Document Woodburn_doc_a8a6e964e7

CITY OF WOODBURN, OREGON Annual Financial Report Year Ended June 30, 2014 ---PAGE BREAK--- CITY OF WOODBURN, OREGON JUNE 30, 2014 MAYOR AND COUNCIL MEMBERS Name Term Expires Mayor Figley December 31, 2014 270 Montgomery Street Woodburn, OR 97071 Council Members Peter McCallum, President December 31, 2014 270 Montgomery Street Woodburn, OR 97071 Jim Cox December 31, 2014 270 Montgomery Street Woodburn, OR 97071 Lisa Ellsworth December 31, 2016 270 Montgomery Street Woodburn, OR 97071 Frank Lonergan December 31, 2014 270 Montgomery Street Woodburn, OR 97071 Eric Morris December 31, 2016 270 Montgomery Street Woodburn, OR 97071 Teresa Alonso Leon December 31, 2016 270 Montgomery Street Woodburn, OR 97071 Staff Scott Derickson, City Administrator N. Robert Shields, City Attorney Sarah Head, Finance Director ---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 22-41 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund 42 Street Fund 43 SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Street SDC Fund 44 Nonmajor Governmental Funds Combining Balance Sheet 45-46 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 47-48 Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Transit Fund 49 Building Fund 50 Search and Seizure Fund 51 Housing Rehabilitation Fund 52 RSVP Fund 53 Cable Franchise Fund 54 Library Endowment Fund 55 Museum Endowment Fund 56 Lavelle Black Trust Fund 57 ---PAGE BREAK--- CITY OF WOODBURN, OREGON TABLE OF CONTENTS Page FINANCIAL SECTION (Continued) SUPPLEMENTARY INFORMATION (Continued) Nonmajor Governmental Funds (Continued) Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued) Urban Renewal Agency Fund 58 General Construction Fund 59 Special Assessment Fund 60 Street/Storm Capital Improvement Fund 61 Parks SDC Fund 62 Storm SDC Fund 63 Equipment Replacement Fund 64 GO Debt Fund 65 Nonmajor Proprietary Funds Combining Statement of Fund Net Position - Enterprise Funds 66 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Enterprise Funds 67 Combining Statement of Cash Flows - Enterprise Funds 68 Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget (Non-GAAP Basis) and Actual – Nonmajor Enterprise Funds Water Fund 69 Sewer Fund 70 WWTP Construction Fund 71 Water SDC Fund 72 Sewer SDC Fund 73 WWD Construction Fund 74 Internal Services Funds Combining Statement of Fund Net Position - Internal Service Funds 75 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Internal Service Funds 76 Combining Statement of Cash Flows - Internal Service Funds 77 Schedules of Revenues, Expenditures and Changes in Fund Balances (Budgetary Basis) - Budget and Actual Information Services Fund 78 Insurance Fund 79 Technical and Environmental Services Fund 80 Other Financial Schedules Schedule of Property Tax Transactions and Outstanding Balances 81 COMPLIANCE SECTION INDEPENDENT AUDITOR'S REPORT REQUIRED BY OREGON STATE REGULATIONS 82-83 ---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 City of Woodburn as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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, 2014, 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 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”) 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 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. 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. ---PAGE BREAK--- - 3 - Report on Other Legal and Regulatory Requirements In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have issued our report dated October 31, 2014, 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: Thomas E. Glogau, A Shareholder October 31, 2014 ---PAGE BREAK--- - 4 - CITY OF WOODBURN Year Ended June 30, 2014 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, 2014. 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, 2014. 2014 2013 change Net position 116,261,329 $ 113,660,647 $ 2,600,682 $ Change in net position 2,600,682 2,369,174 231,508 Governmental activities net position 72,943,496 71,695,875 1,247,621 Business-type activities fund net position 43,317,833 41,964,772 1,353,061 Change in governmental net position 1,247,621 1,336,308 (88,687) Change in proprietary fund net position 1,353,061 1,032,866 320,195 June 30, 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, liabilities and activities of the City. The measurement focus and basis of accounting are the same for the entire entity. 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 and liabilities, with the difference between the two 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 general 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, and culture and recreation. 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 twenty individual governmental funds. Information is presented separately for the General Fund, Street Fund and Street SDC 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, information services, and technical and environmental 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 Wastewater Treatment Plant (WWTP) 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 $167,682,598 in total assets and $51,421,269 in total liabilties, resulting in combined net position of $116,261,329 for governmental and business-type activities. The largest component of the City's net position, reflects its 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 $510,280 over the prior year due primarily to depreciation in excess of current year capital asset additions. Business-type capital assets, net of depreciation decreased $1,940,377 over the prior year due to depreciation in excess of current year capital additions. It should be noted that business-type capital assets are expected to increase as the next phases of the wastewater treatment plant upgrade begin. Total liabilities for both governmental and business-type activities decreased by $2,443,780 from the prior year due to scheduled debt repayments. Overall, the City's financial position changed by $2,600,682 (or This is due to mangement's continued focus on containing costs. 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 18,797,617 23,502,819 42,300,436 $ 17,022,290 $ 23,194,816 $ 40,217,106 $ 1,775,327 $ 308,003 $ 2,083,330 $ Other assets 2,102,248 930,949 3,033,197 1,822,164 686,804 2,508,968 280,084 244,145 524,229 Capital assets 59,558,355 62,790,610 122,348,965 60,068,635 64,730,987 124,799,622 (510,280) (1,940,377) (2,450,657) Total Assets 80,458,220 87,224,378 167,682,598 78,913,089 88,612,607 167,525,696 1,545,131 (1,388,229) 156,902 Other liabilities 1,593,693 923,799 2,517,492 671,971 680,317 1,352,288 921,722 243,482 1,165,204 Long-term debt 5,921,031 42,982,746 48,903,777 6,545,243 45,967,518 52,512,761 (624,212) (2,984,772) (3,608,984) Total Liabilities 7,514,724 43,906,545 51,421,269 7,217,214 46,647,835 53,865,049 297,510 (2,741,290) (2,443,780) Net position: Net investment in capital assets 54,411,373 19,881,340 74,292,713 54,361,481 18,871,567 73,233,048 49,892 1,009,773 1,059,665 Restricted 11,523,032 18,737,342 30,260,374 10,395,999 16,180,395 26,576,394 1,127,033 2,556,947 3,683,980 Unrestricted 7,009,091 4,699,151 11,708,242 6,938,395 6,912,810 13,851,205 70,696 (2,213,659) (2,142,963) Total Net Position 72,943,496 $ 43,317,833 $ 116,261,329 $ 71,695,875 $ 41,964,772 $ 113,660,647 $ 1,247,621 $ 1,353,061 $ 2,600,682 $ Change 2014 2013 Governmental Activities The City’s net position from governmental activities increased $1,247,621 from 2012-13 to 2013-14. Business-type Activities The City’s net position from business-type activities increased $1,353,061(3%) from 2012-13 to 2013-14. ---PAGE BREAK--- - 7 - 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 2,101,267 10,646,521 12,747,788 $ 2,023,412 $ 9,785,103 $ 11,808,515 $ 77,855 $ 861,418 $ 939,273 $ Operating grants and contributions 1,915,475 - 1,915,475 1,948,383 - 1,948,383 (32,908) - (32,908) Capital grants and contributions 885,093 446,971 1,332,064 840,242 290,930 1,131,172 44,851 156,041 200,892 Total Program Revenues 4,901,835 11,093,492 15,995,327 4,812,037 10,076,033 14,888,070 89,798 1,017,459 1,107,257 General Revenues Property taxes 8,234,481 - 8,234,481 8,180,539 - 8,180,539 53,942 - 53,942 Franchise taxes 1,500,730 - 1,500,730 1,656,545 - 1,656,545 (155,815) - (155,815) Other taxes 454,363 - 454,363 382,477 - 382,477 71,886 - 71,886 Intergovernmental 633,530 - 633,530 660,547 - 660,547 (27,017) - (27,017) Other 144,342 (522,180) (377,838) 292,791 177,687 470,478 (148,449) (699,867) (848,316) Total General Revenues 10,967,446 (522,180) 10,445,266 11,172,899 177,687 11,350,586 (205,453) (699,867) (905,320) Total Revenues 15,869,281 10,571,312 26,440,593 15,984,936 10,253,720 26,238,656 (115,655) 317,592 201,937 Expenses (Net of Indirect Expenses) General government 2,646,552 - 2,646,552 2,411,067 - 2,411,067 235,485 - 235,485 Public safety 6,608,391 - 6,608,391 6,389,207 - 6,389,207 219,184 - 219,184 Highways and streets 2,273,271 - 2,273,271 2,663,020 - 2,663,020 (389,749) - (389,749) Culture and recreation 3,530,783 - 3,530,783 3,270,803 - 3,270,803 259,980 - 259,980 Interest on long-term debt 226,504 - 226,504 248,109 - 248,109 (21,605) - (21,605) Water - 2,792,818 2,792,818 - 2,882,056 2,882,056 - (89,238) (89,238) Sewer - 5,761,592 5,761,592 - 6,005,220 6,005,220 - (243,628) (243,628) Total Expenses 15,285,501 8,554,410 23,839,911 14,982,206 8,887,276 23,869,482 303,295 (332,866) (29,571) Changes in Net Position Before Transfers 583,780 2,016,902 2,600,682 1,002,730 1,366,444 2,369,174 (418,950) 650,458 231,508 Transfers 663,841 (663,841) - 333,578 (333,578) - 330,263 (330,263) - Change in Net Position 1,247,621 1,353,061 2,600,682 1,336,308 1,032,866 2,369,174 (88,687) 320,195 231,508 - Beginning Net Position, as adjusted 71,695,875 41,964,772 113,660,647 70,359,567 40,931,906 111,291,473 1,336,308 1,032,866 2,369,174 Ending Net Position 72,943,496 $ 43,317,833 $ 71,695,875 $ 41,964,772 $ 1,247,621 $ 1,353,061 $ 2,600,682 $ 2014 2013 Change Governmental Activities. Total revenues for the City's governmental activities were $15,869,281 for the fiscal year ended June 30, 2014. Approximately 51% of the total revenue for the governmental activities was derived from property taxes and approximately 31% of the total revenue was from program revenues. Total expenses for governmental activities were $15,285,501 and net transfers in were $663,841 resulting in a $1,247,621 increase in net position. General governmental activities accounted for approximately 17% of the total governmental activities expense. Public Safety, Culture and Recreation and Highways and Streets expenses account for 82% 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 $10,571,312 for the current fiscal year. These activities generated $11,093,492 in program revenues, and a loss of $949,970 from disposition of assets. Interest earnings and miscellaneous revenues were $427,390. The total expenses for business-type activities were $8,554,410 and net transfers out were $663,841 resulting in an $1,353,061 increase in net position. Business-type activities for the City of Woodburn consist of operations for water and sewer services. 