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January 8, 2018 Agenda FIGLEY,MAYOR HRYN CITY OF W OO D B U R N JUAN SERRATOS,TCOUNCILOR WARD 1 LISA ELLSWORTH,COUNCILOR WARD II CITY COUNCIL AGENDA ROBERT CARNEY,COUNCILOR WARD III SHARON SCHAUB,COUNCILOR WARD IV FRANK LONERGAN,COUNCILOR WARD V .JANUARY 8, 2018 - 7.00 P.M. ERIC MORRIS,COUNCILOR WARD VI CITY HALL COUNCIL CHAMBERS-270 MONTGOMERY STREET 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 January 15 for Martin Luther King Jr. Day. The Aquatic Center and Transit will be open normal hours. Appointments: None. 4. WOOODBURN POLICE DEPARTMENT SWEARING-IN CEREMONY 5. WOODBURN POLICE DEPARTMENT AWARDS CEREMONY DEPARTMENT MEMBERS: Captain Tom Tennant Memorial Service Award - Officer Jorge Gaspar Distinguished Service Medal - Officer Aaron DeVoe Lifesavinq Medal - Sergeant Colleen Altabef - Officer Jarrod Bowers Lifesaving Medal and Letter of Commendation - Officer Geoff Carpenter - Officer Zachary Williams - Officer Matt Stearns Commendation Medal - Officer Robert Prinslow This facility is ADA accessible. If you need special accommodation, please contact the City Recorder at 503-980- 6318 at least 24 hours prior to this meeting. **Habrd int6rpretes disponibles para aquellas personas que no hablan Ingl6s, previo acuerdo. Comunfquese al (503) 980-2485.** January 8, 2018 Council Agenda Page i COMMUNITY MEMBERS: Commendation Medal - Tim Quinn Chief's Certificate of Appreciation - Chief Paul Iverson (Ret) - Shawn Baird - Paul Bickmore - Ewart Brown - Al Herriges - Eric Swenson - Rhonda Judson 6. 15 MINUTE RECESS 7. COMMUNITY/GOVERNMENT ORGANIZATIONS None. 8. PROCLAMATIONS/PRESENTATIONS Proclamations: None. Presentations: A. Audit Report 1 9. COMMUNICATIONS None. 10. BUSINESS FROM THE PUBLIC - This allows the public to introduce items for Council consideration not already scheduled on the agenda. 11. CONSENT AGENDA - Items listed on the consent agenda are considered routine 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 December 11, 2017 142 Recommended Action: Approve the minutes. B. Woodburn City Council Work Session minutes of December 11, 147 2017 Recommended Action: Approve the minutes. C. Building Activity for November 2017 149 January 8, 2018 Council Agenda Page ii Recommended Action: Receive the report. 12. TABLED BUSINESS None. 13. PUBLIC HEARINGS None. 14. GENERAL BUSINESS-Members of the public wishing to comment on items of general 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. Acceptance of a Public Maintenance &Slope Easement on a portion 150 of Lot 1 and Lot 2 of 1-5 Logistics Center" Located in the SE 1/4 of Sectionl4, Township 5 South, Range 2 West, W.M., Marion County, Oregon. Recommended Action: That City Council accept the Public Maintenance and Slope Easement on a portion of Lot 1 and Lot 2 of "1-5 Logistics Center" Located in the SE '/4 of Section 14, Township 5 South, Range 2 West, W.M., Marion County, Oregon, granted by Darma Real Estate Partnership LP, a Texas limited partnership, property owner of subject tax lots. Acceptance of this easement satisfies Conditions of Approval on Riparian Corridor and Wetlands Overlay District Permit 2017-04. B. Acceptance of a Relinquishment Deed for Sections of Evergreen 159 Road and Tom Tennant Drive per Oregon Department of Transportation Cooperative Improvement Agreement No. 25169 Recommended Action: That City Council accept the relinquishment deed for stipulated sections of Evergreen Road and Tom Tennant Drive per an Oregon Department of Transportation (ODOT) Cooperative Improvement Agreement No. 25169. C. Award Professional Services Contract for Building Repair & 166 Maintenance Services to GC Quality Construction, LLC Recommended Action: That the City Council, acting in its capacity as the Local Contract Review Board, authorize the City Administrator to enter into a Professional Services Agreement with GC Quality Construction, LLC for the Building Repair & Maintenance Services. 15. PLANNING COMMISSION OR ADMINISTRATIVE LAND USE ACTIONS - These are Planning Commission or Administrative Land Use actions that may be called up by the City Council. January 8, 2018 Council Agenda Page iii A. Call-Up Briefing: Planning Commission Approval of a Conditional 168 Use Application for Tienda Mexicana at 311 N. Front St (CU 2017- 04) Recommended Action: Staff recommends no action and briefs the Council on this item pursuant to Woodburn Development Ordinance (WDO) Section 4.02.02. The Council may call up this item for review if desired and, by majority vote, initiate a review of this decision. 16. CITY ADMINISTRATOR'S REPORT 17. MAYOR AND COUNCIL REPORTS 18. ADJOURNMENT January 8, 2018 Council Agenda Page iv GROVE, Mt_..IELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 975 Cotter,e Street:'VL,Suite 200,Sulenr, Oregon 97301 (503)581-7788 December 21, 2017 City Council City of Woodburn 270 Montgomery St. Woodburn, Oregon 97071 We have audited the financial statements of the City of Woodburn (the City) and the Woodburn Urban Renewal Agency as of and for the year ended June 30, 2017, and have issued our report thereon dated December 21, 2017. Professional standards require that we advise you of the following matters relating to our audit. Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated May 8, 2017, our responsibility, as described by professional standards, is to fonn and express opinions about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather-than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing 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 over financial reporting. Accordingly, as part of our audit,we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, and our firm, have complied with all relevant ethical requirements regarding independence. We have evaluated independence based on management's skills, knowledge, and experience (SKE) and safeguards established and have determined that the threats are significant, but have determined that management has the ability to take responsibility for the work performed and that safeguards in place are adequate. The safeguards applied include: the auditor does not make decisions for management, the auditors are preparing the financial statements in accordance with accounting principles generally accepted in the United States of America, management possesses suitable skills, knowledge, and experience to read and understand their financial statements, 1 and Grove, Mueller& Swank, P.C. has a quality control system in place and we have an external peer review every three years. Qualitative Aspects of the City's Significant Accounting Practices Significant Accounting Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in the notes to the financial statements. The City implemented one new pronouncement: GASB Statement No. 77, "Tax Abatement Disclosures," addresses the disclosure requirements for governments that have tax abated properties in their jurisdiction. The statement requires governments to disclose a description of the tax abatement program, the gross dollar amount of taxes abated during the period, and commitments made by a government, other than to abate taxes, as part of the tax abatement agreement. There was no effect to the City's financial statements as a result of implementing this pronouncement. Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management's current judgments. The most sensitive accounting estimates affecting the financial statements are depreciation, deferred inflows, deferred outflows, and net pension liability. We evaluated the key factors and assumptions used to develop the estimates and determined that it is reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units. Significant Difficulties Encountered during the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit. Uncorrected and Corrected Misstatements For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. Management has corrected all identified misstatements. In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. One adjusting entry was proposed to reclass principal payments from interest for the sewer revenue bonds. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be 2 significant to the City's financial statements or the auditor's report. No such disagreements arose during the course of the audit. Representations Requested from Management We have requested certain written representations from management,which are included in the attached letter dated December 21, 2017. Management's Consultations with Other Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. Other Significant Matters,Findings,or Issues In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating and regulatory conditions affecting the City, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City's auditors. We applied certain limited procedures to management's discussion and analysis, the schedule of the City's proportionate share of the net pension liability (asset) — Oregon public employees retirement system, and the schedule of the City's contributions — Oregon public employees retirement system, which are required supplementary infonnation (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on supplementary information, which accompanies the financial statements, but is not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. This information is intended solely for the information and use of the City Council and management of the City of Woodburn and Woodburn Urban Renewal Agency and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, qCERMI DPUBLICACCOUNANTS 3 9 _f- � Irrc.orporaied I889 December 21,2017 Grove,Mueller&Swank,P.C. 475 Cottage Street NE,Suite 200 Salem,OR 97301 This representation letter is provided in connection with your audit of the financial statements of the City of Woodburn and the Woodburn Urban Renewal Agency (collectively, the City) as of June 30, 2017, and the related notes to the financial statements, for the purpose of expressing opinions on whether the basic financial statements present fairly, in all material respects, the financial position and the respective changes in financial position,results of operations, and cash flows, where applicable, of the various opinion units of the City in accordance with accounting principles generally accepted for governments in the United States of America (U.S. GAAP). Certain representations in this letter are described as being limited to matters that are material.Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances,makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. We confirm that,to the best of our knowledge and belief,having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves as of December 21,2017: Financial Statements 1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement dated May 8, 2017, for the preparation and fair presentation of the financial statements of the various opinion units referred to above in accordance with U.S. GAAP. 2. We acknowledge our responsibility for 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. 3. We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud. 4. We acknowledge our responsibility for compliance with the laws, regulations, and provisions of contracts and grant agreements. 5. We have reviewed,approved,and taken responsibility for the financial statements and related notes. 6. We have a process to track the status of audit findings and recommendations. 7. We have identified and communicated to you all previous audits,attestation engagements,and other studies related to the audit objectives and whether related recommendations have been implemented. 8. Significant assumptions used.by us in making accounting estimates, including those measured at fair value, are reasonable. 9. Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of U.S.GAAP. 10. All events subsequent to the date of the financial statements and for which U.S. GAAP requires adjustment or disclosure have been adjusted or disclosed. Finance Department 270 Montgomery Street • t4°aca rurn, Ore ca 7071 Ph.50S-982-5222 •Fns j0.;-482-i24_? 4 11. The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP. 12. We are in agreement with the adjusting journal entries you have proposed,and they have been posted to the City's accounts. 13. All component units, as well as joint ventures with an equity interest, are included and other joint ventures and related organizations are properly disclosed. 14. All funds and activities are properly classified. 15. All funds that meet the quantitative criteria in GASB Statement No. 34,Basic Financial Statements—and Management's Discussion and Analysis for State and Local Governments,GASB Statement No.37,Basic Financial Statements—and Management's Discussion and Analysis- .for State and Local Governments: Omnibus as amended, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, for presentation as major are identified and presented as such and all other funds that are presented as major are considered important to financial statement users. 16. All components of net position, nonspendable fund balance, and restricted, committed, assigned, and unassigned fund balance are properly classified and, if applicable,approved. 17. Our policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position/fund balance are available is appropriately disclosed and net position/fund balance is properly recognized under the policy. 18. All revenues within the statement of activities have been properly classified as program revenues,general revenues,contributions to term or permanent endowments,or contributions to permanent fund principal. 19. All expenses have been properly classified in or allocated to functions and programs in the statement of activities,and allocations, if any,have been made on a reasonable basis. 20. All interfund and intra-entity transactions and balances have been properly classified and reported. 21. Deposit and investment risks'have been properly and fully disclosed. 22. Capital assets, including infrastructure assets, are properly capitalized, reported, and if applicable, depreciated. 23. With respect to the required supplementary information accompanying the financial statements: 24. We acknowledge our responsibility for the presentation of the required supplementary information. 25. We believe the required supplementary information, including its form and content, is measured and fairly presented. 26. The methods of measurement or presentation have not changed from those used in the prior period. 27. We believe the significant assumptions or interpretations underlying the measurement or presentation of the required supplementary information, and the basis for our assumptions and interpretations, are reasonable and appropriate in the circumstances. 28. With regard to investments and other instruments reported at fair value: a. The underlying assumptions are reasonable and they appropriately reflect management's intent and ability to carry out its stated courses of action. b. The measurement methods and related assumptions used in determining fair value are appropriate in the circumstances and have been consistently applied. c. The disclosures related to fair values are complete,adequate, and in accordance with U.S.GAAP. d. There are no subsequent events that require adjustments to the fair value measurements and disclosures included in the financial statements. 29. With respect to the supplementary information: 30. We acknowledge our responsibility for presenting the supplementary information in accordance with accounting principles generally accepted in the United States of America, and we believe the supplementary information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America. The methods of measurement and presentation of the supplementary information have not changed from those used in the prior period, 5 and we have disclosed to you any significant assumptions or interpretations underlying the measurement and presentation of the supplementary information. 31. If the supplementary information is not presented with the audited financial statements,we will make the audited financial statements readily available to the intended users of the supplementary information no later than the date we issue the supplementary information and the auditor's report thereon. Information Provided 1. We have provided you with: a. Access to all im nforation, of which we are aware that is relevant to the preparation and fair presentation of the financial statements of the various opinion units referred to above, such as records,documentation,meeting minutes,and other matters; b. Additional information that you have requested from us for the purpose of the audit; and c. Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence. 2. All transactions have been recorded in the accounting records and are reflected in the financial statements. 3. We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud. 4. We have no knowledge of any fraud or suspected fraud that affects the entity and involves: a. Management; b. Employees who have significant roles in internal control; or c. Others where the fraud could have a material effect on the financial statements. 5. We have no knowledge of any allegations of fraud, or suspected fraud, affecting the entity's financial statements communicated by employees, former employees,vendors,regulators,or others. 6. We are not aware of any pending or threatened litigation, claims, and assessments whose effects should be considered when preparing the financial statements. 7. We have disclosed to you the identity of the entity's related parties and all the related party relationships and transactions of which we are aware. 8. There have been no communications from regulatory agencies concerning noncompliance with or deficiencies in accounting, internal control,or financial reporting practices. 9. The City has no plans or intentions that may materially affect the carrying value or classification of assets and liabilities. 10. We have disclosed to you all guarantees, whether written or oral, under which the City is contingently liable. 11. We have disclosed to you all significant estimates and material concentrations known to management that are required to be disclosed in accordance with GASB Statement No. 62 (GASB-62), Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. Significant estimates are estimates at the balance sheet date that could change materially within the next year. Concentrations refer to volumes of business, revenues, available sources of supply, or markets or geographic areas for which events could occur that would significantly disrupt normal finances within the next year. 12. We have identified and disclosed to you the laws, regulations, and provisions of contracts and grant agreements that could have a direct and material effect on financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds. 13. There are no: a. Violations or possible violations of laws or regulations, or provisions of contracts or grant agreements whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, including applicable budget laws and regulations. 6 b. Unasserted claims or assessments that our lawyer has advised are probable of assertion and must be disclosed in accordance with GASB-62. c. Other liabilities or gain or Ioss contingencies that are required to be accrued or disclosed by GASB-62 d. Continuing disclosure consent decree agreements or filings with the Securities and Exchange Commission and we have filed updates on a timely basis in accordance with the agreements (Rule 240, 15c2-12). 14. The City has satisfactory title to all owned assets,and there are no liens or encumbrances on such assets nor has any asset or future revenue been pledged as collateral. 15. We have complied with all aspects of grant agreements and other contractual agreements that would have a material effect on the financial statements in the event of noncompliance. M Scott Derickson,City Administrator Sandra Montoya,Finance Director 7 WOODB URN URBAN RENEWAL AGENCY (A COMPONENT UNIT OF THE CITY OF WOODB URN, OREGON) ANNUAL FINANCIAL REPORT Year Ended June 30, 2017 8 WOODB URN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) AGENCY OFFICIALS JUNE 30, 2017 MAYOR AND COUNCIL MEMBERS Name Term Expires Mayor Kathryn Figley December 31, 2018 Council Members Frank Lonergan,President December 31, 2018 Robert Carney December 31, 2018 Lisa Ellsworth December 31, 2020 Eric Morris December 31, 2018 Sharon Schaub December 31, 2018 Juan Serratos December 31, 2020 The above individuals may be contacted at the address below. Staff Scott Derickson, City Administrator N. Robert Shields, City Attorney Sandra Montoya, Finance Director Marne Anderson, Accounting Manager City of Woodburn, Oregon 270 Montgomery Street Woodburn, Oregon 97071 9 WOODB URN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) TABLE OF CONTENTS JUNE 30, 2017 Page INDEPENDENT A UDITOR'S REPORT i-ii MANAGEMENT'S DISCUSSION AND ANALYSIS iii-v BASIC FINANCIAL STATEMENTS Government—wide Financial Statement Statement of Net Position—Governmental Activities 6 Statement of Activities—Governmental Activities 7 Fund Financial Statements Balance Sheet—Governmental Fund 8 Statement of Revenues, Expenditures and Changes in Fund Balances—Governmental Fund 9 Notes to Basic Financial Statements 10-15 REQUIRED SUPPLEMENTARY INFORMATION Schedules of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Urban Renewal Fund 16 COMPLIANCE SECTION Independent Auditor's Report Required by State Regulations 17-18 10 GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 475 Cottage Street NE,Suite 200,Saleny 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, 2017, 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 Agency'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- 11 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, 2017, 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 16 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 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 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 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 budgetary schedule is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Report on Other Legal and Regulatory Requirements In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have issued our report dated December 21, 2017, on our consideration of the 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 P UBLIC A CCO UNTANTS By: .: Ryan T.Pasquarella, A Shareholder December 21, 2017 ii 12 MANAGEMENT'S DISCUSSSIONAND ANALYSIS 13 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, 2017 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 assets exceeded liabilities by $2,102,607. The Agency has recorded the following assets as of June 30, 2017: Cash and investments of $2,164,713 and property taxes receivable of$28,238. Liabilities are comprised of accounts payable and accrued payroll liabilities of$90,344 at June 30, 2017. Statements of Net Position June 30, 2017 2016 ASSETS Cash and investments $ 2,164,713 $ 1,753,639 Other assets 28,238 47,592 Total Assets 2,192,951 1,801,231 LIABILITIES Other liabilities 90,344 58,823 NET POSITION Unrestricted 2,102,607 1,742,408 Property taxes totaling $615,957 comprise 95% of the Agency's revenue and are derived from the tax increment assessment within the Agency's boundaries. The remaining revenue of$35,129 is from interest earnings. Expenses for the year ended June 30, 2017 were $82,805 on personnel costs and $76,992 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. - iii- 14 Statements of Activities Year Ended June 30, 2017 2016 REVENUES Property taxes $ 615,957 $ 553,942 Miscellaneous 35,129 28,353 Total Revenues 651,086 582,295 EXPENSES Community development 159,797 139,800 Interest on long-term debt - 562 Total Expenses 159,797 140,362 REVENUES OVER(UNDER) EXPENSES 491,289 441,933 TRANSFERS TO PRIMARY GOVERNMENT (131,090) (18,521) CHANGE IN NET POSITION 360,199 423,412 NET POSITION,beginning of year, as restated 1,742,408 1,318,996 NET POSITION, end of year $ 2,102,607 $ 1,742,408 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 presents 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. - iv - 15 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 10-15. Financial Analysis of Funds As of June 30, 2017 the Agency's governmental fund reported a fund balance of $2,077,188 or an increase of $363,844 over the prior year. This is due mainly to decreases in Downtown Grant and Loan projects and the final payment of long-term debt made in 2016. Budgetary Highlights There was one change to the adopted budget in the current year, which increased beginning fund balance,property taxes and miscellaneous revenues in total by $73,068, and increased capital outlay by $73,068. 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, 2017 the Agency has no long-term debt outstanding, as the final payment was made during the 2015-2016 year. 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 City of Woodburn at 270 Montgomery Street, Woodburn, Oregon. -v- 16 BASIC FINANCIAL STATEMENTS 17 URBAN RENEWAL AGENCY OF THE CITY OF WOODB URN, OREGON (A Component Unit of the City of Woodburn, Oregon) STATEMENT OF NET POSITION—GOVERNMENTAL ACTIVITIES JUNE 30, 2017 ASSETS Cash and investments $ 2,164,713 Property taxes receivable 28,238 Total Assets 2,192,951 LIABILITIES Accounts payable 87,085 Accrued payroll and payroll liabilities 3,259 Total Liabilities 90,344 NET POSITION Unrestricted $ 2,102,607 The accompanying notes are an integral part of the financial statements. - 6- 18 URBAN RENEWAL AGENCY OF THE CITY OF WOODB URN, OREGON (A Component Unit of the City of Woodburn, Oregon) STATEMENT OF ACTIVITIES GOVERNMENTAL ACTIVITIES YEAR ENDED JUNE 30, 2017 Revenues Taxes and assessments $ 615,957 Miscellaneous 35,129 Total Revenues 651,086 Expenses Community development 159,797 Revenues Over Expenses 491,289 Transfer to Primary Government (131,090) CHANGE IN NET POSITION 360,199 NET POSITION, June 30, 2016, as originally stated 1,760,929 Priorperiod adjustment (18,521) NET POSITION, June 30, 2016, as restated 1,742,408 NET POSITION, June 30, 2017 $ 2,102,607 The accompanying notes are an integral part of the financial statements. - 7- 19 URBAN RENEWAL AGENCY OF THE CITY OF WOODB URN, OREGON (A Component Unit of the City of Woodburn, Oregon) BALANCE SHEET GOVERNMENTAL FUND JUNE 30, 2017 ASSETS Cash and investments S 2,164,713 Property taxes receivable 28,238 Total Assets S 2,192,951 LIABILITIES,DEFERRED INFLOWS,AND FUND BALANCE Liabilities Accounts payable S 87,085 Accrued payroll and payroll liabilities 3,259 Total Liabilities 90,344 Deferred Inflows Unavailable revenue 25,419 Fund Balance Unrestricted 2,077,188 Total Liabilities, Deferred Inflows, and Fund Balance S 2,192,951 RECONCILIATION TO THE STATEMENT OF NET POSITION Fund Balance S 2,077,188 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. 