Page I. INTRODUCTORY SECTION Letter of Transmittal 1-6 Certificate of Achievement 7 City of Laramie Organization Chart 8 List of Officials 9 II. FINANCIAL SECTION Independent Auditors’ Report 10-11 A. MANAGEMENT’S DISCUSSION AND ANALYSIS 12-34 B. BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Assets 35 Statement of Activities 36-37 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet 38 Reconciliation of the Balance Sheet to the Statement of Net Assets- Governmental Funds 39 Statement of Revenues, Expenditures and Changes in Fund Balances- Governmental Funds 40 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities- Governmental Funds 41 Proprietary Fund Financial Statements Statement of Net Assets- Proprietary Funds 42-43 Statement of Revenues, Expenses and Changes in Net Assets - Proprietary Funds 44 Statement of Cash Flows- Proprietary Funds 45-46 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets 47 Statement of Changes in Fiduciary Net Assets 48 Notes to Basic Financial Statements 49-77 ---PAGE BREAK--- C. REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A Index to Illustrative Required Supplementary Information 78 Police Officer and Firemen’s Pension Fund Funding Progress Schedule 79 Budgetary Comparison Schedule- Major Funds General Fund 80-81 Notes to Required Supplementary Information- Budgetary Comparisons 82 D. COMBINING FINANCIAL STATEMENTS Non-Major Governmental Funds Combining Balance Sheet Other Governmental Funds 83-84 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances- Governmental Funds 85-86 E. SUPPLEMENTAL INFORMATION Budgetary Comparison Schedules Non-Major Governmental Funds Specific Purpose Tax Fund 87 Wyoming Territorial Prison Debt Service Fund 88 Economic Development Fund 89 Emergency 911 Fund 90 City Council Construction Fund 91 Parks and Recreation Construction Fund 92 West Laramie Capital Projects Fund 93 Recreation Center Fund 94 III. STATISTICAL SECTION 95 A. FINANCIAL TRENDS INFORMATION Net Assets by Component 96-97 Changes in Net Assets 98-101 Fund Balances, Governmental Funds 102-103 Statement of Revenues, Expenditures, and Changes in Fund Balance- Governmental Funds 104-105 General Government Expenditure by Function 106-107 B. REVENUE CAPACITY INFORMATION General Government Revenues by Source 108-109 Tax Revenue by Source 110-111 Assessed and Estimated Actual Value of Taxable Property 112-113 ---PAGE BREAK--- Property Tax Rates and Tax Levies-Direct and Overlapping Governments 114-115 Principal Taxpayers 116 Property Tax Levies and Collections 117-118 C. DEBT CAPACITY INFORMATION Computation of Legal Debt Margin – General Obligation 119 Computation of Direct and Overlapping Debt 120-121 Ratio of Outstanding Debt by Type 122-123 Ratio of General Bonded Debt Outstanding 124 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures 125 D. DEMOGRAPHIC AND ECONOMIC INFORMATION Demographic and Economic Statistics 126-127 Major Employers in Albany County 128 E. OPERATING INFORMATION Full-Time Equivalent City of Laramie Employees and Other Operating Statistics 129-130 Capital Asset Statistics 131 Property Value, Construction and Bank Deposits 132-130 Insurance in Force 134-135 Salaries and Surety Bonds of Principal Officials 136 Annual Budget Process 137 ---PAGE BREAK--- ---PAGE BREAK--- 2 railroad was selected and as it approached the Laramie area, railroad employees and tradesmen began arriving. In the spring of 1868, Union Pacific Railroad’s chief surveyor, General Grenville Dodge selected the Laramie town site and its name, Laramie City. The Railroad began selling lots in April of that year. On May 9th, the line through Laramie was completed with the first train arriving the next day. The City was incorporated on December 12, 1873, seventeen years before Wyoming became a state. Today, Laramie is still a small town and sits on the high plains prairie of the Medicine Bow Mountain Range. The City of Laramie acts as a transportation corridor for the east/west connections of Interstate 80. The location provides connections for trucks, interstate traffic, and traditional rail freight cars traversing the Rocky Mountain region. Union Pacific Railroad mainline operates over 55 freight trains on a daily basis through Laramie. Interstate 80’s highest point, 8,640 feet, is at the summit of the Laramie Range in the Pole Mountain Area. City Services The City of Laramie provides regular community services to its citizens. Among those are law enforcement, emergency services, animal control, code inspections and enforcement, building permits, local licensing, parking enforcement, planning and zoning regulation, street maintenance, mosquito control, water, sewer, and garbage collection and disposal. The Wyoming State Statute requires that the budget must be balanced, adopted