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. ---PAGE BREAK--- - 8 - Governmental Funds. At the end of the fiscal year, there was $17,362,412 of fund balance of the governmental funds, an increase of $1,188,466 from the prior year. The City's governmental funds include the General Fund, Street and Street SDC funds, 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 $3,577,772 was reported by the General Fund. The fund balance increased by $295,332 from the previous year due to increases in property taxes, franchise fees and intergovernmental revenues, along with a decrease in licenses and permits and charges for services, as well as an increase in finance and police expenditures. The City reports two other major governmental funds, the Street Fund and the Street SDC Fund. The Street Fund had a fund balance of $2,749,837, an increase of $644,244 from the previous year, due mainly to a combination of an increase in charges for services and miscellaneous revenues and an increase in highways and streets maintenance. The Street SDC Fund had a fund balance of $5,354,798, an increase of $37,430 from the previous year, due mainly to a combination of an increase in licenses and permits and miscellaneous revenues and an increase in capital outlay. Proprietary Funds. Net position of the proprietary funds equaled $43,285,426 at the end of the current fiscal year. The net position increase of $1,353,061 was comparable to the increase in the previous year. The City reports three major proprietary funds, the Water Fund, the Sewer Fund and the WWTP Construction Fund. The Water Fund had a net position of $194,710, an increase of $552,857 from previous year, due to reimbursements received from ODOT for water line relocation and a decrease in transfers out. The Sewer Fund had a net position of $20,188,800, an increase in $1,161,564 from previous year, due to the combination of an increase in charges for services, an increase in materials and services and debt service expenditures, and a decrease in transfers out. The WWTP Construction Fund had a net position of $16,487,687, a decrease of $804,202 from the previous year, due to capital outlay expenditures for sewer projects. There was also a prior period adjustment in the WWTP Construction Fund reducing beginning net position by $397,716. GENERAL FUND BUDGETARY HIGHLIGHTS The original budget was amended to increase the beginning fund balance by $400,000, increase aquatics revenues by $8,000, and increase community services admininstration revenues by $20,000. The amendment also increased finance, police, aquatics, community services administration, parks maintenance, non-departmental expenditures and contingency by a total of $322,000, and increased transfers out by $106,000. Actual revenues (budgetary basis), exceeded budgeted amounts by General Fund expenditures ended $3,257,747 below budgeted amounts primarily due to management efforts to contain costs throughout the fiscal year. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets. The City's investment in capital assets for its governmental and business-type activities equaled $59,558,355 and $60,068,635 respectively, at the end of the current fiscal year, net of accumulated depreciation. This investment includes land, buildings, improvements, equipment, and infrastructure. Additional information about the City's capital assets is presented in the notes to the financial statements. 2014 2013 2014 2013 2014 2013 Land 22,567,381 $ 22,567,381 $ 1,783,816 $ 1,783,816 $ 24,351,197 $ 24,351,197 $ Construction in progress 1,287,569 1,465,711 4,319,096 4,566,500 5,606,665 6,032,211 Buildings 16,593,555 16,233,984 62,587,863 62,512,275 79,181,418 78,746,259 Equipment 6,101,779 5,779,416 2,361,602 1,972,578 8,463,381 7,751,994 Infrastructure 38,727,993 38,154,005 28,771,320 28,565,883 67,499,313 66,719,888 Accumulated depreciation (25,719,922) (24,131,862) (37,033,087) (34,670,065) (62,753,009) (58,801,927) Net capital assets 59,558,355 $ 60,068,635 $ 62,790,610 $ 64,730,987 $ 122,348,965 $ 124,799,622 $ Governmental Activities Business-type Activiites Total ---PAGE BREAK--- - 9 - Long-term Debt. At the end of the current fiscal year, long-term debt outstanding for the governmental activities totaled $5,921,031, compared to $6,545,243 in the prior year. For the business-type activities, total long-term debt equaled $42,982,747 compared to $45,967,518 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 2014 2013 2014 2013 2014 2013 General obligation bonds 4,745,000 $ 5,065,000 $ - $ - $ 4,745,000 $ 5,065,000 $ URA bonds 275,872 486,381 - - 275,872 486,381 Loans 126,110 155,773 5,194,240 5,559,833 5,320,350 5,715,606 Revenue bonds - - 35,126,768 37,674,655 35,126,768 37,674,655 Bond premium - - 2,555,855 2,624,932 2,555,855 2,624,932 Accrued compensated absences 774,049 838,089 105,884 108,098 879,933 946,187 5,921,031 $ 6,545,243 $ 42,982,747 $ 45,967,518 $ 48,903,778 $ 52,512,761 $ ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES Due to reductions in the real property valuations, it is expected that future property taxes increases will be less than the three percent allowed annually on existing real property value as compression on certain properties will be realized. Currently, the housing market in Marion County is depressed due to the national housing slump and economic conditions. We continue to expect revenues to be impacted by the current national and local conditions. 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, 2014 Governmental Business-type Activities Activities Totals ASSETS Cash and investments 18,797,617 $ 23,502,819 $ 42,300,436 $ Accounts receivable 721,573 879,284 1,600,857 Property taxes receivable 607,690 - 607,690 Assessment liens receivable 39,650 - 39,650 Loans receivable 784,259 - 784,259 Prepaid expenses 740 - 740 Internal balances (51,664) 51,664 - Non-depreciable capital assets 23,854,950 6,102,912 29,957,862 Other capital assets, net of depreciation 35,703,405 56,687,698 92,391,103 Total Assets 80,458,220 87,224,377 167,682,597 LIABILITIES Accounts payable 896,447 142,945 1,039,392 Accrued payroll liabilities 678,184 171,111 849,295 Deposits payable - 99,980 99,980 Interest payable 19,062 509,761 528,823 Noncurrent liabilities: Due within one year: Long-term debt 584,429 3,425,522 4,009,951 Due in more than one year: Long-term debt 4,562,553 36,895,486 41,458,039 Bond premium - 2,555,855 2,555,855 Accrued compensated absenses 774,049 105,884 879,933 Total Liabilities 7,514,724 43,906,544 51,421,268 NET POSITION Net investment in capital assets 55,195,632 19,913,747 75,109,379 Restricted for: Debt service 317,436 1,934,172 2,251,608 Culture and recreation 193,468 - 193,468 Community development 1,699,776 - 1,699,776 Construction 9,312,352 16,803,170 26,115,522 Unrestricted 6,224,832 4,666,744 10,891,576 Total Net Position 72,943,496 $ 43,317,833 $ 116,261,329 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2014 Fees, Fines Operating Capital and Charges Grants and Grants and Expenses for Services Contributions Contributions FUNCTIONS/PROGRAMS Governmental activities: General government 2,646,552 $ 682,238 $ - $ - $ Public safety 6,608,391 627,424 2,142 1,265 Highways and streets 2,273,271 274,205 1,384,277 587,964 Culture and recreation 3,530,783 517,400 529,056 295,864 Interest on long-term debt 226,504 - - - Total Governmental activities 15,285,501 2,101,267 1,915,475 885,093 Business-type activities: Water 2,792,818 3,166,878 - 181,486 Sewer 6,711,162 7,479,643 - 265,485 Total Business-type activities 9,503,980 10,646,521 - 446,971 Total Activities 24,789,481 $ 12,747,788 $ 1,915,475 $ 1,332,064 $ General Revenues: Property taxes Franchise taxes Other taxes Intergovernmental Loss on disposition of assets Unrestricted investment earnings Miscellaneous Total General Revenues Transfers Change in Net Position Net Position - beginning of year, as originally reported Prior period adjustment Net Position - beginning of year, as restated 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 (1,964,314) $ - $ (1,964,314) $ (5,977,560) - (5,977,560) (26,825) - (26,825) (2,188,463) - (2,188,463) (226,504) - (226,504) (10,383,666) - (10,383,666) - 555,546 555,546 - 1,033,966 1,033,966 - 1,589,512 1,589,512 (10,383,666) 1,589,512 (8,794,154) 8,234,481 - 8,234,481 1,500,730 - 1,500,730 454,363 - 454,363 633,530 - 633,530 (69,877) - (69,877) 96,347 125,139 221,486 117,872 302,251 420,123 10,967,446 427,390 11,394,836 663,841 (663,841) - 1,247,621 1,353,061 2,600,682 71,695,875 42,256,488 113,952,363 - (291,716) (291,716) 71,695,875 41,964,772 113,660,647 72,943,496 $ 43,317,833 $ 116,261,329 $ Net (Expenses) Revenues and Changes in Net Position ---PAGE BREAK--- CITY OF WOODBURN, OREGON BALANCE SHEET - GOVERNMENTAL FUNDS JUNE 30, 2014 Special Revenue Capital Projects General Street Street SDC ASSETS Cash and investments 4,101,442 $ 2,687,931 $ 5,255,975 $ Accounts receivable 290,428 138,082 - Property taxes receivable 523,605 - - Assessment liens receivable - - - Loans receivable - - 63,576 Prepaid expenses 740 - - Due from other funds - - 151,232 Total Assets 4,916,215 $ 2,826,013 $ 5,470,783 $ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 132,834 $ 52,554 $ 52,409 $ Accrued payroll and payroll liabilities 545,703 23,622 - Due to other funds 202,895 - - Total Liabilities 881,432 76,176 52,409 Deferred Inflows: Unavailable revenue 457,011 - 63,576 Fund Balance Non-spendable 740 - - Restricted for: Debt service - - - Construction - 2,749,837 5,354,798 Culture and recreation - - - Community development - - - Committed to: Public safety - - - Capital outlay - - - Public works - - - Planning and building - - - Unassigned 3,577,032 - - Total Fund Balance (Deficit) 3,577,772 2,749,837 5,354,798 Total Liabilities and Fund Balance 4,916,215 $ 2,826,013 $ 5,470,783 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 12 - Other Governmental Funds Total 6,135,570 $ 18,180,918 $ 215,657 644,167 84,085 607,690 39,650 39,650 784,259 847,835 - 740 - 151,232 7,259,221 $ 20,472,232 $ 591,544 $ 829,341 $ 53,028 622,353 - 202,895 644,572 1,654,589 934,644 1,455,231 - 740 282,765 282,765 1,106,885 9,211,520 193,468 193,468 1,660,968 1,660,968 1,111 1,111 1,212,106 1,212,106 1,041,261 1,041,261 181,441 181,441 - 3,577,032 5,680,005 17,362,412 7,259,221 $ 20,472,232 $ ---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, 2014 Fund Balances 17,362,412 $ 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. 