Document Woodburn_doc_885a13311d

CITY OF WOODBURN, OREGON Annual Financial Report Year Ended June 30, 2017 ---PAGE BREAK--- CITY OF WOODBURN, OREGON JUNE 30, 2017 MAYOR AND COUNCIL MEMBERS Name Term Expires Mayor Figley December 31, 2018 Council Members Frank Lonergan, President December 31, 2018 Robert Carney December 31, 2018 Lisa Ellsworth December 31, 2020 Eric Morris December 31, 2020 Sharon Schaub December 31, 2018 Juan Serratos December 31, 2020 The above individuals may be contacted at the address below. Staff Scott Derickson, City Administrator N. Robert Shields, City Attorney Sandra Montoya, Finance Director Marne Anderson, Accounting Manager City of Woodburn, Oregon 270 Montgomery Street Woodburn, Oregon 97071 ---PAGE BREAK--- CITY OF WOODBURN, OREGON TABLE OF CONTENTS Page FINANCIAL SECTION INDEPENDENT AUDITOR'S REPORT 1-3 MANAGEMENT'S DISCUSSION AND ANALYSIS 4-9 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position 10 Statement of Activities 11 Fund Financial Statements Balance Sheet - Governmental Funds 12 Reconciliation of Balance Sheet - Governmental Funds to the Statement of Net Position 13 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 14 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds to the Statement of Activities 15 Statement of Fund Net Position - Proprietary Funds 16 Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds 17 Statement of Cash Flows - Proprietary Funds 18-19 Statement of Fiduciary Net Position 20 Statement of Changes in Fiduciary Net Position 21 Notes to Basic Financial Statements 22-46 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund 47 Street Fund 48 Schedule of the City’s Proportionate Share of the Net Pension Liability (Asset) – Oregon Public Employee’s Retirement System 49 Schedule of the City’s Contributions – Oregon Public Employee’s Retirement System 50 SUPPLEMENTARY INFORMATION Governmental Funds Combining Balance Sheet – Nonmajor Funds 51-52 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Funds 53-54 Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Transit Fund 55 Building Inspection Fund 56 Search and Seizure Fund 57 Housing Rehabilitation Fund 58 Library Endowment Fund 59 Museum Endowment Fund 60 Lavelle Black Trust Fund 61 Urban Renewal Agency Fund 62 General Capital Construction Fund 63 ---PAGE BREAK--- CITY OF WOODBURN, OREGON TABLE OF CONTENTS Page FINANCIAL SECTION (Continued) SUPPLEMENTARY INFORMATION (Continued) Governmental Funds (Continued) Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued) Special Assessment Fund 64 Street/Storm Capital Construction Fund 65 Parks SDC Fund 66 Street SDC Fund 67 Storm SDC Fund 68 Equipment Replacement Fund 69 GO Debt Service Fund 70 Proprietary (Enterprise) Funds Combining Statement of Fund Net Position – Nonmajor Funds 71 Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Nonmajor Funds 72 Combining Statement of Cash Flows – Nonmajor Funds 73 Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget (Non-GAAP Basis) and Actual Water Fund 74 Sewer Fund 75 Sewer Capital Construction Fund 76 Water SDC Fund 77 Sewer SDC Fund 78 Water Capital Construction Fund 79 Internal Services Funds Combining Statement of Fund Net Position 80 Combining Statement of Revenues, Expenses and Changes in Fund Net Position 81 Combining Statement of Cash Flows 82 Schedules of Revenues, Expenditures and Changes in Fund Balances (Budgetary Basis) – Budget and Actual Information Services Fund 83 Insurance Fund 84 COMPLIANCE SECTION Independent Auditor’s Report Required by Oregon State Regulations 85-86 ---PAGE BREAK--- - 1 - 475 Cottage Street NE, Suite 200, Salem, Oregon 97301 (503) 581-7788 INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Council Members City of Woodburn 270 Montgomery Street Woodburn, Oregon 97071 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 the City of Woodburn as of and for the year ended June 30, 2017, 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 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. 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 City’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 City’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. ---PAGE BREAK--- - 2 - 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 the City of Woodburn as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis (MD&A) on pages 4 through 9 and the schedules of revenues, expenditures and changes in fund balance – budget and actual for the General and Street funds (“the budgetary schedules”), the schedule of the City’s proportionate share of the net pension liability (asset) – Oregon public employees retirement system, and the schedule of the City’s contributions – Oregon public employees retirement system (PERS schedules) 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 management’s discussion and analysis and PERS schedules described in the preceding paragraph 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. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The budgetary schedules described above were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The budgetary schedules have been subject to the auditing procedures applied in the audit of the basis 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 budgetary schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Supplementary 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 supplementary information is presented for the purpose of additional analysis and is not a required part of the basic financial statements. ---PAGE BREAK--- - 3 - The supplementary information is the responsibility of management and was derived from and relates 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, or other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly presented, in all material respects, in relation to the basic financial statements as a whole. Report on Other Legal and Regulatory Requirements In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have issued our report dated December 21, 2017 on our consideration of the City's compliance with certain provisions of laws and regulations, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS By: Ryan T. Pasquarella, A Shareholder December 21, 2017 ---PAGE BREAK--- - 4 - CITY OF WOODBURN Year Ended June 30, 2017 MANAGEMENT’S DISCUSSION AND ANALYSIS The Management's Discussion and Analysis of the City of Woodburn's Annual Financial Report (AFR) presents a discussion and analysis of the City's financial performance during the fiscal year ended June 30, 2017. The information presented here should be considered in conjunction with the financial statements included in this report. FINANCIAL HIGHLIGHTS Following are the financial highlights of the City for the fiscal year ended June 30, 2017. 2017 2016 change Net position 119,868,417 $ 116,447,857 $ 3,420,560 $ Change in net position 3,420,560 (2,314,820) 5,735,380 Governmental activities net position 69,778,713 69,065,155 713,558 Business-type activities fund net position 50,089,704 47,382,702 2,707,002 Change in governmental net position 713,558 (3,713,067) 4,426,625 Change in proprietary fund net position 2,707,002 1,398,247 1,308,755 June 30, 2017 OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City of Woodburn's basic financial statements. The basic financial statements include three components: the government-wide financial statements, the fund financial statements and notes to the financial statements. This report also contains required and other supplementary information. Government-wide financial statements. The government-wide financial statements present the net position (statement of net position) and results of operations (statement of activities) of the City as a whole. Included are all governmental and business-type assets, deferred outflows, liabilities, deferred inflows and activities of the City. The measurement focus and basis of accounting are the same for the entire City. The measurement focus is on all economic resources of the City, including current financial resources (assets) and non-current financial resources (capital assets) and the related current and non-current liabilities and equity accounts. Both government-wide statements are prepared using the accrual basis of accounting, which is similar to the methods used by most businesses and takes into account all revenues and expenses connected with the fiscal year, even if cash involved has not been received or paid. The statement of net position presents information on all the City's assets, deferred outflows, liabilities and deferred inflows, with the difference reported as net position. Increases or decreases in net position may indicate whether the City's financial position is improving or deteriorating. The statement of activities presents the expenses incurred in providing services to the public and the revenues associated with those activities for both governmental and business-type activities. The statement of activities begins with expenses by function. To these functions are applied charges for services, operating grants and contributions and capital grants and contributions. The resulting sums, with some adjustments, represent charges to taxpayers and may equate to the nearest that governments can determine the "bottom line." ---PAGE BREAK--- - 5 - The government-wide financial statements are divided into two categories. Governmental activities are services funded through property taxes and intergovernmental revenues. The governmental activities for the City include general government, public safety, highways and streets, culture and recreation, and economic environment. Business-type activities are operations funded primarily through charges to external users of goods and services. Business-type activities include water and wastewater. Fund Financial Statements. A fund is a fiscal and accounting entity with a self-balancing set of accounts that is used to segregate resources that are restricted to a particular activity. The use of funds deters commingling of resources designated for a specific purpose, prevents unauthorized transfer of surpluses, and ensures compliance with legal and contractual requirements. The City has three types of fund categories: governmental funds, proprietary funds, and a fiduciary fund. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on current sources and uses of spendable resources and use the modified accrual basis of accounting. Operating statements include all sources and uses of financial resources, and display the excess of revenues and other financial sources over (under) expenditures and other uses. Included in the balance sheet are liquid assets and receivables that will be converted into cash currently and short-term liabilities, including payables to vendors and employees. Unmatured bond principal or liabilities for compensated absences not to be paid in the fiscal year are not included. Because the governmental fund statements do not encompass the long-term focus of the government-wide statements, reconciliations are provided on the subsequent page of the governmental fund statements. The emphasis is on major funds that account for the predominant assets and activities of all funds. The City maintains eighteen individual governmental funds. Information is presented separately for the General Fund and Street Fund in the Governmental Fund Balance Sheet and Statement of Revenue, Expenditures and Changes in Fund Balances. The other governmental funds are combined into a single, aggregated presentation. Information for these non-major governmental funds is provided in the form of combining statements. Proprietary Funds. The City maintains two different types of proprietary funds: enterprise and internal service funds. These funds are used to show activities that operate more like those of commercial enterprises. Fees are charged for services provided, both to outside customers and to other units of the City. Enterprise funds are presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water and sewer activities. Internal service funds account for activities furnishing goods or services to other units of the government. Charges for these services are on a cost-reimbursement basis. The internal services funds include insurance and information services. The internal service funds are reported with governmental activities in the government-wide financial statements. Proprietary fund statements provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water, Sewer, and Sewer Capital Construction funds. The internal service funds are combined into a single column in the proprietary fund financial statements. The City adopts an annual appropriated budget for all of its funds. Budgetary comparison statements, demonstrating compliance with this budget, have been provided. Notes to the Financial Statements. The notes to the financial statements are an integral part of the basic financial statements and should be read along with them. The notes provide additional information necessary to communicate the financial position of the City. ---PAGE BREAK--- - 6 - Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required and other supplementary information concerning the City. GOVERNMENT-WIDE FINANCIAL ANALYSIS The City had $167,797,210 in total assets, $8,388,998 in total deferred outflows, $55,293,916 in total liabilities and $1,023,875 in total deferred inflows, resulting in combined net position of $119,868,417 for governmental and business-type activities. The largest component of the City's net position reflects its net investment in capital assets land, buildings, equipment and infrastructure, less any related debt outstanding that was needed to acquire or construct the assets). The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. Governmental capital assets, net of depreciation, decreased $912,989 over the prior year due to depreciation in excess of current year capital additions. Business-type capital assets, net of depreciation, decreased $1,639,662 over the prior year due to depreciation in excess of current year capital additions. Total liabilities for both governmental and business-type activities increased by $5,083,690 from the prior year mainly due to the increase in the net pension liability. Overall, the City's financial net position increased by $3,420,560 (or The majority of this is due to the application of the provisions of Statement No. 68, Accounting and Financial Reporting for Pensions from the Governmental Accounting Standards Board. The pronouncement included an adjustment to the current year pension expense based on the results of the actuarial study as described in the notes to the financial statements. Statement of Net Position The following table reflects the condensed Statement of Net Position compared to the prior year. Governmental Business-type Governmental Business-type Governmental Business-type Activities Activities Total Activities Activities Total Activities Activities Total Cash and investments 18,766,633 $ 26,656,947 $ 45,423,580 $ 16,366,077 $ 25,266,880 $ 41,632,957 $ 2,400,556 $ 1,390,067 $ 3,790,623 $ Other assets 2,170,344 775,750 2,946,094 2,206,771 1,031,903 3,238,674 (36,427) (256,153) (292,580) Capital assets 61,539,134 57,888,402 119,427,536 62,452,123 59,528,064 121,980,187 (912,989) (1,639,662) (2,552,651) Total Assets 82,476,111 85,321,099 167,797,210 81,024,971 85,826,847 166,851,818 1,451,140 (505,748) 945,392 Deferred outflows 6,800,358 1,588,640 8,388,998 1,272,865 338,462 1,611,327 5,527,493 1,250,178 6,777,671 Other liabilities 14,396,728 4,186,341 18,583,069 6,996,268 2,529,099 9,525,367 7,400,460 1,657,242 9,057,702 Long-term debt 4,312,216 32,398,631 36,710,847 4,810,507 35,874,352 40,684,859 (498,291) (3,475,721) (3,974,012) Total Liabilities 18,708,944 36,584,972 55,293,916 11,806,775 38,403,451 50,210,226 6,902,169 (1,818,479) 5,083,690 Deferred inflows 788,812 235,063 1,023,875 1,425,906 379,156 1,805,062 (637,094) (144,093) (781,187) Net position: Net investment in capital assets 57,813,459 37,312,451 95,125,910 58,326,049 35,777,188 94,103,237 (512,590) 1,535,263 1,022,673 Restricted 10,660,016 16,635,580 27,295,596 9,815,650 16,735,267 26,550,917 844,366 (99,687) 744,679 Unrestricted 1,305,238 (3,858,327) (2,553,089) 923,456 (5,129,753) (4,206,297) 381,782 1,271,426 1,653,208 Total Net Position 69,778,713 $ 50,089,704 $ 119,868,417 $ 69,065,155 $ 47,382,702 $ 116,447,857 $ 713,558 $ 2,707,002 $ 3,420,560 $ Change 2017 2016 Governmental Activities The City’s net position from governmental activities increased $713,558 from 2015-16 to 2016-17. ---PAGE BREAK--- - 7 - Business-type Activities The City’s net position from business-type activities increased $2,707,002 from 2015-16 to 2016-17. Statement of Activities The following table reflects the condensed Statement of Activities compared to the prior year. Business- Business- Business- Governmental type Governmental type Governmental type Activities