25,419 Net Position of Governmental Activities S 2,102,607 The accompanying notes are an integral part of the financial statements. -8- 20 URBAN RENEWAL AGENCY OF THE CITY OF WOODB URN, 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, 2017 REVENUES Taxes and assessments $ 619,602 Miscellaneous 35,129 Total Revenues 654,731 EXPENDITURES Current Personal services 82,805 Materials and services 76,992 Capital outlay 131,090 Total Expenditures 290,887 NET CHANGE IN FUND BALANCE 363,844 FUND BALANCE,Beginning ofyear 1,713,344 FUND BALANCE,End ofyear S 2,077,188 RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES AND CHANGES FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Net Change in Fund Balance S 363,844 Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the fund financial statements. Property taxes (3,645) Change in Net Position S 360,199 The accompanying notes are an integral part of the financial statements. -9- 21 URBAN RENEWAL AGENCY OF THE CITY OF WOODB URN, OREGON (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2017 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. - 10- 22 URBAN RENEWAL AGENCY OF THE CITY OF WOODB URN, OREGON (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Measurement Focus and Basis of Accounting(Continued) Basic Financial Statements (Continued) The Statement of Activities indicates how net position changed during the current period. Fund financial statements display information about the Agency's fund. The single major fund, Urban Renewal 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. 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 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. 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. - 11 - 23 URBAN RENEWAL AGENCY OF THE CITY OF WOODB URN, OREGON (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Measurement Focus and Basis of Accounting(Continued) Fund Balance (Continued) Unassigned fund balance is the residual classification. This classification represents fund balance that has not been restricted, committed or assigned. Governmental Fund Financial Statements 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 Inflows 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. 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. The Board resolution authorizing appropriations for each fund sets the level by which expenditures cannot legally exceed appropriations. Appropriations are made at the program level. Appropriations lapse at year end. - 12- 24 URBAN RENEWAL AGENCY OF THE CITY OF WOODB URN, OREGON (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Budget and Budgetary Accounting(Continued) 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. 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 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 insurance for the City's deposits with financial institutions up to $250,000 each for the aggregate of all non-interest bearing accounts and 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. 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 - 13 - 25 URBAN RENEWAL AGENCY OF THE CITY OF WOODB URN, OREGON (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 CASHAND INVESTMENTS(Continued) Investments (Continued) 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, 2017, the fair value of the position in the Oregon State Treasurer's Short-Term Investment Pool was approximately equal to the value of the pool shares. The investment in the Oregon Short-Term Fund is not subject to 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. BEGINNING BALANCE ADJUSTMENT The beginning net position has been decreased by $18,521 to recognize transfers of assets to the City of Woodburn as of June 30, 2016. 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. - 14- 26 URBAN RENEWAL AGENCY OF THE CITY OF WOODB URN, OREGON (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 SUBSEQUENT EVENTS Management has evaluated subsequent events through December 21, 2017, the date on which the financial statements were available to be issued. Management is not aware of any subsequent events that require recognition or disclosure in the financial statements. - 15- 27 REQUIRED S UPPLEMENTAR Y INFORMA TION 28 URBAN RENEWAL AGENCY OF THE CITY OF WOODB URN, OREGON (A Component Unit of the City of Woodburn, Oregon) SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGETAND ACTUAL - URBANRENEWAL FUND YEAR ENDED JUNE 30, 2017 Budgeted Amounts Original Final Actual Variance REVENUES Taxes and assessments $ 565,000 $ 615,989 $ 619,602 $ 3,613 Miscellaneous 7,000 12,768 35,129 22,361 Total Revenues 572,000 628,757 654,731 25,974 EXPENDITURES Personal services 84,387 84,387 85,774 (1,387) Materials and services 84,000 84,000 76,992 7,008 Capital outlay 200,000 273,068 131,090 141,978 Contingency 16,838 16,838 - 16,838 Total Expenditures 385,225 458,293 293,856 164,437 REVENUES OVER(UNDER) EXPENDITURES 186,775 170,464 360,875 190,411 FUND BALANCE,Beginning of year 1,700,000 1,716,311 1,716,313 2 FUND BALANCE,End of year (budgetary basis) $ 1,886,775 $ 1,886,775 $ 2,077,188 $ 190,413 *Budget is appropriated by program, therefore this does not reflect an expenditure in excess of appropriations. - 16- 29 COMPLIANCE SECTION 30 GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 475 Cottage Street NE,Suite 200,Saleny 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 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 Urban Renewal Agency of the City of Woodburn, Oregon as of and for the year ended June 30, 2017, and have issued our report thereon dated December 21, 2017. Compliance and Other Matters As part of obtaining reasonable assurance about whether the 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. - 17- 31 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: _ Ryan T. Pasquarella, A Shareholder December 21, 2017 - 18- 32 CITY OF WOODB URN, OREGON Annual Financial Report Year Ended June 30, 2017 33 CITY OF WOODB URN, OREGON JUNE 30, 2017 MAYOR AND COUNCIL MEMBERS Name Term Expires Mayor Kathryn Figley December 31, 2018 Council Members Frank Lonergan,President December 31, 2018 Robert Carney December 31, 2018 Lisa Ellsworth December 31, 2020 Eric Morris December 31, 2020 Sharon Schaub December 31, 2018 Juan Serratos December 31, 2020 The above individuals may be contacted at the address below. Staff Scott Derickson, City Administrator N. Robert Shields, City Attorney Sandra Montoya, Finance Director Marne Anderson, Accounting Manager City of Woodburn, Oregon 270 Montgomery Street Woodburn, Oregon 97071 34 CITY OF WOODB URN, OREGON TABLE OF CONTENTS Pape FINANCIAL SECTION INDEPENDENT AUDITOR'S REPORT 1-3 MANAGEMENT'S DISCUSSION AND ANALYSIS 4-9 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position 10 Statement of Activities 11 Fund Financial Statements Balance Sheet- Governmental Funds 12 Reconciliation of Balance Sheet- Governmental Funds to the Statement of Net Position 13 Statement of Revenues, Expenditures and Changes in Fund Balances— Governmental Funds 14 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances— Governmental Funds to the Statement of Activities 15 Statement of Fund Net Position -Proprietary Funds 16 Statement of Revenues, Expenses and Changes in Fund Net Position—Proprietary Funds 17 Statement of Cash Flows -Proprietary Funds 18-19 Statement of Fiduciary Net Position 20 Statement of Changes in Fiduciary Net Position 21 Notes to Basic Financial Statements 22-46 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual General Fund 47 Street Fund 48 Schedule of the City's Proportionate Share of the Net Pension Liability (Asset)—Oregon Public Employee's Retirement System 49 Schedule of the City's Contributions—Oregon Public Employee's Retirement System 50 SUPPLEMENTARY INFORMATION Governmental Funds Combining Balance Sheet—Nonmajor Funds 51-52 Combining Statement of Revenues, Expenditures and Changes in Fund Balances—Nonmajor Funds 53-54 Schedules of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual Transit Fund 55 Building Inspection Fund 56 Search and Seizure Fund 57 Housing Rehabilitation Fund 58 Library Endowment Fund 59 Museum Endowment Fund 60 Lavelle Black Trust Fund 61 Urban Renewal Agency Fund 62 General Capital Construction Fund 63 35 CITY OF WOODB URN, OREGON TABLE OF CONTENTS Pape FINANCIAL SECTION(Continued) SUPPLEMENTARY INFORMATION(Continued) Governmental Funds (Continued) Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual(Continued) Special Assessment Fund 64 Street/Storm Capital Construction Fund 65 Parks SDC Fund 66 Street SDC Fund 67 Storm SDC Fund 68 Equipment Replacement Fund 69 GO Debt Service Fund 70 Proprietary (Enterprise) Funds Combining Statement of Fund Net Position—Nonmaj or Funds 71 Combining Statement of Revenues,Expenses and Changes in Fund Net Position—Nonmajor Funds 72 Combining Statement of Cash Flows—Nonmajor Funds 73 Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget(Non-GAAP Basis) and Actual Water Fund 74 Sewer Fund 75 Sewer Capital Construction Fund 76 Water SDC Fund 77 Sewer SDC Fund 78 Water Capital Construction Fund 79 Internal Services Funds Combining Statement of Fund Net Position 80 Combining Statement of Revenues,Expenses and Changes in Fund Net Position 81 Combining Statement of Cash Flows 82 Schedules of Revenues, Expenditures and Changes in Fund Balances (Budgetary Basis)— Budget and Actual Information Services Fund 83 Insurance Fund 84 COMPLIANCE SECTION Independent Auditor's Report Required by Oregon State Regulations 85-86 36 ..... LP.C. .,,�,��i��r�m�w�wr�r�rrr�rr�rr�rr�r�rr�rr�rr�rr�rr�rr�rrr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rrr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rrr�rr�rr�rr�rr�rr�r��. CERIMB D PUBB_IC: CC(SUNrANI:S AND CONSl.lr..'I'AN1'.S 47,5 Cottage Sfreef NE Suife 200,Salein,Oregon 97301 (503)581-7788 INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Council Members City of Woodburn 270 Montgomery Street Woodburn, Oregon 97071 Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Woodburn as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. - 1 - 37 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Woodburn as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis (MD&A) on pages 4 through 9 and the schedules of revenues, expenditures and changes in fund balance—budget and actual for the General and Street funds ("the budgetary schedules"), the schedule of the City's proportionate share of the net pension liability (asset) — Oregon public employees retirement system, and the schedule of the City's contributions —Oregon public employees retirement system (PERS schedules) be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to management's discussion and analysis and PERS schedules described in the preceding paragraph in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The budgetary schedules described above were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The budgetary schedules have been subject to the auditing procedures applied in the audit of the basis financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the budgetary schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The supplementary information is presented for the purpose of additional analysis and is not a required part of the basic financial statements. -2- 38 The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, or other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly presented, in all material respects, in relation to the basic financial statements as a whole. Report on Other Legal and Regulatory Requirements In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have issued our report dated December 21, 2017 on our consideration of the City's compliance with certain provisions of laws and regulations,including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance. GROVE, MUELLER & SWANK, P.C. CERTIFIED P UBLIC A CCO UNTANTS By: Ryan T.Pasquarella, A Shareholder December 21, 2017 - 3 - 39 CITY OF WOODBURN Year Ended June 30,2017 MANAGEMENT'S DISCUSSION AND ANALYSIS The Management's Discussion and Analysis of the City of Woodburn's Annual Financial Report (AFR) presents a discussion and analysis of the City's financial performance during the fiscal year ended June 30, 2017. The information presented here should be considered in conjunction with the financial statements included in this report. FINANCIAL HIGHLIGHTS Following are the financial highlights of the City for the fiscal year ended June 30, 2017. June 30,2017 2017 2016 change Net position $ 119,868,417 $ 116,447,857 $ 3,420,560 Change in net position 3,420,560 (2,314,820) 5,735,380 Governmental activities net position 69,778,713 69,065,155 713,558 Business-type activities fund net position 50,089,704 47,382,702 2,707,002 Change in governmental net position 713,558 (3,713,067) 4,426,625 Change in proprietary fund net position 2,707,002 1,398,247 1,308,755 OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City of Woodburn's basic financial statements. The basic financial statements include three components: the government-wide financial statements, the fund financial statements and notes to the financial statements. This report also contains required and other supplementary information. Government-wide financial statements. The government-wide financial statements present the net position (statement of net position) and results of operations (statement of activities) of the City as a whole. Included are all governmental and business-type assets, deferred outflows, liabilities, deferred inflows and activities of the City. The measurement focus and basis of accounting are the same for the entire City. The measurement focus is on all economic resources of the City, including current financial resources (assets) and non-current financial resources (capital assets) and the related current and non-current liabilities and equity accounts. Both government-wide statements are prepared using the accrual basis of accounting, which is similar to the methods used by most businesses and takes into account all revenues and expenses connected with the fiscal year, even if cash involved has not been received or paid. The statement of net position presents information on all the City's assets, deferred outflows, liabilities and deferred inflows, with the difference reported as net position. Increases or decreases in net position may indicate whether the City's financial position is improving or deteriorating. The statement of activities presents the expenses incurred in providing services to the public and the revenues associated with those activities for both governmental and business-type activities. The statement of activities begins with expenses by function. To these functions are applied charges for services, operating grants and contributions and capital grants and contributions. The resulting sums,with some adjustments,represent charges to taxpayers and may equate to the nearest that governments can determine the "bottom line." - 4- 40 The government-wide financial statements are divided into two categories. Governmental activities are services funded through property taxes and intergovernmental revenues. The governmental activities for the City include general government, public safety, highways and streets, culture and recreation, and economic environment. Business-type activities are operations funded primarily through charges to external users of goods and services. Business-type activities include water and wastewater. Fund Financial Statements. A fund is a fiscal and accounting entity with a self-balancing set of accounts that is used to segregate resources that are restricted to a particular activity. The use of funds deters commingling of resources designated for a specific purpose, prevents unauthorized transfer of surpluses, and ensures compliance with legal and contractual requirements. The City has three types of fund categories: governmental funds, proprietary funds, and a fiduciary fund. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on current sources and uses of spendable resources and use the modified accrual basis of accounting. Operating statements include all sources and uses of financial resources, and display the excess of revenues and other financial sources over (under) expenditures and other uses. Included in the balance sheet are liquid assets and receivables that will be converted into cash currently and short-term liabilities,including payables to vendors and employees. Unmatured bond principal or liabilities for compensated absences not to be paid in the fiscal year are not included. Because the governmental fund statements do not encompass the long-term focus of the government-wide statements, reconciliations are provided on the subsequent page of the governmental fund statements. The emphasis is on major funds that account for the predominant assets and activities of all funds. The City maintains eighteen individual governmental funds. Information is presented separately for the General Fund and Street Fund in the Governmental Fund Balance Sheet and Statement of Revenue, Expenditures and Changes in Fund Balances. The other governmental funds are combined into a single, aggregated presentation. Information for these non-major governmental funds is provided in the form of combining statements. Proprietary Funds. The City maintains two different types of proprietary funds: enterprise and internal service funds. These funds are used to show activities that operate more like those of commercial enterprises. Fees are charged for services provided, both to outside customers and to other units of the City. Enterprise funds are presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water and sewer activities. Internal service funds account for activities furnishing goods or services to other units of the government. Charges for these services are on a cost-reimbursement basis. The internal services funds include insurance and information services. The internal service funds are reported with governmental activities in the government-wide financial statements. Proprietary fund statements provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water, Sewer, and Sewer Capital Construction funds. The internal service funds are combined into a single column in the proprietary fund financial statements. The City adopts an annual appropriated budget for all of its funds. Budgetary comparison statements, demonstrating compliance with this budget,have been provided. Notes to the Financial Statements. The notes to the financial statements are an integral part of the basic financial statements and should be read along with them. The notes provide additional information necessary to communicate the financial position of the City. - 5- 41 Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required and other supplementary information concerning the City. GOVERNMENT-WIDE FINANCIAL ANALYSIS The City had $167,797,210 in total assets, $8,388,998 in total deferred outflows, $55,293,916 in total liabilities and $1,023,875 in total deferred inflows, resulting in combined net position of $119,868,417 for governmental and business-type activities. The largest component of the City's net position reflects its net investment in capital assets (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 $912,989 over the prior year due to depreciation in excess of current year capital additions. Business-type capital assets, net of depreciation, decreased $1,639,662 over the prior year due to depreciation in excess of current year capital additions. Total liabilities for both governmental and business-type activities increased by $5,083,690 from the prior year mainly due to the increase in the net pension liability. Overall, the City's financial net position increased by $3,420,560 (or 3%). The majority of this is due to the application of the provisions of Statement No. 68, Accounting and Financial Reporting for Pensions from the Governmental Accounting Standards Board. The pronouncement included an adjustment to the current year pension expense based on the results of the actuarial study as described in the notes to the financial statements. Statement of Net Position The following table reflects the condensed Statement of Net Position compared to the prior year. 2017 2016 Change Governneental Business-type Governs—tal Business-type Governmental Business-type Activities Activities Total Activities Activities Total Activities Activities Total Cash and investments $ 18,766,633 $ 26,656,947 $ 45,423,580 $ 16,366,077 $ 25,266,880 $ 41,632,957 $ 2,400,556 $ 1,390,067 $ 3,790,623 Other assets 2,170,344 775,750 2,946,094 2,206,771 1,031,903 3,238,674 (36,427) (256,153) (292,580) Capital assets 61,539,134 57,888,402 119,427,536 62,452,123 59,528,064 121,980,187 (912,989) (1,639,662) (2,552,651) Total Assets 82,476,111 85,321,099 167,797,210 81,024,971 85,826,847 166,851,818 1,451,140 (505,748) 945,392 Deferred outflows 6,800,358 1,588,640 8,388,998 1,272,865 338,462 1,611,327 5,527,493 1,250,178 6,777,671 Other Liabilities 14,396,728 4,186,341 18,583,069 6,996,268 2,529,099 9,525,367 7,400,460 1,657,242 9,057,702 Long-team debt 4,312,216 32,398,631 36,710,847 4,810,507 35,874,352 40,684,859 (498,291) (3,475,721) (3,974,012) Total Liabilities 18,708,944 36,584,972 55,293,916 11,806,775 38,403,451 50,210,226 6,902,169 (1,818,479) 5,083,690 Deferred inflows 788,812 235,063 1,023,875 1,425,906 379,156 1,805,062 (637,094) (144,093) (781,187) Net position: Net investment in capital assets 57,813,459 37,312,451 95,125,910 58,326,049 35,777,188 94,103,237 (512,590) 1,535,263 1,022,673 Restricted 10,660,016 16,635,580 27,295,596 9,815,650 16,735,267 26,550,917 844,366 (99,687) 744,679 Unrestricted 1,305,238 (3,858,327) (2,553,089) 923,456 (5,129,753) (4,206,297) 381,782 1,271,426 1,653,208 Total Net Position $ 69,778,713 $ 50,089,704 $ 119,868,417 $ 69,065,155 $ 47,382,702 $ 116,447,857 $ 713,558 $ 2,707,002 $ 3,420,560 Governmental Activities The City's net position from governmental activities increased $713,558 (1%) from 2015-16 to 2016-17. - 6- 42 Business-type Activities The City's net position from business-type activities increased $2,707,002 (6%) from 2015-16 to 2016-17. Statement of Activities The following table reflects the condensed Statement of Activities compared to the prior year. 2017 2016 Chance Business- Business- Business- Governmental hpe Governmental hpe Governmental type Activities Activities Total Activities Activities Total Activities Activities Total Revenues Program Revenues Charges for service $ 1,798,258 $11,385,096 $ 13,183,354 $ 1,799,621 $11,585,205 $ 13,384,826 $ (1,363) $ (200,109) $ (201,472) Operating grants and contributions 2,052,681 - 2,052,681 1,962,709 - 1,962,709 89,972 - 89,972 Capital grants and contributions 266,679 114,664 381,343 350,449 307,152 657,601 (83,770) (192,488) (276,258) Total Program Reven- 4,117,618 11,499,760 15,617,378 4,112,779 11,892,357 16,005,136 4,839 (392,597) (387,758) General Revenues Propertytaxes 9,724,889 - 9,724,889 9,156,725 - 9,156,725 568,164 - 568,164 Franchise taxes 1,543,317 - 1,543,317 1,511,125 - 1,511,125 32,192 - 32,192 Other taxes 547,220 - 547,220 550,346 - 550,346 (3,126) - (3,126) Intergovernmental 702,990 - 702,990 649,350 - 649,350 53,640 - 53,640 Other 315,885 372,742 688,627 319,676 227,126 546,802 (3,791) 145,616 141,825 Total General Reven- 12,834,301 372,742 13,207,043 12,187,222 227,126 12,414,348 647,079 145,616 792,695 Total Reven- 16,951,919 11,872,502 28,824,421 16,300,001 12,119,483 28,419,484 651,918 (246,981) 404,937 Expenses General government 2,676,477 - 2,676,477 5,114,971 - 5,114,971 (2,438,494) - (2,438,494) Public safety 7,805,948 - 7,805,948 9,231,388 - 9,231,388 (1,425,440) - (1,425,440) Highways and streets 2,426,489 - 2,426,489 2,691,040 - 2,691,040 (264,551) - (264,551) Culture and recreation 2,980,178 - 2,980,178 3,481,264 - 3,481,264 (501,086) - (501,086) Economic Environment 829,477 - 829,477 - - - 829,477 - 829,477 Interest on long-term debt 169,933 - 169,933 183,342 - 183,342 (13,409) - (13,409) Water - 2,885,827 2,885,827 - 3,303,526 3,303,526 - (417,699) (417,699) Sewer - 5,629,532 5,629,532 - 6,728,773 6,728,773 - (1,099,241) (1,099,241) Total Expenses 16,888,502 8,515,359 25,403,861 20,702,005 10,032,299 30,734,304 (3,813,503) (1,516,940) (5,330,443) Changes in Net Position Before Transfers 63,417 3,357,143 3,420,560 (4,402,004) 2,087,184 (2,314,820) 4,465,421 1,269,959 5,735,380 Transfers 650,141 (650,141) - 688,937 (688,937) - (38,796) 38,796 - Change in Net Position 713,558 2,707,002 3,420,560 (3,713,067) 1,398,247 (2,314,820) 4,426,625 1,308,755 5,735,380 Beginning Net Position 69,065,155 47,382,702 116,447,857 72,778,222 45,984,455 118,762,677 (3,713,067) 1,398,247 (2,314,820) Ending Net Position $ 69,778,713 $50,089,704 $119,868,417 $ 69,065,155 $47,382,702 $116,447,857 $ 713,558 $2,707,002 $3,420,560 Governmental Activities. Total revenues for the City's governmental activities were $16,951,919 for the fiscal year ended June 30, 2017. Approximately 57% of the total revenue for the governmental activities was derived from property taxes and approximately 24% of the total revenue was from program revenues. Total expenses for governmental activities were $16,888,502 and net transfers in were $650,141 resulting in a$713,558 increase in net position. General governmental activities accounted for approximately 16% of the total governmental activities expense. Public Safety, Highways and Streets, Culture and Recreation, and Economic Environment expenses account for 83% of the total, and interest on long-term debt was 1% of total governmental activities expenses. Business-Type Activities. Revenues of business-type activities totaled $11,872,502 for the current fiscal year. These activities generated $11,499,760 in program revenues, and $372,742 in interest earnings and miscellaneous revenues. The total expenses for business-type activities were $8,515,359 and net transfers out were $650,141 resulting in a $2,707,002 increase in net position. Business-type activities for the City of Woodburn consist of operations for water and wastewater services. - 7- 43 FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS As noted previously, the City uses fund accounting to segregate resources that are restricted to a particular activity. Fund balance represents the excess of the assets of the fund over its liabilities. Because the fund financial statements focus on current sources and uses of spendable resources, fund balances relating to each fund may be useful in assessing the government's net resources available. Governmental Funds. At the end of the fiscal year, there was $17,778,072 of fund balance of the governmental funds, an increase of$2,383,385 from the prior year. The City's governmental funds include the General Fund and Street Fund, and other non-major funds. The General Fund is the chief operating fund of the City. At the end of the fiscal year, a fund balance of $6,252,781 was reported by the General Fund. The fund balance increased by $1,3661,863 from the previous year due to increases in property taxes, franchise fees and miscellaneous revenues, along with decreases in charges for services and fines and forfeitures, coupled with increases in general government and culture and recreation expenditures and decreases in police expenditures. The City reports one other major governmental fund, the Street Fund. The Street Fund had a fund balance of $3,905,804, an increase of $560,900 from the previous year, due mainly to revenues in excess of a decrease in street maintenance expenditures. Proprietary Funds. Net position of the proprietary funds equaled $50,089,704 at the end of the current fiscal year, an increase of$2,707,002 from the prior year. The City reports three major proprietary funds, the Water Fund, the Sewer Fund and the Sewer Capital Construction Fund. The Water Fund had a net position of$1,106,036, an increase of$455,175 from previous year, due to an increase in charges for services and an increase in personal services expenses, along with a decrease in interest expense. The Sewer Fund had a net position of$25,120,984, an increase of$2,039,732 from previous year, due to the combination of an increase in charges for services along increases in personal services and materials and services. The Sewer Capital Construction Fund had a net position of$16,759,769, an increase of$133,547 from the previous year, due to revenues and transfers in excess of depreciation. GENERAL FUND BUDGETARY HIGHLIGHTS Actual revenues (budgetary basis), exceeded budgeted amounts by 6%. General Fund expenditures ended $4,278,454 below budgeted amounts primarily due to management efforts to contain costs throughout the fiscal year. There was one change to the adopted budget in the current year, which increased transfers out and decreased contingency by $2,596. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets. The City's investment in capital assets for its governmental and business-type activities equaled $61,539,134 and $57,888,402 respectively, at the end of the current fiscal year, net of accumulated depreciation. This investment includes land, construction in process, buildings, equipment, and infrastructure. Additional information about the City's capital assets is presented in the notes to the financial statements. - 8- 44 Governmental Activities Business-type Activiites Total 2017 2016 2017 2016 2017 2016 Land $ 22,567,381 $ 22,567,381 $ 1,783,816 $ 1,783,816 $ 24,351,197 $ 24,351,197 Construction in progress 506,639 96,389 4,365,993 4,441,468 4,872,632 4,537,857 Buildings 16,756,793 16,734,493 62,748,380 62,634,628 79,505,173 79,369,121 Equipment 7,226,203 7,072,539 2,427,869 2,370,459 9,654,072 9,442,998 Infrastructure 44,360,967 44,360,967 30,479,609 29,908,166 74,840,576 74,269,133 Accumulated depreciation (29,878,849) (28,379,646) (43,917,265) (41,610,473) (73,796,114) (69,990,119) Net capital assets $ 61,539,134 $ 62,452,123 $ 57,888,402 $ 59,528,064 $ 119,427,536 $ 121,980,187 Long-term Debt. At the end of the current fiscal year, long-term debt outstanding for the governmental activities totaled $4,312,216, compared to $4,810,507 in the prior year. For the business-type activities, total long-term debt equaled $32,398,632 compared to $35,874,352 in the prior year. The decrease is due to scheduled debt repayments. Additional information about the City's long-term debt outstanding is presented in the notes to the financial statements. Governmental Activities Business-type Activities Total 2017 2016 2017 2016 2017 2016 General obligation bonds $ 3,690,000 $ 4,060,000 $ $ $ 3,690,000 $ 4,060,000 Loans 35,675 66,074 4,002,523 4,416,251 4,038,198 4,482,325 Revenue bonds - - 26,384,767 29,302,005 26,384,767 29,302,005 Bond premium - - 1,934,160 2,072,315 1,934,160 2,072,315 Accrued compensated absences 586,541 684,433 77,181 83,781 663,722 768,214 $ 4,312,216 $ 4,810,507 $ 32,398,631 $ 35,874,352 $ 36,710,847 $ 40,684,859 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES Oregon, much like the national economic environment, has steadily improved over the last few years. The low unemployment rates have positively impacted wages and Oregon's median household incomes have risen. The strong economy, coupled with steady population growth and Woodburn's 2015 approval of the Urban Growth Boundary,will result in an increase in local development and property tax revenue projections. REQUESTS FOR INFORMATION This financial report is designed to provide the City of Woodburn's citizens, taxpayers, customers, investors and creditors with a general overview of the City's finances and to demonstrate the City's accountability for the money it receives. Questions about this report or requests for additional financial information should be addressed to the City of Woodburn, 270 Montgomery Street, Woodburn, Oregon 97071. -9- 45 BASIC FINANCIAL STATEMENTS 46 CITY OF WOODB URN, OREGON STATEMENT OF NET POSITION JUNE 30, 2017 Governmental Business-type Activities Activities Totals ASSEIS Cash and investments $ 18,766,633 $ 26,656,947 $ 45,423,580 Accounts receivable 1,058,215 762,868 1,821,083 Property taxes receivable 437,643 - 437,643 Assessment liens receivable 34,135 - 34,135 Loans receivable 650,169 - 650,169 Prepaid expenses 3,064 - 3,064 Internal balances (12,882) 12,882 - Non-depreciable capital assets 23,074,020 6,149,809 29,223,829 Other capital assets,net of depreciation 38,465,114 51,738,593 90,203,707 Total Assets 82,476,111 85,321,099 167,797,210 DEFERRED OUTFLOWS Deferred outflows related to PERS 6,800,358 1,588,640 8,388,998 LIABILITIES Accounts payable 804,927 308,186 1,113,113 Accrued payroll liabilities 520,148 114,048 634,196 Deposits payable - 121,915 121,915 Interest payable 15,147 468,606 483,753 Noncurrent liabilities: Due within one year: Long-term debt 420,675 3,921,935 4,342,610 Bond premium - 138,154 138,154 Accrued compensated absenses 234,616 33,513 268,129 Due in more than one year: Long-term debt 3,305,000 26,465,355 29,770,355 Bond premium - 1,796,006 1,796,006 Accrued compensated absenses 351,925 43,668 395,593 Net pension liability 13,056,506 3,173,586 16,230,092 Total Liabilities 18,708,944 36,584,972 55,293,916 DEFERRED INFLOWS Deferred inflows related to PERS 788,812 235,063 1,023,875 NET POSIT ION Net investment in capital assets 57,813,459 37,312,451 95,125,910 Restricted for: Debt service 1,758 - 1,758 Culture and recreation 194,820 - 194,820 Community development 3,002,887 - 3,002,887 Construction 7,460,551 16,635,580 24,096,131 Unrestricted 1,305,238 (3,858,327) (2,553,089) Total Net Position S 69,778,713 S 50,089,704 $ 119,868,417 The accompanying notes are an integral part of the financial statements. - 10- 47 CITY OF WOODB URN, OREGON STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2017 Program Revenues Fees,Fines Operating Capital and Charges Grants and Grants and Expenses for Services Contributions Contributions FUNCTIONS/PROGRAMS Governmental activities: General government $ 2,676,477 $ 660,502 - Public safety 7,805,948 113,331 65,368 26,507 Highways and streets 2,426,489 1,104 1,480,081 41,695 Culture and recreation 21980,178 565,889 507,232 198,477 Economic Environment 829,477 457,432 - - Interest on long-term debt 169,933 - - - Total Governmental activities 16,888,502 1,798,258 2,052,681 266,679 Business-type activities: Water 2,885,827 3,293,342 - 41,133 Sewer 5,629,532 8,091,754 - 73,531 Total Business-type activities 8,515,359 11,385,096 - 114,664 Total Activities $ 25,403,861 $ 13,183,354 $ 2,052,681 $ 381,343 General Revenues: Property taxes Franchise taxes Other taxes Intergovernmental Gain on disposition of assets Unrestricted investment earnings Miscellaneous Total General Revenues Transfers Change in Net Position Net Position-beginning of year Net Position-end of year 48 Net(Expenses)Revenues and Changes in Net Position Governmental Business-type Activities Activities Totals $ (2,015,975) $ - $ (2,015,975) (7,600,742) - (7,600,742) (903,609) - (903,609) (1,708,580) - (1,708,580) (372,045) - (372,045) (169,933) - (169,933) (12,770,884) - (12,770,884) 448,648 448,648 2,535,753 2,535,753 2,984,401 2,984,401 (12,770,884) 2,984,401 (9,786,483) 9,724,889 - 9,724,889 1,543,317 - 1,543,317 547,220 - 547,220 702,990 - 702,990 13,241 3,505 16,746 200,736 283,101 483,837 101,908 86,136 188,044 12,834,301 372,742 13,207,043 650,141 (650,141) - 713,558 2,707,002 3,420,560 69,065,155 47,382,702 116,447,857 $ 69,778,713 $ 50,089,704 $ 119,868,417 The accompanying notes are an integral part of the financial statements. - 11 - 49 CITY OF WOODB URN, OREGON BALANCE SHEET- GOVERNMENTAL FUNDS JUNE 30, 2017 Special Revenue Other Governmental General Street Funds ASSETS Cash and investments $ 6,446,267 $ 4,133,878 $ 7,654,872 Accounts receivable 700,869 158,437 197,068 Property taxes receivable 385,416 - 52,228 Assessment liens receivable - - 34,135 Loans receivable - - 650,169 Prepaid expenses 3,064 - - Due from other funds - - 38,768 Total Assets $ 7,535,616 $ 4,292,315 $ 8,627,240 LIABILITIES,DEFERRED INFLOWS AND FUND BALANCES Liabilities Accounts payable $ 143,743 $ 357,819 $ 238,337 Accrued payroll and payroll liabilities 442,542 28,692 32,513 Due to other funds 51,650 - 5,594 Total Liabilities 637,935 386,511 276,444 Deferred Inflows Unavailable revenue 644,900 - 731,309 Fund Balance Non-spendable 3,064 - - Restricted for: Debt service - - 1,758 Construction - 3,905,804 3,554,747 Culture and recreation - - 194,820 Community development - - 2,327,299 Committed to: Public safety - - 9,681 Capital outlay - - 932,081 Planning and building - - 599,101 Unassigned 6,249,717 - - Total Fund Balance 6,252,781 3,905,804 7,619,487 Total Liabilities and Fund Balance $ 7,535,616 $ 4,292,315 $ 8,627,240 50 Total $ 18,235,017 1,056,374 437,644 34,135 650,169 3,064 38,768 $ 20,455,171 $ 739,899 503,747 57,244 1,300,890 1,376,209 3,064 1,758 7,460,551 194,820 2,327,299 9,681 932,081 599,101 6,249,717 17,778,072 $ 20,455,171 The accompanying notes are an integral part of the financial statements. - 12- 51 CITY OF WOODB URN, OREGON RECONCILIATION OF BALANCE SHEET- GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2017 Fund Balances S 17,778,072 The Statement of Net Position reports receivables at their net realizable value. However, receivables not available to pay for current period expenditures are reported as unavailable in governmental funds. 1,376,208 PERS net pension asset, deferred outflows of resources arising from contributions paid, changes in assumptions, and differences between expected and actual experience, and deferred inflows arising from changes in proportionate share of earnings in the current year are not financial resources in governmental funds,but are reported in the Statement of Net Position. Net pension liability (12,519,191) Deferred outflows 6,523,146 Deferred inflows (754,568) Capital assets are not financial resources in governmental funds,but are reported in the Statement of Net Position at their net depreciable value. Cost 91,417,983 Accumulated depreciation (29,878,849) All liabilities are reported in the Statement of Net Position. However, if they are not due and payable in the current period, they are not recorded in governmental funds. Accrued compensated absences (551,595) Accrued interest (15,147) Long-term debt (3,725,675) Internal service funds are proprietary-type funds and not reported with governmental funds. However,because internal service funds primarily benefit governmental activities, their assets, liabilities and net position are reported along with governmental activities in the Statement of Net Position. 128,329 Net Position of Governmental Activities S 69,778,713 The accompanying notes are an integral part of the financial statements. - 13 - 52 CITY OF WOODB URN, OREGON STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES- GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2017 Special Revenue Other Governmental General Fund Street Funds REVENUES Taxes and assessments $ 9,065,453 $ 129,412 $ 1,130,299 Licenses and permits 1,973,591 202 535,522 Charges for services 861,991 359,820 38,227 Intergovernmental 845,008 1,480,082 605,895 Fines and forfeitures 420,305 - - Miscellaneous 243,300 137,675 181,982 Total Revenues 13,409,648 2,107,191 2,491,925 EXPENDITURES Current General government 2,814,214 - 442,983 Public safety 6,861,768 - - Highways and streets - 1,529,569 - Culture and recreation 2,193,922 - 803,820 Debt Service Principal - - 400,399 Interest - - 169,937 Capital outlay - 5,500 467,708 Total Expenditures 11,869,904 1,535,069 2,284,847 REVENUES OVER(UNDER)EXPENDITURES 1,539,744 572,122 207,078 OTHER FINANCING SOURCES(USES) Transfers in - 90,000 329,236 Transfers out (197,742) (101,222) (75,692) Proceeds from sales of assets 19,861 - - Total Other Financing Sources(Uses) (177,881) (11,222) 253,544 NET CHANGE IN FUND BALANCE 1,361,863 560,900 460,622 FUND BALANCE,beginning ofyear 4,890,918 3,344,904 7,158,865 FUND BALANCE,end ofyear $ 6,252,781 $ 3,905,804 $ 7,619,487 53 Total $ 10,325,164 2,509,315 1,260,038 2,930,985 420,305 562,957 18,008,764 3,257,197 6,861,768 1,529,569 2,997,742 400,399 169,937 473,208 15,689,820 2,318,944 419,236 (374,656) 19,861 64,441 2,383,385 15,394,687 $ 17,778,072 The accompanying notes are an integral part of the financial statements. - 14- 54 CITY OF WOODB URN, OREGON RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES- GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2017 Net Change in Fund Balances -Total Governmental Funds $ 2,383,385 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds defer revenues that do not provide current financial resources. However,the Statement of Activities recognizes such revenues at their net realizable value when earned,regardless of when received. Property tax receivables (53,054) Decreases in other loans receivable (58,184) Governmental funds do not report expenditures for unpaid compensated absences,unpaid payroll,interest expense or arbitrage since they do not require the use of current financial resources. However,the Statement of Activities reports such expenses when incurred, regardless of when settlement ultimately occurs. Accrued compensated absences 132,838 Accrued interest payable 4 Capital outlays are reported as expenditures in governmental funds. However,the Statement of Activities allocates the cost of capital outlay over their estimated useful lives as depreciation expense. Capital outlay expenditures capitalized 586,214 Depreciation (1,499,203) Proceeds from the issuance of long-term debt provide current financial resources to governmental funds and are reported as revenues. In the same way,repayments of long-term debt use current financial resources and are reported as expenditures in governmental funds. However,neither the receipt of debt proceeds nor the payment of debt principal affect the Statement of Activities,but are reported as increases and decreases in noncurrent liabilities in the Statement of Net Position. Debt principal paid 400,399 Current year PERS pension expense related to change in net pension liability is reported as an expense in the Statement of Activities but is not recorded as an expenditure in the governmental funds. (1,286,947) Net income of internal service funds 108,106 Change in Net Position of Governmental Activities $ 713,558 The accompanying notes are an integral part of the financial statements. - 15- 55 CITY OF WOODB URN, OREGON STATEMENT OF FUND NET POSITION-PROPRIETARY FUNDS JUNE 30, 2017 Sewer Capital Water Sewer Construction ASSETS Current Assets Cash and investments $ 2,231,622 $ 7,638,173 $ 12,539,830 Accounts receivable 226,199 536,371 93 Due from other funds - - - Total Current Assets 2,457,821 8,174,544 12,539,923 Noncurrent Assets Nondepreciable capital assets 158,444 1,625,372 3,058,298 Other capital assets,net of depreciation 8,786,537 40,071,383 1,371,182 Total Noncurrent Assets 8,944,981 41,696,755 4,429,480 Total Assets 11,402,802 49,871,299 16,969,403 DEFERRED OUTFLOWS Deferred outflows-contributions to PERS 576,095 1,012,545 - LIABILITIES Current Liabilities Accounts payable 35,187 62,799 209,634 Accrued payroll liabilities 50,832 63,216 - Deposits payable 121,915 - - Accrued interest payable 230,367 238,239 - Due to other funds 12,943 12,943 - Current portion of long-term liabilities Long-term debt 744,737 2,603,647 - Bond premiums - 138,154 - Accrued compensated absences 19,009 14,504 - lbtal Current Liabilities 1,214,990 3,133,502 209,634 Noncurrent Liabilities Long-term debt 8,318,481 18,720,425 - Bond premiums - 1,796,006 - Accrued compensated absences 16,824 26,844 - Net pension liability 1,212,117 1,961,469 - I btal Noncurrent Liabilities 9,547,422 22,504,744 - Total Liabilities 10,762,412 25,638,246 209,634 DEFERRED INFLOWS Net projected to actual earnings to PERS 110,449 124,614 - NET POSITION: Net investment in capital assets (118,237) 30,184,022 4,429,480 Restricted for: Construction - - 12,296,851 Unrestricted 1,224,273 (5,063,038) 33,438 Total Net Position $ 1,106,036 $ 25,120,984 $ 16,759,769 56 Governmental Activities Other Business- type Funds Total Internal Service $ 4,247,322 $ 26,656,947 $ 537,210 205 762,868 1,841 38,768 38,768 - 4,286,295 27,458,583 539,051 1,307,695 6,149,809 - 1,509,491 51,738,593 - 2,817,186 57,888,402 - 7,103,481 85,346,985 539,051 - 1,588,640 277,212 566 308,186 65,028 - 114,048 16,401 - 121,915 - - 468,606 - - 25,886 - - 3,348,384 - - 138,154 - - 33,513 - 566 4,558,692 81,429 - 27,038,906 - - 1,796,006 - - 43,668 34,946 - 3,173,586 537,315 - 32,052,166 572,261 566 36,610,858 653,690 - 235,063 34,244 2,817,186 37,312,451 - 4,285,729 16,582,580 - - (3,805,327) 128,329 $ 7,102,915 $ 50,089,704 $ 128,329 The accompanying notes are an integral part of the financial statements. -16- 57 CITY OF WOODB URN, OREGON STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION-PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2017 Water Sewer OPERATING REVENUES Charges for services $ 3,293,342 $ 8,091,754 Miscellaneous 58,922 27,214 Total Operating Revenues 3,352,264 8,118,968 OPERATING EXPENSES Personal services 1,291,072 1,765,552 Materials and services 729,985 1,213,847 Depreciation 358,996 1,810,151 Total Operating Expenses 2,380,053 4,789,550 OPERATING INCOME(LOSS) 972,211 3,329,418 NONOPERA TING REVENUES (EXPENSES) Investment revenue 22,231 79,719 Amortization of bond premiums - 138,155 Debt payments Principal - - Interest expense (420,872) (899,176) Total Nonoperating Revenues (Expenses) (398,641) (681,302) NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS 573,570 2,648,116 Capital contributions - - Transfers in 57,411 - Transfers out (179,311) (608,384) Gain(loss)on disposition of assets 3,505 - CHANGE IN NET POSITION 455,175 2,039,732 NET POSITION, beginning of year 650,861 23,081,252 NET POSITION, end of year $ 1,106,036 $ 25,120,984 58 Governmental Activities Sewer Capital Other Business- Construction type Funds Total Internal Service 11,385,096 $ 1,735,792 86,136 33,121 11,471,232 1,768,913 3,056,624 481,468 - 26,218 1,970,050 1,245,400 78,961 58,684 2,306,792 - 78,961 84,902 7,333,466 1,726,868 (78,961) (84,902) 4,137,766 42,045 133,901 47,250 283,101 8,532 - - 138,155 - - - (1,320,048) - 133,901 47,250 (898,792) 8,532 54,940 (37,652) 3,238,974 50,577 - 114,664 114,664 - 78,607 1,536 137,554 57,529 - - (787,695) - - - 3,505 - 133,547 78,548 2,707,002 108,106 16,626,222 7,024,367 47,382,702 20,223 $ 16,759,769 $ 7,102,915 $ 50,089,704 $ 128,329 The accompanying notes are an integral part of the financial statements. - 17- 59 CITY OF WOODB URN, OREGON STATEMENT OF CASHFLOWS-PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2017 Water Sewer CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers S 3,393,595 $ 8,270,363 Paid to suppliers (733,323) (1,867,910) Paid to employees (1,241,077) (1,068,749) Net Cash Provided by (Used in) Operating Activities 1,419,195 5,333,704 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in - - Transfers out (192,000) (621,073) Net Cash Provided by (Used in)Non-Capital Financing Activities (192,000) (621,073) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets - - Proceeds from disposal of capital assets 3,505 - Principal paid on loans and bonds payable (727,319) (2,603,647) System development receipts -Interest paid (428,779) (930,165) Net Cash Provided by (Used in) Capital and Related Financing Activities (1,152,593) (3,533,812) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 22,231 79,719 Increase (Decrease) in Cash and Investments 96,833 1,258,538 CASH AND INVESTMENTS,Beginning ofyear 2,134,789 6,379,635 CASH AND INVESTMENTS,End ofyear S 2,231,622 S 7,638,173 60 Governmental Activities Sewer Capital Other Business- Construction Type Funds Totals Internal Service $ 197 $ 63 $ 11,664,218 $ 1,790,356 - (45,276) (2,646,509) (1,269,911) - - (2,309,826) (405,798) 197 (45,213) 6,707,883 114,647 78,607 39,544 118,151 57,529 - - (813,073) - 78,607 39,544 (694,922) 57,529 (163,168) (236,919) (400,087) - 3,505 - - (3,330,966) - 180,497 180,497 - - (1,358,944) - (163,168) (56,422) (4,905,995) - 133,901 47,250 283,101 8,532 49,537 (14,841) 1,390,067 180,708 12,490,293 4,262,163 25,266,880 356,502 $ 12,539,830 $ 4,247,322 $ 26,656,947 $ 537,210 The accompanying notes are an integral part of the financial statements. - 18- 61 CITY OF WOODB URN, OREGON STATEMENT OF CASHFLOWS(Continued) YEAR ENDED JUNE 30, 2017 Water Sewer RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) $ 972,211 $ 3,329,418 Adjustments to reconcile the change in operating income to net cash provided by operating activities: Depreciation 358,996 1,810,151 Change in assets and liabilities: Accounts receivable 26,036 151,395 Deferred outflows (432,954) (817,224) Accounts payable and accrued liabilities (46,707) (160,642) Customer deposits 15,295 - Compensated absences payable (11,689) 5,089 Net pension liability(asset) 587,909 1,109,709 Deferred inflows (49,902) (94,192) Net Cash Provided by (Used in) Operating Activities $ 1,419,195 $ 5,333,704 Noncash Transactions Transfer of capital assets $ 57,411 $ - 62 Governmental Activities Sewer Capital Other Business- Internal Construction Type Funds Totals Service $ (78,961) $ (84,902) $ 4,137,766 $ 42,045 78,961 58,684 2,306,792 - 197 63 177,691 21,444 - - (1,250,178) (223,633) (19,058) (226,407) (38,053) - 15,295 - - (6,600) 34,946 - 1,697,618 303,673 - - (144,094) (25,775) $ 197 $ (45,213) $ 6,707,883 $ 114,647 57,411 $ (102,442) The accompanying notes are an integral part of the financial statements. - 19- 63 CITY OF WOODB URN, OREGON STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2017 Pension Trust ASSETS Cash and investments $ 57,943 LIABILITIES - NET POSITION Held in trust for benefits and other purposes $ 57,943 The accompanying notes are an integral part of the financial statements. -20- 64 CITY OF WOODB URN, OREGON STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED JUNE 30, 2017 Pension Trust ADDITIONS Eamings $ 1,685 Total additions 1,685 DEDUCTIONS - CHANGE IN NET POSITION 1,685 NET POSITION, beginning of year 56,258 NET POSITION, end of year $ 57,943 The accompanying notes are an integral part of the financial statements. -21 - 65 NOTES TO BASIC FINANCIAL STATEMENTS 66 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of Woodburn, Oregon (the City) have been prepared in conformity with accounting principles generally accepted in the United States of America(GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards. The Financial Reporting Entity The City of Woodburn, Oregon is governed by an elected mayor and six council members who comprise the City Council. The City Council exercises supervisory responsibilities over the City operations, but day-to-day management control is the responsibility of a city administrator. All significant activities and organizations for which the City is financially accountable are included in the financial statements for the year ended June 30, 2017. There are certain governmental agencies and various service districts which provide services within the City. These agencies have independently elected governing boards and the City is not financially accountable for these organizations. Therefore, financial information for these agencies is not included in the accompanying basic financial statements. As defined by accounting principles generally accepted in the United States of America, the financial reporting entity consists of the primary government, as well as its component units, which are legally separate organizations for which the elected officials of the primary government are financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's board, and either a) the ability to impose will by the primary government, or b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government. The City of Woodburn's financial statements include the Woodburn Urban Renewal Agency as a blended component unit. The City Council and Board of Directors of Woodburn Urban Renewal Agency are composed of the same individuals. The separately issued financial statements of the Woodburn Urban Renewal Agency may be obtained from the City, 270 Montgomery Street, Woodburn, Oregon 97071. Basic Financial Statements Basic financial statements are presented at both the government-wide and fund financial level. Both levels of statements categorize primary activities as either governmental or business-type. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities,which rely to a significant extent on fees and charges for support. Government-wide financial statements display information about the reporting government as a whole. For the most part, the effect of interfund activity has been removed from these statements. These statements focus on the sustainability of the City as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. These aggregated statements consist of the Statement of Net Position and the Statement of Activities. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (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- 67 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Basis of Presentation (Continued) Fund financial statements display information at the individual fund level. Each fund is considered to be a separate accounting entity. Funds are classified and summarized as governmental, enterprise or fiduciary. Currently, the City has general, special revenue, internal service, capital projects, debt service and enterprise type funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Nonmajor funds are consolidated into a single column within each fund type in the financial section of the basic financial statements and are detailed in the other supplementary information. The government-wide and proprietary fund financial statements are accounted for using an economic resources measurement focus, whereby all assets and liabilities are included in the statement of net position and the statement of fund net position. The increases and decreases in those net positions are presented in the government-wide statement of activities and in the proprietary fund statement of revenues, expenses and changes in fund net position. These funds use the accrual basis of accounting whereby revenues are recorded when earned and expenses are recorded when a liability is incurred,regardless of the timing of related cash flows. Interfund activity consists of transfers, services provided and/or used, reimbursements, advances and loans. As a general rule, the effect of interfund activity has been eliminated from the governmental-wide financial statements. Exceptions to this general rule include interfund services provided and/or used. Interfund services provided and/or used are accounted for as revenues and expenses since the elimination of such revenues and expenses would distort the direct costs and program revenues reported for the various functions. Amounts reported as program revenues in the statement of activities include (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 - 68 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Fund Balance (Continued) Fund balance is reported as committed when the City Council takes formal action that places specific constraints on how the resources may be used. The City Council can modify or rescind the commitment at any time through taking a similar formal action. Resources that are constrained by the City's intent to use them for a specific purpose, but are neither restricted nor committed, are reported as assigned fund balance. Intent is expressed when the City Council approves which resources should be "reserved" during the adoption of the annual budget. The City's Finance Director uses that information to determine whether those resources should be classified as assigned or unassigned for presentation in the City's Annual Financial Report. Unassigned fund balance is the residual classification for the General Fund. This classification represents fund balance that has not been restricted, committed, or assigned within the General Fund. This classification is also used to report any negative fund balance amounts in other governmental funds. The City Council has approved a policy to maintain an ending fund balance in the General Fund, in order to provide stable services and employment to offset cyclical variations in revenues and expenditures. The targeted floor for the ending balance is 17% of annual operating revenue, as shown as a minimum fund balance in the General Fund. The City Council is the highest level decision making authority and may take formal action by vote or resolution to establish,modify, or rescind a fund balance commitment. Definitions of Governmental Fund Types The General Fund is used to account for all financial resources not accounted for in another fund. Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. The term "proceeds of specific revenues sources" means that the revenue sources for the fund must be from restricted or committed sources, specifically that a substantial portion of the revenue must be from these sources and be expended in accordance with those requirements. Capital Projects Funds are utilized to account for financial resources to be used for the acquisition or construction of capital equipment and facilities. Debt Service Funds are utilized to account for the accumulation of resources for, and the payment of, long-term debt principal and interest. Governmental Fund Financial Statements Governmental funds use the modified accrual basis of accounting whereby revenues are recorded only when susceptible to accrual (both measurable and available). "Measurable" means that the amount of the transaction can be determined. "Available"is defined as being collectible within the current period or soon enough thereafter (30 days) to be used to liquidate liabilities of the current period. Expenditures other than interest on noncurrent obligations, are recorded when the fund liability is incurred. -24- 69 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Governmental Fund Financial Statements (Continued) Real and personal property taxes are levied as of July 1 for each fiscal year on values assessed as of January 1. Property taxes are an enforceable lien on both real and personal property as of July 1 and are due and payable in three installments on November 15, February 15 and May 15. All property taxes are billed and collected by Marion County and remitted to the City. In the governmental fund financial statements, property taxes are reflected as revenues in the fiscal period for which they were levied, provided they are due, or past due and receivable within the current period, and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period (30 days). Otherwise, they are reported as unavailable revenues. Intergovernmental revenues are recognized as revenues when all eligibility requirements are met. There are, however, essentially two types of intergovernmental revenues. In one, monies must be expended on the specific purpose or project before any amounts will be paid to the City; therefore, all eligibility requirements are determined to be met when the underlying expenditures are recorded. In the other, monies are virtually unrestricted as to the purpose of the expenditure and are usually revocable only for failure to comply with prescribed requirements; therefore, all eligibility requirements are determined to be met at the time of receipt, or earlier,if the susceptible accrual criteria are met. Licenses and permits, charges for services, fines and forfeits and miscellaneous revenues (except investment earnings) are recorded as revenues when received in cash because they are generally not measurable until actually received. Investment earnings are recorded as earned since they are measurable and available. When both restricted and unrestricted resources are available for use, it is the City's practice to use restricted resources first, then unrestricted resources as they are needed. The reporting model sets forth minimum criteria(percentage of the assets, liabilities, receipts or disbursements of either fund category or the government and enterprise combined) for the determination of major funds. Nonmajor funds are combined in a column in the fund financial statements and detailed in the combining section. The City reports the following major governmental funds: General Fund Street Fund The City reports the following major proprietary funds: Water Fund Sewer Fund Sewer Capital Construction Fund Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reporting amounts of certain assets, liabilities, revenues and expenses as of and for the year ended June 30, 2017. Actual results may differ from such estimates. -25- 70 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Cash and Investments Investments, included in cash and investments, are carried at cost which approximates fair value. For purposes of the statement of cash flows, the proprietary funds consider cash and cash equivalents to include the cash and investment common pool. These amounts have the general characteristics of demand deposit accounts in that the proprietary funds may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty. Receivables and Unavailable Revenues Receivables for state, county and local shared revenues, included in accounts receivable, are recorded as revenue in the governmental funds as earned. Receivables of the enterprise funds are recorded as revenue as earned. Property taxes receivable for the governmental fund types, which have been collected within thirty days subsequent to year end, are considered measurable and available and are recognized as revenues. All other property taxes are considered unavailable and, accordingly, have not been recorded as revenue. Property taxes receivable by the City represent the City's allocated share of delinquent property taxes and other amounts to be collected from property owners within Marion County, Oregon. Assessment liens in the governmental fund types are recognized as receivables at the time property owners are assessed for property improvements. All assessments receivable are considered unavailable and, accordingly, have not been recorded as revenue. Revolving loans in the government fund types are recognized as receivables at the time housing rehabilitation loans are made. All loans receivable are considered unavailable and, accordingly, have not been recorded as revenue. Capital Assets Capital assets are stated at cost or estimated historical cost. Donated assets are recorded at fair market value at date of donation. Estimated fair market value of donated assets is determined based on engineering estimates of current cost or price indexed cost. Capital assets include land, right-of-way (included with land),buildings,improvements, equipment,infrastructure and other tangible and intangible assets costing over $5,000 used in operations that have initial useful lives extending beyond a single reporting period. Infrastructure are those capital assets that are stationary in nature and can be preserved for a significantly greater number of years than most other capital assets. Infrastructure reported in governmental activities consists of roads, bridges, sidewalks and traffic and lighting systems. Infrastructure reported in business-type activities consists of water and wastewater collection systems. All capital assets, except for infrastructure in governmental activities prior to July 1, 1980, have been capitalized in the government-wide and proprietary fund financial statements. In accordance with the current financial resources measurement focus, capital assets are not capitalized in the governmental fund financial statements. All purchased capital assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Historical cost is measured by the cash or cash equivalent price of obtaining an asset,including ancillary charges necessary to place the asset into its intended location and condition -26- 71 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Capital Assets (Continued) for use. Donated capital assets are reported at their estimated fair value at the time of acquisition plus ancillary charges, if any. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are capitalized. Amounts expended for maintenance and repairs are charged to expenditures/expenses in the appropriate funds as incurred and are not capitalized. Capital assets are depreciated unless they are inexhaustible in nature (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 10 - 40 years Water and Sewer Systems 15 - 50 years Infrastructure 50 years Equipment 5 - 15 years Upon disposal of capital assets, cost and accumulated depreciation are removed from the accounts and, if appropriate, a gain or loss on the disposal is recognized. Long-Tenn Debt Long-term debt directly related and expected to be paid from the enterprise funds is recorded in these funds. All other unmatured long-term debt is recorded on the statement of net position. Repayment of general bonded debt will be made from debt service funds. Bond premiums will be amortized over the life of the related debt. Payment of compensated absences will be made primarily from the General Fund, Street Fund, Water Fund and Sewer Fund. Deferred Ou flows/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 ou flows, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expenditure) until then. The City reports deferred outflow of resources related to pensions for contributions made after the June 30, 2016 measurement date, differences between expected and actual experience, and changes in proportionate share. -27- 72 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Deferred Ou flows/Inflows of Resources (Continued) In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows, represents an acquisition that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has two items that qualify for reporting in this category. The City reports deferred inflows related to pensions for changes in projected earnings versus actual earnings and contribution versus proportionate share of contributions. The other instance of deferred inflows arises only under a modified accrual basis of accounting. Accordingly, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes and loans receivable. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. Net Pension Liability The City reports its proportionate share of the Net Pension Liability of the Oregon Public Employees Retirement System (OPERS). A negative Net Pension Liability is reported as a Net Pension Asset. For purposes of measuring the net pension liability or asset, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about fiduciary net position of OPERS and additions to/deductions from OPERS's fiduciary net position have been determined on the same basis as they are reported by OPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value. Accrued Vacation Pay Accumulated vested vacation pay is accrued in the proprietary funds as it is earned by employees. In governmental fund types, the amounts, if any, expected to be liquidated with expendable available resources are accrued as liabilities of the funds and the amount payable from future resources is recorded on the statement of net position. The accrued payables in the Statement of Net Position are recorded as long-term in that the amount is not expected to materially change. Sick pay,which does not vest,is recorded in all funds when leave is taken. Budget and Budgetary Accounting A budget is prepared for each fund in accordance with the modified accrual basis of accounting for all funds. For budgetary purposes, interfund loan transactions are reported as interfund transfers. Appropriations are made at the department level for the General Fund and the object level for all other funds. Expenditures may not legally exceed appropriations. Appropriations lapse at the end of each fiscal year. Budget amounts include original approved amounts and all subsequent appropriation transfers approved by the City Council. After budget approval, the City Council may approve supplemental appropriations if an occurrence, condition, or need exists which had not been ascertained at the time the budget was adopted. Management may not amend the budget. A supplemental budget requires hearings before the public, publications in newspapers and approval by the City Council. -28- 73 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 ORGANIZATIONAND OPERATION The City's financial operations are accounted for in the following funds: Governmental Fund Types General Fund The General Fund accounts for activities of the City which are not accounted for in any other fund. Principal sources of revenue are property taxes, franchise fees and state and county shared revenues. Primary expenditures are for police protection, recreation and general government. Special Revenue Funds Street Fund- This fund is used to account for the City's street operations. The fund's major source of revenue is highway gas tax received from the State of Oregon. Transit Fund—This fund accounts for amounts held to be used for weekday transportation services. Building Inspection Fund- This fund accounts for building permit revenue and associated operations. Search and Seizure Fund - This fund accounts for the seizure of private properties that are the product of illegal activity, and for the expenditure of the proceeds by the City for illegal drug activity investigations and subsequent arrests. Housing Rehabilitation Fund - This fund accounts for the City's CDBG grant program and provides low income housing and small business loans. Library Endowment Fund- This fund accounts for funds held to be used for library improvement projects. Museum Endowment Fund- This fund accounts for amounts held for museum activities. Lavelle Black Trust Fund—This fund accounts for the donations received to continue the police dog program. Urban Renewal Fund This fund accounts for transactions related to urban renewal, including debt service on the URA loan.Property taxes are the primary source of revenue. Capital Projects Funds Street SDC Fund- This fund accounts for the collection and spending of street SDC's. General Capital Construction Fund - This fund is used to account for transfers from general services funds used for general services construction projects. Special Assessment Fund - This fund accounts for the repayment of local improvement district (LID) assessments. The money is used for construction of LID projects. Street/Storm Capital Construction Fund- This fund accounts for transfers from the Storm and Street funds. The money is used for street and storm related capital projects. -29- 74 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 ORGANIZATIONAND OPERATION(Continued) Governmental Fund Types (Continued) Capital Projects Funds (Continued) Parks SDC Fund- This fund is used to account for the collection and spending of park SDC's. Storm SDC Fund- This fund accounts for the collection and spending of storm SDC's. Equipment Replacement Fund - This fund accounts for transfers from other funds set aside for future equipment purchases. Debt Service Fund GO Debt Service Fund- This fund accounts for debt service on the City's 2005 GO bond. Property taxes are the major source of revenue. Proprietary Fund Types Enterprise Funds The City has six enterprise funds. Three funds are related to water, and three are related to sewer. The specific funds and their purposes are as follows. Water Fund- This fund accounts for the City's water system operation. Customer charges are the primary source of revenue. Sewer Fund - This fund accounts for the operation of the City's sewer system. Customer charges are the primary revenue source. Sewer Capital Construction Fund - This fund was used to account for the City's sewer treatment plant upgrade. The major source of revenue is debt proceeds. Water SDC Fund- This fund accounts for the collection and spending of water SDC's. Sewer SDC Fund- This fund accounts for the collection and spending of sewer SDC's. Water Capital Construction Fund- This fund accounts for water system capital improvement projects and the retirement of associated debt. Internal Service Funds The City has two internal service funds which provide services to other City departments. Internal charges are the primary revenue source for all funds. Expenditures are for the purposes as described below. Information Services Fund- This fund accounts for the maintenance and replacement of the City's network and technology services. Insurance Fund—This fund accounts for the City's insurance coverage. - 30- 75 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 ORGANIZATIONAND OPERATION(Continued) Fiduciary Fund The City has one fiduciary fund. The City's pension trust fund holds assets to provide retirement benefits to certain City employees. CASH AND INVESTMENTS The City maintains a cash and investment pool that is available for use by all funds. Each fund type's portion of this pool is displayed on the Statement of Net Position as part of"cash and investments." Carrying Fair Value Value Cash Deposits with financial institutions $ 184,902 S 184,902 Cash on hand 1,660 1,660 Investments Local Government Investment Pool 45,237,018 45,237,018 Assets held for pension benefits 57,943 57,943 8 45,481,523 S 45,481,523 Cash is reported in the financial statements as follows: Governmental funds S 18,229,418 Internal Service funds (included in governmental activities) 537,210 Enterprise funds 26,656,952 Fiduciary funds 57,943 S 45,481,523 Deposits The book balance of the City's bank deposits (checking accounts) was 8184,902 and the bank balance was 8250,480 at year end. The difference is due to transactions in process. Bank deposits are secured to legal limits by federal deposit insurance. The remaining amount is secured in accordance with ORS 295 under a collateral program administered by the Oregon State Treasurer. Investments The State Treasurer of the State of Oregon maintains the Oregon Short-term Fund, of which the Local Government Investment Pool is part. Participation by local governments is voluntary. The State of Oregon investment policies are governed by statute and the Oregon Investment Council. In accordance with Oregon Statutes, the investment funds are invested as a prudent investor would do, exercising reasonable care, skill and - 31 - 76 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 CASHAND INVESTMENTS(Continued) Investments (Continued) caution. The Oregon Short-term Fund is the LGIP for local governments and was established by the State Treasurer. It was created to meet the financial and administrative responsibilities of federal arbitrage regulations. The investments are regulated by the Oregon Short Term Fund Board and approved by the Oregon Investment Council(ORS 294.805 to 294.895). At June 30, 2017, the fair value of the position in the Oregon State Treasurer's Short-term Investment Pool was approximately equal to the value of the pool shares. The investment in the Oregon Short-term Fund is not subject to classification. Separate financial statements for the Oregon Short-term Fund are available from the Oregon State Treasurer. Interest Rate Risk In accordance with its investment policy, the City manages its exposure to declines in fair value of its investments by limiting the weighted average maturity of its investments. Custodial Credit Risk-Deposits This is the risk that in the event of a bank failure, the City's deposits may not be returned. The Federal Depository Insurance Corporation (FDIC)provides insurance for the City's deposits with financial institutions up to $250,000 for the aggregate of all non-interest bearing accounts and up to $250,000 for the aggregate of all interest bearing accounts at each institution. Deposits in excess of FDIC coverage are with institutions participating in the Oregon Public Funds Collateralization Program (PFCP). The PFCP is a shared liability structure for participating bank depositories, better protecting public funds though still not guaranteeing that all funds are 100% protected. Barring any exceptions, a bank depository is required to pledge collateral valued at least 10% of their quarter-end public fund deposits if they are well capitalized, 25% of their quarter-end public fund deposits if they are adequately capitalized or 110% of their quarter-end public fund deposits if they are undercapitalized or assigned to pledge 110% by the Office of the State Treasurer. In the event of a bank failure, the entire pool of collateral pledged by all qualified Oregon public funds bank depositories is available to repay deposits of public funds of government entities. As of June 30, 2017, $480 of the City's bank balances were exposed to custodial credit risk as part of the Public Funds Collateralization Program. Custodial Risk-Investments For an investment, this is the risk that, in the event of a failure of the counterparty, the City will not be able to recover the value of its investments