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December 14, 2020 Agenda Packet E RIC S WENSON,M AYOR D EBBIE C ABRALES,C OUNCILOR W ARD 1 C ITY OF W OODBURN A LICE S WANSON,C OUNCILOR W ARD II R OBERT C ARNEY,C OUNCILOR W ARD III C ITY C OUNCIL A GENDA S HARON S CHAUB,C OUNCILOR W ARD IV M ARY B ETH C ORNWELL,C OUNCILOR W ARD V D ECEMBER 14,2020–7:00 P.M. B ENITO P UENTE J R.,C OUNCILOR W ARD VI VIAVIDEOCONFERENCING 1.CALL TO ORDER AND FLAG SALUTE 2.ROLL CALL 3.OATH OF OFFICE AND ELECTION A.Oath of Office for Mayor and Councilors for Wards I, II, and VI B.Election of Council President (by electronic ballot) 4.OUTGOING CITY COUNCILOR AND MAYOR PRESENTATION A.City Recognition 5.PRESENTATIONS 6.ANNOUNCEMENTS AND APPOINTMENTS Announcements: A. Holiday Closures: Christmas: City Hall will be closedbeginning at noon on December 24and will reopen for regular business hours on December 28. th for curbside The Library will be open 10am-2pm on December 24 material pickup and drop off onlyand Closed on December 25. Transit Services will be closed December 25 the Libraryand Transit Services will be closed New Year: City Hall, January 1. Appointments: None. 7.COMMUNITY/GOVERNMENT ORGANIZATIONS This facility is ADA accessible. If you need special accommodation, please contact the City Recorder at 503-980- 6318at least 24 hours prior to this meeting. **Habrá intérpretes disponibles para aquéllas personas que no hablan Inglés, previo acuerdo. Comuníquese al (503) 980-2485.** December 14, 2020Council Agenda Page i None. 8.PROCLAMATIONS/PRESENTATIONS Proclamations: None. Presentations: A.Audit1 B.Emergency Business Assistance Program C.COVID-19Update 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 Meeting minutes of November 23, 2020196 Recommended Action: Approve the minutes. B.Acceptance of a Public Utility Easement at 591Gatch Street, 199 Woodburn, OR 97071 (Tax Lot 051W18AA05700) Recommended Action:Authorize the dedication of a public utility easement granted by Mid-Valley Community Church, owners of the property located at 591 Gatch Street, Woodburn, OR 97071 (Tax Lot 051W18AA05700). C.Liquor License Application for Las Islas.204 Recommended Action:Recommend that the OLCC does approve the Liquor License Application for Las Islas. D.Certified Election Results –November 3, 2020General Election206 Recommended Action:Accept the Certified Results from Marion County. E.Building Activity for November 2020209 Recommended Action:Receive the report. F.Crime Statistics through October 2020220 Recommended Action:Receive the report. December 14, 2020Council Agenda Page ii 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.Award of Construction Contract for the Parr Road Municipal Water 225 Supply Well Project Recommended Action:Award the construction contract for the Parr Road Municipal Water Supply Well Project to the lowest responsible and responsive bidder, Holt Services, Inc., in the amount of $434,683.00. B.Award of Construction Contract for the Santiam Lift Station Removal 227 Project Recommended Action:Award the construction contract for the Santiam Lift Station Removal Projectto the lowest responsible and responsive bidder, Canby Excavating, Inc.,in the amount of $60,950.00. 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. None. 16.CITY ADMINISTRATOR’S REPORT 17.MAYOR AND COUNCIL REPORTS 18.EXECUTIVE SESSION None. 19.ADJOURNMENT December 14, 2020Council Agenda Page iii November 25, 2020 City Council City of Woodburn 270 Montgomery St. Woodburn, Oregon 97071 We have audited the financial statements of the City of Woodburn and the Woodburn Urban Renewal Agency (collectively, the City) as of and for the year ended June 30, 2020, and have issued our report thereon dated November 25, 2020. 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 April 17, 2020, our responsibility, as described by professional standards, is to form and express an opinion 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 entityÓs 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. Planned Scope and Timing of the Audit We conducted our audit consistent with the planned scope and timing we previously communicated to you in our letter dated April 17, 2020. 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. 1 Qualitative Aspects of the EntityÓs 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. There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during the year. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on managementÓs 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 managementÓs current judgments. The most sensitive accounting estimates affecting the financial statements are depreciation, net pension liability, net OPEB liability and asset, and related deferred inflows and outflows. We evaluated the key factors and assumptions used to develop the estimates and determined that they are reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units. The financial statement disclosures are neutral, consistent and clear. 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. Attached is a list of misstatements that we identified as a result of our audit procedures that were brought to the attention of, and were corrected by, management. 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 significant to the CityÓs financial statements or the auditorÓs report. No such disagreements arose during the course of the audit. 2 Representations Requested from Management We have requested certain written representations from management, which are included in the attached letter dated November 25, 2020. ManagementÓs 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 CityÓs auditors. We applied certain limited procedures to managementÓs discussion and analysis, the CityÓs PERS schedules and the CityÓs OPEB schedules which are required supplementary information (RSI) that supplement 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 managementÓs 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. We were not engaged to report on the introductory section, other financial schedules or statistical section which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. This report 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, CERTIFIED PUBLIC ACCOUNTANTS 3 11/25/2020 11:38 AM Client:88925 - City of Woodburn Engagement:Audit 2020 - City of Woodburn Period Ending:6/30/2020 Trial Balance:3001 - TB Workpaper:1400.01 - Copy of Adjusting Journal Entries Report AccountDescriptionW/P RefDebitCredit Adjusting Journal Entries JE # 13701.01 To true up housing rehab notes and related deferred revenues (client has recorded) 50,098.77 137 2257 Deferred Revenue 137 1163 50,098.77 Notes/Contracts Receivabl Total50,098.7750,098.77 Adjusting Journal Entries JE # 24102 To adjust for payroll paid subsequent to YE 240,342.05 001 1101Cash 240,342.05 901 2000Payroll Clearing/Suspense Total240,342.05240,342.05 Adjusting Journal Entries JE # 33701.02 To record June STIF revenue and receivable (client has recorded) 16,118.00 Accounts Receivable 110 1122 16,118.00 110-000 3345Statewide Transit Total16,118.0016,118.00 Adjusting Journal Entries JE # 44205 Adjustment to true up special assessment receivable and deferred revenues (client has recorded) 9,887.39 360 2257Deferred Revenue 9,887.39 360 1123Assessments Receivable Total9,887.399,887.39 Adjusting Journal Entries JE # 54202 To correct accrual for property tax receivable/deferred revenues (client has recorded entries to agree) 23,270.21 001 2257Deferred Revenue 493.84 001-000 3111Property Tax - Current 302.39 001-000 3112Property Tax - Delinquent 1,570.61 250 2257Deferred Revenue 1,100.28 720 2257Deferred Revenue 9,960.64 001 1111Taxes Receivable 14,105.80 001 1122Accounts Receivable 764.46 250 1111Taxes Receivable 9.92 250 1122 Accounts Receivable 424.86 250-000 3111Property Tax - Current 371.37 250-000 3112Property Tax - Delinquent 47.91 720 1111Taxes Receivable 1,052.37 720 1122 Accounts Receivable Total26,737.3326,737.33 Adjusting Journal Entries JE # 64206 Reversal - Utility billing June consumption billing YE accrual (client has recorded) 9,756.95 470 1101Cash 204,025.67 470-000 3434.101Water Sales Revenue 349,123.89 472-000 3435.101Sewer System Revenue 193,570.59 470 1126Utility Acct Receivable 20,212.03 470 2238UB Overpayments 9,756.95 472 1101Cash 338,908.83 472 1126Utility Acct Receivable 458.11 472 2238UB Overpayments Total562,906.51562,906.51 Adjusting Journal Entries JE # 75602 To adjust Def Revenue for Sale of Assoc Building (client has recorded) 001 2257Deferred Revenue11,120.60 001 1122Accounts Receivable 11,120.60 Total11,120.6011,120.60 1 of 2 4 11/25/2020 11:38 AM Client:88925 - City of Woodburn Engagement:Audit 2020 - City of Woodburn Period Ending:6/30/2020 Trial Balance:3001 - TB Workpaper:1400.01 - Copy of Adjusting Journal Entries Report