1,455,231 Capital assets are not financial resources in governmental funds, but are reported in the Statement of Net Position at their net depreciable value. Cost 85,278,276 Accumulated depreciation (25,719,922) 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 (674,581) Accrued interest (19,062) Long-term debt (5,146,982) 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. 408,124 Net Position of Governmental Activities 72,943,496 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 General Fund Street Street SDC REVENUES Taxes and assessments 7,521,463 $ 101,761 $ - $ Licenses and permits 1,741,948 302 521,933 Charges for services 500,473 360,046 - Intergovernmental 790,151 1,384,277 - Fines and forfeitures 571,831 - - Miscellaneous 98,477 124,806 169,268 Total Revenues 11,224,343 1,971,192 691,201 EXPENDITURES General government 1,133,889 - - Public safety 6,569,367 - - Highways and streets - 1,003,547 - Culture and recreation 2,887,681 - - Debt Service Principal - - 29,663 Interest - - 7,857 Capital outlay - - 619,986 Total Expenditures 10,590,937 1,003,547 657,506 REVENUES OVER (UNDER) EXPENDITURES 633,406 967,645 33,695 OTHER FINANCING SOURCES (USES) Transfers in 205,920 220,000 3,735 Transfers out (543,994) (543,421) - Total Other Financing Sources (Uses) (338,074) (323,421) 3,735 NET CHANGE IN FUND BALANCE 295,332 644,224 37,430 FUND BALANCE, beginning of year 3,282,440 2,105,613 5,317,368 FUND BALANCE, end of year 3,577,772 $ 2,749,837 $ 5,354,798 $ Special Revenue Capital Projects ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 14 - Other Governmental Funds Total 1,163,140 8,786,364 $ 690,797 2,954,980 40,678 901,197 500,270 2,674,698 - 571,831 148,231 540,782 2,543,116 16,429,852 507,604 1,641,493 - 6,569,367 - 1,003,547 957,749 3,845,430 530,509 560,172 221,004 228,861 759,530 1,379,516 , 2,976,396 15,228,386 (433,280) 1,201,466 1,001,330 1,430,985 (356,570) (1,443,985) 644,760 (13,000) 211,480 1,188,466 5,468,525 16,173,946 5,680,005 $ 17,362,412 $ ---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, 2014 Net Change in Fund Balances - Total Governmental Funds 1,188,466 $ 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 (86,712) Decreases in other loans receivable 170,246 Governmental funds do not report expenditures for unpaid compensated absences, unpaid payroll, interest expense or arbitrag 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 57,064 Accrued interest payable 2,357 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 1,147,654 Depreciation (1,588,060) Net book value of assets disposed (69,877) 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 560,172 Net loss of internal service funds (133,689) Change in Net Position of Governmental Activities 1,247,621 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF FUND NET POSITION - PROPRIETARY FUNDS JUNE 30, 2014 Water Sewer WWTP Construction ASSETS Current Assets Cash and investments 1,772,293 $ 4,679,792 $ 12,672,274 $ Accounts receivable 187,814 590,034 2,062 Due from other funds - - - Total Current Assets 1,960,107 5,269,826 12,674,336 Noncurrent Assets Nondepreciable capital assets 158,444 1,625,372 3,029,375 Other capital assets, net of depreciation 9,808,306 45,515,272 836,976 Total Noncurrent Assets 9,966,750 47,140,644 3,866,351 Total Assets 11,926,857 52,410,470 16,540,687 LIABILITIES Current Liabilities Accounts payable 33,941 56,709 - Accrued payroll liabilities 71,799 99,312 - Deposits payable 99,980 - - Accrued interest payable 269,914 239,847 - Due to other funds 49,784 49,784 53,000 Current portion of long-term liabilities Long-term debt 670,522 2,755,000 - Total Current Liabilities 1,195,940 3,200,652 53,000 Noncurrent Liabilities Long-term debt 10,489,082 26,406,404 - Bond premiums - 2,555,855 - Accrued compensated absences 47,125 58,759 - Total Noncurrent Liabilities 10,536,207 29,021,018 - Total Liabilities 11,732,147 32,221,670 53,000 NET POSITION: Net investment in capital assets (1,192,854) 15,423,385 3,866,351 Restricted for: Debt service 754,000 1,180,172 - Construction - - 12,173,399 Unrestricted 633,564 3,585,243 447,937 Total Net Position 194,710 $ 20,188,800 $ 16,487,687 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 16 - Governmental Activities Other Business- type Funds Total Internal Service 4,378,460 $ 23,502,819 $ 616,699 $ 99,374 879,284 13,831 204,232 204,232 - 4,682,066 24,586,335 630,530 1,289,721 6,102,912 - 527,144 56,687,698 - 1,816,865 62,790,610 - 6,498,931 87,376,945 630,530 52,295 142,945 67,106 - 171,111 55,831 - 99,980 - - 509,761 - - 152,568 - - 3,425,522 - 52,295 4,501,887 122,937 - 36,895,486 - - 2,555,855 - - 105,884 99,469 - 39,557,225 99,469 52,295 44,059,112 222,406 1,816,865 19,913,747 - - 1,934,172 - 4,629,771 16,803,170 - - 4,666,744 408,124 6,446,636 $ 43,317,833 $ 408,124 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2014 Water Sewer OPERATING REVENUES Charges for services 3,166,879 $ 7,479,643 $ Intergovernmental - - Miscellaneous 303,593 3,065 Total Operating Revenues 3,470,472 7,482,708 OPERATING EXPENSES Personal services 1,278,981 1,818,362 Materials and services 584,123 922,203 Depreciation 411,384 1,891,270 Total Operating Expenses 2,274,488 4,631,835 OPERATING INCOME (LOSS) 1,195,984 2,850,873 NONOPERATING REVENUES (EXPENSES) Investment revenue 7,498 23,692 Amortization of bond premiums - 69,077 Interest expense (487,046) (1,112,698) Total Nonoperating Revenues (Expenses) (479,548) (1,019,929) NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS 716,436 1,830,944 Capital contributions - - Transfers in - - Transfers out (163,579) (503,997) Gain (loss) on disposition of assets - (165,383) CHANGE IN NET POSITION 552,857 1,161,564 NET POSITION (Deficit), beginning of year as originally reported (358,147) 19,027,236 Prior period adjustment - - NET POSITION, beginning of year as restated (358,147) 19,027,236 NET POSITION, end of year 194,710 $ 20,188,800 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 17 - Governmental Activities WWTP Construction Other Business- type Funds Total Internal Service 372 $ - $ 10,646,894 $ 2,408,830 $ - - - 19,203 - - 306,658 29,431 372 - 10,953,552 2,457,464 - - 3,097,343 1,240,199 24,427 216 1,530,969 1,538,305 61,709 31,068 2,395,431 - 86,136 31,284 7,023,743 2,778,504 (85,764) (31,284) 3,929,809 (321,040) 70,156 23,421 124,767 5,351 - - 69,077 - - - (1,599,744) - 70,156 23,421 (1,405,900) 5,351 (15,608) (7,863) 2,523,909 (315,689) - 446,971 446,971 - - 3,734 3,734 187,000 - - (667,576) (5,000) (788,594) - (953,977) - (804,202) 442,842 1,353,061 (133,689) 17,689,605 5,897,794 42,256,488 541,813 (397,716) 106,000 (291,716) - 17,291,889 6,003,794 41,964,772 541,813 16,487,687 $ 6,446,636 $ 43,317,833 $ 408,124 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2014 Water Sewer CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers 3,474,618 $ 7,271,651 $ Paid to suppliers (579,042) (903,971) Paid to employees (1,199,617) (1,728,829) Net Cash Provided by (Used in) Operating Activities 1,695,959 4,638,851 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in - - Transfers out (175,675) (516,093) Net Cash Provided by (Used in) Non-Capital Financing Activities (175,675) (516,093) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets - - Principal paid on loans and bonds payable (648,318) (2,265,153) System development revenue - - Interest paid (511,318) (1,044,559) Net Cash Provided by (Used in) Capital and Related Financing Activities (1,159,636) (3,309,712) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 7,498 23,692 Increase (Decrease) in Cash and Investments 368,146 836,738 CASH AND INVESTMENTS, Beginning of year 1,404,147 3,843,054 CASH AND INVESTMENTS, End of year 1,772,293 $ 4,679,792 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 18 - Other Governmental Activities WWTP Construction Business-Type Funds Totals Internal Service 1,186 $ 525 $ 10,747,980 $ 2,443,633 $ (62,831) - (1,545,844) (1,509,829) - - (2,928,446) (1,191,345) (61,645) 525 6,273,690 (257,541) - 39,220 39,220 187,000 - - (691,768) (5,000) - 39,220 (652,548) 182,000 (1,226,039) (430,586) (1,656,625) - - - (2,913,471) - - 396,351 396,351 - - - (1,555,877) - (1,226,039) (34,235) (5,729,622) - 70,156 23,421 124,767 5,351 (1,217,528) 28,931 16,287 (70,190) 13,889,802 4,349,529 23,486,532 686,889 12,672,274 $ 4,378,460 $ 23,502,819 $ 616,699 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF CASH FLOWS (Continued) YEAR ENDED JUNE 30, 2014 Water Sewer RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) 1,195,984 $ 2,850,873 $ Depreciation 411,384 1,891,270 Change in assets and liabilities: Accounts receivable 4,901 (211,057) Accounts payable and accrued liabilities 76,880 18,232 Customer deposits (755) 99,312 Compensated absences payable 7,565 (9,779) Net Cash Provided by (Used in) Operating Activities 1,695,959 $ 4,638,851 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 19 - Other Governmental Activities WWTP Construction Business-Type Funds Totals Internal Service (85,764) $ (31,284) $ 3,929,809 $ (321,040) $ 61,709 31,068 2,395,431 - 814 525 (204,817) (13,831) (38,404) 216 56,924 84,307 - - 98,557 - - - (2,214) (6,977) (61,645) $ 525 $ 6,273,690 $ (257,541) $ ---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, 2014 Pension Trust ASSETS Cash and investments 145,345 $ LIABILITIES - NET POSITION Held in trust for benefits and other purposes 145,345 $ ---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, 2014 Pension Trust ADDITIONS Contributions 170,000 $ Earnings 4,890 Total additions 174,890 DEDUCTIONS 111,782 CHANGE IN NET POSITION 63,108 NET POSITION, beginning of year 82,237 NET POSITION, end of year 145,345 $ ---PAGE BREAK--- NOTES TO BASIC FINANCIAL STATEMENTS ---PAGE BREAK--- - 22 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2014 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, 2014. 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, 2014 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 position 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, 2014 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 will be at ten percent 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, 2014 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 deferred 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 Street SDC Fund The City reports the following major proprietary funds: Water Fund Sewer Fund WWTP 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, 2014. Actual results may differ from such estimates. ---PAGE BREAK--- - 26 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 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 Deferred 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 conisdered 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 conisdered 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, 2014 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 40 years Water and Sewer Systems 20 - 50 years Infrastructure 20 - 50 years Equipment 10 - 20 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 Development 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 has no items that qualify for reporting in this category. ---PAGE BREAK--- - 28 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 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 only has one item that qualifies for reporting in this category. It 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. 