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November 10, 2014 Agenda KF,M CW ATHRYN IGLEYAYOR ITY OF OODBURN TAL,CW1 ERESA LONSO EONOUNCILOR ARD LE,CWII ISA LLSWORTHOUNCILOR ARD CCA PMC,CWIII ITYOUNCILGENDA ETER CALLUMOUNCILOR ARD JC,CWIV AMES OXOUNCILOR ARD FL,CWV RANK ONERGANOUNCILOR ARD N10,2014–7:00.. OVEMBERPM EM,CWVI RIC ORRISOUNCILOR ARD CHCC–270MS ITY ALL OUNCIL HAMBERS ONTGOMERY TREET 1.CALL TO ORDER AND FLAG SALUTE 2.ROLL CALL 3.ANNOUNCEMENTS AND APPOINTMENTS Announcements: A. City Hall and the Library will be closed on November 11 in observance of Veterans Day. The Aquatic Center will be open normal hours. B.City Hall will be closed November 27and 28for the Thanksgiving Holiday. The Aquatic Center and the Library are closed on Thanksgiving day C.The City Council meeting scheduled for November 24is cancelled. The next City Council meeting will take place on December 8, 2014 at 7:00 p.m. Appointments: None. 4.COMMUNITY/GOVERNMENT ORGANIZATIONS None. 5.PROCLAMATIONS/PRESENTATIONS Proclamations: None. Presentations: A.Audit Presentation1 B.ODOT This facility is ADA accessible. If you need special accommodation, please contact the City Recorder at 503-980- 6318at least 24 hours prior to this meeting. **Habrá intérpretes disponibles para aquéllas personas que no hablan Inglés, previo acuerdo. Comuníquese al (503) 980-2485.** November 10, 2014Council Agenda Page i 6.COMMUNICATIONS . None – This allows the public to introduce items for Council 7.BUSINESS FROM THE PUBLIC consideration not already scheduled on the agenda. –Items listed on the consent agenda are considered routine 8.CONSENT AGENDA and may be adopted by one motion. Any item may be removed for discussion at the request of a Council member. A.Woodburn City Council minutes of October 27, 2014142 Recommended Action: Approve the minutes. B.Woodburn City Council Executive Session minutes of October 145 27, 2014 Recommended Action:Approve the minutes. C.Woodburn Planning Commission minutes of July 10, 2014146 Recommended Action:Accept the minutes. D.Building Activity for October 2014148 Recommended Action:Receive the report. E.Limited On-Premise Sales–Change of Ownership149 RecommendedAction:The Woodburn City Council recommends that the OLCC approve the Limited On-Premise Sales-Change of Ownership,for Carniceria Y Taqueria Las Palmas. 9.TABLED BUSINESS None. 10.PUBLIC HEARINGS None. –Members of the public wishing to comment on items of general 11.GENERAL BUSINESS business must complete and submit a speaker’s card to the City Recorder prior to commencing this portion of the Council’s agenda. Comment time may be limited by Mayoral prerogative. A.City Owned, Potential Surplus Property151 Recommended Action:That the City Council provide policy direction regarding the City owned sites listed below as potential surplus property and direct staff to initiate the formal surplus property process provided by state law. November 10, 2014Council Agenda Page ii B.Oregon’s Urban Growth Boundary (UGB) Expansion Process166 Recommended Action:We are now recommending that the City Council, via a motion: 1)Approve an expenditure of up to $20,000 for the procurement of a professional consultant to assist in providing lobbying support in the upcoming legislative sessions. 2)Authorize the selection of a consultant once our selection process, which consists of interviewing professionals and reviewing qualifications, is completed. We expect to have this effort completed within the next week. – These are 12.PLANNING COMMISSION OR ADMINISTRATIVE LAND USE ACTIONS Planning Commission or Administrative Land Use actions that may be called up by the City Council. None. 13.CITY ADMINISTRATOR’S REPORT A.Introduction of New Pool Manager 14.MAYOR AND COUNCIL REPORTS 15.ADJOURNMENT November 10, 2014Council Agenda Page iii 1 2 WOODBURN URBAN RENEWAL AGENCY (A COMPONENT UNIT OF THE CITY OF WOODBURN, OREGON) ANNUAL FINANCIAL REPORT Year Ended June 30, 2014 3 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of WOODBURN, Oregon) AGENCY OFFICIALS June 30, 2014 MAYOR AND COUNCIL MEMBERS Name Term Expires Mayor Kathryn Figley December 31, 2014 270 Montgomery Street Woodburn, Oregon 97071 Council Members Peter McCallum, President December 31, 2014 270 Montgomery Street Woodburn, Oregon 97071 Jim Cox December 31, 2014 270 Montgomery Street Woodburn, Oregon 97071 Lisa Ellsworth December 31, 2016 270 Montgomery Street Woodburn, Oregon 97071 Frank Lonergan December 31, 2014 270 Montgomery Street Woodburn, Oregon 97071 Eric Morris December 31, 2016 270 Montgomery Street Woodburn, Oregon 97071 Teresa Alonso Leon December 31, 2016 270 Montgomery Street Woodburn, Oregon 97071 Staff Scott Derickson, City Administrator N. Robert Shields, City Attorney Sarah Head, Finance Director City of Woodburn, Oregon 270 Mongomery Avenue Woodburn, Oregon 97071 4 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) TABLE OF CONTENTS June 30, 2014 Page INDEPENDENT AUDITOR’S REPORT i-iii MANAGEMENT’S DISCUSSION AND ANALYSIS iv-vi BASIC FINANCIAL STATEMENTS Government-wide Financial Statement Statement of Net Position – Governmental Activities 7 Statement of Activities – Governmental Activities 8 Fund Financial Statements Balance Sheet – Governmental Fund 9 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Fund 10 Notes to Basic Financial Statements 11-17 REQUIRED SUPPLEMENTARY INFORMATION Schedules of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Urban Renewal Debt Service Fund 18 SUPPLEMENTARY INFORMATION Schedule of Property Tax Transactions 19 COMPLIANCE SECTION Independent Auditor’s Report Required by State Regulations 20-21 5 475 Cottage Street NE, Suite 200, Salem, Oregon 97301 (503) 581-7788 INDEPENDENT AUDITOR’S REPORT Board of Directors City of Woodburn Urban Renewal Agency 270 Montgomery Street Woodburn, Oregon 97071 Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities and each major fund of the Urban Renewal Agency of the City of Woodburn, Oregon (a component unit of the City of Woodburn, Oregon) as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the Agency’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’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 Agency’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. - i - 6 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the Urban Renewal Agency of the City of Woodburn, as of June 30, 2014, and the respective changes in financial position 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 management’s discussion and analysis (MD&A) (pages iv through vi) and the schedule of revenues, expenditures and changes in fund balances - budget to actual on page 18 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 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 or audit of the basics 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 Agency’s basic financial statements. The budgetary schedule described above was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The budgetary schedule has 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 schedule is 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 Agency’s basic financial statements. The supplementary information is presented for purposes of additional analysis and is not a required part of the financial statements. The supplementary information is the responsibility of management and was derived from and relates directly to, the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole. - ii - 7 Report on Other Legal and Regulatory Requirements In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have issued our report dated October 31, 2014, on our consideration of the Agency’s compliance with certain provisions of laws and regulations, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS By: Thomas E. Glogau, A Shareholder October 31, 2014 - iii - 8 MANAGEMENT’S DISCUSSSION AND ANALYSIS 9 WOODBURN URBAN RENEWAL AGENCY MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the Woodburn Urban Renewal Agency (the Agency), we offer readers of the Agency’s basic financial statements this narrative overview and analysis of the financial activities of the Agency as of June 30, 2014 and for the fiscal year then ended. We encourage readers to consider the information presented here in conjunction with the Agency’s basic financial statements in the financial section of this report. Financial Highlights The Agency’s net assets exceeded liabilities by $1,651,516. This is due to the continued retirement of the Agency’s outstanding debt. The Agency currently has two assets, cash and investments ($1,908,678) and receivables ($44,362). The Agency’s receivables are comprised solely of property taxes due at June 30, 2014. Liabilities are comprised of the balance on Agency accounts payable of $25,532, debt of $275,872, and the accrued interest due at June 30, 2014 of $120. Statements of Net Position June 30, 20142013 ASSETS Cash and investments$1,908,678$1,817,541 Other assets44,36249,402 Total Assets1,953,040 1,866,943 LIABILITIES Other liabilities 25,652 20,429 Long-term liabilities275,872 486,381 Total Liabilities 301,524 506,810 NET POSITION Restricted 227,732 210,509 Unrestricted1,423,784 1,149,624 Total Net Position$1,651,516$1,360,133 Property taxes totaling $596,003 comprise 98 % of the Agency’s revenue and are derived from the tax increment assessment within the Agency’s boundaries. The remaining revenue of $10,266 is from interest earnings. Expenses for the year ended June 30, 2014 were $16,636 for interest on long-term debt. Additionally, the Agency expended $122,885 on personnel costs and $175,365 on the Agency’s Downtown Grant and Loan program. The Agency maintains a single fund used to account for activities supported by the property tax increment. - iv - 10 Statements of Activities Year Ended June 30, 20142013 REVENUES Property taxes$ 596,003$625,577 Miscellaneous 10,2668,188 Total Revenues 606,269633,765 EXPENSES Community development 298,250199,927 Interest on long-term debt 16,63626,287 Total Expenses 314,886226,214 CHANGE IN NET POSITION 291,383407,551 NET POSITION, beginning of yea 952,5821,360,133 r NET POSITION, end of year1,651,516$ 1,360,133$ Overview of the Basic Financial Statements The Agency’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. Government-wide financial statements. The government-wide financial statements are comprised of the Statement of Net Position and the Statement of Activities. These two statements are designed to provide readers with a broad overview of the Agency’s finances utilizing the full accrual method of accounting, in a manner similar to a private-sector business. Under the full accrual method of accounting, transactions are reported as soon as the underlying event(s) giving rise to the change occurs, regardless of the timing of related cash flows. Thus, assets, liabilities, revenues and expenses are reported in these statements for some items that will only result in cash flows in future fiscal periods (i.e. uncollected revenues and accrued but unpaid interest). The Statement of Net Position presents information on all of the Agency’s assets and liabilities, including capital assets and long-term liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Agency as a whole is improving or deteriorating. The Statement of Activities present information showing how the Agency’s net position changed during the most recent fiscal year. Fund financial statements. The fund financial statements focus on current available resources and are organized on the basis of funds, each of which is defined as a fiscal and accounting entity with a self-balancing set of accounts established for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. - v - 11 Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 11-17. Financial Analysis of Funds As of June 30, 2014 the Agency’s governmental fund reported a fund balance of $1,888,700 or an increase of $86,631 over the prior year. This is due to tax revenues in excess of payments of the Agency for approved Downtown Grant and Loan projects and annual debt service. Budgetary Highlights There were no changes to the adopted budget in the current year. Capital Assets and Debt Administration The Agency has no capital assets. All assets constructed with urban renewal funds are property of the City (see the City of Woodburn financial statements). As of June 30, 2014 the Agency has $275,872 of long-term debt outstanding. Additional information on the long- term debt can be found in the notes to the basic financial statements. Financial Contact The Agency’s financial statements are designed to present users (citizens, taxpayers, customers, investors, and creditors with a general overview of the Agency’s finances and to demonstrate the Agency’s accountability. Any questions or request for additional information should be directed to the Agency’s Finance Director at 270 Montgomery Street, Woodburn, Oregon. - vi - 12 BASIC FINANCIAL STATEMENTS 13 URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, OREGON (A Component Unit of the City of Woodburn, Oregon) STATEMENT OF NET POSITION – GOVERNMENTAL ACTIVITIES JUNE 30, 2014 ASSETS Cash and investments$1,908,678 Property taxes receivable44,362 Total Assets1,953,040 LIABILITIES Accounts payable18,321 Accrued payroll and payroll liabilities7,211 Accrued interest payable120 Noncurrent liablities Due within one year Bonds payable219,534 Due in more than one year Bonds payable56,338 Total Liabilities301,524 NET POSITION Restricted227,732 Unrestricted1,423,784 TOTAL NET POSITION$1,651,516 The accompanying notes are an integral part of the financial statements. - 7 - 14 URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, OREGON (A Component Unit of the City of Woodburn, Oregon) STATEMENT OF ACTIVITIES – GOVERNMENTAL ACTIVITIES YEAR ENDED JUNE 30, 2014 Revenues Taxes and assessments$596,003 Miscellaneous10,266 Total Revenues 606,269 Expenses Community development298,250 Interest on long-term debt16,636 Total Expenses 314,886 CHANGE IN NET POSITION 291,383 NET POSITION, June 30, 2013 1,360,133 NET POSITION, June 30, 2014 $1,651,516 The accompanying notes are an integral part of the financial statements. - 8 - 15 URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, OREGON (A Component Unit of the City of Woodburn, Oregon) BALANCE SHEET – GOVERNMENTAL FUND JUNE 30, 2014 Urban Renewal Deb t ervice Fund S ASSETS Cash and investments $ 1,908,678 Property taxes receivable44,362 Total Assets $ 1,953,040 IABILITIES, DEFERRED INFLOWS, AND FUND BALANCE L iabilities L Accounts payable $ 18,321 Accrued payroll and payroll liabilitites7,211 Total Liabilities25,532 eferred Inflows D Unavailable revenue38,808 Fund Balance Restricted Debt service227,732 Unrestricted1,660,968 Total Liabilities, Deferred Inflows, and Fund Balance $ 1,953,040 RECONCILIATION TO THE STATEMENT OF NET POSITIO N Fund Balance$1,888,700 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 revenue in governmental funds.38,808 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. Bonds payable (275,872) Accrued interest payable(120) Net Position of Governmental Activities$1,651,516 The accompanying notes are an integral part of the financial statements. - 9 - 16 URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, OREGON (A Component Unit of the City of Woodburn, Oregon) STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – GOVERNMENTAL FUND YEAR ENDED JUNE 30, 2014 Urban enewal Deb Rt ervice Fund S EVENUES R Taxes and assessments$602,347 Miscellaneous10,266 Total Revenues612,613 XPENDITURES E Personal services122,885 Materials and services175,365 Debt service Principal210,509 Interest17,223 Total Expenditures525,982 NET CHANGE IN FUND BALANCE 86,631 FUND BALANCE, Beginning of yea r1,802,069 FUND BALANCE, End of year $1,888,700 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Net Change in Fund Balance$86,631 Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the fund financial sttements as follows: Property taxes (6,344) Bond proceeds provide current financial resources to governmental funds, but issuing debt increses long-term liabilities in the statment of net position. Repayment of long-term debt obligation principal is an expenditure in the governmental funds, but the repayment reduces long-term obligaions in the statement of net position. This is the amount of repay- ments in the current year.210,509 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in government funds. 586 Chane in Net Position$291,382 g The accompanying notes are an integral part of the financial statements. - 10 - 17 URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, OREGON (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity The City of Woodburn Urban Renewal Agency (the Agency) was created to provide for rehabilitation of blighted and deteriorated areas within the City’s designated urban renewal areas. Through the Downtown Grant and Loan program the Agency enables property owners to rehabilitate properties. The Agency is governed by a seven- member board of directors that include the City’s mayor and other council members and is included as a component unit in the City’s financial statements. Urban Renewal Areas Tax Allocation bonds for urban renewal plan areas are authorized by state law to 1) “…eliminate and prevent the development or spread of urban blight and deterioration; and 2) encourage needed urban conservation and rehabilitation and provide for redevelopment of blighted or deteriorated areas.” Projects are financed in urban renewal plan areas as follows: The Agency (City Council) selects an urban renewal plan area and defines its boundaries. The County Assessor “freezes” the assessed value of property within the urban renewal area. This is referred to as the “frozen” value. Any increase in assessed value above the frozen value is called the “incremental value.” The tax revenue generated by the tax rate times the incremental value is provided for use in paying the principal and interest on any indebtedness incurred to finance the Urban Renewal project. Urban Renewal tax increment revenues are used to repay the indebtedness of the Agency. The proceeds of the indebtedness finance the Agency’s activities. As required by ORS 457.190(3)(a), the Agency has included in its current plan the maximum amount of indebtedness that may be issued or incurred under the plan in the amount of $29,300,000. Measurement Focus and Basis of Accounting Basic Financial Statements Basic financial statements are presented at both the government-wide and fund financial level. Governmental activities are normally supported by taxes and intergovernmental revenues. Government-wide financial statements display information about the reporting government as a whole. These statements focus on the sustainability of the Agency 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 Assets and the Statement of Activities. The Statement of Net Position presents all the assets and liabilities of the Agency, including related debt. Net position, representing assets less liabilities and is shown as restricted. Restricted represents amounts which must be spent in accordance with legal restrictions. - 11 - 18 URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, OREGON (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Measurement Focus and Basis of Accounting (Continued) Basic Financial Statements (Continued) The Statement of Activities indicate how net position changed during the current period. Fund financial statements display information about the Agency’s fund. The single major fund, Urban Renewal Debt Service fund, accounts for general administration of the Agency’s urban renewal areas, for acquisition and rehabilitation of blighted and deteriorated areas within the designated urban renewal areas, and repayment of debt incurred for these activities. Basis of Presentation The financial transactions of the Agency are recorded in a single fund. The fund’s activity is accounted for by providing a separate set of self-balancing accounts that comprises its assets, liabilities, fund equity, revenues and expenditures. 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 Agency 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 non-spendable when the resources cannot be spent because they are either in a non- spendable form or legally or contractually required to be maintained intact. Resources in non-spendable form include inventories, prepaid amounts, deposits, and assets held for sale. Fund balance is reported as restricted when the constraints placed on the use of resources are either: (a) externally imposed by creditors (such as debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. Fund balance is reported as committed when the Agency takes formal action that places specific constraints on how the resources may be used. The Agency can modify or rescind the commitment at any time through taking a similar formal action. Resources that are constrained by the Agency’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 Agency approves which resources should be “reserved” during the adoption of the annual budget. Unassigned fund balance is the residual classification. This classification represents fund balance that has not been restricted, committed or assigned. - 12 - 19 URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, OREGON (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Measurement Focus and Basis of Accounting Accounting principles generally accepted in the United States of America, as promulgated by the Governmental Accounting Standards Board, define principles that should be used to report financial transactions. The government-wide and proprietary fund financial statements are reported using the economic resources and accrual basis of accounting. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when the liability is incurred. The governmental fund financial statements are reported using the modified accrual basis of accounting. Under the modified accrual basis of accounting revenues are recorded when they become both measurable and available, while expenditures are recorded when the related liability is incurred. Cash and Investments The City of Woodburn maintains the Agency’s cash and investments in a common pool. Oregon Revised Statutes and the City of Woodburn investment policy authorize the City to invest in certificates of deposit, savings accounts, bank repurchase agreements, bankers’ acceptances, general obligations of U.S. Government and its agencies, certain bonded obligations of Oregon Municipalities and the State Treasurer’s Local Government Investment Pool, among others. Investments are stated at cost, which approximates fair value. Receivables and Deferred Revenues Property taxes are levied by the County Assessor and collected by the County Tax Collector. The taxes are levied and become a lien as of July 1. They may be paid in three installments payable in equal payments due November 15, February 15, and May 15. Uncollected property taxes levied for the current and prior years are recorded as receivable at year-end. The Agency’s property tax collection records show that most of the property taxes due are collected during the year of levy and delinquent taxes are collected in the next few years. Property tax receivables not available are recognized as deferred inflows in the governmental funds balance sheet. Long-Term Debt All unmatured long-term debt is recorded on the Statement of Net Position. Urban Renewal Agency bonded debt is paid from the Urban Renewal Agency Debt Service Fund. Budget and Budgetary Accounting The Agency budgets in accordance with requirements of State law. Annual appropriated budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. The Agency begins its budgeting process by appointing budget committee members. The budget officer prepares a budget, which is reviewed by the Budget Committee. The budget is then published in proposed form and is presented for public hearings to obtain taxpayer comments and approval from the Budget Committee. The budget is legally adopted by the Agency’s Board by resolution prior to the beginning of the Agency’s fiscal year. - 13 - 20 URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, OREGON (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Budget and Budgetary Accounting (Continued) The Board resolution authorizing appropriations for each fund sets the level by which expenditures cannot legally exceed appropriations. Appropriations are made at the object level. Appropriations lapse at year end. Appropriation authority may be transferred from one level of control to another by Board resolution. Supplemental appropriations may occur if the Board approves them due to a need which exists which was not determined at the time the budget was adopted. There were no changes to the adopted budget in the current year. Use of Estimates The preparation of basic financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the basic financial statements and reported amounts of revenues and expenses/expenditures during the reporting period. Actual results may differ from those estimates. CASH AND INVESTMENTS The Agency’s deposits with financial institutions and investments and are pooled with the City of Woodburn. Cash and investments for the City of Woodburn are disclosed in the City’s financial statements. Other disclosures about the City’s cash and investment that are applicable to the Agency are as follows. Deposits 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. Custodial Credit Risk - Deposits This is the risk that in the event of a bank failure, the City’s deposits may not be returned. The Federal Depository Insurance Corporation (FDIC) provides unlimited insurance for the City’s deposits with financial institutions for the aggregate of all 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. 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. - 14 - 21 URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, OREGON (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 CASH AND INVESTMENTS (Continued) Investments The State Treasurer of the State of Oregon maintains the Oregon Short-Term Fund, of which the Local Government Investment Pool is part. Participation by local governments is voluntary. The State of Oregon investment policies are governed by statute and the Oregon Investment Council. In accordance with Oregon Statutes, the investment funds are invested as a prudent investor would do, exercising reasonable care, skill and caution. The Oregon Short-Term Fund is the LGIP for local governments and was established by the State Treasurer. It was created to meet the financial and administrative responsibilities of federal arbitrage regulations. The investments are regulated by the Oregon Short-Term Fund Board and approved by the Oregon Investment Council (ORS 294.805 to 294.895). At June 30, 2014, the fair value of the position in the Oregon State Treasurer’s Short-Term Investment Pool was approximately equal to the value of the pool shares. The investment in the Oregon Short-Term Fund is not subject to risk evaluation. LGIP is not rated for credit quality. 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 through use of the Local Government Investment Pool. 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 Commission. 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. 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. - 15 - 22 URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, OREGON (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 LONG-TERM DEBT Long-term debt transactions for the year were as follows: OutstandingMatured/Outstanding July 1, RedeemedJune 30,Due Within 2013IssuedDuring Year2014One Year 2005 Urban Renewal Bonds due in quarterly installments with $ 486,381 $ - $ (210,509) $ 275,872 $ 219,534 interest at 4.22% Future debt service requirements are as follows: Fiscal Year nding E une 30,rincipalInteresTotal JPt 2015$219,534 $ 8 ,198$ 227,732 201656,338 595 56,933 $275,872 $ 8 ,793$ 284,665 CONTINGENCIES The Agency 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. NEW PRONOUNCEMENTS GASB Statement No. 70 “Accounting and Financial Reporting for Nonexchange Financial Guarantees.” The objective of the statement is to improve accounting and financial reporting by State and local governments that extend and receive nonexchange financial guarantees. The statement was implemented in the current year. The Agency 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 pronouncements. GASB Statement No. 68 “Accounting and Reporting for Pension Plans—an amendment of GASB Statement No. 27.” The statement establishes accounting and financial reporting requirements related to pensions provided by governments. The statement is effective for fiscal years beginning after June 15, 2014. - 16 - 23 URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, OREGON (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 NEW PRONOUNCEMENTS (continued) GASB Statement No. 69 “Government Combinations and Disposals of Government Operations.” The statement establishes accounting and financial reporting standards related to government combinations and disposals of government operations. The statement is effective for fiscal years beginning after December 15, 2013. GASB Statement No. 71 “Pension Transition for Contributions Made Subsequent to the Measurement Date”. The statement amends transition provisions of GASB Statement No. 68, establishes accounting and financial reporting standards for recognition of contributions made between the measurement date of the net pension liability and implementation of GASB Statement No. 68. The statement is effective for fiscal years beginning after June 15, 2014. SUBSEQUENT EVENTS Management has evaluated subsequent events through October 31, 2014, the date on which the financial statements were available to be issued. Management is not aware of any subsequent events that require recognition or disclosure in the financial statements. - 17 - 24 REQUIRED SUPPLEMENTARY INFORMATION 25 URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, OREGON (A Component Unit of the City of Woodburn, Oregon) SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL - URBAN RENEWAL DEBT SERVICE FUND YEAR ENDED JUNE 30, 2014 Budgeted Amounts OriginalFinalActualVariance REVENUE S Taxes and assessments$550,000 $550,000 $ 602,347$52,347 Miscellaneous 10,500 10,500 10,266 (234) Total Revenues 560,500 560,500 52,113 612,613 XPENDITURE ES Personal services154,487 154,487 34,495 119,992 Materials and services 309,500 309,500 134,135 175,365 Debt service Principal251,855251,855210,509 41,346 Interest375,877375,87717,223 358,654 Contingency1,393,7811,393,781 1,393,781- Total Expenditures 6,985,500 6,985,500 6,462,411 523,089 REVENUES OVER (UNDER) EXPENDITURE (6,425,000)(6,425,000) 6,514,524 S 89,524 OTHER FINANCING SOURCES (USES) Proceeds from issuance of debt 4,500,000 4,500,000 (4,500,000)- NET CHANGE IN FUND BALANCE (1,925,000) (1,925,000) 2,014,524 89,524 FUND BALANCE, Beginning of yea 1,925,0001,925,0001,802,069(122,931) r FUND BALANCE, End of year (budgetary basis) $- $- 1,891,593$1,891,593 Accrued payroll(2,893) FUND BALANCE, End of year (GAAP basis) $1,888,700 - 18 - 26 SUPPLEMENTARY INFORMATION 27 URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, OREGON (A Component Unit of the City of Woodburn, Oregon) SCHEDULE OF PROPERTY TAX TRANSACTIONS YEAR ENDED JUNE 30, 2014 UncollectedUncollected 2013-2014BalanceDiscounts andBalance Tax YearLevyJuly 1, 2013AdjustmentsTurnoversJune 30, 2014 2013-2014$ 611,035$ -$ (17,090)$ (575,727)$ 18,218 2012-2013 22,115 (236) (11,606) 10,273 2011-2012 - 11,143 (143) (5,187) 5,813 2010-2011 - 7,140 (210) 2,242(4,688) 2009-2010 - 2,364 26 (1,641) 749 2008-2009 - 744 (141) (205) 398 2007-2008 - 431 (117) (101) 213 Prior Years - 1,245 (249) (94) 902 Total$ 611,035$ 45,182$ (18,160)$ (599,249) 38,808 Unsegregated Taxes 5,554 Total Receivable at June 30, 2014$44,362 - 19 - 28 OMPLIANCE SECTION C 29 475 Cottage Street NE, Suite 200, Salem, Oregon 97301 (503) 581-7788 INDEPENDENT AUDITOR’S REPORT REQUIRED BY OREGON STATE REGULATIONS Honorable Mayor and Members of the City Council City of Woodburn Urban Renewal Agency 270 Woodburn, Oregon 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 Urban Renewal Agency of the City of Woodburn, Oregon as of and for the year ended June 30, 2014, and have issued our report thereon dated October 31, 2014. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Urban Renewal Agency of the City of Woodburn, Oregon'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. Authorized investment of surplus funds (ORS Chapter 294). Public contracts and purchasing (ORS Chapters 279A, 279B, 279C). In connection with our testing nothing came to our attention that caused us to believe the Agency 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. - 20 - 30 Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Agency'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 Agency's internal control. Accordingly, we do not express an opinion on the effectiveness of the Agency's internal control. Restriction on Use This report is intended solely for the information and use of the governing body and management of the Urban Renewal Agency of the City of Woodburn, Oregon and the Oregon Secretary of State and is not intended to be and should not be used by anyone other than these parties. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS By: Thomas E. Glogau, A Shareholder October 31, 2014 - 21 - 31 CITY OF WOODBURN, OREGON Annual Financial Report Year Ended June 30, 2014 32 CITY OF WOODBURN, OREGON JUNE 30, 2014 MAYOR AND COUNCIL MEMBERS Name Term Expires Mayor Kathryn Figley December 31, 2014 270 Montgomery Street Woodburn, OR 97071 Council Members Peter McCallum, President December 31, 2014 270 Montgomery Street Woodburn, OR 97071 Jim Cox December 31, 2014 270 Montgomery Street Woodburn, OR 97071 Lisa Ellsworth December 31, 2016 270 Montgomery Street Woodburn, OR 97071 Frank Lonergan December 31, 2014 270 Montgomery Street Woodburn, OR 97071 Eric Morris December 31, 2016 270 Montgomery Street Woodburn, OR 97071 Teresa Alonso Leon December 31, 2016 270 Montgomery Street Woodburn, OR 97071 Staff Scott Derickson, City Administrator N. Robert Shields, City Attorney Sarah Head, Finance Director 33 CITY OF WOODBURN, OREGON TABLE OF CONTENTS Page FINANCIAL SECTION INDEPENDENT AUDITOR'S REPORT 1-3 MANAGEMENT'S DISCUSSION AND ANALYSIS 4-9 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position 10 Statement of Activities 11 Fund Financial Statements Balance Sheet - Governmental Funds 12 Reconciliation of Balance Sheet - Governmental Funds to the Statement of Net Position 13 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 14 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds to the Statement of Activities 15 Statement of Fund Net Position - Proprietary Funds 16 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds 17 Statement of Cash Flows - Proprietary Funds 18-19 Statement of Fiduciary Net Position 20 Statement of Changes in Fiduciary Net Position 21 Notes to Basic Financial Statements 22-41 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund 42 Street Fund 43 SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Street SDC Fund 44 Nonmajor Governmental Funds Combining Balance Sheet 45-46 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 47-48 Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Transit Fund 49 Building Fund 50 Search and Seizure Fund 51 Housing Rehabilitation Fund 52 RSVP Fund 53 Cable Franchise Fund 54 Library Endowment Fund 55 Museum Endowment Fund 56 Lavelle Black Trust Fund 57 34 CITY OF WOODBURN, OREGON TABLE OF CONTENTS Page FINANCIAL SECTION (Continued) SUPPLEMENTARY INFORMATION (Continued) Nonmajor Governmental Funds (Continued) Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Continued) Urban Renewal Agency Fund 58 General Construction Fund 59 Special Assessment Fund 60 Street/Storm Capital Improvement Fund 61 Parks SDC Fund 62 Storm SDC Fund 63 Equipment Replacement Fund 64 GO Debt Fund 65 Nonmajor Proprietary Funds Combining Statement of Fund Net Position - Enterprise Funds 66 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Enterprise Funds 67 Combining Statement of Cash Flows - Enterprise Funds 68 Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget (Non-GAAP Basis) and Actual – Nonmajor Enterprise Funds Water Fund 69 Sewer Fund 70 WWTP Construction Fund 71 Water SDC Fund 72 Sewer SDC Fund 73 WWD Construction Fund 74 Internal Services Funds Combining Statement of Fund Net Position - Internal Service Funds 75 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Internal Service Funds 76 Combining Statement of Cash Flows - Internal Service Funds 77 Schedules of Revenues, Expenditures and Changes in Fund Balances (Budgetary Basis) - Budget and Actual Information Services Fund 78 Insurance Fund 79 Technical and Environmental Services Fund 80 Other Financial Schedules Schedule of Property Tax Transactions and Outstanding Balances 81 COMPLIANCE SECTION INDEPENDENT AUDITOR'S REPORT REQUIRED BY OREGON STATE REGULATIONS 82-83 35 475 Cottage Street NE, Suite 200, Salem, Oregon 97301 (503) 581-7788 INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Council Members City of Woodburn 270 Montgomery Street Woodburn, Oregon 97071 Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Woodburn as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. - 1 - 36 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Woodburn as of June 30, 2014, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 4 through 9 and the schedules of revenues, expenditures and changes in fund balance – budget and actual for the General and Street funds (“the budgetary schedules”) be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to management’s discussion and analysis described in the preceding paragraph in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The budgetary schedules described above were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The budgetary schedules have been subject to the auditing procedures applied in the audit of the basis financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the budgetary schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The supplementary information is presented for the purpose of additional analysis and is not a required part of the basic financial statements. The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, or other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly presented, in all material respects, in relation to the basic financial statements as a whole. - 2 - 37 Report on Other Legal and Regulatory Requirements In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have issued our report dated October 31, 2014, on our consideration of the City's compliance with certain provisions of laws and regulations, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS By: Thomas E. Glogau, A Shareholder October 31, 2014 - 3 - 38 CITY OF WOODBURN Year Ended June 30, 2014 MANAGEMENT’S DISCUSSION AND ANALYSIS The Management's Discussion and Analysis of the City of Woodburn's Annual Financial Report (AFR) presents a discussion and analysis of the City's financial performance during the fiscal year ended June 30, 2014. The information presented here should be considered in conjunction with the financial statements included in this report. FINANCIAL HIGHLIGHTS Following are the financial highlights of the City for the fiscal year ended June 30, 2014. une 30, J 2012013change 4 Net position$116,261,329$113,660,647$ 2,600,682 Change in net position2,600,6822,369,174 231,508 Governmental activities net position72,943,49671,695,875 1,247,621 Business-type activities fund net position43,317,83341,964,772 1,353,061 Change in governmental net position1,247,6211,336,308 (88,687) Change in proprietary fund net position1,353,0611,032,866 320,195 OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City of Woodburn's basic financial statements. The basic financial statements include three components: the government-wide financial statements, the fund financial statements and notes to the financial statements. This report also contains required and other supplementary information. Government-wide financial statements. The government-wide financial statements present the net position (statement of net position) and results of operations (statement of activities) of the City as a whole. Included are all governmental and business-type assets, liabilities and activities of the City. The measurement focus and basis of accounting are the same for the entire entity. The measurement focus is on all economic resources of the City, including current financial resources (assets) and non-current financial resources (capital assets) and the related current and non-current liabilities and equity accounts. Both government-wide statements are prepared using the accrual basis of accounting, which is similar to the methods used by most businesses and takes into account all revenues and expenses connected with the fiscal year, even if cash involved has not been received or paid. The statement of net position presents information on all the City's assets and liabilities, with the difference between the two reported as net position. Increases or decreases in net position may indicate whether the City's financial position is improving or deteriorating. The statement of activities presents the expenses incurred in providing services to the public and the revenues associated with those activities for both governmental and business-type activities. The statement of activities begins with expenses by function. To these functions are applied charges for services, operating grants and contributions and capital grants and contributions. The resulting sums, with some adjustments, represent charges to general taxpayers and may equate to the nearest that governments can determine the "bottom line." - 4 - 39 The government-wide financial statements are divided into two categories. Governmental activities are services funded through property taxes and intergovernmental revenues. The governmental activities for the City include general government, public safety, highways and streets, and culture and recreation. Business-type activities are operations funded primarily through charges to external users of goods and services. Business-type activities include water and wastewater. Fund Financial Statements. A fund is a fiscal and accounting entity with a self-balancing set of accounts that is used to segregate resources that are restricted to a particular activity. The use of funds deters commingling of resources designated for a specific purpose, prevents unauthorized transfer of surpluses, and ensures compliance with legal and contractual requirements. The City has three types of fund categories: governmental funds, proprietary funds, and a fiduciary fund. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on current sources and uses of spendable resources and use the modified accrual basis of accounting. Operating statements include all sources and uses of financial resources, and display the excess of revenues and other financial sources over (under) expenditures and other uses. Included in the balance sheet are liquid assets and receivables that will be converted into cash currently and short-term liabilities, including payables to vendors and employees. Unmatured bond principal or liabilities for compensated absences not to be paid in the fiscal year are not included. Because the governmental fund statements do not encompass the long-term focus of the government-wide statements, reconciliations are provided on the subsequent page of the governmental fund statements. The emphasis is on major funds that account for the predominant assets and activities of all funds. The City maintains twenty individual governmental funds. Information is presented separately for the General Fund, Street Fund and Street SDC Fund in the Governmental Fund Balance Sheet and Statement of Revenue, Expenditures and Changes in Fund Balances. The other governmental funds are combined into a single, aggregated presentation. Information for these non-major governmental funds is provided in the form of combining statements. Proprietary Funds. The City maintains two different types of proprietary funds: enterprise and internal service funds. These funds are used to show activities that operate more like those of commercial enterprises. Fees are charged for services provided, both to outside customers and to other units of the City. Enterprise funds are presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water and sewer activities. Internal service funds account for activities furnishing goods or services to other units of the government. Charges for these services are on a cost-reimbursement basis. The internal services funds include insurance, information services, and technical and environmental services. The internal service funds are reported with governmental activities in the government-wide financial statements. Proprietary fund statements provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water, Sewer, and Wastewater Treatment Plant (WWTP) Construction funds. The internal service funds are combined into a single column in the proprietary fund financial statements. The City adopts an annual appropriated budget for all of its funds. Budgetary comparison statements, demonstrating compliance with this budget, have been provided. Notes to the Financial Statements. The notes to the financial statements are an integral part of the basic financial statements and should be read along with them. The notes provide additional information necessary to communicate the financial position of the City. - 5 - 40 Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required and other supplementary information concerning the City. GOVERNMENT-WIDE FINANCIAL ANALYSIS The City had $167,682,598 in total assets and $51,421,269 in total liabilties, resulting in combined net position of $116,261,329 for governmental and business-type activities. The largest component of the City's net position, reflects its investment in capital assets (i.e., land, buildings, equipment and infrastructure, less any related debt outstanding that was needed to acquire or construct the assets). The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. Governmental capital assets, net of depreciation, decreased $510,280 over the prior year due primarily to depreciation in excess of current year capital asset additions. Business-type capital assets, net of depreciation decreased $1,940,377 over the prior year due to depreciation in excess of current year capital additions. It should be noted that business-type capital assets are expected to increase as the next phases of the wastewater treatment plant upgrade begin. Total liabilities for both governmental and business-type activities decreased by $2,443,780 from the prior year due to scheduled debt repayments. Overall, the City's financial position changed by $2,600,682 (or 2%). This is due to mangement's continued focus on containing costs. Statement of Net Position The following table reflects the condensed Statement of Net Position compared to the prior year. 20142013Change GovernmentalBusiness-typeGovernmentalBusiness-typeGovernmentalBusiness-type ActivitiesActivitiesTotalActivitiesActivitiesTotalActivitiesActivitiesTotal Cash and investments18,797,61723,502,81942,300,436$ $ 17,022,290$ 23,194,816$ 40,217,106$ 1,775,327$ 308,003$ 2,083,330 Other assets2,102,248930,9493,033,197 1,822,164 686,804 2,508,968 280,084 244,145 524,229 Capital assets59,558,35562,790,610122,348,965 60,068,635 64,730,987 124,799,622 (510,280) (1,940,377) (2,450,657) Total Assets 80,458,220 87,224,378 167,682,598 78,913,089 88,612,607 167,525,696 1,545,131 (1,388,229) 156,902 Other liabilities1,593,693923,7992,517,492 671,971 680,317 1,352,288 921,722 243,482 1,165,204 Long-term debt5,921,03142,982,74648,903,777 6,545,243 45,967,518 52,512,761 (624,212) (2,984,772) (3,608,984) Total Liabilities 7,514,724 43,906,545 51,421,269 7,217,214 46,647,835 53,865,049 297,510 (2,741,290) (2,443,780) Net position: Net investment in capital assets54,411,373 19,881,340 74,292,713 54,361,481 18,871,567 73,233,048 49,892 1,009,773 1,059,665 Restricted 11,523,032 18,737,342 30,260,374 10,395,999 16,180,395 26,576,394 1,127,033 2,556,947 3,683,980 Unrestricted7,009,0914,699,15111,708,242 6,938,395 6,912,810 13,851,205 70,696 (2,213,659) (2,142,963) $ 2,600,682 Total Net Position$ 72,943,496$ 43,317,833$ 116,261,329$ 71,695,875$ 41,964,772$ 113,660,647$ 1,247,621$1,353,061 Governmental Activities The City’s net position from governmental activities increased $1,247,621 (2%) from 2012-13 to 2013-14. Business-type Activities The City’s net position from business-type activities increased $1,353,061(3%) from 2012-13 to 2013-14. - 6 - 41 Statement of Activities The following table reflects the condensed Statement of Activities compared to the prior year. 20142013Change Business- Business-Business- Governmental te GovernmentalteGovernmentalte ypypyp Activities Activities TotalActivitiesActivitiesTotalActivitiesActivitiesTotal evenues R Program Revenues Charges for service 2,101,26710,646,52112,747,788$ 2,023,412$ 9,785,103$ 11,808,515$ 77,855$ 861,418$ 939,273$ Operating grants and contributions1,915,475 1,915,475- 1,948,383 1,948,383- (32,908) (32,908)- Capital grants and contributions885,093446,9711,332,064 840,242 290,9301,131,172 44,851 156,041200,892 Total Program Revenues 4,901,83511,093,492 15,995,327 4,812,03710,076,03314,888,070 89,798 1,017,4591,107,257 General Revenues Property taxes 8,234,481 8,234,481- 8,180,539 8,180,539- 53,942 53,942- Franchise taxes 1,500,730 1,500,730- 1,656,545 1,656,545-(155,815) (155,815)- Other taxes 454,363 454,363- 382,477 382,477- 71,886 71,886- Intergovernmental 633,530 633,530- 660,547 660,547- (27,017) (27,017)- Other 144,342(522,180) (377,838) 292,791 470,478 177,687(148,449) (699,867)(848,316) Total General Revenues 10,967,446 (522,180) 10,445,266 11,172,899 177,687 11,350,586 205,453 699,867905,320 ()()() Total Revenues 15,869,281 10,571,312 26,440,593 15,984,936 10,253,720 26,238,656 (115,655) 317,592 201,937 xpenses (Net of Indirect Expenses) E General government 2,646,552- 2,646,552 2,411,067 - 2,411,067 235,485 - 235,485 Public safety6,608,391 6,608,391- 6,389,207 6,389,207-219,184 219,184- Highways and streets2,273,271 2,273,271- 2,663,020 2,663,020-(389,749) (389,749)- Culture and recreation 3,530,783 3,530,783- 3,270,803 3,270,803-259,980 259,980- Interest on long-term debt 226,504 226,504- 248,109 248,109- (21,605) (21,605)- Water 2,792,8182,792,818- 2,882,056-2,882,056 (89,238)- (89,238) Sewer 5,761,5925,761,592- 6,005,220-6,005,220 (243,628)- (243,628) Total Expenses 15,285,501 8,554,410 23,839,911 14,982,206 8,887,276 23,869,482 303,295 (332,866) (29,571) Changes in Net Position Before Transfers 583,7802,016,902 2,600,682 1,002,7301,366,4442,369,174(418,950) 650,458231,508 Transfers 663,841(663,841) 333,578- (333,578) 330,263- (330,263) - Change in Net Position 1,247,6211,353,061 2,600,682 1,336,3081,032,8662,369,174 (88,687) 320,195231,508 - Beginning Net Position, as adjusted 71,695,87541,964,772113,660,64770,359,567 40,931,906111,291,4731,336,3081,032,8662,369,174 nng Net Poston 43,317,833###########71,695,875 ###########1,247,62141,964,772 2,600,6821,353,061 72,943,496 Ediii$$$$$$$ Governmental Activities. Total revenues for the City's governmental activities were $15,869,281 for the fiscal year ended June 30, 2014. Approximately 51% of the total revenue for the governmental activities was derived from property taxes and approximately 31% of the total revenue was from program revenues. Total expenses for governmental activities were $15,285,501 and net transfers in were $663,841 resulting in a $1,247,621 increase in net position. General governmental activities accounted for approximately 17% of the total governmental activities expense. Public Safety, Culture and Recreation and Highways and Streets expenses account for 82% of the total, and interest on long-term debt was 1% of total governmental activities expenses. Business-Type Activities. Revenues of business-type activities totaled $10,571,312 for the current fiscal year. These activities generated $11,093,492 in program revenues, and a loss of $949,970 from disposition of assets. Interest earnings and miscellaneous revenues were $427,390. The total expenses for business-type activities were $8,554,410 and net transfers out were $663,841 resulting in an $1,353,061 increase in net position. Business-type activities for the City of Woodburn consist of operations for water and sewer services. FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS As noted previously, the City uses fund accounting to segregate resources that are restricted to a particular activity. Fund balance represents the excess of the assets of the fund over its liabilities. Because the fund financial statements focus on current sources and uses of spendable resources, fund balances relating to each fund may be useful in assessing the government's net resources available. - 7 - 42 Governmental Funds. At the end of the fiscal year, there was $17,362,412 of fund balance of the governmental funds, an increase of $1,188,466 from the prior year. The City's governmental funds include the General Fund, Street and Street SDC funds, and other non-major funds. The General Fund is the chief operating fund of the City. At the end of the fiscal year, a fund balance of $3,577,772 was reported by the General Fund. The fund balance increased by $295,332 from the previous year due to increases in property taxes, franchise fees and intergovernmental revenues, along with a decrease in licenses and permits and charges for services, as well as an increase in finance and police expenditures. The City reports two other major governmental funds, the Street Fund and the Street SDC Fund. The Street Fund had a fund balance of $2,749,837, an increase of $644,244 from the previous year, due mainly to a combination of an increase in charges for services and miscellaneous revenues and an increase in highways and streets maintenance. The Street SDC Fund had a fund balance of $5,354,798, an increase of $37,430 from the previous year, due mainly to a combination of an increase in licenses and permits and miscellaneous revenues and an increase in capital outlay. Proprietary Funds. Net position of the proprietary funds equaled $43,285,426 at the end of the current fiscal year. The net position increase of $1,353,061 was comparable to the increase in the previous year. The City reports three major proprietary funds, the Water Fund, the Sewer Fund and the WWTP Construction Fund. The Water Fund had a net position of $194,710, an increase of $552,857 from previous year, due to reimbursements received from ODOT for water line relocation and a decrease in transfers out. The Sewer Fund had a net position of $20,188,800, an increase in $1,161,564 from previous year, due to the combination of an increase in charges for services, an increase in materials and services and debt service expenditures, and a decrease in transfers out. The WWTP Construction Fund had a net position of $16,487,687, a decrease of $804,202 from the previous year, due to capital outlay expenditures for sewer projects. There was also a prior period adjustment in the WWTP Construction Fund reducing beginning net position by $397,716. GENERAL FUND BUDGETARY HIGHLIGHTS The original budget was amended to increase the beginning fund balance by $400,000, increase aquatics revenues by $8,000, and increase community services admininstration revenues by $20,000. The amendment also increased finance, police, aquatics, community services administration, parks maintenance, non-departmental expenditures and contingency by a total of $322,000, and increased transfers out by $106,000. Actual revenues (budgetary basis), exceeded budgeted amounts by 4%. General Fund expenditures ended $3,257,747 below budgeted amounts primarily due to management efforts to contain costs throughout the fiscal year. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets. The City's investment in capital assets for its governmental and business-type activities equaled $59,558,355 and $60,068,635 respectively, at the end of the current fiscal year, net of accumulated depreciation. This investment includes land, buildings, improvements, equipment, and infrastructure. Additional information about the City's capital assets is presented in the notes to the financial statements. Governmental ActivitiesBusiness-type ActiviitesTotal 201420132014201320142013 Land 22,567,381$ $ 22,567,381$ 1,783,816$ 1,783,816$ 24,351,197$ 24,351,197 Construction in progress 1,287,569 1,465,711 4,319,096 4,566,500 5,606,665 6,032,211 Buildings 16,593,555 16,233,984 62,587,863 62,512,275 79,181,418 78,746,259 Equipment 6,101,779 5,779,416 2,361,602 1,972,578 8,463,381 7,751,994 Infrastructure 38,727,993 38,154,005 28,771,320 28,565,883 67,499,313 66,719,888 Accumulated depreciation (25,719,922) (24,131,862) (37,033,087) (34,670,065) (62,753,009) (58,801,927) Net capital assets$ 59,558,355$ 60,068,635$ 62,790,610$ 64,730,987$ 122,348,965$ 124,799,622 - 8 - 43 Long-term Debt . At the end of the current fiscal year, long-term debt outstanding for the governmental activities totaled $5,921,031, compared to $6,545,243 in the prior year. For the business-type activities, total long-term debt equaled $42,982,747 compared to $45,967,518 in the prior year. The decrease is due to scheduled debt repayments. Additional information about the City's long-term debt outstanding is presented in the notes to the financial statements. Governmental ActivitiesBusiness-type ActivitiesTotal 201420132014201320142013 General obligation bonds$ 4,745,000$ 5,065,000$ -$ 4,745,000-$ $ 5,065,000 URA bonds 275,872 486,381 - - 275,872 486,381 Loans 126,110 155,773 5,194,240 5,559,833 5,320,350 5,715,606 Revenue bonds - 35,126,768- 37,674,655 35,126,768 37,674,655 Bond premium - 2,555,855- 2,624,932 2,555,855 2,624,932 Accrued compensated absences 774,049 838,089 105,884 108,098 879,933 946,187 $ 5,921,031$ 6,545,243$ 42,982,747$ 45,967,518$ 48,903,778$ 52,512,761 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES Due to reductions in the real property valuations, it is expected that future property taxes increases will be less than the three percent allowed annually on existing real property value as compression on certain properties will be realized. Currently, the housing market in Marion County is depressed due to the national housing slump and economic conditions. We continue to expect revenues to be impacted by the current national and local conditions. REQUESTS FOR INFORMATION This financial report is designed to provide the City of Woodburn's citizens, taxpayers, customers, investors and creditors with a general overview of the City's finances and to demonstrate the City's accountability for the money it receives. Questions about this report or requests for additional financial information should be addressed to the City of Woodburn, 270 Montgomery Street, Woodburn, Oregon 97071. - 9 - 44 BASIC FINANCIAL STATEMENTS 45 CITY OF WOODBURN, OREGON STATEMENT OF NET POSITION JUNE 30, 2014 Governmentalusiness-type B ActivitiesActivitiesTotals ASSETS Cash and investments18,797,617$ 23,502,819$ 42,300,436$ Accounts receivable721,573 879,2841,600,857 Property taxes receivable607,690 - 607,690 Assessment liens receivable39,650 - 39,650 Loans receivable784,259 - 784,259 Prepaid expenses740 - 740 Internal balances(51,664) 51,664 - Non-depreciable capital assets23,854,950 6,102,91229,957,862 Other capital assets, net of depreciation35,703,405 56,687,69892,391,103 Total Assets 87,224,37780,458,220 167,682,597 LIABILITIE S Accounts payable896,447142,9451,039,392 Accrued payroll liabilities678,184171,111849,295 Deposits payable -99,98099,980 Interest payable19,062509,761528,823 Noncurrent liabilities: Due within one year: Long-term debt584,4293,425,5224,009,951 Due in more than one year: Long-term debt4,562,55336,895,48641,458,039 Bond premiu 2,555,8552,555,855- m Accrued compensated absenses774,049 105,884879,933 Total Liabilities 43,906,5447,514,724 51,421,268 NET POSITIO N Net investment in capital assets55,195,63219,913,74775,109,379 Restricted for: Debt service317,4361,934,1722,251,608 Culture and recreation193,468 193,468- Community development1,699,776 1,699,776- Construction9,312,35216,803,17026,115,522 Unrestricted 6,224,8324,666,74410,891,576 Total Net Position$72,943,496$43,317,833$116,261,329 The accompanying notes are an integral part of the financial statements. - 10 - 46 CITY OF WOODBURN, OREGON STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2014 Program Revenues OperatingCapital ees, Fines F Grants andGrants and and Charges xpensesfor ServicesContributionsContributions E FUNCTIONS/PROGRAMS Governmental activities: General governmen$ 682,2382,646,552$ -$ -$ t Public safet6,608,391627,4242,1421,265 y Highways and streets2,273,271274,2051,384,277587,964 Culture and recreation3,530,783517,400529,056295,864 Interest on long-term deb -226,504 - - t Total Governmental activities 2,101,26715,285,501 1,915,475 885,093 Business-type activities: Water2,792,8183,166,878- 181,486 Sewer6,711,1627,479,643- 265,485 Total Business-type activities 10,646,5219,503,980 - 446,971 Total Activities$ 12,747,78824,789,481$ 1,915,475$ 1,332,064$ General Revenues: Property taxes Franchise taxes Other taxes Intergovernmental Loss on disposition of assets Unrestricted investment earnings Miscellaneous Total General Revenues Transfers Change in Net Position Net Position - beginning of year, as originally reported Prior period adjustmen t Net Position - beginning of year, as restated Net Position - end of year 47 Net (Expenses) Revenues and Changes in Net Position GovernmentalBusiness-type ActivitiesActivities Totals $ -(1,964,314)$ (1,964,314)$ -(5,977,560) (5,977,560) -(26,825) (26,825) -(2,188,463) (2,188,463) -(226,504) (226,504) -(10,383,666) (10,383,666) 555,546- 555,546 1,033,966- 1,033,966 1,589,512- 1,589,512 1,589,512(10,383,666) (8,794,154) -8,234,481 8,234,481 -1,500,730 1,500,730 -454,363 454,363 -633,530 633,530 -(69,877) (69,877) 125,13996,347 221,486 302,251117,872 420,123 427,39010,967,446 11,394,836 (663,841)663,841 - 1,353,0611,247,621 2,600,682 71,695,87542,256,488113,952,363 (291,716)-(291,716) 71,695,87541,964,772113,660,647 $72,943,496$43,317,833$116,261,329 The accompanying notes are an integral part of the financial statements. - 11 - 48 CITY OF WOODBURN, OREGON BALANCE SHEET - GOVERNMENTAL FUNDS JUNE 30, 2014 pecial RevenueCapital Projects S GeneralStreetStreet SDC ASSETS $ 4,101,442$ 2,687,931$ 5,255,975 Cash and investments 290,428 138,082 - Accounts receivable -523,605 - Property taxes receivable -- - Assessment liens receivable -- 63,576 Loans receivable -740 - Prepaid expenses -- 151,232 Due from other funds Total Assets$ 2,826,0134,916,215$ 5,470,783$ LIABILITIES AND FUND BALANCES iabilities: L $ 52,554132,834$ 52,409$ Accountsaable py 23,622545,703 - Accruedpayroll and payroll liabilities -202,895 - Due to other funds Total Liabilities 76,176881,432 52,409 eferred Inflows: D -457,011 63,576 Unavailable revenue Fund Balance Non-spendable 740 - - Restricted for: Debt service - - - Construction - 2,749,837 5,354,798 Culture and recreation - - - Community developmen -- - t Committed to: Public safet -- - y Capital outla -- - y Public works- - - Planning and building- - - Unassigned3,577,032 - - Total Fund Balance (Deficit) 2,749,8373,577,772 5,354,798 Total Liabilities and Fund Balance$ 2,826,0134,916,215$ 5,470,783$ 49 Other Governmental FundsTotal $ 6,135,570$ 18,180,918 215,657 644,167 84,085 607,690 39,650 39,650 784,259 847,835 - 740 - 151,232 $ 7,259,221$ 20,472,232 $ 591,544$ 829,341 53,028 622,353 - 202,895 644,572 1,654,589 934,6441,455,231 - 740 282,765 282,765 1,106,885 9,211,520 193,468 193,468 1,660,968 1,660,968 1,111 1,111 1,212,106 1,212,106 1,041,261 1,041,261 181,441181,441 3,577,032- 17,362,4125,680,005 $ 20,472,2327,259,221$ The accompanying notes are an integral part of the financial statements. - 12 - 50 CITY OF WOODBURN, OREGON RECONCILIATION OF BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2014 Fund Balances$ 17,362,412 The Statement of Net Position reports receivables at their net realizable value. However, receivables not available to pay for current period expenditures are reported as unavailable in governmental funds. 1,455,231 Capital assets are not financial resources in governmental funds, but are reported in the Statement of Net Position at their net depreciable value. Cost 85,278,276 Accumulated depreciation (25,719,922) All liabilities are reported in the Statement of Net Position. However, if they are not due and payable in the current period, they are not recorded in governmental funds. Accrued compensated absences (674,581) Accrued interest (19,062) Long-term debt (5,146,982) Internal service funds are proprietary-type funds and not reported with governmental funds. However, because internal service funds primarily benefit governmental activities, their assets, liabilities and net position are reported along with governmental activities in the Statement of Net Position. 