AccountDescriptionW/P RefDebitCredit Adjusting Journal Entries JE # 87104 To reverse August accrual for property taxes (client has recorded entries to agree) 001-000 3111Property Tax - Current51.37 001-000 3112Property Tax - Delinquent77,335.41 720-000 3111Property Tax - Current3.96 720-000 3111Property Tax - Current5.30 720-000 3112Property Tax - Delinquent5,842.13 001 1122Accounts Receivable 77,386.78 720 1122Accounts Receivable 5,851.39 Total83,238.1783,238.17 Adjusting Journal Entries JE # 95204 To transfer from PERS liability - difference collected vs paid (client has recorded) 901 2231.521PERS - City276,986.66 901-000 3665Internal PERS Revenue 276,986.66 Total276,986.66276,986.66 2 of 2 5 6 7 8 9 10 City of Woodburn, Oregon Comprehensive Annual Financial Report For the year Ended June 30, 2020 11 CITY OF WOODBURN, OREGON COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended June 30, 2020 Prepared by City of Woodburn Finance Department Anthony Turley, Finance Director 12 CITY OF WOODBURN, OREGON TABLE OF CONTENTS Page INTRODUCTORY SECTION Letter of Transmittal i-iv Organization of the City of Woodburn, Oregon v List of Officials vi FINANCIAL SECTION INDEPENDENT AUDITORÓS REPORT 1-3 MANAGEMENTÓS 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 Î Governmental Funds 14 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances Î Governmental Funds to the Statement of Activities 15 Statement of Net Position - Proprietary Funds 16 Statement of Revenues, Expenses and Changes in Net Position Î Proprietary Funds 17 Statement of Cash Flows - Proprietary Funds 18-19 Notes to Basic Financial Statements 20-49 REQUIRED SUPPLEMENTARY INFORMATION Combining Balance Sheet - Budgetary Funds Reported as General Fund 50 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Budgetary Funds reported as General Fund 51 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund 52 PERS Reserve Fund 53 Street Fund 54 Urban Renewal Fund 55 Schedule of the CityÓs Proportionate Share of the Net Pension Liability (Asset) Î Oregon Public EmployeeÓs Retirement System 56 Schedule of the CityÓs Contributions Î Oregon Public EmployeeÓs Retirement System 57 Schedule of Changes in Total Other Post-Employment Benefits Liability and Related Ratios - Implicit Rate Subsidy 58 Schedule of the CityÓs Proportionate Share of the Net OPEB Liability (Asset) Î Oregon Public EmployeeÓs Retirement System Retiree Health Insurance Account 59 Schedule of the CityÓs Contributions Î Oregon Public EmployeeÓs Retirement System Retiree Health Insurance Account 60 Notes to the Required Supplementary Information 61-62 13 CITY OF WOODBURN, OREGON TABLE OF CONTENTS Page FINANCIAL SECTION (Continued) SUPPLEMENTARY INFORMATION Governmental Funds Combining Balance Sheet Î Nonmajor Funds 63-64 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Î Nonmajor Funds 65-66 Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Transit Fund 67 Building Inspection Fund 68 Asset Forfeiture Fund 69 Housing Rehabilitation Fund 70 Lavelle Black Trust Fund 71 Special Assessment Fund 72 Street & Storm Capital Construction Fund 73 Parks SDC Fund 74 General Capital Construction Fund 75 Street SDC Fund 76 Storm SDC Fund 77 Equipment Replacement Fund 78 GO Debt Service Fund 79 Proprietary Funds Enterprise Funds Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget (Non-GAAP Basis) and Actual Water Operations Combining 80 Water Fund 81 Water SDC Fund 82 Water Capital Construction Fund 83 Sewer Operations Combining 84 Sewer Fund 85 Sewer SDC Fund 86 Sewer Capital Construction Fund 87 Internal Services Funds Combining Statement of Fund Net Position 88 Combining Statement of Revenues, Expenses and Changes in Fund Net Position 89 Combining Statement of Cash Flows 90 Schedules of Revenues, Expenditures and Changes in Fund Balances (Budgetary Basis) Budget and Actual Information Technology Fund 91 Insurance Fund 92 STATISTICAL SECTION FINANCIAL TRENDS Net Position by Component 93 Changes in Net Position 94-95 Fund Balance of Governmental Funds 96 Changes in Fund Balances of Governmental Funds 97 14 CITY OF WOODBURN, OREGON TABLE OF CONTENTS Page STATISTICAL SECTION (Continued) REVENUE CAPACITY Market and Assessed Value of Taxable Property 98 Direct and Overlapping Governments 99 Principal Property Taxpayers 100 Property Tax Levies and Collections 101 DEBT CAPACITY Ratios of Outstanding Debt by Type 102 Ratios of General