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. 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 and fire 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. ---PAGE BREAK--- - 29 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 ORGANIZATION AND OPERATION (Continued) Governmental Fund Types (Continued) Transit Fund – This fund accounts for amounts held to be used for weekday transportation services. Building 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. RSVP Fund - This fund accounts for the federal grant for the Retired Seniors Volunteer Program. This fund was closed during 2014. Cable Franchise Fund - This fund is used to account for the City’s of local cable franchise fees to the local cable access program (WCAT). This fund was closed during the year. 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 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 Improvement Fund - This fund accounts for transfers from the Storm and Street funds. The money is used for street and storm related capital projects. 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. ---PAGE BREAK--- - 30 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 ORGANIZATION AND OPERATION (Continued) Governmental Fund Types (Continued) Debt Service Fund GO Debt 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. WWTP 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. WWD Construction Fund - This fund accounts for water system capital improvement projects and the retirement of associated debt. Internal Service Funds The City has three 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. Technical & Environmental Services Fund - This fund accounts for administrative, engineering and fleet services provided. Fiduciary Fund The City has one fiduciary fund. The City's pension trust fund holds assets to provide retirement benefits to certain City employees. ---PAGE BREAK--- - 31 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 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 $ 720,340 $ 720,340 Cash on hand 2,310 2,310 Investments Local Government Investment Pool 41,577,786 41,577,786 Assets held for pension benefits 145,345 145,345 $ 42,445,780 $ 42,445,780 Cash is reported in the financial statements as follows: Governmental funds $ 18,180,918 Internal Service funds (included in governmental activities) 616,699 Enterprise funds 23,502,819 Fiduciary funds 145,345 $ 42,445,780 Carrying Fair Value Value Deposits The book balance of the City’s bank deposits (checking accounts) was $720,340 and the bank balance was $774,596 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 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, 2014, 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. ---PAGE BREAK--- - 32 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 CASH AND INVESTMENTS (Continued) 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 unlimited insurance for the City’s deposits with financial institutions for the aggregate of all demand deposit and money market accounts and up to $250,000 for the aggregate of all savings and time deposit 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, 2014, $524,596 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. ---PAGE BREAK--- - 33 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 CAPITAL ASSETS The summary of capital assets for the business-type activities for the year ended June 30, 2014 is as follows: Balances Balances July 1, June 30, 2013 Additions Retirements Adjustments 2014 Nondepreciable assets Land (nondepreciable) 1,783,816 $ - $ - $ - $ 1,783,816 Construction in progress 4,566,498 782,163 (1,029,565) - 4,319,096 Subtotal, nondepreciable assets 6,350,314 782,163 (1,029,565) - 6,102,912 Depreciable assets Buildings 62,512,275 75,588 - - 62,587,863 Water and sewer systems 28,565,883 205,437 - - 28,771,320 Equipment 1,972,578 389,024 - - 2,361,602 Subtotal, depreciable assets 93,050,736 670,049 - - 93,720,785 Accumulated depreciation Buildings and improvements (22,884,128) (1,707,006) - - (24,591,134) Water and sewer systems (10,399,206) (575,425) - - (10,974,631) Equipment (1,386,729) (113,000) - 32,407 (1,467,322) Total accumulated depreciation (34,670,063) (2,395,431) - 32,407 (37,033,087) Total depreciable assets, net 58,380,673 (1,725,382) - 32,407 56,687,698 Net capital assets 64,730,987 $ (943,219) $ (1,029,565) $ 32,407 $ 62,790,610 $ Depreciation expense was allocated as follows: Water funds 442,453 $ Sewer funds 1,952,978 2,395,431 $ ---PAGE BREAK--- - 34 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 CAPITAL ASSETS (Continued) The changes in the capital assets for governmental activities for the year ended June 30, 2014 are as follows: Balances Balances July 1, June 30, 2013 Additions Retirements 2014 Nondepreciable assets Land (nondepreciable) 22,567,381 $ - $ - $ 22,567,381 $ Construction in progress 1,465,711 723,976 (902,118) 1,287,569 Subtotal, nondepreciable assets 24,033,092 723,976 (902,118) 23,854,950 Depreciable assets Buildings 16,233,984 359,571 - 16,593,555 Equipment 5,779,416 322,363 - 6,101,779 Infrastructure 38,154,005 573,988 - 38,727,993 Subtotal, depreciable assets 60,167,405 1,255,922 - 61,423,327 Accumulated depreciation Buildings (5,260,905) (466,102) - (5,727,007) Equipment (4,498,052) (347,397) - (4,845,449) Infrastructure (14,372,905) (774,561) - (15,147,466) Total accumulated depreciation (24,131,862) (1,588,060) - (25,719,922) Total depreciable assets, net 36,035,543 (332,138) - 35,703,405 Net capital assets 60,068,635 $ 391,838 $ (902,118) $ 59,558,355 $ Depreciation expense was allocated as follows: General government 429,412 $ Public safety 230,605 Highways and streets 868,561 Culture and recreation 59,482 1,588,060 $ ---PAGE BREAK--- - 35 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 LONG-TERM DEBT Long-term debt transactions for the year were as follows: Outstanding Outstanding Due July 1, Redeemed June 30, Within 2013 Issued During Year 2014 One Year Governmental Activities: Series 2005 general obligation bonds due in annual installments with principal and interest varying annually 5,065,000 $ - $ (320,000) $ 4,745,000 $ 335,000 $ 1999 Oregon EDD Loan due in annual installments of $38,319 with interest at 5.01%. 155,773 - (29,663) 126,110 29,895 2005 URA bonds due in quarterly installments of $56,933 with interest at 4.22%. 486,381 - (210,509) 275,872 219,534 5,707,154 - (560,172) 5,146,982 584,429 Accrued compensated absences 838,089 570,754 (634,794) 774,049 - 6,545,243 $ 570,754 $ (1,194,966) $ 5,921,031 $ 584,429 $ Outstanding Matured/ Outstanding Due July 1, Redeemed June 30, Within 2013 Issued During Year Adjustments 2014 One Year Business-type Activities: Series 2003 Water loan paid over 25 years; interest at various rates 6,248,098 $ - $ (282,734) $ - $ 5,965,364 $ 289,548 $ 2005 Oregon EDD due in annual installments including interest at 4.21% 2,779,912 - (182,792) - 2,597,120 190,487 2005 SDWR due in annual installments including interest at 4.21% 2,779,921 - (182,792) 2,597,120 190,487 2011 Sewer Revenue Bonds paid over 20 years; interest at various rates 31,426,557 - (2,265,153) - 29,161,404 2,755,000 43,234,488 - (2,913,471) 40,321,008 3,425,522 2011 Sewer Revenue Bond premium 2,624,932 - (69,077) - 2,555,855 (69,077) Accrued compensated absences 108,098 96,639 (98,853) - 105,884 - 45,967,518 $ 96,639 $ (3,081,401) $ $ 42,982,747 $ 3,356,445 $ ---PAGE BREAK--- - 36 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 LONG-TERM DEBT (Continued) Future maturities of long-term debt are as follows: Governmental Activities Ending Principal Interest Total 2015 584,429 $ 206,832 $ 791,261 $ 2016 436,479 185,340 621,819 2017 400,399 169,937 570,336 2018 420,675 153,956 574,631 2019 405,000 136,736 541,736 2020-24 2,355,000 420,048 2,775,048 2025 545,000 23,163 568,163 5,146,982 $ 1,296,012 $ 6,442,994 $ Fiscal Year June 30, Business-type Activities Ending Principal Interest Total 2015 3,425,522 $ 1,457,889 $ 4,883,411 $ 2016 3,177,229 1,358,931 4,536,160 2017 3,330,966 1,358,943 4,689,909 2018 3,921,935 1,123,066 5,045,001 2019 4,407,430 996,283 5,403,713 2020-24 18,602,318 4,764,920 23,367,238 2025-29 3,335,608 439,242 3,774,850 2030-31 120,000 7,125 127,125 40,321,008 $ 11,506,399 $ 51,827,407 $ June 30, Fiscal Year DEFINED BENEFIT PENSION PLAN – THE RETIRMENT PLAN FOR EMPLOYEES OF THE CITY OF WOODBURN, OREGON Plan Description The City sponsors a single-employer defined benefit pension plan that covers nonexecutive employees who have completed six months of employment with the City and executive employees, except the city administrator, who elect coverage under this plan. It provides retirement and disability benefits, cost of living adjustments and death benefits to members and beneficiaries. The City Council has the authority to amend the benefit provisions of the plan. ---PAGE BREAK--- - 37 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 DEFINED BENEFIT PENSION PLAN – THE RETIRMENT PLAN FOR EMPLOYEES OF THE CITY OF WOODBURN, OREGON (Continued) On November 5, 1998, the City decided to integrate its retirement plan into the Oregon Public Employees Retirement System (PERS) pursuant to ORS 238.680. The City ceased contributions to its retirement plan in December 1998, except for one employee who continued under the plan until August 2000. In December 1998, the City transferred $6,738,120 to PERS under the integration agreement with PERS. The remaining assets of the retirement plan are to provide retirement benefits to employees who have already retired or elected to remain in the plan. Membership of the plan consisted of two inactive members at July 1, 2013, the date of the latest actuarial valuation available as of the date of this report. Funding Status and Progress The pension benefit obligation (PBO), which is the actuarial present value of credited projected benefits, is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and any step-rate benefits estimated to be payable in the future as a result of employee service to date. The measure is intended to help assess the funding status of the plan, to assess progress made in accumulating sufficient assets to pay benefits when due, and to make comparisons among employers. The latest actuarial valuation was performed as of July 1, 2013. Significant actuarial assumptions used to compute the PBO were as follows: Investment earnings 5.5% (net of all plan expenses) Salary increases as per contract Cost-of-living increases 3.0% The Plan had no unfunded actuarial liability at June 30, 2014. PUBLIC EMPLOYEES RETIREMENT SYSTEM (PERS) Plan Description The City contributes to two pension plans administered by the Oregon Public Employees Retirement System (PERS). The Oregon Public Employees Retirement Fund (OPERF) applies to the City’s contribution for qualifying employees who were hired before August 29, 2003, and is a cost-sharing multiple-employer defined benefit pension plan. The City participates in the state and local government rate pool The Oregon Public Service Retirement Plan (OPSRP) is a hybrid successor plan to the OPERF and consists of two programs: The Pension Program, the defined benefit portion of the plan, applies to qualifying City employees hired after August 29, 2003, and to inactive employees who return to employment following a six-month or greater break in service. Benefits are calculated by a formula for members who attain normal retirement age. The formula takes into account final average salary and years of service. Beginning January 1, 2004, all PERS member contributions go into the Individual Account Program (IAP), the defined contribution portion of the plan. PERS members retain their existing PERS accounts, but any future member contributions are deposited into the member’s IAP, not the member’s PERS account. ---PAGE BREAK--- - 38 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 PUBLIC EMPLOYEES RETIREMENT SYSTEM (PERS) (Continued) Plan Description (Continued) Both PERS plans provide retirement and disability benefits, post-employment healthcare benefits, annual cost-of- living adjustments, and death benefits to plan members and beneficiaries. PERS is administered under Oregon Revised Statute Chapter 238, which establishes the Public Employees Retirement Board as the governing body of PERS. PERS issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to PERS, PO Box 23700, Tigard, OR, 97281- 3700 or by calling [PHONE REDACTED]. Funding Policy Members of PERS are required to contribute 6.00% of their salary covered under the plan, which is invested in the OPSRP Individual Account Program. The City is required by ORS 238.225 to contribute at an actuarially determined rate for the qualifying employees under the OPERF plan, and a general service rate and a police/fire rate for the qualifying employees under the OPSRP plan. The OPERF and the OPSRP rates in effect for the year ended June 30, 2014 were 13.42%, 9.38% and 12.11% respectively. The contribution requirements for plan members are established by ORS Chapter 238 and may be amended by an act of the Oregon Legislature. Annual Pension Cost The City’s contributions to PERS for the years ending June 30, 2012, 2013, and 2014 were $1,515,526, $1,500,370, and $1,507,694 respectively, which equaled the required contribution for the year. 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 $9,126 to the plan for the year ended June 30, 2014. 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 depending on contractual agreements. The City contributed $138,610 to the plan for the year ended June 30, 2014. ---PAGE BREAK--- - 39 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 TRANSFERS Interfund transfers on the budgetary basis of accounting are as follows: General $ 205,920 $ 590,774 Street 220,000 543,421 Transit 134,294 - Housing Rehabilitation - 200,000 RSVP - 5,920 Street SDC 39,221 - General Constuction 149,356 89,000 Street/Storm Capital Improvement 513,421 - Parks SDC 89,000 43,356 Equipment Replacement 115,259 18,294 Water - 23,334 Sewer - 173,593 WWD Construction 39,221 - Information Services 187,000 - Technical and Enviromental Services - 5,000 $ 1,692,692 $ 1,692,692 Transfers In Transfers Out 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 WWD Construction $ 186,718 $ (35,486) $ 151,232 Street SDC 186,718 (35,486) 151,232 WWD Construction 53,000 - 53,000 $ 426,436 $ (70,972) $ 355,464 Received July 1, 2013 Outstanding Outstanding June 30, 2014 Payments ---PAGE BREAK--- - 40 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 INTERFUND LOANS (Continued) LOANS PAYABLE Fund General $ 249,676 $ (46,780) $ 202,896 Water 61,880 (12,096) 49,784 Sewer 61,880 (12,096) 49,784 WWTP 53,000 - 53,000 $ 426,436 $ (70,972) $ 355,464 July 1, 2013 Made June 30, 2014 Payments Outstanding Outstanding BEGINNING BALANCE ADJUSTMENTS Beginning balance adjustments have been recorded on the budgetary and GAAP bases to reflect the correction for interfund loan balances. Additionally, the beginning balance of the WWTP Constrution fund has been reduced by $291,716 to reflect the purchase of a sewer sweeper and related depreciation adjustment in 2013. EXPENDITURES IN EXCESS OF APPROPRIATIONS The following funds had expenditures in excess of appropriations: Fund / Category Appropriation Actual Variance General Swim center 508,027 $ 508,569 $ (542) $ 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 GASB Statement No. 70 “Accounting and Financial Reporting for Nonexchange Financial Guarantees.” The statement provides guidance on accounting for and reporting nonexchange financial guarantees. The statement was implemented in the current year. ---PAGE BREAK--- - 41 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 NEW PRONOUNCEMENTS (Continued) The City will implement 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. 68 “Accounting and Reporting for Pension Plans—an amendment of GASB Statement No. 27.” The statement establishes accounting and financial reporting requirements related to pensions provided by governments. The statement is effective for fiscal years beginning after June 15, 2014. GASB Statement No. 69 “Government Combinations and Disposals of Government Operations.” The statement establishes accounting and financial reporting standards related to government combinations and disposals of government operations. The statement is effective for fiscal years beginning after December 15, 2013. GASB Statement No. 71 “Pension Transition for Contributions Made Subsequent to the Measurement Date”. The statement amends transition provisions of GASB Statement No. 68, establishes accounting and financial reporting standards for recognition of contributions made between the measurement date of the net pension liability and implementation of GASB Statement No. 68. The statement is effective for fiscal years beginning after June 15, 2014. SUBSEQUENT EVENTS Management has evaluated subsequent events through October 31, 2014, 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--- - 42 - 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, 2014 Original Final Actual Variance REVENUES Taxes and assessments 7,331,000 $ 7,331,000 $ 7,521,463 $ 190,463 $ Licenses and permits 108,500 108,500 120,182 11,682 Franchise fees 1,497,340 1,497,340 1,621,766 124,426 Charges for services 554,210 562,210 500,473 (61,737) Intergovernmental 665,189 665,189 790,151 124,962 Fines and forfeitures 596,400 596,400 571,831 (24,569) Miscellaneous 61,550 81,550 98,477 16,927 Total Revenues 10,814,189 10,842,189 11,224,343 382,154 EXPENDITURES Council and Mayor 40,465 40,465 38,619 1,846 Administration 205,842 205,842 196,258 9,584 City Recorder 58,754 58,754 50,941 7,813 City Attorney 141,785 141,785 134,127 7,658 Finance 278,060 448,060 428,554 19,506 Human Resources 46,339 46,339 37,520 8,819 Municipal Court 138,469 138,469 131,400 7,069 Nondepartmental 235,259 235,259 204,121 31,138 Police 6,534,462 6,580,462 6,312,753 267,709 Library 913,486 913,486 880,927 32,559 Recreation 411,630 411,630 303,234 108,396 Swim Center 493,027 508,027 508,569 (542) Community Services Administration 309,158 329,158 298,558 30,600 RSVP 68,582 68,582 64,197 4,385 Planning 364,566 364,566 342,179 22,387 Parks Maintenance 520,121 520,121 462,711 57,410 Contingency 2,570,410 2,641,410 - 2,641,410 Total Expenditures 13,330,415 13,652,415 10,394,668 3,257,747 REVENUES OVER (UNDER) EXPENDITURES (2,516,226) (2,810,226) 829,675 3,639,901 OTHER FINANCING SOURCES (USES) Transfers in 220,000 220,000 205,920 (14,080) Transfers out (484,774) (590,774) (590,774) - Total Other Financing Sources and Uses (264,774) (370,774) (384,854) (14,080) NET CHANGE IN FUND BALANCE (2,781,000) (3,181,000) 444,821 3,625,821 FUND BALANCE, beginning of year 2,781,000 3,181,000 3,532,115 351,115 FUND BALANCE, end of year (budgetary basis) - $ - $ 3,976,936 3,976,936 $ Interfund loan (202,895) Accrued payroll (196,269) FUND BALANCE, end of year (GAAP basis) 3,577,772 $ Budget Amounts ---PAGE BREAK--- - 43 - 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, 2014 Original Final Actual Variance REVENUES Taxes and assessments 120,000 $ 120,000 $ 101,761 $ (18,239) $ Licenses and permits 750 750 302 (448) Franchise fees 300,000 300,000 360,046 60,046 Intergovernmental 1,300,000 1,300,000 1,384,277 84,277 Miscellaneous 8,500 8,500 124,806 116,306 Total Revenues 1,729,250 1,729,250 1,971,192 241,942 EXPENDITURES Personal services 496,197 496,197 410,315 85,882 Materials and services 881,697 881,697 582,446 299,251 Contingency 751,756 751,756 - 751,756 Total Expenditures 2,129,650 2,129,650 992,761 1,136,889 REVENUES OVER (UNDER) EXPENDITURES (400,400) (400,400) 978,431 1,378,831 OTHER FINANCING SOURCES (USES) Transfers in 220,000 220,000 220,000 - Transfers out (1,169,600) (1,169,600) (543,421) 626,179 Total Other Financing Sources and Uses (949,600) (949,600) (323,421) 626,179 NET CHANGE IN FUND BALANCE (1,350,000) (1,350,000) 655,010 2,005,010 FUND BALANCE, beginning of year 1,350,000 1,350,000 2,105,613 755,613 FUND BALANCE, end of year (budgetary basis) - $ - $ 2,760,623 2,760,623 $ Accrued payroll (10,786) FUND BALANCE, end of year (GAAP basis) 2,749,837 $ Budget Amounts ---PAGE BREAK--- OTHER SUPPLEMENTARY INFORMATION ---PAGE BREAK--- - 44 - 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, 2014 Original Final Actual Variance REVENUES Licenses and permits 300,000 $ 300,000 $ 521,933 $ 221,933 $ Miscellaneous 34,000 34,000 169,268 135,268 Total Revenues 334,000 334,000 691,201 357,201 EXPENDITURES Debt service Principal 29,663 29,663 29,663 - Interest 7,857 7,857 7,857 - Capital outlay 867,500 867,500 619,986 247,514 Contingency 4,468,201 4,468,201 - 4,468,201 Total Expenditures 5,373,221 5,373,221 657,506 4,715,715 REVENUES OVER (UNDER) EXPENDITURES (5,039,221) (5,039,221) 33,695 5,072,916 OTHER FINANCING SOURCES (USES) Transfers in 39,221 