Activities Total Activities Activities Total Activities Activities Total Revenues Program Revenues Charges for service 1,798,258 $ 11,385,096 $ 13,183,354 $ 1,799,621 $ 11,585,205 $ 13,384,826 $ (1,363) $ (200,109) $ (201,472) $ Operating grants and contributions 2,052,681 - 2,052,681 1,962,709 - 1,962,709 89,972 - 89,972 Capital grants and contributions 266,679 114,664 381,343 350,449 307,152 657,601 (83,770) (192,488) (276,258) Total Program Revenues 4,117,618 11,499,760 15,617,378 4,112,779 11,892,357 16,005,136 4,839 (392,597) (387,758) General Revenues Property taxes 9,724,889 - 9,724,889 9,156,725 - 9,156,725 568,164 - 568,164 Franchise taxes 1,543,317 - 1,543,317 1,511,125 - 1,511,125 32,192 - 32,192 Other taxes 547,220 - 547,220 550,346 - 550,346 (3,126) - (3,126) Intergovernmental 702,990 - 702,990 649,350 - 649,350 53,640 - 53,640 Other 315,885 372,742 688,627 319,676 227,126 546,802 (3,791) 145,616 141,825 Total General Revenues 12,834,301 372,742 13,207,043 12,187,222 227,126 12,414,348 647,079 145,616 792,695 Total Revenues 16,951,919 11,872,502 28,824,421 16,300,001 12,119,483 28,419,484 651,918 (246,981) 404,937 Expenses General government 2,676,477 - 2,676,477 5,114,971 - 5,114,971 (2,438,494) - (2,438,494) Public safety 7,805,948 - 7,805,948 9,231,388 - 9,231,388 (1,425,440) - (1,425,440) Highways and streets 2,426,489 - 2,426,489 2,691,040 - 2,691,040 (264,551) - (264,551) Culture and recreation 2,980,178 - 2,980,178 3,481,264 - 3,481,264 (501,086) - (501,086) Economic Environment 829,477 - 829,477 - - - 829,477 - 829,477 Interest on long-term debt 169,933 - 169,933 183,342 - 183,342 (13,409) - (13,409) Water - 2,885,827 2,885,827 - 3,303,526 3,303,526 - (417,699) (417,699) Sewer - 5,629,532 5,629,532 - 6,728,773 6,728,773 - (1,099,241) (1,099,241) Total Expenses 16,888,502 8,515,359 25,403,861 20,702,005 10,032,299 30,734,304 (3,813,503) (1,516,940) (5,330,443) Changes in Net Position Before Transfers 63,417 3,357,143 3,420,560 (4,402,004) 2,087,184 (2,314,820) 4,465,421 1,269,959 5,735,380 Transfers 650,141 (650,141) - 688,937 (688,937) - (38,796) 38,796 - Change in Net Position 713,558 2,707,002 3,420,560 (3,713,067) 1,398,247 (2,314,820) 4,426,625 1,308,755 5,735,380 - Beginning Net Position 69,065,155 47,382,702 116,447,857 72,778,222 45,984,455 118,762,677 (3,713,067) 1,398,247 (2,314,820) Ending Net Position 69,778,713 $ 50,089,704 $ 119,868,417 $ 69,065,155 $ 47,382,702 $ 116,447,857 $ 713,558 $ 2,707,002 $ 3,420,560 $ 2017 2016 Change Governmental Activities. Total revenues for the City's governmental activities were $16,951,919 for the fiscal year ended June 30, 2017. Approximately 57% of the total revenue for the governmental activities was derived from property taxes and approximately 24% of the total revenue was from program revenues. Total expenses for governmental activities were $16,888,502 and net transfers in were $650,141 resulting in a $713,558 increase in net position. General governmental activities accounted for approximately 16% of the total governmental activities expense. Public Safety, Highways and Streets, Culture and Recreation, and Economic Environment expenses account for 83% of the total, and interest on long-term debt was 1% of total governmental activities expenses. Business-Type Activities. Revenues of business-type activities totaled $11,872,502 for the current fiscal year. These activities generated $11,499,760 in program revenues, and $372,742 in interest earnings and miscellaneous revenues. The total expenses for business-type activities were $8,515,359 and net transfers out were $650,141 resulting in a $2,707,002 increase in net position. Business-type activities for the City of Woodburn consist of operations for water and wastewater services. ---PAGE BREAK--- - 8 - FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS As noted previously, the City uses fund accounting to segregate resources that are restricted to a particular activity. Fund balance represents the excess of the assets of the fund over its liabilities. Because the fund financial statements focus on current sources and uses of spendable resources, fund balances relating to each fund may be useful in assessing the government's net resources available. Governmental Funds. At the end of the fiscal year, there was $17,778,072 of fund balance of the governmental funds, an increase of $2,383,385 from the prior year. The City's governmental funds include the General Fund and Street Fund, and other non-major funds. The General Fund is the chief operating fund of the City. At the end of the fiscal year, a fund balance of $6,252,781 was reported by the General Fund. The fund balance increased by $1,3661,863 from the previous year due to increases in property taxes, franchise fees and miscellaneous revenues, along with decreases in charges for services and fines and forfeitures, coupled with increases in general government and culture and recreation expenditures and decreases in police expenditures. The City reports one other major governmental fund, the Street Fund. The Street Fund had a fund balance of $3,905,804, an increase of $560,900 from the previous year, due mainly to revenues in excess of a decrease in street maintenance expenditures. Proprietary Funds. Net position of the proprietary funds equaled $50,089,704 at the end of the current fiscal year, an increase of $2,707,002 from the prior year. The City reports three major proprietary funds, the Water Fund, the Sewer Fund and the Sewer Capital Construction Fund. The Water Fund had a net position of $1,106,036, an increase of $455,175 from previous year, due to an increase in charges for services and an increase in personal services expenses, along with a decrease in interest expense. The Sewer Fund had a net position of $25,120,984, an increase of $2,039,732 from previous year, due to the combination of an increase in charges for services along increases in personal services and materials and services. The Sewer Capital Construction Fund had a net position of $16,759,769, an increase of $133,547 from the previous year, due to revenues and transfers in excess of depreciation. GENERAL FUND BUDGETARY HIGHLIGHTS Actual revenues (budgetary basis), exceeded budgeted amounts by General Fund expenditures ended $4,278,454 below budgeted amounts primarily due to management efforts to contain costs throughout the fiscal year. There was one change to the adopted budget in the current year, which increased transfers out and decreased contingency by $2,596. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets. The City's investment in capital assets for its governmental and business-type activities equaled $61,539,134 and $57,888,402 respectively, at the end of the current fiscal year, net of accumulated depreciation. This investment includes land, construction in process, buildings, equipment, and infrastructure. Additional information about the City's capital assets is presented in the notes to the financial statements. ---PAGE BREAK--- - 9 - 2017 2016 2017 2016 2017 2016 Land 22,567,381 $ 22,567,381 $ 1,783,816 $ 1,783,816 $ 24,351,197 $ 24,351,197 $ Construction in progress 506,639 96,389 4,365,993 4,441,468 4,872,632 4,537,857 Buildings 16,756,793 16,734,493 62,748,380 62,634,628 79,505,173 79,369,121 Equipment 7,226,203 7,072,539 2,427,869 2,370,459 9,654,072 9,442,998 Infrastructure 44,360,967 44,360,967 30,479,609 29,908,166 74,840,576 74,269,133 Accumulated depreciation (29,878,849) (28,379,646) (43,917,265) (41,610,473) (73,796,114) (69,990,119) Net capital assets 61,539,134 $ 62,452,123 $ 57,888,402 $ 59,528,064 $ 119,427,536 $ 121,980,187 $ Governmental Activities Business-type Activiites Total Long-term Debt. At the end of the current fiscal year, long-term debt outstanding for the governmental activities totaled $4,312,216, compared to $4,810,507 in the prior year. For the business-type activities, total long-term debt equaled $32,398,632 compared to $35,874,352 in the prior year. The decrease is due to scheduled debt repayments. Additional information about the City's long-term debt outstanding is presented in the notes to the financial statements. Governmental Activities Business-type Activities Total 2017 2016 2017 2016 2017 2016 General obligation bonds 3,690,000 $ 4,060,000 $ - $ - $ 3,690,000 $ 4,060,000 $ Loans 35,675 66,074 4,002,523 4,416,251 4,038,198 4,482,325 Revenue bonds - - 26,384,767 29,302,005 26,384,767 29,302,005 Bond premium - - 1,934,160 2,072,315 1,934,160 2,072,315 Accrued compensated absences 586,541 684,433 77,181 83,781 663,722 768,214 4,312,216 $ 4,810,507 $ 32,398,631 $ 35,874,352 $ 36,710,847 $ 40,684,859 $ ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES Oregon, much like the national economic environment, has steadily improved over the last few years. The low unemployment rates have positively impacted wages and Oregon’s median household incomes have risen. The strong economy, coupled with steady population growth and Woodburn’s 2015 approval of the Urban Growth Boundary, will result in an increase in local development and property tax revenue projections. REQUESTS FOR INFORMATION This financial report is designed to provide the City of Woodburn's citizens, taxpayers, customers, investors and creditors with a general overview of the City's finances and to demonstrate the City's accountability for the money it receives. Questions about this report or requests for additional financial information should be addressed to the City of Woodburn, 270 Montgomery Street, Woodburn, Oregon 97071. ---PAGE BREAK--- BASIC FINANCIAL STATEMENTS ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 10 - CITY OF WOODBURN, OREGON STATEMENT OF NET POSITION JUNE 30, 2017 Governmental Business-type Activities Activities Totals ASSETS Cash and investments 18,766,633 $ 26,656,947 $ 45,423,580 $ Accounts receivable 1,058,215 762,868 1,821,083 Property taxes receivable 437,643 - 437,643 Assessment liens receivable 34,135 - 34,135 Loans receivable 650,169 - 650,169 Prepaid expenses 3,064 - 3,064 Internal balances (12,882) 12,882 - Non-depreciable capital assets 23,074,020 6,149,809 29,223,829 Other capital assets, net of depreciation 38,465,114 51,738,593 90,203,707 Total Assets 82,476,111 85,321,099 167,797,210 DEFERRED OUTFLOWS Deferred outflows related to PERS 6,800,358 1,588,640 8,388,998 LIABILITIES Accounts payable 804,927 308,186 1,113,113 Accrued payroll liabilities 520,148 114,048 634,196 Deposits payable - 121,915 121,915 Interest payable 15,147 468,606 483,753 Noncurrent liabilities: Due within one year: Long-term debt 420,675 3,921,935 4,342,610 Bond premium - 138,154 138,154 Accrued compensated absenses 234,616 33,513 268,129 Due in more than one year: Long-term debt 3,305,000 26,465,355 29,770,355 Bond premium - 1,796,006 1,796,006 Accrued compensated absenses 351,925 43,668 395,593 Net pension liability 13,056,506 3,173,586 16,230,092 Total Liabilities 18,708,944 36,584,972 55,293,916 DEFERRED INFLOWS Deferred inflows related to PERS 788,812 235,063 1,023,875 NET POSITION Net investment in capital assets 57,813,459 37,312,451 95,125,910 Restricted for: Debt service 1,758 - 1,758 Culture and recreation 194,820 - 194,820 Community development 3,002,887 - 3,002,887 Construction 7,460,551 16,635,580 24,096,131 Unrestricted 1,305,238 (3,858,327) (2,553,089) Total Net Position 69,778,713 $ 50,089,704 $ 119,868,417 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2017 Fees, Fines Operating Capital and Charges Grants and Grants and Expenses for Services Contributions Contributions FUNCTIONS/PROGRAMS Governmental activities: General government 2,676,477 $ 660,502 $ - $ - $ Public safety 7,805,948 113,331 65,368 26,507 Highways and streets 2,426,489 1,104 1,480,081 41,695 Culture and recreation 2,980,178 565,889 507,232 198,477 Economic Environment 829,477 457,432 - - Interest on long-term debt 169,933 - - - Total Governmental activities 16,888,502 1,798,258 2,052,681 266,679 Business-type activities: Water 2,885,827 3,293,342 - 41,133 Sewer 5,629,532 8,091,754 - 73,531 Total Business-type activities 8,515,359 11,385,096 - 114,664 Total Activities 25,403,861 $ 13,183,354 $ 2,052,681 $ 381,343 $ General Revenues: Property taxes Franchise taxes Other taxes Intergovernmental Gain on disposition of assets Unrestricted investment earnings Miscellaneous Total General Revenues Transfers Change in Net Position Net Position - beginning of year Net Position - end of year Program Revenues ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 11 - Governmental Business-type Activities Activities Totals (2,015,975) $ - $ (2,015,975) $ (7,600,742) - (7,600,742) (903,609) - (903,609) (1,708,580) - (1,708,580) (372,045) - (372,045) (169,933) - (169,933) (12,770,884) - (12,770,884) - 448,648 448,648 - 2,535,753 2,535,753 - 2,984,401 2,984,401 (12,770,884) 2,984,401 (9,786,483) 9,724,889 - 9,724,889 1,543,317 - 1,543,317 547,220 - 547,220 702,990 - 702,990 13,241 3,505 16,746 200,736 283,101 483,837 101,908 86,136 188,044 12,834,301 372,742 13,207,043 650,141 (650,141) - 713,558 2,707,002 3,420,560 69,065,155 47,382,702 116,447,857 69,778,713 $ 50,089,704 $ 119,868,417 $ Net (Expenses) Revenues and Changes in Net Position ---PAGE BREAK--- CITY OF WOODBURN, OREGON BALANCE SHEET - GOVERNMENTAL FUNDS JUNE 30, 2017 Special Revenue General Street Other Governmental Funds ASSETS Cash and investments 6,446,267 $ 4,133,878 $ 7,654,872 $ Accounts receivable 700,869 158,437 197,068 Property taxes receivable 385,416 - 52,228 Assessment liens receivable - - 34,135 Loans receivable - - 650,169 Prepaid expenses 3,064 - - Due from other funds - - 38,768 Total Assets 7,535,616 $ 4,292,315 $ 8,627,240 $ LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities Accounts payable 143,743 $ 357,819 $ 238,337 $ Accrued payroll and payroll liabilities 442,542 28,692 32,513 Due to other funds 51,650 - 5,594 Total Liabilities 637,935 386,511 276,444 Deferred Inflows Unavailable revenue 644,900 - 731,309 Fund Balance Non-spendable 3,064 - - Restricted for: Debt service - - 1,758 Construction - 3,905,804 3,554,747 Culture and recreation - - 194,820 Community development - - 2,327,299 Committed to: Public safety - - 9,681 Capital outlay - - 932,081 Planning and building - - 599,101 Unassigned 6,249,717 - - Total Fund Balance 6,252,781 3,905,804 7,619,487 Total Liabilities and Fund Balance 7,535,616 $ 4,292,315 $ 8,627,240 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 12 - Total 18,235,017 $ 1,056,374 437,644 34,135 650,169 3,064 38,768 20,455,171 $ 739,899 $ 503,747 57,244 1,300,890 1,376,209 3,064 1,758 7,460,551 194,820 2,327,299 9,681 932,081 599,101 6,249,717 17,778,072 20,455,171 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 13 - CITY OF WOODBURN, OREGON RECONCILIATION OF BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2017 Fund Balances 17,778,072 $ The Statement of Net Position reports receivables at their net realizable value. However, receivables not available to pay for current period expenditures are reported as unavailable in governmental funds. 1,376,208 PERS net pension asset, deferred outflows of resources arising from contributions paid, changes in assumptions, and differences between expected and actual experience, and deferred inflows arising from changes in proportionate share of earnings in the current year are not financial resources in governmental funds, but are reported in the Statement of Net Position. Net pension liability (12,519,191) Deferred outflows 6,523,146 Deferred inflows (754,568) Capital assets are not financial resources in governmental funds, but are reported in the Statement of Net Position at their net depreciable value. Cost 91,417,983 Accumulated depreciation (29,878,849) All liabilities are reported in the Statement of Net Position. However, if they are not due and payable in the current period, they are not recorded in governmental funds. Accrued compensated absences (551,595) Accrued interest (15,147) Long-term debt (3,725,675) Internal service funds are proprietary-type funds and not reported with governmental funds. However, because internal service funds primarily benefit governmental activities, their assets, liabilities and net position are reported along with governmental activities in the Statement of Net Position. 