by the third Tuesday in June, and that the fiscal year for local governments is from July 1 through June 30. The budget sets forth City Council’s goals and objectives, and identifies the resources necessary to accomplish these goals and objectives. The legal level of budgetary control is adopted by Council and identified by department and fund. Appropriations lapse at fiscal year end and incomplete projects must be re-appropriated in the next fiscal year as part of the annual budget adoption process. The City did not exceed legally-adopted budget appropriations during the 2008-2009 fiscal year. Accounting Systems and Internal Controls The City’s governmental and fiduciary fund types are maintained on the modified accrual basis of accounting. Revenues are recorded when measurable and available. Expenditures are recorded when the goods or services are delivered and liabilities are incurred. The City’s enterprise and internal service funds are also maintained on the accrual basis of accounting. Management is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the government are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable but not absolute assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived. Valuation of costs and benefits requires that estimates and judgments be made by management to protect city funds. All internal control evaluations have been made within the framework described above. We believe the City’s internal accounting controls meet the material standards for audit adequately ---PAGE BREAK--- 3 and safeguard the City’s assets, providing reasonable assurance that financial transactions are properly reported. Cash The City strives to maximize interest income on cash assets for the benefit of the public. The City, through the office of the Director of Administrative Services, pursues a cash management and investment program to achieve maximum financial return on available funds. Depending on cash needs, excess funds are invested on a short, intermediate, or long-term basis at the best obtainable rate. Investments are limited generally to direct or indirect obligations of the U.S. government and fully collateralized repurchase agreements. The City utilizes the practice of recording investment income in the period in which it is earned. Cash in all City funds is pooled and invested in the state managed Local Government Investment Pool or short term instruments which are restricted to investments approved by the State Treasurer in accordance with Wyoming Statutes. Risk Management In fiscal year 2009, the City was insured for general liability through a risk pool comprised of cities and counties in Wyoming and managed through the Wyoming Association of Risk Management (WARM). WARM is a joint-powers liability pool that provides comprehensive general liability and automotive liability coverage to the City of Laramie, WY according to the Wyoming State Statues, W.S. 1-39-118. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Laramie, Wyoming operates. The State of Wyoming primarily relies on its natural resources, federal land management, and tourism as revenue for the state. Laramie benefits from these opportunities since it is located in the southeast region of Wyoming, nestled in the state’s 5th largest county, Albany. The City of Laramie is host to the University of Wyoming, Wyoming Technical Automotive School, and Laramie County Community College at Albany County Campus. These educational resources provide the city with a temporary population of 16,000 annually. The top four primary employers for the Laramie region are the University of Wyoming, Albany County School District, Albany County Hospital District, and Wal-Mart Stores Inc. Local Economy The downturn in energy exploration, particularly natural gas production, dragged Wyoming’s economy into a recession earlier this year – more than one year after the U.S. recession began. For the second quarter 2009, the recession in the State deepened due to diminished mining activities, resulting in a dramatically weakened labor market, particularly in the mining and construction industries. Compared to the second quarter of 2008, employment in the State decreased by 5,460 jobs, or 1.8 percent. It was the worst performance since 1987 (the bust of the oil industry). The unemployment rate climbed quickly to 5.1 percent in the quarter, while it jumped to 9.3 percent in the U.S. for the same period. With energy related industries no longer able to provide the support they once did, momentum in other industries also slowed. Construction struggled with ---PAGE BREAK--- 4 job losses of 2,830, or 10.1 percent in the quarter. Residential building permits were at the lowest level since early 1990s, and were over 40 percent less than the second quarter of 2008. Albany