39,221 39,221 - NET CHANGE IN FUND BALANCE (5,000,000) (5,000,000) 72,916 5,072,916 FUND BALANCE, beginning of year 5,000,000 5,000,000 5,130,650 130,650 FUND BALANCE, end of year (budgetary basis) - $ - $ 5,203,566 5,203,566 $ Interfund loan 151,232 FUND BALANCE, end of year GAAP basis 5,354,798 $ Budget Amounts ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 Transit Building Search and Seizure ASSETS Cash and investments 5,955 $ 459,402 $ 1,111 $ Accounts receivable 143,450 - - Property taxes receivable - - - Assessment liens receivable - - - Loans receivable - - - Total Assets 149,405 $ 459,402 $ 1,111 $ LIABILITIES AND FUND BALANCE Liabilities: Accounts payable 7,422 $ 61,837 $ - $ Accrued payroll and payroll liabilities 23,550 21,511 - Total Liabilities 30,972 83,348 - Deferred Inflows: Unavailable revenue - - - Fund Balance: Restricted for: Debt service - - - Construction - - - Culture and recreation 118,433 - - Community development - - - Committed to: Public safety - - 1,111 Capital outlay - 376,054 - Public works - - - Planning and building - - - Total Fund Balance 118,433 376,054 1,111 Total Liabilities and Fund Balance 149,405 $ 459,402 $ 1,111 $ Special Revenue ---PAGE BREAK--- - 45 - Capital Projects Housing Rehabilitation Library Endowment Museum Endowment Lavelle Black Trust URA General Construction 234,505 $ 26,261 $ 3,011 $ 45,763 $ 1,908,678 $ 10,128 $ - - - - - 34,951 - - - - 44,362 - - - - - - - 784,259 - - - - - 1,018,764 $ 26,261 $ 3,011 $ 45,763 $ 1,953,040 $ 45,079 $ 52,308 $ - $ - $ - $ 18,321 $ 21,294 $ 756 - - - 7,211 - 53,064 - - - 25,532 21,294 784,259 - - - 38,808 - - - - - 227,732 - - - - - - - - 26,261 3,011 45,763 - - - - - - 1,660,968 - - - - - - - - - - - - 23,785 - - - - - - 181,441 - - - - - 181,441 26,261 3,011 45,763 1,888,700 23,785 1,018,764 $ 26,261 $ 3,011 $ 45,763 $ 1,953,040 $ 45,079 $ Special Revenue ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS (Continued) JUNE 30, 2014 Special Assessment Street/Storm Capital Improvement Parks SDC ASSETS Cash and investments 1,041,261 $ 608,514 $ 428,841 $ Accounts receivable - - - Property taxes receivable - - - Assessment liens receivable 39,650 - - Loans receivable - - 31,536 Total Assets 1,080,911 $ 608,514 $ 460,377 $ LIABILITIES AND FUND BALANCE Liabilities: Accounts payable - $ 430,362 $ - $ Accrued payroll and payroll liabilities - - - Total Liabilities - 430,362 - Deferred Inflows: Unavailable revenue 39,650 - 31,536 Fund Balance: Restricted for: Debt service - - - Construction - 178,152 428,841 Culture and recreation - - - Community development - - - Committed to: Public safety - - - Capital outlay - - Public works 1,041,261 - - Planning and building - - - Total Fund Balance 1,041,261 178,152 428,841 Total Liabilities and Fund Balance 1,080,911 $ 608,514 $ 460,377 $ Capital Projects ---PAGE BREAK--- - 46 - Debt Service Storm SDC Equipment Replacement GO Debt Total 499,892 $ 812,267 $ 49,981 $ 6,135,570 $ - - - 178,401 - - 39,723 84,085 - - - 39,650 5,720 - - 821,515 505,612 $ 812,267 $ 89,704 $ 7,259,221 $ - $ - $ - $ 591,544 $ - - - 53,028 - - - 644,572 5,720 - 34,671 934,644 - - 55,033 282,765 499,892 - - 1,106,885 - - - 193,468 - - - 1,660,968 - - - 1,111 - 812,267 - 1,212,106 - - - 1,041,261 - - - 181,441 499,892 812,267 55,033 5,680,005 505,612 $ 812,267 $ 89,704 $ 7,259,221 $ 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, 2014 Transit Building Search and Seizure REVENUES Taxes and assessments - $ - $ - $ Licenses and permits - 524,792 - Charges for services 40,678 - - Intergovernmental 435,236 - - Miscellaneous 8,290 28,694 1,111 Total Revenues 484,204 553,486 1,111 EXPENDITURES General government - 485,783 - Culture and recreation 631,763 - - Debt service Principal - - - Interest - - - Capital outlay 2,378 - - Total Expenditures 634,141 485,783 - REVENUES OVER (UNDER) EXPENDITURES (149,937) 67,703 1,111 OTHER FINANCING SOURCES (USES) Transfers in 134,294 - - Transfers out - - - Total Other Financing Sources and Uses 134,294 - - NET CHANGE IN FUND BALANCE (15,643) 67,703 1,111 FUND BALANCE, beginning of year 134,076 308,351 - FUND BALANCE, end of year 118,433 $ 376,054 $ 1,111 $ Special Revenue ---PAGE BREAK--- - 47 - Housing Rehabilitation RSVP Cable Franchise Library Endowment Museum Endowment Lavelle Black Trust - $ - $ - $ - $ - $ - $ - - 13,759 - - - - - - - - - - - - - - - 58,410 - 5 140 81 515 58,410 - 13,764 140 81 515 - - 21,821 - - - 14,988 - - - - 6,628 - - - - - - - - - - - - - - - - - - 14,988 - 21,821 - - 6,628 43,422 - (8,057) 140 81 (6,113) - - - - - - (200,000) (5,920) - - - - (200,000) (5,920) - - - - (156,578) (5,920) (8,057) 140 81 (6,113) 338,019 5,920 8,057 26,121 2,930 51,876 181,441 $ - $ - $ 26,261 $ 3,011 $ 45,763 $ Special Revenue ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (Continued) YEAR ENDED JUNE 30, 2014 Special Revenue URA General Construction Special Assessment REVENUES Taxes and assessments 602,347 $ - $ 10,810 $ Licenses and permits - - - Charges for services - - - Intergovernmental - 65,034 - Miscellaneous 10,266 183 5,539 Total Revenues 612,613 65,217 16,349 EXPENDITURES General government - - - Culture and recreation 298,250 - - Debt service Principal 210,509 - - Interest 17,223 - - Capital outlay - 161,371 - Total Expenditures 525,982 161,371 - REVENUES OVER (UNDER) EXPENDITURES 86,631 (96,154) 16,349 OTHER FINANCING SOURCES (USES) Transfers in - 149,356 - Transfers out - (89,000) - Total Other Financing Sources and Uses - 60,356 - NET CHANGE IN FUND BALANCE 86,631 (35,798) 16,349 FUND BALANCE, beginning of year 1,802,069 59,583 1,024,912 FUND BALANCE, end of year 1,888,700 $ 23,785 $ 1,041,261 $ Capital Projects ---PAGE BREAK--- - 48 - Debt Service Street/Storm Capital Improvement Parks SDC Storm SDC Equipment Replacement GO Debt Total - $ - $ - $ - $ 549,983 $ 1,163,140 $ - 125,055 27,191 - - 690,797 - - - - - 40,678 - - - - - 500,270 25,012 1,845 2,582 4,297 1,261 148,231 25,012 126,900 29,773 4,297 551,244 2,543,116 - - - - - 507,604 - 6,120 - - - 957,749 - - - - 320,000 530,509 - - - - 203,781 221,004 595,781 - - - - 759,530 595,781 6,120 - - 523,781 2,976,396 (570,769) 120,780 29,773 4,297 27,463 (433,280) 513,421 89,000 - 115,259 - 1,001,330 - (43,356) - (18,294) - (356,570) 513,421 45,644 - 96,965 - 644,760 (57,348) 166,424 29,773 101,262 27,463 211,480 235,500 262,417 470,119 711,005 27,570 5,468,525 178,152 $ 428,841 $ 499,892 $ 812,267 $ 55,033 $ 5,680,005 $ Capital Projects ---PAGE BREAK--- - 49 - 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, 2014 Original Final Actual Variance REVENUES Charges for services 56,000 $ 56,000 $ 40,678 $ (15,322) $ Intergovernmental 797,150 797,150 435,236 (361,914) Miscellaneous 9,600 9,600 8,290 (1,310) Total Revenues 862,750 862,750 484,204 (378,546) EXPENDITURES Personal services 371,780 371,780 371,677 103 Materials and services 622,917 622,917 250,756 372,161 Capital outlay 60,000 60,000 2,378 57,622 Contingency 64,559 64,559 - 64,559 Total Expenditures 1,119,256 1,119,256 624,811 494,445 REVENUES OVER (UNDER) EXPENDITURES (256,506) (256,506) (140,607) 115,899 OTHER FINANCING SOURCES (USES) Transfers in 154,294 154,294 134,294 (20,000) NET CHANGE IN FUND BALANCE (102,212) (102,212) (6,313) 95,899 FUND BALANCE, beginning of year 102,212 102,212 134,076 31,864 FUND BALANCE, end of year (budgetary basis) - $ - $ 127,763 127,763 $ Accrued payroll (9,330) FUND BALANCE, end of year (GAAP basis) 118,433 $ Budget Amounts ---PAGE BREAK--- - 50 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - BUILDING FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Licenses and permits 308,251 $ 386,251 $ 524,792 $ 138,541 $ Miscellaneous 35,000 35,000 28,694 (6,306) Total Revenues 343,251 421,251 553,486 132,235 EXPENDITURES Personal services 352,108 360,108 333,733 26,375 Materials and services 95,193 165,193 143,954 21,239 Contingency 235,950 235,950 - 235,950 Total Expenditures 683,251 761,251 477,687 283,564 REVENUES OVER (UNDER) EXPENDITURES (340,000) (340,000) 75,799 415,799 OTHER FINANCING SOURCES (USES) Transfers in 65,000 65,000 - (65,000) NET CHANGE IN FUND BALANCE (275,000) (275,000) 75,799 350,799 FUND BALANCE, beginning of year 275,000 275,000 308,351 33,351 FUND BALANCE, end of year (budgetary basis) - $ - $ 384,150 384,150 $ Accrued payroll (8,096) FUND BALANCE, end of year (GAAP basis) 376,054 $ Budget Amounts ---PAGE BREAK--- - 51 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – SEARCH AND SEIZURE FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Miscellaneous - $ - $ 1,111 $ 1,111 $ EXPENDITURES - - - - NET CHANGE IN FUND BALANCE - - 1,111 1,111 FUND BALANCE, beginning of year - - - - FUND BALANCE, end of year - $ - $ 1,111 $ 1,111 $ Budget Amounts ---PAGE BREAK--- - 52 - 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, 2014 Original Final Actual Variance REVENUES Miscellaneous 29,500 $ 29,500 $ 58,410 $ 28,910 $ EXPENDITURES Personal services 13,736 13,736 12,273 1,463 Materials and services 40,200 40,200 2,430 37,770 Contingency 49,564 49,564 - 49,564 Total Expenditures 103,500 103,500 14,703 88,797 REVENUES OVER (UNDER) EXPENDITURES (74,000) (74,000) 43,707 117,707 OTHER FINANCING SOURCES (USES) Transfers out (200,000) (200,000) (200,000) - NET CHANGE IN FUND BALANCE (274,000) (274,000) (156,293) 117,707 FUND BALANCE, beginning of year 274,000 274,000 338,019 64,019 FUND BALANCE, end of year (budgetary basis) - $ - $ 181,726 181,726 $ Accrued payroll (285) FUND BALANCE, end of year (GAAP basis) 181,441 $ Budget Amounts ---PAGE BREAK--- - 53 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - RSVP FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES - $ - $ - $ - $ EXPENDITURES - - - - REVENUES OVER (UNDER) EXPENDITURES - - - - OTHER FINANCING SOURCES (USES) Transfers out (20,000) (20,000) (5,920) 14,080 NET CHANGE IN FUND BALANCE (20,000) (20,000) (5,920) 14,080 FUND BALANCE, beginning of year 20,000 20,000 5,920 (14,080) FUND BALANCE, end of year - $ - $ - $ - $ Budget Amounts ---PAGE BREAK--- - 54 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – CABLE FRANCHISE FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Licenses and permits 24,500 $ 24,500 $ 13,759 $ (10,741) $ Miscellaneous - - 5 5 Total Revenues 24,500 24,500 13,764 (10,736) EXPENDITURES Materials and services 26,050 26,050 21,821 4,229 Contingency 2,950 2,950 - 2,950 Total Expenditures 29,000 29,000 21,821 7,179 NET CHANGE IN FUND BALANCE (4,500) (4,500) (8,057) (3,557) FUND BALANCE, beginning of year 4,500 4,500 8,057 3,557 FUND BALANCE, end of year - $ - $ - $ - $ Budget Amounts ---PAGE BREAK--- - 55 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – LIBRARY ENDOWMENT FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Miscellaneous 165 $ 165 $ 140 $ (25) $ EXPENDITURES Contingency 26,265 26,265 - 26,265 NET CHANGE IN FUND BALANCE (26,100) (26,100) 140 26,240 FUND BALANCE, beginning of year 26,100 26,100 26,121 21 FUND BALANCE, end of year - $ - $ 26,261 $ 26,261 $ Budget Amounts ---PAGE BREAK--- - 56 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – MUSEUM ENDOWMENT FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Miscellaneous 20 $ 20 $ 81 $ 61 $ EXPENDITURES Contingency 2,805 2,805 - 2,805 NET CHANGE IN FUND BALANCE (2,785) (2,785) 81 2,866 FUND BALANCE, beginning of year 2,785 2,785 2,930 145 FUND BALANCE, end of year - $ - $ 3,011 $ 3,011 $ Budget Amounts ---PAGE BREAK--- - 57 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – LAVELLE BLACK TRUST FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Miscellaneous 325 $ 325 $ 515 $ 190 $ EXPENDITURES Materials and services 10,000 10,000 6,628 3,372 Contingency 30,325 30,325 - 30,325 Total Expenditures 40,325 40,325 6,628 33,697 NET CHANGE IN FUND BALANCE (40,000) (40,000) (6,113) 33,887 FUND BALANCE, beginning of year 40,000 40,000 51,876 11,876 FUND BALANCE, end of year - $ - $ 45,763 $ 45,763 $ Budget Amounts ---PAGE BREAK--- - 58 - 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, 2014 Original Final Actual Variance REVENUES Taxes and assessments 550,000 $ 550,000 $ 602,347 $ 52,347 $ Miscellaneous 10,500 10,500 10,266 (234) Total Revenues 560,500 560,500 612,613 52,113 EXPENDITURES Personal services 154,487 154,487 119,992 34,495 Materials and services 309,500 309,500 175,365 134,135 Debt service Principal 251,855 251,855 210,509 41,346 Interest 375,877 375,877 17,223 358,654 Capital outlay 4,500,000 4,500,000 - 4,500,000 Contingency 1,393,781 1,393,781 - 1,393,781 Total Expenditures 6,985,500 6,985,500 523,089 6,462,411 REVENUES OVER (UNDER) EXPENDITURES (6,425,000) (6,425,000) 89,524 6,514,524 OTHER FINANCING SOURCES (USES) Proceeds from issuance of debt 4,500,000 4,500,000 - (4,500,000) NET CHANGE IN FUND BALANCE (1,925,000) (1,925,000) 89,524 2,014,524 FUND BALANCE, beginning of year 1,925,000 1,925,000 1,802,069 (122,931) FUND BALANCE, end of year (budgetary basis) - $ - $ 1,891,593 1,891,593 $ Accrued payroll (2,893) FUND BALANCE, end of year (GAAP basis) 1,888,700 $ Budget Amounts ---PAGE BREAK--- - 59 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Intergovernmental - $ 277,800 $ 65,034 $ (212,766) $ Miscellaneous - - 183 183 Total Revenues - 277,800 65,217 (212,583) EXPENDITURES Capital outlay 59,000 538,800 161,371 377,429 Contingency 43,000 43,000 - 43,000 Total Expenditures 102,000 581,800 161,371 420,429 REVENUES OVER (UNDER) EXPENDITURES (102,000) (304,000) (96,154) 207,846 OTHER FINANCING SOURCES (USES) Transfers in - 291,000 149,356 (141,644) Transfers out (20,000) (109,000) (89,000) 20,000 Total Other Financing Sources and Uses (20,000) 182,000 60,356 (121,644) NET CHANGE IN FUND BALANCE (122,000) (122,000) (35,798) 86,202 FUND BALANCE, beginning of year 122,000 122,000 59,583 (62,417) FUND BALANCE, end of year - $ - $ 23,785 $ 23,785 $ Budget Amounts ---PAGE BREAK--- - 60 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – SPECIAL ASSESSMENT FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Taxes and assessments 34,685 $ 34,685 $ 10,810 $ (23,875) $ Miscellaneous 6,000 6,000 5,539 (461) Total Revenues 40,685 40,685 16,349 (24,336) EXPENDITURES Contingency 872,685 872,685 - 872,685 NET CHANGE IN FUND BALANCE (832,000) (832,000) 16,349 848,349 FUND BALANCE, beginning of year 832,000 832,000 1,024,912 192,912 FUND BALANCE, end of year - $ - $ 1,041,261 $ 1,041,261 $ Budget Amounts ---PAGE BREAK--- - 61 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – STREET/STORM CAPITAL IMPROVEMENT FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Miscellaneous - $ - $ 25,012 $ 25,012 $ EXPENDITURES Capital outlay 1,189,600 1,189,600 595,781 593,819 REVENUES OVER (UNDER) EXPENDITURES (1,189,600) (1,189,600) (570,769) 618,831 OTHER FINANCING SOURCES (USES) Transfers in 1,164,600 1,164,600 513,421 (651,179) NET CHANGE IN FUND BALANCE (25,000) (25,000) (57,348) (32,348) FUND BALANCE, beginning of year 25,000 25,000 235,500 210,500 FUND BALANCE, end of year - $ - $ 178,152 $ 178,152 $ Budget Amounts ---PAGE BREAK--- - 62 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – PARKS SDC FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Licenses and permits 20,000 $ 20,000 $ 125,055 $ 105,055 $ Miscellaneous 2,785 2,785 1,845 (940) Total Revenues 22,785 22,785 126,900 104,115 EXPENDITURES Materials and services 30,000 30,000 6,120 23,880 Contingency 442,785 346,785 - 346,785 Total Expenditures 472,785 376,785 6,120 370,665 REVENUES OVER (UNDER) EXPENDITURES (450,000) (354,000) 120,780 474,780 OTHER FINANCING SOURCES (USES) Transfers in - 89,000 89,000 - Transfers out - (185,000) (43,356) 141,644 Total Other Financing Sources and Uses - (96,000) 45,644 141,644 NET CHANGE IN FUND BALANCE (450,000) (450,000) 166,424 616,424 FUND BALANCE, beginning of year 450,000 450,000 262,417 (187,583) FUND BALANCE, end of year - $ - $ 428,841 $ 428,841 $ Budget Amounts ---PAGE BREAK--- - 63 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – STORM SDC FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Licenses and permits 15,000 $ 15,000 $ 27,191 $ 12,191 $ Miscellaneous 2,000 2,000 2,582 582 Total Revenues 17,000 17,000 29,773 12,773 EXPENDITURES Contingency 455,000 455,000 - 455,000 REVENUES OVER (UNDER) EXPENDITURES (438,000) (438,000) 29,773 467,773 OTHER FINANCING SOURCES (USES) Transfers out (25,000) (25,000) - 25,000 NET CHANGE IN FUND BALANCE (463,000) (463,000) 29,773 492,773 FUND BALANCE, beginning of year 463,000 463,000 470,119 7,119 FUND BALANCE, end of year - $ - $ 499,892 $ 499,892 $ Budget Amounts ---PAGE BREAK--- - 64 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – EQUIPMENT REPLACEMENT FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Miscellaneous 4,000 $ 4,000 $ 4,297 $ 297 $ EXPENDITURES Capital outlay 829,428 829,428 - 829,428 REVENUES OVER (UNDER) EXPENDITURES (825,428) (825,428) 4,297 829,725 OTHER FINANCING SOURCES (USES) Transfers in 115,259 115,259 115,259 - Transfers out (18,294) (18,294) (18,294) - Total Other Financing Sources and Uses 96,965 96,965 96,965 - NET CHANGE IN FUND BALANCE (728,463) (728,463) 101,262 829,725 FUND BALANCE, beginning of year 728,463 728,463 711,005 (17,458) FUND BALANCE, end of year - $ - $ 812,267 $ 812,267 $ Budget Amounts ---PAGE BREAK--- - 65 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL OBLIGATION DEBT FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Taxes and assessments 528,000 $ 528,000 $ 549,983 $ 21,983 $ Miscellaneous 900 900 1,261 361 Total Revenues 528,900 528,900 551,244 22,344 EXPENDITURES Debt service Principal 320,000 320,000 320,000 - Interest 203,781 203,781 203,781 - Contingency 35,119 35,119 - 35,119 Total Expenditures 558,900 558,900 523,781 35,119 NET CHANGE IN FUND BALANCE (30,000) (30,000) 27,463 57,463 FUND BALANCE, beginning of year 30,000 30,000 27,570 (2,430) FUND BALANCE, end of year - $ - $ 55,033 $ 55,033 $ Budget Amounts ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF FUND NET POSITION - NONMAJOR PROPRIETARY (ENTERPRISE) FUNDS JUNE 30, 2014 Water SDC Sewer SDC WWD Construction ASSETS Current Assets Cash and investments 906,363 $ 687,935 $ 2,784,162 $ Accounts receivable 37,530 53,586 8,258 Due from other funds - - 204,232 Total Current Assets 943,893 741,521 2,996,652 Noncurrent Assets Nondepreciable capital assets - - 1,289,721 Capital assets, net of depreciation - - 527,144 Total Noncurrent Assets - - 1,816,865 Total Assets 943,893 741,521 4,813,517 LIABILITIES Current Liabilities Accounts payable - - 52,295 NET POSITION: Net investment in capital assets - - 1,816,865 Restricted for: Construction 943,893 741,521 2,944,357 Total Net Position 943,893 $ 741,521 $ 4,761,222 $ ---PAGE BREAK--- - 66 - Total 4,378,460 $ 99,374 204,232 4,682,066 1,289,721 527,144 1,816,865 6,498,931 52,295 1,816,865 4,629,771 6,446,636 $ ---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, 2014 Water SDC Sewer SDC WWD Construction OPERATING REVENUES - $ - $ - $ OPERATING EXPENSES Materials and services - - 216 Depreciation - - 31,068 Total Expenses - - 31,284 OPERATING INCOME (LOSS) - - (31,284) NONOPERATING REVENUES (EXPENSES) Investment revenue 4,357 2,955 16,109 NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS 4,357 2,955 (15,175) Capital contributions 181,486 265,485 - Transfers in - - 3,734 CHANGE IN NET POSITION 185,843 268,440 (11,441) NET POSITION, beginning of year as originally reported 758,050 473,081 4,666,663 Prior period adjustment - - 106,000 NET POSITION, beginning of year as restated 758,050 473,081 4,772,663 NET POSITION, end of year 943,893 $ 741,521 $ 4,761,222 $ ---PAGE BREAK--- - 67 - Total - $ 216 31,068 31,284 (31,284) 23,421 (7,863) 446,971 3,734 442,842 5,897,794 106,000 6,003,794 6,446,636 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF CASH FLOWS - NONMAJOR PROPRIETARY (ENTERPRISE) FUNDS YEAR ENDED JUNE 30, 2014 CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers $ - $ - CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in - - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets - - System development revenue 160,636 235,715 Net Cash Provided by (Used in) Capital and Related Financing Activities 160,636 235,715 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 4,357 2,955 Increase (Decrease) in Cash and Investments 164,993 238,670 CASH AND INVESTMENTS, Beginning of year 741,370 449,265 CASH AND INVESTMENTS, End of year $ 906,363 $ 687,935 Water Sewer SDC SDC RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) $ - $ - Depreciation - - Change in assets and liabilities Accounts receivable - - Accounts payable and accrued liabilities - - Net Cash Provided by (Used in) Operating Activities $ - $ - ---PAGE BREAK--- - 68 - Totals $ 525 $ 525 39,220 39,220 (430,586) (430,586) - 396,351 (430,586) (34,235) 16,109 23,421 (374,732) 28,931 3,158,894 4,349,529 $ 2,784,162 $ 4,378,460 WWD Construction $ (31,284) $ (31,284) 31,068 31,068 525 525 216 216 $ 525 $ 525 ---PAGE BREAK--- - 69 - 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, 2014 Original Final Actual Variance REVENUES Charges for services 3,315,515 $ 3,315,515 $ 3,166,879 $ (148,636) $ Miscellaneous 51,000 51,000 303,593 252,593 Interest earnings 5,200 5,200 7,498 2,298 Total Revenues 3,371,715 3,371,715 3,477,970 106,255 EXPENDITURES Personal services 1,371,458 1,371,458 1,244,302 127,156 Materials and services 838,457 838,457 736,473 101,984 Debt service Principal 648,320 648,320 648,318 2 Interest 511,310 511,310 511,310 - Contingency 1,239,062 1,239,062 - 1,239,062 Total Expenditures 4,608,607 4,608,607 3,140,403 1,468,204 REVENUES OVER (UNDER) EXPENDITURES (1,236,892) (1,236,892) 337,567 1,574,459 OTHER FINANCING