128,329 Net Position of Governmental Activities 69,778,713 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2017 General Fund Street Other Governmental Funds REVENUES Taxes and assessments 9,065,453 $ 129,412 $ 1,130,299 $ Licenses and permits 1,973,591 202 535,522 Charges for services 861,991 359,820 38,227 Intergovernmental 845,008 1,480,082 605,895 Fines and forfeitures 420,305 - - Miscellaneous 243,300 137,675 181,982 Total Revenues 13,409,648 2,107,191 2,491,925 EXPENDITURES Current General government 2,814,214 - 442,983 Public safety 6,861,768 - - Highways and streets - 1,529,569 - Culture and recreation 2,193,922 - 803,820 Debt Service Principal - - 400,399 Interest - - 169,937 Capital outlay - 5,500 467,708 , Total Expenditures 11,869,904 1,535,069 2,284,847 REVENUES OVER (UNDER) EXPENDITURES 1,539,744 572,122 207,078 OTHER FINANCING SOURCES (USES) Transfers in - 90,000 329,236 Transfers out (197,742) (101,222) (75,692) Proceeds from sales of assets 19,861 - - Total Other Financing Sources (Uses) (177,881) (11,222) 253,544 NET CHANGE IN FUND BALANCE 1,361,863 560,900 460,622 FUND BALANCE, beginning of year 4,890,918 3,344,904 7,158,865 FUND BALANCE, end of year 6,252,781 $ 3,905,804 $ 7,619,487 $ Special Revenue ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 14 - Total 10,325,164 $ 2,509,315 1,260,038 2,930,985 420,305 562,957 18,008,764 3,257,197 6,861,768 1,529,569 2,997,742 400,399 169,937 473,208 15,689,820 2,318,944 419,236 (374,656) 19,861 64,441 2,383,385 15,394,687 17,778,072 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 15 - CITY OF WOODBURN, OREGON RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2017 Net Change in Fund Balances - Total Governmental Funds 2,383,385 $ Amounts reported for governmental activities in the statement of activities are different because: Governmental funds defer revenues that do not provide current financial resources. However, the Statement of Activities recognizes such revenues at their net realizable value when earned, regardless of when received. Property tax receivables (53,054) Decreases in other loans receivable (58,184) Governmental funds do not report expenditures for unpaid compensated absences, unpaid payroll, interest expense or arbitrage since they do not require the use of current financial resources. However, the Statement of Activities reports such expenses when incurred, regardless of when settlement ultimately occurs. Accrued compensated absences 132,838 Accrued interest payable 4 Capital outlays are reported as expenditures in governmental funds. However, the Statement of Activities allocates the cost of capital outlay over their estimated useful lives as depreciation expense. Capital outlay expenditures capitalized 586,214 Depreciation (1,499,203) Proceeds from the issuance of long-term debt provide current financial resources to governmental funds and are reported as revenues. In the same way, repayments of long-term debt use current financial resources and are reported as expenditures in governmental funds. However, neither the receipt of debt proceeds nor the payment of debt principal affect the Statement of Activities, but are reported as increases and decreases in noncurrent liabilities in the Statement of Net Position. Debt principal paid 400,399 Current year PERS pension expense related to change in net pension liability is reported as an expense in the Statement of Activities but is not recorded as an expenditure in the governmental funds. (1,286,947) Net income of internal service funds 108,106 Change in Net Position of Governmental Activities 713,558 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF FUND NET POSITION - PROPRIETARY FUNDS JUNE 30, 2017 Water Sewer Sewer Capital Construction ASSETS Current Assets Cash and investments 2,231,622 $ 7,638,173 $ 12,539,830 $ Accounts receivable 226,199 536,371 93 Due from other funds - - - Total Current Assets 2,457,821 8,174,544 12,539,923 Noncurrent Assets Nondepreciable capital assets 158,444 1,625,372 3,058,298 Other capital assets, net of depreciation 8,786,537 40,071,383 1,371,182 Total Noncurrent Assets 8,944,981 41,696,755 4,429,480 Total Assets 11,402,802 49,871,299 16,969,403 DEFERRED OUTFLOWS Deferred outflows - contributions to PERS 576,095 1,012,545 - LIABILITIES Current Liabilities Accounts payable 35,187 62,799 209,634 Accrued payroll liabilities 50,832 63,216 - Deposits payable 121,915 - - Accrued interest payable 230,367 238,239 - Due to other funds 12,943 12,943 - Current portion of long-term liabilities Long-term debt 744,737 2,603,647 - Bond premiums - 138,154 - Accrued compensated absences 19,009 14,504 - Total Current Liabilities 1,214,990 3,133,502 209,634 Noncurrent Liabilities Long-term debt 8,318,481 18,720,425 - Bond premiums - 1,796,006 - Accrued compensated absences 16,824 26,844 - Net pension liability 1,212,117 1,961,469 - Total Noncurrent Liabilities 9,547,422 22,504,744 - Total Liabilities 10,762,412 25,638,246 209,634 DEFERRED INFLOWS Net projected to actual earnings to PERS 110,449 124,614 - NET POSITION: Net investment in capital assets (118,237) 30,184,022 4,429,480 Restricted for: Construction - - 12,296,851 Unrestricted 1,224,273 (5,063,038) 33,438 Total Net Position 1,106,036 $ 25,120,984 $ 16,759,769 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 16 - Governmental Activities Other Business- type Funds Total Internal Service 4,247,322 $ 26,656,947 $ 537,210 $ 205 762,868 1,841 38,768 38,768 - 4,286,295 27,458,583 539,051 1,307,695 6,149,809 - 1,509,491 51,738,593 - 2,817,186 57,888,402 - 7,103,481 85,346,985 539,051 - 1,588,640 277,212 566 308,186 65,028 - 114,048 16,401 - 121,915 - - 468,606 - - 25,886 - - 3,348,384 - - 138,154 - - 33,513 - 566 4,558,692 81,429 - 27,038,906 - - 1,796,006 - - 43,668 34,946 - 3,173,586 537,315 - 32,052,166 572,261 566 36,610,858 653,690 - 235,063 34,244 2,817,186 37,312,451 - 4,285,729 16,582,580 - - (3,805,327) 128,329 7,102,915 $ 50,089,704 $ 128,329 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2017 Water Sewer OPERATING REVENUES Charges for services 3,293,342 $ 8,091,754 $ Miscellaneous 58,922 27,214 Total Operating Revenues 3,352,264 8,118,968 OPERATING EXPENSES Personal services 1,291,072 1,765,552 Materials and services 729,985 1,213,847 Depreciation 358,996 1,810,151 Total Operating Expenses 2,380,053 4,789,550 OPERATING INCOME (LOSS) 972,211 3,329,418 NONOPERATING REVENUES (EXPENSES) Investment revenue 22,231 79,719 Amortization of bond premiums - 138,155 Debt payments Principal - - Interest expense (420,872) (899,176) Total Nonoperating Revenues (Expenses) (398,641) (681,302) NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS 573,570 2,648,116 Capital contributions - - Transfers in 57,411 - Transfers out (179,311) (608,384) Gain (loss) on disposition of assets 3,505 - CHANGE IN NET POSITION 455,175 2,039,732 NET POSITION, beginning of year 650,861 23,081,252 NET POSITION, end of year 1,106,036 $ 25,120,984 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 17 - Governmental Activities Sewer Capital Construction Other Business- type Funds Total Internal Service - $ - $ 11,385,096 $ 1,735,792 $ - - 86,136 33,121 - - 11,471,232 1,768,913 - - 3,056,624 481,468 - 26,218 1,970,050 1,245,400 78,961 58,684 2,306,792 - 78,961 84,902 7,333,466 1,726,868 (78,961) (84,902) 4,137,766 42,045 133,901 47,250 283,101 8,532 - - 138,155 - - - - - - - (1,320,048) - 133,901 47,250 (898,792) 8,532 54,940 (37,652) 3,238,974 50,577 - 114,664 114,664 - 78,607 1,536 137,554 57,529 - - (787,695) - - - 3,505 - 133,547 78,548 2,707,002 108,106 16,626,222 7,024,367 47,382,702 20,223 16,759,769 $ 7,102,915 $ 50,089,704 $ 128,329 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2017 Water Sewer CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers 3,393,595 $ 8,270,363 $ Paid to suppliers (733,323) (1,867,910) Paid to employees (1,241,077) (1,068,749) Net Cash Provided by (Used in) Operating Activities 1,419,195 5,333,704 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in - - Transfers out (192,000) (621,073) Net Cash Provided by (Used in) Non-Capital Financing Activities (192,000) (621,073) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets - - Proceeds from disposal of capital assets 3,505 - Principal paid on loans and bonds payable (727,319) (2,603,647) System development receipts - - Interest paid (428,779) (930,165) Net Cash Provided by (Used in) Capital and Related Financing Activities (1,152,593) (3,533,812) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 22,231 79,719 Increase (Decrease) in Cash and Investments 96,833 1,258,538 CASH AND INVESTMENTS, Beginning of year 2,134,789 6,379,635 CASH AND INVESTMENTS, End of year 2,231,622 $ 7,638,173 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 18 - Governmental Activities Sewer Capital Construction Other Business- Type Funds Totals Internal Service 197 $ 63 $ 11,664,218 $ 1,790,356 $ - (45,276) (2,646,509) (1,269,911) - - (2,309,826) (405,798) 197 (45,213) 6,707,883 114,647 78,607 39,544 118,151 57,529 - - (813,073) - 78,607 39,544 (694,922) 57,529 (163,168) (236,919) (400,087) - - - 3,505 - - - (3,330,966) - - 180,497 180,497 - - - (1,358,944) - (163,168) (56,422) (4,905,995) - 133,901 47,250 283,101 8,532 49,537 (14,841) 1,390,067 180,708 12,490,293 4,262,163 25,266,880 356,502 12,539,830 $ 4,247,322 $ 26,656,947 $ 537,210 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF CASH FLOWS (Continued) YEAR ENDED JUNE 30, 2017 Water Sewer RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) 972,211 $ 3,329,418 $ cash provided by operating activities: Depreciation 358,996 1,810,151 Change in assets and liabilities: Accounts receivable 26,036 151,395 Deferred outflows (432,954) (817,224) Accounts payable and accrued liabilities (46,707) (160,642) Customer deposits 15,295 - Compensated absences payable (11,689) 5,089 Net pension liability (asset) 587,909 1,109,709 Deferred inflows (49,902) (94,192) Net Cash Provided by (Used in) Operating Activities 1,419,195 $ 5,333,704 $ Noncash Transactions Transfer of capital assets 57,411 $ - $ Adjustments to reconcile the change in operating income to net ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 19 - Governmental Activities Sewer Capital Construction Other Business- Type Funds Totals Internal Service (78,961) $ (84,902) $ 4,137,766 $ 42,045 $ 78,961 58,684 2,306,792 - 197 63 177,691 21,444 - - (1,250,178) (223,633) - (19,058) (226,407) (38,053) - - 15,295 - - - (6,600) 34,946 - - 1,697,618 303,673 - - (144,094) (25,775) 197 $ (45,213) $ 6,707,883 $ 114,647 $ - $ - $ 57,411 $ (102,442) $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 20 - CITY OF WOODBURN, OREGON STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2017 Pension Trust ASSETS Cash and investments 57,943 $ LIABILITIES - NET POSITION Held in trust for benefits and other purposes 57,943 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 21 - CITY OF WOODBURN, OREGON STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED JUNE 30, 2017 Pension Trust ADDITIONS Earnings 1,685 $ Total additions 1,685 DEDUCTIONS - CHANGE IN NET POSITION 1,685 NET POSITION, beginning of year 56,258 NET POSITION, end of year 57,943 $ ---PAGE BREAK--- NOTES TO BASIC FINANCIAL STATEMENTS ---PAGE BREAK--- - 22 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of Woodburn, Oregon (the City) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards. The Financial Reporting Entity The City of Woodburn, Oregon is governed by an elected mayor and six council members who comprise the City Council. The City Council exercises supervisory responsibilities over the City operations, but day-to-day management control is the responsibility of a city administrator. All significant activities and organizations for which the City is financially accountable are included in the financial statements for the year ended June 30, 2017. There are certain governmental agencies and various service districts which provide services within the City. These agencies have independently elected governing boards and the City is not financially accountable for these organizations. Therefore, financial information for these agencies is not included in the accompanying basic financial statements. As defined by accounting principles generally accepted in the United States of America, the financial reporting entity consists of the primary government, as well as its component units, which are legally separate organizations for which the elected officials of the primary government are financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's board, and either a) the ability to impose will by the primary government, or b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government. The City of Woodburn's financial statements include the Woodburn Urban Renewal Agency as a blended component unit. The City Council and Board of Directors of Woodburn Urban Renewal Agency are composed of the same individuals. The separately issued financial statements of the Woodburn Urban Renewal Agency may be obtained from the City, 270 Montgomery Street, Woodburn, Oregon 97071. Basic Financial Statements Basic financial statements are presented at both the government-wide and fund financial level. Both levels of statements categorize primary activities as either governmental or business-type. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Government-wide financial statements display information about the reporting government as a whole. For the most part, the effect of interfund activity has been removed from these statements. These statements focus on the sustainability of the City as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. These aggregated statements consist of the Statement of Net Position and the Statement of Activities. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment, and grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. ---PAGE BREAK--- - 23 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation (Continued) Fund financial statements display information at the individual fund level. Each fund is considered to be a separate accounting entity. Funds are classified and summarized as governmental, enterprise or fiduciary. Currently, the City has general, special revenue, internal service, capital projects, debt service and enterprise type funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Nonmajor funds are consolidated into a single column within each fund type in the financial section of the basic financial statements and are detailed in the other supplementary information. The government-wide and proprietary fund financial statements are accounted for using an economic resources measurement focus, whereby all assets and liabilities are included in the statement of net position and the statement of fund net position. The increases and decreases in those net positions are presented in the government-wide statement of activities and in the proprietary fund statement of revenues, expenses and changes in fund net position. These funds use the accrual basis of accounting whereby revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Interfund activity consists of transfers, services provided and/or used, reimbursements, advances and loans. As a general rule, the effect of interfund activity has been eliminated from the governmental-wide financial statements. Exceptions to this general rule include interfund services provided and/or used. Interfund services provided and/or used are accounted for as revenues and expenses since the elimination of such revenues and expenses would distort the direct costs and program revenues reported for the various functions. Amounts reported as program revenues in the statement of activities include fines, fees and charges to customers or applicants for goods, services or privileges provided, operating grants and contributions, and capital grants and contributions, including special assessments. Grants and contributions not restricted are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Operating revenues and operating expenses are intermediate components within the proprietary fund statement of revenues, expenses and changes in fund net position, and include only those transactions that constitute their principal, ongoing activities exclusive of investing or financing transactions. Significant operating revenues include charges for services and miscellaneous income. Significant operating expenses include personnel, materials and supplies, outside services, and depreciation. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Fund Balance In the fund financial statements, the fund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Although not a major impact on the financial statements, Governmental Fund type fund balances are now reported in the following classifications. Fund balance is reported as nonspendable when the resources cannot be spent because they are either in a nonspendable form or legally or contractually required to be maintained intact. Resources in nonspendable form include inventories, prepaids and deposits, and assets held for resale. Fund balance is reported as restricted when the constraints placed on the use of resources are either: externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. ---PAGE BREAK--- - 24 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fund Balance (Continued) Fund balance is reported as committed when the City Council takes formal action that places specific constraints on how the resources may be used. The City Council can modify or rescind the commitment at any time through taking a similar formal action. Resources that are constrained by the City’s intent to use them for a specific purpose, but are neither restricted nor committed, are reported as assigned fund balance. Intent is expressed when the City Council approves which resources should be “reserved” during the adoption of the annual budget. The City’s Finance Director uses that information to determine whether those resources should be classified as assigned or unassigned for presentation in the City’s Annual Financial Report. Unassigned fund balance is the residual classification for the General Fund. This classification represents fund balance that has not been restricted, committed, or assigned within the General Fund. This classification is also used to report any negative fund balance amounts in other governmental funds. The City Council has approved a policy to maintain an ending fund balance in the General Fund, in order to provide stable services and employment to offset cyclical variations in revenues and expenditures. The targeted floor for the ending balance is 17% of annual operating revenue, as shown as a minimum fund balance in the General Fund. The City Council is the highest level decision making authority and may take formal action by vote or resolution to establish, modify, or rescind a fund balance commitment. Definitions of Governmental Fund Types The General Fund is used to account for all financial resources not accounted for in another fund. Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. The term “proceeds of specific revenues sources” means that the revenue sources for the fund must be from restricted or committed sources, specifically that a substantial portion of the revenue must be from these sources and be expended in accordance with those requirements. Capital Projects Funds are utilized to account for financial resources to be used for the acquisition or construction of capital equipment and facilities. Debt Service Funds are utilized to account for the accumulation of resources for, and the payment of, long-term debt principal and interest. Governmental Fund Financial Statements Governmental funds use the modified accrual basis of accounting whereby revenues are recorded only when susceptible to accrual (both measurable and available). “Measurable” means that the amount of the transaction can be determined. “Available” is defined as being collectible within the current period or soon enough thereafter (30 days) to be used to liquidate liabilities of the current period. Expenditures other than interest on noncurrent obligations, are recorded when the fund liability is incurred. ---PAGE BREAK--- - 25 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Governmental Fund Financial Statements (Continued) Real and personal property taxes are levied as of July 1 for each fiscal year on values assessed as of January 1. Property taxes are an enforceable lien on both real and personal property as of July 1 and are due and payable in three installments on November 15, February 15 and May 15. All property taxes are billed and collected by Marion County and remitted to the City. In the governmental fund financial statements, property taxes are reflected as revenues in the fiscal period for which they were levied, provided they are due, or past due and receivable within the current period, and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period (30 days). Otherwise, they are reported as unavailable revenues. Intergovernmental revenues are recognized as revenues when all eligibility requirements are met. There are, however, essentially two types of intergovernmental revenues. In one, monies must be expended on the specific purpose or project before any amounts will be paid to the City; therefore, all eligibility requirements are determined to be met when the underlying expenditures are recorded. In the other, monies are virtually unrestricted as to the purpose of the expenditure and are usually revocable only for failure to comply with prescribed requirements; therefore, all eligibility requirements are determined to be met at the time of receipt, or earlier, if the susceptible accrual criteria are met. Licenses and permits, charges for services, fines and forfeits and miscellaneous revenues (except investment earnings) are recorded as revenues when received in cash because they are generally not measurable until actually received. Investment earnings are recorded as earned since they are measurable and available. When both restricted and unrestricted resources are available for use, it is the City's practice to use restricted resources first, then unrestricted resources as they are needed. The reporting model sets forth minimum criteria (percentage of the assets, liabilities, receipts or disbursements of either fund category or the government and enterprise combined) for the determination of major funds. Nonmajor funds are combined in a column in the fund financial statements and detailed in the combining section. The City reports the following major governmental funds: General Fund Street Fund The City reports the following major proprietary funds: Water Fund Sewer Fund Sewer Capital Construction Fund Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reporting amounts of certain assets, liabilities, revenues and expenses as of and for the year ended June 30, 2017. Actual results may differ from such estimates. ---PAGE BREAK--- - 26 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Cash and Investments Investments, included in cash and investments, are carried at cost which approximates fair value. For purposes of the statement of cash flows, the proprietary funds consider cash and cash equivalents to include the cash and investment common pool. These amounts have the general characteristics of demand deposit accounts in that the proprietary funds may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty. Receivables and Unavailable Revenues Receivables for state, county and local shared revenues, included in accounts receivable, are recorded as revenue in the governmental funds as earned. Receivables of the enterprise funds are recorded as revenue as earned. Property taxes receivable for the governmental fund types, which have been collected within thirty days subsequent to year end, are considered measurable and available and are recognized as revenues. All other property taxes are considered unavailable and, accordingly, have not been recorded as revenue. Property taxes receivable by the City represent the City's allocated share of delinquent property taxes and other amounts to be collected from property owners within Marion County, Oregon. Assessment liens in the governmental fund types are recognized as receivables at the time property owners are assessed for property improvements. All assessments receivable are considered unavailable and, accordingly, have not been recorded as revenue. Revolving loans in the government fund types are recognized as receivables at the time housing rehabilitation loans are made. All loans receivable are considered unavailable and, accordingly, have not been recorded as revenue. Capital Assets Capital assets are stated at cost or estimated historical cost. Donated assets are recorded at fair market value at date of donation. Estimated fair market value of donated assets is determined based on engineering estimates of current cost or price indexed cost. Capital assets include land, right-of-way (included with land), buildings, improvements, equipment, infrastructure and other tangible and intangible assets costing over $5,000 used in operations that have initial useful lives extending beyond a single reporting period. Infrastructure are those capital assets that are stationary in nature and can be preserved for a significantly greater number of years than most other capital assets. Infrastructure reported in governmental activities consists of roads, bridges, sidewalks and traffic and lighting systems. Infrastructure reported in business-type activities consists of water and wastewater collection systems. All capital assets, except for infrastructure in governmental activities prior to July 1, 1980, have been capitalized in the government-wide and proprietary fund financial statements. In accordance with the current financial resources measurement focus, capital assets are not capitalized in the governmental fund financial statements. All purchased capital assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Historical cost is measured by the cash or cash equivalent price of obtaining an asset, including ancillary charges necessary to place the asset into its intended location and condition ---PAGE BREAK--- - 27 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Capital Assets (Continued) for use. Donated capital assets are reported at their estimated fair value at the time of acquisition plus ancillary charges, if any. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are capitalized. Amounts expended for maintenance and repairs are charged to expenditures/expenses in the appropriate funds as incurred and are not capitalized. Capital assets are depreciated unless they are inexhaustible in nature land and right-of-ways). Depreciation is an accounting process to allocate the cost of capital assets to expense in a systematic and rational manner to those periods expected to benefit from the use of capital assets. Depreciation is not intended to represent an estimate in the decline of fair market value, nor are capital assets, net of accumulated depreciation, intended to represent an estimate of the current condition of the assets, or the maintenance requirements needed to maintain the assets at their current level of condition. Depreciation is computed over the estimated useful lives of the capital assets. All estimates of useful lives are based on actual experience by City departments with identical or similar capital assets. Depreciation is calculated on the straight-line basis, except for infrastructure and improvements other than buildings reported in the governmental activities column of the government-wide financial statements, which are calculated using a composite depreciation method. The estimated useful lives of the various categories of assets are as follows: Buildings and improvements 10 - 40 years Water and Sewer Systems 15 - 50 years Infrastructure 50 years Equipment 5 - 15 years Upon disposal of capital assets, cost and accumulated depreciation are removed from the accounts and, if appropriate, a gain or loss on the disposal is recognized. Long-Term Debt Long-term debt directly related and expected to be paid from the enterprise funds is recorded in these funds. All other unmatured long-term debt is recorded on the statement of net position. Repayment of general bonded debt will be made from debt service funds. Bond premiums will be amortized over the life of the related debt. Payment of compensated absences will be made primarily from the General Fund, Street Fund, Water Fund and Sewer Fund. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expenditure) until then. The City reports deferred outflow of resources related to pensions for contributions made after the June 30, 2016 measurement date, differences between expected and actual experience, and changes in proportionate share. ---PAGE BREAK--- - 28 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Deferred Outflows/Inflows of Resources (Continued) In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows, represents an acquisition that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has two items that qualify for reporting in this category. The City reports deferred inflows related to pensions for changes in projected earnings versus actual earnings and contribution versus proportionate share of contributions. The other instance of deferred inflows arises only under a modified accrual basis of accounting. Accordingly, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes and loans receivable. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. Net Pension Liability The City reports its proportionate share of the Net Pension Liability of the Oregon Public Employees Retirement System (OPERS). A negative Net Pension Liability is reported as a Net Pension Asset. For purposes of measuring the net pension liability or asset, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about fiduciary net position of OPERS and additions to/deductions from OPERS’s fiduciary net position have been determined on the same basis as they are reported by OPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value. Accrued Vacation Pay Accumulated vested vacation pay is accrued in the proprietary funds as it is earned by employees. In governmental fund types, the amounts, if any, expected to be liquidated with expendable available resources are accrued as liabilities of the funds and the amount payable from future resources is recorded on the statement of net position. The accrued payables in the Statement of Net Position are recorded as long-term in that the amount is not expected to materially change. Sick pay, which does not vest, is recorded in all funds when leave is taken. Budget and Budgetary Accounting A budget is prepared for each fund in accordance with the modified accrual basis of accounting for all funds. For budgetary purposes, interfund loan transactions are reported as interfund transfers. Appropriations are made at the department level for the General Fund and the object level for all other funds. Expenditures may not legally exceed appropriations. Appropriations lapse at the end of each fiscal year. Budget amounts include original approved amounts and all subsequent appropriation transfers approved by the City Council. After budget approval, the City Council may approve supplemental appropriations if an occurrence, condition, or need exists which had not been ascertained at the time the budget was adopted. Management may not amend the budget. A supplemental budget requires hearings before the public, publications in newspapers and approval by the City Council. ---PAGE BREAK--- - 29 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 ORGANIZATION AND OPERATION The City's financial operations are accounted for in the following funds: Governmental Fund Types General Fund The General Fund accounts for activities of the City which are not accounted for in any other fund. Principal sources of revenue are property taxes, franchise fees and state and county shared revenues. Primary expenditures are for police protection, recreation and general government. Special Revenue Funds Street Fund - This fund is used to account for the City’s street operations. The fund’s major source of revenue is highway gas tax received from the State of Oregon. Transit Fund – This fund accounts for amounts held to be used for weekday transportation services. Building Inspection Fund - This fund accounts for building permit revenue and associated operations. Search and Seizure Fund - This fund accounts for the seizure of private properties that are the product of illegal activity, and for the expenditure of the proceeds by the City for illegal drug activity investigations and subsequent arrests. Housing Rehabilitation Fund - This fund accounts for the City’s CDBG grant program and provides low income housing and small business loans. Library Endowment Fund - This fund accounts for funds held to be used for library improvement projects. Museum Endowment Fund - This fund accounts for amounts held for museum activities. Lavelle Black Trust Fund – This fund accounts for the donations received to continue the police dog program. Urban Renewal Fund – This fund accounts for transactions related to urban renewal, including debt service on the URA loan. Property taxes are the primary source of revenue. Capital Projects Funds Street SDC Fund - This fund accounts for the collection and spending of street SDC’s. General Capital Construction Fund - This fund is used to account for transfers from general services funds used for general services construction projects. Special Assessment Fund - This fund accounts for the repayment of local improvement district (LID) assessments. The money is used for construction of LID projects. Street/Storm Capital Construction Fund - This fund accounts for transfers from the Storm and Street funds. The money is used for street and storm related capital projects. ---PAGE BREAK--- - 30 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 ORGANIZATION AND OPERATION (Continued) Governmental Fund Types (Continued) Capital Projects Funds (Continued) Parks SDC Fund - This fund is used to account for the collection and spending of park SDC’s. Storm SDC Fund - This fund accounts for the collection and spending of storm SDC’s. Equipment Replacement Fund - This fund accounts for transfers from other funds set aside for future equipment purchases. Debt Service Fund GO Debt Service Fund - This fund accounts for debt service on the City’s 2005 GO bond. Property taxes are the major source of revenue. Proprietary Fund Types Enterprise Funds The City has six enterprise funds. Three funds are related to water, and three are related to sewer. The specific funds and their purposes are as follows. Water Fund - This fund accounts for the City’s water system operation. Customer charges are the primary source of revenue. Sewer Fund - This fund accounts for the operation of the City's sewer system. Customer charges are the primary revenue source. Sewer Capital Construction Fund - This fund was used to account for the City’s sewer treatment plant upgrade. The major source of revenue is debt proceeds. Water SDC Fund - This fund accounts for the collection and spending of water SDC’s. Sewer SDC Fund - This fund accounts for the collection and spending of sewer SDC’s. Water Capital Construction Fund - This fund accounts for water system capital improvement projects and the retirement of associated debt. Internal Service Funds The City has two internal service funds which provide services to other City departments. Internal charges are the primary revenue source for all funds. Expenditures are for the purposes as described below. Information Services Fund - This fund accounts for the maintenance and replacement of the City’s network and technology services. Insurance Fund – This fund accounts for the City’s insurance coverage. ---PAGE BREAK--- - 31 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 ORGANIZATION AND OPERATION (Continued) Fiduciary Fund The City has one fiduciary fund. The City's pension trust fund holds assets to provide retirement benefits to certain City employees. CASH AND INVESTMENTS The City maintains a cash and investment pool that is available for use by all funds. Each fund type's portion of this pool is displayed on the Statement of Net Position as part of “cash and investments.” Cash Deposits with financial institutions $ 184,902 $ 184,902 Cash on hand 1,660 1,660 Investments Local Government Investment Pool 45,237,018 45,237,018 Assets held for pension benefits 57,943 57,943 $ 45,481,523 $ 45,481,523 Cash is reported in the financial statements as follows: Governmental funds $ 18,229,418 Internal Service funds (included in governmental activities) 537,210 Enterprise funds 26,656,952 Fiduciary funds 57,943 $ 45,481,523 Carrying Fair Value Value Deposits The book balance of the City’s bank deposits (checking accounts) was $184,902 and the bank balance was $250,480 at year end. The difference is due to transactions in process. Bank deposits are secured to legal limits by federal deposit insurance. The remaining amount is secured in accordance with ORS 295 under a collateral program administered by the Oregon State Treasurer. Investments The State Treasurer of the State of Oregon maintains the Oregon Short-term Fund, of which the Local Government Investment Pool is part. Participation by local governments is voluntary. The State of Oregon investment policies are governed by statute and the Oregon Investment Council. In accordance with Oregon Statutes, the investment funds are invested as a prudent investor would do, exercising reasonable care, skill and ---PAGE BREAK--- - 32 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 CASH AND INVESTMENTS (Continued) Investments (Continued) caution. The Oregon Short-term Fund is the LGIP for local governments and was established by the State Treasurer. It was created to meet the financial and administrative responsibilities of federal arbitrage regulations. The investments are regulated by the Oregon Short Term Fund Board and approved by the Oregon Investment Council (ORS 294.805 to 294.895). At June 30, 2017, the fair value of the position in the Oregon State Treasurer’s Short-term Investment Pool was approximately equal to the value of the pool shares. The investment in the Oregon Short-term Fund is not subject to classification. Separate financial statements for the Oregon Short-term Fund are available from the Oregon State Treasurer. Interest Rate Risk In accordance with its investment policy, the City manages its exposure to declines in fair value of its investments by limiting the weighted average maturity of its investments. Custodial Credit Risk - Deposits This is the risk that in the event of a bank failure, the City’s deposits may not be returned. The Federal Depository Insurance Corporation (FDIC) provides insurance for the City’s deposits with financial institutions up to $250,000 for the aggregate of all non-interest bearing accounts and up to $250,000 for the aggregate of all interest bearing accounts at each institution. Deposits in excess of FDIC coverage are with institutions participating in the Oregon Public Funds Collateralization Program (PFCP). The PFCP is a shared liability structure for participating bank depositories, better protecting public funds though still not guaranteeing that all funds are 100% protected. Barring any exceptions, a bank depository is required to pledge collateral valued at least 10% of their quarter-end public fund deposits if they are well capitalized, 25% of their quarter-end public fund deposits if they are adequately capitalized or 110% of their quarter-end public fund deposits if they are undercapitalized or assigned to pledge 110% by the Office of the State Treasurer. In the event of a bank failure, the entire pool of collateral pledged by all qualified Oregon public funds bank depositories is available to repay deposits of public funds of government entities. As of June 30, 2017, $480 of the City’s bank balances were exposed to custodial credit risk as part of the Public Funds Collateralization Program. Custodial Risk - Investments For an investment, this is the risk that, in the event of a failure of the counterparty, the City will not be able to recover the value of its investments or collateralized securities that are in the possession of an outside party. The City's investment policy limits the types of investments that may be held and does not allow securities to be held by the counterparty. The LGIP is administered by the Oregon State Treasury with the advice of other state agencies and is not registered with the U.S. Securities and Exchange Council. The LGIP is an open-ended no-load diversified portfolio offered to any agency, political subdivision, or public corporation of the state that by law is made the custodian of, or has control of any fund. The LGIP is commingled with the State's short-term funds. In seeking to best serve local governments of Oregon, the Oregon Legislature established the Oregon Short Term Fund Board, which has established diversification percentages and specifies the types and maturities of the investments. The purpose of the Board is to advise the Oregon State Treasury in the management and investment of the LGIP. These investments within the LGIP must be invested and managed as a prudent investor would, exercising reasonable care, skill and caution. Professional standards indicate that the investments in external investment pools are not subject to custodial risk because they are not evidenced by securities that exist in physical or book entry form. Nevertheless, management does not believe that there is any substantial custodial risk related to investments in the LGIP. The LGIP is not rated for credit quality. ---PAGE BREAK--- - 33 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 CAPITAL ASSETS The summary of capital assets for the business-type activities for the year ended June 30, 2017 is as follows: Balances Balances July 1, June 30, 2016 Additions Retirements 2017 Nondepreciable assets Land 1,783,816 $ - $ - $ 1,783,816 $ Construction in progress 4,441,468 492,440 (567,915) 4,365,993 Subtotal, nondepreciable assets 6,225,284 492,440 (567,915) 6,149,809 Depreciable assets Buildings 62,634,628 113,752 - 62,748,380 Water and sewer systems 29,908,166 571,443 - 30,479,609 Equipment 2,370,459 57,410 - 2,427,869 Subtotal, depreciable assets 94,913,253 742,605 - 95,655,858 Accumulated depreciation Buildings and improvements (28,011,382) (1,717,708) - (29,729,090) Water and sewer systems (11,918,534) (494,707) - (12,413,241) Equipment (1,680,557) (94,377) - (1,774,934) Total accumulated depreciation (41,610,473) (2,306,792) - (43,917,265) Total depreciable assets, net 53,302,780 (1,564,187) - 51,738,593 Net capital assets 59,528,064 $ (1,071,747) $ (567,915) $ 57,888,402 $ Depreciation expense was allocated as follows: Water funds 417,680 $ Sewer funds 1,889,112 2,306,792 $ ---PAGE BREAK--- - 34 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 CAPITAL ASSETS (Continued) The changes in the capital assets for governmental activities for the year ended June 30, 2017 are as follows: Balances Balances July 1, June 30, 2016 Additions Retirements 2017 Nondepreciable assets Land 22,567,381 $ - $ - $ 22,567,381 $ Construction in progress 96,389 410,250 - 506,639 Subtotal, nondepreciable assets 22,663,770 410,250 - 23,074,020 Depreciable assets Buildings 16,734,493 22,300 - 16,756,793 Equipment 7,072,539 153,664 - 7,226,203 Infrastructure 44,360,967 - - 44,360,967 Subtotal, depreciable assets 68,167,999 175,964 - 68,343,963 Accumulated depreciation Buildings (6,355,161) (457,319) - (6,812,480) Equipment (5,558,084) (327,723) - (5,885,807) Infrastructure (16,466,401) (714,161) - (17,180,562) Total accumulated depreciation (28,379,646) (1,499,203) - (29,878,849) Total depreciable assets, net 39,788,353 (1,323,239) - 38,465,114 Net capital assets 62,452,123 $ (912,989) $ - $ 61,539,134 $ Depreciation expense was allocated as follows: General government 217,770 $ Public safety 246,638 Highways and streets 817,134 Culture and recreation 98,188 Internal service funds 119,473 1,499,203 $ ---PAGE BREAK--- - 35 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 LONG-TERM DEBT Long-term debt transactions for the year were as follows: Outstanding Matured/ Outstanding Due July 1, Redeemed June 30, Within 2016 Issued During Year 2017 One Year Governmental Activities: Series 2005 general obligation bonds due in annual installments with principal and interest varying annually 4,060,000 $ - $ (370,000) $ 3,690,000 $ 385,000 $ 1999 Oregon EDD Loan due in annual installments of $38,319 with interest at 5.01%. 66,074 - (30,399) 35,675 35,675 4,126,074 - (400,399) 3,725,675 420,675 Accrued compensated absences 684,433 824,900 (922,792) 586,541 234,616 4,810,507 $ 824,900 $ (1,323,191) $ 4,312,216 $ 655,291 $ Business-type Activities: Series 2003 Water loan paid over 25 years; interest at various rates 5,374,286 $ - $ (313,591) $ 5,060,695 $ 325,789 $ 2005 Oregon EDD due in annual installments including interest at 4.21% 2,208,126 - (206,864) 2,001,262 215,573 2005 SDWR due in annual installments including interest at 4.21% 2,208,125 - (206,864) 2,001,261 215,573 2011 Sewer Revenue Bonds paid over 20 years; interest at various rates 23,927,719 - (2,603,647) 21,324,072 3,165,000 33,718,256 - (3,330,966) 30,387,290 3,921,935 2011 Sewer Revenue Bond premium 2,072,315 - (138,155) 1,934,160 138,154 Accrued compensated absences 83,781 294,055 (300,655) 77,181 30,872 35,874,352 $ 294,055 $ (3,769,776) $ 32,398,631 $ 4,090,961 $ ---PAGE BREAK--- - 36 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 LONG-TERM DEBT (Continued) Future maturities of long-term debt are as follows: Governmental Activities Principal Interest Total 2018 420,675 $ 153,956 $ 574,631 $ 2019 405,000 136,736 541,736 2020 425,000 120,536 545,536 2021 445,000 103,536 548,536 2022 470,000 85,180 555,180 2023-25 1,560,000 133,959 1,693,959 3,725,675 $ 733,903 $ 4,459,578 $ Fiscal Year June 30, Ending Business-type Activities Principal Interest Total 2018 3,921,935 $ 1,123,066 $ 5,045,001 $ 2019 4,407,430 996,283 5,403,713 2020 4,293,372 1,332,332 5,625,704 2021 4,557,224 1,340,501 5,897,725 2022 5,769,614 526,412 6,296,026 2023-27 6,140,306 1,913,216 8,053,522 2028-31 1,297,409 98,824 1,396,233 30,387,290 $ 7,330,634 $ 37,717,924 $ June 30, Fiscal Year Ending ---PAGE BREAK--- - 37 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM Plan Description Substantially all City employees are members in the Oregon Public Employees Retirement System (OPERS); a cost-sharing multiple-employer defined benefit pension plan that acts as a common investment and administrative agent for government units in the State of Oregon. Employees hired before August 29, 2003 belong to the Tier One/Tier Two Retirement Benefit Program (established pursuant to ORS Chapter 238), while employees hired on or after August 29, 2003 belong to the OPSRP Pension Program (established pursuant to ORS Chapter 238A). OPERS produces an independently audited CAFR which can be found at: http://www.oregon.gov/pers/Pages/section/financial_reports/financials.aspx. Benefits Provided Tier One/Tier Two Retirement Benefit Pension Benefits. The PERS retirement allowance is payable for life. It may be selected from 13 retirement benefit options. These options include survivorship benefits and lump-sum refunds. The basic benefit is based on years of service and final average salary. A percentage (2.0% for police and fire employees, 1.67% for general service employees) is multiplied by the number of years of service and the final average salary. Benefits may also be calculated under either a formula plus annuity (for members who were contributing before August 21, 1981) or a money match computation if a greater benefit results. A member is considered vested and will be eligible at a minimum retirement age for a service retirement allowance if he or she has had contribution in each of five calendar years or has reached at least 50 years of age before ceasing employment with a participating employer (age 45 for police and fire members). General service employees may retire after reaching age 55. Police and fire members are eligible after reaching age 50. Tier One general service employee benefits are reduced if retirement occurs prior to age 58 with fewer than 30 years of service. Police and fire member benefits are reduced if retirement occurs prior to age 55 with fewer than 25 years of service. Tier Two members are eligible for full benefits at age 60. The ORS Chapter 238 Defined Benefit Pension Plan is closed to new members hired on or after August 29, 2003. Death Benefits. Upon the death of a non-retired member, the beneficiary receives a lump-sum refund of the member’s account balance (accumulated contributions and interest). In addition, the beneficiary will receive a lump-sum payment from employer funds equal to the account balance, provided one or more of the following conditions are met:  the member was employed by a PERS employer at the time of death,  the member died within 120 days after termination of PERS-covered employment,  the member died as a result of injury sustained while employed in a PERS-covered job, or  the member was on an official leave of absence from a PERS-covered job at the time of death. Disability Benefits. A member with 10 or more years of creditable service who becomes disabled from other than duty-connected causes may receive a non-duty disability benefit. A disability resulting from a job-incurred injury or illness qualifies a member for disability benefit regardless of the length of PERS-covered service. Upon qualifying for either a non-duty or duty disability, service time is computed to age 58 (55 for police and fire members) when determining the benefit. ---PAGE BREAK--- - 38 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM (Continued) Benefits Provided (Continued) Tier One/Tier Two Retirement Benefit (Continued) Benefit Changes After Retirement. Members may choose to continue participation in a variable equities investment account after retiring and may experience annual benefit fluctuations due to changes in the market value of equity investments. Under ORS 238.360 benefits are adjusted annually through cost-of-living changes. Under current law, the cap on the COLA in fiscal year 2015 and beyond will vary based on 1.25% on the first $60,000 of annual benefit and 0.15% on annual benefits above $60,000. OPSRP Pension Program Pension Benefits. The Pension Program (ORS Chapter 238A) provides benefits to members hired on or after August 29, 2003. This portion of OPSRP provides a life pension funded by employer contributions. Benefits are calculated by formula for members who attain normal retirement age. For general service members, 1.5% is multiplied by the number of years of service and the final average salary. Normal retirement age for general service members is age 65, or age 58 with 30 years of retirement credit. For police and fire members, 1.8% is multiplied by the number of years of service and the final average salary. Normal retirement age for police and fire members is age 60 or age 53 with 25 years of retirement credit. To be classified as a police and fire member, the individual must have been employed continuously as a police and fire member for at least five years immediately