County is nestled in rural southeast Wyoming and the City of Laramie holds 85% of the population of the entire county. Based on sales and use tax collections, total taxable sales in the State reached approximately $4.0 billion in the second quarter of 2009, a significant decline of 18.5 percent from the second quarter of 2008, the steepest ever. Albany County’s Annual Percent Change in Taxable Sales between 2Q2008 to 2Q2009 was 8.0 percent; Sales tax dropped by 3.7 percent; Use tax dropped by 12.7 percent; Lodging Tax was up by 7.0 percent. As Wyoming’s economy often lags behind the national economy, so will the effects of a national recovery. A complete turnaround for Wyoming’s economy could come sometime after the rest of the nation has recovered. Long Term Financial Planning City of Laramie council and management are working on several long-term plans that will ensure a positive and productive environment. Through a number of council supported programs, the City of Laramie intends to improve economic factors for the citizens and businesses of Laramie. In late 2008 the City of Laramie enlisted the Wyoming Survey & Analysis Center (WYSAC) to conduct the second iteration of the City of Laramie Survey. This mail survey was conducted during the final months of 2008, with data collection concluding in early January 2009. The purpose of this community survey was to assess levels of citizen satisfaction with services provided by the City, as well as to gather citizen perceptions, preferences, and attitudes about various issues relevant to the City of Laramie. Of 23 City of Laramie services rated for quality by Laramie citizens, 21 received overall ratings of average or above average in 2008. In 2008, the two City-provided services that citizens felt were below average were street maintenance and repair and code enforcement (weeds, junk, etc.). As a result of this information the City of Laramie responded directly to the “below average” issues in street repair and code enforcement, and nuisance. • Planning and Code Administration has written and updated documents pertaining to the physical development of the City, including zoning ordinances, subdivision and development standards, special corridor plans and the Comprehensive Plan. Titles had become outdated with conflicting regulations that were overly amended. This had become confusing to citizens and developers. The purpose of the development code update was to create a new unified development code which will result in a single document that is easy to read, follow, understand and address development concerns within the City. As part of this effort, the City has established a special committee, the Zoning Advisory Committee (ZAC). The ZAC is intended to represent a cross section of the development community and will be comprised of with several Planning Commissioners and other Laramie residents. • Fall 2009 the City of Laramie initiated the upgrading and replacement of water mains, placement of storm water infrastructure, curb gutter and sidewalk followed by paving several West Laramie streets. Work began in mid-October of 2009. Completion is planned for June 2010. Further water enhancement projects include the implementation of a raw water pipeline. Design for a raw water pipeline is completed with ---PAGE BREAK--- 5 construction slated for FY 2010. This pipeline will eliminate evaporative ditch losses and increase the volume of water to the water treatment plant by roughly 1.85 million gallons per day. The City has obtained a grant and loan funding that has been secured through the Wyoming Water Development Commission (WWDC) to secure construction funding. • The 2008 Citizen Survey found over 60% of citizens consider nuisances either a moderate or major problem. City staff has taken a proactive and complaint-based approach to nuisance abatement. Once a nuisance is identified, the property owner is notified by City staff of the violation and instructions on how to abate the nuisance. One consequence of non-compliance is that the City may hire a contractor to abate the violation and the property owner is then billed for the cost of the contractor plus a 20% administration fee. The property owner has the right to file an appeal within 10 business days of the date of the notice. The appeal is heard by the City Planning Commission acting in its capacity as the Nuisance Board of Appeals. In addition, the citizens’ survey identified a priority to fund infrastructure projects. The city hired Red Oak Consultants to complete an analysis on cost of service, financial plan, and a model in conjunction with a citizens group to develop a tiered plan for our business type water and wastewater funds. This plan was completed in FY2009 for implementation in FY2010. This developed a 10 