or collateralized securities that are in the possession of an outside party. The City's investment policy limits the types of investments that may be held and does not allow securities to be held by the counterparty. The LGIP is administered by the Oregon State Treasury with the advice of other state agencies and is not registered with the U.S. Securities and Exchange Council. The LGIP is an open-ended no-load diversified portfolio offered to any agency, political subdivision, or public corporation of the state that by law is made the custodian of, or has control of any fund. The LGIP is commingled with the State's short-term funds. In seeking to best serve local governments of Oregon, the Oregon Legislature established the Oregon Short Term Fund Board, which has established diversification percentages and specifies the types and maturities of the investments. The purpose of the Board is to advise the Oregon State Treasury in the management and investment of the LGIP. These investments within the LGIP must be invested and managed as a prudent investor would, exercising reasonable care, skill and caution. Professional standards indicate that the investments in external investment pools are not subject to custodial risk because they are not evidenced by securities that exist in physical or book entry form. Nevertheless, management does not believe that there is any substantial custodial risk related to investments in the LGIP. The LGIP is not rated for credit quality. - 32- 77 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 CAPITAL ASSETS The summary of capital assets for the business-type activities for the year ended June 30, 2017 is as follows: Balances Balances July 1, June 30, 2016 Additions Retirements 2017 Nondepreciable assets Land $ 1,783,816 $ - $ - $ 1,783,816 Construction in progress 4,441,468 492,440 (567,915) 4,365,993 Subtotal,nondepreciable assets 6,225,284 492,440 (567,915) 6,149,809 Depreciable assets Buildings 62,634,628 113,752 - 62,748,380 Water and sewer systems 29,908,166 571,443 - 30,479,609 Equipment 2,370,459 57,410 - 2,427,869 Subtotal,depreciable assets 94,913,253 742,605 - 95,655,858 Accumulated depreciation Buildings and improvements (28,011,382) (1,717,708) - (29,729,090) Water and sewer systems (11,918,534) (494,707) - (12,413,241) Equipment (1,680,557) (94,377) - (1,774,934) Total accumulated depreciation (41,610,473) (2,306,792) - (43,917,265) Total depreciable assets, net 53,302,780 (1,564,187) - 51,738,593 Net capital assets $ 59,528,064 $ (1,071,747) $ (567,915) $ 57,888,402 Depreciation expense was allocated as follows: Water funds $ 417,680 Sewer funds 1,889,112 $ 2,306,792 - 33 - 78 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 CAPITAL ASSETS(Continued) The changes in the capital assets for governmental activities for the year ended June 30, 2017 are as follows: Balances Balances July 1, June 30, 2016 Additions Retirements 2017 Nondepreciable assets Land $ 22,567,381 $ - $ - $ 22,567,381 Construction in progress 96,389 410,250 - 506,639 Subtotal,nondepreciable assets 22,663,770 410,250 - 23,074,020 Depreciable assets Buildings 16,734,493 22,300 - 16,756,793 Equipment 7,072,539 153,664 - 7,226,203 Infrastructure 44,360,967 - - 44,360,967 Subtotal,depreciable assets 68,167,999 175,964 - 68,343,963 Accumulated depreciation Buildings (6,355,161) (457,319) - (6,812,480) Equipment (5,558,084) (327,723) - (5,885,807) Infrastructure (16,466,401) (714,161) - (17,180,562) Total accumulated depreciation (28,379,646) (1,499,203) - (29,878,849) Total depreciable assets, net 39,788,353 (1,323,239) - 38,465,114 Net capital assets $ 62,452,123 $ (912,989) $ - $ 61,539,134 Depreciation expense was allocated as follows: General government $ 217,770 Public safety 246,638 Highways and streets 817,134 Culture and recreation 98,188 Internal service funds 119,473 $ 1,499,203 - 34- 79 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 LONG-TERM DEBT Long-term debt transactions for the year were as follows: Outstanding Matured/ Outstanding Due July 1, Redeemed June 30, Within 2016 Issued During Year 2017 One Year Governmental Activities: Series 2005 general obligation bonds due in annual installments with principal and interest varying annually $ 4,060,000 $ - $ (370,000) $ 3,690,000 $ 385,000 1999 Oregon EDD Loan due in annual installments of$38,319 with interest at 5.01%. 66,074 - (30,399) 35,675 35,675 4,126,074 - (400,399) 3,725,675 420,675 Accrued compensated absences 684,433 824,900 (922,792) 586,541 234,616 $ 4,810,507 $ 824,900 $ (1,323,191) $ 4,312,216 $ 655,291 Business-type Activities: Series 2003 Water loan paid over 25 years;interest at various rates $ 5,374,286 $ - $ (313,591) $ 5,060,695 $ 325,789 2005 Oregon EDD due in annual installments including interest at 4.21% 2,208,126 - (206,864) 2,001,262 215,573 2005 SDWR due in annual installments including interest at 4.21% 2,208,125 - (206,864) 2,001,261 215,573 2011 Sewer Revenue Bonds paid over 20 years;interest at various rates 23,927,719 - (2,603,647) 21,324,072 3,165,000 33,718,256 - (3,330,966) 30,387,290 3,921,935 2011 Sewer Revenue Bond premium 2,072,315 - (138,155) 1,934,160 138,154 Accrued compensated absences 83,781 294,055 (300,655) 77,181 30,872 $35,874,352 $ 294,055 $ (3,769,776) $32,398,631 $ 4,090,961 - 35- 80 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 L ONG-TERM DEB T(Continued) Future maturities of long-term debt are as follows: Governmental Activities Fiscal Year Ending June 30, Principal Interest Total 2018 $ 420,675 $ 153,956 $ 574,631 2019 405,000 136,736 541,736 2020 425,000 120,536 545,536 2021 445,000 103,536 548,536 2022 470,000 85,180 555,180 2023-25 1,560,000 133,959 1,693,959 $ 3,725,675 $ 733,903 $ 4,459,578 Business-type Activities Fiscal Year Ending June 30, Principal Interest Total 2018 $ 3,921,935 $ 1,123,066 $ 5,045,001 2019 4,407,430 996,283 5,403,713 2020 4,293,372 1,332,332 5,625,704 2021 4,557,224 1,340,501 5,897,725 2022 5,769,614 526,412 6,296,026 2023-27 6,140,306 1,913,216 8,053,522 2028-31 1,297,409 98,824 1,396,233 $ 30,387,290 $ 7,330,634 $ 37,717,924 - 36- 81 36- 81 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN—OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM Plan Description Substantially all City employees are members in the Oregon Public Employees Retirement System (OPERS); a cost-sharing multiple-employer defined benefit pension plan that acts as a common investment and administrative agent for government units in the State of Oregon. Employees hired before August 29, 2003 belong to the Tier One/Tier Two Retirement Benefit Program (established pursuant to ORS Chapter 238), while employees hired on or after August 29, 2003 belong to the OPSRP Pension Program (established pursuant to ORS Chapter 238A). OPERS produces an independently audited CAFR which can be found at: hllp://www.oregon.gov/pers/Pages/section/financial reports/financials.as]2 Benefits Provided Tier One/Tier Two Retirement Benefit Pension Benefits. The PERS retirement allowance is payable monthly for life. It may be selected from 13 retirement benefit options. These options include survivorship benefits and lump-sum refunds. The basic benefit is based on years of service and final average salary. A percentage (2.0% for police and fire employees, 1.67% for general service employees) is multiplied by the number of years of service and the final average salary. Benefits may also be calculated under either a formula plus annuity (for members who were contributing before August 21, 198 1) or a money match computation if a greater benefit results. A member is considered vested and will be eligible at a minimum retirement age for a service retirement allowance if he or she has had contribution in each of five calendar years or has reached at least 50 years of age before ceasing employment with a participating employer (age 45 for police and fire members). General service employees may retire after reaching age 55. Police and fire members are eligible after reaching age 50. Tier One general service employee benefits are reduced if retirement occurs prior to age 58 with fewer than 30 years of service. Police and fire member benefits are reduced if retirement occurs prior to age 55 with fewer than 25 years of service. Tier Two members are eligible for full benefits at age 60. The ORS Chapter 238 Defined Benefit Pension Plan is closed to new members hired on or after August 29, 2003. Death Benefits. Upon the death of a non-retired member, the beneficiary receives a lump-sum refund of the member's account balance (accumulated contributions and interest). In addition, the beneficiary will receive a lump-sum payment from employer funds equal to the account balance, provided one or more of the following conditions are met: • the member was employed by a PERS employer at the time of death, • the member died within 120 days after termination of PERS-covered employment, • the member died as a result of injury sustained while employed in a PERS-covered job,or • the member was on an official leave of absence from a PERS-covered job at the time of death. Disability Benefits. A member with 10 or more years of creditable service who becomes disabled from other than duty-connected causes may receive a non-duty disability benefit. A disability resulting from a job-incurred injury or illness qualifies a member for disability benefit regardless of the length of PERS-covered service. Upon qualifying for either a non-duty or duty disability, service time is computed to age 58 (55 for police and fire members)when determining the monthly benefit. - 37- 82 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN—OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM(Continued) Benefits Provided(Continued) Tier One/Tier Two Retirement Benefit(Continued) Benefit Changes After Retirement. Members may choose to continue participation in a variable equities investment account after retiring and may experience annual benefit fluctuations due to changes in the market value of equity investments. Under ORS 238.360 monthly benefits are adjusted annually through cost-of-living changes. Under current law, the cap on the COLA in fiscal year 2015 and beyond will vary based on 1.25% on the first $60,000 of annual benefit and 0.15% on annual benefits above $60,000. OPSRP Pension Program Pension Benefits. The Pension Program (ORS Chapter 238A) provides benefits to members hired on or after August 29, 2003. This portion of OPSRP provides a life pension funded by employer contributions. Benefits are calculated by formula for members who attain normal retirement age. For general service members, 1.5% is multiplied by the number of years of service and the final average salary. Normal retirement age for general service members is age 65, or age 58 with 30 years of retirement credit. For police and fire members, 1.8% is multiplied by the number of years of service and the final average salary. Normal retirement age for police and fire members is age 60 or age 53 with 25 years of retirement credit. To be classified as a police and fire member, the individual must have been employed continuously as a police and fire member for at least five years immediately preceding retirement. A member of the OPSRP Pension Program becomes vested on the earliest of the following dates: the date the member completes 600 hours of service in each of five calendar years, the date the member reaches normal retirement age, and if the pension program is terminated, the date on which termination becomes effective. Death Benefits. Upon the death of a non-retired member, the spouse or other person who is constitutionally required to be treated in the same manner as the spouse, receives for life 50 percent of the pension that would otherwise have been paid to the deceased member. Disability Benefits. A member who has accrued 10 or more years of retirement credits before the member becomes disabled or a member who becomes disabled due to job-related injury shall receive a disability benefit of 45 percent of the member's salary determined as of the last full month of employment before the disability occurred. Benefit Changes After Retirement. Under ORS 238A.210 monthly benefits are adjusted annually through cost-of- living changes. Under current law, the cap on the COLA in fiscal year 2015 and beyond will vary based on 1.25% on the first$60,000 of annual benefit and 0.15% on annual benefits above $60,000. Contributions PERS funding policy provides for monthly employer contributions at actuarially determined rates. These contributions, expressed as a percentage of covered payroll, are intended to accumulate sufficient assets to pay benefits when due. Employer contribution rates for the period were based on the December 31, 2014 actuarial valuation as subsequently modified by 2013 legislated changes in benefit provisions. The rates based on a percentage of payroll, first became effective July 1, 2015. The City's contribution rates for the period were 16.29% for Tier One/Tier Two members, 9.24% for OPSRP General Service members, and 13.35% for OPSRP Police and Fire members. The City's total contributions exclusive of the 6% "pick-up"was $1,034,667. - 38- 83 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN—OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM(Continued) Contributions (Continued) Covered employees are required to contribute 6% of their salary to the Plan, but the employer is allowed to pay any or all of the employees' contribution in addition to the required employers' contribution. The City has elected to contribute the 6% "pick-up"or$579,640 of the employees' contribution. Pension Assets, Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2017, the City reported a liability of$16,230,092 for its proportionate share of the OPERS net pension asset. The net pension asset was measured as of June 30, 2016, and the total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of December 31, 2014 rolled forward to June 30, 2016. The City's proportion of the net pension asset was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2016, the City's proportion was 0.1081%, which is a decrease of 0.0143% from its proportion measured as of June 30, 2015. For the year ended June 30, 2017, the City recognized pension expense of$1,644,558. At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Deferred Inflows of Resources Resources Differences between expected and actual $ 536,962 $ - experience Changes of assumptions 3,461,489 - Net difference between projected and actual earnings on investments 3,206,385 - Changes in proportionate share 104,763 768,377 Differences between employer contributions and proportionate share of contributions 44,732 255,498 Contributions subsequent to measurement date 1,034,667 - Total $ 8,388,998 $ 1,023,875 - 39- 84 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN—OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM(Continued) Pension Assets, Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Deferred outflows of resources related to pensions of$1,034,667 resulting from the City's contributions subsequent to the measurement date will be recognized as either a reduction of the net pension liability or an increase in the net pension asset in the year ending June 30, 2018. Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as an addition to (reduction from) as follows: Fiscal Year Ending June 30, 2018 $ 1,082,552 2019 1,082,552 2020 2,267,204 2021 1,687,720 2022 210,428 Total $ 6,330,456 Actuarial Methods and Assumptions The total pension liability in the December 31, 2014 actuarial valuation was determined using the following actuarial methods and assumptions: Actuarial Cost Method Entry Age Normal Amortization Method Amortized as a level percentage of payroll as layered amortization bases over a closed period; Tier One/Tier Two UAL is amortized over 20 years and OPSRP pension UAL is amortized over 16 years Asset Valuation Method Market value of assets Actuarial Assumptions: Inflation Rate 2.50% Investment Rate of Return 7.50% Projected Salary Increases 3.50% overall payroll growth; salaries for individuals are assumed to grow at 3.50% plus assumed rates of merit/longevity increases based on service - 40- 85 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN—OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM(Continued) Actuarial Methods and Assumptions (Continued) Mortality Healthy retirees and beneficiaries: RP-2000 Sex-distinct, generational per Scale BB, with collar adjustments and set-backs as described in the valuation. Active members: Mortality rates are a percentage of healthy retiree rates that vary by group, as described in the valuation. Disabled retirees: Mortality rates are a percentage (70% for males, 95% for females) of the RP-2000 Sex-distinct, generational per Scale BB, disabled mortality table. Actuarial valuations of an ongoing plan involve estimates of the value of projected benefits and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Experience studies are performed as of December 31 of even numbered years. The methods and assumptions shown above are based on the 2014 experience study which reviewed experience for the four-year period ending on December 31, 2014. Long-Term Expected Rate of Return To develop an analytical basis for the selection of the long-term expected rate of return assumption, in July 2013 the PERS Board reviewed long-term assumptions developed by both Milliman's capital market assumptions team and the Oregon Investment Council's (OIC) investment advisors. The table below shows Milliman's assumptions for each of the asset classes in which the plan was invested at that time based on the OIC long-term target asset allocation. The OIC's description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption was based on a consistent set of underlying assumptions, and includes adjustment for the inflation assumption. These assumptions are not based on historical returns, but instead are based on a forward-looking capital market economic model. - 41 - 86 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN-OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM(Continued) Long-Term Expected Rate of Return (Continued) Compount Annual Asset Class Target Return (Geometric) Core Fixed Income 8.00 % 4.00 % Short-Term Bonds 8.00 3.61 Bank/Leveraged Loans 3.00 5.42 High Yield Bonds 1.00 6.20 Large/Mid Cap US Equities 15.75 6.70 Small Cap US Equities 1.31 6.99 Micro Cap US Equities 1.31 7.01 Developed Foreign Equities 13.13 6.73 Emerging Market Equities 4.12 7.25 Non-US Small Cap Equities 1.88 7.22 Private Equity 17.50 7.97 Real Estate (Property) 10.00 5.84 Real Estate (REITS) 2.50 6.69 Hedge Fund of Funds -Diversified 2.50 4.64 Hedge Fund-Event-driven 0.63 6.72 Timber 1.88 5.85 Farmland 1.88 6.37 Infrastructure 3.75 7.13 Commodities 1.88 4.58 Assumed Inflation -Mean 2.50 % Discount Rate The discount rate used to measure the total pension liability was 7.50% for the Defined Benefit Pension Plan. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and those contributing employers are made at the contractually required rates, as actuarially determined. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments for the Defined Benefit Pension Plan was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the City's proportionate share of the net pension liability to changes in the discount rate The following presents the City's proportionate share of the net pension liability (asset) calculated using the discount rate of 7.50%, as well as what the City's proportionate share of the net pension liability (asset)would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%)than the current rate: - 42- 87 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 PENSION PLAN—OREGON PUBLIC EMPLOYEES RETIRMENT SYSTEM(Continued) 1%Decrease Discount Rate 1%Increase (6.50%) (7.50%) (8.50%) Proportionate share of the net pension liability S 26,206,188 S 16,230,092 S 7,891,822 Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the separately issued OPERS financial report. DEFINED CONTRIBUTION PENSION PLANS The City sponsors two defined contribution pension plans. Both plan's provisions and contribution requirements are established and amended by the City Council. The 401A is administered by ICMA Retirement Corp. to provide retirement benefits for the City Attorney. The City has established a contribution amount equivalent to approximately 7% of covered salary. The City contributed 88,424 to the plan for the year ended June 30, 2017. The 457 plan is administered by both ICMA Retirement Corporation and First Investors Financial Services, and provides additional retirement benefits for contract and unrepresented employees. The City has established matching contribution rates of 5% or 8.5%, depending on contractual agreements. The City contributed 8161,876 to the plan for the year ended June 30, 2017. TRANSFERS Interfund transfers on the GAAP basis of accounting are as follows: Transfers In Transfers Out Governmental funds: General 8 605,443 S 197,742 Street 90,000 101,222 Governmental non-major 386,765 133,103 Proprietary funds: Water 57,411 179,311 Sewer - 608,384 Sewer Capital Construction 78,607 - Proprietary non-major 1,536 - S 1,219,762 S 1,219,762 - 43 - 88 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 TRANSFERS(Continued) 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 Payments Outstanding Fund July 1, 2016 Received June 30, 2017 Water Capital Construction $ 76,777 S (38,009) S 38,768 Street SDC 76,776 (38,008) 38,768 Street SDC 69,294 (69,294) - S 222,847 S (145,311) S 77,536 LOANS PAYABLE Outstanding Payments Outstanding Fund July 1, 2016 Made June 30, 2017 General S 102,289 S (50,639) S 51,650 Special Assessments 69,294 (69,294) - Water 25,632 (12,689) 12,943 Sewer 25,632 (12,689) 12,943 S 222,847 S (145,311) S 77,536 The loans receivable and payable reflect two internal loans for the purchase of the City's accounting and telephone systems,both which will be retired as of June 30, 2018. - 44- 89 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 DEFICIT NET POSITION/FUND BALANCES The following funds reported deficit balances as of June 30, 2017: Internal Service Funds Information services $ (86,029) The deficit fund balance in the information services fund is due to changes in net pension liability during the year. CONTINGENCIES The City purchases commercial insurance to cover all commonly insurable risks, which includes property damage, liability and employee bonds. Most policies carry a small deductible amount. No insurance claims settled in each of the prior three years have exceeded policy coverage. The City is a defendant in various litigation proceedings. Management believes any losses arising from these actions will not materially affect the City's financial position. NEW PRONOUNCEMENTS The City implemented the following pronouncement during the current fiscal year: GASB Statement No. 77, "Tax Abatement Disclosures," addresses the disclosure requirements for governments that have tax abated properties in their jurisdiction. It requires governments to disclose a description of the tax abatement program, the gross dollar amount of taxes abated during the period, and commitments made by a government, other than to abate taxes, as part of the tax abatement agreement. The pronouncement had no effect on the financial statements. The City will implement applicable new GASB pronouncements no later than the required fiscal year. Management has not determined the effect on the financial statements from implementing any of the following pronouncements. GASB Statement No. 75, "Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions", addresses reporting by governments that provide OPEB to their employees and for governments that finance OPEB for employees of other governments. It requires governments in all types of OPEB plans to present more extensive note disclosures and required supplementary information (RSI) about their OPEB liabilities. This statement is effective for fiscal years beginning after June 15, 2017. GASB Statement No. 82, "An Amendment of GASB Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions, and No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68." This statement will improve financial reporting by enhancing consistency in the application of financial reporting requirements to certain pension issues. Specifically, this Statement addresses issues regarding (1) the presentation of payroll-related measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements. This statement is effective for the first reporting period in which the measurement date of the pension liability is on or after June 15, 2017. - 45- 90 CITY OF WOODB URN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS(Continued) YEAR ENDED JUNE 30, 2017 SUBSEQUENT EVENTS Management has evaluated subsequent events through December 21, 2017 the date on which the financial statements were available to be issued. Management is not aware of any subsequent events that require recognition or disclosure in the financial statements. - 46- 91 46- 91 REQUIRED S UPPLEMENTAR Y INFORMA TION 92 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGETAND ACTUAL GENERAL FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Taxes and assessments $ 8,594,000 $ 8,594,000 $ 9,065,453 $ 471,453 Licenses and permits 158,500 158,500 222,880 64,380 Franchise fees 1,696,323 1,696,323 1,750,711 54,388 Charges for services 845,000 845,000 861,991 16,991 Intergovernmental 764,000 764,000 845,008 81,008 Fines and forfeitures 470,400 470,400 420,305 (50,095) Miscellaneous 182,435 182,435 243,300 60,865 Total Revenues 12,710,658 12,710,658 13,409,648 698,990 EXPENDITURES Council and Mayor 21,000 21,000 19,148 1,852 Administration 245,581 245,581 242,427 3,154 Economic Development 87,092 87,092 81,224 5,868 City Recorder 85,010 85,010 78,858 6,152 City Attorney 195,546 195,546 188,103 7,443 Finance 593,827 593,827 567,768 26,059 Human Resources 200,663 