preceding retirement. A member of the OPSRP Pension Program becomes vested on the earliest of the following dates: the date the member completes 600 hours of service in each of five calendar years, the date the member reaches normal retirement age, and if the pension program is terminated, the date on which termination becomes effective. Death Benefits. Upon the death of a non-retired member, the spouse or other person who is constitutionally required to be treated in the same manner as the spouse, receives for life 50 percent of the pension that would otherwise have been paid to the deceased member. Disability Benefits. A member who has accrued 10 or more years of retirement credits before the member becomes disabled or a member who becomes disabled due to job-related injury shall receive a disability benefit of 45 percent of the member’s salary determined as of the last full month of employment before the disability occurred. Benefit Changes After Retirement. Under ORS 238A.210 benefits are adjusted annually through cost-of- living changes. Under current law, the cap on the COLA in fiscal year 2015 and beyond will vary based on 1.25% on the first $60,000 of annual benefit and 0.15% on annual benefits above $60,000. Contributions PERS funding policy provides for employer contributions at actuarially determined rates. These contributions, expressed as a percentage of covered payroll, are intended to accumulate sufficient assets to pay benefits when due. Employer contribution rates for the period were based on the December 31, 2014 actuarial valuation as subsequently modified by 2013 legislated changes in benefit provisions. The rates based on a percentage of payroll, first became effective July 1, 2015. The City’s contribution rates for the period were 16.29% for Tier One/Tier Two members, 9.24% for OPSRP General Service members, and 13.35% for OPSRP Police and Fire members. The City’s total contributions exclusive of the 6% “pick-up” was $1,034,667. ---PAGE BREAK--- - 39 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM (Continued) Contributions (Continued) Covered employees are required to contribute 6% of their salary to the Plan, but the employer is allowed to pay any or all of the employees’ contribution in addition to the required employers’ contribution. The City has elected to contribute the 6% “pick-up” or $579,640 of the employees’ contribution. Pension Assets, Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2017, the City reported a liability of $16,230,092 for its proportionate share of the OPERS net pension asset. The net pension asset was measured as of June 30, 2016, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of December 31, 2014 rolled forward to June 30, 2016. The City’s proportion of the net pension asset was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2016, the City’s proportion was 0.1081%, which is a decrease of 0.0143% from its proportion measured as of June 30, 2015. For the year ended June 30, 2017, the City recognized pension expense of $1,644,558. At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual $ 536,962 $ - experience Changes of assumptions 3,461,489 - Net difference between projected and actual earnings on investments 3,206,385 - Changes in proportionate share 104,763 768,377 Differences between employer contributions and proportionate share of contributions 44,732 255,498 Contributions subsequent to measurement date 1,034,667 - Total $ 8,388,998 $ 1,023,875 Deferred Outflows of Resources Deferred Inflows of Resources ---PAGE BREAK--- - 40 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM (Continued) Pension Assets, Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Deferred outflows of resources related to pensions of $1,034,667 resulting from the City’s contributions subsequent to the measurement date will be recognized as either a reduction of the net pension liability or an increase in the net pension asset in the year ending June 30, 2018. Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as an addition to (reduction from) as follows: Fiscal Year Ending June 30, 2018 $ 1,082,552 2019 1,082,552 2020 2,267,204 2021 1,687,720 2022 210,428 Total $ 6,330,456 Actuarial Methods and Assumptions The total pension liability in the December 31, 2014 actuarial valuation was determined using the following actuarial methods and assumptions: Actuarial Cost Method Entry Age Normal Amortization Method Amortized as a level percentage of payroll as layered amortization bases over a closed period; Tier One/Tier Two UAL is amortized over 20 years and OPSRP pension UAL is amortized over 16 years Asset Valuation Method Market value of assets Actuarial Assumptions: Inflation Rate 2.50% Investment Rate of Return 7.50% Projected Salary Increases 3.50% overall payroll growth; salaries for individuals are assumed to grow at 3.50% plus assumed rates of merit/longevity increases based on service ---PAGE BREAK--- - 41 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM (Continued) Actuarial Methods and Assumptions (Continued) Mortality Healthy retirees and beneficiaries: RP-2000 Sex-distinct, generational per Scale BB, with collar adjustments and set-backs as described in the valuation. Active members: Mortality rates are a percentage of healthy retiree rates that vary by group, as described in the valuation. Disabled retirees: Mortality rates are a percentage (70% for males, 95% for females) of the RP-2000 Sex-distinct, generational per Scale BB, disabled mortality table. Actuarial valuations of an ongoing plan involve estimates of the value of projected benefits and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Experience studies are performed as of December 31 of even numbered years. The methods and assumptions shown above are based on the 2014 experience study which reviewed experience for the four-year period ending on December 31, 2014. Long-Term Expected Rate of Return To develop an analytical basis for the selection of the long-term expected rate of return assumption, in July 2013 the PERS Board reviewed long-term assumptions developed by both Milliman’s capital market assumptions team and the Oregon Investment Council’s (OIC) investment advisors. The table below shows Milliman’s assumptions for each of the asset classes in which the plan was invested at that time based on the OIC long-term target asset allocation. The OIC’s description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption was based on a consistent set of underlying assumptions, and includes adjustment for the inflation assumption. These assumptions are not based on historical returns, but instead are based on a forward-looking capital market economic model. ---PAGE BREAK--- - 42 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM (Continued) Long-Term Expected Rate of Return (Continued) Asset Class Core Fixed Income 8.00 % 4.00 % Short-Term Bonds 8.00 3.61 Bank/Leveraged Loans 3.00 5.42 High Yield Bonds 1.00 6.20 Large/Mid Cap US Equities 15.75 6.70 Small Cap US Equities 1.31 6.99 Micro Cap US Equities 1.31 7.01 Developed Foreign Equities 13.13 6.73 Emerging Market Equities 4.12 7.25 Non-US Small Cap Equities 1.88 7.22 Private Equity 17.50 7.97 Real Estate (Property) 10.00 5.84 Real Estate (REITS) 2.50 6.69 Hedge Fund of Funds - Diversified 2.50 4.64 Hedge Fund - Event-driven 0.63 6.72 Timber 1.88 5.85 Farmland 1.88 6.37 Infrastructure 3.75 7.13 Commodities 1.88 4.58 Assumed Inflation - Mean 2.50 % Target Compount Annual Return (Geometric) Discount Rate The discount rate used to measure the total pension liability was 7.50% for the Defined Benefit Pension Plan. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and those contributing employers are made at the contractually required rates, as actuarially determined. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments for the Defined Benefit Pension Plan was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the City’s proportionate share of the net pension liability to changes in the discount rate The following presents the City’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.50%, as well as what the City’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate: ---PAGE BREAK--- - 43 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM (Continued) Proportionate share of the net pension liability $ 26,206,188 $ 16,230,092 $ 7,891,822 1% Decrease (6.50%) Discount Rate (7.50%) 1% Increase (8.50%) Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued OPERS financial report. DEFINED CONTRIBUTION PENSION PLANS The City sponsors two defined contribution pension plans. Both plan's provisions and contribution requirements are established and amended by the City Council. The 401A is administered by ICMA Retirement Corp. to provide retirement benefits for the City Attorney. The City has established a contribution amount equivalent to approximately 7% of covered salary. The City contributed $8,424 to the plan for the year ended June 30, 2017. The 457 plan is administered by both ICMA Retirement Corporation and First Investors Financial Services, and provides additional retirement benefits for contract and unrepresented employees. The City has established matching contribution rates of 5% or 8.5%, depending on contractual agreements. The City contributed $161,876 to the plan for the year ended June 30, 2017. TRANSFERS Interfund transfers on the GAAP basis of accounting are as follows: Governmental funds: General $ 605,443 $ 197,742 Street 90,000 101,222 Governmental non-major 386,765 133,103 Proprietary funds: Water 57,411 179,311 Sewer - 608,384 Sewer Capital Construction 78,607 - Proprietary non-major 1,536 - $ 1,219,762 $ 1,219,762 Transfers In Transfers Out ---PAGE BREAK--- - 44 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 TRANSFERS (Continued) Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, and use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. INTERFUND LOANS LOANS RECEIVABLE Fund Water Capital Construction $ 76,777 $ (38,009) $ 38,768 Street SDC 76,776 (38,008) 38,768 Street SDC 69,294 (69,294) - $ 222,847 $ (145,311) $ 77,536 Received July 1, 2016 Outstanding Outstanding June 30, 2017 Payments LOANS PAYABLE Fund General $ 102,289 $ (50,639) $ 51,650 Special Assessments 69,294 (69,294) - Water 25,632 (12,689) 12,943 Sewer 25,632 (12,689) 12,943 $ 222,847 $ (145,311) $ 77,536 July 1, 2016 Made June 30, 2017 Payments Outstanding Outstanding The loans receivable and payable reflect two internal loans for the purchase of the City’s accounting and telephone systems, both which will be retired as of June 30, 2018. ---PAGE BREAK--- - 45 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 DEFICIT NET POSITION/FUND BALANCES The following funds reported deficit balances as of June 30, 2017: Internal Service Funds Information services (86,029) $ The deficit fund balance in the information services fund is due to changes in net pension liability during the year. CONTINGENCIES The City purchases commercial insurance to cover all commonly insurable risks, which includes property damage, liability and employee bonds. Most policies carry a small deductible amount. No insurance claims settled in each of the prior three years have exceeded policy coverage. The City is a defendant in various litigation proceedings. Management believes any losses arising from these actions will not materially affect the City's financial position. NEW PRONOUNCEMENTS The City implemented the following pronouncement during the current fiscal year: GASB Statement No. 77, “Tax Abatement Disclosures,” addresses the disclosure requirements for governments that have tax abated properties in their jurisdiction. It requires governments to disclose a description of the tax abatement program, the gross dollar amount of taxes abated during the period, and commitments made by a government, other than to abate taxes, as part of the tax abatement agreement. The pronouncement had no effect on the financial statements. The City will implement applicable new GASB pronouncements no later than the required fiscal year. Management has not determined the effect on the financial statements from implementing any of the following pronouncements. GASB Statement No. 75, “Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions”, addresses reporting by governments that provide OPEB to their employees and for governments that finance OPEB for employees of other governments. It requires governments in all types of OPEB plans to present more extensive note disclosures and required supplementary information (RSI) about their OPEB liabilities. This statement is effective for fiscal years beginning after June 15, 2017. GASB Statement No. 82, “An Amendment of GASB Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions, and No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68.” This statement will improve financial reporting by enhancing consistency in the application of financial reporting requirements to certain pension issues. Specifically, this Statement addresses issues regarding the presentation of payroll-related measures in required supplementary information, the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and the classification of payments made by employers to satisfy employee (plan member) contribution requirements. This statement is effective for the first reporting period in which the measurement date of the pension liability is on or after June 15, 2017. ---PAGE BREAK--- - 46 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2017 SUBSEQUENT EVENTS Management has evaluated subsequent events through December 21, 2017 the date on which the financial statements were available to be issued. Management is not aware of any subsequent events that require recognition or disclosure in the financial statements. ---PAGE BREAK--- REQUIRED SUPPLEMENTARY INFORMATION ---PAGE BREAK--- - 47 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Taxes and assessments 8,594,000 $ 8,594,000 $ 9,065,453 $ 471,453 $ Licenses and permits 158,500 158,500 222,880 64,380 Franchise fees 1,696,323 1,696,323 1,750,711 54,388 Charges for services 845,000 845,000 861,991 16,991 Intergovernmental 764,000 764,000 845,008 81,008 Fines and forfeitures 470,400 470,400 420,305 (50,095) Miscellaneous 182,435 182,435 243,300 60,865 Total Revenues 12,710,658 12,710,658 13,409,648 698,990 EXPENDITURES Council and Mayor 21,000 21,000 19,148 1,852 Administration 245,581 245,581 242,427 3,154 Economic Development 87,092 87,092 81,224 5,868 City Recorder 85,010 85,010 78,858 6,152 City Attorney 195,546 195,546 188,103 7,443 Finance 593,827 593,827 567,768 26,059 Human Resources 200,663 200,663 164,697 35,966 Nondepartmental 223,566 223,566 178,500 45,066 Police 7,222,364 7,222,364 6,861,768 360,596 Library 869,871 869,871 855,535 14,336 Recreation 464,435 464,435 421,870 42,565 Aquatic Center 598,730 598,730 585,463 13,267 Community Services Administration 351,707 351,707 331,054 20,653 Planning 387,331 387,331 374,824 12,507 Engineering 504,625 504,625 454,654 49,971 Maintenance 898,265 898,265 816,262 82,003 Contingency 3,553,592 3,550,996 - 3,550,996 Total Expenditures 16,503,205 16,500,609 12,222,155 4,278,454 REVENUES OVER (UNDER) EXPENDITURES (3,792,547) (3,789,951) 1,187,493 4,977,444 OTHER FINANCING SOURCES (USES) Transfers out (207,453) (210,049) (197,742) 12,307 Proceeds from sale of assets - - 19,861 19,861 Total Other Financing Sources (Uses) (207,453) (210,049) (177,881) 32,168 NET CHANGE IN FUND BALANCE (4,000,000) (4,000,000) 1,009,612 5,009,612 FUND BALANCE, beginning of year 4,000,000 4,000,000 5,294,819 1,294,819 FUND BALANCE, end of year (budgetary basis) - $ - $ 6,304,431 6,304,431 $ Interfund loan (51,650) FUND BALANCE, end of year (GAAP basis) 6,252,781 $ Budget Amounts ---PAGE BREAK--- - 48 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - STREET FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Taxes and assessments 100,000 $ 100,000 $ 129,412 $ 29,412 $ Licenses and permits - - 202 202 Franchise fees 320,000 320,000 359,820 39,820 Intergovernmental 1,400,000 1,400,000 1,480,082 80,082 Miscellaneous 202,497 202,497 137,675 (64,822) Total Revenues 2,022,497 2,022,497 2,107,191 84,694 EXPENDITURES Personal services 709,127 709,127 625,844 83,283 Materials and services 1,609,029 1,609,029 924,620 684,409 Capital outlay 5,500 5,500 5,500 - Contingency 231,816 231,816 - 231,816 Total Expenditures 2,555,472 2,555,472 1,555,964 999,508 REVENUES OVER (UNDER) EXPENDITURES (532,975) (532,975) 551,227 1,084,202 OTHER FINANCING SOURCES (USES) Transfers in 90,000 90,000 90,000 - Transfers out (1,174,501) (1,174,501) (101,222) 1,073,279 Total Other Financing Sources (Uses) (1,084,501) (1,084,501) (11,222) 1,073,279 NET CHANGE IN FUND BALANCE (1,617,476) (1,617,476) 540,005 2,157,481 FUND BALANCE, beginning of year 2,689,000 2,689,000 3,365,799 676,799 FUND BALANCE, end of year (budgetary basis) 1,071,524 $ 1,071,524 $ 3,905,804 $ 2,834,280 $ Budget Amounts ---PAGE