year capital plan for water, at $96 million, and wastewater, at $38 million. • Public Works infrastructure enhancement and replacement of sewer and water lines remain a priority for the City of Laramie, committing improvements through 2012. Several storm drainage studies have been funded. The Public Works department is working with the Wyoming Water Development Commission (WWDC) to complete a number of studies assessing the integrity of the existing water provision system, and identifying potential future needs for expansion to accommodate development and outlying user groups. The goal of the study is to 1) Improve the capital plan to repair and upgrade existing infrastructure needs, 2) allow for system expansion in tandem with community growth, and 3) look at a positive tier rate structure that would encourage conservation. • The Casper Aquifer Protection Plan (CAPP) is an aquifer protection program for the City of Laramie and Albany County, Wyoming. The purpose of the CAPP is to protect the recharge area of the Casper Aquifer which supplies all of the water to approximately 400 rural residences in Albany County and on an annual basis approximately 60% of Laramie's water supply. The CAPP is being implemented through the Aquifer Protection Plan Overlay (APO) zoning district, which was adopted by an ordinance. The APO establishes additional development standards and criteria for new projects located within the aquifer protection area to minimize risks and potential impacts from new development. • Further long term planning throughout the city includes the Fire Department and the assurance of the ISO rating, Insurance Service Office, (ISO), rating of class 3. Business growth has expanded over the last 3 years and too much growth had occurred in the commercial sections of the City with no corresponding growth in fire defense resources or the water system. An aging line replacement and system expansion is currently planned to match the development of a third Fire House, expanding services and reducing call time. Initial design began FY 2009. The new Fire House is a multipurpose complex for public meetings and the future development of an Emergency Operating Command (EOC) center held in the basement of the new Fire House complex. ---PAGE BREAK--- 6 • The Solid Waste Department has developed an Integrated Solid Waste Management plan to comply with the legislation passed by the 2006 Wyoming Legislature requiring operators of Wyoming’s existing landfills to prepare a 20-year integrated solid waste management plan. The purpose of this plan is to identify and evaluate a combination of waste management options that complement each other, and provide a cost-effective and environmentally sound solution to waste management issues. This funded mandate has allowed the City of Laramie to hire an outside agency to investigate regional improvement opportunities and develop an integrated management plan. The investigation and planning phase is complete and the plan, Integrated Solid Waste Management Plan (ISWMP), has been submitted to the Wyoming Department of Environmental Quality for review and acceptance. A priority for the City of Laramie is expanding and solidifying business growth and preserving our City’s downtown history. The Laramie Main Street Program’s mission is to foster the economic and social vitality of downtown Laramie, while accentuating its unique heritage. Certificate of Achievement for Excellence in Financial Reporting The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement of Excellence in Financial Reporting to the CITY OF LARAMIE for its Comprehensive Annual Financial Report for the fiscal year ended JUNE 30, 2008. This was the 32nd 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 principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe 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. Acknowledgements The compilation of the Comprehensive Annual Financial Report is the responsibility of the Finance Department. This report is evidence of the dedication and many hours of hard work required to compile such a report. I would like to thank the entire Finance Staff for the excellent service they provide throughout the year which is reflected in this Comprehensive Annual Financial Report. The City is grateful to the State of Wyoming Division of Economic Analysis, the University of Wyoming, Wyoming Center for Business & Economic Analysis, Inc. and the Laramie Chamber of Commerce for their support in providing statistical data. I would also like to thank the City Council, the Finance Committee members, and the City Manager and Assistant City Manager for their leadership and support in developing this CAFR. Malea Brown Administrative Services Director ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK---