Document Woodburn_doc_ea64918788

CITY OF WOODBURN, OREGON Annual Financial Report Year Ended June 30, 2016 ---PAGE BREAK--- CITY OF WOODBURN, OREGON JUNE 30, 2016 MAYOR AND COUNCIL MEMBERS Name Term Expires Mayor Figley December 31, 2016 Council Members Frank Lonergan, President December 31, 2018 Robert Carney December 31, 2018 Lisa Ellsworth December 31, 2016 Teresa Alonso Leon December 31, 2016 Eric Morris December 31, 2016 Sharon Schaub December 31, 2018 The above individuals may be contacted at the address below. Staff Scott Derickson, City Administrator N. Robert Shields, City Attorney Sarah Head, Finance Director City of Woodburn, Oregon 270 Montgomery Street Woodburn, OR 97071 ---PAGE BREAK--- CITY OF WOODBURN, OREGON TABLE OF CONTENTS Page FINANCIAL SECTION INDEPENDENT AUDITOR'S REPORT 1-3 MANAGEMENT'S DISCUSSION AND ANALYSIS 4-9 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position 10 Statement of Activities 11 Fund Financial Statements Balance Sheet - Governmental Funds 12 Reconciliation of Balance Sheet - Governmental Funds to the Statement of Net Position 13 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 14 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds to the Statement of Activities 15 Statement of Fund Net Position - Proprietary Funds 16 Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds 17 Statement of Cash Flows - Proprietary Funds 18-19 Statement of Fiduciary Net Position 20 Statement of Changes in Fiduciary Net Position 21 Notes to Basic Financial Statements 22-46 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund 47 Street Fund 48 Schedule of the City’s Proportionate Share of the Net Pension Liability (Asset) – Oregon Public Employee’s Retirement System 49 Schedule of the City’s Contributions – Oregon Public Employee’s Retirement System 50 SUPPLEMENTARY INFORMATION Governmental Funds Combining Balance Sheet – Nonmajor Funds 51-52 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Funds 53-54 Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Transit Fund 55 Building Inspection Fund 56 Search and Seizure Fund 57 Housing Rehabilitation Fund 58 Library Endowment Fund 59 Museum Endowment Fund 60 Lavelle Black Trust Fund 61 Urban Renewal Agency Fund 62 General Capital Construction Fund 63 ---PAGE BREAK--- CITY OF WOODBURN, OREGON TABLE OF CONTENTS Page FINANCIAL SECTION (Continued) SUPPLEMENTARY INFORMATION (Continued) Governmental Funds (Continued) Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued) Special Assessment Fund 64 Street/Storm Capital Construction Fund 65 Parks SDC Fund 66 Storm SDC Fund 67 Street SDC Fund 68 Equipment Replacement Fund 69 GO Debt Service Fund 70 Proprietary (Enterprise) Funds Combining Statement of Fund Net Position – Nonmajor Funds 71 Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Nonmajor Funds 72 Combining Statement of Cash Flows – Nonmajor Funds 73 Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget (Non-GAAP Basis) and Actual Water Fund 74 Sewer Fund 75 Sewer Capital Construction Fund 76 Water SDC Fund 77 Sewer SDC Fund 78 Water Capital Construction Fund 79 Internal Services Funds Combining Statement of Fund Net Position 80 Combining Statement of Revenues, Expenses and Changes in Fund Net Position 81 Combining Statement of Cash Flows 82 Schedules of Revenues, Expenditures and Changes in Fund Balances (Budgetary Basis) – Budget and Actual Information Services Fund 83 Insurance Fund 84 COMPLIANCE SECTION Independent Auditor’s Report Required by Oregon State Regulations 85-86 ---PAGE BREAK--- - 1 - 475 Cottage Street NE, Suite 200, Salem, Oregon 97301 (503) 581-7788 INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Council Members City of Woodburn 270 Montgomery Street Woodburn, Oregon 97071 Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Woodburn as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. ---PAGE BREAK--- - 2 - Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Woodburn as of June 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis (MD&A) on pages 4 through 9 and the schedules of revenues, expenditures and changes in fund balance – budget and actual for the General and Street funds (“the budgetary schedules”), the schedule of the City’s proportionate share of the net pension liability (asset) – Oregon public employees retirement system, and the schedule of the City’s contributions – Oregon public employees retirement system (PERS schedules) be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to management’s discussion and analysis and PERS schedules described in the preceding paragraph in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The budgetary schedules described above were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The budgetary 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 are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The supplementary information is presented for the purpose of additional analysis and is not a required part of the basic financial statements. ---PAGE BREAK--- - 3 - The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, or other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly presented, in all material respects, in relation to the basic financial statements as a whole. Report on Other Legal and Regulatory Requirements In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have issued our report dated November 8, 2016 on our consideration of the City's compliance with certain provisions of laws and regulations, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS By: Ryan T. Pasquarella, A Shareholder November 8, 2016 ---PAGE BREAK--- - 4 - CITY OF WOODBURN Year Ended June 30, 2016 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, 2016. 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, 2016. 2016 2015 change Net position 116,447,857 $ 118,762,677 $ (2,314,820) $ Change in net position (2,314,820) 7,114,199 (9,429,019) Governmental activities net position 69,065,155 72,778,222 (3,713,067) Business-type activities fund net position 47,382,702 45,984,455 1,398,247 Change in governmental net position (3,713,067) 3,816,115 (7,529,182) Change in proprietary fund net position 1,398,247 3,298,084 (1,899,837) 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, deferred outflows, liabilities, deferred inflows and activities of the City. The measurement focus and basis of accounting are the same for the entire City. The measurement focus is on all economic resources of the City, including current financial resources (assets) and non-current financial resources (capital assets) and the related current and non-current liabilities and equity accounts. Both government-wide statements are prepared using the accrual basis of accounting, which is similar to the methods used by most businesses and takes into account all revenues and expenses connected with the fiscal year, even if cash involved has not been received or paid. The statement of net position presents information on all the City's assets, deferred outflows, liabilities and deferred inflows, with the difference reported as net position. Increases or decreases in net position may indicate whether the City's financial position is improving or deteriorating. The statement of activities presents the expenses incurred in providing services to the public and the revenues associated with those activities for both governmental and business-type activities. The statement of activities begins with expenses by function. To these functions are applied charges for services, operating grants and contributions and capital grants and contributions. The resulting sums, with some adjustments, represent charges to ---PAGE BREAK--- - 5 - taxpayers and may equate to the nearest that governments can determine the "bottom line." 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 eighteen individual governmental funds. Information is presented separately for the General Fund and Street Fund in the Governmental Fund Balance Sheet and Statement of Revenue, Expenditures and Changes in Fund Balances. The other governmental funds are combined into a single, aggregated presentation. Information for these non-major governmental funds is provided in the form of combining statements. Proprietary Funds. The City maintains two different types of proprietary funds: enterprise and internal service funds. These funds are used to show activities that operate more like those of commercial enterprises. Fees are charged for services provided, both to outside customers and to other units of the City. Enterprise funds are presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water and sewer activities. Internal service funds account for activities furnishing goods or services to other units of the government. Charges for these services are on a cost-reimbursement basis. The internal services funds include insurance and information services. The internal service funds are reported with governmental activities in the government-wide financial statements. Proprietary fund statements provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water, Sewer, and Sewer Capital Construction funds. The internal service funds are combined into a single column in the proprietary fund financial statements. The City adopts an annual appropriated budget for all of its funds. Budgetary comparison statements, demonstrating compliance with this budget, have been provided. Notes to the Financial Statements. The notes to the financial statements are an integral part of the basic financial statements and should be read along with them. The notes provide additional information necessary to communicate the financial position of the City. ---PAGE BREAK--- - 6 - Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required and other supplementary information concerning the City. GOVERNMENT-WIDE FINANCIAL ANALYSIS The City had $166,851,818 in total assets, $1,611,327 in total deferred outflows, $50,210,226 in total liabilities and $1,805,062 in total deferred inflows, resulting in combined net position of $116,447,857 for governmental and business-type activities. The largest component of the City's net position reflects its net investment in capital assets land, buildings, equipment and infrastructure, less any related debt outstanding that was needed to acquire or construct the assets). The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. Governmental capital assets, net of depreciation, decreased $1,376,493 over the prior year due to depreciation in excess of current year capital additions. Business-type capital assets, net of depreciation, decreased $1,557,670 over the prior year due to depreciation in excess of current year capital additions. Total liabilities for both governmental and business-type activities decreased by $978,701 from the prior year mainly due to scheduled debt repayments. Overall, the City's financial net position decreased by $2,314,820 (or The majority of this is due to the application of the provisions of Statement No. 68, Accounting and Financial Reporting for Pensions from the Governmental Accounting Standards Board. The pronouncement included an adjustment to the current year pension expense based on the results of the actuarial study as described in the notes to the financial statements. Statement of Net Position The following table reflects the condensed Statement of Net Position compared to the prior year. Governmental Business-type Governmental Business-type Governmental Business-type Activities Activities Total Activities Activities Total Activities Activities Total Cash and investments 16,366,077 $ 25,266,880 $ 41,632,957 $ 19,129,639 $ 24,363,529 $ 43,493,168 $ (2,763,562) $ 903,351 $ (1,860,211) $ Other assets 2,206,771 1,031,903 3,238,674 4,141,747 1,392,416 5,534,163 (1,934,976) (360,513) (2,295,489) Capital assets 62,452,123 59,528,064 121,980,187 63,828,616 61,085,734 124,914,350 (1,376,493) (1,557,670) (2,934,163) Total Assets 81,024,971 85,826,847 166,851,818 87,100,002 86,841,679 173,941,681 (6,075,031) (1,014,832) (7,089,863) Deferred outflows 1,272,865 338,462 1,611,327 864,117 182,030 1,046,147 408,748 156,432 565,180 Other liabilities 6,996,268 2,529,099 9,525,367 5,799,592 956,381 6,755,973 1,196,676 1,572,718 2,769,394 Long-term debt 4,810,507 35,874,352 40,684,859 5,226,383 39,206,571 44,432,954 (415,876) (3,332,219) (3,748,095) Total Liabilities 11,806,775 38,403,451 50,210,226 11,025,975 40,162,952 51,188,927 780,800 (1,759,501) (978,701) Deferred inflows 1,425,906 379,156 1,805,062 4,159,922 876,302 5,036,224 (2,734,016) (497,146) (3,231,162) Net position: Net investment in capital assets 58,326,049 23,737,493 82,063,542 59,266,063 21,979,780 81,245,843 (940,014) 1,757,713 817,699 Restricted 9,815,650 16,735,267 26,550,917 8,929,025 16,841,111 25,770,136 886,625 (105,844) 780,781 Unrestricted 923,456 6,909,942 7,833,398 4,583,134 7,163,564 11,746,698 (3,659,678) (253,622) (3,913,300) Total Net Position 69,065,155 $ 47,382,702 $ 116,447,857 $ 72,778,222 $ 45,984,455 $ 118,762,677 $ (3,713,067) $ 1,398,247 $ (2,314,820) $ Change 2016 2015 Governmental Activities The City’s net position from governmental activities decreased $3,713,067 from 2014-15 to 2015-16. ---PAGE BREAK--- - 7 - Business-type Activities The City’s net position from business-type activities increased $1,398,247 from 2014-15 to 2015-16. Statement of Activities The following table reflects the condensed Statement of Activities compared to the prior year. Business- Business- Business- Governmental type Governmental type Governmental type Activities Activities Total Activities Activities Total Activities Activities Total Revenues Program Revenues Charges for service 1,799,621 $ 11,585,205 $ 13,384,826 $ 1,944,279 $ 11,259,263 $ 13,203,542 $ (144,658) $ 325,942 $ 181,284 $ Operating grants and contributions 1,962,709 - 1,962,709 1,993,925 - 1,993,925 (31,216) - (31,216) Capital grants and contributions 350,449 307,152 657,601 1,286,163 310,272 1,596,435 (935,714) (3,120) (938,834) Total Program Revenues 4,112,779 11,892,357 16,005,136 5,224,367 11,569,535 16,793,902 (1,111,588) 322,822 (788,766) General Revenues Property taxes 9,156,725 - 9,156,725 8,836,939 - 8,836,939 319,786 - 319,786 Franchise taxes 1,511,125 - 1,511,125 1,539,926 - 1,539,926 (28,801) - (28,801) Other taxes 550,346 - 550,346 437,339 - 437,339 113,007 - 113,007 Intergovernmental 649,350 - 649,350 655,575 - 655,575 (6,225) - (6,225) Other 319,676 227,126 546,802 128,240 190,449 318,689 191,436 36,677 228,113 Total General Revenues 12,187,222 227,126 12,414,348 11,598,019 190,449 11,788,468 589,203 36,677 625,880 Total Revenues 16,300,001 12,119,483 28,419,484 16,822,386 11,759,984 28,582,370 (522,385) 359,499 (162,886) Expenses General government 5,114,971 - 5,114,971 3,058,648 - 3,058,648 2,056,323 - 2,056,323 Public safety 9,231,388 - 9,231,388 5,662,660 - 5,662,660 3,568,728 - 3,568,728 Highways and streets 2,691,040 - 2,691,040 1,976,022 - 1,976,022 715,018 - 715,018 Culture and recreation 3,481,264 - 3,481,264 2,784,248 - 2,784,248 697,016 - 697,016 Interest on long-term debt 183,342 - 183,342 204,905 - 204,905 (21,563) - (21,563) Water - 3,303,526 3,303,526 - 2,478,695 2,478,695 - 824,831 824,831 Sewer - 6,728,773 6,728,773 - 5,302,993 5,302,993 - 1,425,780 1,425,780 Total Expenses 20,702,005 10,032,299 30,734,304 13,686,483 7,781,688 21,468,171 7,015,522 2,250,611 9,266,133 Changes in Net Position Before Transfers (4,402,004) 2,087,184 (2,314,820) 3,135,903 3,978,296 7,114,199 (7,537,907) (1,891,112) (9,429,019) Transfers 688,937 (688,937) - 680,212 (680,212) - 8,725 (8,725) - Change in Net Position (3,713,067) 1,398,247 (2,314,820) 3,816,115 3,298,084 7,114,199 (7,529,182) (1,899,837) (9,429,019) - Beginning Net Position 72,778,222 45,984,455 118,762,677 68,962,107 42,686,371 111,648,478 3,816,115 3,298,084 7,114,199 Ending Net Position 69,065,155 $ 47,382,702 $ 116,447,857 $ 72,778,222 $ 45,984,455 $ 118,762,677 $ (3,713,067) $ 1,398,247 $ (2,314,820) $ 2016 2015 Change Governmental Activities. Total revenues for the City's governmental activities were $16,300,001 for the fiscal year ended June 30, 2016. Approximately 56% of the total revenue for the governmental activities was derived from property taxes and approximately 25% of the total revenue was from program revenues. Total expenses for governmental activities were $20,702,005 and net transfers in were $688,937 resulting in a $3,713,067 decrease in net position. General governmental activities accounted for approximately 25% of the total governmental activities expense. Public Safety, Culture and Recreation and Highways and Streets expenses account for 74% 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 $12,119,483 for the current fiscal year. These activities generated $11,892,357 in program revenues, and $227,126 in interest earnings and miscellaneous revenues. The total expenses for business-type activities were $10,032,299 and net transfers out were $688,937 resulting in a $1,398,247 increase in net position. Business-type activities for the City of Woodburn consist of operations for water and wastewater services. ---PAGE BREAK--- - 8 - FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS As noted previously, the City uses fund accounting to segregate resources that are restricted to a particular activity. Fund balance represents the excess of the assets of the fund over its liabilities. Because the fund financial statements focus on current sources and uses of spendable resources, fund balances relating to each fund may be useful in assessing the government's net resources available. Governmental Funds. At the end of the fiscal year, there was $15,394,687 of fund balance of the governmental funds, an increase of $1,806,892 from the prior year. The City's governmental funds include the General Fund and Street Fund, and other non-major funds. The General Fund is the chief operating fund of the City. At the end of the fiscal year, a fund balance of $4,890,918 was reported by the General Fund. The fund balance increased by $730,370 from the previous year due to increases in property taxes, franchise fees and miscellaneous revenues, along with decreases in charges for services and fines and forfeitures, coupled with increases in general government and culture and recreation expenditures and decreases in police expenditures. The City reports one other major governmental fund, the Street Fund. The Street Fund had a fund balance of $3,344,904, an increase of $394,190 from the previous year, due mainly to revenues in excess of a decrease in street maintenance expenditures. Proprietary Funds. Net position of the proprietary funds equaled $47,382,702 at the end of the current fiscal year, an increase of $1,398,247 from the prior year. The City reports three major proprietary funds, the Water Fund, the Sewer Fund and the Sewer Capital Construction Fund. The Water Fund had a net position of $650,861, an increase of $50,586 from previous year, due to an increase in charges for services and an increase in personal services expenses, along with a decrease in interest expense. The Sewer Fund had a net position of $23,081,252, an increase of $1,018,468 from previous year, due to the combination of an increase in charges for services along increases in personal services and materials and services. The Sewer Capital Construction Fund had a net position of $16,573,222, an increase of $35,042 from the previous year, due to revenues and transfers in excess of depreciation. GENERAL FUND BUDGETARY HIGHLIGHTS The original budget was amended to increase city attorney and non-departmental expenditures by $150,000 and decrease contingency by $150,000. Actual revenues (budgetary basis), exceeded budgeted amounts by General Fund expenditures ended $3,983,762 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 $62,452,123 and $59,528,064 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. ---PAGE BREAK--- - 9 - 2016 2015 2016 2015 2016 2015 Land 22,567,381 $ 22,567,381 $ 1,783,816 $ 1,783,816 $ 24,351,197 $ 24,351,197 $ Construction in progress 96,389 6,197,878 4,441,468 4,841,877 4,537,857 11,039,755 Buildings 16,734,493 16,593,555 62,634,628 62,634,628 79,369,121 79,228,183 Equipment 7,072,539 6,752,476 2,370,459 2,361,602 9,442,998 9,114,078 Infrastructure 44,360,967 38,891,615 29,908,166 28,775,570 74,269,133 67,667,185 Accumulated depreciation (28,379,646) (27,174,289) (41,610,473) (39,311,759) (69,990,119) (66,486,048) Net capital assets 62,452,123 $ 63,828,616 $ 59,528,064 $ 61,085,734 $ 121,980,187 $ 124,914,350 $ Governmental Activities Business-type Activiites Total Long-term Debt. At the end of the current fiscal year, long-term debt outstanding for the governmental activities totaled $4,810,507, compared to $5,226,383 in the prior year. For the business-type activities, total long-term debt equaled $35,874,352 compared to $39,206,571 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 2016 2015 2016 2015 2016 2015 General obligation bonds 4,060,000 $ 4,410,000 $ - $ - $ 4,060,000 $ 4,410,000 $ URA bonds - 56,338 - - - 56,338 Loans 66,074 96,215 4,416,251 4,813,265 4,482,325 4,909,480 Revenue bonds - - 29,302,005 32,082,220 29,302,005 32,082,220 Bond premium - - 2,072,315 2,210,469 2,072,315 2,210,469 Accrued compensated absences 684,433 663,830 83,781 100,617 768,214 764,447 4,810,507 $ 5,226,383 $ 35,874,352 $ 39,206,571 $ 40,684,859 $ 44,432,954 $ ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES Due to reductions in the real property valuations, it is expected that future property tax 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 Woodburn is recovering more slowly than nearby areas. 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, 2016 Governmental Business-type Activities Activities Totals ASSETS Cash and investments 16,366,077 $ 25,266,880 $ 41,632,957 $ Accounts receivable 998,826 1,006,391 2,005,217 Property taxes receivable 493,153 - 493,153 Assessment liens receivable 44,739 - 44,739 Loans receivable 694,629 - 694,629 Prepaid expenses 936 - 936 Internal balances (25,512) 25,512 - Non-depreciable capital assets 22,663,770 6,225,284 28,889,054 Other capital assets, net of depreciation 39,788,353 53,302,780 93,091,133 Total Assets 81,024,971 85,826,847 166,851,818 DEFERRED OUTFLOWS Deferred outflows related to PERS 1,272,865 338,462 1,611,327 LIABILITIES Accounts payable 824,434 223,305 1,047,739 Accrued payroll liabilities 605,975 215,703 821,678 Deposits payable - 106,620 106,620 Interest payable 15,150 507,503 522,653 Noncurrent liabilities: Due within one year: Long-term debt 400,399 3,330,966 3,731,365 Bond premium - 138,154 138,154 Accrued compensated absenses 273,773 33,512 307,285 Due in more than one year: Long-term debt 3,725,675 30,387,290 34,112,965 Bond premium - 1,934,161 1,934,161 Accrued compensated absenses 410,660 50,269 460,929 Net pension liability 5,550,709 1,475,968 7,026,677 Total Liabilities 11,806,775 38,403,451 50,210,226 DEFERRED INFLOWS Deferred inflows related to PERS 1,425,906 379,156 1,805,062 NET POSITION Net investment in capital assets 58,326,049 23,737,493 82,063,542 Restricted for: Debt service 25,117 - 25,117 Culture and recreation 202,738 - 202,738 Community development 2,670,710 - 2,670,710 Construction 6,917,085 16,735,267 23,652,352 Unrestricted 923,456 6,909,942 7,833,398 Total Net Position 69,065,155 $ 47,382,702 $ 116,447,857 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2016 Fees, Fines Operating Capital and Charges Grants and Grants and Expenses for Services Contributions Contributions FUNCTIONS/PROGRAMS Governmental activities: General government 5,114,971 $ 978,244 $ - $ - $ Public safety 9,231,388 93,443 2,763 1,000 Highways and streets 2,691,040 22,519 1,454,076 185,625 Culture and recreation 3,481,264 705,415 505,870 163,824 Interest on long-term debt 183,342 - - - Total Governmental activities 20,702,005 1,799,621 1,962,709 350,449 Business-type activities: Water 3,303,526 3,415,661 - 114,000 Sewer 6,728,773 8,169,544 - 193,152 Total Business-type activities 10,032,299 11,585,205 - 307,152 Total Activities 30,734,304 $ 13,384,826 $ 1,962,709 $ 657,601 $ General Revenues: Property taxes Franchise taxes Other taxes Intergovernmental Gain on disposition of assets Unrestricted investment earnings Miscellaneous Total General Revenues Transfers Change in Net Position Net Position - beginning of year Net Position - end of year Program Revenues ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 11 - Governmental Business-type Activities Activities Totals (4,136,727) $ - $ (4,136,727) $ (9,134,182) - (9,134,182) (1,028,820) - (1,028,820) (2,106,155) - (2,106,155) (183,342) - (183,342) (16,589,226) - (16,589,226) - 226,135 226,135 - 1,633,923 1,633,923 - 1,860,058 1,860,058 (16,589,226) 1,860,058 (14,729,168) 9,156,725 - 9,156,725 1,511,125 - 1,511,125 550,346 - 550,346 649,350 - 649,350 49,948 - 49,948 105,901 159,067 264,968 163,827 68,059 231,886 12,187,222 227,126 12,414,348 688,937 (688,937) - (3,713,067) 1,398,247 (2,314,820) 72,778,222 45,984,455 118,762,677 69,065,155 $ 47,382,702 $ 116,447,857 $ Net (Expenses) Revenues and Changes in Net Position ---PAGE BREAK--- CITY OF WOODBURN, OREGON BALANCE SHEET - GOVERNMENTAL FUNDS JUNE 30, 2016 Special Revenue General Street Other Governmental Funds ASSETS Cash and investments 5,079,747 $ 3,723,032 $ 7,206,796 $ Accounts receivable 729,008 156,054 90,479 Property taxes receivable 432,622 - 60,531 Assessment liens receivable - - 44,739 Loans receivable - - 694,629 Prepaid expenses 936 - - Due from other funds - - 146,070 Total Assets 6,242,313 $ 3,879,086 $ 8,243,244 $ LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities Accounts payable 85,225 $ 491,648 $ 158,021 $ Accrued payroll and payroll liabilities 470,655 42,534 62,844 Due to other funds 102,288 - 69,294 Total Liabilities 658,168 534,182 290,159 Deferred Inflows Unavailable revenue 693,227 - 794,220 Fund Balance Non-spendable 936 - - Restricted for: Debt service - - 25,117 Construction - 3,344,904 3,555,339 Culture and recreation - - 202,738 Community development - - 1,963,858 Committed to: Public safety - - 7,005 Capital outlay - - 881,912 Planning and building - - 525,714 Unassigned 4,889,982 - (2,818) Total Fund Balance 4,890,918 3,344,904 7,158,865 Total Liabilities and Fund Balance 6,242,313 $ 3,879,086 $ 8,243,244 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 12 - Total 16,009,575 $ 975,541 493,153 44,739 694,629 936 146,070 18,364,643 $ 734,894 $ 576,033 171,582 1,482,509 1,487,447 936 25,117 6,900,243 202,738 1,963,858 7,005 881,912 525,714 4,887,164 15,394,687 18,364,643 $ ---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, 2016 Fund Balances 15,394,687 $ 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. 1,487,447 PERS net pension asset, deferred outflows of resources arising from contributions paid, and deferred inflows arising from changes in proportionate share of earnings in the current year are not financial resources in governmental funds, but are reported in the Statement of Net Position Net pension liability (5,317,067) Deferred outflows 1,219,286 Deferred inflows (1,365,887) Capital assets are not financial resources in governmental funds, but are reported in the Statement of Net Position at their net depreciable value. Cost 90,831,769 Accumulated depreciation (28,379,646) 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 (684,433) Accrued interest (15,150) Long-term debt (4,126,074) 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. 20,223 Net Position of Governmental Activities 69,065,155 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 General Fund Street Other Governmental Funds REVENUES Taxes and assessments 8,562,396 $ 115,692 $ 1,069,936 $ Licenses and permits 1,911,054 369 837,449 Charges for services 963,953 357,984 42,747 Intergovernmental 756,566 1,454,076 522,729 Fines and forfeitures 426,867 - - Miscellaneous 271,214 196,750 215,407 Total Revenues 12,892,050 2,124,871 2,688,268 EXPENDITURES Current General government 3,277,246 - 513,490 Public safety 6,598,236 - - Highways and streets - 1,777,030 - Culture and recreation 2,077,363 - 797,425 Debt Service Principal - - 436,479 Interest - - 185,327 Capital outlay - 9,150 268,421 , Total Expenditures 11,952,845 1,786,180 2,201,142 REVENUES OVER (UNDER) EXPENDITURES 939,205 338,691 487,126 OTHER FINANCING SOURCES (USES) Transfers in - 90,000 204,248 Transfers out (208,835) (34,501) (9,042) Total Other Financing Sources (Uses) (208,835) 55,499 195,206 NET CHANGE IN FUND BALANCE 730,370 394,190 682,332 FUND BALANCE, beginning of year 4,160,548 2,950,714 6,476,533 FUND BALANCE, end of year 4,890,918 $ 3,344,904 $ 7,158,865 $ Special Revenue ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 14 - Total 9,748,024 $ 2,748,872 1,364,684 2,733,371 426,867 683,371 17,705,189 3,790,736 6,598,236 1,777,030 2,874,788 436,479 185,327 277,571 15,940,167 1,765,022 294,248 (252,378) 41,870 1,806,892 13,587,795 15,394,687 $ ---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, 2016 Net Change in Fund Balances - Total Governmental Funds 1,806,892 $ 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 (32,060) Increases in other loans receivable 185,272 Governmental funds do not report expenditures for unpaid compensated absences, unpaid payroll, interest expense or arbitrage since they do not require the use of current financial resources. However, the Statement of Activities reports such expenses when incurred, regardless of when settlement ultimately occurs. Accrued compensated absences (20,602) Accrued interest payable 1,986 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 451,249 Depreciation (1,497,439) Net book value of assets disposed (330,302) 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 436,479 Current year PERS pension expense related to change in net pension liability is reported as an expense in the Statement of Activities but is not recorded as an expenditure in the governmental funds. (4,351,891) Net income of internal service funds (362,651) Change in Net Position of Governmental Activities (3,713,067) $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF FUND NET POSITION - PROPRIETARY FUNDS JUNE 30, 2016 Water Sewer Sewer Capital Construction ASSETS Current Assets Cash and investments 2,134,789 $ 6,379,635 $ 12,490,293 $ Accounts receivable 252,234 687,766 290 Due from other funds - - - Total Current Assets 2,387,023 7,067,401 12,490,583 Noncurrent Assets Nondepreciable capital assets 158,444 1,625,372 2,864,540 Other capital assets, net of depreciation 9,088,123 41,881,535 1,271,099 Total Noncurrent Assets 9,246,567 43,506,907 4,135,639 Total Assets 11,633,590 50,574,308 16,626,222 DEFERRED OUTFLOWS Deferred outflows - contributions to PERS 143,141 195,321 - LIABILITIES Current Liabilities Accounts payable 38,525 165,156 - Accrued payroll liabilities 94,202 121,501 - Deposits payable 106,620 - - Accrued interest payable 238,274 269,229 - Due to other funds 25,632 25,632 - Current portion of long-term liabilities Long-term debt 744,737 2,603,647 - Bond premiums - 138,154 - Accrued compensated absences 19,009 14,504 - Total Current Liabilities 1,266,999 3,337,823 - Noncurrent Liabilities Long-term debt 9,045,800 21,324,072 - Bond premiums - 1,934,161 - Accrued compensated absences 28,513 21,755 - Net pension liability 624,208 851,760 - Total Noncurrent Liabilities 9,698,521 24,131,748 - Total Liabilities 10,965,520 27,469,571 - DEFERRED INFLOWS Net projected to actual earnings to PERS 160,350 218,806 - NET POSITION: Net investment in capital assets (543,970) 17,506,873 4,135,639 Restricted for: Construction - - 12,296,851 Unrestricted 1,194,831 5,574,379 193,732 Total Net Position 650,861 $ 23,081,252 $ 16,626,222 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 16 - Governmental Activities Other Business- type Funds Total Internal Service 4,262,163 $ 25,266,880 $ 356,502 $ 66,101 1,006,391 23,285 76,776 76,776 - 4,405,040 26,350,047 379,787 1,576,928 6,225,284 - 1,062,023 53,302,780 - 2,638,951 59,528,064 - 7,043,991 85,878,111 379,787 - 338,462 53,579 19,624 223,305 89,540 - 215,703 29,942 - 106,620 - - 507,503 - - 51,264 - - 3,348,384 - - 138,154 - - 33,512 - 19,624 4,624,445 119,482 - 30,369,872 - - 1,934,161 - - 50,269 - - 1,475,968 233,642 - 33,830,270 233,642 19,624 38,454,715 353,124 - 379,156 60,019 2,638,951 23,737,493 - 4,385,416 16,682,267 - - 6,962,942 20,223 7,024,367 $ 47,382,702 $ 20,223 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2016 Water Sewer OPERATING REVENUES Charges for services 3,415,661 $ 8,169,544 $ Miscellaneous 67,290 769 Total Operating Revenues 3,482,951 8,170,313 OPERATING EXPENSES Personal services 1,740,671 2,317,924 Materials and services 718,323 1,701,193 Depreciation 359,577 1,820,506 Total Operating Expenses 2,818,571 5,839,623 OPERATING INCOME (LOSS) 664,380 2,330,690 NONOPERATING REVENUES (EXPENSES) Investment revenue 12,425 38,865 Amortization of bond premiums - 138,154 Interest expense (440,986) (951,139) Total Nonoperating Revenues (Expenses) (428,561) (774,120) NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS 235,819 1,556,570 Capital contributions - - Transfers in - - Non-cash transfers in - 8,857 Transfers out (185,233) (546,959) Non-cash transfers out - - CHANGE IN NET POSITION 50,586 1,018,468 NET POSITION, beginning of year, as originally stated 600,275 22,062,784 Restatement - - NET POSITION, beginning of year as restated 600,275 22,062,784 NET POSITION, end of year 650,861 $ 23,081,252 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 17 - Governmental Activities Sewer Capital Construction Other Business- type Funds Total Internal Service - $ - $ 11,585,205 $ 1,493,372 $ - - 68,059 9,424 - - 11,653,264 1,502,796 - - 4,058,595 594,667 785 718 2,421,019 1,225,080 75,380 43,251 2,298,714 - 76,165 43,969 8,778,328 1,819,747 (76,165) (43,969) 2,874,936 (316,951) 79,424 28,353 159,067 4,926 - - 138,154 - - - (1,392,125) - 79,424 28,353 (1,094,904) 4,926 3,259 (15,616) 1,780,032 (312,025) - 307,152 307,152 - 31,783 2,615 34,398 57,529 - - 8,857 - - - (732,192) - - - - (108,155) 35,042 294,151 1,398,247 (362,651) 16,538,180 6,783,216 45,984,455 382,874 53,000 (53,000) - - 16,591,180 6,730,216 45,984,455 382,874 16,626,222 $ 7,024,367 $ 47,382,702 $ 20,223 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2016 Water Sewer CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers 3,441,071 $ 8,121,584 $ Paid to suppliers (720,998) (1,646,136) Paid to employees (1,171,232) (1,602,945) Net Cash Provided by (Used in) Operating Activities 1,548,841 4,872,503 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in - - Transfers out (197,047) (558,773) Net Cash Provided by (Used in) Non-Capital Financing Activities (197,047) (558,773) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets - - Proceeds from disposal of capital assets 2,279 - Principal paid on loans and bonds payable (698,544) (2,478,685) System development receipts - - Interest paid (457,553) (901,377) Net Cash Provided by (Used in) Capital and Related Financing Activities (1,153,818) (3,380,062) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 12,425 38,865 Increase (Decrease) in Cash and Investments 210,401 972,533 CASH AND INVESTMENTS, Beginning of year, as restated 1,924,388 5,407,102 CASH AND INVESTMENTS, End of year 2,134,789 $ 6,379,635 $ ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 18 - Governmental Activities Sewer Capital Construction Other Business-Type Funds Totals Internal Service 1,370 $ 7,790 $ 11,571,815 $ 1,503,370 $ (19,055) 251 (2,385,938) (1,213,992) - - (2,774,177) (389,491) (17,685) 8,041 6,411,700 (100,113) 31,783 40,875 72,658 57,529 - - (755,820) (108,155) 31,783 40,875 (683,162) (50,626) (288,943) (443,246) (732,189) - - - 2,279 - - - (3,177,229) - - 281,815 281,815 - - - (1,358,930) - (288,943) (161,431) (4,984,254) - 79,424 28,353 159,067 4,926 (195,421) (84,162) 903,351 (145,813) 12,685,714 4,346,325 24,363,529 502,315 12,490,293 $ 4,262,163 $ 25,266,880 $ 356,502 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON STATEMENT OF CASH FLOWS (Continued) YEAR ENDED JUNE 30, 2016 Water Sewer RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) 662,101 $ 2,330,690 $ cash provided by operating activities: Depreciation 359,577 1,820,506 Change in assets and liabilities: Accounts receivable (40,765) (48,729) Deferred outflows (73,049) (83,383) Accounts payable and accrued liabilities 16,102 65,871 Customer deposits (1,115) - Compensated absences payable 4,984 (21,820) Net pension liability (asset) 798,082 1,129,438 Deferred inflows (177,076) (320,070) Net Cash Provided by (Used in) Operating Activities 1,548,841 $ 4,872,503 $ Noncash Transactions Transfer of capital assets - $ - $ Adjustments to reconcile the change in operating income to net ---PAGE BREAK--- The accompanying notes are an integral part of the financial statements. - 19 - Governmental Activities Sewer Capital Construction Other Business-Type Funds Totals Internal Service (76,165) $ (43,969) $ 2,872,657 $ (316,951) $ 75,380 43,251 2,298,714 - 1,370 7,790 (80,334) 574 - - (156,432) (23,241) (18,270) 969 64,672 16,636 - - (1,115) - - - (16,836) - - - 1,927,520 308,900 - - (497,146) (86,031) (17,685) $ 8,041 $ 6,411,700 $ (100,113) $ (5,827) $ 5,827 $ - $ (108,155) $ ---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, 2016 Pension Trust ASSETS Cash and investments 56,258 $ LIABILITIES - NET POSITION Held in trust for benefits and other purposes 56,258 $ ---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, 2016 Pension Trust ADDITIONS Earnings 1,641 $ Total additions 1,641 DEDUCTIONS - CHANGE IN NET POSITION 1,641 NET POSITION, beginning of year 54,617 NET POSITION, end of year 56,258 $ ---PAGE BREAK--- NOTES TO BASIC FINANCIAL STATEMENTS ---PAGE BREAK--- - 22 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2016 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, 2016. 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, 2016 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation (Continued) Fund financial statements display information at the individual fund level. Each fund is considered to be a separate accounting entity. Funds are classified and summarized as governmental, enterprise or fiduciary. Currently, the City has general, special revenue, internal service, capital projects, debt service and enterprise type funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Nonmajor funds are consolidated into a single column within each fund type in the financial section of the basic financial statements and are detailed in the other supplementary information. The government-wide and proprietary fund financial statements are accounted for using an economic resources measurement focus, whereby all assets and liabilities are included in the statement of net position and the statement of fund net position. The increases and decreases in those net positions are presented in the government-wide statement of activities and in the proprietary fund statement of revenues, expenses and changes in fund net position. These funds use the accrual basis of accounting whereby revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Interfund activity consists of transfers, services provided and/or used, reimbursements, advances and loans. As a general rule, the effect of interfund activity has been eliminated from the governmental-wide financial statements. Exceptions to this general rule include interfund services provided and/or used. Interfund services provided and/or used are accounted for as revenues and expenses since the elimination of such revenues and expenses would distort the direct costs and program revenues reported for the various functions. Amounts reported as program revenues in the statement of activities include fines, fees and charges to customers or applicants for goods, services or privileges provided, operating grants and contributions, and capital grants and contributions, including special assessments. Grants and contributions not restricted are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Operating revenues and operating expenses are intermediate components within the proprietary fund statement of revenues, expenses and changes in fund net position, and include only those transactions that constitute their principal, ongoing activities exclusive of investing or financing transactions. Significant operating revenues include charges for services and miscellaneous income. Significant operating expenses include personnel, materials and supplies, outside services, and depreciation. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Fund Balance In the fund financial statements, the fund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Although not a major impact on the financial statements, Governmental Fund type fund balances are now reported in the following classifications. Fund balance is reported as nonspendable when the resources cannot be spent because they are either in a nonspendable form or legally or contractually required to be maintained intact. Resources in nonspendable form include inventories, prepaids and deposits, and assets held for resale. Fund balance is reported as restricted when the constraints placed on the use of resources are either: externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. ---PAGE BREAK--- - 24 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fund Balance (Continued) Fund balance is reported as committed when the City Council takes formal action that places specific constraints on how the resources may be used. The City Council can modify or rescind the commitment at any time through taking a similar formal action. Resources that are constrained by the City’s intent to use them for a specific purpose, but are neither restricted nor committed, are reported as assigned fund balance. Intent is expressed when the City Council approves which resources should be “reserved” during the adoption of the annual budget. The City’s Finance Director uses that information to determine whether those resources should be classified as assigned or unassigned for presentation in the City’s Annual Financial Report. Unassigned fund balance is the residual classification for the General Fund. This classification represents fund balance that has not been restricted, committed, or assigned within the General Fund. This classification is also used to report any negative fund balance amounts in other governmental funds. The City Council has approved a policy to maintain an ending fund balance in the General Fund, in order to provide stable services and employment to offset cyclical variations in revenues and expenditures. The targeted floor for the ending balance is 10% of annual operating revenue, as shown as a minimum fund balance in the General Fund. In February 2016, the City Council adopted a fiscal year 2016-2017 Budget Policies and Fiscal Strategy which created a $250,000 PERS reserve line item and increased the General Fund contingency from 10% to 17%, beginning July 1, 2016. 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, 2016 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Governmental Fund Financial Statements (Continued) Real and personal property taxes are levied as of July 1 for each fiscal year on values assessed as of January 1. Property taxes are an enforceable lien on both real and personal property as of July 1 and are due and payable in three installments on November 15, February 15 and May 15. All property taxes are billed and collected by Marion County and remitted to the City. In the governmental fund financial statements, property taxes are reflected as revenues in the fiscal period for which they were levied, provided they are due, or past due and receivable within the current period, and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period (30 days). Otherwise, they are reported as unavailable revenues. Intergovernmental revenues are recognized as revenues when all eligibility requirements are met. There are, however, essentially two types of intergovernmental revenues. In one, monies must be expended on the specific purpose or project before any amounts will be paid to the City; therefore, all eligibility requirements are determined to be met when the underlying expenditures are recorded. In the other, monies are virtually unrestricted as to the purpose of the expenditure and are usually revocable only for failure to comply with prescribed requirements; therefore, all eligibility requirements are determined to be met at the time of receipt, or earlier, if the susceptible accrual criteria are met. Licenses and permits, charges for services, fines and forfeits and miscellaneous revenues (except investment earnings) are recorded as revenues when received in cash because they are generally not measurable until actually received. Investment earnings are recorded as earned since they are measurable and available. When both restricted and unrestricted resources are available for use, it is the City's practice to use restricted resources first, then unrestricted resources as they are needed. The reporting model sets forth minimum criteria (percentage of the assets, liabilities, receipts or disbursements of either fund category or the government and enterprise combined) for the determination of major funds. Nonmajor funds are combined in a column in the fund financial statements and detailed in the combining section. The City reports the following major governmental funds: General Fund Street Fund The City reports the following major proprietary funds: Water Fund Sewer Fund Sewer Capital Construction Fund Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reporting amounts of certain assets, liabilities, revenues and expenses as of and for the year ended June 30, 2016. Actual results may differ from such estimates. ---PAGE BREAK--- - 26 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Cash and Investments Investments, included in cash and investments, are carried at cost which approximates fair value. For purposes of the statement of cash flows, the proprietary funds consider cash and cash equivalents to include the cash and investment common pool. These amounts have the general characteristics of demand deposit accounts in that the proprietary funds may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty. Receivables and Unavailable Revenues Receivables for state, county and local shared revenues, included in accounts receivable, are recorded as revenue in the governmental funds as earned. Receivables of the enterprise funds are recorded as revenue as earned. Property taxes receivable for the governmental fund types, which have been collected within thirty days subsequent to year end, are considered measurable and available and are recognized as revenues. All other property taxes are considered unavailable and, accordingly, have not been recorded as revenue. Property taxes receivable by the City represent the City's allocated share of delinquent property taxes and other amounts to be collected from property owners within Marion County, Oregon. Assessment liens in the governmental fund types are recognized as receivables at the time property owners are assessed for property improvements. All assessments receivable are considered unavailable and, accordingly, have not been recorded as revenue. Revolving loans in the government fund types are recognized as receivables at the time housing rehabilitation loans are made. All loans receivable are considered unavailable and, accordingly, have not been recorded as revenue. Capital Assets Capital assets are stated at cost or estimated historical cost. Donated assets are recorded at fair market value at date of donation. Estimated fair market value of donated assets is determined based on engineering estimates of current cost or price indexed cost. Capital assets include land, right-of-way (included with land), buildings, improvements, equipment, infrastructure and other tangible and intangible assets costing over $5,000 used in operations that have initial useful lives extending beyond a single reporting period. Infrastructure are those capital assets that are stationary in nature and can be preserved for a significantly greater number of years than most other capital assets. Infrastructure reported in governmental activities consists of roads, bridges, sidewalks and traffic and lighting systems. Infrastructure reported in business-type activities consists of water and wastewater collection systems. All capital assets, except for infrastructure in governmental activities prior to July 1, 1980, have been capitalized in the government-wide and proprietary fund financial statements. In accordance with the current financial resources measurement focus, capital assets are not capitalized in the governmental fund financial statements. All purchased capital assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Historical cost is measured by the cash or cash equivalent price of obtaining an asset, including ancillary charges necessary to place the asset into its intended location and condition ---PAGE BREAK--- - 27 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Capital Assets (Continued) for use. Donated capital assets are reported at their estimated fair value at the time of acquisition plus ancillary charges, if any. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are capitalized. Amounts expended for maintenance and repairs are charged to expenditures/expenses in the appropriate funds as incurred and are not capitalized. Capital assets are depreciated unless they are inexhaustible in nature land and right-of-ways). Depreciation is an accounting process to allocate the cost of capital assets to expense in a systematic and rational manner to those periods expected to benefit from the use of capital assets. Depreciation is not intended to represent an estimate in the decline of fair market value, nor are capital assets, net of accumulated depreciation, intended to represent an estimate of the current condition of the assets, or the maintenance requirements needed to maintain the assets at their current level of condition. Depreciation is computed over the estimated useful lives of the capital assets. All estimates of useful lives are based on actual experience by City departments with identical or similar capital assets. Depreciation is calculated on the straight-line basis, except for infrastructure and improvements other than buildings reported in the governmental activities column of the government-wide financial statements, which are calculated using a composite depreciation method. The estimated useful lives of the various categories of assets are as follows: Buildings and improvements 10 - 40 years Water and Sewer Systems 15 - 50 years Infrastructure 50 years Equipment 5 - 15 years Upon disposal of capital assets, cost and accumulated depreciation are removed from the accounts and, if appropriate, a gain or loss on the disposal is recognized. Long-Term Debt Long-term debt directly related and expected to be paid from the enterprise funds is recorded in these funds. All other unmatured long-term debt is recorded on the statement of net position. Repayment of general bonded debt will be made from debt service funds. Bond premiums will be amortized over the life of the related debt. Payment of compensated absences will be made primarily from the General Fund, Street Fund, Water Fund and Sewer Fund. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expenditure) until then. The City reports deferred outflow of resources related to pensions for contributions made after the June 30, 2015 measurement date, differences between expected and actual experience, and changes in proportionate share. ---PAGE BREAK--- - 28 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Deferred Outflows/Inflows of Resources (Continued) In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows, represents an acquisition that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has two items that qualify for reporting in this category. The City reports deferred inflows related to pensions for changes in projected earnings versus actual earnings and contribution versus proportionate share of contributions. The other instance of deferred inflows arises only under a modified accrual basis of accounting. Accordingly, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes and loans receivable. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. Net Pension Liability The City reports its proportionate share of the Net Pension Liability of the Oregon Public Employees Retirement System (OPERS). A negative Net Pension Liability is reported as a Net Pension Asset. For purposes of measuring the net pension liability or asset, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about fiduciary net position of OPERS and additions to/deductions from OPERS’s fiduciary net position have been determined on the same basis as they are reported by OPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value. Accrued Vacation Pay Accumulated vested vacation pay is accrued in the proprietary funds as it is earned by employees. In governmental fund types, the amounts, if any, expected to be liquidated with expendable available resources are accrued as liabilities of the funds and the amount payable from future resources is recorded on the statement of net position. The accrued payables in the Statement of Net Position are recorded as long-term in that the amount is not expected to materially change. Sick pay, which does not vest, is recorded in all funds when leave is taken. Budget and Budgetary Accounting A budget is prepared for each fund in accordance with the modified accrual basis of accounting for all funds. For budgetary purposes, interfund loan transactions are reported as interfund transfers. Appropriations are made at the department level for the General Fund and the object level for all other funds. Expenditures may not legally exceed appropriations. Appropriations lapse at the end of each fiscal year. Budget amounts include original approved amounts and all subsequent appropriation transfers approved by the City Council. After budget approval, the City Council may approve supplemental appropriations if an occurrence, condition, or need exists which had not been ascertained at the time the budget was adopted. Management may not amend the budget. A supplemental budget requires hearings before the public, publications in newspapers and approval by the City Council. ---PAGE BREAK--- - 29 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 ORGANIZATION AND OPERATION The City's financial operations are accounted for in the following funds: Governmental Fund Types General Fund The General Fund accounts for activities of the City which are not accounted for in any other fund. Principal sources of revenue are property taxes, franchise fees and state and county shared revenues. Primary expenditures are for police protection, recreation and general government. Special Revenue Funds Street Fund - This fund is used to account for the City’s street operations. The fund’s major source of revenue is highway gas tax received from the State of Oregon. Transit Fund – This fund accounts for amounts held to be used for weekday transportation services. Building Inspection Fund - This fund accounts for building permit revenue and associated operations. Search and Seizure Fund - This fund accounts for the seizure of private properties that are the product of illegal activity, and for the expenditure of the proceeds by the City for illegal drug activity investigations and subsequent arrests. Housing Rehabilitation Fund - This fund accounts for the City’s CDBG grant program and provides low income housing and small business loans. Library Endowment Fund - This fund accounts for funds held to be used for library improvement projects. Museum Endowment Fund - This fund accounts for amounts held for museum activities. Lavelle Black Trust Fund – This fund accounts for the donations received to continue the police dog program. Urban Renewal Fund – This fund accounts for transactions related to urban renewal, including debt service on the URA loan. Property taxes are the primary source of revenue. Capital Projects Funds Street SDC Fund - This fund accounts for the collection and spending of street SDC’s. General Capital Construction Fund - This fund is used to account for transfers from general services funds used for general services construction projects. Special Assessment Fund - This fund accounts for the repayment of local improvement district (LID) assessments. The money is used for construction of LID projects. Street/Storm Capital Construction Fund - This fund accounts for transfers from the Storm and Street funds. The money is used for street and storm related capital projects. ---PAGE BREAK--- - 30 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 ORGANIZATION AND OPERATION (Continued) Governmental Fund Types (Continued) Capital Projects Funds (Continued) Parks SDC Fund - This fund is used to account for the collection and spending of park SDC’s. Storm SDC Fund - This fund accounts for the collection and spending of storm SDC’s. Equipment Replacement Fund - This fund accounts for transfers from other funds set aside for future equipment purchases. Debt Service Fund GO Debt Service Fund - This fund accounts for debt service on the City’s 2005 GO bond. Property taxes are the major source of revenue. Proprietary Fund Types Enterprise Funds The City has six enterprise funds. Three funds are related to water, and three are related to sewer. The specific funds and their purposes are as follows. Water Fund - This fund accounts for the City’s water system operation. Customer charges are the primary source of revenue. Sewer Fund - This fund accounts for the operation of the City's sewer system. Customer charges are the primary revenue source. Sewer Capital Construction Fund - This fund was used to account for the City’s sewer treatment plant upgrade. The major source of revenue is debt proceeds. Water SDC Fund - This fund accounts for the collection and spending of water SDC’s. Sewer SDC Fund - This fund accounts for the collection and spending of sewer SDC’s. Water Capital Construction Fund - This fund accounts for water system capital improvement projects and the retirement of associated debt. Internal Service Funds The City has two internal service funds which provide services to other City departments. Internal charges are the primary revenue source for all funds. Expenditures are for the purposes as described below. Information Services Fund - This fund accounts for the maintenance and replacement of the City’s network and technology services. Insurance Fund – This fund accounts for the City’s insurance coverage. ---PAGE BREAK--- - 31 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 ORGANIZATION AND OPERATION (Continued) Fiduciary Fund The City has one fiduciary fund. The City's pension trust fund holds assets to provide retirement benefits to certain City employees. CASH AND INVESTMENTS The City maintains a cash and investment pool that is available for use by all funds. Each fund type's portion of this pool is displayed on the Statement of Net Position as part of “cash and investments.” Cash Deposits with financial institutions $ 538,865 $ 538,865 Cash on hand 2,310 2,310 Investments Local Government Investment Pool 41,091,782 41,091,782 Assets held for pension benefits 56,258 56,258 $ 41,689,215 $ 41,689,215 Cash is reported in the financial statements as follows: Governmental funds $ 16,009,575 Internal Service funds (included in governmental activities) 356,502 Enterprise funds 25,266,880 Fiduciary funds 56,258 $ 41,689,215 Carrying Fair Value Value Deposits The book balance of the City’s bank deposits (checking accounts) was $538,865 and the bank balance was $1,000,200 at year end. The difference is due to transactions in process. Bank deposits are secured to legal limits by federal deposit insurance. The remaining amount is secured in accordance with ORS 295 under a collateral program administered by the Oregon State Treasurer. Investments The State Treasurer of the State of Oregon maintains the Oregon Short-term Fund, of which the Local Government Investment Pool is part. Participation by local governments is voluntary. The State of Oregon investment policies are governed by statute and the Oregon Investment Council. In accordance with Oregon Statutes, the investment funds are invested as a prudent investor would do, exercising reasonable care, skill and ---PAGE BREAK--- - 32 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 CASH AND INVESTMENTS (Continued) Investments (Continued) caution. The Oregon Short-term Fund is the LGIP for local governments and was established by the State Treasurer. It was created to meet the financial and administrative responsibilities of federal arbitrage regulations. The investments are regulated by the Oregon Short Term Fund Board and approved by the Oregon Investment Council (ORS 294.805 to 294.895). At June 30, 2016, the fair value of the position in the Oregon State Treasurer’s Short-term Investment Pool was approximately equal to the value of the pool shares. The investment in the Oregon Short-term Fund is not subject to classification. Separate financial statements for the Oregon Short-term Fund are available from the Oregon State Treasurer. Interest Rate Risk In accordance with its investment policy, the City manages its exposure to declines in fair value of its investments by limiting the weighted average maturity of its investments. Custodial Credit Risk - Deposits This is the risk that in the event of a bank failure, the City’s deposits may not be returned. The Federal Depository Insurance Corporation (FDIC) provides insurance for the City’s deposits with financial institutions up to $250,000 for the aggregate of all non-interest bearing accounts and up to $250,000 for the aggregate of all interest bearing accounts at each institution. Deposits in excess of FDIC coverage are with institutions participating in the Oregon Public Funds Collateralization Program (PFCP). The PFCP is a shared liability structure for participating bank depositories, better protecting public funds though still not guaranteeing that all funds are 100% protected. Barring any exceptions, a bank depository is required to pledge collateral valued at least 10% of their quarter-end public fund deposits if they are well capitalized, 25% of their quarter-end public fund deposits if they are adequately capitalized or 110% of their quarter-end public fund deposits if they are undercapitalized or assigned to pledge 110% by the Office of the State Treasurer. In the event of a bank failure, the entire pool of collateral pledged by all qualified Oregon public funds bank depositories is available to repay deposits of public funds of government entities. As of June 30, 2016, $750,200 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, 2016 CAPITAL ASSETS The summary of capital assets for the business-type activities for the year ended June 30, 2016 is as follows: Balances Balances July 1, June 30, 2015 Additions Retirements 2016 Nondepreciable assets Land 1,783,816 $ - $ - $ 1,783,816 $ Construction in progress 4,841,877 - (400,409) 4,441,468 Subtotal, nondepreciable assets 6,625,693 - (400,409) 6,225,284 Depreciable assets Buildings 62,634,628 - - 62,634,628 Water and sewer systems 28,775,570 1,132,596 - 29,908,166 Equipment 2,361,602 8,857 - 2,370,459 Subtotal, depreciable assets 93,771,800 1,141,453 - 94,913,253 Accumulated depreciation Buildings and improvements (26,301,258) (1,710,124) - (28,011,382) Water and sewer systems (11,435,257) (483,277) - (11,918,534) Equipment (1,575,244) (105,313) - (1,680,557) Total accumulated depreciation (39,311,759) (2,298,714) - (41,610,473) Total depreciable assets, net 54,460,041 (1,157,261) - 53,302,780 Net capital assets 61,085,734 $ (1,157,261) $ (400,409) $ 59,528,064 $ Depreciation expense was allocated as follows: Water funds 402,829 $ Sewer funds 1,895,885 2,298,714 $ ---PAGE BREAK--- - 34 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 CAPITAL ASSETS (Continued) The changes in the capital assets for governmental activities for the year ended June 30, 2016 are as follows: Balances Balances July 1, June 30, 2015 Additions Retirements 2016 Nondepreciable assets Land 22,567,381 $ - $ - $ 22,567,381 $ Construction in progress 6,197,878 - (6,101,489) 96,389 Subtotal, nondepreciable assets 28,765,259 - (6,101,489) 22,663,770 Depreciable assets Buildings 16,593,555 763,322 (622,384) 16,734,493 Equipment 6,752,476 320,063 - 7,072,539 Infrastructure 38,891,615 5,469,352 - 44,360,967 Subtotal, depreciable assets 62,237,646 6,552,737 (622,384) 68,167,999 Accumulated depreciation Buildings (6,193,109) (454,134) 292,082 (6,355,161) Equipment (5,228,940) (329,144) - (5,558,084) Infrastructure (15,752,240) (714,161) - (16,466,401) Total accumulated depreciation (27,174,289) (1,497,439) 292,082 (28,379,646) Total depreciable assets, net 35,063,357 5,055,298 (330,302) 39,788,353 Net capital assets 63,828,616 $ 5,055,298 $ (6,431,791) $ 62,452,123 $ Depreciation expense was allocated as follows: General government 323,330 $ Public safety 238,424 Highways and streets 840,682 Culture and recreation 95,003 1,497,439 $ ---PAGE BREAK--- - 35 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 LONG-TERM DEBT Long-term debt transactions for the year were as follows: Outstanding Matured/ Outstanding Due July 1, Redeemed June 30, Within 2015 Issued During Year 2016 One Year Governmental Activities: Series 2005 general obligation bonds due in annual installments with principal and interest varying annually 4,410,000 $ - $ (350,000) $ 4,060,000 $ 370,000 $ 1999 Oregon EDD Loan due in annual installments of $38,319 with interest at 5.01%. 96,215 - (30,141) 66,074 30,399 2005 URA bonds due in quarterly installments of $56,933 with interest at 4.22%. 56,338 - (56,338) - - 4,562,553 - (436,479) 4,126,074 400,399 Accrued compensated absences 663,830 565,486 (544,883) 684,433 273,773 5,226,383 $ 565,486 $ (981,362) $ 4,810,507 $ 674,172 $ Business-type Activities: Series 2003 Water loan paid over 25 years; interest at various rates 5,675,816 $ - $ (301,530) $ 5,374,286 $ 313,591 $ 2005 Oregon EDD due in annual installments including interest at 4.21% 2,406,633 - (198,507) 2,208,126 206,864 2005 SDWR due in annual installments including interest at 4.21% 2,406,632 - (198,507) 2,208,125 206,864 2011 Sewer Revenue Bonds paid over 20 years; interest at various rates 26,406,404 - (2,478,685) 23,927,719 2,603,647 36,895,485 - (3,177,229) 33,718,256 3,330,966 2011 Sewer Revenue Bond premium 2,210,469 - (138,154) 2,072,315 138,154 Accrued compensated absences 100,617 90,206 (107,042) 83,781 33,512 39,206,571 $ 90,206 $ (3,422,425) $ 35,874,352 $ 3,502,632 $ ---PAGE BREAK--- - 36 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 LONG-TERM DEBT (Continued) Future maturities of long-term debt are as follows: Governmental Activities Ending Principal Interest Total 2017 400,399 $ 169,937 $ 570,336 $ 2018 420,675 153,956 574,631 2019 405,000 136,736 541,736 2020 425,000 120,536 545,536 2021 445,000 103,536 548,536 2022-25 2,030,000 219,139 2,249,139 4,126,074 $ 903,840 $ 5,029,914 $ Fiscal Year June 30, Business-type Activities Ending Principal Interest Total 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 4,293,372 1,332,332 5,625,704 2021 4,557,224 1,340,501 5,897,725 2022-26 11,357,053 2,355,441 13,712,494 2027-31 1,850,276 183,013 2,033,289 33,718,256 $ 8,689,579 $ 42,407,835 $ June 30, Fiscal Year ---PAGE BREAK--- - 37 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM Plan Description Substantially all City employees are members in the Oregon Public Employees Retirement System (OPERS); a cost-sharing multiple-employer defined benefit pension plan that acts as a common investment and administrative agent for government units in the State of Oregon. Employees hired before August 29, 2003 belong to the Tier One/Tier Two Retirement Benefit Program (established pursuant to ORS Chapter 238), while employees hired on or after August 29, 2003 belong to the OPSRP Pension Program (established pursuant to ORS Chapter 238A). OPERS produces an independently audited CAFR which can be found at: http://www.oregon.gov/pers/Pages/section/financial_reports/financials.aspx. Benefits Provided Tier One/Tier Two Retirement Benefit Pension Benefits. The PERS retirement allowance is payable for life. It may be selected from 13 retirement benefit options. These options include survivorship benefits and lump-sum refunds. The basic benefit is based on years of service and final average salary. A percentage (2.0% for police and fire employees, 1.67% for general service employees) is multiplied by the number of years of service and the final average salary. Benefits may also be calculated under either a formula plus annuity (for members who were contributing before August 21, 1981) or a money match computation if a greater benefit results. A member is considered vested and will be eligible at a minimum retirement age for a service retirement allowance if he or she has had contribution in each of five calendar years or has reached at least 50 years of age before ceasing employment with a participating employer (age 45 for police and fire members). General service employees may retire after reaching age 55. Police and fire members are eligible after reaching age 50. Tier One general service employee benefits are reduced if retirement occurs prior to age 58 with fewer than 30 years of service. Police and fire member benefits are reduced if retirement occurs prior to age 55 with fewer than 25 years of service. Tier Two members are eligible for full benefits at age 60. The ORS Chapter 238 Defined Benefit Pension Plan is closed to new members hired on or after August 29, 2003. Death Benefits. Upon the death of a non-retired member, the beneficiary receives a lump-sum refund of the member’s account balance (accumulated contributions and interest). In addition, the beneficiary will receive a lump-sum payment from employer funds equal to the account balance, provided one or more of the following conditions are met:  the member was employed by a PERS employer at the time of death,  the member died within 120 days after termination of PERS-covered employment,  the member died as a result of injury sustained while employed in a PERS-covered job, or  the member was on an official leave of absence from a PERS-covered job at the time of death. Disability Benefits. A member with 10 or more years of creditable service who becomes disabled from other than duty-connected causes may receive a non-duty disability benefit. A disability resulting from a job-incurred injury or illness qualifies a member for disability benefit regardless of the length of PERS-covered service. Upon qualifying for either a non-duty or duty disability, service time is computed to age 58 (55 for police and fire members) when determining the benefit. ---PAGE BREAK--- - 38 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM (Continued) Benefits Provided (Continued) Tier One/Tier Two Retirement Benefit (Continued) Benefit Changes After Retirement. Members may choose to continue participation in a variable equities investment account after retiring and may experience annual benefit fluctuations due to changes in the market value of equity investments. Under ORS 238.360 benefits are adjusted annually through cost-of-living changes. Under current law, the cap on the COLA in fiscal year 2015 and beyond will vary based on 1.25% on the first $60,000 of annual benefit and 0.15% on annual benefits above $60,000. OPSRP Pension Program Pension Benefits. The Pension Program (ORS Chapter 238A) provides benefits to members hired on or after August 29, 2003. This portion of OPSRP provides a life pension funded by employer contributions. Benefits are calculated by formula for members who attain normal retirement age. For general service members, 1.5% is multiplied by the number of years of service and the final average salary. Normal retirement age for general service members is age 65, or age 58 with 30 years of retirement credit. For police and fire members, 1.8% is multiplied by the number of years of service and the final average salary. Normal retirement age for police and fire members is age 60 or age 53 with 25 years of retirement credit. To be classified as a police and fire member, the individual must have been employed continuously as a police and fire member for at least five years immediately preceding retirement. A member of the OPSRP Pension Program becomes vested on the earliest of the following dates: the date the member completes 600 hours of service in each of five calendar years, the date the member reaches normal retirement age, and if the pension program is terminated, the date on which termination becomes effective. Death Benefits. Upon the death of a non-retired member, the spouse or other person who is constitutionally required to be treated in the same manner as the spouse, receives for life 50 percent of the pension that would otherwise have been paid to the deceased member. Disability Benefits. A member who has accrued 10 or more years of retirement credits before the member becomes disabled or a member who becomes disabled due to job-related injury shall receive a disability benefit of 45 percent of the member’s salary determined as of the last full month of employment before the disability occurred. Benefit Changes After Retirement. Under ORS 238A.210 benefits are adjusted annually through cost-of- living changes. Under current law, the cap on the COLA in fiscal year 2015 and beyond will vary based on 1.25% on the first $60,000 of annual benefit and 0.15% on annual benefits above $60,000. Contributions PERS funding policy provides for employer contributions at actuarially determined rates. These contributions, expressed as a percentage of covered payroll, are intended to accumulate sufficient assets to pay benefits when due. Employer contribution rates for the period were based on the December 31, 2013 actuarial valuation as subsequently modified by 2013 legislated changes in benefit provisions. The rates based on a percentage of payroll, first became effective July 1, 2015. The City’s contribution rates for the period were 16.29% for Tier One/Tier Two members, 9.24% for OPSRP General Service members, and 13.35% for OPSRP Police and Fire members. The City’s total contributions exclusive of the 6% “pick-up” was $1,096,838. ---PAGE BREAK--- - 39 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM (Continued) Contributions (Continued) Covered employees are required to contribute 6% of their salary to the Plan, but the employer is allowed to pay any or all of the employees’ contribution in addition to the required employers’ contribution. The City has elected to contribute the 6% “pick-up” or $503,648 of the employees’ contribution. Pension Assets, Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2016, the City reported a liability of $7,026,677 for its proportionate share of the OPERS net pension asset. The net pension asset was measured as of June 30, 2015, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of December 31, 2013 rolled forward to June 30, 2015. The City’s proportion of the net pension asset was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2015, the City’s proportion was 0.1224%, which is an increase of 0.0079% from its proportion measured as of June 30, 2014. The Oregon Supreme Court (Court) ruled on April 30, 2015 that certain provisions of Senate Bill (SB) 861, signed into law in October 2013, were unconstitutional. SB 861 included provisions that limited post-retirement COLA on benefits accrued prior to the signing of the law. The Court ruled that benefits could be modified prospectively, but not retrospectively. As a result, those who retired before the bills were passed will continue to receive a COLA tied to the Consumer Price Index that normally results in a 2% increase annually. OPERS members who have accrued benefits before and after the effective dates of the 2013 legislation will have a blended COLA rate when they retire. This is a change in benefit terms has been included in the net pension asset/liability proportionate shares calculated by OPERS as of June 30, 2015. For the year ended June 30, 2016, the City recognized pension expense of $10,861,686. At June 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual $ 378,914 $ - experience Net difference between projected and actual earnings on investments - 1,472,951 Changes in proportionate share 135,575 - Changes in proportion and differences between employer contributions and proportionate share of contributions - 332,113 Contributions subsequent to measurement date 1,096,838 - Deferred Outflows of Resources Deferred Inflows of Resources ---PAGE BREAK--- - 40 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM (Continued) Pension Assets, Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Deferred outflows of resources related to pensions of $1,611,327 resulting from the City’s contributions subsequent to the measurement date totaling $1,096,838 will be recognized as either a reduction of the net pension liability or an increase in the net pension asset in the year ended June 30, 2016. Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as an addition to (reduction from) as follows: Fiscal Year Ending June 30, 2017 $ (662,480) 2018 (662,480) 2019 (662,480) 2020 678,241 2021 18,624 Total $ (1,290,575) Actuarial Methods and Assumptions The total pension liability in the December 31, 2013 actuarial valuation was determined using the following actuarial methods and assumptions: Actuarial Cost Method Entry Age Normal Amortization Method Amortized as a level percentage of payroll as layered amortization bases over a closed period; Tier One/Tier Two UAL is amortized over 20 years and OPSRP pension UAL is amortized over 16 years Asset Valuation Method Market value of assets Actuarial Assumptions: Inflation Rate 2.75% Investment Rate of Return 7.75% Projected Salary Increases 3.75% overall payroll growth; salaries for individuals are assumed to grow at 3.75% plus assumed rates of merit/longevity increases based on service ---PAGE BREAK--- - 41 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM (Continued) Actuarial Methods and Assumptions (Continued) Mortality Healthy retirees and beneficiaries: RP-2000 Sex-distinct, generational per Scale AA, with collar adjustments and set-backs as described in the valuation. Active members: Mortality rates are a percentage of healthy retiree rates that vary by group, as described in the valuation. Disabled retirees: Mortality rates are a percentage (65% for males, 90% for females) of the RP-2000 static combined disabled mortality sex-distinct table. Actuarial valuations of an ongoing plan involve estimates of the value of projected benefits and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Experience studies are performed as of December 31 of even numbered years. The methods and assumptions shown above are based on the 2013 experience study which reviewed experience for the four-year period ending on December 31, 2013. Long-Term Expected Rate of Return To develop an analytical basis for the selection of the long-term expected rate of return assumption, in July 2013 the PERS Board reviewed long-term assumptions developed by both Milliman’s capital market assumptions team and the Oregon Investment Council’s (OIC) investment advisors. The table below shows Milliman’s assumptions for each of the asset classes in which the plan was invested at that time based on the OIC long-term target asset allocation. The OIC’s description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption was based on a consistent set of underlying assumptions, and includes adjustment for the inflation assumption. These assumptions are not based on historical returns, but instead are based on a forward-looking capital market economic model. ---PAGE BREAK--- - 42 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM (Continued) Long-Term Expected Rate of Return (Continued) Asset Class Core Fixed Income 7.20 % 4.50 % Short-Term Bonds 8.00 3.70 Intermediate-Term Bonds 3.00 4.10 High Yield Bonds 1.80 6.66 Large Cap US Equities 11.65 7.20 Mid Cap US Equities 3.88 7.30 Small Cap US Equities 2.27 7.45 Developed Foreign Equities 14.21 6.90 Emerging Foreign Equities 5.49 7.40 Private Equity 20.00 8.26 Opportunity Funds/Absolute Return 5.00 6.01 Real Estate (Property) 13.75 6.51 Real Estate (REITS) 2.50 6.76 Commodities 7.71 6.07 Assumed Inflation - Mean 2.75 Target Compount Annual Return (Geometric) Discount Rate The discount rate used to measure the total pension liability was 7.75% for the Defined Benefit Pension Plan. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and those contributing employers are made at the contractually required rates, as actuarially determined. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments for the Defined Benefit Pension Plan was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the City’s proportionate share of the net pension liability to changes in the discount rate The following presents the City’s proportionate share of the net pension liability (asset) calculated using the discount rate of 7.75%, as well as what the City’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.75%) or 1-percentage-point higher (8.75%) than the current rate: Proportionate share of the net pension liability $ 16,958,621 $ 7,026,676 $ (1,343,344) 1% Decrease (6.75%) Discount Rate (7.75%) 1% Increase (8.75%) ---PAGE BREAK--- - 43 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 PENSION PLAN – OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM (Continued) Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued OPERS financial report. DEFINED CONTRIBUTION PENSION PLANS The City sponsors two defined contribution pension plans. Both plan's provisions and contribution requirements are established and amended by the City Council. The 401A is administered by ICMA Retirement Corp. to provide retirement benefits for the City Attorney. The City has established a contribution amount equivalent to approximately 7% of covered salary. The City contributed $8,424 to the plan for the year ended June 30, 2016. The 457 plan is administered by both ICMA Retirement Corporation and First Investors Financial Services, and provides additional retirement benefits for contract and unrepresented employees. The City has established matching contribution rates of 5% or 8.5%, depending on contractual agreements. The City contributed $145,650 to the plan for the year ended June 30, 2016. TRANSFERS Interfund transfers on the budgetary basis of accounting are as follows: Major funds General $ - $ 208,835 Street 90,000 34,501 Water - 32,391 Sewer - 177,925 Sewer Capital Construction 31,783 - Non-major funds Street/Storm SDC 1,036,476 - Transit 116,000 3,001 Building - 3,001 Museum Endowment - 3,040 General Construction 15,634 - Special Assessments - 995,602 Equipment Replacement 70,000 - Water Capital Construction 40,874 - Information Services 57,529 - $ 1,458,296 $ 1,458,296 Transfers In Transfers Out ---PAGE BREAK--- - 44 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 TRANSFERS (Continued) Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, and use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. INTERFUND LOANS LOANS RECEIVABLE Fund Water Capital Construction $ 115,036 $ (38,259) $ 76,777 Street SDC 115,036 (38,260) 76,776 Street SDC 1,064,896 (995,602) 69,294 $ 1,294,968 $ (1,072,121) $ 222,847 LOANS PAYABLE Outstanding Outstanding June 30, 2016 Payments Received July 1, 2015 Fund General $ 155,180 $ (52,891) $ 102,289 Special Assessments 1,064,896 (995,602) 69,294 Water 37,446 (11,814) 25,632 Sewer 37,446 (11,814) 25,632 $ 1,294,968 $ (1,072,121) $ 222,847 Outstanding Outstanding July 1, 2015 Made June 30, 2016 Payments ---PAGE BREAK--- - 45 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 DEFICIT NET POSITION/FUND BALANCES The following funds reported deficit balances as of June 30, 2016: Governmental Funds Special assessments (2,818) $ Internal Service Funds Information services (59,054) The deficit fund balance in the special assessments fund is due to repayment of an interfund loan to the Street SDC fund and the deficit net position in the information services fund is due to changes in net pension liability during the year. BEGINNING BALANCE ADJUSTMENTS The beginning balance of the Sewer Capital Construction fund has been increased by $53,000 and the Water Capital Construction fund has been decreased by $53,000 to reflect a prior period adjustment for a duplicate payment on an interfund loan. 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. 72 “Fair Value Measurement and Application” addresses accounting and financial reporting issues related to fair value measurements. It provides guidance for determining a fair value measurement for financial reporting purposes, as well as guidance for applying fair value to certain investments, and disclosures related to all fair value measurements. This statement was implemented in the current year. GASB Statement No. 73 “Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68”, completes the suite of pension standards. The requirements in Statement 73 for reporting pensions generally are the same as in Statement 68. This statement was implemented in the current year. ---PAGE BREAK--- - 46 - CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2016 NEW PRONOUNCEMENTS (Continued) GASB Statement No. 76 “The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments”. This statement supersedes Statement No. 55, “The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments”. This statement reduces the GAAP hierarchy to two categories of authoritative GAAP and addresses the use of authoritative and nonauthoritative literature in the event that the accounting treatment for a transaction or other event is not specified within a source of authoritative GAAP. This statement was implemented in the current year. 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. 74, “Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans”. This statement replaces Statement No. 46, “Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans”, as amended, and Statement No. 57, “OPEB Measurements by Agent Employers and Agent Multiple- Employer Plans”. It also includes requirements for defined contribution OPEB plans that replace the requirements for those OPEB plans in Statement No. 25, “Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans”, as amended, and Statement No. 50, “Pension Disclosures”. This statement is effective for financial statement periods beginning after June 15, 2016. GASB Statement No. 75, “Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions”, addresses reporting by governments that provide OPEB to their employees and for governments that finance OPEB for employees of other governments. It requires governments in all types of OPEB plans to present more extensive note disclosures and required supplementary information (RSI) about their OPEB liabilities. The statement is effective for fiscal years beginning after June 15, 2016. GASB Statement No. 77, “Tax Abatement Disclosures,” addresses the disclosure requirements for governments that have tax abated properties in their jurisdiction. It will require governments to disclose the a description of the tax abatement program, the gross dollar amount of taxes abated during the period, and commitments made by a government, other than to abate taxes, as part of the tax abatement agreement. The statement is effective for fiscal years beginning after December 15, 2015. SUBSEQUENT EVENTS Management has evaluated subsequent events through November 8, 2016, the date on which the financial statements were available to be issued. Management is not aware of any subsequent events that require recognition or disclosure in the financial statements. ---PAGE BREAK--- REQUIRED SUPPLEMENTARY INFORMATION ---PAGE BREAK--- - 47 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Taxes and assessments 8,206,000 $ 8,206,000 $ 8,562,396 $ 356,396 $ Licenses and permits 128,100 128,100 203,474 75,374 Franchise fees 1,635,212 1,635,212 1,707,580 72,368 Charges for services 1,124,500 1,124,500 963,953 (160,547) Intergovernmental 720,189 720,189 756,566 36,377 Fines and forfeitures 658,400 658,400 426,867 (231,533) Miscellaneous 136,976 136,976 271,214 134,238 Total Revenues 12,609,377 12,609,377 12,892,050 282,673 EXPENDITURES Council and Mayor 17,803 17,803 17,700 103 Administration 245,756 245,756 239,162 6,594 Economic Development 56,883 56,883 45,628 11,255 City Recorder 78,634 78,634 69,603 9,031 City Attorney 185,157 235,157 176,955 58,202 Finance 572,139 572,139 499,938 72,201 Human Resources 113,353 113,353 105,175 8,178 Nondepartmental 272,435 372,435 325,038 47,397 Police 7,157,207 7,157,207 6,598,236 558,971 Library 862,096 862,096 801,275 60,821 Recreation 452,920 452,920 423,427 29,493 Aquatic Center 534,264 534,264 517,356 16,908 Community Services Administration 311,832 311,832 277,182 34,650 RSVP 74,010 74,010 58,123 15,887 Planning 375,053 375,053 332,414 42,639 Engineering 773,220 773,220 660,222 112,998 Maintenance 893,272 893,272 775,940 117,332 Contingency 2,931,102 2,781,102 - 2,781,102 Total Expenditures 15,907,136 15,907,136 11,923,374 3,983,762 REVENUES OVER (UNDER) EXPENDITURES (3,297,759) (3,297,759) 968,676 4,266,435 OTHER FINANCING SOURCES (USES) Transfers out (402,241) (402,241) (208,835) 193,406 NET CHANGE IN FUND BALANCE (3,700,000) (3,700,000) 759,841 4,459,841 FUND BALANCE, beginning of year 3,700,000 3,700,000 4,534,978 834,978 FUND BALANCE, end of year (budgetary basis) - $ - $ 5,294,819 5,294,819 $ Interfund loan (102,288) Accrued payroll (301,613) FUND BALANCE, end of year (GAAP basis) 4,890,918 $ Budget Amounts ---PAGE BREAK--- - 48 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - STREET FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Taxes and assessments 105,000 $ 105,000 $ 115,692 $ 10,692 $ Licenses and permits - - 369 369 Franchise fees 350,000 350,000 357,984 7,984 Intergovernmental 1,300,000 1,300,000 1,454,076 154,076 Miscellaneous 190,034 190,034 196,750 6,716 Total Revenues 1,945,034 1,945,034 2,124,871 179,837 EXPENDITURES Personal services 599,438 599,438 565,071 34,367 Materials and services 1,635,179 1,635,179 1,206,394 428,785 Capital outlay 12,000 12,000 9,150 2,850 Contingency 223,462 223,462 - 223,462 Total Expenditures 2,470,079 2,470,079 1,780,615 689,464 REVENUES OVER (UNDER) EXPENDITURES (525,045) (525,045) 344,256 869,301 OTHER FINANCING SOURCES (USES) Transfers in 220,000 220,000 90,000 (130,000) Transfers out (264,501) (264,501) (34,501) 230,000 Total Other Financing Sources (Uses) (44,501) (44,501) 55,499 100,000 NET CHANGE IN FUND BALANCE (569,546) (569,546) 399,755 969,301 FUND BALANCE, beginning of year 2,900,000 2,900,000 2,966,044 66,044 FUND BALANCE, end of year (budgetary basis) 2,330,454 $ 2,330,454 $ 3,365,799 1,035,345 $ Accrued payroll (20,895) FUND BALANCE, end of year (GAAP basis) 3,344,904 $ Budget Amounts ---PAGE BREAK--- - 49 - CITY OF WOODBURN, OREGON SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY (ASSET) OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM LAST THREE FISCAL YEARS 1 2016 2015 2014 City's proportion of the net pension liability (asset) 0.1224% 0.1145% 0.1145% (7,026,676) $ 2,595,126 $ (5,842,512) $ City's covered-employee payroll 8,344,438 8,457,225 8,048,595 City's proportionate share of the net pension liability (asset) as a percentage of its covered-employee payroll -84.2% 30.7% -72.6% Plan fiduciary net position as a percentage of the total pension liability 91.9% 103.6% 92.0% 1 10-year trend information required by GASB Statement 68 will be presented prospectively City's proportionate share of the net pension liability (asset) ---PAGE BREAK--- - 50 - CITY OF WOODBURN, OREGON SCHEDULE OF THE CITY’S CONTRIBUTIONS OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM LAST THREE FISCAL YEARS 1 2016 2015 2014 Contractually required contributions 1,096,838 $ 1,046,147 $ 1,022,429 $ Contributions in relation to the contractually required contribution (1,096,838) (1,046,147) (1,022,429) Contribution deficiency (excess) - $ - $ - $ City's covered-employee payroll 8,344,438 $ 8,457,225 $ 8,048,595 $ . Contributions as a percentage of covered- employee payroll 13.14% 12.37% 12.70% 1 10-year trend information required by GASB Statement 68 will be presented prospectively ---PAGE BREAK--- SUPPLEMENTARY INFORMATION ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 Transit Building Inspection Search and Seizure ASSETS Cash and investments 89,733 $ 558,859 $ 7,005 $ Accounts receivable 74,979 - - Property taxes receivable - - - Assessment liens receivable - - - Loans receivable - - - Due from other funds - - - Total Assets 164,712 $ 558,859 $ 7,005 $ LIABILITIES, DEFERRED INFLOWS AND FUND BALANCE Liabilities: Accounts payable 1,518 $ 7,444 $ - $ Accrued payroll and payroll liabilities 31,181 25,701 - Due to other funds - - - Total Liabilities 32,699 33,145 - Deferred Inflows: Unavailable revenue - - - Fund Balance: Restricted for: Debt service - - - Construction - - - Culture and recreation 132,013 - - Community development - - - Committed to: Public safety - - 7,005 Capital outlay - - - Planning and building - 525,714 - Unassigned - - - Total Fund Balance 132,013 525,714 7,005 Total Liabilities and Fund Balance 164,712 $ 558,859 $ 7,005 $ Special Revenue ---PAGE BREAK--- - 51 - Capital Projects Housing Rehabilitation Library Endowment Museum Endowment Lavelle Black Trust URA Special Assessment 251,524 $ 26,563 $ 627 $ 43,535 $ 1,753,639 $ 66,476 $ - - - - 15,500 - - - - - 32,092 - - - - - - 44,739 677,787 - - - - - - - - - - - 929,311 $ 26,563 $ 627 $ 43,535 $ 1,801,231 $ 111,215 $ - $ - $ - $ - $ 53,871 $ - $ 1,010 - - - 4,952 - - - - - - 69,294 1,010 - - - 58,823 69,294 677,787 - - - 29,064 44,739 - - - - - - - - - - - - - 26,563 627 43,535 - - 250,514 - - - 1,713,344 - - - - - - - - - - - - - - - - - - - - - - - (2,818) 250,514 26,563 627 43,535 1,713,344 (2,818) 929,311 $ 26,563 $ 627 $ 43,535 $ 1,801,231 $ 111,215 $ Special Revenue ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS (Continued) JUNE 30, 2016 Street/Storm Capital Construction Parks SDC Street SDC ASSETS Cash and investments 31,022 $ 301,446 $ 2,543,272 Accounts receivable - - - Property taxes receivable - - - Assessment liens receivable - - - Loans receivable - 5,256 10,596 Due from other funds - - 146,070 Total Assets 31,022 $ 306,702 $ 2,699,938 $ LIABILITIES, DEFERRED INFLOWS AND FUND BALANCE Liabilities: Accounts payable 18,819 $ 6,305 $ - $ Accrued payroll and payroll liabilities - - - Due to other funds - - - Total Liabilities 18,819 6,305 - Deferred Inflows: Unavailable revenue - 5,256 10,596 Fund Balance: Restricted for: Debt service - - - Construction 12,203 295,141 2,689,342 Culture and recreation - - - Community development - - - Committed to: Public safety - - - Capital outlay - - - Planning and building - - - Unassigned - - - Total Fund Balance 12,203 295,141 2,689,342 Total Liabilities and Fund Balance 31,022 $ 306,702 $ 2,699,938 $ Capital Projects ---PAGE BREAK--- - 52 - Debt Service Storm SDC Equipment Replacement GO Debt Service Total 558,653 $ 951,976 $ 22,466 $ 7,206,796 $ - - - 90,479 - - 28,439 60,531 - - - 44,739 990 - - 694,629 - - - 146,070 559,643 $ 951,976 $ 50,905 $ 8,243,244 $ - $ 70,064 $ - $ 158,021 $ - - - 62,844 - - - 69,294 - 70,064 - 290,159 990 - 25,788 794,220 - - 25,117 25,117 558,653 - - 3,555,339 - - - 202,738 - - - 1,963,858 - - - 7,005 - 881,912 - 881,912 - - - 525,714 - - - (2,818) 558,653 881,912 25,117 7,158,865 559,643 $ 951,976 $ 50,905 $ 8,243,244 $ 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, 2016 Transit Building Inspection Search and Seizure REVENUES Taxes and assessments - $ - $ - $ Licenses and permits - 561,238 - Charges for services 42,747 - - Intergovernmental 427,284 - - Miscellaneous 10,473 24,944 45 Total Revenues 480,504 586,182 45 EXPENDITURES General government - 513,490 - Culture and recreation 593,004 - - Debt service Principal - - - Interest - - - Capital outlay - - - Total Expenditures 593,004 513,490 - REVENUES OVER (UNDER) EXPENDITURES (112,500) 72,692 45 OTHER FINANCING SOURCES (USES) Transfers in 116,000 - - Transfers out (3,001) (3,001) - Total Other Financing Sources (Uses) 112,999 (3,001) - NET CHANGE IN FUND BALANCE 499 69,691 45 FUND BALANCE, beginning of year 131,514 456,023 6,960 FUND BALANCE, end of year 132,013 $ 525,714 $ 7,005 $ Special Revenue ---PAGE BREAK--- - 53 - Housing Rehabilitation Library Endowment Museum Endowment Lavelle Black Trust URA General Capital Construction - $ - $ - $ - $ 558,545 $ - $ - - - - - - - - - - - - 34,074 - - - - 61,371 81,755 168 471 278 28,353 38,569 115,829 168 471 278 586,898 99,940 - - - - - - 49,922 - - 1,835 139,800 - - - - - 56,338 - - - - - 582 - - - - - 18,521 115,574 49,922 - - 1,835 215,241 115,574 65,907 168 471 (1,557) 371,657 (15,634) - - - - - 15,634 - - (3,040) - - - - - (3,040) - - 15,634 65,907 168 (2,569) (1,557) 371,657 - 184,607 26,395 3,196 45,092 1,341,687 - 250,514 $ 26,563 $ 627 $ 43,535 $ 1,713,344 $ - $ Special Revenue Capital Projects ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (Continued) YEAR ENDED JUNE 30, 2016 Special Assessment Street/Storm Capital Construction Parks SDC REVENUES Taxes and assessments 8,893 $ - $ - $ Licenses and permits - - 71,320 Charges for services - - - Intergovernmental - - - Miscellaneous 1,527 343 1,762 Total Revenues 10,420 343 73,082 EXPENDITURES General government - - - Culture and recreation - - 12,864 Debt service Principal - - - Interest - - - Capital outlay - 53,577 - Total Expenditures - 53,577 12,864 REVENUES OVER (UNDER) EXPENDITURES 10,420 (53,234) 60,218 OTHER FINANCING SOURCES (USES) Transfers in - - - Transfers out - - - Total Other Financing Sources (Uses) - - - NET CHANGE IN FUND BALANCE 10,420 (53,234) 60,218 FUND BALANCE, beginning of year (13,238) 65,437 234,923 FUND BALANCE, end of year (2,818) $ 12,203 $ 295,141 $ Capital Projects ---PAGE BREAK--- - 54 - Debt Service Street SDC Storm SDC Equipment Replacement GO Debt Service Total - $ - $ - $ 502,498 $ 1,069,936 $ 183,698 21,193 - - 837,449 - - - - 42,747 - - - - 522,729 15,509 3,469 6,027 1,714 215,407 199,207 24,662 6,027 504,212 2,688,268 - - - - 513,490 - - - - 797,425 - 30,141 - - 350,000 436,479 4,879 - 179,866 185,327 1,828 - 78,921 - 268,421 36,848 - 78,921 529,866 2,201,142 162,359 24,662 (72,894) (25,654) 487,126 2,614 - 70,000 - 204,248 - - - - (9,042) 2,614 - 70,000 - 195,206 164,973 24,662 (2,894) (25,654) 682,332 2,524,369 533,991 884,806 50,771 6,476,533 2,689,342 $ 558,653 $ 881,912 $ 25,117 $ 7,158,865 $ Capital Projects ---PAGE BREAK--- - 55 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - TRANSIT FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Charges for services 48,500 $ 48,500 $ 42,747 $ (5,753) $ Intergovernmental 440,000 440,000 427,284 (12,716) Miscellaneous 10,250 10,250 10,473 223 Total Revenues 498,750 498,750 480,504 (18,246) EXPENDITURES Personal services 409,875 409,875 390,920 18,955 Materials and services 226,772 226,772 194,812 31,960 Contingency 45,102 45,102 - 45,102 Total Expenditures 681,749 681,749 585,732 96,017 REVENUES OVER (UNDER) EXPENDITURES (182,999) (182,999) (105,228) 77,771 OTHER FINANCING SOURCES (USES) Transfers in 116,000 116,000 116,000 - Transfers out (3,001) (3,001) (3,001) - Total Other Financing Sources (Uses) 112,999 112,999 112,999 - NET CHANGE IN FUND BALANCE (70,000) (70,000) 7,771 77,771 FUND BALANCE, beginning of year 70,000 70,000 140,025 70,025 FUND BALANCE, end of year (budgetary basis) - $ - $ 147,796 147,796 $ Accrued payroll (15,783) FUND BALANCE, end of year (GAAP basis) 132,013 $ Budget Amounts ---PAGE BREAK--- - 56 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - BUILDING INSPECTION FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Licenses and permits 798,084 $ 798,084 $ 561,238 $ (236,846) $ Miscellaneous 21,700 21,700 24,944 3,244 Total Revenues 819,784 819,784 586,182 (233,602) EXPENDITURES Personal services 467,104 467,104 329,171 137,933 Materials and services 453,715 453,715 180,326 273,389 Contingency 245,964 245,964 - 245,964 Total Expenditures 1,166,783 1,166,783 509,497 657,286 REVENUES OVER (UNDER) EXPENDITURES (346,999) (346,999) 76,685 423,684 OTHER FINANCING SOURCES (USES) Transfers out (3,001) (3,001) (3,001) - NET CHANGE IN FUND BALANCE (350,000) (350,000) 73,684 423,684 FUND BALANCE, beginning of year 350,000 350,000 464,903 114,903 FUND BALANCE, end of year (budgetary basis) - $ - $ 538,587 538,587 $ Accrued payroll (12,873) FUND BALANCE, end of year (GAAP basis) 525,714 $ Budget Amounts ---PAGE BREAK--- - 57 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – SEARCH AND SEIZURE FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Miscellaneous 15 $ 15 $ 45 $ 30 $ EXPENDITURES Materials and services 6,959 6,959 - 6,959 NET CHANGE IN FUND BALANCE (6,944) (6,944) 45 6,989 FUND BALANCE, beginning of year 6,944 6,944 6,960 16 FUND BALANCE, end of year - $ - $ 7,005 $ 7,005 $ Budget Amounts ---PAGE BREAK--- - 58 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - HOUSING REHABILITATION FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Intergovernmental - $ - $ 34,074 $ 34,074 $ Miscellaneous 21,000 21,000 81,755 60,755 Total Revenues 21,000 21,000 115,829 94,829 EXPENDITURES Personal services 13,071 13,071 12,692 379 Materials and services 40,000 40,000 37,071 2,929 Contingency 117,668 117,668 - 117,668 Total Expenditures 170,739 170,739 49,763 120,976 NET CHANGE IN FUND BALANCE (149,739) (149,739) 66,066 215,805 FUND BALANCE, beginning of year 149,739 149,739 184,944 35,205 FUND BALANCE, end of year (budgetary basis) - $ - $ 251,010 251,010 $ Accrued payroll (496) FUND BALANCE, end of year (GAAP basis) 250,514 $ Budget Amounts ---PAGE BREAK--- - 59 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – LIBRARY ENDOWMENT FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Miscellaneous 100 $ 100 $ 168 $ 68 $ EXPENDITURES Contingency 26,491 26,491 - 26,491 NET CHANGE IN FUND BALANCE (26,391) (26,391) 168 26,559 FUND BALANCE, beginning of year 26,391 26,391 26,395 4 FUND BALANCE, end of year - $ - $ 26,563 $ 26,563 $ Budget Amounts ---PAGE BREAK--- - 60 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – MUSEUM ENDOWMENT FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Miscellaneous 15 $ 15 $ 471 $ 456 $ EXPENDITURES Contingency 3,040 - - - REVENUES OVER (UNDER) EXPENDITURES (3,025) 15 471 456 OTHER FINANCING SOURCES (USES) Transfers out - (3,040) (3,040) - NET CHANGE IN FUND BALANCE (3,025) (3,025) (2,569) 456 FUND BALANCE, beginning of year 3,025 3,025 3,196 171 FUND BALANCE, end of year - $ - $ 627 $ 627 $ Budget Amounts ---PAGE BREAK--- - 61 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – LAVELLE BLACK TRUST FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Miscellaneous 200 $ 200 $ 278 $ 78 $ EXPENDITURES Materials and services 10,000 10,000 1,835 8,165 Contingency 35,287 35,287 - 35,287 Total Expenditures 45,287 45,287 1,835 43,452 NET CHANGE IN FUND BALANCE (45,087) (45,087) (1,557) 43,530 FUND BALANCE, beginning of year 45,087 45,087 45,092 5 FUND BALANCE, end of year - $ - $ 43,535 $ 43,535 $ Budget Amounts ---PAGE BREAK--- - 62 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – URBAN RENEWAL AGENCY FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Taxes and assessments 580,000 $ 580,000 $ 558,545 $ (21,455) $ Miscellaneous 10,000 10,000 28,353 18,353 Total Revenues 590,000 590,000 586,898 (3,102) EXPENDITURES Personal services 75,550 75,550 35,152 40,398 Materials and services 184,500 184,500 105,019 79,481 Debt service Principal 56,338 56,338 56,338 - Interest 595 595 582 13 Capital outlay 4,500,000 4,500,000 18,521 4,481,479 Contingency 26,005 26,005 - 26,005 Total Expenditures 4,842,988 4,842,988 215,612 4,627,376 REVENUES OVER (UNDER) EXPENDITURES (4,252,988) (4,252,988) 371,286 4,624,274 OTHER FINANCING SOURCES (USES) Proceeds from issuance of debt 4,000,000 4,000,000 - (4,000,000) NET CHANGE IN FUND BALANCE (252,988) (252,988) 371,286 624,274 FUND BALANCE, beginning of year 1,300,000 1,300,000 1,345,027 45,027 FUND BALANCE, end of year (budgetary basis) 1,047,012 $ 1,047,012 $ 1,716,313 669,301 $ Accrued payroll (2,969) FUND BALANCE, end of year (GAAP basis) 1,713,344 $ Budget Amounts ---PAGE BREAK--- - 63 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Intergovernmental - $ 65,280 $ 61,371 $ (3,909) $ Miscellaneous - 17,456 38,569 21,113 Total Revenues - 82,736 99,940 17,204 EXPENDITURES Capital outlay 76,000 161,776 115,574 46,202 REVENUES OVER (UNDER) EXPENDITURES (76,000) (79,040) (15,634) 63,406 OTHER FINANCING SOURCES (USES) Transfers in 76,000 79,040 15,634 (63,406) NET CHANGE IN FUND BALANCE - - - - FUND BALANCE, beginning of year - - - - FUND BALANCE, end of year - $ - $ - $ - $ Budget Amounts ---PAGE BREAK--- - 64 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – SPECIAL ASSESSMENT FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Taxes and assessments 16,449 $ 16,449 $ 8,893 $ (7,556) $ Miscellaneous 5,400 5,400 1,527 (3,873) Total Revenues 21,849 21,849 10,420 (11,429) EXPENDITURES - - - - REVENUES OVER (UNDER) EXPENDITURES 21,849 21,849 10,420 (11,429) OTHER FINANCING SOURCES (USES) Transfers out (1,071,849) (1,071,849) (995,602) 76,247 NET CHANGE IN FUND BALANCE (1,050,000) (1,050,000) (985,182) 64,818 FUND BALANCE, beginning of year 1,050,000 1,050,000 1,051,658 1,658 FUND BALANCE, end of year (budgetary basis) - $ - $ 66,476 66,476 $ Interfund loan (69,294) FUND BALANCE (Deficit), end of year GAAP basis (2,818) $ Budget Amounts ---PAGE BREAK--- - 65 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – STREET/STORM CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Miscellaneous 1,000 $ 1,000 $ 343 $ (657) $ EXPENDITURES Capital outlay 345,000 345,000 53,577 291,423 REVENUES OVER (UNDER) EXPENDITURES (344,000) (344,000) (53,234) 290,766 OTHER FINANCING SOURCES (USES) Transfers in 290,000 290,000 - (290,000) NET CHANGE IN FUND BALANCE (54,000) (54,000) (53,234) 766 FUND BALANCE, beginning of year 54,000 54,000 65,437 11,437 FUND BALANCE, end of year - $ - $ 12,203 $ 12,203 $ Budget Amounts ---PAGE BREAK--- - 66 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – PARKS SDC FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Licenses and permits 90,000 $ 90,000 $ 71,320 $ (18,680) $ Miscellaneous 2,300 2,300 1,762 (538) Total Revenues 92,300 92,300 73,082 (19,218) EXPENDITURES Materials and services 30,000 30,000 12,864 17,136 NET CHANGE IN FUND BALANCE 62,300 62,300 60,218 (2,082) FUND BALANCE, beginning of year 180,000 180,000 234,923 54,923 FUND BALANCE, end of year 242,300 $ 242,300 $ 295,141 $ 52,841 $ Budget Amounts ---PAGE BREAK--- - 67 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – STREET SDC FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Licenses and permits 325,000 $ 325,000 $ 183,698 $ (141,302) $ Miscellaneous 27,500 27,500 15,509 (11,991) Total Revenues 352,500 352,500 199,207 (153,293) EXPENDITURES Debt service Principal 30,141 30,141 30,141 - Interest 4,879 4,879 4,879 - Capital outlay 4,600,000 4,600,000 1,828 4,598,172 Total Expenditures 4,635,020 4,635,020 36,848 4,598,172 REVENUES OVER (UNDER) EXPENDITURES (4,282,520) (4,282,520) 162,359 4,444,879 OTHER FINANCING SOURCES (USES) Transfers in 1,112,723 1,112,723 1,036,476 (76,247) Transfers out (25,000) (25,000) - 25,000 Total Other Financing Sources and Uses 1,087,723 1,087,723 1,036,476 (51,247) NET CHANGE IN FUND BALANCE (3,194,797) (3,194,797) 1,198,835 4,393,632 FUND BALANCE, beginning of year 5,500,000 5,500,000 1,344,437 - FUND BALANCE, end of year 2,305,203 $ 2,305,203 $ 2,543,272 $ 4,393,632 $ Interfund loan 146,070 FUND BALANCE, end of year GAAP basis 2,689,342 $ Budget Amounts ---PAGE BREAK--- - 68 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – STORM SDC FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Licenses and Permits 20,000 $ 20,000 $ 21,193 $ 1,193 $ Miscellaneous 2,500 2,500 3,469 969 Total Revenues 22,500 22,500 24,662 2,162 EXPENDITURES - - - - REVENUES OVER (UNDER) EXPENDITURES 22,500 22,500 24,662 2,162 OTHER FINANCING SOURCES (USES) Transfers out (60,000) (60,000) - 60,000 NET CHANGE IN FUND BALANCE (37,500) (37,500) 24,662 62,162 FUND BALANCE, beginning of year 520,000 520,000 533,991 13,991 FUND BALANCE, end of year 482,500 $ 482,500 $ 558,653 $ 76,153 $ Budget Amounts ---PAGE BREAK--- - 69 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – EQUIPMENT REPLACEMENT FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Miscellaneous 4,500 $ 4,500 $ 6,027 $ 1,527 $ EXPENDITURES Capital outlay 959,337 959,337 78,921 880,416 REVENUES OVER (UNDER) EXPENDITURES (954,837) (954,837) (72,894) 881,943 OTHER FINANCING SOURCES (USES) Transfers in 70,000 70,000 70,000 - NET CHANGE IN FUND BALANCE (884,837) (884,837) (2,894) 881,943 FUND BALANCE, beginning of year 884,837 884,837 884,806 (31) FUND BALANCE, end of year - $ - $ 881,912 $ 881,912 $ Budget Amounts ---PAGE BREAK--- - 70 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL OBLIGATION DEBT SERVICE FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Taxes and assessments 511,000 $ 511,000 $ 502,498 $ (8,502) $ Miscellaneous 400 400 1,714 1,314 Total Revenues 511,400 511,400 504,212 (7,188) EXPENDITURES Principal 350,000 350,000 350,000 - Interest 179,866 179,866 179,866 - Total Expenditures 529,866 529,866 529,866 - NET CHANGE IN FUND BALANCE (18,466) (18,466) (25,654) (7,188) FUND BALANCE, beginning of year 48,000 48,000 50,771 2,771 FUND BALANCE, end of year 29,534 $ 29,534 $ 25,117 $ (4,417) $ Budget Amounts ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF FUND NET POSITION - NONMAJOR PROPRIETARY (ENTERPRISE) FUNDS JUNE 30, 2016 Water SDC Sewer SDC Water Capital Construction ASSETS Current Assets Cash and investments 1,173,486 $ 1,086,304 $ 2,002,373 $ Accounts receivable 22,240 43,593 268 Due from other funds - - 76,776 Total Current Assets 1,195,726 1,129,897 2,079,417 Noncurrent Assets Nondepreciable capital assets - - 1,576,928 Capital assets, net of depreciation - - 1,062,023 Total Noncurrent Assets - - 2,638,951 Total Assets 1,195,726 1,129,897 4,718,368 LIABILITIES Current Liabilities Accounts payable - - 19,624 NET POSITION: Net investment in capital assets - - 2,638,951 Restricted for: Construction 1,195,726 1,129,897 2,059,793 Total Net Position 1,195,726 $ 1,129,897 $ 4,698,744 $ ---PAGE BREAK--- - 71 - Total 4,262,163 $ 66,101 76,776 4,405,040 1,576,928 1,062,023 2,638,951 7,043,991 19,624 2,638,951 4,385,416 7,024,367 $ ---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, 2016 Water SDC Sewer SDC Water Capital Construction OPERATING REVENUES - $ - $ - $ OPERATING EXPENSES Materials and services - - 718 Depreciation - - 43,251 Total Expenses - - 43,969 OPERATING INCOME (LOSS) - - (43,969) NONOPERATING REVENUES (EXPENSES) Investment revenue 7,166 6,464 14,723 NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS 7,166 6,464 (29,246) Capital contributions 114,000 193,152 - Transfers in - - 2,615 CHANGE IN NET POSITION 121,166 199,616 (26,631) NET POSITION, beginning of year as originally stated 1,074,560 930,281 4,778,375 Prior period adjustment - - (53,000) NET POSITION, beginning of year as restated 1,074,560 930,281 4,725,375 NET POSITION, end of year 1,195,726 $ 1,129,897 $ 4,698,744 $ ---PAGE BREAK--- - 72 - Total - $ 718 43,251 43,969 (43,969) 28,353 (15,616) 307,152 2,615 294,151 6,783,216 (53,000) 6,730,216 7,024,367 $ ---PAGE BREAK--- CITY OF WOODBURN, OREGON COMBINING STATEMENT OF CASH FLOWS - NONMAJOR PROPRIETARY (ENTERPRISE) FUNDS YEAR ENDED JUNE 30, 2016 CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers $ - $ - Paid to suppliers - - Net Cash Provided by Operating Activities - - CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in - - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets - - System development receipts 108,440 173,375 Net Cash Provided by (Used in) Capital and Related Financing Activities 108,440 173,375 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 7,166 6,464 Increase (Decrease) in Cash and Investments 115,606 179,839 CASH AND INVESTMENTS, Beginning of year, as restated 1,057,880 906,465 CASH AND INVESTMENTS, End of year $ 1,173,486 $ 1,086,304 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 $ - $ - SDC SDC Water Sewer ---PAGE BREAK--- - 73 - Totals $ 7,790 $ 7,790 251 251 8,041 8,041 40,875 40,875 (443,246) (443,246) - 281,815 (443,246) (161,431) 14,723 28,353 (379,607) (84,162) 2,381,980 4,346,325 $ 2,002,373 $ 4,262,163 Water Capital Construction $ (43,969) $ (43,969) 43,251 43,251 7,790 7,790 969 969 $ 8,041 $ 8,041 Totals Construction Water Capital ---PAGE BREAK--- - 74 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET (NON-GAAP BASIS) AND ACTUAL - WATER FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Charges for services 3,458,306 $ 3,458,306 $ 3,415,661 $ (42,645) $ Miscellaneous 54,000 54,000 67,290 13,290 Interest earnings 9,600 9,600 12,425 2,825 Total Revenues 3,521,906 3,521,906 3,495,376 (26,530) EXPENDITURES Personal services 1,282,452 1,282,452 1,172,688 109,764 Materials and services 925,040 925,040 885,257 39,783 Debt service Principal 698,544 698,544 698,544 - Interest 457,554 457,554 457,554 - Contingency 110,375 110,375 - 110,375 Total Expenditures 3,473,965 3,473,965 3,214,043 259,922 REVENUES OVER (UNDER) EXPENDITURES 47,941 47,941 281,333 233,392 OTHER FINANCING SOURCES (USES) Transfers out (32,391) (32,391) (32,391) - Gain (loss) on sale of assets - - 2,279 2,279 Total Other Financing Sources (Uses) (32,391) (32,391) (30,112) 2,279 NET CHANGE IN FUND BALANCE 15,550 15,550 251,221 235,671 FUND BALANCE, beginning of year 1,858,000 1,858,000 1,942,866 84,866 FUND BALANCE, end of year 1,873,550 $ 1,873,550 $ 2,194,087 $ 320,537 $ Budget Amounts ---PAGE BREAK--- - 75 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL - SEWER FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Charges for services 7,751,933 $ 7,751,933 $ 8,169,544 $ 417,611 $ Miscellaneous 2,000 2,000 769 (1,231) Interest earnings 29,000 29,000 38,865 9,865 Total Revenues 7,782,933 7,782,933 8,209,178 426,245 EXPENDITURES Personal services 1,808,295 1,808,295 1,597,277 211,018 Materials and services 2,356,766 2,356,766 2,082,040 274,726 Debt service Principal 2,490,000 2,490,000 2,478,685 11,315 Interest 890,064 890,064 901,378 (11,314) Contingency 208,253 208,253 - 208,253 Total Expenditures 7,753,378 7,753,378 7,059,380 693,998 REVENUES OVER (UNDER) EXPENDITURES 29,555 29,555 1,149,798 1,120,243 OTHER FINANCING SOURCES (USES) Transfers out (826,142) (826,142) (177,925) 648,217 NET CHANGE IN FUND BALANCE (796,587) (796,587) 971,873 1,768,460 FUND BALANCE, beginning of year 4,744,000 4,744,000 5,869,126 1,125,126 FUND BALANCE, end of year 3,947,413 $ 3,947,413 $ 6,840,999 $ 2,893,586 $ Budget Amounts ---PAGE BREAK--- - 76 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL – SEWER CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Interest earnings 65,000 $ 65,000 $ 79,424 $ 14,424 $ EXPENDITURES Materials and services - 1,000 785 215 Capital outlay 6,173,000 6,172,000 288,939 5,883,061 Total Expenditures 6,173,000 6,173,000 289,724 5,883,276 REVENUES OVER (UNDER) EXPENDITURES (6,108,000) (6,108,000) (210,300) 5,898,051 OTHER FINANCING SOURCES (USES) Transfers in 1,205,000 1,205,000 31,783 (1,173,217) NET CHANGE IN FUND BALANCE (4,903,000) (4,903,000) (178,517) 4,724,834 FUND BALANCE, beginning of year 12,000,000 12,000,000 12,616,103 616,103 FUND BALANCE, end of year 7,097,000 $ 7,097,000 $ 12,437,586 $ 5,340,937 $ Budget Amounts ---PAGE BREAK--- - 77 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL - WATER SDC FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Licenses and permits 100,000 $ 100,000 $ 108,440 $ 8,440 $ Interest earnings 5,000 5,000 7,166 2,166 Total Revenues 105,000 105,000 115,606 10,606 EXPENDITURES Materials and services 100,000 100,000 - 100,000 NET CHANGE IN FUND BALANCE 5,000 5,000 115,606 110,606 FUND BALANCE, beginning of year 1,000,000 1,000,000 1,057,880 57,880 FUND BALANCE, end of year 1,005,000 $ 1,005,000 $ 1,173,486 $ 168,486 $ Budget Amounts ---PAGE BREAK--- - 78 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL - SEWER SDC FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Licenses and permits 150,000 $ 150,000 $ 173,375 $ 23,375 $ Interest earnings 4,000 4,000 6,464 2,464 Total Revenues 154,000 154,000 179,839 25,839 EXPENDITURES - - - - REVENUES OVER (UNDER) EXPENDITURES 154,000 154,000 179,839 25,839 OTHER FINANCING SOURCES (USES) Transfers out (500,000) (500,000) - 500,000 NET CHANGE IN FUND BALANCE (346,000) (346,000) 179,839 525,839 FUND BALANCE, beginning of year 850,000 850,000 906,465 56,465 FUND BALANCE, end of year 504,000 $ 504,000 $ 1,086,304 $ 582,304 $ Budget Amounts ---PAGE BREAK--- - 79 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL – WATER CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Interest earnings 14,000 $ 14,000 $ 14,723 $ 723 $ EXPENDITURES Materials and services - 1,000 718 282 Capital outlay 1,089,000 1,088,000 443,245 644,755 Total Expenditures 1,089,000 1,089,000 443,963 645,037 REVENUES OVER (UNDER) EXPENDITURES (1,075,000) (1,075,000) (429,240) 645,760 OTHER FINANCING SOURCES (USES) Transfers in 40,874 40,874 40,874 - NET CHANGE IN FUND BALANCE (1,034,126) (1,034,126) (388,366) 645,760 FUND BALANCE, beginning of year 2,000,000 2,000,000 2,424,383 424,383 FUND BALANCE, end of year 965,874 $ 965,874 $ 2,036,017 $ 1,070,143 $ Budget Amounts ---PAGE BREAK--- - 80 - CITY OF WOODBURN, OREGON COMBINING STATEMENT OF FUND NET POSITION - INTERNAL SERVICE FUNDS JUNE 30, 2016 Information Services Insurance Total ASSETS Current Assets Cash and investments 160,107 $ 196,395 $ 356,502 $ Accounts receivable 21,420 1,865 23,285 Total Assets 181,527 198,260 379,787 DEFERRED OUTFLOWS Deferred outflows - contributions to PERS 47,291 6,288 53,579 LIABILITIES Current Liabilities Accounts payable 1,342 88,198 89,540 Accrued payroll liabilities 27,330 2,612 29,942 Total Current Liabilities 28,672 90,810 119,482 Noncurrent Liabilities Net pension liability 206,224 27,418 233,642 Total Liabilities 234,896 118,228 353,124 DEFERRED INFLOWS Net projected to actual earnings - PERS 52,976 7,043 60,019 NET POSITION: Unrestricted (59,054) $ 79,277 $ 20,223 $ ---PAGE BREAK--- - 81 - CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2016 Information Services Insurance Total OPERATING REVENUES Charges for services 835,308 $ 658,065 $ 1,493,373 $ Miscellaneous 1,502 7,921 9,423 Total Operating Revenues 836,810 665,986 1,502,796 OPERATING EXPENSES Personal services 524,760 69,907 594,667 Materials and services 436,778 788,302 1,225,080 Total Expenses 961,538 858,209 1,819,747 OPERATING INCOME (LOSS) (124,728) (192,223) (316,951) NONOPERATING REVENUES (EXPENSES) Investment revenue 2,467 2,459 4,926 NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS (122,261) (189,764) (312,025) Transfers in 57,529 - 57,529 Non-cash transfers out (108,155) - (108,155) CHANGE IN NET POSITION (172,887) (189,764) (362,651) NET POSITION, beginning of year 113,833 269,041 382,874 NET POSITION (Deficit), end of year (59,054) $ 79,277 $ 20,223 $ ---PAGE BREAK--- - 82 - CITY OF WOODBURN, OREGON COMBINING STATEMENT OF CASH FLOWS - INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2016 Information Services Insurance Totals CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers 815,390 $ 687,980 $ 1,503,370 $ Paid to suppliers (438,803) (775,189) (1,213,992) Paid to employees (344,643) (44,848) (389,491) Net Cash Provided by (Used in) Operating Activities 31,944 (132,057) (100,113) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in 57,529 - 57,529 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 2,467 2,459 4,926 Increase (Decrease) in Cash and Investments (16,215) (129,598) (145,813) CASH AND INVESTMENTS, Beginning of year 176,322 325,993 502,315 CASH AND INVESTMENTS, End of year 160,107 $ 196,395 $ 356,502 $ RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) (124,728) $ (192,223) $ (316,951) $ Change in assets and liabilities Accounts receivable (21,420) 21,994 574 Deferred outflows (19,045) (4,196) (23,241) Accounts payable and accrued liabilities 3,847 12,789 16,636 Net pension liability 276,292 32,608 308,900 Deferred inflows (83,002) (3,029) (86,031) Net Cash Provided by (Used in) Operating Activities 31,944 $ (132,057) $ (100,113) $ Noncash Transactions Transfer of capital assets (108,155) $ - $ (108,155) $ ---PAGE BREAK--- - 83 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BASIS) – INFORMATION SERVICES FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Charges for services 821,591 $ 821,591 $ 835,308 $ 13,717 $ Miscellaneous - - 1,502 1,502 Interest earnings 2,000 2,000 2,467 467 Total Revenues 823,591 823,591 839,277 15,686 EXPENDITURES Personal services 362,559 362,559 345,817 16,742 Materials and services 442,551 442,551 436,778 5,773 Capital outlay 117,529 117,529 108,155 9,374 Contingency 28,481 28,481 - 28,481 Total Expenditures 951,120 951,120 890,750 60,370 REVENUES OVER (UNDER) EXPENDITURES (127,529) (127,529) (51,473) 76,056 OTHER FINANCING SOURCES (USES) Transfers in 57,529 57,529 57,529 - NET CHANGE IN FUND BALANCE (70,000) (70,000) 6,056 76,056 FUND BALANCE, beginning of year 70,000 70,000 160,392 90,392 FUND BALANCE, end of year - $ - $ 166,448 $ 166,448 $ Budget Amounts ---PAGE BREAK--- - 84 - CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BASIS) – INSURANCE FUND YEAR ENDED JUNE 30, 2016 Original Final Actual Variance REVENUES Charges for services 655,738 $ 655,738 $ 658,065 2,327 $ Miscellaneous 1,000 1,000 7,921 6,921 Interest earnings 2,500 2,500 2,459 (41) Total Revenues 659,238 659,238 668,445 9,207 EXPENDITURES Personal services 45,231 45,231 44,407 824 Materials and services 592,815 817,815 788,302 29,513 Contingency 271,192 46,192 - 46,192 Total Expenditures 909,238 909,238 832,709 76,529 NET CHANGE IN FUND BALANCE (250,000) (250,000) (164,264) 85,736 FUND BALANCE, beginning of year 250,000 250,000 273,014 23,014 FUND BALANCE, end of year - $ - $ 108,750 $ 108,750 $ Budget Amounts ---PAGE BREAK--- COMPLIANCE SECTION ---PAGE BREAK--- - 85 - 475 Cottage Street NE, Suite 200, Salem, Oregon 97301 (503) 581-7788 INDEPENDENT AUDITOR’S REPORT REQUIRED BY OREGON STATE REGULATIONS Honorable Mayor and Council Members City of Woodburn 270 Montgomery Street Woodburn, Oregon 97071 We have audited, in accordance with auditing standards generally accepted in the United States of America, the basic financial statements of the City of Woodburn as of and for the year ended June 30, 2016, and have issued our report thereon dated November 8, 2016. 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. ---PAGE BREAK--- - 86 - Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. Restriction on Use This report is intended solely for the information and use of the council members and management of the City of Woodburn and the Oregon Secretary of State and is not intended to be and should not be used by anyone other than these parties. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS By: Ryan T. Pasquarella, A Shareholder November 8, 2016