BREAK--- - 49 - CITY OF WOODBURN, OREGON SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY (ASSET) OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM LAST FOUR FISCAL YEARS 1 2017 2016 2015 2014 City's proportion of the net pension liability (asset) 0.1081% 0.1224% 0.1145% 0.1145% (16,230,093) $ (7,026,676) $ 2,595,126 $ (5,842,512) $ City's covered-employee payroll 8,800,124 8,344,438 8,457,225 8,048,595 City's proportionate share of the net pension liability (asset) as a percentage of its covered-employee payroll -184.4% -84.2% 30.7% -72.6% Plan fiduciary net position as a percentage of the total pension liability 80.5% 91.9% 103.6% 92.0% 1 10-year trend information required by GASB Statement 68 will be presented prospectively City's proportionate share of the net pension liability (asset) ---PAGE BREAK--- - 50 - CITY OF WOODBURN, OREGON SCHEDULE OF THE CITY’S CONTRIBUTIONS OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM LAST FOUR FISCAL YEARS 1 2017 2016 2015 2014 Contractually required contributions 1,034,667 $ 1,096,838 $ 1,046,147 $ 1,022,429 $ Contributions in relation to the contractually required contribution (1,034,667) (1,096,838) (1,046,147) (1,022,429) Contribution deficiency (excess) - $ - $ - $ - $ City's covered-employee payroll 8,800,124 $ 8,344,438 $ 8,457,225 $ 8,048,595 $ . Contributions as a percentage of covered-employee payroll 11.76% 13.14% 12.37% 12.70% 1 10-year trend information required by GASB Statement 68 will be presented prospectively ---PAGE BREAK--- SUPPLEMENTARY INFORMATION ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 Transit Building Inspection Search and Seizure ASSETS Cash and investments 73,351 $ 623,694 $ 9,681 $ Accounts receivable 66,480 - - Property taxes receivable - - - Assessment liens receivable - - - Loans receivable - - - Prepaid expenses - - - Due from other funds - - - Total Assets 139,831 $ 623,694 $ 9,681 $ LIABILITIES, DEFERRED INFLOWS AND FUND BALANCE Liabilities: Accounts payable 5,695 $ 9,818 $ - $ Accrued payroll and payroll liabilities 14,198 14,775 - Due to other funds - - - Total Liabilities 19,893 24,593 - Deferred Inflows: Unavailable revenue - - - Fund Balance: Restricted for: Debt service - - - Construction - - - Culture and recreation 119,938 - - Community development - - - Committed to: Public safety - - 9,681 Capital outlay - - - Planning and building - 599,101 - Unassigned - - - Total Fund Balance 119,938 599,101 9,681 Total Liabilities and Fund Balance 139,831 $ 623,694 $ 9,681 $ Special Revenue ---PAGE BREAK--- - 51 - Capital Projects Housing Rehabilitation Library Endowment Museum Endowment Lavelle Black Trust URA General Capital Construction 250,392 $ 26,851 $ 829 $ 55,971 $ 2,164,713 $ - $ - - - - - 130,588 - - - - 28,238 - - - - - - - 650,169 - - - - - - - - - - - - - - - - - 900,561 $ 26,851 $ 829 $ 55,971 $ 2,192,951 $ 130,588 $ - $ - $ - $ 8,769 $ 87,085 $ 125,640 $ 281 - - - 3,259 - - - - - - 4,948 281 - - 8,769 90,344 130,588 650,169 - - - 25,419 - - - - - - - - - - - - - - 26,851 829 47,202 - - 250,111 - - - 2,077,188 - - - - - - - - - - - - - - - - - - - - - - - - - 250,111 26,851 829 47,202 2,077,188 - 900,561 $ 26,851 $ 829 $ 55,971 $ 2,192,951 $ 130,588 $ Special Revenue ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS (Continued) JUNE 30, 2017 Special Assessment Street/Storm Capital Construction Parks SDC ASSETS Cash and investments 12,383 $ 1,330 $ 248,835 $ Accounts receivable - - - Property taxes receivable - - - Assessment liens receivable 34,135 - - Loans receivable - - - Prepaid expenses - - - Due from other funds - - - Total Assets 46,518 $ 1,330 $ 248,835 $ LIABILITIES, DEFERRED INFLOWS AND FUND BALANCE Liabilities: Accounts payable - $ 1,330 $ - $ Accrued payroll and payroll liabilities - - - Due to other funds - - - Total Liabilities - 1,330 - Deferred Inflows: Unavailable revenue 34,135 - - Fund Balance: Restricted for: Debt service - - - Construction - - 248,835 Culture and recreation - - - Community development - - - Committed to: Public safety - - - Capital outlay 12,383 - - Planning and building - - - Unassigned - - - Total Fund Balance 12,383 - 248,835 Total Liabilities and Fund Balance 46,518 $ 1,330 $ 248,835 $ Capital Projects ---PAGE BREAK--- - 52 - Debt Service Street SDC Storm SDC Equipment Replacement GO Debt Service Total 2,680,411 586,733 $ 919,698 $ - $ 7,654,872 $ - - - - 197,068 - - - 23,990 52,228 - - - - 34,135 - - - - 650,169 - - - - - 38,768 - - - 38,768 2,719,179 $ 586,733 $ 919,698 $ 23,990 $ 8,627,240 $ - $ - $ - $ - $ 238,337 $ - - - - 32,513 - - - 646 5,594 - - - 646 276,444 - - - 21,586 731,309 - - - 1,758 1,758 2,719,179 586,733 - - 3,554,747 - - - - 194,820 - - - - 2,327,299 - - - - 9,681 - - 919,698 - 932,081 - - - - 599,101 - - - - - 2,719,179 586,733 919,698 1,758 7,619,487 2,719,179 $ 586,733 $ 919,698 $ 23,990 $ 8,627,240 $ Capital Projects ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2017 Transit Building Inspection Search and Seizure REVENUES Taxes and assessments - $ - $ - $ Licenses and permits - 458,741 - Charges for services 38,227 - - Intergovernmental 431,122 44,185 - Miscellaneous 16,851 16,445 80 Total Revenues 486,200 519,371 80 EXPENDITURES Current General government - 442,983 - Culture and recreation 611,274 - - Debt service Principal - - - Interest - - - Capital outlay - - - Total Expenditures 611,274 442,983 - REVENUES OVER (UNDER) EXPENDITURES (125,074) 76,388 80 OTHER FINANCING SOURCES (USES) Transfers in 116,000 - 2,596 Transfers out (3,001) (3,001) - Total Other Financing Sources (Uses) 112,999 (3,001) 2,596 NET CHANGE IN FUND BALANCE (12,075) 73,387 2,676 FUND BALANCE, beginning of year 132,013 525,714 7,005 FUND BALANCE, end of year 119,938 $ 599,101 $ 9,681 $ Special Revenue ---PAGE BREAK--- - 53 - Housing Rehabilitation Library Endowment Museum Endowment Lavelle Black Trust URA General Capital Construction - $ - $ - $ - $ 619,602 $ - $ - - - - - - - - - - - - - - - - - 130,588 13,766 288 202 20,935 35,129 - 13,766 288 202 20,935 654,731 130,588 - - - - - - 14,169 - - 17,268 159,797 - - - - - - - - - - - - - - - - - 131,090 200,278 14,169 - - 17,268 290,887 200,278 (403) 288 202 3,667 363,844 (69,690) - - - - - 69,690 - - - - - - - - - - - 69,690 (403) 288 202 3,667 363,844 - 250,514 26,563 627 43,535 1,713,344 - 250,111 $ 26,851 $ 829 $ 47,202 $ 2,077,188 $ - $ Special Revenue Capital Projects ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (Continued) YEAR ENDED JUNE 30, 2017 Special Assessment Street/Storm Capital Construction Parks SDC REVENUES Taxes and assessments - $ - $ - $ Licenses and permits - - 21,405 Charges for services - - - Intergovernmental - - - Miscellaneous 12,508 5 3,291 Total Revenues 12,508 5 24,696 EXPENDITURES Current General government - - - Culture and recreation - - 1,312 Debt service Principal - - - Interest - - - Capital outlay - 78,929 - Total Expenditures - 78,929 1,312 REVENUES OVER (UNDER) EXPENDITURES 12,508 (78,924) 23,384 OTHER FINANCING SOURCES (USES) Transfers in 2,693 66,721 - Transfers out - - (69,690) Total Other Financing Sources (Uses) 2,693 66,721 (69,690) NET CHANGE IN FUND BALANCE 15,201 (12,203) (46,306) FUND BALANCE, beginning of year (2,818) 12,203 295,141 FUND BALANCE, end of year 12,383 $ - $ 248,835 $ Capital Projects ---PAGE BREAK--- - 54 - Debt Service Street SDC Storm SDC Equipment Replacement GO Debt Service Total - $ - $ - $ 510,697 $ 1,130,299 $ 33,396 21,980 - - 535,522 - - - - 38,227 - - - - 605,895 28,675 6,100 25,197 2,510 181,982 62,071 28,080 25,197 513,207 2,491,925 - - - - 442,983 - - - - 803,820 30,399 - - 370,000 400,399 3,371 - 166,566 169,937 - - 57,411 - 467,708 33,770 - 57,411 536,566 2,284,847 28,301 28,080 (32,214) (23,359) 207,078 1,536 - 70,000 - 329,236 - - - - (75,692) 1,536 - 70,000 - 253,544 29,837 28,080 37,786 (23,359) 460,622 2,689,342 558,653 881,912 25,117 7,158,865 2,719,179 $ 586,733 $ 919,698 $ 1,758 $ 7,619,487 $ Capital Projects ---PAGE BREAK--- - 55 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - TRANSIT FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Charges for services 48,500 $ 48,500 $ 38,227 $ (10,273) $ Intergovernmental 440,000 440,000 431,122 (8,878) Miscellaneous 10,250 10,250 16,851 6,601 Total Revenues 498,750 498,750 486,200 (12,550) EXPENDITURES Personal services 426,614 426,614 424,984 1,630 Materials and services 219,212 219,212 202,073 17,139 Contingency 105,923 105,923 - 105,923 Total Expenditures 751,749 751,749 627,057 124,692 REVENUES OVER (UNDER) EXPENDITURES (252,999) (252,999) (140,857) 112,142 OTHER FINANCING SOURCES (USES) Transfers in 116,000 116,000 116,000 - Transfers out (3,001) (3,001) (3,001) - Total Other Financing Sources (Uses) 112,999 112,999 112,999 - NET CHANGE IN FUND BALANCE (140,000) (140,000) (27,858) 112,142 FUND BALANCE, beginning of year 140,000 140,000 147,796 7,796 FUND BALANCE, end of year - $ - $ 119,938 $ 119,938 $ Budget Amounts ---PAGE BREAK--- - 56 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - BUILDING INSPECTION FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Licenses and permits 638,389 $ 638,389 $ 458,741 $ (179,648) $ Intergovernmental 455,561 455,561 44,185 (411,376) Miscellaneous 6,360 6,360 16,445 10,085 Total Revenues 1,100,310 1,100,310 519,371 (580,939) EXPENDITURES Personal services 460,068 460,068 363,430 96,638 Materials and services 537,181 537,181 92,426 444,755 Contingency 500,060 500,060 - 500,060 Total Expenditures 1,497,309 1,497,309 455,856 1,041,453 REVENUES OVER (UNDER) EXPENDITURES (396,999) (396,999) 63,515 460,514 OTHER FINANCING SOURCES (USES) Transfers out (3,001) (3,001) (3,001) - NET CHANGE IN FUND BALANCE (400,000) (400,000) 60,514 460,514 FUND BALANCE, beginning of year 400,000 400,000 538,587 138,587 FUND BALANCE, end of year - $ - $ 599,101 $ 599,101 $ Budget Amounts ---PAGE BREAK--- - 57 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – SEARCH AND SEIZURE FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Miscellaneous - $ - $ 80 $ 80 $ EXPENDITURES Materials and services 6,975 9,571 - 9,571 REVENUES OVER (UNDER) EXPENDITURES (6,975) (9,571) 80 9,651 OTHER FINANCING SOURCES (USES) Transfers in - 2,596 2,596 - NET CHANGE IN FUND BALANCE (6,975) (6,975) 2,676 9,651 FUND BALANCE, beginning of year 6,975 6,975 7,005 30 FUND BALANCE, end of year - $ - $ 9,681 $ 9,681 $ Budget Amounts ---PAGE BREAK--- - 58 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - HOUSING REHABILITATION FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Miscellaneous 21,000 $ 21,000 $ 13,766 $ (7,234) $ EXPENDITURES Personal services 13,983 13,983 14,665 (682) * Materials and services 16,000 16,000 - 16,000 Contingency 218,017 218,017 - 218,017 Total Expenditures 248,000 248,000 14,665 233,335 NET CHANGE IN FUND BALANCE (227,000) (227,000) (899) 226,101 FUND BALANCE, beginning of year 227,000 227,000 251,010 24,010 FUND BALANCE, end of year - $ - $ 250,111 $ 250,111 $ Budget Amounts *Budget is appropriated by function, therefore this is not an expenditure in excess of appropriations. ---PAGE BREAK--- - 59 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – LIBRARY ENDOWMENT FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Miscellaneous 100 $ 100 $ 288 $ 188 $ EXPENDITURES Contingency 26,595 26,595 - 26,595 NET CHANGE IN FUND BALANCE (26,495) (26,495) 288 26,783 FUND BALANCE, beginning of year 26,495 26,495 26,563 68 FUND BALANCE, end of year - $ - $ 26,851 $ 26,851 $ Budget Amounts ---PAGE BREAK--- - 60 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – MUSEUM ENDOWMENT FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Miscellaneous - $ - $ 202 $ 202 $ EXPENDITURES - - - - NET CHANGE IN FUND BALANCE - - 202 202 FUND BALANCE, beginning of year - - 627 627 FUND BALANCE, end of year - $ - $ 829 $ 829 $ Budget Amounts ---PAGE BREAK--- - 61 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – LAVELLE BLACK TRUST FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Miscellaneous 200 $ 200 $ 20,935 $ 20,735 $ EXPENDITURES Materials and services 10,000 10,000 17,268 (7,268) * Contingency 30,200 30,200 - 30,200 Total Expenditures 40,200 40,200 17,268 22,932 NET CHANGE IN FUND BALANCE (40,000) (40,000) 3,667 43,667 FUND BALANCE, beginning of year 40,000 40,000 43,535 3,535 FUND BALANCE, end of year - $ - $ 47,202 $ 47,202 $ Budget Amounts *Budget is appropriated by function, therefore this is not an expenditure in excess of appropriations. ---PAGE BREAK--- - 62 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – URBAN RENEWAL AGENCY FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Taxes and assessments 565,000 $ 615,989 $ 619,602 $ 3,613 $ Miscellaneous 7,000 12,768 35,129 22,361 Total Revenues 572,000 628,757 654,731 25,974 EXPENDITURES Personal services 84,387 84,387 85,774 (1,387) * Materials and services 84,000 84,000 76,992 7,008 Capital outlay 200,000 273,068 131,090 141,978 Contingency 16,838 16,838 - 16,838 Total Expenditures 385,225 458,293 293,856 164,437 NET CHANGE IN FUND BALANCE 186,775 170,464 360,875 190,411 FUND BALANCE, beginning of year 1,700,000 1,716,311 1,716,313 2 FUND BALANCE, end of year 1,886,775 $ 1,886,775 $ 2,077,188 $ 190,413 $ Budget Amounts *Budget is appropriated by function, therefore this is not an expenditure in excess of appropriations. ---PAGE BREAK--- - 63 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Intergovernmental - $ 121,752 $ 130,588 $ 8,836 $ EXPENDITURES Capital outlay - 225,000 200,278 24,722 REVENUES OVER (UNDER) EXPENDITURES - (103,248) (69,690) 33,558 OTHER FINANCING SOURCES (USES) Transfers in - 103,248 69,690 (33,558) NET CHANGE IN FUND BALANCE - - - - FUND BALANCE, beginning of year - - - - FUND BALANCE, end of year - $ - $ - $ - $ Budget Amounts ---PAGE BREAK--- - 64 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – SPECIAL ASSESSMENT FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Miscellaneous 5,500 $ 5,500 $ 12,508 $ 7,008 $ EXPENDITURES Contingency 11,206 11,206 - 11,206 REVENUES OVER (UNDER) EXPENDITURES (5,706) (5,706) 12,508 18,214 OTHER FINANCING SOURCES (USES) Transfers in 15,000 15,000 2,693 (12,307) Transfers out (69,294) (69,294) (69,294) - Total Other Financing Sources and Uses (54,294) (54,294) (66,601) (12,307) NET CHANGE IN FUND BALANCE (60,000) (60,000) (54,093) 5,907 FUND BALANCE, beginning of year 60,000 60,000 66,476 6,476 FUND BALANCE, end of year - $ - $ 12,383 $ 12,383 $ Budget Amounts ---PAGE BREAK--- - 65 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – STREET/STORM CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Intergovernmental 500,000 $ 500,000 $ - $ (500,000) $ Miscellaneous - - 5 5 Total Revenues 500,000 500,000 5 (499,995) EXPENDITURES Capital outlay 3,495,000 3,495,000 78,929 3,416,071 Contingency 11,000 11,000 - 11,000 Total Expenditures 3,506,000 3,506,000 78,929 3,427,071 REVENUES OVER (UNDER) EXPENDITURES (3,006,000) (3,006,000) (78,924) 2,927,076 OTHER FINANCING SOURCES (USES) Transfers in 2,995,000 2,995,000 66,721 (2,928,279) NET CHANGE IN FUND BALANCE (11,000) (11,000) (12,203) (1,203) FUND BALANCE, beginning of year 11,000 11,000 12,203 1,203 FUND BALANCE, end of year - $ - $ - $ - $ Budget Amounts ---PAGE BREAK--- - 66 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – PARKS SDC FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Licenses and permits 90,000 $ 90,000 $ 21,405 $ (68,595) $ Miscellaneous 1,500 1,500 3,291 1,791 Total Revenues 91,500 91,500 24,696 (66,804) EXPENDITURES Materials and services 10,000 10,000 1,312 8,688 REVENUES OVER (UNDER) EXPENDITURES 81,500 81,500 23,384 (58,116) OTHER FINANCING SOURCES (USES) Transfers out - (103,248) (69,690) 33,558 NET CHANGE IN FUND BALANCE 81,500 (21,748) (46,306) (24,558) FUND BALANCE, beginning of year 275,000 275,000 295,141 20,141 FUND BALANCE, end of year 356,500 $ 253,252 $ 248,835 $ (4,417) $ Budget Amounts ---PAGE BREAK--- - 67 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – STREET SDC FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Licenses and permits 200,000 $ 200,000 $ 33,396 $ (166,604) $ Miscellaneous 1,000 1,000 28,675 27,675 Total Revenues 201,000 201,000 62,071 (138,929) EXPENDITURES Debt service Principal 30,399 30,399 30,399 - Interest 3,371 3,371 3,371 - Total Expenditures 33,770 33,770 33,770 - REVENUES OVER (UNDER) EXPENDITURES 167,230 167,230 28,301 (138,929) OTHER FINANCING SOURCES (USES) Transfers in 108,838 108,838 108,838 - Transfers out (1,700,000) (1,700,000) - 1,700,000 Total Other Financing Sources and Uses (1,591,162) (1,591,162) 108,838 1,700,000 NET CHANGE IN FUND BALANCE (1,423,932) (1,423,932) 137,139 1,561,071 FUND BALANCE, beginning of year 2,200,000 2,200,000 2,543,272 - FUND BALANCE, end of year 776,068 $ 776,068 $ 2,680,411 $ 1,561,071 $ Interfund loan 38,768 FUND BALANCE, end of year GAAP basis 2,719,179 $ Budget Amounts ---PAGE BREAK--- - 68 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – STORM SDC FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Licenses and Permits 25,000 $ 25,000 $ 21,980 $ (3,020) $ Miscellaneous 2,500 2,500 6,100 3,600 Total Revenues 27,500 27,500 28,080 580 EXPENDITURES - - - - REVENUES OVER (UNDER) EXPENDITURES 27,500 27,500 28,080 580 OTHER FINANCING SOURCES (USES) Transfers out (155,000) (155,000) - 155,000 NET CHANGE IN FUND BALANCE (127,500) (127,500) 28,080 155,580 FUND BALANCE, beginning of year 496,000 496,000 558,653 62,653 FUND BALANCE, end of year 368,500 $ 368,500 $ 586,733 $ 218,233 $ Budget Amounts ---PAGE BREAK--- - 69 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – EQUIPMENT REPLACEMENT FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Miscellaneous 4,500 $ 4,500 $ 25,197 $ 20,697 $ EXPENDITURES Capital outlay 954,837 954,837 57,411 897,426 REVENUES OVER (UNDER) EXPENDITURES (950,337) (950,337) (32,214) 918,123 OTHER FINANCING SOURCES (USES) Transfers in 70,000 70,000 70,000 - NET CHANGE IN FUND BALANCE (880,337) (880,337) 37,786 918,123 FUND BALANCE, beginning of year 880,337 880,337 881,912 1,575 FUND BALANCE, end of year - $ - $ 919,698 $ 919,698 $ Budget Amounts ---PAGE BREAK--- - 70 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL OBLIGATION DEBT SERVICE FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Taxes and assessments 522,000 $ 522,000 $ 510,697 $ (11,303) $ Miscellaneous 450 450 2,510 2,060 Total Revenues 522,450 522,450 513,207 (9,243) EXPENDITURES Principal 370,000 370,000 370,000 - Interest 166,566 166,566 166,566 - Total Expenditures 536,566 536,566 536,566 - NET CHANGE IN FUND BALANCE (14,116) (14,116) (23,359) (9,243) FUND BALANCE, beginning of year 32,000 32,000 25,117 (6,883) FUND BALANCE, end of year 17,884 $ 17,884 $ 1,758 $ (16,126) $ Budget Amounts ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF FUND NET POSITION - NONMAJOR PROPRIETARY (ENTERPRISE) FUNDS JUNE 30, 2017 Water SDC Sewer SDC Water Capital Construction ASSETS Current Assets Cash and investments 1,224,264 $ 1,215,981 $ 1,807,077 $ Accounts receivable - - 205 Due from other funds - - 38,768 Total Current Assets 1,224,264 1,215,981 1,846,050 Noncurrent Assets Nondepreciable capital assets - - 1,307,695 Capital assets, net of depreciation - - 1,509,491 Total Noncurrent Assets - - 2,817,186 Total Assets 1,224,264 1,215,981 4,663,236 LIABILITIES Accounts payable 566 - - NET POSITION: Net investment in capital assets - - 2,817,186 Restricted for: Construction 1,223,698 1,215,981 1,846,050 Total Net Position 1,223,698 $ 1,215,981 $ 4,663,236 $ ---PAGE BREAK--- - 71 - Total 4,247,322 $ 205 38,768 4,286,295 1,307,695 1,509,491 2,817,186 7,103,481 566 2,817,186 4,285,729 7,102,915 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - NONMAJOR PROPRIETARY (ENTERPRISE) FUNDS YEAR ENDED JUNE 30, 2017 Water SDC Sewer SDC Water Capital Construction OPERATING REVENUES - $ - $ - $ OPERATING EXPENSES Materials and services 26,218 - - Depreciation - - 58,684 Total Expenses 26,218 - 58,684 OPERATING INCOME (LOSS) (26,218) - (58,684) NONOPERATING REVENUES (EXPENSES) Investment revenue 13,057 12,553 21,640 NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS (13,161) 12,553 (37,044) Capital contributions 41,133 73,531 - System development revenue - - - Transfers in - - 1,536 Transfers out - - - CHANGE IN NET POSITION 27,972 86,084 (35,508) NET POSITION, beginning of year 1,195,726 1,129,897 4,698,744 NET POSITION, end of year 1,223,698 $ 1,215,981 $ 4,663,236 $ ---PAGE BREAK--- - 72 - Total - $ 26,218 58,684 84,902 (84,902) 47,250 (37,652) 114,664 - 1,536 - 78,548 7,024,367 7,102,915 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF CASH FLOWS - NONMAJOR PROPRIETARY (ENTERPRISE) FUNDS YEAR ENDED JUNE 30, 2017 CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers $ - $ - Paid to suppliers (25,652) - Net Cash Provided by Operating Activities (25,652) - CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in - - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets - - System development receipts 63,373 117,124 Net Cash Provided by (Used in) Capital and Related Financing Activities 63,373 117,124 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 13,057 12,553 Increase (Decrease) in Cash and Investments 50,778 129,677 CASH AND INVESTMENTS, Beginning of year, as restated 1,173,486 1,086,304 CASH AND INVESTMENTS, End of year $ 1,224,264 $ 1,215,981 Water Sewer SDC SDC RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) $ (26,218) $ - Depreciation - - Change in assets and liabilities Accounts receivable - - Accounts payable and accrued liabilities 566 - Net Cash Provided by (Used in) Operating Activities $ (25,652) $ - ---PAGE BREAK--- - 73 - Totals $ 63 $ 63 (19,624) (45,276) (19,561) (45,213) 39,544 39,544 (236,919) (236,919) - 180,497 (236,919) (56,422) 21,640 47,250 (195,296) (14,841) 2,002,373 4,262,163 $ 1,807,077 $ 4,247,322 Water Capital Construction $ (58,684) $ (84,902) 58,684 58,684 63 63 (19,624) (19,058) $ (19,561) $ (45,213) ---PAGE BREAK--- - 74 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET (NON-GAAP BASIS) AND ACTUAL - WATER FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Charges for services 3,529,752 $ 3,529,752 $ 3,293,342 $ (236,410) $ Miscellaneous 37,000 37,000 58,922 21,922 Interest earnings 9,600 9,600 22,231 12,631 Total Revenues 3,576,352 3,576,352 3,374,495 (201,857) EXPENDITURES Personal services 1,276,897 1,276,897 1,244,118 32,779 Materials and services 1,003,884 1,003,884 889,030 114,854 Debt service Principal 727,319 727,319 727,318 1 Interest 428,778 428,778 428,779 Contingency 114,039 114,039 - 114,039 Total Expenditures 3,550,917 3,550,917 3,289,245 261,672 REVENUES OVER (UNDER) EXPENDITURES 25,435 25,435 85,250 59,815 OTHER FINANCING SOURCES (USES) Transfers out (32,955) (32,955) (32,955) - Gain (loss) on sale of assets - - 3,505 3,505 Total Other Financing Sources (Uses) (32,955) (32,955) (29,450) 3,505 NET CHANGE IN FUND BALANCE (7,520) (7,520) 55,800 63,320 FUND BALANCE, beginning of year 2,179,000 2,179,000 2,194,087 15,087 FUND BALANCE, end of year 2,171,480 $ 2,171,480 $ 2,249,887 $ 78,407 $ Budget Amounts ---PAGE BREAK--- - 75 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL - SEWER FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Charges for services 8,182,000 $ 8,182,000 $ 8,091,754 $ (90,246) $ Miscellaneous 2,000 2,000 27,214 25,214 Interest earnings 30,000 30,000 79,719 49,719 Total Revenues 8,214,000 8,214,000 8,198,687 (15,313) EXPENDITURES Personal services 1,797,720 1,797,720 1,622,426 175,294 Materials and services 2,136,028 2,136,028 1,609,607 526,421 Debt service Principal 2,715,000 2,715,000 2,603,647 111,353 Interest 818,812 818,812 930,165 (111,353) Contingency 196,687 196,687 - 196,687 Total Expenditures 7,664,247 7,664,247 6,765,845 898,402 REVENUES OVER (UNDER) EXPENDITURES 549,753 549,753 1,432,842 883,089 OTHER FINANCING SOURCES (USES) Transfers out (526,706) (526,706) (225,313) 301,393 NET CHANGE IN FUND BALANCE 23,047 23,047 1,207,529 1,184,482 FUND BALANCE, beginning of year 5,788,000 5,788,000 6,840,999 1,052,999 FUND BALANCE, end of year 5,811,047 $ 5,811,047 $ 8,048,528 $ 2,237,481 $ Budget Amounts ---PAGE BREAK--- - 76 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL – SEWER CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Interest earnings 60,000 $ 60,000 $ 133,902 $ 73,902 $ EXPENDITURES Capital outlay 4,825,000 4,825,000 372,803 4,452,197 REVENUES OVER (UNDER) EXPENDITURES (4,765,000) (4,765,000) (238,901) 4,526,450 OTHER FINANCING SOURCES (USES) Transfers in 880,000 880,000 78,607 (801,393) NET CHANGE IN FUND BALANCE (3,885,000) (3,885,000) (160,294) 3,725,057 FUND BALANCE, beginning of year 12,000,000 12,000,000 12,490,586 490,586 FUND BALANCE, end of year 8,115,000 $ 8,115,000 $ 12,330,292 $ 4,215,643 $ Budget Amounts ---PAGE BREAK--- - 77 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL - WATER SDC FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Licenses and permits 100,000 $ 100,000 $ 63,373 $ (36,627) $ Interest earnings 5,000 5,000 13,057 8,057 Total Revenues 105,000 105,000 76,430 (28,570) EXPENDITURES Materials and services 100,000 100,000 26,218 73,782 NET CHANGE IN FUND BALANCE 5,000 5,000 50,212 45,212 FUND BALANCE, beginning of year 1,062,000 1,062,000 1,173,486 111,486 FUND BALANCE, end of year 1,067,000 $ 1,067,000 $ 1,223,698 $ 156,698 $ Budget Amounts ---PAGE BREAK--- - 78 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL - SEWER SDC FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Licenses and permits 225,000 $ 225,000 $ 117,124 $ (107,876) $ Interest earnings 5,000 5,000 12,553 7,553 Total Revenues 230,000 230,000 129,677 (100,323) EXPENDITURES - - - - REVENUES OVER (UNDER) EXPENDITURES 230,000 230,000 129,677 (100,323) OTHER FINANCING SOURCES (USES) Transfers out (500,000) (500,000) - 500,000 NET CHANGE IN FUND BALANCE (270,000) (270,000) 129,677 399,677 FUND BALANCE, beginning of year 1,060,000 1,060,000 1,086,304 26,304 FUND BALANCE, end of year 790,000 $ 790,000 $ 1,215,981 $ 425,981 $ Budget Amounts ---PAGE BREAK--- - 79 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL – WATER CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Interest earnings 10,000 $ 10,000 $ 21,641 $ 11,641 $ EXPENDITURES Capital outlay 375,000 375,000 236,920 138,080 REVENUES OVER (UNDER) EXPENDITURES (365,000) (365,000) (215,279) 149,721 OTHER FINANCING SOURCES (USES) Transfers in 39,544 39,544 39,544 - NET CHANGE IN FUND BALANCE (325,456) (325,456) (175,735) 149,721 FUND BALANCE, beginning of year 1,779,000 1,779,000 1,983,017 204,017 FUND BALANCE, end of year 1,453,544 $ 1,453,544 $ 1,807,282 $ 353,738 $ Budget Amounts ---PAGE BREAK--- - 80 - CITY OF WOODBURN, OREGON COMBINING STATEMENT OF FUND NET POSITION - INTERNAL SERVICE FUNDS JUNE 30, 2017 Information Services Insurance Total ASSETS Current Assets Cash and investments 223,893 $ 313,317 $ 537,210 $ Accounts receivable 1,841 - 1,841 Total Current Assets 225,734 313,317 539,051 DEFERRED OUTFLOWS Deferred outflows - contributions to PERS 246,394 30,818 277,212 LIABILITIES Current Liabilities Accounts payable 2,001 63,027 65,028 Accrued payroll liabilities 14,595 1,806 16,401 Accrued compensated absences 34,946 - 34,946 Total Current Liabilities 51,542 64,833 116,375 Noncurrent Liabilities Net pension liability 476,587 60,728 537,315 Total Liabilities 528,129 125,561 653,690 DEFERRED INFLOWS Net projected to actual earnings - PERS 30,028 4,216 34,244 NET POSITION: Unrestricted (86,029) $ 214,358 $ 128,329 $ ---PAGE BREAK--- - 81 - CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2017 Information Services Insurance Total OPERATING REVENUES Charges for services 912,937 $ 822,855 $ 1,735,792 $ Miscellaneous 7,591 25,530 33,121 Total Operating Revenues 920,528 848,385 1,768,913 OPERATING EXPENSES Personal services 439,255 42,213 481,468 Materials and services 570,207 675,193 1,245,400 Total Expenses 1,009,462 717,406 1,726,868 OPERATING INCOME (LOSS) (88,934) 130,979 42,045 NONOPERATING REVENUES (EXPENSES) Investment revenue 4,430 4,102 8,532 NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS (84,504) 135,081 50,577 Transfers in 57,529 - 57,529 CHANGE IN NET POSITION (26,975) 135,081 108,106 NET POSITION (Deficit), beginning of year (59,054) 79,277 20,223 NET POSITION (Deficit), end of year (86,029) $ 214,358 $ 128,329 $ ---PAGE BREAK--- - 82 - CITY OF WOODBURN, OREGON COMBINING STATEMENT OF CASH FLOWS - INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2017 Information Services Insurance Totals CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers 940,106 $ 850,250 $ 1,790,356 $ Paid to suppliers (569,547) (700,364) (1,269,911) Paid to employees (368,732) (37,066) (405,798) Net Cash Provided by (Used in) Operating Activities 1,827 112,820 114,647 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in 57,529 - 57,529 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 4,430 4,102 8,532 Increase (Decrease) in Cash and Investments 63,786 116,922 180,708 CASH AND INVESTMENTS, Beginning of year 160,107 196,395 356,502 CASH AND INVESTMENTS, End of year 223,893 $ 313,317 $ 537,210 $ RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) (88,934) $ 130,979 $ 42,045 $ Change in assets and liabilities Accounts receivable 19,579 1,865 21,444 Deferred outflows (199,103) (24,530) (223,633) Compensated absences payable 34,946 - 34,946 Accounts payable and accrued liabilities (12,076) (25,977) (38,053) Net pension liability 270,363 33,310 303,673 Deferred inflows (22,948) (2,827) (25,775) Net Cash Provided by (Used in) Operating Activities 1,827 $ 112,820 $ 114,647 $ Noncash Transactions Transfer of capital assets (102,442) $ - $ (102,442) $ ---PAGE BREAK--- - 83 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BASIS) – INFORMATION SERVICES FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Charges for services 911,071 $ 911,071 $ 912,937 $ 1,866 $ Miscellaneous - - 7,591 7,591 Interest earnings 1,500 1,500 4,430 2,930 Total Revenues 912,571 912,571 924,958 12,387 EXPENDITURES Personal services 375,156 375,156 369,591 5,565 Materials and services 474,357 474,357 467,763 6,594 Capital outlay 102,529 102,529 102,442 87 Contingency 133,058 133,058 - 133,058 Total Expenditures 1,085,100 1,085,100 939,796 145,304 REVENUES OVER (UNDER) EXPENDITURES (172,529) (172,529) (14,838) 157,691 OTHER FINANCING SOURCES (USES) Transfers in 57,529 57,529 57,529 - NET CHANGE IN FUND BALANCE (115,000) (115,000) 42,691 157,691 FUND BALANCE, beginning of year 115,000 115,000 166,448 51,448 FUND BALANCE, end of year - $ - $ 209,139 $ 209,139 $ Budget Amounts ---PAGE BREAK--- - 84 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BASIS) – INSURANCE FUND YEAR ENDED JUNE 30, 2017 Original Final Actual Variance REVENUES Charges for services 822,855 $ 822,855 $ 822,855 $ - $ Miscellaneous 1,000 1,000 25,530 24,530 Interest earnings 2,500 2,500 4,102 1,602 Total Revenues 826,355 826,355 852,487 26,132 EXPENDITURES Personal services 36,586 36,586 37,560 (974) * Materials and services 787,644 787,644 675,193 112,451 Contingency 77,125 77,125 - 77,125 Total Expenditures 901,355 901,355 712,753 188,602 NET CHANGE IN FUND BALANCE (75,000) (75,000) 139,734 214,734 FUND BALANCE, beginning of year 75,000 75,000 108,750 33,750 FUND BALANCE, end of year - $ - $ 248,484 $ 248,484 $ Budget Amounts *Budget is appropriated by function, therefore this is not an expenditure in excess of appropriations. ---PAGE BREAK--- COMPLIANCE SECTION ---PAGE BREAK--- - 85 - 475 Cottage Street NE, Suite 200, Salem, Oregon 97301 (503) 581-7788 INDEPENDENT AUDITOR’S REPORT REQUIRED BY OREGON STATE REGULATIONS Honorable Mayor and Council Members City of Woodburn 270 Montgomery Street Woodburn, Oregon 97071 We have audited, in accordance with auditing standards generally accepted in the United States of America, the basic financial statements of the City of Woodburn as of and for the year ended June 30, 2017, and have issued our report thereon dated December 21, 2017. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Woodburn's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules 162- 10-000 through 162-10-320 of the Minimum Standards for Audits of Oregon Municipal Corporations, noncompliance with which could have a direct and material effect on the determination of financial statements 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. We performed procedures to the extent we considered necessary to address the required comments and disclosures which included, but were not limited to the following:  Deposit of public funds with financial institutions (ORS Chapter 295).  Indebtedness limitations, restrictions and repayment.  Budgets legally required (ORS Chapter 294).  Insurance and fidelity bonds in force or required by law.  Programs funded from outside sources.  Highway revenues used for public highways, roads, and streets.  Authorized investment of surplus funds (ORS Chapter 294).  Public contracts and purchasing (ORS Chapters 279A, 279B, 279C).  Accountability for collecting or receiving money by elected officials – no money was collected or received by elected officials. In connection with our testing nothing came to our attention that caused us to believe the City was not in substantial compliance with certain provisions of laws, regulations, contracts, and grants, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules 162-10-000 through 162-10-320 of the Minimum Standards for Audits of Oregon Municipal Corporations, except deficit fund balances as disclosed in the financial statements. ---PAGE BREAK--- - 86 - 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 to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. Restriction on Use This report is intended solely for the information and use of the council members and management of the City of Woodburn and the Oregon Secretary of State and is not intended to be and should not be used by anyone other than these parties. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS By: Ryan T. Pasquarella, A Shareholder December 21, 2017