200,663 164,697 35,966 Nondepartmental 223,566 223,566 178,500 45,066 Police 7,222,364 7,222,364 6,861,768 360,596 Library 869,871 869,871 855,535 14,336 Recreation 464,435 464,435 421,870 42,565 Aquatic Center 598,730 598,730 585,463 13,267 Community Services Administration 351,707 351,707 331,054 20,653 Planning 387,331 387,331 374,824 12,507 Engineering 504,625 504,625 454,654 49,971 Maintenance 898,265 898,265 816,262 82,003 Contingency 3,553,592 3,550,996 - 3,550,996 Total Expenditures 16,503,205 16,500,609 12,222,155 4,278,454 REVENUES OVER(UNDER)EXPENDITURES (3,792,547) (3,789,951) 1,187,493 4,977,444 OTHER FINANCING SOURCES(USES) Transfers out (207,453) (210,049) (197,742) 12,307 Proceeds from sale of assets - - 19,861 19,861 Total Other Financing Sources(Uses) (207,453) (210,049) (177,881) 32,168 NET CHANGE IN FUND BALANCE (4,000,000) (4,000,000) 1,009,612 5,009,612 FUND BALANCE,beginning ofyear 4,000,000 4,000,000 5,294,819 1,294,819 FUND BALANCE,end ofyear(budgetary basis) $ - $ - 6,304,431 $ 6,304,431 Interfund loan (51,650) FUND BALANCE,end ofyear(GAAP basis) $ 6,252,781 - 47- 93 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGETANDACTUAL -STREETFUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Taxes and assessments $ 100,000 $ 100,000 $ 129,412 $ 29,412 Licenses and permits - - 202 202 Franchise fees 320,000 320,000 359,820 39,820 Intergovernmental 1,400,000 1,400,000 1,480,082 80,082 Miscellaneous 202,497 202,497 137,675 (64,822) Total Revenues 2,022,497 2,022,497 2,107,191 84,694 EXPENDITURES Personal services 709,127 709,127 625,844 83,283 Materials and services 1,609,029 1,609,029 924,620 684,409 Capital outlay 5,500 5,500 5,500 - Contingency 231,816 231,816 - 231,816 Total Expenditures 2,555,472 2,555,472 1,555,964 999,508 REVENUES OVER (UNDER) EXPENDITURES (532,975) (532,975) 551,227 1,084,202 OTHER FINANCING SOURCES(USES) Transfers in 90,000 90,000 90,000 - Transfers out (1,174,501) (1,174,501) (101,222) 1,073,279 Total Other Financing Sources (Uses) (1,084,501) (1,084,501) (11,222) 1,073,279 NET CHANGE IN FUND BALANCE (1,617,476) (1,617,476) 540,005 2,157,481 FUND BALANCE, beginning of year 2,689,000 2,689,000 3,365,799 676,799 FUND BALANCE, end ofyear(budgetary basis) $ 1,071,524 $ 1,071,524 $ 3,905,804 $ 2,834,280 - 48- 94 CITY OF WOODB URN, OREGON SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY(ASSET) OREGON P UBLIC EMPLOYEES RETIREMENT SYSTEM LAST FOUR FISCAL YEARS' 2017 2016 2015 2014 City's proportion of the net pension liability (asset) 0.1081% 0.1224% 0.1145% 0.1145% City's proportionate share of the net pension liability (asset) $(16,230,093) $ (7,026,676) $ 2,595,126 $ (5,842,512) City's covered-employee payroll 8,800,124 8,344,438 8,457,225 8,048,595 City's proportionate share of the net pension liability (asset)as a percentage of its covered-employee payroll -184.4% -84.2% 30.7% -72.6% Plan fiduciary net position as a percentage of the total pension liability 80.5% 91.9% 103.6% 92.0% i 10-year trend information required by GASB Statement 68 will be presented prospectively - 49- 95 CITY OF WOODB URN, OREGON SCHEDULE OF THE CITY'S CONTRIBUTIONS OREGON P UBLIC EMPLOYEES RETIREMENT SYSTEM LAST FOUR FISCAL YEARS' 2017 2016 2015 2014 Contractually required contributions $1,034,667 $ 1,096,838 $ 1,046,147 $ 1,022,429 Contributions in relation to the contractually required contribution (1,034,667) (1,096,838) (1,046,147) (1,022,429) Contribution deficiency(excess) $ - $ - $ - $ - City's covered-employee payroll $8,800,124 $ 8,344,438 $ 8,457,225 $ 8,048,595 Contributions as a percentage of covered-employee payroll 11.76% 13.14% 12.37% 12.70% i 10-year trend information required by GASB Statement 68 will be presented prospectively - 50- 96 SUPPLEMENTARYINFORMATION 97 CITY OF WOODB URN, OREGON COMBINING BALANCE SHEET-NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 Special Revenue Building Search and Transit Inspection Seizure ASSETS Cash and investments $ 73,351 $ 623,694 $ 9,681 Accounts receivable 66,480 - - Property taxes receivable - - - Assessment liens receivable - - - Loans receivable - - - Prepaid expenses - - - Due from other funds - - - Total Assets $ 139,831 $ 623,694 $ 9,681 LIABILITIES,DEFERRED INFLOWS AND FUND BALANCE Liabilities: Accounts payable $ 5,695 $ 9,818 $ - Accrued payroll and payroll liabilities 14,198 14,775 - Due to other funds - - - Total Liabilities 19,893 24,593 - Deferred Inflows: Unavailable revenue - - - Fund Balance: Restricted for: Debt service - - - Construction - - - Culture and recreation 119,938 - - Community development - - - Committed to: Public safety - - 9,681 Capital outlay - - - Planning and building - 599,101 - Unassigned - - - Total Fund Balance 119,938 599,101 9,681 Total Liabilities and Fund Balance $ 139,831 $ 623,694 $ 9,681 98 Special Revenue Capital Projects Housing Library Museum Lavelle Black General Capital Rehabilitation Endowment Endowment Trust URA Construction $ 250,392 $ 26,851 $ 829 $ 55,971 $ 2,164,713 $ - - - - - - 130,588 28,238 - 650,169 - - - - - $ 900,561 $ 26,851 $ 829 $ 55,971 $ 2,192,951 $ 130,588 8,769 $ 87,085 $ 125,640 281 - - - 3,259 - - - - - - 4,948 281 - - 8,769 90,344 130,588 650,169 - - - 25,419 - - 26,851 829 47,202 - - 250,111 - - - 2,077,188 - 250,111 26,851 829 47,202 2,077,188 - $ 900,561 $ 26,851 $ 829 $ 55,971 $ 2,192,951 $ 130,588 - 51 - 99 CITY OF WOODB URN, OREGON COMBINING BALANCE SHEET-NONMAJOR GOVERNMENTAL FUNDS(Continued) JUNE 30, 2017 Capital Projects Street/Storm Special Capital Assessment Construction Parks SDC ASSETS Cash and investments $ 12,383 $ 1,330 $ 248,835 Accounts receivable - - - Property taxes receivable - - - Assessment liens receivable 34,135 - - Loans receivable - - - Prepaid expenses - - - Due from other funds - - - Total Assets $ 46,518 $ 1,330 $ 248,835 LIABILITIES,DEFERRED INFL0WSAND FUND BALANCE Liabilities: Accounts payable $ - $ 1,330 $ - Accrued payroll and payroll liabilities - - - Due to other funds - - - Total Liabilities - 1,330 - Deferred Inflows: Unavailable revenue 34,135 - - Fund Balance: Restricted for: Debt service - - - Construction - - 248,835 Culture and recreation - - - Community development - - - Committed to: Public safety - - - Capital outlay 12,383 - - Planning and building - - - Unassigned - - - Total Fund Balance 12,383 - 248,835 Total Liabilities and Fund Balance $ 46,518 $ 1,330 $ 248,835 100 Capital Projects Debt Service Equipment GO Debt Street SDC Storm SDC Replacement Service Total 2,680,411 $ 586,733 $ 919,698 $ - $ 7,654,872 - - - - 197,068 23,990 52,228 - 34,135 650,169 38,768 - - - 38,768 $ 2,719,179 $ 586,733 $ 919,698 $ 23,990 $ 8,627,240 238,337 - 32,513 - 646 5,594 - 646 276,444 - 21,586 731,309 - - - 1,758 1,758 2,719,179 586,733 - - 3,554,747 - - - - 194,820 - - - 2,327,299 - - - 9,681 - 919,698 - 932,081 - - 599,101 2,719,179 586,733 919,698 1,758 7,619,487 $ 2,719,179 $ 586,733 $ 919,698 $ 23,990 $ 8,627,240 - 52- 101 CITY OF WOODB URN, OREGON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES- NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2017 Special Revenue Building Search and Transit Inspection Seizure REVENUES Taxes and assessments - Licenses and permits - 458,741 - Charges for services 38,227 - - Intergovernmental 431,122 44,185 - Miscellaneous 16,851 16,445 80 Total Revenues 486,200 519,371 80 EXPENDITURES Current General government - 442,983 - Culture and recreation 611,274 - - Debt service Principal - - - Interest - - - Capital outlay - - - Total Expenditures 611,274 442,983 - REVENUES OVER(UNDER) EXPENDITURES (125,074) 76,388 80 OTHER FINANCING SOURCES(USES) Transfers in 116,000 - 2,596 Transfers out (3,001) (3,001) - Total Other Financing Sources (Uses) 112,999 (3,001) 2,596 NET CHANGE IN FUND BALANCE (12,075) 73,387 2,676 FUND BALANCE, beginning ofyear 132,013 525,714 7,005 FUND BALANCE, end ofyear $ 119,938 $ 599,101 $ 9,681 102 Special Revenue Capital Projects Housing Library Museum Lavelle General Capital Rehabilitation Endowment Endowment Black Trust URA Construction 619,602 $ - - 130,588 13,766 288 202 20,935 35,129 - 13,766 288 202 20,935 654,731 130,588 14,169 - - 17,268 159,797 - - - - - 131,090 200,278 14,169 - - 17,268 290,887 200,278 (403) 288 202 3,667 363,844 (69,690) - - - - - 69,690 - - - - - 69,690 (403) 288 202 3,667 363,844 - 250,514 26,563 627 43,535 1,713,344 - $ 250,111 $ 26,851 $ 829 $ 47,202 $ 2,077,188 $ - - 53 - 103 CITY OF WOODB URN, OREGON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES- NONMAJOR GOVERNMENTAL FUNDS(Continued) YEAR ENDED JUNE 30, 2017 Capital Projects Street/Storm Special Capital Assessment Construction Parks SDC REVENUES Taxes and assessments - Licenses and permits - - 21,405 Charges for services - - - Intergovernmental - - - Miscellaneous 12,508 5 3,291 Total Revenues 12,508 5 24,696 EXPENDITURES Current General government - - - Culture and recreation - - 1,312 Debt service Principal - - - Interest - - - Capital outlay - 78,929 - Total Expenditures - 78,929 1,312 REVENUES OVER(UNDER) EXPENDITURES 12,508 (78,924) 23,384 OTHER FINANCING SOURCES(USES) Transfers in 2,693 66,721 - Transfers out - - (69,690) Total Other Financing Sources (Uses) 2,693 66,721 (69,690) NET CHANGE IN FUND BALANCE 15,201 (12,203) (46,306) FUND BALANCE, beginning of year (2,818) 12,203 295,141 FUND BALANCE, end ofyear $ 12,383 $ - $ 248,835 104 Capital Projects Debt Service Equipment GO Debt Street SDC Storm SDC Replacement Service Total $ - $ - $ - $ 510,697 $ 1,130,299 33,396 21,980 - - 535,522 - - - - 38,227 - - - - 605,895 28,675 6,100 25,197 2,510 181,982 62,071 28,080 25,197 513,207 2,491,925 - - - - 442,983 - - - - 803,820 30,399 - - 370,000 400,399 3,371 - 166,566 169,937 - - 57,411 - 467,708 33,770 - 57,411 536,566 2,284,847 28,301 28,080 (32,214) (23,359) 207,078 1,536 - 70,000 - 329,236 - - - - (75,692) 1,536 - 70,000 - 253,544 29,837 28,080 37,786 (23,359) 460,622 2,689,342 558,653 881,912 25,117 7,158,865 $ 2,719,179 $ 586,733 $ 919,698 $ 1,758 $ 7,619,487 - 54- 105 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGETANDACTUAL - TRANSITFUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Charges for services $ 48,500 $ 48,500 $ 38,227 $ (10,273) Intergovernmental 440,000 440,000 431,122 (8,878) Miscellaneous 10,250 10,250 16,851 6,601 Total Revenues 498,750 498,750 486,200 (12,550) EXPENDITURES Personal services 426,614 426,614 424,984 1,630 Materials and services 219,212 219,212 202,073 17,139 Contingency 105,923 105,923 - 105,923 Total Expenditures 751,749 751,749 627,057 124,692 REVENUES OVER(UNDER) EXPENDITURES (252,999) (252,999) (140,857) 112,142 OTHER FINANCING SOURCES(USES) Transfers in 116,000 116,000 116,000 - Transfers out (3,001) (3,001) (3,001) - Total Other Financing Sources (Uses) 112,999 112,999 112,999 - NET CHANGE IN FUND BALANCE (140,000) (140,000) (27,858) 112,142 FUND BALANCE, beginning of year 140,000 140,000 147,796 7,796 FUND BALANCE, end ofyear $ - $ - $ 119,938 $ 119,938 - 55- 106 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- B UDGET AND ACTUAL -BUILDING INSPECTION FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Licenses and permits $ 638,389 $ 638,389 $ 458,741 $ (179,648) Intergovernmental 455,561 455,561 44,185 (411,376) Miscellaneous 6,360 6,360 16,445 10,085 Total Revenues 1,100,310 1,100,310 519,371 (580,939) EXPENDITURES Personal services 460,068 460,068 363,430 96,638 Materials and services 537,181 537,181 92,426 444,755 Contingency 500,060 500,060 - 500,060 Total Expenditures 1,497,309 1,497,309 455,856 1,041,453 REVENUES OVER(UNDER) EXPENDITURES (396,999) (396,999) 63,515 460,514 OTHER FINANCING SOURCES(USES) Transfers out (3,001) (3,001) (3,001) - NET CHANGE IN FUND BALANCE (400,000) (400,000) 60,514 460,514 FUND BALANCE, beginning ofyear 400,000 400,000 538,587 138,587 FUND BALANCE, end of year $ - $ - $ 599,101 $ 599,101 - 56- 107 56- 107 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- B UDGET AND ACTUAL SEARCH AND SEIZURE FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Miscellaneous $ - $ - $ 80 $ 80 EXPENDITURES Materials and services 6,975 9,571 - 9,571 REVENUES OVER(UNDER) EXPENDITURES (6,975) (9,571) 80 9,651 OTHER FINANCING SOURCES(USES) Transfers in - 2,596 2,596 - NET CHANGE IN FUND BALANCE (6,975) (6,975) 2,676 9,651 FUND BALANCE, beginning ofyear 6,975 6,975 7,005 30 FUND BALANCE, end of year $ - $ - $ 9,681 $ 9,681 - 57- 108 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGETAND ACTUAL -HOUSING REHABILITATIONFUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Miscellaneous $ 21,000 $ 21,000 $ 13,766 $ (7,234) EXPENDITURES Personal services 13,983 13,983 14,665 (682) Materials and services 16,000 16,000 - 16,000 Contingency 218,017 218,017 - 218,017 Total Expenditures 248,000 248,000 14,665 233,335 NET CHANGE IN FUND BALANCE (227,000) (227,000) (899) 226,101 FUND BALANCE, beginning of year 227,000 227,000 251,010 24,010 FUND BALANCE, end of year $ - $ - $ 250,111 $ 250,111 *Budget is appropriated by function, therefore this is not an expenditure in excess of appropriations. - 58- 109 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- B UDGET AND ACTUAL LIBRARY ENDOWMENT FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Miscellaneous $ 100 $ 100 $ 288 $ 188 EXPENDITURES Contingency 26,595 26,595 - 26,595 NET CHANGE IN FUND BALANCE (26,495) (26,495) 288 26,783 FUND BALANCE, beginning of year 26,495 26,495 26,563 68 FUND BALANCE, end ofyear $ - $ - $ 26,851 $ 26,851 - 59- 110 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- B UDGET AND ACTUAL MUSEUM ENDOWMENT FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Miscellaneous $ - $ - $ 202 $ 202 EXPENDITURES - - - - NET CHANGE IN FUND BALANCE - - 202 202 FUND BALANCE, beginning of year - - 627 627 FUND BALANCE, end of year $ - $ - $ 829 $ 829 - 60- ill 60- ill CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- B UDGET AND ACTUAL LAVELLE BLACK TR UST FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Miscellaneous $ 200 $ 200 $ 20,935 $ 20,735 EXPENDITURES Materials and services 10,000 10,000 17,268 (7,268) Contingency 30,200 30,200 - 30,200 Total Expenditures 40,200 40,200 17,268 22,932 NET CHANGE IN FUND BALANCE (40,000) (40,000) 3,667 43,667 FUND BALANCE, beginning of year 40,000 40,000 43,535 3,535 FUND BALANCE, end of year $ - $ - $ 47,202 $ 47,202 *Budget is appropriated by function, therefore this is not an expenditure in excess of appropriations. - 61 - 112 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGETAND ACTUAL URBANRENEWAL AGENCYFUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Taxes and assessments $ 565,000 $ 615,989 $ 619,602 $ 3,613 Miscellaneous 7,000 12,768 35,129 22,361 Total Revenues 572,000 628,757 654,731 25,974 EXPENDITURES Personal services 84,387 84,387 85,774 (1,387) Materials and services 84,000 84,000 76,992 7,008 Capital outlay 200,000 273,068 131,090 141,978 Contingency 16,838 16,838 - 16,838 Total Expenditures 385,225 458,293 293,856 164,437 NET CHANGE IN FUND BALANCE 186,775 170,464 360,875 190,411 FUND BALANCE, beginning of year 1,700,000 1,716,311 1,716,313 2 FUND BALANCE, end ofyear $ 1,886,775 $ 1,886,775 $ 2,077,188 $ 190,413 *Budget is appropriated by function, therefore this is not an expenditure in excess of appropriations. - 62- 113 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- B UDGET AND ACTUAL GENERAL CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Intergovernmental $ - $ 121,752 $ 130,588 $ 8,836 EXPENDITURES Capital outlay - 225,000 200,278 24,722 REVENUES OVER(UNDER) EXPENDITURES - (103,248) (69,690) 33,558 OTHER FINANCING SOURCES(USES) Transfers in - 103,248 69,690 (33,558) NET CHANGE IN FUND BALANCE - - - - FUND BALANCE, beginning of year - - - - FUND BALANCE, end of year - - 63 - 114 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- B UDGET AND ACTUAL SPECIAL ASSESSMENT FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Miscellaneous $ 5,500 $ 5,500 $ 12,508 $ 7,008 EXPENDITURES Contingency 11,206 11,206 - 11,206 REVENUES OVER(UNDER) EXPENDITURES (5,706) (5,706) 12,508 18,214 OTHER FINANCING SOURCES(USES) Transfers in 15,000 15,000 2,693 (12,307) Transfers out (69,294) (69,294) (69,294) - Total Other Financing Sources and Uses (54,294) (54,294) (66,601) (12,307) NET CHANGE IN FUND BALANCE (60,000) (60,000) (54,093) 5,907 FUND BALANCE, beginning of year 60,000 60,000 66,476 6,476 FUND BALANCE, end ofyear $ - $ - $ 12,383 $ 12,383 - 64- 115 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- B UDGET AND ACTUAL STREET/STORM CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Intergovernmental $ 500,000 $ 500,000 $ - $ (500,000) Miscellaneous - - 5 5 Total Revenues 500,000 500,000 5 (499,995) EXPENDITURES Capital outlay 3,495,000 3,495,000 78,929 3,416,071 Contingency 11,000 11,000 - 11,000 Total Expenditures 3,506,000 3,506,000 78,929 3,427,071 REVENUES OVER(UNDER) EXPENDITURES (3,006,000) (3,006,000) (78,924) 2,927,076 OTHER FINANCING SOURCES(USES) Transfers in 2,995,000 2,995,000 66,721 (2,928,279) NET CHANGE IN FUND BALANCE (11,000) (11,000) (12,203) (1,203) FUND BALANCE, beginning ofyear 11,000 11,000 12,203 1,203 FUND BALANCE, end of year - - 65- 116 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- B UDGET AND ACTUAL PARKS SDC FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Licenses and permits $ 90,000 $ 90,000 $ 21,405 $ (68,595) Miscellaneous 1,500 1,500 3,291 1,791 Total Revenues 91,500 91,500 24,696 (66,804) EXPENDITURES Materials and services 10,000 10,000 1,312 8,688 REVENUES OVER(UNDER) EXPENDITURES 81,500 81,500 23,384 (58,116) OTHER FINANCING SOURCES(USES) Transfers out - (103,248) (69,690) 33,558 NET CHANGE IN FUND BALANCE 81,500 (21,748) (46,306) (24,558) FUND BALANCE, beginning of year 275,000 275,000 295,141 20,141 FUND BALANCE, end of year $ 356,500 $ 253,252 $ 248,835 $ (4,417) - 66- 117 66- 117 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL STREET SDC FUND (BUDGETARY BASIS, NON-GAAP) YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Licenses and permits $ 200,000 $ 200,000 $ 33,396 $ (166,604) Miscellaneous 1,000 1,000 28,675 27,675 Total Revenues 201,000 201,000 62,071 (138,929) EXPENDITURES Debt service Principal 30,399 30,399 30,399 - Interest 3,371 3,371 3,371 - Total Expenditures 33,770 33,770 33,770 - REVENUES OVER(UNDER) EXPENDITURES 167,230 167,230 28,301 (138,929) OTHER FINANCING SOURCES(USES) Transfers in 108,838 108,838 108,838 - Transfers out (1,700,000) (1,700,000) - 1,700,000 Total Other Financing Sources and Uses (1,591,162) (1,591,162) 108,838 1,700,000 NET CHANGE IN FUND BALANCE (1,423,932) (1,423,932) 137,139 1,561,071 FUND BALANCE, beginning ofyear 2,200,000 2,200,000 2,543,272 - FUND BALANCE, end of year $ 776,068 $ 776,068 $ 2,680,411 $ 1,561,071 Interfund loan 38,768 FUND BALANCE, end of year GAAP basis $ 2,719,179 - 67- 118 67- 118 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- B UDGET AND ACTUAL STORM SDC FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Licenses and Permits $ 25,000 $ 25,000 $ 21,980 $ (3,020) Miscellaneous 2,500 2,500 6,100 3,600 Total Revenues 27,500 27,500 28,080 580 EXPENDITURES - - - - REVENUES OVER(UNDER) EXPENDITURES 27,500 27,500 28,080 580 OTHER FINANCING SOURCES(USES) Transfers out (155,000) (155,000) - 155,000 NET CHANGE IN FUND BALANCE (127,500) (127,500) 28,080 155,580 FUND BALANCE, beginning of year 496,000 496,000 558,653 62,653 FUND BALANCE, end of year $ 368,500 $ 368,500 $ 586,733 $ 218,233 - 68- 119 68- 119 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL EQUIPMENT REPLACEMENT FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Miscellaneous $ 4,500 $ 4,500 $ 25,197 $ 20,697 EXPENDITURES Capital outlay 954,837 954,837 57,411 897,426 REVENUES OVER(UNDER) EXPENDITURES (950,337) (950,337) (32,214) 918,123 OTHER FINANCING SOURCES(USES) Transfers in 70,000 70,000 70,000 - NET CHANGE IN FUND BALANCE (880,337) (880,337) 37,786 918,123 FUND BALANCE, beginning of year 880,337 880,337 881,912 1,575 FUND BALANCE, end of year $ - $ - $ 919,698 $ 919,698 - 69- 120 69- 120 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL GENERAL OBLIGATIONDEBT SERVICE FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Taxes and assessments $ 522,000 $ 522,000 $ 510,697 $ (11,303) Miscellaneous 450 450 2,510 2,060 Total Revenues 522,450 522,450 513,207 (9,243) EXPENDITURES Principal 370,000 370,000 370,000 - Interest 166,566 166,566 166,566 - Total Expenditures 536,566 536,566 536,566 - NET CHANGE IN FUND BALANCE (14,116) (14,116) (23,359) (9,243) FUND BALANCE, beginning ofyear 32,000 32,000 25,117 (6,883) FUND BALANCE, end ofyear $ 17,884 $ 17,884 $ 1,758 $ (16,126) - 70- 121 CITY OF WOODB URN, OREGON COMBINING STATEMENT OF FUND NET POSITION-NONMAJOR PROPRIETARY(ENTERPRISE)FUNDS JUNE 30, 2017 Water Capital Water SDC Sewer SDC Construction ASSETS Current Assets Cash and investments $ 1,224,264 $ 1,215,981 $ 1,807,077 Accounts receivable - - 205 Due from other funds - - 38,768 Total Current Assets 1,224,264 1,215,981 1,846,050 Noncurrent Assets Nondepreciable capital assets - - 1,307,695 Capital assets,net of depreciation - - 1,509,491 Total Noncurrent Assets - - 2,817,186 Total Assets 1,224,264 1,215,981 4,663,236 LIABILITIES Accounts payable 566 - - NET POSITION: Net investment in capital assets - - 2,817,186 Restricted for: Construction 1,223,698 1,215,981 1,846,050 Total Net Position $ 1,223,698 $ 1,215,981 $ 4,663,236 122 Total $ 4,247,322 205 38,768 4,286,295 1,307,695 1,509,491 2,817,186 7,103,481 566 2,817,186 4,285,729 $ 7,102,915 - 71 - 123 CITY OF WOODB URN, OREGON COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION- NONMAJOR PROPRIETARY(ENTERPRISE)FUNDS YEAR ENDED JUNE 30, 2017 Water Capital Water SDC Sewer SDC Construction OPERATING REVENUES OPERATING EXPENSES Materials and services 26,218 - - Depreciation - - 58,684 Total Expenses 26,218 - 58,684 OPERATING INCOME(LOSS) (26,218) - (58,684) NONOPERA TING REVENUES (EXPENSES) Investment revenue 13,057 12,553 21,640 NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS (13,161) 12,553 (37,044) Capital contributions 41,133 73,531 - System development revenue - - - Transfers in - - 1,536 Transfers out - - - CHANGE IN NET POSITION 27,972 86,084 (35,508) NETPOSITION, beginning ofyear 1,195,726 1,129,897 4,698,744 NET POSITION, end ofyear S 1,223,698 S 1,215,981 S 4,663,236 124 Total 26,218 58,684 84,902 (84,902) 47,250 (37,652) 114,664 1,536 78,548 7,024,367 $ 7,102,915 - 72- 125 CITY OF WOODB URN, OREGON COMBINING STATEMENT OF CASH FLOWS-NONMAJOR PROPRIETARY(ENTERPRISE)FUNDS YEAR ENDED JUNE 30, 2017 Water Sewer SDC SDC CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers - Paid to suppliers (25,652) - Net Cash Provided by Operating Activities (25,652) - CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers in - - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets - - System development receipts 63,373 117,124 Net Cash Provided by (Used in) Capital and Related Financing Activities 63,373 117,124 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 13,057 12,553 Increase (Decrease) in Cash and Investments 50,778 129,677 CASHAND INVESTMENTS,Beginning ofyear, as restated 1,173,486 1,086,304 CASH AND INVESTMENTS,End of year $ 1,224,264 $ 1,215,981 RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss) $ (26,218) $ - Depreciation - - Change in assets and liabilities Accounts receivable - - Accounts payable and accrued liabilities 566 - Net Cash Provided by (Used in) Operating Activities $ (25,652) $ - 126 Water Capital Construction Totals $ 63 $ 63 (19,624) (45,276) (19,561) (45,213) 39,544 39,544 (236,919) (236,919) 180,497 (236,919) (56,422) 21,640 47,250 (195,296) (14,841) 2,002,373 4,262,163 $ 1,807,077 $ 4,247,322 $ (58,684) $ (84,902) 58,684 58,684 63 63 (19,624) (19,058) $ (19,561) $ (45,213) - 73 - 127 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET(NON-GAAP BASIS)AND ACTUAL - WATER FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Charges for services $ 3,529,752 $ 3,529,752 $ 3,293,342 $ (236,410) Miscellaneous 37,000 37,000 58,922 21,922 Interest earnings 9,600 9,600 22,231 12,631 Total Revenues 3,576,352 3,576,352 3,374,495 (201,857) EXPENDITURES Personal services 1,276,897 1,276,897 1,244,118 32,779 Materials and services 1,003,884 1,003,884 889,030 114,854 Debt service Principal 727,319 727,319 727,318 1 Interest 428,778 428,778 428,779 (1) Contingency 114,039 114,039 - 114,039 Total Expenditures 3,550,917 3,550,917 3,289,245 261,672 REVENUES OVER(UNDER) EXPENDITURES 25,435 25,435 85,250 59,815 OTHER FINANCING SOURCES(USES) Transfers out (32,955) (32,955) (32,955) - Gain (loss) on sale of assets - - 3,505 3,505 Total Other Financing Sources (Uses) (32,955) (32,955) (29,450) 3,505 NET CHANGE IN FUND BALANCE (7,520) (7,520) 55,800 63,320 FUND BALANCE, beginning ofyear 2,179,000 2,179,000 2,194,087 15,087 FUND BALANCE, end ofyear $ 2,171,480 $ 2,171,480 $ 2,249,887 $ 78,407 - 74- 128 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET(NON-GAAP BASIS)AND ACTUAL -SEWER FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Charges for services $ 8,182,000 $ 8,182,000 $ 8,091,754 $ (90,246) Miscellaneous 2,000 2,000 27,214 25,214 Interest earnings 30,000 30,000 79,719 49,719 Total Revenues 8,214,000 8,214,000 8,198,687 (15,313) EXPENDITURES Personal services 1,797,720 1,797,720 1,622,426 175,294 Materials and services 2,136,028 2,136,028 1,609,607 526,421 Debt service Principal 2,715,000 2,715,000 2,603,647 111,353 Interest 818,812 818,812 930,165 (111,353) Contingency 196,687 196,687 - 196,687 Total Expenditures 7,664,247 7,664,247 6,765,845 898,402 REVENUES OVER (UNDER) EXPENDITURES 549,753 549,753 1,432,842 883,089 OTHER FINANCING SOURCES(USES) Transfers out (526,706) (526,706) (225,313) 301,393 NET CHANGE IN FUND BALANCE 23,047 23,047 1,207,529 1,184,482 FUND BALANCE, beginning of year 5,788,000 5,788,000 6,840,999 1,052,999 FUND BALANCE, end ofyear $ 5,811,047 $ 5,811,047 $ 8,048,528 $ 2,237,481 - 75- 129 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET(NON-GAAP BASIS)AND ACTUAL SEWER CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Interest earnings $ 60,000 $ 60,000 $ 133,902 $ 73,902 EXPENDITURES Capital outlay 4,825,000 4,825,000 372,803 4,452,197 REVENUES OVER(UNDER) EXPENDITURES (4,765,000) (4,765,000) (238,901) 4,526,450 OTHER FINANCING SOURCES(USES) Transfers in 880,000 880,000 78,607 (801,393) NET CHANGE IN FUND BALANCE (3,885,000) (3,885,000) (160,294) 3,725,057 FUND BALANCE, beginning of year 12,000,000 12,000,000 12,490,586 490,586 FUND BALANCE, end ofyear $ 8,115,000 $ 8,115,000 $ 12,330,292 $ 4,215,643 - 76- 130 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET(NON-GAAP BASIS)AND ACTUAL - WATER SDC FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Licenses and permits $ 100,000 $ 100,000 $ 63,373 $ (36,627) Interest earnings 5,000 5,000 13,057 8,057 Total Revenues 105,000 105,000 76,430 (28,570) EXPENDITURES Materials and services 100,000 100,000 26,218 73,782 NET CHANGE IN FUND BALANCE 5,000 5,000 50,212 45,212 FUND BALANCE, beginning ofyear 1,062,000 1,062,000 1,173,486 111,486 FUND BALANCE, end of year $ 1,067,000 $ 1,067,000 $ 1,223,698 $ 156,698 - 77- 131 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET(NON-GAAP BASIS)AND ACTUAL -SEWER SDC FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Licenses andpermits $ 225,000 $ 225,000 $ 117,124 $ (107,876) Interest earnings 5,000 5,000 12,553 7,553 Total Revenues 230,000 230,000 129,677 (100,323) EXPENDITURES - - - - REVENUES OVER(UNDER) EXPENDITURES 230,000 230,000 129,677 (100,323) OTHER FINANCING SOURCES(USES) Transfers out (500,000) (500,000) - 500,000 NET CHANGE IN FUND BALANCE (270,000) (270,000) 129,677 399,677 FUND BALANCE, beginning of year 1,060,000 1,060,000 1,086,304 26,304 FUND BALANCE, end of year $ 790,000 $ 790,000 $ 1,215,981 $ 425,981 - 78- 132 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET(NON-GAAP BASIS)AND ACTUAL WATER CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Interest earnings $ 10,000 $ 10,000 $ 21,641 $ 11,641 EXPENDITURES Capital outlay 375,000 375,000 236,920 138,080 REVENUES OVER(UNDER) EXPENDITURES (365,000) (365,000) (215,279) 149,721 OTHER FINANCING SOURCES(USES) Transfers in 39,544 39,544 39,544 - NET CHANGE IN FUND BALANCE (325,456) (325,456) (175,735) 149,721 FUND BALANCE, beginning of year 1,779,000 1,779,000 1,983,017 204,017 FUND BALANCE, end ofyear $ 1,453,544 $ 1,453,544 $ 1,807,282 $ 353,738 - 79- 133 79- 133 CITY OF WOODB URN, OREGON COMBINING STATEMENT OF FUND NET POSITION-INTERNAL SERVICE FUNDS JUNE 30, 2017 Information Services Insurance Total ASSETS Current Assets Cash and investments $ 223,893 $ 313,317 S 537,210 Accounts receivable 1,841 - 1,841 Total Current Assets 225,734 313,317 539,051 DEFERRED OUTFLOWS Deferred outflows - contributions to PERS 246,394 30,818 277,212 LIABILITIES Current Liabilities Accounts payable 2,001 63,027 65,028 Accrued payroll liabilities 14,595 1,806 16,401 Accrued compensated absences 34,946 - 34,946 Total Current Liabilities 51,542 64,833 116,375 Noncurrent Liabilities Net pension liability 476,587 60,728 537,315 Total Liabilities 528,129 125,561 653,690 DEFERRED INFLOWS Net projected to actual earnings -PERS 30,028 4,216 34,244 NET POSITION: Unrestricted S (86,029) S 214,358 S 128,329 - 80- 134 CITY OF WOODB URN, OREGON COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION- INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2017 Information Services Insurance Total OPERATING REVENUES Charges for services $ 912,937 $ 822,855 $ 1,735,792 Miscellaneous 7,591 25,530 33,121 Total Operating Revenues 920,528 848,385 1,768,913 OPERATING EXPENSES Personal services 439,255 42,213 481,468 Materials and services 570,207 675,193 1,245,400 Total Expenses 1,009,462 717,406 1,726,868 OPERATING INCOME(LOSS) (88,934) 130,979 42,045 NONOPERA TING REVENUES (EXPENSES) Investment revenue 4,430 4,102 8,532 NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS (84,504) 135,081 50,577 Transfers in 57,529 - 57,529 CHANGE IN NET POSITION (26,975) 135,081 108,106 NET POSITION(Deficit), beginning of year (59,054) 79,277 20,223 NET POSITION(Deficit), end of year $ (86,029) $ 214,358 $ 128,329 - 81 - 135 CITY OF WOODB URN, OREGON COMBINING STATEMENT OF CASHFLOWS-INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2017 Information Services Insurance Totals CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers $ 940,106 $ 850,250 $ 1,790,356 Paid to suppliers (569,547) (700,364) (1,269,911) Paid to employees (368,732) (37,066) (405,798) Net Cash Provided by(Used in) Operating Activities 1,827 112,820 114,647 CASHFLOWS FROMNON-CAPITALFINANCING ACTIVITIES Transfers in 57,529 - 57,529 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 4,430 4,102 8,532 Increase(Decrease)in Cash and Investments 63,786 116,922 180,708 CASHAND INVESTMENTS,Beginning ofyear 160,107 196,395 356,502 CASHAND INVESTMENTS,End of year $ 223,893 $ 313,317 $ 537,210 RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income(loss) $ (88,934) $ 130,979 $ 42,045 Change in assets and liabilities Accounts receivable 19,579 1,865 21,444 Deferred outflows (199,103) (24,530) (223,633) Compensated absences payable 34,946 - 34,946 Accounts payable and accrued liabilities (12,076) (25,977) (38,053) Net pension liability 270,363 33,310 303,673 Deferred inflows (22,948) (2,827) (25,775) Net Cash Provided by(Used in) Operating Activities $ 1,827 $ 112,820 $ 114,647 Noncash Transactions Transfer of capital assets $ (102,442) $ - $ (102,442) - 82- 136 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL (NON-GAAP BASIS) INFORMATION SERVICES FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Charges for services $ 911,071 $ 911,071 $ 912,937 $ 1,866 Miscellaneous - - 7,591 7,591 Interest earnings 1,500 1,500 4,430 2,930 Total Revenues 912,571 912,571 924,958 12,387 EXPENDITURES Personal services 375,156 375,156 369,591 5,565 Materials and services 474,357 474,357 467,763 6,594 Capital outlay 102,529 102,529 102,442 87 Contingency 133,058 133,058 - 133,058 Total Expenditures 1,085,100 1,085,100 939,796 145,304 REVENUES OVER(UNDER) EXPENDITURES (172,529) (172,529) (14,838) 157,691 OTHER FINANCING SOURCES(USES) Transfers in 57,529 57,529 57,529 - NET CHANGE IN FUND BALANCE (115,000) (115,000) 42,691 157,691 FUND BALANCE, beginning of year 115,000 115,000 166,448 51,448 FUND BALANCE, end of year $ - $ - $ 209,139 $ 209,139 - 83 - 137 CITY OF WOODB URN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL (NON-GAAP BASIS) INSURANCE FUND YEAR ENDED JUNE 30, 2017 Budget Amounts Original Final Actual Variance REVENUES Charges for services $ 822,855 $ 822,855 $ 822,855 $ - Miscellaneous 1,000 1,000 25,530 24,530 Interest earnings 2,500 2,500 4,102 1,602 Total Revenues 826,355 826,355 852,487 26,132 EXPENDITURES Personal services 36,586 36,586 37,560 (974) Materials and services 787,644 787,644 675,193 112,451 Contingency 77,125 77,125 - 77,125 Total Expenditures 901,355 901,355 712,753 188,602 NET CHANGE IN FUND BALANCE (75,000) (75,000) 139,734 214,734 FUND BALANCE, beginning ofyear 75,000 75,000 108,750 33,750 FUND BALANCE, end of year $ - $ - $ 248,484 $ 248,484 *Budget is appropriated by function, therefore this is not an expenditure in excess of appropriations. - 84- 138 COMPLIANCE SECTION 139 ..... LP.C. .,,�,��i>��r�m�w�w�r�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�rr�r��. CERIMB D PUBI_IC: CC(SUNrANI:S AND CONSl.lr..'I"AN1'.S 47,5 Collage StreeI NE Suile 200,Salein,Oregon 97301 (503)581-7788 INDEPENDENT AUDITOR'S REPORT REQUIRED BY OREGON STATE REGULATIONS Honorable Mayor and Council Members City of Woodburn 270 Montgomery Street Woodburn, Oregon 97071 We have audited, in accordance with auditing standards generally accepted in the United States of America, the basic financial statements of the City of Woodburn as of and for the year ended June 30, 2017, and have issued our report thereon dated December 21, 2017. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Woodburn's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules 162- 10-000 through 162-10-320 of the Minimum Standards for Audits of Oregon Municipal Corporations, noncompliance with which could have a direct and material effect on the determination of financial statements amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly,we do not express such an opinion. We performed procedures to the extent we considered necessary to address the required comments and disclosures which included,but were not limited to the following: ■ Deposit of public funds with financial institutions (ORS Chapter 295). ■ Indebtedness limitations, restrictions and repayment. ■ Budgets legally required (ORS Chapter 294). ■ Insurance and fidelity bonds in force or required by law. ■ Programs funded from outside sources. ■ Highway revenues used for public highways, roads, and streets. ■ Authorized investment of surplus funds (ORS Chapter 294). ■ Public contracts and purchasing(ORS Chapters 279A,279B,279C). ■ Accountability for collecting or receiving money by elected officials — no money was collected or received by elected officials. In connection with our testing nothing came to our attention that caused us to believe the City was not in substantial compliance with certain provisions of laws, regulations, contracts, and grants, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules 162-10-000 through 162-10-320 of the Minimum Standards for Audits of Oregon Municipal Corporations, except deficit fund balances as disclosed in the financial statements. - 85- 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: Ryan T.Pasquarella, A Shareholder December 21, 2017 - 86- 141 86- 141 COUNCIL MEETING MINUTES DECEMBER 11, 2017 0:00 DATE COUNCIL CHAMBERS, CITY HALL, CITY OF WOODBURN, COUNTY OF MARION, STATE OF OREGON, DECEMBER 11, 2017 CONVENED The meeting convened at 7:16 p.m. with Mayor Figley presiding. ROLL CALL Mayor Figley Present Councilor Carney Present Councilor Lonergan Present Councilor Schaub Present Councilor Morris Present Councilor Ellsworth Present Councilor Serratos Present Staff Present: City Administrator Derickson, City Attorney Shields, Assistant City Administrator Row, Community Development Director Kerr, Police Chief Ferraris, Interim Public Works Director Liljequist, Economic Development Director Johnk, Assistant City Attorney Granum, Recreation Services Manager Cuomo, Community Relations Manager Gutierrez-Gomez, City Recorder Pierson 0:00 ANNOUNCEMENTS A. Holiday Closures: Christmas: City Hall will close at noon on December 22 and will reopen for regular business hours on December 26. The Aquatic Center and Library will be closed on December 24 and 25. New Year's Day: City Hall and the Library will be closed on January 1. The Aquatic Center will be open noon—5:00 p.m. B. The City Council meeting scheduled for December 25 is cancelled. The next City Council meeting will take place on January 8, 2018 at 7:00 p.m. APPOINTMENTS: Planning Commission Ellen Bandelow-Position 4 Woodburn Recreation and Parks Board Uriel Cruz Salgado - Student Position II Kasi Pankey -Position III Donna Stone—Position V Library Board Nancy Kirksey-Position III Logan Dean Grabill-Brown-Position VII(Student Member) Public Art Mural Committee Merri Berlin Lonergan/Ellsworth...accept the appointments in their entirety. The motion passed Page 1 - Council Meeting Minutes, December 11, 2017 142 COUNCIL MEETING MINUTES DECEMBER 11, 2017 unanimously. 0:09 COMMUNITY/GOVERNMENT ORGANIZATIONS Woodburn Bulldogs Soccer Team Recognition -Mayor Figley recognized the Woodburn Bulldogs Soccer Team for their State Championship win and presented them with a key to the City. Mayor Figley called for a 15 minute recess. 0:15 BUSINESS FROM THE PUBLIC Ana Bautista, stated that she believes she was discriminated against by the City for being a Hispanic woman who is not a contractor. She added that she went to the planning department and was given information on putting in a new home. She stated that she found out later that she was initially given incorrect information and was trying to work with the planning department on how she could make her project work and felt that they were making it very difficult for her. She stated that she was told that all fees moving forward would be waived and that she believes that includes SDC's and she would like the City Council to waive the SDC fees as well as all application fees as a fair resolution. Mayor Figley responded that she is not allowed to unilaterally waive fees and that she invited Ms. Bautista to come speak to the City Council. Councilor Lonergan stated that he is sorry that she had to go through this but that he has never heard of any SDC's being waived and doesn't believe it is even legal to do that. City Administrator Derickson added that he is pleased Ms. Bautista came to the meeting tonight and that the City takes her concerns very seriously. He stated that to make Ms. Bautista whole, he authorized the waiver of the cost of the variance and asked staff to complete the paperwork on her behalf,which was done and the building permit has been ready to pick up since October 25. 0:33 CONSENT AGENDA A. Woodburn City Council minutes of November 13, 2017, B. Liquor License/Change of Ownership Application for Crossroads Grocery and Deli, C. Woodburn Planning Commission minutes of September 28, 2017, D. Woodburn Planning Commission minutes of October 12, 2017, E. Building Activity for October 2017, F. Crime Statistics through October 2017, G. Appointment of Public Works Director. Lonergan/Schaub... adopt the Consent Agenda. The motion passed unanimously. 0:35 PUBLIC HEARING A Public Hearing to consider input on Specht Annexation (ANX 2017-04; CPA 2017-01; MP 2017-01;ZC 2017-01;RCWOD 2017-04).Mayor Figley declared thehearing open at 7:59 p.m. for the purpose of hearing public input on the Specht Annexation (ANX 2017-04; CPA 2017-01; MP 2017-01; ZC 2017-01; RCWOD 2017-04). Mayor Figley asked if there were any conflicts of interest, ex-parte contacts or site visits. Mayor Figley stated that she is very familiar with the property and has driven by it. Each Councilor stated that they are familiar with the property. Councilor Lonergan stated that he was part of the committee to help bring this property into the UGB. Mayor Figley asked if there were any challenges and there were Page 2 - Council Meeting Minutes, December 11, 2017 143 COUNCIL MEETING MINUTES DECEMBER 11, 2017 none. City Recorder Pierson read the Public Hearing Statement. Community Development Director Kerr provided a staff report and answered clarifying questions of Council. Applicant Greg Specht, provided testimony in favor of the annexation and answered questions of the Council. Lee Leighton with Mackenzie, 1515 SW Water Ave,Portland,provided information on a hydraulic analysis that was done. No members of the public wished to speak in either support or opposition of the Specht Annexation (ANX 2017-04; CPA 2017-01; MP 2017-01; ZC 2017-01; RCWOD 2017-04). Mayor Figley declared the hearing closed at 8:33 p.m. 1:08 COUNCIL BILL NO. 3050 -A RESOLUTION APPROVING A MASTER PLAN FOR THE SOUTHWEST INDUSTRIAL AREA IN CONJUNCTION WITH AN ANNEXATION APPLICATION SUBMITTED BY SPECHT WOODBURN LLC Lonergan introduced Council Bill No. 3050. Recorder Pierson read 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. 3050 duly passed. 1:09 COUNCIL BILL NO.3 051 -AN ORDINANCE ANNEXING APPROXIMATELY 107.8 ACRES OF PROPERTY INTO THE CITY OF WOODBURN, GENERALLY LOCATED AT THE SOUTHEAST CORNER OF BUTTEVILLE ROAD AND STATE HIGHWAY 219, MARION COUNTY, OREGON Lonergan introduced Council Bill No. 3051. Recorder Pierson read the bill twice 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. 3051 duly passed. 1:10 COUNCIL BILL NO. 3052 - AN ORDINANCE APPROVING A COMPREHENSIVE PLAN MAP AMENDMENT FROM PRIMARY AGRICULTURE (COUNTY) TO SOUTHWEST INDUSTRIAL RESERVE (CITY OF WOODBURN) ON APPROXIMATELY 107.8 ACRES OF PROPERTY, GENERALLY LOCATED AT THE SOUTHEAST CORNER OF BUTTEVILLE ROAD AND STATE HIGHWAY 219, MARION COUNTY, OREGON AND APPROVING A ZONING MAP AMENDMENT ON SAID PROPERTY TO SOUTHWEST INDUSTRIAL RESERVE Lonergan introduced Council Bill No. 3052. Recorder Pierson read the bill twice 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. 3052 duly passed. 1:12 FINAL ORDER RCWOD 2017-04 Lonergan/Ellsworth...approve the Final Order. On roll call vote the motion passed unanimously. 1:13 COUNCIL BILL NO. 3053 - AN ORDINANCE ANNEXING APPROXIMATELY 39 ACRES OF PROPERTY INTO THE CITY OF WOODBURN, LOCATED AT 9065 ARNEY LANE NE, 2385 ARNEY ROAD, MARION COUNTY, OREGON Lonergan introduced Council Bill No. 3053. Recorder Pierson read the bill twice 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. 3053 duly passed. 1:14 COUNCIL BILL NO. 3054 - AN ORDINANCE APPROVING A ZONING MAP AMENDMENT ON APPROXIMATELY 39 ACRES OF PROPERTY, LOCATED AT Page 3 - Council Meeting Minutes, December 11, 2017 144 COUNCIL MEETING MINUTES DECEMBER 11, 2017 9065 ARNEY LANE NE, 2385 ARNEY ROAD, MARION COUNTY, OREGON AS MEDIUM DENSITY RESIDENTIAL Lonergan introduced Council Bill No. 3054. Recorder Pierson read the bill twice 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. 3054 duly passed. 1:16 FINAL ORDER DR 2017-03, CU 2017-02, RCWOD 2017-03,VAR 2017-03, PLA 2017- 04 Lonergan/Ellsworth...adopt the Final Order DR 2017-03, CU 2017-02, RCWOD 2017-03, VAR 2017-03, PLA 2017-04. On roll call vote the motion passed unanimously. iris AWARD PERSONAL SERVICE CONTRACT TO PBS ENGINEERING & ENVIRONMENTAL, INC. Lonergan/Morris... accept the contract with PBS Engineering &Environmental, Inc. Public Works Director Liljequist provided a staff report. The motion passed unanimously. 1:21 AWARD PERSONAL SERVICE CONTRACT TO GALARDI CONSULTING, LLC (DBA GALARDI ROTHSTEIN GROUP) Lonergan/Schaub... award the Personal Service Contract with Galardi Consulting,LLC. The motion passed unanimously. 1:22 CALL-UP BRIEFING: PLANNING COMMISSION APPROVAL OF A VARIANCE APPLICATION FOR THE LOPEZ RESIDENCE AT 909 SIXTH ST. (VAR 2017-06) The Council declined to call this item up for review. CALL-UP BRIEFING: PLANNING COMMISSION APPROVAL OF A VARIANCE APPLICATION FOR THE BAUTISTA RESIDENCE GARAGE AT 1644 GRANITE DR. (VAR 2017-12) The Council declined to call this item up for review. 1:23 CITY ADMINISTRATOR'S REPORT City Administrator Derickson stated that this is a record breaking night for Woodburn and he is happy to be here. MAYOR AND COUNCIL REPORTS Councilor Morris stated that there was a lot of big stuff tonight and wished everyone a Merry Christmas. Councilor Schaub wished everyone a Merry Christmas and added that she enjoyed the tree lighting ceremony. Councilor Ellsworth stated that she is excited and proud of the accomplishments of the City and wished everyone a happy and safe holiday season. Mayor Figley wished everyone a very happy holiday season and a Happy New Year. Page 4 - Council Meeting Minutes, December 11, 2017 145 COUNCIL MEETING MINUTES DECEMBER 11, 2017 Councilor Carney stated that this was a momentous night for Woodburn and wished everyone a happy holiday. Councilor Serratos wished everyone a Merry Christmas and Happy New Year. ADJOURNMENT Morris/Schaub... meeting be adjourned. The motion passed unanimously. The meeting adjourned at 8:51 p.m. APPROVED KATHRYN FIGLEY, MAYOR ATTEST Heather Pierson, City Recorder City of Woodburn, Oregon Page 5 - Council Meeting Minutes, December 11, 2017 146 COUNCIL WORK SESSION MEETING MINUTES DECEMBER 11, 2017 DATE COUNCIL CHAMBERS, CITY HALL, CITY OF WOODBURN, COUNTY OF MARION, STATE OF OREGON, DECEMBER 11, 2017. CONVENED The work session convened at 6:15 p.m. with Mayor Figley presiding. COUNCIL PRESENT Mayor Figley Councilor Carney Councilor Lonergan Councilor Schaub Councilor Morris Councilor Ellsworth Councilor Serratos Staff Present: City Administrator Derickson, City Attorney Shields, Assistant City Administrator Row, Community Development Director Kerr, Police Chief Ferraris, Interim Public Works Director Liljequist, Economic Development Director Johnk, Assistant City Attorney Granum, Recreation Services Manager Cuomo, Community Relations Manager Gutierrez-Gomez, City Recorder Pierson PRESENTATION Assistant City Administrator Row provided information on the Community Center Project. Bill Hart and Martin Segura of Carleton Hart Architecture provided a presentation on concepts that were found to be important to the community members that attended the community listening sessions that were held. Anthony Veliz, stated that he is in favor of a community center and would like to see the pool upgraded, a dedicated senior space, indoor soccer space and basketball courts/gym space. Marie, a Woodburn resident and mother of three boys stated that she would like to see an indoor soccer field as part of the community center project as well as upgrading the pool to include more water features. Ruby Robles, who works at the Boy's and Girl's Club, stated that a community center would be a good place for students to study after the library closes. She added that an indoor soccer field would be a great addition for the children in the community. City Administrator Derickson stated that the goal is to have a concept, a design and a location with the due diligence done that could then be put in front of the voters for potential bond funding. He added that the next steps of the project would be to identify the scope of the project, what it will look like, costs, and what will be included. Council provided comments periodically throughout the work session. No action was taken by Council. ADJOURNMENT The work session adjourned 7:04 p.m. APPROVED KATHRYN FIGLEY, MAYOR Page 1 —Council Work Session Meeting Minutes, December 11, 2017 147 ATTEST Heather Pierson, Recorder City of Woodburn, Oregon Page 2—Council Work Session Meeting Minutes, December 11, 2017 148 CITY OF WOODBURN Economic and Development Services Department MEMORANDUM 270 Montgomery Street Woodburn, Oregon 97071 (503)982-5246 Date: December 28, 2017 To: Chris Kerr, Community Development Department Director From: Building Division Subject: Building Activity for November 2017 ..w............ . ............._. ... ............... 2015 2016 2017 No. Dollar Amount No. Dollar Amount No. Dollar Amount Single-Family Residential 5 $1,553,530 0 $0 0 $0 �w.......... ........ ......�w .. ...... ..._. .............. Multi-Family Residential 0 $0 0 $0 0 $0 Assisted Living Facilities .._...� - 0 W$0 0 $0 I 0 � W$0 t ....._ Residential Adds &Alts 6 $40,714 2 $19,923 4 $110,778 Industrial 1. $25,000 _ 1 m $20,000 0 $0 Commercial 6 $21,818 4 $181,443 7 $3,594,200 SiSigns andFences 0 m ���w�._.........��.._._..... mm ........�� g $0 0 $0 1 $8,000 ��...._���.. �__.... . ............,,,,, .. Manufactured Homes 0 $0 1 $114,799 4 $234,000 �_.._............... .... ..... .... _.. m.. ..�.......... �...__.. _.. . �. TOTALS 18 $1,841,062 8 $335,165 16 $3,946,978 Fiscal Year to Date.... ....... ........�.m_ _ ._�_��.._�._._�....._�_._.��. ... (July 1 — $9,116,261 $3,910,909 $11,228,527 June 30 _......._......._....... �.� _. ........ .........�...� ......... . L------------ ._..__� 1Xommunity Development\Building\Building Activity\B1dgAct-2017\B1dg Activity-Memos\memo-2017-11 November.doc 149 Iii♦ 4 B V' January 8, 2018 TO: Honorable Mayor and City Council through City Administrator FROM: Eric Liljequist, Public Works Director SUBJECT: Acceptance of a Public Maintenance & Slope Easement on a portion of Lot 1 and Lot 2 of 1-5 Logistics Center" Located in the SE 1/4 of Sectionl4, Township 5 South, Range 2 West, W.M., Marion County, Oregon. RECOMMENDATION: That City Council accept the Public Maintenance and Slope Easement on a portion of Lot 1 and Lot 2 of "I-5 Logistics Center" Located in the SE '/4 of Section 14, Township 5 South, Range 2 West, W.M., Marion County, Oregon, granted by Darma Real Estate Partnership LP, a Texas limited partners hip,property owner of subject tax lots. Acceptance of this easement satisfies Conditions of Approval on Riparian Corridor and Wetlands Overlay District Permit 2017-04, as more fully explained below. BACKGROUND: On December 11 , 2017, the City Council conducted a public hearing and approved consolidated land use applications related to the Specht property (ANX 2017-04; CPA 2017-01 ; MP 2017-01 ; ZC 2017-01 ; RCWOD 2017-04) ("the Specht Annexation"). A specific requirement of the Specht Annexation was to record a Public Maintenance and Slope Easement to allow for the necessary improvements to be made to Butteville Road when future development occurs. The relevant Finding provides as follows: To assure access for construction of improvements that will be necessary to avoid gaps and to support initial and subsequent phases of development as outlined in the SWIR Master Plan, specifically the widening of Butteville Road, Agenda Item Review: City Administrator_x_ City Attorney_x_ Finance—x- 150 Mayor and City Council January 8, 2018 Page 2 Section 3 of the proposed Ordinance requires the Applicant to provide easements to the City adjacent to the segment of the Butteville Road right-of- way between the future extension of Woodland Avenue and Oregon Highway 219, as a precondition for this annexation to become effective. DISCUSSION: Acceptance of the Public Maintenance and Slope Easement will satisfy the Conditions of Approval on the RCWOD and will complete the City's land use process on the Specht Annexation. The pertinent RCWOD Condition of Approval is as follows: R2. To meet the requirements of WDO 3.02.02 and to facilitate the construction of Butteville Road improvements, the applicant shall dedicate the following to the City: 1 . An easement (or other grant or conveyance to the City) providing a maintenance easement along Senecal Creek at a minimum width to adequately accommodate the 100 year floodway, or at a width and location acceptable to the City Engineer. Fill and associated improvements, together with required public utilities, necessary to accommodate future widening of Butteville Road as generally described in the Staff Report shall be allowed within the easement area, subject to issuance of any necessary state or federal authorizations required for such fill and/or excavation. 2. An easement (or other grant or conveyance to the City) providing permanent slope easement(s) and temporary construction easement(s) as necessary to accommodate future improvements to the eastern frontage of Butteville Road located between the new intersection at Woodland Avenue and Highway 219 required to accommodate future travel demands from the subject property. FINANCIAL IMPACT: There is no cost to the City for this Public Maintenance and Slope Easement since it is granted by the property owner as a result of the Specht Annexation and RCWOD Conditions of Approval. 151 Mayor and City Council January 8, 2018 Page 3 Attachment A copy of the Public Maintenance and Slope Easement is attached. 152 AFTER RECORDING RETURN TO: Woodburn City Recorder City of Woodburn 270 Montgomery Street Woodburn, OR 97071 CITY OF WOODBURN, OREGON MAINTENANCE AND SLOPE EASEMENT This Maintenance and Slope Easement (the "Agreement") is made and entered into by and between DARMA REAL ESTATE PARTNERSHIP LP, a Texas limited partnership, GRANTOR, and the CITY OF WOODBURN, OREGON, hereinafter called CITY. RECITALS A. GRANTOR is the owner of certain real property located in Marion County, Oregon (such real property, the "Maintenance Easement Area"), which is legally described on Exhibit "A" attached hereto and made a part hereof and depicted on Exhibit "B" attached hereto and made a part hereof. B. To satisfy conditions of approval on City of Woodburn application for Riparian Corridor and Wetlands Overlay District Permit 2017-04, GRANTOR must dedicate to the CITY a maintenance easement (the "Maintenance Easement") within the Maintenance Easement Area as depicted on Exhibit "B". C. In connection with its proposed development of property adjacent to the Maintenance Easement Area, GRANTOR, its successors or assigns may construct a public road extending Woodland Avenue to Butteville Road and may place fill materials in the Maintenance Easement Area in connection therewith (such installation, the "Fill Work"). D. GRANTOR further desires to grant to the CITY a permanent, non-exclusive, appurtenant easement (the "Slope Easement") over, across, along and under that portion of the Maintenance Easement Area in which the Fill Work is completed (the "Slope Easement Area"). NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, GRANTOR and CITY agree as follows- 1. ollows:1. Grant of Maintenance Easement. GRANTOR hereby grants the Maintenance Easement to the CITY, which Maintenance Easement shall be a permanent easement to remove fill and other debris from the Maintenance Easement Area. GRANTOR hereby covenants declares that it will not construct any building or other improvement or cause any debris other materials to be placed upon, under, or within the Maintenance Easement Maintenance and Slope Easement (Permanent) Page 1 of 6 137945348.3 153 Area without the written permission of CITY, except as otherwise permitted by Section 2 hereof. 2. Fill Work Permitted. Notwithstanding anything to the contrary in this Agreement, GRANTOR reserves unto itself, its successors and assigns as owner of the Maintenance Easement Area and its contractors the right to complete the Fill Work (together with any reasonably necessary disturbance of materials in the Maintenance Easement Area including, without limitation, planting and mitigation work) in connection with the construction of a public road adjacent to the Maintenance Easement Area, and completion of the Fill Work shall not be deemed a violation of this Agreement. 3. Slope Easement. GRANTOR hereby grants the Slope Easement to the CITY and any contractors performing maintenance and support work related to the public road adjacent to the Maintenance Easement Area, which Slope Easement shall be a permanent, non-exclusive, appurtenant easement over, across, along and under that portion of GRANTOR's property in which the Fill Work is completed (the "Slope Easement Area"). CITY may use the Slope Easement Area for the following purposes: (i) lateral, adjacent, and subjacent support for the public road; (ii) maintenance of the Slope Easement Area to ensure continued stability and support of the public road; and (iii) ingress and egress to and from the Slope Easement Area for the purposes of exercising the foregoing rights. 4. Slope Easement Amendment. Upon completion of the slope, CITY shall be entitled to survey the Slope Easement Area and prepare an amendment to this easement to attach the legal description of the Slope Easement Area. GRANTOR agrees to execute and acknowledge, and permit CITY to record against GRANTOR'S property, such an amendment provided the form and content of the amendment are reasonably acceptable to GRANTOR. 5. Indemnity. CITY shall indemnify and hold GRANTOR harmless against any and all loss, cost, or damage arising out of the exercise of the rights granted herein. 6. Covenant of Title. GRANTOR covenants to CITY that GRANTOR is lawfully seized in fee simple of the above-granted premises, free from all encumbrances other than those of record and that GRANTOR and its successors, heirs and personal representatives shall warrant and forever defend the said premises and every part thereof to CITY against the lawful claims and demands of all persons claiming by, through, or under GRANTOR. DATED this day of 2017. [Signatures follow] Maintenance and Slope Easement (Permanent) Page 2of6 137945348.3 154 DARMA REAL ESTATE PARTNERSHIP LP By- Name- Its y:Name:Its General Partner CORPORATE ACKNOWLEDGEMENT STATE OF , County of ) ss. The foregoing instrument was acknowledged before me this day of 2017 by , as General Partner of DARMA REAL ESTATE PARTNERSHIP LP, a Texas limited partnership, and the foregoing instrument was signed and sealed on behalf of said limited partnership by authority of its General Partner, which acknowledged said instrument to be its voluntary act and deed. NOTARY PUBLIC FOR TEXAS My Commission Expires: City of Woodburn 270 Montgomery Street Woodburn, OR 97071 (Grantee's Name and Address) Accepted on behalf of the City of Woodburn: City Recorder: Heather Pierson Maintenance and Slope Easement (Permanent) Page 3 of 6 137945348.3 155 EXHIBIT "A" Legal Description of Maintenance Easement Northwest REGIST Nus rESSIO AL NI SURVEYOR tier LINT HI. STUB ,JFK. RENEWAL DATE: 06/30/1 1815 NW 169t1 Place, Suite 2090 Beaverton,OR 97006 Telephone: 503-848-2127 Exhibit A Maintenance Easement Area Description December 22, 2017 NWS Project Number 1567 A portion of Lot 1 and a portion of Lot 2 of "I-5 Logistics Center" in the southeast one-quarter of Section 11 and the northeast one-quarter of Section 14, Township 5 South, Range 2 West, Willamette Meridian, Marion County, Oregon, and being more particularly described as follows: Beginning at the most northerly northwest corner of said Lot 1, said point being marked by a 5/8 inch iron rod with a yellow plastic cap stamped "KC Development" and being located on the southerly right-of-way line of State Highway 219 (30.00 feet southerly from the centerline thereof, when measured at right angles); Thence along said southerly right-of-way line, South 88°04'44"East 162.12 feet; Thence departing said southerly right-of-way line, South 02°58'45"East 95.38 feet; Thence South 19°10'45"West 64.12 feet; Thence South 34°06'48"West 100.81 feet; Thence South 05°48'16"Wet 65.80 feet; Thence South 31°41'15"West 84.20 feet; Thence South 19°43'32"West 47.22 feet; Thence South 58°16'54"West 70.96 feet; Thence South 12°19'18"West 106.78 feet; Thence South 54°41'08"West 43.96 feet; Thence South 39°20'06"West 91.21 feet; Thence South 20°20'57"East 54.61 feet; Thence South 10°02'05"West 86.55 feet; Thence South 19°46'51"West 84.44 feet; Thence South 31°12'11"West 71.14 feet; Thence South 01°26'45"East 63.35 feet; Maintenance and Slope Easement (Permanent) Page 4of6 137945348.3 156 Thence South 05°16'35"West 97.00 feet; Thence South 11°30'53"West 114.68 feet; Thence North 65°20'09"West 68.21 feet to a point on the easterly right-of-way line of Butteville Road (50.00 feet easterly from the centerline thereof,when measured at right angles); Thence along the easterly right-of-way line of Butteville Road, North 02'07'13"East 101.94 feet to an angle point thereon, said point being marked by a 5/8 inch iron rod with a yellow plastic cap stamped "Northwest Surveying Inc"; Thence continuing along said easterly right-of-way line, North 02°07'06"East 426.88 feet to a point of curvature thereon, said point being marked by a 5/8 inch iron rod with a yellow plastic cap stamped "Northwest Surveying Inc"; Thence continuing along said easterly right-of-way line, 225.73 feet through the arc of a tangent circular curve to the right,having a radius of 1095.92 feet, a delta angle of 11°48'05", and a long chord of North 08°01'08" East 225.33 feet to a point of tangency thereon, said point being marked by a 5/8 inch iron rod with a yellow plastic cap stamped"Northwest Surveying Inc"; Thence continuing along said easterly right-of-way line, North 13'55'11"East 277.78 feet to a point of curvature thereon, said point being marked by a 5/8 inch iron rod with a yellow plastic cap stamped "Northwest Surveying Inc"; Thence continuing along said easterly right-of-way line, 256.93 feet through the arc of a tangent circular curve to the right, having a radius of 188.73 feet, a delta angle of 78°00'06", and a long chord of North 52'55'13" East 237.55 feet to an angle point thereon, said point being marked by a 5/8 inch iron rod with a yellow plastic cap stamped"Northwest Surveying Inc"; Thence continuing along said easterly right-of-way line, North 01'55'12" East 20.00 feet to the Point of Beginning. The above described easement contains 5.342 acres, more or less. The basis of bearings for this description is the plat of "I-5 Logistics Center", Marion County Plat Records. Maintenance and Slope Easement (Permanent) Page 5 of 6 137945348.3 157 � | / | 158 � Iii♦ 4 B V' January 8, 2018 TO: Honorable Mayor and City Council through City Administrator FROM: Eric Liljequist, Public Works Director SUBJECT: Acceptance of a Relinquishment Deed for Sections of Evergreen Road and Tom Tennant Drive per Oregon Department of Transportation Cooperative Improvement Agreement No. 25169 RECOMMENDATION: That City Council accept the relinquishment deed for stipulated sections of Evergreen Road and Tom Tennant Drive per an Oregon Department of Transportation (ODOT) Cooperative Improvement Agreement No. 25169. BACKGROUND: At the April 27, 2009 City Council Meeting, the City Council authorized the City Administrator to execute Cooperative Improvement Agreement No. 25169 with ODOT for the construction of the Evergreen Road Transit Facility and associated improvements to Evergreen Road. Cooperative Improvement Agreement No. 25169 was made and entered into on May 25, 2010 by and between the Oregon Department of Transportation and the City of Woodburn. This cooperative improvement agreement includes all pertinent State and City obligations regarding the OR 214 at Evergreen Road Transit Facility Project that was completed in conjunction with the 1-5 Interchange Project. One of the State's obligations is to relinquish specified sections of right-of-way upon the completion of the project. DISCUSSION: In order to complete the terms of Misc. Contracts & Agreements No. 25169, ODOT's Right of Way Manager has submitted a signed relinquishment deed for Tom Tennant Drive and Evergreen Road from OR 214 north to the intersection with Country Club Court as described and shown in the attached Relinquishment Deed exhibits "A" and "B". The execution of this agreement will give the City of Woodburn jurisdictional authority over the aforementioned public right-of-way. Agenda Item Review: City Administrator_x_ City Attorney_x_ Finance—X- 159 Mayor and City Council January 8, 2018 Page 2 FINANCIAL IMPACT: The only financial impact will be future maintenance costs of the newly acquired right-of-way. Attachments A Copy of the relinquishment deed is attached. 160 OF c., O Department of Transportation regon Technical Leadership Center Right of Way Section—IVIS 2 is Kate Brown,Governor 4040 Fairview Industrial Dr SE Salem, OR 97302-1142 December 13, 2017 Phone:(503)986-3600 Fax: (503)986-3625 www.oregon.gov/odot/hwy/row City of Woodburn Attn: Eric Liljequist, Interim Public Works Director 190 Garfield St Woodburn, OR 97071-4730 Re: Relinquishment No. 7557000A Cooperative Improvement (Misc. C &A) Agreement No. 25169 OR214 at Evergreen Rd.-Transit Facility Section Hillsboro-Silverton Hwy Marion County Enclosed is a Relinquishment Deed in which the State relinquishes some right of way to the City of Woodburn. This Relinquishment Deed pertains to specific pieces of right of way acquired in the OR 214 at Evergreen Rd-Transit Facility (Woodburn) project, in the City of Woodburn. This relinquishment is in accordance with Cooperative Improvement Agreement No. 25169, signed by the City of Woodburn on April 14, 2010, and by the Oregon Department of Transportation on May 25, 2010. Before this Relinquishment Deed is recorded, it must be accepted on behalf of the City of Woodburn. Please have the document signed by the appropriate party with authority to accept the document on behalf of the City of Woodburn. Please do not make any additions, deletions, corrections or changes without the State's prior written approval. When the Relinquishment Deed has been accepted, please return the original to this office. We will then proceed with recording the document. Or, if you prefer, you may proceed with recording the document and then return the original to this office. Thank you for your attention to this matter. Sean Erion Jurisdictional Transfer Specialist ODOT Right of Way Section HQ (503) 986-3648 Sean.C.ErionRodot.state.or.us 161 Relinquishment No. 7557000A Misc. C &A Agreement No. 25169 OR 214 at Evergreen Rd.-Transit Facility Section Hillsboro-Silverton Hwy Marion County Relinquishment Deed In order to complete terms of Misc. C &A Agreement No. 25169, dated May 25, 2010, between the STATE OF OREGON, by and through its Department of Transportation, hereinafter called "State", and CITY OF WOODBURN, a municipal corporation of the State of Oregon, by and through its Elected Officials, hereinafter called "City", State does hereby relinquish unto City its right, title and interest in the connecting streets or portions thereof as provided for in said agreement. Any right-of-way being conveyed in which State has any title shall be vested in City ONLY SO LONG AS USED FOR PUBLIC ROAD PURPOSES. IF SAID RIGHT OF WAY IS NO LONGER USED FOR PUBLIC ROAD PURPOSES, IT SHALL AUTOMATICALLY REVERT TO STATE. The area being relinquished is described in the legal description and accompanying map, marked Exhibit "A" and Exhibit "B", attached hereto and by this reference made a part hereof. AS SHOWN ON THE ATTACHED EXHIBIT MAP, HEREIN AND MADE A PART OF THIS DOCUMENT AS SET FORTH ABOVE, THAT IN THE EVENT OF A CONFLICT OR DISCREPANCY BETWEEN THE EXHIBIT MAP AS SHOWN AND THE WRITTEN LEGAL DESCRIPTION EXHIBIT "A", THE WRITTEN LEGAL DESCRIPTION EXHIBIT "A" SHALL PREVAIL. The property above described is transferred subject to the rights of any utilities located within said property and further subject to the rights of the owners of said existing facilities if any there be, to operate, reconstruct, and maintain their utility facilities presently located within said property. AFTER RECORDING RETURN TO & TAX STATEMENTS TO: OREGON DEPARTMENT OF TRANSPORTATION RIGHT OF WAY SECTION 4040 FAIRVIEW INDUSTRIAL DRIVE SE MS#2 SALEM OR 97302-1142 12/13/17 Page 1 -Relinquishment 162 Relinquishment No. 7557000A Misc. C &A Agreement No. 25169 OR 214 at Evergreen Rd.-Transit Facility Section Hillsboro-Silverton Hwy Marion County The Oregon Transportation Commission, by a duly adopted Delegation Order OTC —01; Delegation Order No. DIR-03, Paragraph No. A-21; Delegation Order No. HWY 04, Paragraph No. A-8; and Delegation Order No. TSB 04, Paragraph No. A-6, all dated December 1, 2010, authorize the State Right of Way Manager to sign this Relinquishment Deed for and on behalf of the Commission. y Dated this Lt day ofc.� ��� t 20 _ I STATE OF OREGON, by and through its DEPARTMENT OF TRANSPORTATION ow"V"zT By Scot C. Claus, State Right of Way Manager STATE OF OREGON, County of Marion M , 20 Personally appeared Scott C. Claus, stated Dated � that he is the State Right of Way Manager for the State of Oregon, Department of Transportation, and that this document was voluntarily signed on behalf of the State of Oregon by authority delegated to him. Before me: A " OFFICIAL STAMP Notary Public for Oregon DALE REX SHAFER NOTARY PUBLIC-OREGON My Commission expires ' ei COMMISSION NO.943628 *my COMMISSION EXPIRES OCTOBER 12,2019 Title as hereinabove relinquished and as shown on accompanying legal description and map, Exhibit "A" and Exhibit "B", is hereby accepted by City of Woodburn Accepted on behalf of the City of Woodburn By Title: City Administrator Date 12/13/17 Page 2-Relinquishment 163 EXHIBIT A-Page 1 of I File 7557000A Drawing 11 B-6-3 April 12, 2017 Relinquished to the City of Woodburn A parcel of land lying in the William Darst D.L.C. No. 60, Township 5 South, Range 2 West, W.M. and in Parcel 1 and Parcel 3 of Partition Plat No. 2010-028 and in Parcel 2 of Partition Plat No. 1993-049 and in Parcel 1 and Parcel 2 of Partition Plat No. 1992-061 and in Parcel 1 and Parcel 2 of Partition Plat 2014-009, all of Marion County, Oregon; said parcel being that property designated as Parcel I and that permanent easement for Slopes, Drainage, Water, Gas, Electric and Communication Service Lines, Fixtures and Facilities designated as Parcel 2 and described in that Stipulated General Judgment dated March 18, 2013, entered as Circuit Court Case No. 12C24284, Marion County, Oregon and recorded July 10, 2013 on Reel 3521, Page 314 of Marion County Records; and being that property designated as Parcel 1 and Parcel 2 and that permanent easement for Slopes, Drainage, Water, Gas,, Electric and Communication Service Lines, Fixtures and Facilities designated as Parcel 3 and described in that Warranty Deed to the State of Oregon, by and through its State Highway Commission, recorded October 10, 2012 on Reel 3433, Page 49 of Marion County Records; and being that property designated as Parcel 1 and Parcel 2 and that permanent easement for Slopes, Drainage, Water, Gas, Electric and Communication Service Lines, Fixtures and Facilities designated as Parcel 3 and Parcel 4 and described in that Bargain and Sale Deed to the State of Oregon, by and through its State Highway Commission, recorded May 13, 2013 on Reel 3502, Page 168 of Marion County Records; and being those properties designated as Parcel 1 and those permanent easements for Slopes, Drainage, Water, Gas, Electric and Communication Service Lines, Fixtures and Facilities designated as Parcel 2 and described in those Warranty Deeds to the State of Oregon, by and through its State Highway Commission, recorded October 15, 2012 on Reel 3434, Page 330 and recorded October 26, 2012 on Reel 3438, Page 70 and recorded November 21, 2012. on Reel 3446, Page 219 and recorded January 14, 2013 on Reel 3463, Page 155, all of Marion County Records; and being that property designated as Parcel I and that permanent easement for Slopes, Drainage, Water, Gas, Electric and Communication Service Lines, REGISTERED Fixtures and Facilities designated as Parcel 2 and PROFESSIONAL Parcel 3 and described in that Bargain and Sale LAND SURVEYOR Deed to the State of Oregon, by and through its State Highway Commission, recorded May 13, 2013 on DIGITALLY SIGNED Reel 3502, Page 167 of Marion County Records; and being that Permanent Easement and Subordination OREGON designated as Parcel 1 and described in that Deed to January 16, 1996 the State of Oregon, by and through its State PAULJOSEPH MORIN Highway Commission, recorded September 23, 2013 2746 on Reel 3545, Page 489 of Marion County Records. RENEWS: DEC. 31 , 2018 164 SEC. 12, T. 5 S., R. 2 W., W.M. Y COUNTRY CLUB CT. B Q� FEE TITLE ® (7> PERMANENT EASEMENT () DENOTES DEED PARCELS DEED RECORDING NO. P.P. 7993-049 O STIPULATED GENERAL JUDGMENT#72C24284 PARCEL 2 REEL 3527, PAGE 374, PARCELS 7 &2 ® REEL 3446, PAGE 279, PARCELS 7 &2 P.P. 2070-028 REEL 3433, PAGE 49, PARCELS 7, 2&3 PARCEL 7 & 3 �D REEL 3463, PAGE 755, PARCELS 7 &2 �E REEL 3502, PAGE 768, PARCELS 7, 2, 3& 4 �F REEL 3438, PAGE 70, PARCELS 7 &2 (3) �G REEL 3434, PAGE 330, PARCELS 7 &2 �H REEL 3502, PAGE 767, PARCELS 7, 2&3 (I REEL 3545, PAGE 489, PARCEL 7 -- REGISTERED P.P. 7992-067 PROFESSIONAL PARCEL 7 & 2 F LAND SURVEYOR EEDIGITALLY SIGNED (7) <2> OREGON January 16, 1996 (4) PAUL JOSEPH MORIN P.P. 20.74-009 (3) 2746 N PARCEL 7 & 2 RENEWS: DEC. 31 , 2018 G (2) (7 (© (3) H TOM TENNANT DRIVE !2 I P.P. 2070-028 rn 070 n PARCEL 7 WOODBURN MEMOR%AL TRANS/T FAC/LITY rn z OREGON DEPARTMENT OF TRANSPORTATION SECTION OR214 0 EVERGREEN ROAD - TRANS/T FAC/L/TY asrnxr` RIGHT OF WA Y HIGHWAY HILL590RO - 51L VER TON SCALE 7"= 700' RELINQU15HMENT COUNTY MARION COUNTY FILE 7557000A 4'Usraat n'°? EXHIB/T B . DATE APRIL, 2017 SEE DRAW/NG I I 9-6-3 165 �'I'1�r I Iii♦ r} B V' January 8, 2018 TO: Honorable Mayor and City Council through City Administrator FROM: Eric Liljequist, Public Works Director SUBJECT: Award Professional Services Contract for Building Repair & Maintenance Services to GC Quality Construction, LLC RECOMMENDATION: That the City Council, acting in its capacity as the Local Contract Review Board, authorize the City Administrator to enter into a Professional Services Agreement with GC Quality Construction, LLC for the Building Repair & Maintenance Services. BACKGROUND: Staff utilized a Request for Proposals (RFP) process to solicit proposals for building repair & maintenance contractor services to assist City staff in completing necessary maintenance activities at various City facilities in Woodburn. The RFP was advertised in the Daily Journal of Commerce and was also posted on the City website. Staff received four proposals from qualified firms that satisfied the requirements of the RFP. After a thorough evaluation process, City staff selected GC Quality Construction, LLC as the highest ranking proposer. City staff proceeded to negotiate with GC Quality Construction, LLC a fee schedule of hourly rates for work to be performed over the life of the maintenance contract. The four qualified proposals that were received by the December 8, 2017 deadline were ranked as follows by the evaluation committee: No: Name 1 GC Quality Construction, LLC 2 DGS General Construction, Inc. 3 Grant Company General Contractors 4 All-Ways Construction Agenda Item Review: City Administrator_x City Attorney_x_ Finance_x 166 Honorable Mayor and City Council January 8, 2018 Page 2 DISCUSSION: City staff desires a fast and efficient method for performing smaller sized building repair and maintenance services from a qualified contractor via a multi-year contract. The building repair and maintenance services will cover all City facilities and parks. This will be an on-call service that allows City staff to quickly engage a contractor to supply maintenance services within a reasonable amount of time depending on the severity of the need. Anticipated job categories include light carpentry services, building repair services and other general maintenance work. Each job is anticipated to be less than $35,000 and shall not include major structural work that requires architectural or engineering design. These jobs include both interior and exterior work. Contractors are expected to utilize standard construction materials and practices while adhering to local building codes and standards. The contractor shall provide all labor, tools, material, and equipment needed to complete specified services. The proposed contract is for a term of three years, with two one-year extensions if agreed to by both parties. The contract award is in conformance with public contracting laws of the State of Oregon as outlined in ORS Chapter 279C and the laws and regulations of the City of Woodburn. Staff is recommending that the contract be awarded. FINANCIAL IMPACT: Historically, the City spends approximately $50,000 to $75,000 annually on work performed by building maintenance contractors. Funding for this is included in the FY 17/18 adopted budget. The negotiated standard hourly rate for GC Quality Construction, LLC is $85. 167 OFFI Iii♦ r�} B V' January 8, 2018 To: Honorable Mayor and City Council through City Administrator From: Chris Kerr, AICP, Community Development Director Colin Cortes, AICP, CNU-A, Senior Planner Subject: Call-Up Briefing: Planning Commission Approval of a Conditional Use Application for Tienda Mexicana at 311 N. Front St (CU 2017-04) RECOMMENDATION: Staff recommends no action and briefs the Council on this item pursuant to Woodburn Development Ordinance (WDO) Section x.02.02,. The Council may call up this item for review if desired and, by majority vote, initiate a review of this decision. BACKGROUND: The Planning Commission held a public hearing on December 14, 2017 and unanimously approved the conditional use (Type III) with the conditions recommended by staff. No parties testified in opposition to the proposal. The site is a lot at the north/northwest corner of N. Front and Garfield Streets developed in 1904 and occupied by a one-story commercial retail building. The proposal is about land use only; no redevelopment or site plan is relevant. The existing business, Tienda Mexicana Monte Alban, is primarily retail trade. The proposal is the conditional use within the Downtown Development and Conservation (DDC) zone of, "pawn, check cashing, payday loan and cash transfer" pursuant to WDO Table 2.03A, B 18. Within the group use, the applicant's chief interest is check cashing and cash transfer. FINANCIAL IMPACT: Staff anticipates no direct financial impact to the City by the decision. 168