SOURCES (USES) Transfers out (38,108) (38,108) (23,334) 14,774 NET CHANGE IN FUND BALANCE (1,275,000) (1,275,000) 314,233 1,589,233 FUND BALANCE, beginning of year 1,275,000 1,275,000 1,467,268 192,268 FUND BALANCE, end of year - $ - $ 1,781,501 $ 1,781,501 $ Budget Amounts ---PAGE BREAK--- - 70 - 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, 2014 Original Final Actual Variance REVENUES Charges for services 7,030,000 $ 7,030,000 $ 7,479,642 $ 449,642 $ Miscellaneous 2,000 2,000 3,065 1,065 Interest earnings 12,200 12,200 23,692 11,492 Total Revenues 7,044,200 7,044,200 7,506,399 462,199 EXPENDITURES Personal services 1,954,268 1,954,268 1,789,712 164,556 Materials and services 1,507,184 1,507,184 1,264,703 242,481 Debt service Principal 2,265,153 2,265,153 2,265,153 - Interest 1,044,559 1,044,559 1,044,559 - Capital outlay 45,084 45,084 - 45,084 Contingency 3,833,359 3,833,359 - 3,833,359 Total Expenditures 10,649,607 10,649,607 6,364,127 4,285,480 REVENUES OVER (UNDER) EXPENDITURES (3,605,407) (3,605,407) 1,142,272 4,747,679 OTHER FINANCING SOURCES (USES) Transfers out (173,593) (173,593) (173,593) - NET CHANGE IN FUND BALANCE (3,779,000) (3,779,000) 968,679 4,747,679 FUND BALANCE, beginning of year 3,779,000 3,779,000 4,183,555 404,555 FUND BALANCE, end of year - $ - $ 5,152,234 $ 5,152,234 $ Budget Amounts ---PAGE BREAK--- - 71 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL – WWTP CONSTRUCTION FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Interest earnings 105,100 $ 105,100 $ 70,528 $ (34,572) EXPENDITURES Capital outlay 2,635,200 2,635,200 926,343 1,708,857 Contingency 14,469,900 14,469,900 - 14,469,900 Total Expenditures 17,105,100 17,105,100 926,343 16,178,757 NET CHANGE IN FUND BALANCE (17,000,000) (17,000,000) (855,815) 16,144,185 FUND BALANCE, beginning of year 17,000,000 17,000,000 13,530,151 (3,469,849) FUND BALANCE, end of year - $ - $ 12,674,336 $ 12,674,336 $ Budget Amounts ---PAGE BREAK--- - 72 - 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, 2014 Original Final Actual Variance REVENUES Licenses and permits 60,000 $ 60,000 $ 160,636 $ 100,636 $ Interest earnings 3,475 3,475 4,357 882 Total Revenues 63,475 63,475 164,993 101,518 EXPENDITURES Debt service Principal 623,475 623,475 - 623,475 REVENUES OVER (UNDER) EXPENDITURES (560,000) (560,000) 164,993 724,993 OTHER FINANCING SOURCES (USES) Transfers out (40,000) (40,000) - 40,000 NET CHANGE IN FUND BALANCE (600,000) (600,000) 164,993 764,993 FUND BALANCE, beginning of year 600,000 600,000 741,370 141,370 FUND BALANCE, end of year - $ - $ 906,363 $ 906,363 $ Budget Amounts ---PAGE BREAK--- - 73 - 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, 2014 Original Final Actual Variance REVENUES Licenses and permits 100,000 $ 100,000 $ 235,715 $ 135,715 $ Interest earnings 1,750 1,750 2,955 1,205 Total Revenues 101,750 101,750 238,670 136,920 EXPENDITURES Contingency 374,750 374,750 - 374,750 NET CHANGE IN FUND BALANCE (273,000) (273,000) 238,670 511,670 FUND BALANCE, beginning of year 273,000 273,000 449,265 176,265 FUND BALANCE, end of year - $ - $ 687,935 $ 687,935 $ Budget Amounts ---PAGE BREAK--- - 74 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL – WWD CONSTRUCTION FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Interest earnings 26,800 $ 26,800 $ 16,109 $ (10,691) $ EXPENDITURES Capital outlay 733,974 733,974 474,925 259,049 Contingency 3,821,821 3,821,821 - 3,821,821 Total Expenditures 4,555,795 4,555,795 474,925 4,080,870 REVENUES OVER (UNDER) EXPENDITURES (4,528,995) (4,528,995) (458,816) 4,070,179 OTHER FINANCING SOURCES (USES) Transfers in 93,995 93,995 39,221 (54,774) Transfers out (65,000) (65,000) - 65,000 Total Other Financing Sources and Uses 28,995 28,995 39,221 10,226 NET CHANGE IN FUND BALANCE (4,500,000) (4,500,000) (419,595) 4,080,405 FUND BALANCE, beginning of year 4,500,000 4,500,000 3,159,720 (1,340,280) FUND BALANCE, end of year - $ - $ 2,740,125 $ 2,740,125 $ Budget Amounts ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF FUND NET POSITION - INTERNAL SERVICE FUNDS JUNE 30, 2014 Information Services Insurance Technical & Environmental Services ASSETS Current Assets Cash and investments 119,737 $ 404,919 $ 92,043 $ Accounts receivable 13,831 - - Total Assets 133,568 404,919 92,043 LIABILITIES Current Liabilities Accounts payable 1,491 5,859 59,756 Accrued payroll liabilities 20,397 3,147 32,287 Accrued compensated absences - - 99,469 Total Liabilities 21,888 9,006 191,512 NET POSITION: Unrestricted 111,680 $ 395,913 $ (99,469) $ ---PAGE BREAK--- - 75 - Total 616,699 $ 13,831 630,530 67,106 55,831 99,469 222,406 408,124 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2014 Information Services Insurance Technical & Environmental Services OPERATING REVENUES Licenses and permits - $ - $ 22,132 $ Charges for services 759,801 500,005 1,149,024 Miscellaneous - 1,558 24,944 Total Operating Revenues 759,801 501,563 1,196,100 OPERATING EXPENSES Personal services 354,816 54,385 830,998 Materials and services 550,574 450,679 537,052 Total Expenses 905,390 505,064 1,368,050 OPERATING INCOME (LOSS) (145,589) (3,501) (171,950) NONOPERATING REVENUES (EXPENSES) Investment revenue 1,905 2,599 847 NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS (143,684) (902) (171,103) Transfers in 187,000 - - Transfers out - - (5,000) CHANGE IN NET POSITION 43,316 (902) (176,103) NET POSITION, beginning of year 68,364 396,815 76,634 NET POSITION (Deficit), end of year 111,680 $ 395,913 $ (99,469) $ ---PAGE BREAK--- - 76 - Total 22,132 $ 2,408,830 26,502 2,457,464 1,240,199 1,538,305 2,778,504 (321,040) 5,351 (315,689) 187,000 (5,000) (133,689) 541,813 408,124 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF CASH FLOWS - INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2014 Technical and Information Environmental Services Insurance Services CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers 745,970 $ 501,563 $ 1,196,100 $ Paid to suppliers (570,184) (445,407) (494,238) Paid to employees (334,419) (51,238) (805,688) Net Cash Provided by (Used in) Operating Activities (158,633) 4,918 (103,826) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in 187,000 - - Transfers out - - (5,000) Net Cash Provided by (Used in) Non-Capital Financing Activities 187,000 - (5,000) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 1,905 2,599 847 Increase (Decrease) in Cash and Investments 30,272 7,517 (107,979) CASH AND INVESTMENTS, Beginning of year 89,465 397,402 200,022 CASH AND INVESTMENTS, End of year 119,737 $ 404,919 $ 92,043 $ RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) (145,589) $ (3,501) $ (171,950) $ Change in assets and liabilities Accounts receivable (13,831) - - Compensated absences payable - - (6,977) Accounts payable and accrued liabilities 787 8,419 75,101 Net Cash Provided by (Used in) Operating Activities (158,633) $ 4,918 $ (103,826) $ ---PAGE BREAK--- - 77 - Totals 2,443,633 $ (1,509,829) (1,191,345) (257,541) 187,000 (5,000) 182,000 5,351 (70,190) 686,889 616,699 $ (321,040) $ (13,831) (6,977) 84,307 (257,541) $ ---PAGE BREAK--- - 78 - 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, 2014 Original Final Actual Variance REVENUES Charges for services 728,461 $ 728,461 $ 759,801 $ 31,340 $ Interest earnings 300 300 1,905 1,605 Total Revenues 728,761 728,761 761,706 32,945 EXPENDITURES Personal services 359,339 359,339 346,784 12,555 Materials and services 274,161 274,161 274,096 65 Capital outlay 277,000 277,000 276,477 523 Contingency 23,261 23,261 - 23,261 Total Expenditures 933,761 933,761 897,357 36,404 REVENUES OVER (UNDER) EXPENDITURES (205,000) (205,000) (135,651) 69,349 OTHER FINANCING SOURCES (USES) Transfers in 187,000 187,000 187,000 - NET CHANGE IN FUND BALANCE (18,000) (18,000) 51,349 69,349 FUND BALANCE, beginning of year 18,000 18,000 68,364 50,364 FUND BALANCE, end of year - $ - $ 119,713 $ 119,713 $ Budget Amounts ---PAGE BREAK--- - 79 - 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, 2014 Original Final Actual Variance REVENUES Charges for services 500,005 $ 500,005 $ 500,005 $ - $ Miscellaneous 12,624 12,624 1,558 (11,066) Interest earnings 1,600 1,600 2,599 999 Total Revenues 514,229 514,229 504,162 (10,067) EXPENDITURES Personal services 55,754 55,754 53,287 2,467 Materials and services 518,152 518,152 450,679 67,473 Contingency 90,323 90,323 - 90,323 Total Expenditures 664,229 664,229 503,966 160,263 NET CHANGE IN FUND BALANCE (150,000) (150,000) 196 150,196 FUND BALANCE, beginning of year 150,000 150,000 396,815 246,815 FUND BALANCE, end of year - $ - $ 397,011 $ 397,011 $ Budget Amounts ---PAGE BREAK--- - 80 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BASIS) – TECHNICAL & ENVIRONMENTAL SERVICES FUND YEAR ENDED JUNE 30, 2014 Original Final Actual Variance REVENUES Licenses and permits 12,500 $ 12,500 $ 22,132 $ 9,632 $ Charges for services 1,502,597 1,502,597 1,149,024 (353,573) Miscellaneous 1,600 1,600 24,944 23,344 Interest earnings 350 350 847 497 Total Revenues 1,517,047 1,517,047 1,196,947 (320,100) EXPENDITURES Personal services 912,471 912,471 837,975 74,496 Materials and services 599,576 599,576 537,052 62,524 Contingency 25,000 25,000 - 25,000 Total Expenditures 1,537,047 1,537,047 1,375,027 162,020 REVENUES OVER (UNDER) EXPENDITURES (20,000) (20,000) (178,080) (158,080) OTHER FINANCING SOURCES (USES) Transfers out (5,000) (5,000) (5,000) - NET CHANGE IN FUND BALANCE (25,000) (25,000) (183,080) (158,080) FUND BALANCE, beginning of year 25,000 25,000 183,080 158,080 FUND BALANCE, end of year - $ - $ - $ - $ Budget Amounts ---PAGE BREAK--- OTHER FINANCIAL SCHEDULES ---PAGE BREAK--- - 81 - CITY OF WOODBURN, OREGON SCHEDULE OF PROPERTY TAX TRANSACTIONS AND OUTSTANDING BALANCES YEAR ENDED JUNE 30, 2014 Uncollected Interest, Uncollected 2013-14 Balance Discounts and Balances Tax Year Levy July 1, 2013 Adjustments Collections June 30, 2014 2013-14 8,410,177 $ - $ (235,226) $ (7,924,202) $ 250,749 $ 2012-13 - 288,141 (3,127) (151,194) 133,820 2011-12 - 152,690 (1,956) (71,083) 79,651 2010-11 - 99,688 (2,974) (66,344) 30,370 2009-10 - 35,088 385 (24,368) 11,105 2008-09 - 13,291 (2,512) (3,653) 7,126 2007-08 - 8,286 (2,239) (1,951) 4,096 Prior - 18,740 (3,754) (1,413) 13,573 8,410,177 $ 615,924 $ (251,403) $ (8,244,208) $ 530,490 Unsegregated 77,200 Property taxes receivable 607,690 $ ---PAGE BREAK--- COMPLIANCE SECTION ---PAGE BREAK--- - 82 - 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, 2014, and have issued our report thereon dated October 31, 2014. 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 expenditures exceeded appropriations, as detailed in the notes to the financial statements. ---PAGE BREAK--- - 83 - 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: Thomas E. Glogau, A Shareholder October 31, 2014