408,124 Net Position of Governmental Activities$ 72,943,496 The accompanying notes are an integral part of the financial statements. - 13 - 51 CITY OF WOODBURN, OREGON STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 Special RevenueCapital Projects General FundStreetStreet SDC REVENUE S Taxes and assessments $ 101,7617,521,463$ -$ Licenses and permits 3021,741,948 521,933 Charges for services 360,046500,473 - Intergovernmental 1,384,277790,151 - Fines and forfeitures -571,831 - Miscellaneous 124,80698,477 169,268 Total Revenues 1,971,19211,224,343 691,201 XPENDITURE ES General governmen -1,133,889 - t -6,569,367 - Public safet y Highways and streets- 1,003,547 - -2,887,681 - Culture and recreatio n Debt Service Principal- - 29,663 Interest- - 7,857 -- 619,986 Capital outla y Tota Expenitures 1,003,54710,590,937 657,506 ld REVENUES OVER (UNDER) EXPENDITURES 967,645633,406 33,695 OTHER FINANCING SOURCES (USES) Transfers i 220,000205,920 3,735 n Transfers ou (543,421)(543,994) - t Total Other Financing Sources (Uses) (323,421)(338,074) 3,735 NET CHANGE IN FUND BALANCE 644,224295,332 37,430 FUND BALANCE, beginning of yea 2,105,6133,282,440 5,317,368 r FUND BALANCE, end of year $ 2,749,8373,577,772$ 5,354,798$ 52 Other Governmental FundsTotal 1,163,140$8,786,364 690,7972,954,980 40,678901,197 500,2702,674,698 -571,831 148,231540,782 2,543,11616,429,852 507,6041,641,493 -6,569,367 -1,003,547 957,7493,845,430 530,509560,172 221,004228,861 759,5301,379,516 , 15,228,3862,976,396 1,201,466(433,280) 1,001,3301,430,985 (1,443,985)(356,570) (13,000)644,760 1,188,466211,480 5,468,52516,173,946 $ 17,362,4125,680,005$ The accompanying notes are an integral part of the financial statements. - 14 - 53 CITY OF WOODBURN, OREGON RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2014 Net Change in Fund Balances - Total Governmental Funds$1,188,466 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds defer revenues that do not provide current financial resources. However, the Statement of Activities recognizes such revenues at their net realizable value when earned, regardless of when received. Property tax receivables(86,712) Decreases in other loans receivable170,246 Governmental funds do not report expenditures for unpaid compensated absences, unpaid payroll, interest expense or arbitrag since they do not require the use of current financial resources. However, the Statement of Activities reports such expenses when incurred, regardless of when settlement ultimately occurs. Accrued compensated absences57,064 Accrued interest payable 2,357 Capital outlays are reported as expenditures in governmental funds. However, the Statement of Activities allocates the cost of capital outlay over their estimated useful lives as depreciation expense. Capital outlay expenditures capitalized1,147,654 Depreciation(1,588,060) Net book value of assets disposed(69,877) Proceeds from the issuance of long-term debt provide current financial resources to governmental funds and are reported as revenues. In the same way, repayments of long-term debt use current financial resources and are reported as expenditures in governmental funds. However, neither the receipt of debt proceeds nor the payment of debt principal affect the Statement of Activities, but are reported as increases and decreases in noncurrent liabilities in the Statement of Net Position. Debt principal paid 560,172 Net loss of internal service funds(133,689) Change in Net Position of Governmental Activities$1,247,621 The accompanying notes are an integral part of the financial statements. - 15 - 54 CITY OF WOODBURN, OREGON STATEMENT OF FUND NET POSITION - PROPRIETARY FUNDS JUNE 30, 2014 WWTP WaterSewerConstruction SSETS A Current Assets Cas annvestments1,772,2934,679,79212,672,274 hdi$$$ Accounts recevae187,814590,034 2,062 ibl Due rom oteruns- - - fhfd Tota Current Assets 5,269,8261,960,107 12,674,336 l Noncurrent Assets Noneprecae capta assets158,4441,625,372 3,029,375 diblil Oter capta assets, net oeprecaton9,808,30645,515,272836,976 hilfdii Tota Noncurrent Assets 47,140,6449,966,750 3,866,351 l Tota Assets 52,410,47011,926,857 16,540,687 l IABILITIES L Current Liabilities Accounts payae33,94156,709 - bl Accrue payroates71,79999,312 - dlllibilii Deposts payae99,980- - ibl Accruenterest payae269,914239,847 - dibl Due to oteruns49,78449,784 53,000 hfd Current porton oong-term ates ifllibilii Long-term e 2,755,000670,522 - dbt Tota Current Liaiities 3,200,6521,195,940 53,000 lbl Noncurrent Liabilities Long-term e 26,406,40410,489,082 - dbt Bon premums-2,555,855 - di Accrue compensate asences47,12558,759 - ddb Tota Noncurrent Liaiities 29,021,01810,536,207 - lbl Tota Liaiities 32,221,67011,732,147 53,000 lbl NET POSITION: Netnvestment n capta assets1,192,85415,423,385 3,866,351 iiil() Restrcteor: idf Det servce754,0001,180,172 - bi Constructo -- 12,173,399 in Unrestrcte 3,585,243633,564 447,937 id Tota Net Position194,71020,188,80016,487,687 l$$$ 55 overnmenta Gl Activities Other Business- type FundsTotalInternal Service 4,378,46023,502,819616,699 $$$ 99,374879,284 13,831 204,232204,232 - 24,586,3354,682,066 630,530 1,289,7216,102,912 - 527,14456,687,698 - 62,790,6101,816,865 - 87,376,9456,498,931 630,530 52,295142,945 67,106 171,111- 55,831 99,980- - 509,761- - 152,568- - 3,425,522- - 4,501,88752,295 122,937 36,895,486- - 2,555,855- - 105,884- 99,469 39,557,225- 99,469 44,059,11252,295 222,406 19,913,7471,816,865 - 1,934,172- - 16,803,1704,629,771 - 4,666,744- 408,124 6,446,63643,317,833408,124 $$$ The accompanying notes are an integral part of the financial statements. - 16 - 56 CITY OF WOODBURN, OREGON STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2014 WaterSewer OPERATING REVENUES Charges for services$3,166,879$ 7,479,643 Intergovernmental- - Miscellaneous303,593 3,065 Total Operating Revenues3,470,472 7,482,708 OPERATING EXPENSES Personal services1,278,981 1,818,362 Materials and services584,123 922,203 Depreciation411,384 1,891,270 Total Operating Expenses2,274,488 4,631,835 OPERATING INCOME (LOSS) 1,195,984 2,850,873 NONOPERATING REVENUES (EXPENSES) Investment revenue7,498 23,692 Amortization of bond premiums- 69,077 Interest expense(487,046) (1,112,698) Total Nonoperating Revenues (Expenses)(479,548) (1,019,929) NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS 716,436 1,830,944 Capital contributions- - Transfers in- - Transfers ou 163,579 503,997 t()() Gain (loss) on disposition of assets - 165,383 () CHANGE IN NET POSITIO 1,161,564552,857 N NET POSITION (Deficit), beginning of year as originally reported 19,027,236(358,147) rior period adjustmen -- Pt NET POSITION, beginning of year as restated 19,027,236(358,147) NET POSITION, end of yea $ 20,188,800194,710$ r 57 Governmental Activities terusness- WWTPOhBi Constructiontype FundsTotalInternal Service $ -372$ 10,646,894$ 2,408,830$ -- - 19,203 -- 306,658 29,431 -372 10,953,552 2,457,464 -- 3,097,343 1,240,199 2161,530,96924,427 1,538,305 31,0682,395,43161,709 - 31,28486,136 7,023,743 2,778,504 (31,284)(85,764) 3,929,809 (321,040) 23,421124,76770,156 5,351 -- 69,077 - -- (1,599,744) - 23,42170,156 (1,405,900) 5,351 (7,863)(15,608) 2,523,909 (315,689) 446,971446,971- - 3,7343,734- 187,000 (667,576)- (5,000) - (953,977)- - 788,594 () 442,842(804,202) 1,353,061 (133,689) 17,689,6055,897,79442,256,488 541,813 106,000(397,716) (291,716) - 17,291,8896,003,79441,964,772541,813 $16,487,687$6,446,636$43,317,833$408,124 The accompanying notes are an integral part of the financial statements. - 17 - 58 CITY OF WOODBURN, OREGON STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2014 WaterSewer CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers$3,474,618$ 7,271,651 Paid to suppliers (579,042) (903,971) Paid to employees(1,199,617) (1,728,829) Net Cash Provided by (Used in) Operating Activities1,695,959 4,638,851 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in - - Transfers out (175,675) (516,093) Net Cash Provided by (Used in) Non-Capita l Financing Activities (516,093)(175,675) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIE S Acquisition of capital assets - - Principal paid on loans and bonds payable (648,318) (2,265,153) System development revenue - - Interest paid (511,318) (1,044,559) et Cash Provided by (Used in) Capital and Related N inancing Activities (3,309,712)(1,159,636) F CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments7,498 23,692 Increase (Decrease) in Cash and Investments 836,738368,146 CASH AND INVESTMENTS, Beginning of year 3,843,0541,404,147 CASH AND INVESTMENTS, End of year$ 4,679,7921,772,293$ 59 Governmental Activities Other WWTPBusiness-Type ConstructionFundsInternal Service Totals $ 5251,186$ 10,747,980$ 2,443,633$ -(62,831) (1,545,844) (1,509,829) -- (2,928,446) (1,191,345) 525(61,645) 6,273,690 (257,541) 39,220- 39,220 187,000 -- (691,768) (5,000) 39,220- (652,548) 182,000 (430,586)(1,226,039) (1,656,625) - -- (2,913,471) - 396,351- 396,351 - -- (1,555,877) - (34,235)(1,226,039) (5,729,622) - 70,15623,421124,767 5,351 (1,217,528)28,93116,287 (70,190) 13,889,8024,349,52923,486,532 686,889 $12,672,274$4,378,460$23,502,819$ 616,699 The accompanying notes are an integral part of the financial statements. - 18 - 60 CITY OF WOODBURN, OREGON STATEMENT OF CASH FLOWS (Continued) YEAR ENDED JUNE 30, 2014 WaterSewer RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss)$1,195,984$ 2,850,873 Depreciation 411,384 1,891,270 Change in assets and liabilities: Accounts receivable 4,901 (211,057) Accounts payable and accrued liabilities 76,880 18,232 Customer deposits (755) 99,312 Compensated absences payable 7,565 (9,779) Net Cash Provided by (Used in) Operating Activities$1,695,959$ 4,638,851 61 Governmental Activities Other WWTPBusiness-Type ConstructionFundsInternal Service Totals $ (31,284)(85,764)$ 3,929,809$ (321,040)$ 61,70931,0682,395,431 - 814525(204,817) (13,831) (38,404)21656,924 84,307 --98,557 - --(2,214) (6,977) $(61,645)$525$6,273,690$ (257,541) The accompanying notes are an integral part of the financial statements. - 19 - 62 CITY OF WOODBURN, OREGON STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2014 Pension Trust ASSETS $ 145,345 Cash and investments IABILITIES L - NET POSITIO N Held in trust for benefits and other purposes $ 145,345 The accompanying notes are an integral part of the financial statements. - 20 - 63 CITY OF WOODBURN, OREGON STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED JUNE 30, 2014 ension P Trust ADDITIONS $ 170,000 Contributions 4,890 Earnings 174,890 Total additions EDUCTION DS 111,782 CHANGE IN NET POSITIO N 63,108 NET POSITION, beginning of year 82,237 NET POSITION, end of year $ 145,345 The accompanying notes are an integral part of the financial statements. - 21 - 64 NOTES TO BASIC FINANCIAL STATEMENTS 65 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of Woodburn, Oregon (the City) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards. The Financial Reporting Entity The City of Woodburn, Oregon is governed by an elected mayor and six council members who comprise the City Council. The City Council exercises supervisory responsibilities over the City operations, but day-to-day management control is the responsibility of a city administrator. All significant activities and organizations for which the City is financially accountable are included in the financial statements for the year ended June 30, 2014. There are certain governmental agencies and various service districts which provide services within the City. These agencies have independently elected governing boards and the City is not financially accountable for these organizations. Therefore, financial information for these agencies is not included in the accompanying basic financial statements. As defined by accounting principles generally accepted in the United States of America, the financial reporting entity consists of the primary government, as well as its component units, which are legally separate organizations for which the elected officials of the primary government are financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's board, and either a) the ability to impose will by the primary government, or b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government. The City of Woodburn's financial statements include the Woodburn Urban Renewal Agency as a blended component unit. The City Council and Board of Directors of Woodburn Urban Renewal Agency are composed of the same individuals. The separately issued financial statements of the Woodburn Urban Renewal Agency may be obtained from the City, 270 Montgomery Street, Woodburn, Oregon 97071. Basic Financial Statements Basic financial statements are presented at both the government-wide and fund financial level. Both levels of statements categorize primary activities as either governmental or business-type. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Government-wide financial statements display information about the reporting government as a whole. For the most part, the effect of interfund activity has been removed from these statements. These statements focus on the sustainability of the City as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. These aggregated statements consist of the Statement of Net Position and the Statement of Activities. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment, and (2) 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. - 22 - 66 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation (Continued) Fund financial statements display information at the individual fund level. Each fund is considered to be a separate accounting entity. Funds are classified and summarized as governmental, enterprise or fiduciary. Currently, the City has general, special revenue, internal service, capital projects, debt service and enterprise type funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Nonmajor funds are consolidated into a single column within each fund type in the financial section of the basic financial statements and are detailed in the other supplementary information. The government-wide and proprietary fund financial statements are accounted for using an economic resources measurement focus, whereby all assets and liabilities are included in the statement of net position and the statement of fund net position. The increases and decreases in those net position are presented in the government-wide statement of activities and in the proprietary fund statement of revenues, expenses and changes in fund net position. These funds use the accrual basis of accounting whereby revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Interfund activity consists of transfers, services provided and/or used, reimbursements, advances and loans. As a general rule, the effect of interfund activity has been eliminated from the governmental-wide financial statements. Exceptions to this general rule include interfund services provided and/or used. Interfund services provided and/or used are accounted for as revenues and expenses since the elimination of such revenues and expenses would distort the direct costs and program revenues reported for the various functions. Amounts reported as program revenues in the statement of activities include (1) fines, fees and charges to customers or applicants for goods, services or privileges provided, (2) operating grants and contributions, and (3) 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: (a) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. - 23 - 67 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fund Balance (Continued) Fund balance is reported as committed when the City Council takes formal action that places specific constraints on how the resources may be used. The City Council can modify or rescind the commitment at any time through taking a similar formal action. Resources that are constrained by the City’s intent to use them for a specific purpose, but are neither restricted nor committed, are reported as assigned fund balance. Intent is expressed when the City Council approves which resources should be “reserved” during the adoption of the annual budget. The City’s Finance Director uses that information to determine whether those resources should be classified as assigned or unassigned for presentation in the City’s Annual Financial Report. Unassigned fund balance is the residual classification for the General Fund. This classification represents fund balance that has not been restricted, committed, or assigned within the General Fund. This classification is also used to report any negative fund balance amounts in other governmental funds. The City Council has approved a policy to maintain an ending fund balance in the general fund, in order to provide stable services and employment to offset cyclical variations in revenues and expenditures. The targeted floor for the ending balance will be at ten percent of annual operating revenue, as shown as a minimum fund balance in the General Fund. The City Council is the highest level decision making authority and may take formal action by vote or resolution to establish, modify, or rescind a fund balance commitment. Definitions of Governmental Fund Types The General Fund is used to account for all financial resources not accounted for in another fund. Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. The term “proceeds of specific revenues sources” means that the revenue sources for the fund must be from restricted or committed sources, specifically that a substantial portion of the revenue must be from these sources and be expended in accordance with those requirements. Capital Projects Funds are utilized to account for financial resources to be used for the acquisition or construction of capital equipment and facilities. Debt Service Funds are utilized to account for the accumulation of resources for, and the payment of, long-term debt principal and interest. Governmental Fund Financial Statements Governmental funds use the modified accrual basis of accounting whereby revenues are recorded only when susceptible to accrual (both measurable and available). “Measurable” means that the amount of the transaction can be determined. “Available” is defined as being collectible within the current period or soon enough thereafter (30 days) to be used to liquidate liabilities of the current period. Expenditures other than interest on noncurrent obligations, are recorded when the fund liability is incurred. - 24 - 68 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Governmental Fund Financial Statements (Continued) Real and personal property taxes are levied as of July 1 for each fiscal year on values assessed as of January 1. Property taxes are an enforceable lien on both real and personal property as of July 1 and are due and payable in three installments on November 15, February 15 and May 15. All property taxes are billed and collected by Marion County and remitted to the City. In the governmental fund financial statements, property taxes are reflected as revenues in the fiscal period for which they were levied, provided they are due, or past due and receivable within the current period, and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period (30 days). Otherwise, they are reported as deferred revenues. Intergovernmental revenues are recognized as revenues when all eligibility requirements are met. There are, however, essentially two types of intergovernmental revenues. In one, monies must be expended on the specific purpose or project before any amounts will be paid to the City; therefore, all eligibility requirements are determined to be met when the underlying expenditures are recorded. In the other, monies are virtually unrestricted as to the purpose of the expenditure and are usually revocable only for failure to comply with prescribed requirements; therefore, all eligibility requirements are determined to be met at the time of receipt, or earlier, if the susceptible accrual criteria are met. Licenses and permits, charges for services, fines and forfeits and miscellaneous revenues (except investment earnings) are recorded as revenues when received in cash because they are generally not measurable until actually received. Investment earnings are recorded as earned since they are measurable and available. When both restricted and unrestricted resources are available for use, it is the City's practice to use restricted resources first, then unrestricted resources as they are needed. The reporting model sets forth minimum criteria (percentage of the assets, liabilities, receipts or disbursements of either fund category or the government and enterprise combined) for the determination of major funds. Nonmajor funds are combined in a column in the fund financial statements and detailed in the combining section. The City reports the following major governmental funds: General Fund Street Fund Street SDC Fund The City reports the following major proprietary funds: Water Fund Sewer Fund WWTP Construction Fund Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reporting amounts of certain assets, liabilities, revenues and expenses as of and for the year ended June 30, 2014. Actual results may differ from such estimates. - 25 - 69 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Cash and Investments Investments, included in cash and investments, are carried at cost which approximates fair value. For purposes of the statement of cash flows, the proprietary funds consider cash and cash equivalents to include the cash and investment common pool. These amounts have the general characteristics of demand deposit accounts in that the proprietary funds may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty. Receivables and Deferred Revenues Receivables for state, county and local shared revenues, included in accounts receivable, are recorded as revenue in the governmental funds as earned. Receivables of the enterprise funds are recorded as revenue as earned. Property taxes receivable for the governmental fund types, which have been collected within thirty days subsequent to year end, are considered measurable and available and are recognized as revenues. All other property taxes are considered unavailable and, accordingly, have not been recorded as revenue. Property taxes receivable by the City represent the City's allocated share of delinquent property taxes and other amounts to be collected from property owners within Marion County, Oregon. Assessment liens in the governmental fund types are recognized as receivables at the time property owners are assessed for property improvements. All assessments receivable are conisdered unavailable and, accordingly, have not been recorded as revenue. Revolving loans in the government fund types are recognized as receivables at the time housing rehabilitation loans are made. All loans receivable are conisdered unavailable and, accordingly, have not been recorded as revenue. Capital Assets Capital assets are stated at cost or estimated historical cost. Donated assets are recorded at fair market value at date of donation. Estimated fair market value of donated assets is determined based on engineering estimates of current cost or price indexed cost. Capital assets include land, right-of-way (included with land), buildings, improvements, equipment, infrastructure and other tangible and intangible assets costing over $5,000 used in operations that have initial useful lives extending beyond a single reporting period. Infrastructure are those capital assets that are stationary in nature and can be preserved for a significantly greater number of years than most other capital assets. Infrastructure reported in governmental activities consists of roads, bridges, sidewalks and traffic and lighting systems. Infrastructure reported in business-type activities consists of water and wastewater collection systems. All capital assets, except for infrastructure in governmental activities prior to July 1, 1980, have been capitalized in the government-wide and proprietary fund financial statements. In accordance with the current financial resources measurement focus, capital assets are not capitalized in the governmental fund financial statements. All purchased capital assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Historical cost is measured by the cash or cash equivalent price of obtaining an asset, including ancillary charges necessary to place the asset into its intended location and condition - 26 - 70 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Capital Assets (Continued) for use. Donated capital assets are reported at their estimated fair value at the time of acquisition plus ancillary charges, if any. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are capitalized. Amounts expended for maintenance and repairs are charged to expenditures/expenses in the appropriate funds as incurred and are not capitalized. Capital assets are depreciated unless they are inexhaustible in nature (e.g., land and right-of-ways). Depreciation is an accounting process to allocate the cost of capital assets to expense in a systematic and rational manner to those periods expected to benefit from the use of capital assets. Depreciation is not intended to represent an estimate in the decline of fair market value, nor are capital assets, net of accumulated depreciation, intended to represent an estimate of the current condition of the assets, or the maintenance requirements needed to maintain the assets at their current level of condition. Depreciation is computed over the estimated useful lives of the capital assets. All estimates of useful lives are based on actual experience by City departments with identical or similar capital assets. Depreciation is calculated on the straight-line basis, except for infrastructure and improvements other than buildings reported in the governmental activities column of the government-wide financial statements, which are calculated using a composite depreciation method. The estimated useful lives of the various categories of assets are as follows: Buildings and improvements 40 years Water and Sewer Systems 20 - 50 years Infrastructure 20 - 50 years Equipment 10 - 20 years Upon disposal of capital assets, cost and accumulated depreciation are removed from the accounts and, if appropriate, a gain or loss on the disposal is recognized. Long-Term Debt Long-term debt directly related and expected to be paid from the enterprise funds is recorded in these funds. All other unmatured long-term debt is recorded on the statement of net position. Repayment of general bonded debt will be made from debt service funds. Bond premiums will be amortized over the life of the related debt. Payment of compensated absences will be made primarily from the General Fund, Street Development Fund, Water Fund and Sewer Fund. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expenditure) until then. The City has no items that qualify for reporting in this category. - 27 - 71 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Deferred Outflows/Inflows of Resources (Continued) In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows, represents an acquisition that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City only has one item that qualifies for reporting in this category. It arises only under a modified accrual basis of accounting. Accordingly, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes and loans receivable. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. Accrued Vacation Pay Accumulated vested vacation pay is accrued in the proprietary funds as it is earned by employees. In governmental fund types, the amounts, if any, expected to be liquidated with expendable available resources are accrued as liabilities of the funds and the amount payable from future resources is recorded on the statement of net position. The accrued payables in the Statement of Net Position are recorded as long-term in that the amount is not expected to materially change. Sick pay, which does not vest, is recorded in all funds when leave is taken. Budget and Budgetary Accounting A budget is prepared for each fund in accordance with the modified accrual basis of accounting for all funds. For budgetary purposes, interfund loan transactions are reported as interfund transfers. Appropriations are made at the department level for the General Fund and the object level for all other funds. Expenditures may not legally exceed appropriations. Appropriations lapse at the end of each fiscal year. Budget amounts include original approved amounts and all subsequent appropriation transfers approved by the City Council. After budget approval, the City Council may approve supplemental appropriations if an occurrence, condition, or need exists which had not been ascertained at the time the budget was adopted. Management may not amend the budget. A supplemental budget requires hearings before the public, publications in newspapers and approval by the City Council. ORGANIZATION AND OPERATION The City's financial operations are accounted for in the following funds: Governmental Fund Types General Fund The General Fund accounts for activities of the City which are not accounted for in any other fund. Principal sources of revenue are property taxes, franchise fees and state and county shared revenues. Primary expenditures are for police and fire protection, recreation and general government. Special Revenue Funds Street Fund - This fund is used to account for the City’s street operations. The fund’s major source of revenue is highway gas tax received from the State of Oregon. - 28 - 72 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 ORGANIZATION AND OPERATION (Continued) Governmental Fund Types (Continued) Transit Fund – This fund accounts for amounts held to be used for weekdaytransportation services. Building Fund - This fund accounts for building permit revenue and associated operations. Search and Seizure Fund - This fund accounts for the seizure of private properties that are the product of illegal activity, and for the expenditure of the proceeds by the City for illegal drug activity investigations and subsequent arrests. Housing Rehabilitation Fund - This fund accounts for the City’s CDBG grant program and provides low income housing and small business loans. RSVP Fund - This fund accounts for the federal grant for the Retired Seniors Volunteer Program. This fund was closed during 2014. Cable Franchise Fund - This fund is used to account for the City’s passthrough of local cable franchise fees to the local cable access program (WCAT). This fund was closed during the year. Library Endowment Fund - This fund accounts for funds held to be used for library improvement projects. Museum Endowment Fund - This fund accounts for amounts held for museum activities. Lavelle Black Trust Fund – This fund accounts for the donations received to continue the police dog program. Urban Renewal Fund – This fund accounts for transactions related to urban renewal, including debt service on the URA loan. Property taxes are the primary source of revenue. Capital Projects Funds Street SDC Fund - This fund accounts for the collection and spending of street SDC’s. General Construction Fund - This fund is used to account for transfers from general services funds used for general services construction projects. Special Assessment Fund - This fund accounts for the repayment of local improvement district (LID) assessments. The money is used for construction of LID projects. Street/Storm Capital Improvement Fund - This fund accounts for transfers from the Storm and Street funds. The money is used for street and storm related capital projects. Parks SDC Fund - This fund is used to account for the collection and spending of park SDC’s. Storm SDC Fund - This fund accounts for the collection and spending of storm SDC’s. Equipment Replacement Fund - This fund accounts for transfers from other funds set aside for future equipment purchases. - 29 - 73 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 ORGANIZATION AND OPERATION (Continued) Governmental Fund Types (Continued) Debt Service Fund GO Debt Fund - This fund accounts for debt service on the City’s 2005 GO bond. Property taxes are the major source of revenue. Proprietary Fund Types Enterprise Funds The City has six enterprise funds. Three funds are related to water, and three are related to sewer. The specific funds and their purposes are as follows. Water Fund - This fund accounts for the City’s water system operation. Customer charges are the primary source of revenue. Sewer Fund - This fund accounts for the operation of the City's sewer system. Customer charges are the primary revenue source. WWTP Construction Fund - This fund was used to account for the City’s sewer treatment plant upgrade. The major source of revenue is debt proceeds. Water SDC Fund - This fund accounts for the collection and spending of water SDC’s. Sewer SDC Fund - This fund accounts for the collection and spending of sewer SDC’s. WWD Construction Fund - This fund accounts for water system capital improvement projects and the retirement of associated debt. Internal Service Funds The City has three internal service funds which provide services to other City departments. Internal charges are the primary revenue source for all funds. Expenditures are for the purposes as described below. Information Services Fund - This fund accounts for the maintenance and replacement of the City’s network and technology services. Insurance Fund – This fund accounts for the City’s insurance coverage. Technical & Environmental Services Fund - This fund accounts for administrative, engineering and fleet services provided. Fiduciary Fund The City has one fiduciary fund. The City's pension trust fund holds assets to provide retirement benefits to certain City employees. - 30 - 74 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 CASH AND INVESTMENTS The City maintains a cash and investment pool that is available for use by all funds. Each fund type's portion of this pool is displayed on the Statement of Net Position as part of “cash and investments.” CarryingFair ValueValue Cash Deposits with financial institutions$720,340 $720,340 Cash on hand2,310 2,310 Investments Local Government Investment Pool41,577,786 41,577,786 Assets held for pension benefits145,345 145,345 $42,445,780 $42,445,780 Cash is reported in the financial statements as follows: Governmental funds$18,180,918 Internal Service funds (included in governmental activities)616,699 Enterprise funds23,502,819 Fiduciary funds145,345 $42,445,780 Deposits The book balance of the City’s bank deposits (checking accounts) was $720,340 and the bank balance was $774,596 at year end. The difference is due to transactions in process. Bank deposits are secured to legal limits by federal deposit insurance. The remaining amount is secured in accordance with ORS 295 under a collateral program administered by the Oregon State Treasurer. Investments The State Treasurer of the State of Oregon maintains the Oregon Short-term Fund, of which the Local Government Investment Pool is part. Participation by local governments is voluntary. The State of Oregon investment policies are governed by statute and the Oregon Investment Council. In accordance with Oregon Statutes, the investment funds are invested as a prudent investor would do, exercising reasonable care, skill and caution. The Oregon Short-term Fund is the LGIP for local governments and was established by the State Treasurer. It was created to meet the financial and administrative responsibilities of federal arbitrage regulations. The investments are regulated by the Oregon Short Term Fund Board and approved by the Oregon Investment Council (ORS 294.805 to 294.895). At June 30, 2014, the fair value of the position in the Oregon State Treasurer’s Short-term Investment Pool was approximately equal to the value of the pool shares. The investment in the Oregon Short-term Fund is not subject to classification. Separate financial statements for the Oregon Short-term Fund are available from the Oregon State Treasurer. - 31 - 75 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 CASH AND INVESTMENTS (Continued) Interest Rate Risk In accordance with its investment policy, the City manages its exposure to declines in fair value of its investments by limiting the weighted average maturity of its investments. Custodial Credit Risk - Deposits This is the risk that in the event of a bank failure, the City’s deposits may not be returned. The Federal Depository Insurance Corporation (FDIC) provides unlimited insurance for the City’s deposits with financial institutions for the aggregate of all demand deposit and money market accounts and up to $250,000 for the aggregate of all savings and time deposit accounts at each institution. Deposits in excess of FDIC coverage are with institutions participating in the Oregon Public Funds Collateralization Program (PFCP). The PFCP is a shared liability structure for participating bank depositories, better protecting public funds though still not guaranteeing that all funds are 100% protected. Barring any exceptions, a bank depository is required to pledge collateral valued at least 10% of their quarter-end public fund deposits if they are well capitalized, 25% of their quarter-end public fund deposits if they are adequately capitalized or 110% of their quarter-end public fund deposits if they are undercapitalized or assigned to pledge 110% by the Office of the State Treasurer. In the event of a bank failure, the entire pool of collateral pledged by all qualified Oregon public funds bank depositories is available to repay deposits of public funds of government entities. As of June 30, 2014, $524,596 of the City’s bank balances were exposed to custodial credit risk as part of the Public Funds Collateralization Program. Custodial Risk - Investments For an investment, this is the risk that, in the event of a failure of the counterparty, the City will not be able to recover the value of its investments or collateralized securities that are in the possession of an outside party. The City's investment policy limits the types of investments that may be held and does not allow securities to be held by the counterparty. The LGIP is administered by the Oregon State Treasury with the advice of other state agencies and is not registered with the U.S. Securities and Exchange Council. The LGIP is an open-ended no-load diversified portfolio offered to any agency, political subdivision, or public corporation of the state that by law is made the custodian of, or has control of any fund. The LGIP is commingled with the State's short-term funds. In seeking to best serve local governments of Oregon, the Oregon Legislature established the Oregon Short Term Fund Board, which has established diversification percentages and specifies the types and maturities of the investments. The purpose of the Board is to advise the Oregon State Treasury in the management and investment of the LGIP. These investments within the LGIP must be invested and managed as a prudent investor would, exercising reasonable care, skill and caution. Professional standards indicate that the investments in external investment pools are not subject to custodial risk because they are not evidenced by securities that exist in physical or book entry form. Nevertheless, management does not believe that there is any substantial custodial risk related to investments in the LGIP. - 32 - 76 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 CAPITAL ASSETS The summary of capital assets for the business-type activities for the year ended June 30, 2014 is as follows: alancesalances BB uly 1,une 30, JJ 2013AdditionsetirementsAdjustments2014 R ondepreciable assets N Land (nondepreciable)1,783,816$ -$ -$ -$ 1,783,816 Construction in progress4,566,498 782,163 (1,029,565) - 4,319,096 Subtotal, nondepreciable assets6,350,314 782,163 (1,029,565) - 6,102,912 Depreciable assets Buildings62,512,275 75,588 - - 62,587,863 Water and sewer systems28,565,883 205,437 - - 28,771,320 Equipment1,972,578 389,024 - - 2,361,602 utota,eprecae assets93,050,736 670,049 - 93,720,785- Sbldibl Accumulated depreciation Buildings and improvements(22,884,128)(1,707,006) - (24,591,134)- Water and sewer systems(10,399,206) (575,425) - (10,974,631)- Equipment(1,386,729) (113,000) - 32,407(1,467,322) Total accumulated depreciation(34,670,063)(2,395,431) - 32,407(37,033,087) Total depreciable assets, ne (1,725,382)58,380,673 - 32,407 56,687,698 t Net capital assets64,730,987$ (943,219)$ (1,029,565)$ 32,407$ 62,790,610$ Depreciation expense was allocated as follows: Water funds$442,453 Sewer funds1,952,978 $2,395,431 - 33 - 77 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 CAPITAL ASSETS (Continued) The changes in the capital assets for governmental activities for the year ended June 30, 2014 are as follows: BalancesBalances ul 1,une 30, JyJ 2013AdditionsRetirements2014 Nondepreciable assets Land (nondepreciable)22,567,381$ -$ -$ 22,567,381$ Construction in progress 1,465,711 723,976 (902,118) 1,287,569 Subtotal, nondepreciable assets24,033,092 723,976 (902,118) 23,854,950 Depreciable assets Buildings16,233,984 359,571 16,593,555- Equipmen 5,779,416 322,363 6,101,779- t Infrastructure38,154,005 573,988 38,727,993- Subtotal, depreciable assets60,167,405 1,255,922 61,423,327- Accumulated depreciation Buildings(5,260,905) (466,102) (5,727,007)- Equipmen (347,397)(4,498,052) - (4,845,449) t Infrastructure(14,372,905) (774,561) (15,147,466)- Total accumulated depreciation(24,131,862) (1,588,060) (25,719,922)- Total depreciable assets, net36,035,543 (332,138) 35,703,405- Net capital assets$60,068,635$ 391,838$ (902,118)$ 59,558,355 Depreciation expense was allocated as follows: General government$429,412 Public safety230,605 Highways and streets868,561 Culture and recreation59,482 $1,588,060 - 34 - 78 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 LONG-TERM DEBT Long-term debt transactions for the year were as follows: OutstandingOutstandingDue July 1,RedeemedJune 30,Within 2013IssuedDuring Year2014One Year Governmental Activities: Series 2005 general obligation bonds due in annual installments with principal and interest varying annually5,$065,000$ (320,000)-$$4,745,000$335,000 1999 Oregon EDD Loan due in annual installments of $38,319 with interest at 5.01%. 155,773 (29,663)-126,11029,895 2005 URA bonds due in quarterly installments of $56,933 with interest at 4.22%. 486,381 (210,509)-275,872219,534 5,707,154 (560,172)-5,146,982584,429 Accrued compensated absences 838,089570,754(634,794)774,049- $ 6,545,243$570,754$(1,194,966)$5,921,031$584,429 OutstandingMatured/OutstandingDue July 1,RedeemedJune 30,Within 2013IssuedDuring YearAdjustments2014One Year Business-type Activities: Series 2003 Water loan paid over 25 years; interest at various rates$6,248,098$ (282,734)-$ $ 5,965,364-$$289,548 2005 Oregon EDD due in annual installments including interest at 4.21%2,779,912 (182,792)- 2,597,120-190,487 2005 SDWR due in annual installments including interest at 4.21%2,779,921 (182,792)- 2,597,120(9)190,487 2011 Sewer Revenue Bonds paid over 20 years; interest at various rates31,426,557 (2,265,153)- 29,161,404-2,755,000 43,234,488 (2,913,471)- 40,321,008(9)3,425,522 2011 Sewer Revenue Bond premium2,624,932 (69,077)- 2,555,855-(69,077) Accrued compensated absences108,09896,639 (98,853) 105,884-- $ 96,63945,967,518$$(3,081,401)$ 42,982,747(9)$ 3,356,445$ - 35 - 79 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 LONG-TERM DEBT (Continued) Future maturities of long-term debt are as follows: Governmental Activities Fiscal Year Ending June 30,PrincipalInterestTotal 2015584,429$ 206,832$ 791,261$ 2016436,479 185,340 621,819 2017400,399 169,937 570,336 2018420,675 153,956 574,631 2019405,000 136,736 541,736 2020-242,355,000 420,048 2,775,048 2025545,000 23,163 568,163 $ 1,296,0125,146,982$ 6,442,994$ Business-type Activities Fiscal Year Ending June 30,PrincipalInterestTotal 20153,425,522$ 1,457,889$ 4,883,411$ 20163,177,229 1,358,931 4,536,160 20173,330,966 1,358,943 4,689,909 20183,921,935 1,123,066 5,045,001 20194,407,430 996,283 5,403,713 2020-2418,602,318 4,764,920 23,367,238 2025-293,335,608 439,242 3,774,850 2030-31120,000 7,125 127,125 $ 11,506,39940,321,008$ 51,827,407$ DEFINED BENEFIT PENSION PLAN – THE RETIRMENT PLAN FOR EMPLOYEES OF THE CITY OF WOODBURN, OREGON Plan Description The City sponsors a single-employer defined benefit pension plan that covers nonexecutive employees who have completed six months of employment with the City and executive employees, except the city administrator, who elect coverage under this plan. It provides retirement and disability benefits, cost of living adjustments and death benefits to members and beneficiaries. The City Council has the authority to amend the benefit provisions of the plan. - 36 - 80 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 DEFINED BENEFIT PENSION PLAN – THE RETIRMENT PLAN FOR EMPLOYEES OF THE CITY OF WOODBURN, OREGON (Continued) On November 5, 1998, the City decided to integrate its retirement plan into the Oregon Public Employees Retirement System (PERS) pursuant to ORS 238.680. The City ceased contributions to its retirement plan in December 1998, except for one employee who continued under the plan until August 2000. In December 1998, the City transferred $6,738,120 to PERS under the integration agreement with PERS. The remaining assets of the retirement plan are to provide retirement benefits to employees who have already retired or elected to remain in the plan. Membership of the plan consisted of two inactive members at July 1, 2013, the date of the latest actuarial valuation available as of the date of this report. Funding Status and Progress The pension benefit obligation (PBO), which is the actuarial present value of credited projected benefits, is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and any step-rate benefits estimated to be payable in the future as a result of employee service to date. The measure is intended to help assess the funding status of the plan, to assess progress made in accumulating sufficient assets to pay benefits when due, and to make comparisons among employers. The latest actuarial valuation was performed as of July 1, 2013. Significant actuarial assumptions used to compute the PBO were as follows: Investment earnings 5.5% (net of all plan expenses) Salary increases as per contract Cost-of-living increases 3.0% The Plan had no unfunded actuarial liability at June 30, 2014. PUBLIC EMPLOYEES RETIREMENT SYSTEM (PERS) Plan Description The City contributes to two pension plans administered by the Oregon Public Employees Retirement System (PERS). The Oregon Public Employees Retirement Fund (OPERF) applies to the City’s contribution for qualifying employees who were hired before August 29, 2003, and is a cost-sharing multiple-employer defined benefit pension plan. The City participates in the state and local government rate pool (SLGRP). The Oregon Public Service Retirement Plan (OPSRP) is a hybrid successor plan to the OPERF and consists of two programs: The Pension Program, the defined benefit portion of the plan, applies to qualifying City employees hired after August 29, 2003, and to inactive employees who return to employment following a six-month or greater break in service. Benefits are calculated by a formula for members who attain normal retirement age. The formula takes into account final average salary and years of service. Beginning January 1, 2004, all PERS member contributions go into the Individual Account Program (IAP), the defined contribution portion of the plan. PERS members retain their existing PERS accounts, but any future member contributions are deposited into the member’s IAP, not the member’s PERS account. - 37 - 81 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 PUBLIC EMPLOYEES RETIREMENT SYSTEM (PERS) (Continued) Plan Description (Continued) Both PERS plans provide retirement and disability benefits, post-employment healthcare benefits, annual cost-of- living adjustments, and death benefits to plan members and beneficiaries. PERS is administered under Oregon Revised Statute Chapter 238, which establishes the Public Employees Retirement Board as the governing body of PERS. PERS issues a publicly available financial report that includes financial statements and required supplementary information. The report may be obtained by writing to PERS, PO Box 23700, Tigard, OR, 97281- 3700 or by calling 503-598-7377. Funding Policy Members of PERS are required to contribute 6.00% of their salary covered under the plan, which is invested in the OPSRP Individual Account Program. The City is required by ORS 238.225 to contribute at an actuarially determined rate for the qualifying employees under the OPERF plan, and a general service rate and a police/fire rate for the qualifying employees under the OPSRP plan. The OPERF and the OPSRP rates in effect for the year ended June 30, 2014 were 13.42%, 9.38% and 12.11% respectively. The contribution requirements for plan members are established by ORS Chapter 238 and may be amended by an act of the Oregon Legislature. Annual Pension Cost The City’s contributions to PERS for the years ending June 30, 2012, 2013, and 2014 were $1,515,526, $1,500,370, and $1,507,694 respectively, which equaled the required contribution for the year. DEFINED CONTRIBUTION PENSION PLANS The City sponsors two defined contribution pension plans. Both plan's provisions and contribution requirements are established and amended by the City Council. The 401A is administered by ICMA Retirement Corp. to provide retirement benefits for the City Attorney. The City has established a contribution amount equivalent to approximately 7% of covered salary. The City contributed $9,126 to the plan for the year ended June 30, 2014. The 457 plan is administered by both ICMA Retirement Corporation and First Investors Financial Services, and provides additional retirement benefits for contract and unrepresented employees. The City has established matching contribution rates of 5% or 6%, depending on contractual agreements. The City contributed $138,610 to the plan for the year ended June 30, 2014. - 38 - 82 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 TRANSFERS Interfund transfers on the budgetary basis of accounting are as follows: Transfers InTransfers Ou t General $205,920 $590,774 Street220,000 543,421 Transit134,294 - Housing Rehabilitation- 200,000 RSVP - 5,920 Street SDC39,221 - General Constuction149,356 89,000 Street/Storm Capital Improvement513,421 - Parks SDC89,000 43,356 Equipment Replacement115,259 18,294 Water- 23,334 Sewer- 173,593 WWD Construction39,221 - Information Services187,000 - Technical and Enviromental Services- 5,000 $1,692,692$1,692,692 Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, and (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. INTERFUND LOANS LOANS RECEIVABLE Outstanding Outstanding Payments FundJuly 1, 2013ReceivedJune 30, 2014 WWD Construction$ $186,718 $(35,486) 151,232 Street SDC 186,718 (35,486) 151,232 WWD Construction 53,000 - 53,000 $ $426,436 $(70,972) 355,464 - 39 - 83 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 INTERFUND LOANS (Continued) LOANS PAYABLE Outstanding Outstanding Payments Fund July 1, 2013MadeJune 30, 2014 General $ $249,676 $(46,780) 202,896 Water 61,880 (12,096) 49,784 Sewer 61,880 (12,096) 49,784 WWTP 53,000 - 53,000 $ $426,436 $(70,972) 355,464 BEGINNING BALANCE ADJUSTMENTS Beginning balance adjustments have been recorded on the budgetary and GAAP bases to reflect the correction for interfund loan balances. Additionally, the beginning balance of the WWTP Constrution fund has been reduced by $291,716 to reflect the purchase of a sewer sweeper and related depreciation adjustment in 2013. EXPENDITURES IN EXCESS OF APPROPRIATIONS The following funds had expenditures in excess of appropriations: Fund / CategoryAppropriationActualVariance General Swim center$ 508,027$ 508,569$ (542) CONTINGENCIES The City purchases commercial insurance to cover all commonly insurable risks, which includes property damage, liability and employee bonds. Most policies carry a small deductible amount. No insurance claims settled in each of the prior three years have exceeded policy coverage. The City is a defendant in various litigation proceedings. Management believes any losses arising from these actions will not materially affect the City's financial position. NEW PRONOUNCEMENTS GASB Statement No. 70 “Accounting and Financial Reporting for Nonexchange Financial Guarantees.” The statement provides guidance on accounting for and reporting nonexchange financial guarantees. The statement was implemented in the current year. - 40 - 84 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2014 NEW PRONOUNCEMENTS (Continued) The City will implement new GASB pronouncements no later than the required fiscal year. Management has not determined the effect on the financial statements from implementing any of the following pronouncements. GASB Statement No. 68 “Accounting and Reporting for Pension Plans—an amendment of GASB Statement No. 27.” The statement establishes accounting and financial reporting requirements related to pensions provided by governments. The statement is effective for fiscal years beginning after June 15, 2014. GASB Statement No. 69 “Government Combinations and Disposals of Government Operations.” The statement establishes accounting and financial reporting standards related to government combinations and disposals of government operations. The statement is effective for fiscal years beginning after December 15, 2013. GASB Statement No. 71 “Pension Transition for Contributions Made Subsequent to the Measurement Date”. The statement amends transition provisions of GASB Statement No. 68, establishes accounting and financial reporting standards for recognition of contributions made between the measurement date of the net pension liability and implementation of GASB Statement No. 68. The statement is effective for fiscal years beginning after June 15, 2014. SUBSEQUENT EVENTS Management has evaluated subsequent events through October 31, 2014, the date on which the financial statements were available to be issued. Management is not aware of any subsequent events that require recognition or disclosure in the financial statements. - 41 - 85 REQUIRED SUPPLEMENTARY INFORMATION 86 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalinaActua Fll REVENUE S Taxes and assessments$ 7,331,000$ 7,331,000$ 7,521,463$ 190,463 Licenses and permits 108,500 108,500 120,182 11,682 Franchise fees 1,497,340 1,497,340 1,621,766 124,426 Charges for services 554,210 562,210 500,473 (61,737) Intergovernmental 665,189 665,189 790,151 124,962 Fines and forfeitures 596,400 596,400 571,831 (24,569) Miscellaneous 61,550 81,550 98,477 16,927 Total Revenues 10,814,189 10,842,189 11,224,343 382,154 XPENDITURE ES Council and Mayor 40,465 40,465 38,619 1,846 Administration 205,842 205,842 196,258 9,584 City Recorder 58,754 58,754 50,941 7,813 City Attorney 141,785 141,785 134,127 7,658 Finance 278,060 448,060 428,554 19,506 Human Resources 46,339 46,339 37,520 8,819 Municipal Court 138,469 138,469 131,400 7,069 Nondepartmental 235,259 235,259 204,121 31,138 Police 6,534,462 6,580,462 6,312,753 267,709 Library 913,486 913,486 880,927 32,559 Recreation 411,630 411,630 303,234 108,396 Swim Center 493,027 508,027 508,569 (542) Community Services Administration 309,158 329,158 298,558 30,600 RSVP 68,582 68,582 64,197 4,385 Planning 364,566 364,566 342,179 22,387 Parks Maintenance 520,121 520,121 462,711 57,410 Contingency 2,570,410 2,641,410 2,641,410- Total Expenditures 13,330,415 13,652,415 10,394,668 3,257,747 REVENUES OVER (UNDER) EXPENDITURE (2,810,226)(2,516,226) 829,675 3,639,901 S OTHER FINANCING SOURCES (USES) Transfers in220,000 220,000 205,920 (14,080) Transfers out(484,774) (590,774) (590,774) - Total Other Financing Sources and Uses (370,774)(264,774) (384,854) (14,080) NET CHANGE IN FUND BALANCE (3,181,000)(2,781,000) 444,821 3,625,821 FUND BALANCE, beginning of year 3,181,0002,781,000 3,532,115 351,115 FUND BALANCE, end of year (budgetary basis) $ --$ 3,976,936 3,976,936$ Interfund loan (202,895) Accrued payroll (196,269) FUND BALANCE, end of year (GAAP basis) $ 3,577,772 - 42 - 87 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - STREET FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Taxes and assessments120,000$ 101,761$(18,239) $ $ 120,000 Licenses and permits 750 302 (448) 750 Franchise fees 300,000 300,000 60,046 360,046 Intergovernmental1,300,0001,384,277 84,277 1,300,000 Miscellaneous 8,500 8,500 124,806 116,306 Total Revenues1,729,250 241,942 1,729,250 1,971,192 EXPENDITURES Personal services 496,197 496,197 85,882 410,315 Materials and services 881,697 881,697 582,446 299,251 Contingency 751,756 751,756 751,756- Total Expenditures2,129,650 2,129,650 992,761 1,136,889 REVENUES OVER (UNDER) EXPENDITURES (400,400) (400,400) 1,378,831 978,431 OTHER FINANCING SOURCES (USES) Transfers in 220,000 220,000 220,000 - Transfers out(1,169,600) (1,169,600) (543,421) 626,179 Total Other Financing Sources and Uses(949,600) (949,600) (323,421) 626,179 NET CHANGE IN FUND BALANCE (1,350,000) (1,350,000) 655,010 2,005,010 FUND BALANCE, beginning of year 1,350,000 755,613 1,350,000 2,105,613 FUND BALANCE, end of year (budgetary basis) $ -$ 2,760,623-$2,760,623 Accrued payroll (10,786) FUND BALANCE, end oear (GAAP basis) $2,749,837 fy - 43 - 88 OTHER SUPPLEMENTARY INFORMATION 89 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – STREET SDC FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits300,000 $ $ 300,000$ 521,933$ 221,933 Miscellaneous34,000 34,000135,268 169,268 Total Revenues334,000357,201 334,000 691,201 EXPENDITURES Debt service Principal29,663 29,663 29,663 - Interest 7,857 7,857 7,857 - Capital outlay867,500247,514 867,500 619,986 Contingency4,468,2014,468,201 4,468,201- Total Expenditures5,373,2214,715,715 5,373,221 657,506 REVENUES OVER (UNDER) EXPENDITURES (5,039,221)(5,039,221) 33,6955,072,916 OTHER FINANCING SOURCES (USES) Transfers in39,221 39,221 39,221 - NET CHANGE IN FUND BALANCE(5,000,000)(5,000,000) 72,9165,072,916 FUND BALANCE, beginning of year5,000,000130,650 5,000,000 5,130,650 FUND BALANCE, end of year (budgetary basis) $ -$ 5,203,566-$5,203,566 Interfund loan151,232 FUND BALANCE, end of year GAAP basis$5,354,798 - 44 - 90 CITY OF WOODBURN, OREGON COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2014 Special Revenue Search and TransitBuildingSeizure ASSETS $ 459,4025,955$ 1,111$ Cash and investments -143,450 - Accounts receivable -- - Property taxes receivable -- - Assessment liens receivable -- - Loans receivable Total Assets$ 459,402149,405$ 1,111$ LIABILITIES AND FUND BALANCE Liabilities: Accounts payable7,422$ 61,837$ -$ Accrued payroll and payroll liabilities23,550 21,511 - Total Liabilities 83,34830,972 - Deferred Inflows: Unavailable revenue- - - Fund Balance: Restricted for: -- - Debt service -- - Construction -118,433 - Culture and recreation -- - Community development Committed to: -- 1,111 Public safety 376,054- - Capital outlay -- - Public works -- - Planning and building Total Fund Balance 376,054118,433 1,111 Total Liabilities and Fund Balance$ 459,402149,405$ 1,111$ 91 Capital Projects Special Revenue Housing LibraryMuseum Lavelle Black General RehabilitationEndowmentEndowmentTrustURAConstruction $234,505$26,261$3,011$ 45,763$1,908,678$10,128 --- - -34,951 --- - 44,362 - --- - - - 784,259-- - - - $1,018,764$26,261$3,011$ 45,763$1,953,040$45,079 $52,308$-$-$ -$ 18,321$21,294 756-- - 7,211 - 53,064-- - 25,53221,294 784,259-- - 38,808 - --- 227,732- - --- - - - -26,2613,011 45,763 - - --- 1,660,968- - --- - - - --- - -23,785 --- - - - 181,441-- - - - 181,44126,2613,011 45,7631,888,70023,785 $1,018,764$26,261$3,011$ 45,763$1,953,040$45,079 - 45 - 92 CITY OF WOODBURN, OREGON COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS (Continued) JUNE 30, 2014 Capital Projects Street/Storm Special Capital AssessmentImprovementParks SDC ASSETS $ 608,5141,041,261$ 428,841$ Cash and investments -- - Accounts receivable -- - Property taxes receivable -39,650 - Assessment liens receivable -- 31,536 Loans receivable Total Assets$ 608,5141,080,911$ 460,377$ LIABILITIES AND FUND BALANCE Liabilities: Accounts payable-$ 430,362$ -$ Accrued payroll and payroll liabilities- - - Total Liabilities 430,362- - Deferred Inflows: Unavailable revenue39,650 - 31,536 Fund Balance: Restricted for: -- - Debt service 178,152- 428,841 Construction -- - Culture and recreation -- - Community development Committed to: -- - Public safety -- Capital outlay -1,041,261 - Public works -- - Planning and building Total Fund Balance 178,1521,041,261 428,841 Total Liabilities and Fund Balance$ 608,5141,080,911$ 460,377$ 93 Debt Service Capital Projects Equipment Storm SDCReplacementGO DebtTotal $499,892$812,267$49,981$ 6,135,570 -- 178,401- --39,723 84,085 --- 39,650 5,720- 821,515- $505,612$812,267$89,704$ 7,259,221 $ -$-$ 591,544-$ --- 53,028 -- 644,572- 5,720-34,671 934,644 --55,033 282,765 499,892- 1,106,885- -- 193,468- -- 1,660,968- --- 1,111 812,267- 1,212,106- -- 1,041,261- -- 181,441- 499,892812,26755,033 5,680,005 $505,612$812,267$89,704$ 7,259,221 - 46 - 94 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 Special Revenue Search and TransitBuildingSeizure EVENUES R Taxes and assessments- $ $ -$ - Licenses and permits 524,792- - Charges for services 40,678 - - Intergovernmental 435,236 - - Miscellaneous 8,29028,694 1,111 Total Revenues 484,204553,486 1,111 XPENDITURES E General government- 485,783 - Culture and recreation631,763 - - Debt service Principal - - - Interest - - - Capital outlay 2,378 - - Total Expenditures 634,141485,783 - EVENUES OVER (UNDER) EXPENDITURES 67,703(149,937) 1,111 R OTHER FINANCING SOURCES (USES) Transfers in134,294 - - Transfers out - - - Total Other Financing Sources and Uses 134,294 - - NET CHANGE IN FUND BALANCE (15,643)67,703 1,111 FUND BALANCE, beginning of year 134,076308,351 - FUND BALANCE, end of year$ 118,433$376,054$ 1,111 95 Special Revenue Housing Cable LibraryMuseum Lavelle RehabilitationRSVPFranchiseEndowmentEndowmentBlack Trust $ --$ -$ -$ -$ -$ -- 13,759 - - - ----- - ----- - 58,410-514081515 58,410 13,764-14081515 - 21,821--- - 14,988--- 6,628- ----- - ----- - ----- - 14,988 21,821-- 6,628- 43,422 (8,057)-14081(6,113) ----- - (200,000)(5,920)--- - (200,000)(5,920)--- - (156,578)(5,920)(8,057)14081(6,113) 338,0195,9208,05726,1212,93051,876 $181,441$-$ 26,261-$$3,011$45,763 - 47 - 96 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (Continued) YEAR ENDED JUNE 30, 2014 Special Revenue Capital Projects General Special URAConstructionAssessment EVENUES R Taxes and assessments602,347$ -$ 10,810$ Licenses and permits- - - Charges for services- - - Intergovernmental- 65,034 - Miscellaneous10,266 183 5,539 Total Revenues 65,217612,613 16,349 XPENDITURE ES General government - - - Culture and recreation 298,250 - - Debt service Principal 210,509 - - Interest 17,223 - - Capital outla 161,371- - y Total Expenditures 525,982 161,371 - EVENUES OVER (UNDER) EXPENDITURE (96,154)86,631 16,349 RS OTHER FINANCING SOURCES (USES) Transfers in- 149,356 - Transfers out- (89,000) - Total Other Financing Sources and Uses - 60,356 - NET CHANGE IN FUND BALANCE 86,631 (35,798) 16,349 FUND BALANCE, beginning of year 1,802,069 59,5831,024,912 FUND BALANCE, end of yea$ 23,7851,888,700$ 1,041,261$ r 97 Debt Service Capital Projects Street/Storm Capital Equipment ImprovementParks SDCStorm SDCReplacementGO DebtTotal $-$-$-$ 549,983-$$1,163,140 125,055-27,191- 690,797- ---- 40,678- ---- 500,270- 25,0121,8452,5824,2971,261148,231 25,012126,90029,7734,297551,2442,543,116 ---- 507,604- 6,120--- 957,749- --- 320,000-530,509 --- 203,781-221,004 595,781--- 759,530- 595,7816,120- 523,781-2,976,396 (570,769)120,78029,7734,29727,463(433,280) 513,42189,000 115,259- 1,001,330- (43,356)- (18,294)- (356,570)- 513,42145,644 96,965- 644,760- (57,348)166,42429,773101,26227,463211,480 235,500262,417470,119711,00527,5705,468,525 $178,152$428,841$499,892$812,267$55,033$5,680,005 - 48 - 98 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - TRANSIT FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Charges for services56,000$40,678$(15,322) $ $ 56,000 Intergovernmental 797,150435,236(361,914) 797,150 Miscellaneous 9,6008,290(1,310) 9,600 Total Revenues 862,750484,204(378,546) 862,750 EXPENDITURES Personal services 371,780103 371,780 371,677 Materials and services 622,917372,161 622,917 250,756 Capital outlay 60,00057,622 60,000 2,378 Contingency 64,55964,559 - 64,559 Total Expenditures1,119,256494,445 1,119,256 624,811 REVENUES OVER (UNDER) EXPENDITURES (256,506)(256,506)(140,607)115,899 OTHER FINANCING SOURCES (USES) Transfers in 154,294134,294(20,000) 154,294 NET CHANGE IN FUND BALANCE(102,212)(102,212)(6,313)95,899 FUND BALANCE, beginning of year 102,21231,864 102,212 134,076 FUND BALANCE, end of year (budgetary basis) $ -- $ 127,763$ 127,763 Accrued payroll(9,330) FUND BALANCE, end of year (GAAP basis) $118,433 - 49 - 99 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - BUILDING FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits$ 308,251 $ 386,251$ 524,792$ 138,541 Miscellaneous 35,00028,694(6,306) 35,000 Total Revenues 343,251 421,251 553,486 132,235 EXPENDITURES Personal services 352,108 360,108 333,733 26,375 Materials and services 95,193 165,193 143,954 21,239 Contingency 235,950 235,950 - 235,950 Total Expenditures 683,251 761,251 477,687 283,564 REVENUES OVER (UNDER) EXPENDITURES (340,000)(340,000) 75,799 415,799 OTHER FINANCING SOURCES (USES) Transfers in 65,000 (65,000)- 65,000 NET CHANGE IN FUND BALANCE (275,000)(275,000) 75,799 350,799 FUND BALANCE, beginning of year 275,000 275,000 308,351 33,351 FUND BALANCE, end of year (budgetary basis) $ - $ - 384,150$ 384,150 Accrued payroll(8,096) FUND BALANCE, end of year (GAAP basis) $ 376,054 - 50 - 100 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – SEARCH AND SEIZURE FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Miscellaneous$- $ -$ 1,111$ 1,111 EXPENDITURES - - - - NET CHANGE IN FUND BALANCE - - 1,111 1,111 FUND BALANCE, beginning of year - - - - FUND BALANCE, end of year $ -$ -$ 1,111$ 1,111 - 51 - 101 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - HOUSING REHABILITATION FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Miscellaneous29,500$ 29,500 $ $ 5 8,410$ 2 8,910 EXPENDITURES Personal services13,73613,736 1 2,273 1 ,463 Materials and services40,20040,200 2 ,430 3 7,770 Contingency49,56449,564 - 4 9,564 Total Expenditures103,500 1 03,500 1 4,703 8 8,797 REVENUES OVER (UNDER) EXPENDITURES (74,000)(74,000) 117,707 4 3,707 OTHER FINANCING SOURCES (USES) Transfers out(200,000) (200,000) (200,000) - NET CHANGE IN FUND BALANCE (274,000)(274,000) (156,293) 1 17,707 FUND BALANCE, beginning of year274,000 2 74,000 3 38,019 6 4,019 FUND BALANCE, end of year (budgetary basis) $ --$ 181,726 $ 1 81,726 Accrued payroll(285) FUND BALANCE, end of year (GAAP basis)$181,441 - 52 - 102 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - RSVP FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES- $ $ -$ -$ - EXPENDITURES- - - - REVENUES OVER (UNDER) EXPENDITURES - - - - OTHER FINANCING SOURCES (USES) Transfers out(20,000) (20,000) (5,920) 14,080 NET CHANGE IN FUND BALANCE (20,000)(20,000) (5,920) 14,080 FUND BALANCE, beginning of year20,0005,920(14,080) 20,000 FUND BALANCE, end of year$- $ -$ -$ - - 53 - 103 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – CABLE FRANCHISE FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits24,500$13,759$(10,741) $ $ 24,500 Miscellaneous- - 5 5 Total Revenues24,50013,764(10,736) 24,500 EXPENDITURES Materials and services26,050 4,229 26,050 21,821 Contingency2,950 2,950 - 2,950 Total Expenditures29,000 7,179 29,000 21,821 NET CHANGE IN FUND BALANCE(4,500)(4,500)(8,057)(3,557) FUND BALANCE, beginning of year 4,5004,500 3,557 8,057 FUND BALANCE, end of year $- $ -$ -$ - - 54 - 104 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – LIBRARY ENDOWMENT FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Miscellaneous165$ 165$ 140$ (25)$ EXPENDITURES Contingency26,265 26,265 - 26,265 NET CHANGE IN FUND BALANCE(26,100)(26,100)140 26,240 FUND BALANCE, beginning of year26,10026,121 26,100 21 FUND BALANCE, end of year$-- $ $ 26,261$ 26,261 - 55 - 105 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – MUSEUM ENDOWMENT FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Miscellaneous20$ 61 $ $ 20$ 81 EXPENDITURES Contingency2,805 2,805 - 2,805 NET CHANGE IN FUND BALANCE(2,785)(2,785) 81 2,866 FUND BALANCE, beginning of year2,7852,7852,930 145 FUND BALANCE, end of year$-- $ $ 3,011$ 3,011 - 56 - 106 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – LAVELLE BLACK TRUST FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Miscellaneous325$ 325$ 190 $ $ 515 EXPENDITURES Materials and services10,000 3,372 10,000 6,628 Contingency30,32530,325 - 30,325 Total Expenditures40,3256,628 40,325 33,697 NET CHANGE IN FUND BALANCE(40,000)(40,000)(6,113) 33,887 FUND BALANCE, beginning of year 40,00011,876 40,000 51,876 FUND BALANCE, end of year$-- $ $ 45,763$ 45,763 - 57 - 107 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – URBAN RENEWAL AGENCY FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Taxes and assessments550,000$ 550,000$ 52,347 $ $ 602,347 Miscellaneous10,50010,50010,266 (234) Total Revenues560,500560,500612,613 52,113 EXPENDITURES Personal services154,487154,487119,992 34,495 Materials and services309,500309,500175,365 134,135 Debt service Principal251,855251,855210,509 41,346 Interest375,877375,87717,223 358,654 Capital outlay4,500,0004,500,000 4,500,000- Contingency1,393,7811,393,781 1,393,781- Total Expenditures6,985,500 6,462,411 6,985,500 523,089 REVENUES OVER (UNDER) EXPENDITURES (6,425,000)(6,425,000) 6,514,524 89,524 OTHER FINANCING SOURCES (USES) Proceeds from issuance of debt4,500,0004,500,000 (4,500,000)- NET CHANGE IN FUND BALANCE (1,925,000)(1,925,000) 2,014,524 89,524 FUND BALANCE, beginning of year1,925,0001,802,069 (122,931) 1,925,000 FUND BALANCE, end of year (budgetary basis) $ -$1,891,593 $ -1,891,593 Accrued payroll(2,893) FUND BALANCE, end of year (GAAP basis)$1,888,700 - 58 - 108 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Intergovernmental$ 277,800-$$65,034$ (212,766) Miscellaneous - -183 183 Total Revenues 277,800-65,217 (212,583) EXPENDITURES Capital outlay59,000538,800161,371 377,429 Contingency43,00043,000 43,000- Total Expenditures102,000581,800161,371 420,429 REVENUES OVER (UNDER) EXPENDITURES (102,000)(304,000)(96,154) 207,846 OTHER FINANCING SOURCES (USES) Transfers in 291,000-149,356 (141,644) Transfers out(20,000)(109,000)(89,000) 20,000 Total Other Financing Sources and Uses (20,000)182,00060,356 (121,644) NET CHANGE IN FUND BALANCE(122,000)(122,000)(35,798) 86,202 FUND BALANCE, beginning of year 122,000122,00059,583 (62,417) FUND BALANCE, end of year$ -$ 23,785-$$ 23,785 - 59 - 109 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – SPECIAL ASSESSMENT FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Taxes and assessments34,685$(23,875) $ $ 34,685$ 10,810 Miscellaneous 6,000 5,539 (461) 6,000 Total Revenues 40,685 16,349 (24,336) 40,685 EXPENDITURES Contingency 872,685 872,685 872,685- NET CHANGE IN FUND BALANCE (832,000) (832,000) 16,349 848,349 FUND BALANCE, beginning of year 832,000 1,024,912 192,912 832,000 FUND BALANCE, end of year$ -$ 1,041,261-$ $1,041,261 - 60 - 110 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – STREET/STORM CAPITAL IMPROVEMENT FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Miscellaneous-$ -$ 25,012$ 25,012$ EXPENDITURES Capital outlay1,189,600 1,189,600 595,781 593,819 REVENUES OVER (UNDER) EXPENDITURES (1,189,600)(1,189,600) (570,769) 618,831 OTHER FINANCING SOURCES (USES) Transfers in1,164,600 1,164,600 513,421 (651,179) NET CHANGE IN FUND BALANCE (25,000) (25,000) (57,348) (32,348) FUND BALANCE, beginning of year 25,000 25,000 235,500 210,500 FUND BALANCE, end of year $ -$ 178,152-$ $ 178,152 - 61 - 111 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – PARKS SDC FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits20,000$105,055 $ $ 20,000$ 125,055 Miscellaneous2,7851,845(940) 2,785 Total Revenues22,785 22,785 126,900 104,115 EXPENDITURES Materials and services30,000 30,000 6,120 23,880 Contingency442,785 346,785 - 346,785 Total Expenditures472,785 376,785 6,120 370,665 REVENUES OVER (UNDER) EXPENDITURES (450,000)(354,000) 120,780 474,780 OTHER FINANCING SOURCES (USES) Transfers in- 89,000 89,000 - Transfers out (185,000)-(43,356) 141,644 Total Other Financing Sources and Uses (96,000)- 45,644 141,644 NET CHANGE IN FUND BALANCE(450,000)(450,000) 166,424 616,424 FUND BALANCE, beginning of year 450,000262,417(187,583) 450,000 FUND BALANCE, end of year$$428,841 $ -$ -428,841 - 62 - 112 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – STORM SDC FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits15,000$12,191 $ $ 15,000$ 27,191 Miscellaneous 2,000 582 2,000 2,582 Total Revenues 17,00012,773 17,000 29,773 EXPENDITURES Contingency455,000455,000 455,000- REVENUES OVER (UNDER) EXPENDITURES (438,000)(438,000)467,773 29,773 OTHER FINANCING SOURCES (USES) Transfers out (25,000)(25,000) 25,000- NET CHANGE IN FUND BALANCE (463,000)(463,000)492,773 29,773 FUND BALANCE, beginning of year 463,0007,119 463,000 470,119 FUND BALANCE, end of year$ -$ 499,892-$$499,892 - 63 - 113 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – EQUIPMENT REPLACEMENT FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Miscellaneous4,000$ 4,000$ 4,297$ 297$ EXPENDITURES Capital outlay829,428 829,428 - 829,428 REVENUES OVER (UNDER) EXPENDITURES (825,428)(825,428) 4,297 829,725 OTHER FINANCING SOURCES (USES) Transfers in115,259115,259 115,259 - Transfers out (18,294) (18,294)(18,294) - Total Other Financing Sources and Uses 96,965 96,96596,965 - NET CHANGE IN FUND BALANCE (728,463)(728,463)101,262829,725 FUND BALANCE, beginning of year 728,463711,005(17,458) 728,463 FUND BALANCE, end of year$ -$ 812,267-$$812,267 - 64 - 114 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL OBLIGATION DEBT FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Taxes and assessments528,000$549,983$21,983 $ $ 528,000 Miscellaneous 900 361 900 1,261 Total Revenues 528,900 551,244 22,344 528,900 EXPENDITURES Debt service Principal 320,000 320,000 320,000 - Interest 203,781 203,781 203,781 - Contingency 35,119 35,119 35,119- Total Expenditures 558,900 523,781 35,119 558,900 NET CHANGE IN FUND BALANCE (30,000) (30,000) 27,463 57,463 FUND BALANCE, beginning of year 30,000 27,570 (2,430) 30,000 FUND BALANCE, end of year $ -$ 55,033-$$55,033 - 65 - 115 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF FUND NET POSITION - NONMAJOR PROPRIETARY (ENTERPRISE) FUNDS JUNE 30, 2014 WWD Water SDCSewer SDCConstruction ASSETS Current Assets Cash and investments906,363$ 687,935$ 2,784,162$ Accounts receivable37,530 53,586 8,258 Due from other funds- - 204,232 Total Current Assets 741,521943,893 2,996,652 Noncurrent Assets Nondepreciable capital assets- - 1,289,721 Capital assets, net of depreciation- - 527,144 Total Noncurrent Assets -- 1,816,865 Total Assets 741,521943,893 4,813,517 LIABILITIES Current Liabilities Accounts payable- - 52,295 NET POSITION: Net investment in capital assets- - 1,816,865 Restricted for: Construction943,893 741,521 2,944,357 Total Net Position$ 741,521943,893$ 4,761,222$ 116 Total $ 4,378,460 99,374 204,232 4,682,066 1,289,721 527,144 1,816,865 6,498,931 52,295 1,816,865 4,629,771 $ 6,446,636 - 66 - 117 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - NONMAJOR PROPRIETARY (ENTERPRISE) FUNDS YEAR ENDED JUNE 30, 2014 WWD Water SDCSewer SDCConstruction OPERATING REVENUES$ --$ -$ OPERATING EXPENSES Materials and services- - 216 Depreciation- - 31,068 Total Expenses -- 31,284 OPERATING INCOME (LOSS) -- (31,284) NONOPERATING REVENUES (EXPENSES) Investment revenue 2,9554,357 16,109 NET INCOME BEFORE CONTRIBUTION S AND TRANSFER S 2,9554,357 (15,175) Capital contributions181,486265,485- Transfers in- - 3,734 CHANGE IN NET POSITION 268,440185,843 (11,441) NET POSITION, beginning of year as originally reported 473,081758,050 4,666,663 Prior period adjustment -- 106,000 NET POSITION, beginning of year as restated 473,081758,050 4,772,663 NET POSITION, end of year $ 741,521943,893$ 4,761,222$ 118 Total $ - 216 31,068 31,284 (31,284) 23,421 (7,863) 446,971 3,734 442,842 5,897,794 106,000 6,003,794 $6,446,636 - 67 - 119 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF CASH FLOWS - NONMAJOR PROPRIETARY (ENTERPRISE) FUNDS YEAR ENDED JUNE 30, 2014 Wateewe rSr SDCSDC CASH FLOWS FROM OPERATING ACTIVITIE S Collected from customers$- $ - CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIE S Transfers in- - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIE S Acquisition of capital assets - - System development revenue 160,636235,715 et Cash Provided by (Used in) Capital and Related N inancing Activities 235,715160,636 F CASH FLOWS FROM INVESTING ACTIVITIE S Interest on investments 4,357 2,955 Increase (Decrease) in Cash and Investments 164,993238,670 CASH AND INVESTMENTS, Beginning of year 741,370449,265 CASH AND INVESTMENTS, End of yea$906,363 $687,935 r RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIE S Operating income (loss)$- $ - Depreciation - - Change in assets and liabilities Accounts receivable - - Accounts payable and accrued liabilities - - Net Cash Provided by (Used in) Operating Activities$- $ - 120 WWD ConstructionTotals $ 525$525 39,220 39,220 (430,586)(430,586) 396,351 - (430,586)(34,235) 23,421 16,109 (374,732)28,931 4,349,529 3,158,894 $4,378,460 $ 2,784,162 $(31,284) $(31,284) 31,068 31,068 525 525 216 216 $ 525$525 - 68 - 121 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET (NON-GAAP BASIS) AND ACTUAL - WATER FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Charges for services3,315,515$3,166,879$(148,636) $ $ 3,315,515 Miscellaneous 51,000 51,000 303,593 252,593 Interest earnings 5,200 5,200 7,498 2,298 Total Revenues 3,371,715 3,371,715 3,477,970 106,255 EXPENDITURES Personal services1,371,458 1,371,458 1,244,302 127,156 Materials and services 838,457 838,457 736,473 101,984 Debt service Principal 648,320 648,320 648,318 2 Interest 511,310 511,310 511,310 - Contingency1,239,062 1,239,062 - 1,239,062 Total Expenditures 4,608,607 4,608,607 3,140,403 1,468,204 REVENUES OVER (UNDER) EXPENDITURES (1,236,892)(1,236,892) 337,567 1,574,459 OTHER FINANCING SOURCES (USES) Transfers out (38,108)(38,108)(23,334) 14,774 NET CHANGE IN FUND BALANCE(1,275,000)(1,275,000) 314,233 1,589,233 FUND BALANCE, beginning of year 1,275,000 1,275,000 1,467,268 192,268 FUND BALANCE, end of year$ - $ -$ 1,781,501$ 1,781,501 - 69 - 122 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL - SEWER FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Charges for services7,030,000$7,479,642$449,642 $ $ 7,030,000 Miscellaneous 2,000 1,065 2,000 3,065 Interest earnings 12,200 23,692 11,492 12,200 Total Revenues7,044,2007,506,399462,199 7,044,200 EXPENDITURES Personal services1,954,2681,789,712164,556 1,954,268 Materials and services1,507,1841,264,703242,481 1,507,184 Debt service Principal2,265,1532,265,153 2,265,153 - Interest1,044,5591,044,559 1,044,559 - Capital outlay 45,084 45,084 45,084- Contingency3,833,3593,833,359 3,833,359- Total Expenditures10,649,6076,364,1274,285,480 10,649,607 REVENUES OVER (UNDER) EXPENDITURES (3,605,407)(3,605,407)1,142,2724,747,679 OTHER FINANCING SOURCES (USES) Transfers out(173,593)(173,593)(173,593) - NET CHANGE IN FUND BALANCE(3,779,000)(3,779,000)968,6794,747,679 FUND BALANCE, beginning of year3,779,0004,183,555404,555 3,779,000 FUND BALANCE, end of year$ -$ 5,152,234-$$5,152,234 - 70 - 123 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL – WWTP CONSTRUCTION FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Interest earnings105,100$ 105,100$ 70,528$ (34,572) EXPENDITURES Capital outlay2,635,200 2,635,200 926,343 1,708,857 Contingency14,469,900 14,469,900 - 14,469,900 Total Expenditures 17,105,10017,105,100 926,343 16,178,757 NET CHANGE IN FUND BALANCE (17,000,000)(17,000,000) (855,815) 16,144,185 FUND BALANCE, beginning of year 17,000,00017,000,000 13,530,151 (3,469,849) FUND BALANCE, end of year$ --$ 12,674,336$ 12,674,336$ - 71 - 124 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL - WATER SDC FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits60,000$100,636 $ $ 60,000$ 160,636 Interest earnings 3,475 4,357 882 3,475 Total Revenues 63,475 63,475164,993101,518 EXPENDITURES Debt service Principal623,475623,475 623,475- REVENUES OVER (UNDER) EXPENDITURES (560,000)(560,000)164,993724,993 OTHER FINANCING SOURCES (USES) Transfers out(40,000)(40,000) 40,000- NET CHANGE IN FUND BALANCE(600,000)(600,000)164,993764,993 FUND BALANCE, beginning of year 600,000141,370 600,000 741,370 FUND BALANCE, end of year$ -$ 906,363-$$906,363 - 72 - 125 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL - SEWER SDC FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits100,000$135,715 $ $ 100,000$ 235,715 Interest earnings 1,750 1,205 1,750 2,955 Total Revenues101,750136,920 101,750 238,670 EXPENDITURES Contingency374,750374,750 374,750- NET CHANGE IN FUND BALANCE(273,000)(273,000)238,670511,670 FUND BALANCE, beginning of year273,000176,265 273,000 449,265 FUND BALANCE, end of year $ -$ 687,935-$$687,935 - 73 - 126 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BASIS) AND ACTUAL – WWD CONSTRUCTION FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Interest earnings26,800$ 26,800$ 16,109$ (10,691)$ EXPENDITURES Capital outlay733,974 733,974 474,925 259,049 Contingency3,821,821 3,821,821 - 3,821,821 Total Expenditures4,555,795 4,080,870 4,555,795 474,925 REVENUES OVER (UNDER) EXPENDITURES (4,528,995)(4,528,995)(458,816) 4,070,179 OTHER FINANCING SOURCES (USES) Transfers in93,99593,99539,221 (54,774) Transfers out(65,000)(65,000) 65,000- Total Other Financing Sources and Uses 28,99528,995 10,226 39,221 NET CHANGE IN FUND BALANCE(4,500,000)(4,500,000)(419,595) 4,080,405 FUND BALANCE, beginning of year4,500,0003,159,720(1,340,280) 4,500,000 FUND BALANCE, end of year$ -$$2,740,125 $ -2,740,125 - 74 - 127 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF FUND NET POSITION - INTERNAL SERVICE FUNDS JUNE 30, 2014 Technical & Information Environmental ServicesInsuranceServices ASSETS Current Assets Cash and investments119,737$ 404,919$ 92,043$ Accounts receivable13,831 - - Total Assets 404,919133,568 92,043 LIABILITIES Current Liabilities Accounts payable1,491 5,859 59,756 Accrued payroll liabilities20,397 3,147 32,287 Accrued compensated absences- - 99,469 Total Liabilities 9,00621,888 191,512 NET POSITION: Unrestricted111,680$ 395,913$ (99,469)$ 128 Total $616,699 13,831 630,530 67,106 55,831 99,469 222,406 $408,124 - 75 - 129 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2014 Technical & Information Environmental ServicesInsuranceServices OPERATING REVENUES Licenses and permits-$ -$ 22,132$ Charges for services759,801 500,005 1,149,024 Miscellaneous- 1,558 24,944 Total Operating Revenues 501,563759,801 1,196,100 OPERATING EXPENSES Personal services354,816 54,385 830,998 Materials and services550,574450,679 537,052 Total Expenses 505,064905,390 1,368,050 OPERATING INCOME (LOSS) (3,501)(145,589) (171,950) NONOPERATING REVENUES (EXPENSES) Investment revenue 2,5991,905 847 NET INCOME BEFORE CONTRIBUTION S AND TRANSFER S (902)(143,684) (171,103) Transfers in187,000 - - Transfers out- - (5,000) CHANGE IN NET POSITION (902)43,316 (176,103) NET POSITION, beginning of year 396,81568,364 76,634 NET POSITION (Deficit), end of year$ 395,913111,680$ (99,469)$ 130 Total $22,132 2,408,830 26,502 2,457,464 1,240,199 1,538,305 2,778,504 (321,040) 5,351 (315,689) 187,000 (5,000) (133,689) 541,813 $408,124 - 76 - 131 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF CASH FLOWS - INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2014 Technical and InformationEnvironmental ServicesInsuranceServices CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers745,970$ 501,563$ 1,196,100$ Paid to suppliers(570,184) (445,407) (494,238) Paid to employees(334,419) (51,238) (805,688) Net Cash Provided by (Used in) Operating Activities 4,918(158,633) (103,826) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in187,000 - - Transfers out- - (5,000) Net Cash Provided by (Used in) Non-Capital Financing Activities -187,000 (5,000) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments1,905 2,599 847 Increase (Decrease) in Cash and Investments 7,51730,272 (107,979) CASH AND INVESTMENTS, Beginning of year 397,40289,465 200,022 CASH AND INVESTMENTS, End of year$ 404,919119,737$ 92,043$ RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss)(145,589)$ (3,501)$ (171,950)$ Change in assets and liabilities Accounts receivable(13,831) - - Compensated absences payable - - (6,977) Accounts payable and accrued liabilities 787 8,419 75,101 Net Cash Provided by (Used in) Operating Activities$(158,633)$ 4,918$ (103,826) 132 Totals $2,443,633 (1,509,829) (1,191,345) (257,541) 187,000 (5,000) 182,000 5,351 (70,190) 686,889 $616,699 $(321,040) (13,831) (6,977) 84,307 $(257,541) - 77 - 133 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BASIS) – INFORMATION SERVICES FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Charges for services728,461$31,340 $ $ 728,461$ 759,801 Interest earnings 3001,605 300 1,905 Total Revenues728,76132,945 728,761 761,706 EXPENDITURES Personal services359,33912,555 359,339 346,784 Materials and services274,161 65 274,161 274,096 Capital outlay277,000 523 277,000 276,477 Contingency 23,26123,261 23,261- Total Expenditures933,76136,404 933,761 897,357 REVENUES OVER (UNDER) EXPENDITURES (205,000)(205,000)(135,651)69,349 OTHER FINANCING SOURCES (USES) Transfers in187,000187,000 187,000 - NET CHANGE IN FUND BALANCE (18,000)(18,000)69,349 51,349 FUND BALANCE, beginning of year 18,00050,364 18,000 68,364 FUND BALANCE, end of year$ -$ 119,713-$$119,713 - 78 - 134 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BASIS) – INSURANCE FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Charges for services500,005$500,005$ - $ $ 500,005 Miscellaneous 12,624 12,624 1,558 (11,066) Interest earnings 1,600 2,599 999 1,600 Total Revenues514,229504,162 (10,067) 514,229 EXPENDITURES Personal services 55,754 2,467 55,754 53,287 Materials and services518,152 67,473 518,152 450,679 Contingency 90,323 90,323 90,323- Total Expenditures664,229160,263 664,229 503,966 NET CHANGE IN FUND BALANCE(150,000)(150,000) 150,196196 FUND BALANCE, beginning of year150,000246,815 150,000 396,815 FUND BALANCE, end of year$ -$ 397,011-$$397,011 - 79 - 135 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON-GAAP BASIS) – TECHNICAL & ENVIRONMENTAL SERVICES FUND YEAR ENDED JUNE 30, 2014 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits$ 12,500$9,632 $ 12,500$ 22,132 Charges for services1,502,5971,149,024(353,573) 1,502,597 Miscellaneous 1,60023,344 1,600 24,944 Interest earnings 350 497 350 847 Total Revenues1,517,0471,196,947(320,100) 1,517,047 EXPENDITURES Personal services912,47174,496 912,471 837,975 Materials and services599,57662,524 599,576 537,052 Contingency 25,00025,000 25,000- Total Expenditures1,537,047162,020 1,537,047 1,375,027 REVENUES OVER (UNDER) EXPENDITURES (20,000)(20,000)(178,080)(158,080) OTHER FINANCING SOURCES (USES) Transfers out (5,000) (5,000)(5,000) - NET CHANGE IN FUND BALANCE (25,000)(25,000)(183,080)(158,080) FUND BALANCE, beginning of year 25,000158,080 25,000 183,080 FUND BALANCE, end of year$ - $ -$ -$ - - 80 - 136 OTHER FINANCIAL SCHEDULES 137 CITY OF WOODBURN, OREGON SCHEDULE OF PROPERTY TAX TRANSACTIONS AND OUTSTANDING BALANCES YEAR ENDED JUNE 30, 2014 UncollectedInterest,Uncollected 2013-14BalanceDiscounts andBalances Tax YearLevyJuly 1, 2013AdjustmentsCollectionsJune 30, 2014 2013-14$8,410,177$ (235,226)-$$(7,924,202)$250,749 2012-13 288,141-(3,127) (151,194)133,820 2011-12 152,690-(1,956) (71,083) 79,651 2010-11 99,688-(2,974) (66,344) 30,370 2009-10 35,088-385 (24,368) 11,105 2008-09 13,291-(2,512) (3,653) 7,126 2007-08 -8,286(2,239) (1,951) 4,096 Prior 18,740-(3,754) (1,413) 13,573 $8,410,177$615,924$(251,403)$(8,244,208)530,490 Unsegregated77,200 Property taxes receivable$607,690 - 81 - 138 COMPLIANCE SECTION 139 475 Cottage Street NE, Suite 200, Salem, Oregon 97301 (503) 581-7788 INDEPENDENT AUDITOR’S REPORT REQUIRED BY OREGON STATE REGULATIONS Honorable Mayor and Council Members City of Woodburn 270 Montgomery Street Woodburn, Oregon 97071 We have audited, in accordance with auditing standards generally accepted in the United States of America, the basic financial statements of the City of Woodburn as of and for the year ended June 30, 2014, and have issued our report thereon dated October 31, 2014. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Woodburn's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules 162- 10-000 through 162-10-320 of the Minimum Standards for Audits of Oregon Municipal Corporations, noncompliance with which could have a direct and material effect on the determination of financial statements amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. We performed procedures to the extent we considered necessary to address the required comments and disclosures which included, but were not limited to the following: Deposit of public funds with financial institutions (ORS Chapter 295). Indebtedness limitations, restrictions and repayment. Budgets legally required (ORS Chapter 294). Insurance and fidelity bonds in force or required by law. Programs funded from outside sources. Highway revenues used for public highways, roads, and streets. Authorized investment of surplus funds (ORS Chapter 294). Public contracts and purchasing (ORS Chapters 279A, 279B, 279C). Accountability for collecting or receiving money by elected officials – no money was collected or received by elected officials. In connection with our testing nothing came to our attention that caused us to believe the City was not in substantial compliance with certain provisions of laws, regulations, contracts, and grants, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules 162-10-000 through 162-10-320 of the Minimum Standards for Audits of Oregon Municipal Corporations except expenditures exceeded appropriations, as detailed in the notes to the financial statements. - 82 - 140 Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. Restriction on Use This report is intended solely for the information and use of the council members and management of the City of Woodburn and the Oregon Secretary of State and is not intended to be and should not be used by anyone other than these parties. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS By: Thomas E. Glogau, A Shareholder October 31, 2014 - 83 - 141 COUNCIL MEETING MINUTES October 27, 2014 DATECOUNCIL CHAMBERS, CITY HALL, CITY OF WOODBURN, COUNTY 0:00 OF MARION, STATE OF OREGON, OCTOBER 27, 2014 CONVENED The meeting convened at 7:01 p.m. withMayor Figley presiding. ROLL CALL Mayor Figley Present Councilor Cox Present Councilor Lonergan Present Councilor McCallum Present Councilor Morris Present Councilor EllsworthPresent Councilor Alonso Leon Absent Staff Present: City Administrator Derickson, City Attorney Shields, Human Resources Director Hereford, Captain Alexander,Captain Garrett, Economic and Development Services Director Hendryx, Public Works Director Scott, Communications Coordinator Horton, City Recorder Pierson ANNOUNCEMENTS AND APPOINTMENTS 0:00 A.City Hall and the Library will be closed on November 11 in observance of Veterans Day. The Aquatic Center will be open normal hours. B.Woodburn Recreation & Parks will be hosting a Downtown Trick or Treating event on Friday October 31st at the Downtown Plaza from 3:30-5 p.m. The event includes games, contests, crafts and more. Parents are encouraged to bring their children dressed in costume and select businesses will be participating in trick or treating. C.The Cityof Woodburn will continue its Fall Leaf Program this year to provide residents assistance with disposal of collected leaves. The leaf drop-off site is on Second Street between Lincoln and Grant Streets behind the Post Office. The site will be open from November 1 through December 31, Monday through Friday, 8:00 a.m. - 4:00 p.m. and Saturday 9:00 a.m. - 1:00 p.m., closed Sundays and Holidays. COMMUNITY/GOVERNMENT ORGANIZATIONS 0:01 Woodburn School District- Chuck Ransom, Woodburn School District Superintendent provided a brief overview of where the state is going and the climate of change that public schools are facing. CONSENT AGENDA 0:24 A.Woodburn City Council minutes of October 13, 2014, B.Crime Statistics through September. McCallum/Lonergan …adopt the Consent Agenda. The motion passed unanimously. Page 1 - Council Meeting Minutes, October 27, 2014 142 COUNCIL MEETING MINUTES October 27, 2014 PUBLIC HEARINGS 0:25 A Public Hearing to consider granting a non-exclusive gas utility franchise to Northwest Natural Gas Company. Mayor Figley declared the hearing open at 7:25p.m. for the purpose of hearing public input on granting a non-exclusive gas utility franchise to Northwest Natural Gas Company. City Administrator Dericksonprovided a staff report. No members of the public wished to speak in either support or opposition of granting a non-exclusive gas utility franchise to Northwest Natural Gas Company. Mayor Figley declared the hearing closed at 7:32 p.m. COUNCIL BILL NO. 2972 - AN ORDINANCE GRANTING A NON-EXCLUSIVE 0:32 GAS UTILITY FRANCHISE TO NORTHWEST NATURAL GAS COMPANY, AND FIXING TERMS, CONDITIONS AND COMPENSATION OF SUCH FRANCHISE; PROVIDING AN EFFECTIVE DATE; REPEALING ORDINANCE 2376; AND DECLARING AN EMERGENCY McCallum introduced Council Bill No. 2972. Recorder Pierson read the two readings of the bill by title only since there were no objections from the Council. On roll call vote for final passage, the bill passed unanimously. Mayor Figley declared Council Bill No. 2972 duly passed. CITY ADMINISTRATOR’S REPORT 0:33 City Administrator Derickson thanked public works and the police for their work over the weekend. He also announced that the presentation of the annual fiscal audit will be taking th place at the November 10meeting and that the second meeting in November is being cancelled. MAYOR AND COUNCIL REPORTS 0:35 Councilor Ellsworth announced that her and Mike will be this year’s co-chairs for Woodburn’s Relay for Life. EXECUTVE SESSION 0:36 Mayor Figley entertained a motion to adjourn into executive session under the authority of ORS 192.660 (2)(i). Lonergan/Morris …to move into executive session. The motion passed unanimously. The Council adjourned to executive session at 7:37 p.m. and reconvened at 8:11 p.m. Mayor Figley stated that no action was taken by the Council while in executive session. Cox/McCallum …Council extend the agreement with the City Administrator for a period not to exceed three years. The motion passed unanimously. ADJOURNMENT 1:11 McCallum/Cox ...meeting be adjourned. The motion passed unanimously. The meeting adjourned at 8:12 p.m. APPROVED KATHRYN FIGLEY, MAYOR Page 2 - Council Meeting Minutes, October 27, 2014 143 COUNCIL MEETING MINUTES October 27, 2014 ATTEST Heather Pierson,City Recorder City of Woodburn, Oregon Page 3 - Council Meeting Minutes, October 27, 2014 144 EXECUTIVE SESSION COUNCIL MEETING MINUTES OCTOBER 27, 2014 DATECONFERENCE ROOM, CITY HALL, CITY OF WOODBURN, COUNTY OF MARION, STATE OF OREGON,OCTOBER 27, 2014 CONVENED TheCouncil met in executive session at 7:37 p.m. with Mayor Figley presiding. ROLL CALL Mayor Figley Present Councilor Cox Present Councilor Lonergan Present Councilor McCallum Present Councilor Morris Present Councilor Alonso Leon Absent Councilor Ellsworth Present Mayor Figley reminded Councilors and staff that information discussed in executive session is not to be discussed with the public. Media Present: None. Staff Present: City Administrator Derickson, City Recorder Pierson The executive session was called: To review and evaluate, pursuant to standards, criteria and policy directives adopted by the governing body, the employment-related performance of the chief executive officer of any public body, a public officer, employee or staff member unless the person whose performance is being reviewed and evaluated requests an open hearing pursuant to ORS 192.660 (2)(i). ADJOURNMENT The executive session adjourned at 8:10 p.m. APPROVED_______________________________ KATHRYN FIGLEY, MAYOR ATTEST_______________________________ Heather Pierson,CityRecorder City of Woodburn, Oregon Page1 – Executive Session, Council Meeting Minutes, October 27, 2014 145 146 147 148 Agenda Item November 10, 2014 TO: Honorable Mayor and City Council through City Administrator THRU: Scott Russell, Chief of Police FROM: Jason R. Alexander, Captain SUBJECT: Limited On-Premise Sales Change of Ownership RECOMMENDATION: The Woodburn City Council recommends that the OLCC approve the Limited for Carniceria Y Taqueria Las Palmas. On-Premise Sales-Change of Ownership, BACKGROUND: Applicant: Rafael Castaneda Jr. 1740 Park Ave #20 Woodburn, OR 97071 503.997.2792 Business: Carniceria Y Taqueria Las Palmas 954 N Pacific Hwy Woodburn, OR 97071 503.982.0465 Owners: Same as Applicant (Above) License Type: Limited On-Premise Sales-Change of Ownership Change of - Permits beer, wine, and cider, for on-premise consumption only. Name On October 27, 2014, the Woodburn Police Department received an application, requesting approval for a Limited On-Premise Sales-Change of for Carniceria Y Taqueria Las Palmas located at 954 N Pacific Hwy, Ownership Agenda Item Review: City Administrator ___x___ City Attorney __x____ Finance __x___ 149 Honorable Mayor and City Council November 10, 2014 Page 2 Woodburn, Oregon. This location was formally the Carniceria Y Restaurante La Peral, which also held a Limited On-Premise Sales through OLCC. The business will be open Monday thru Friday from 10:00am to 9:00pm and Saturday and Sunday from 9:00am to 9:00pm. This being a restaurant there will be food service while the business is open and alcohol will be served during this time. The business will not have live music, karaoke, video lottery games, or pool tables. The Police Department has received no communication from the public or surrounding businesses in support of or against the new outlet. DISCUSSION: The Police Department has completed a background investigation, in connection with the OLCC, on the applicant and found nothing of a questionable nature, which would preclude the issuance of this license. FINANCIAL IMPACT: None. 150 Agenda Item November 10, 2014 TO:Honorable Mayor and City Council FROM:Scott Derickson, City Administrator Randy Scott, Public Works Director SUBJECT: City Owned, Potential Surplus Property RECOMMENDATION: That the City Council provide policy direction regarding the City owned sites listed below as potential surplus property and directstaff to initiate the formal surplus property process provided by state law. BACKGROUND: One of the fiscal 2014/15 Council Goals is to identify aplan for city owned property. Thisinvolves the review of all cityowned real property and the identification of possible surplus properties to be sold or reallocated as needed. Based on Marion County Assessor’s records, the city currently owns120 parcelsof real property. Theparcels vary in size and use. Attachment “A” is a map which identifies those properties. DISCUSSION: Staff reviewed the current and long term needs of the 120 city-owned properties and hasidentified, for Council consideration, the parcelslisted below that could be considered surplus property.The property information dataprovided is from Marion County Assessor property records, which includesthe real market value of the property per the assessor’s records. Staff is asking the City Council to reviewthe attached properties including any properties the Council believes should remain in the city’s ownership, and direct that the city move forward with the process. Under state law, the declaration of surplus property by a city requires published notice, a public hearing, and the passage of a resolution finding that the property is not needed for public use. If so directed,staff will take the steps necessary to place each of the listed properties before the City Council on a Agenda Item Review:City Administrator __x____City Attorney __x____Finance __x___ 151 Honorable Mayor and City Council November 10, 2014 Page 2 future agenda for a formal surplus property determination. Staff is also exploring the use of a realtor to assist with the possible sale of property in the future. 11842 Chateau Drive; Marion County Assessor property record information, property ID R45041, purchase date 2011, 0.166 Acres and real market value of $73,430. This property is currently abare lot, in Chateau Ranchettes residential subdivision, in MarionCounty. The property was acquired in 2011via anagreement when the city extended water service to the Chateau subdivision. 152 Honorable Mayor and City Council November 10, 2014 Page 3 670 Gatch Street;Marion County Assessor property record information, property ID R13625, no recordofpurchase date,0.55 Acres and real market value of $82,160. This property is currently a bare lot. It is currently zoned RS, single family residential. City would need to retain a drainage easement for future maintenance oftheexisting drainage way traversing along the northerlyboundary of the property. 153 Honorable Mayor and City Council November 10, 2014 Page 4 200WClevelandStreet;Marion County Assessor property record information, propertyID R13785, purchase date of 1995, 0.13Acres and a real market value of $53,500. This property is currently a bare lot. It is currently zoned (DDC). The Downtown Development and Conservation Downtown Development Plan does identify this block (currently not all owned by the City)asaredevelopment program for senior housing, assuming full City ownership in the future. 154 Honorable Mayor and City Council November 10, 2014 Page 5 137 N First Street; Marion County Assessor property record information, propertyID R13783, purchase date of 2007, 0.11Acres and a real market value of $108,410. This property currently has a vacant residential structure built in 1945. It is currently zoned Downtown Development and (DDC).The Downtown Development Plan does identify this Conservation block (currently not all owned by the City) as a redevelopment program for senior housing, assuming full City ownership in the future. 155 Honorable Mayor and City Council November 10, 2014 Page 6 200 Block ofOak Street; Marion County Assessor property record information, property ID R107861, purchase date of 2004, 0.115Acres anda real market value of $53,500. This property is currently a bare lot. It is currently zoned (DDC). The Downtown Development and Conservation Downtown Development Plan does identify this block (currently not all owned by the City) as a redevelopment program forsenior housing, assuming full City ownership in the future. 156 Honorable Mayor and City Council November 10, 2014 Page 7 175 N First Street; Marion County Assessor property record information, property ID R107860, purchase date of 2004, 0.153 Acres and a real market value of $53,500. This property currentlyhas a vacant residential structure built in the early 1900’s. It is currently zoned Downtown Development and (DDC). The Downtown Development Plan does identify this Conservation block (currently not all owned by the City) as a redevelopment program for senior housing, assuming full City ownership in the future. 157 Honorable Mayor and City Council November 10, 2014 Page 8 The following properties are used for or in conjunction with another use, but are underutilized and could also be designated as surplus property. 1750 Park Avenue; Marion County Assessor property record information , propertyID R13074, no record of purchase date, 2.79 Acres and a real market value of $210,590. This property is currently underutilized, the east half has an existing city water well, two structures used for equipment storage and an area for material storage. The structures, if kept, need a considerable amount of work. It is currently zoned Medium Density (RM). The West portion of this lot could be partitioned from the Residential parent parcel and designated as surplusproperty. 158 Honorable Mayor and City Council November 10, 2014 Page 9 Legion Park;Marion County Assessor property record information, property ID R108708,no record of purchase date, 0.44Acres and a real market value of $71,690. This property is currently bare land andit is land locked. It is currently zoned (P/SP). Public and Semi Public 159 Honorable Mayor and City Council November 10, 2014 Page 10 300 Block of Second Street; Marion County Assessor property record information , property ID R12811, no record of purchase date, 0.51 Acres and a real market value of $178,720. The propertyis currently used as public parking and special events, such as leaf disposal and holiday tree disposal. The lot currently gets minimal use as a publicparking lot. It is currently zoned (DDC). Downtown Development and Conservation 160 Honorable Mayor and City Council November 10, 2014 Page 11 347 N Front Street; MarionCounty Assessor property record information, propertyID R108940,purchase date of 2000, 0.12Acres anda real market value of $535,650.Called , the disposition of this the Association Building property iscurrently under a separate process of future decision.It is currently zoned (DDC). Downtown Development and Conservation The following properties use is in conjunction with an adjacent propertyand could be designated as surplusproperty. 161 Honorable Mayor and City Council November 10, 2014 Page 12 East of City; Marion County Assessor property record information, ID R13271, purchase date of 1982, 0.33 Acres anda real market value of $2,310. The property is currently used a private access, and was acquired by the city from Marion County due totax foreclosure. 162 Honorable Mayor and City Council November 10, 2014 Page 13 S Settlemier/Ben Brown; Marion County Assessor property record information, ID R13764, purchase date of 1982, 0.02Acres and a real market value of $2,680. The property is currently used asanadjacent residential use, and was acquired by the city from Marion Countydue to taxforeclosure. 163 Honorable Mayor and City Council November 10, 2014 Page 14 POTENTIAL SURPLUS PROPERTY SUMMARY Marion CountPurchaseMarion County Real Market Value LocationProperty IDDateAcresZoneUseImprovementsImprovementsLandTotal 11842 Chateau DriveR450413/17/20110.166CountyVacantNone$ 15,930 $ 57,500$ 73,430 670 Gatch StreetR13625No Record0.55RSVacantNone$ -$ 82,160$ 82,160 200-212 W ClevelandR1378510/20/19950.13DDCVacantNone$ -$ 53,500$ 53,500 137 N 1STR137839/27/20070.11DDCVacantResidence$ 36,910 $ 71,500$ 108,410 200 BLK Oak StR10786110/8/20040.115DDCVacantNone$ -$ 53,500$ 53,500 175 N 1STR10786010/8/20040.153DDCVacantResidence$ 45,850 $ 68,500$ 114,350 $ 98,690 $ 386,660$ 485,350 Under Utilized property 1750 Park AvenueR13074No Record2.79RMStorageWell/Equip Stora $ 50,690 $ 159,900$ 210,590 Legion ParkR108708No Record0.44P/SPVacantNone$ -$ 71,690$ 71,690 Second StreetR12811No Record0.51DDCParking LotPavement$ 18,720 $ 160,000$ 178,720 347 N Front StR1089408/14/20000.12DDCStructureAssociation Build$ 493,650$ 42,000$ 535,650 $ 563,060$ 433,590$ 996,650 Other East of TownR132716/14/19820.33CountyAccessNone$ -$ 2,310$ 2,310 S Settlemier/Ben BrownR137646/14/19820.02RSResidentialResidential $ -$ 2,680$ 2,680 $ -$ 4,990$ 4,990 Total$ 661,750$ 825,240$ 1,486,990 If the City Council elects to pursuedesignating and selling any of the identified parcels as surplus property, staff can bring back to Council for review and action, the proceduresfor moving those forward. FINANCIAL IMPACT: There will be no financial impact at this time. 164 ATTACHMENT “A” 165 Agenda Item November 10, 2014 TO:City Council FROM:Kathy Figley, Mayor Pete McCallum, Council President SUBJECT: Oregon’s Urban Growth Boundary (UGB) Expansion Process RECOMMENDATION: Given that we have not yet had any results from Oregon Consensus’ Assessment Process, we are also recommending that the City begin an effort simultaneously to raise legislative awareness around and possible legislative solutions to specifically fix Woodburn’s UGB problem. In anticipation of a possible legislative solution, we have been interviewing various lobbying consultants. We are now recommending that the City Council, via a motion: 1)Approve an expenditure of up to $20,000 for the procurement of a professional consultant to assist in providing lobbying support in the upcoming legislative sessions. 2)Authorize the selection of a consultant once our selection process, which consists of interviewing professionals and reviewing qualifications, is completed. We expect to have this effort completed within the next week. : DISCUSSION On September 10, 2014, we provided Oregon Consensus’ Turner Odell with the attached letter clearly stating that, among other things, the City of Woodburn wished to mediate our current Urban Growth Boundary (UGB)dispute with 1000 Friends of Oregon. Mr. Odell has been assigned to Woodburn’s Assessment Process via an agreement between the Department of Land, Conservation & Development (DLCD) and Portland State University, which houses Oregon Consensus. Unfortunately, at the time of this , Oregon Consensus Agenda Item has not yet completed nor has the City received the outcome of their Assessment Process. Agenda Item Review:City Administrator ___x___City Attorney __x____Finance __x___ 166 Honorable Mayor and City Council November 10, 2014 Page 2 Despite all parties having expressed a desire to mediate our dispute, we do not yet know if mediation will occur. Nevertheless, we are recommending that the City Council continue to wait for the outcome of this effort, which will hopefully result in an eventual mediation effort. We have already discussed our issues and frustrations with key legislators and municipal leaders and have found there is sympathy and growing support for the legislature to not only solve Woodburn’s UGB problem, but alsohelp other communities in similar circumstances. Our goal is to introduce a bill that resolves Woodburn’s UGB issue, and also provides process specific reforms to aid in the future. Our effort will be focused on the upcoming legislative session. : FINANCIAL IMPACT Authorize up to $20,000 expenditure from the General Fund’s Material & Supplies line item. 167 168 169