Bonded Debt Outstanding 103 Direct and Overlapping Governmental Activities Debt 104 Legal Debt Margin 105 Pledged Revenue Coverage 106 DEMOGRAPHIC AND ECONOMIC INFORMATION Demographic and Economic Statistics 107 Principal Employers 108 OPERATING INFORMATION Full Time Equivalent Employees by Function 109 Operating Indicators by Function 110 Capital Asset Statistics by Function 111 OTHER INFORMATION Water System Coverage Calculation 112 Top Ten Water Customers 113 Sewer System Coverage Calculation 114 Top Ten Sewer Customers 115 COMPLIANCE SECTION Independent AuditorÓs Report Required by Oregon State Regulations 116-117 15 INTRODUCTORY SECTION 16 City of Woodburn 270 Montgomery Street Woodburn, OR 97071 (503) 982-5222 / (503) 982-5244 FAX www.ci.woodburn.or.us November 25, 2020 To the Citizens of Woodburn, Honorable Mayor, City Council, and City Administrator: It is my pleasure to submit the Comprehensive Annual Financial Report (CAFR) of the City of Woodburn, Oregon, for the fiscal year ended June 30, 2020. State law requires that a CAFR and component unit financial statements be published within six months of the fiscal year end and be audited in accordance with generally accepted auditing standards by independent certified public accountants. Independent auditors, Grove, Mueller & Swank, P.C., have issued an unmodified opinion on the City of WoodburnÓs financial statements for the fiscal year ended June 30, 2020. The independent auditorsÓ report is presented in the Financial Section of this report. Responsibility for the completeness and reliability of the information contained in this report rests with the CityÓs management and is based on an internal control structure designed for this purpose. The internal control structure is designed to provide reasonable, rather than absolute, assurance that these objectives are met, as the cost of the internal control should not exceed the related benefits. In the ManagementÓs Discussion and Analysis (MD&A) section of this report, a narrative introduction, overview, and analysis of the basic financial statements is provided. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with the MD&A. CITY PROFILE The City of Woodburn is a municipal corporation which operates under a Council- Manager form of government. Policy making and legislative authority are vested on the City Council which consists of an elected Mayor (two-year term position) and six councilors (four-year term positions). The City Council is responsible for passing ordinances, resolutions, adopting a budget, and hiring the City Administrator and City Attorney among other things. The City Administrator is responsible for carrying out Council ordinances and policies, managing the daily operations, and appointing department heads. Woodburn is located in the Willamette Valley, halfway between the larger urban areas of Portland and Salem. The city was incorporated as Woodburn on February 20, 1889. rd The City of Woodburn, with a population of 25,135, is OregonÓs 23rd most populated city, and 3 populated city in Marion County. The City provides a full range of municipal services, including but not limited to: police, water, wastewater, municipal court, public works (water, sewer, storm, and transportation), economic development, community planning and building inspections, transit, parks, recreation, aquatics, and library. - i - 17 REPORTING ENTITY The financial statements include information for the City of Woodburn and its blended component unit, the Urban Renewal Agency of the City of Woodburn. BUDGET PROCESS The Oregon Constitution and Oregon Revised Statutes 294 require an adopted balanced budget by July 1, and that the fiscal year for local governments is July 1 through June 30. The budget sets forth City CouncilÓs goals and objectives, and identifies the resources necessary to accomplish them. The legal level of budgetary control, as adopted by Council Resolution, is by fund, although department level detail is shown. Appropriations lapse at fiscal year-end and incomplete projects must be re-appropriated in the following fiscal year as part of the adoption of the annual budget. ECONOMIC ENVIRONMENT Woodburn has high concentrations of employment across several tradedsector clusters. These clusters are key target industries for Woodburn and include: Production Technology and Machinery: manufacturing of machinery for food production, automatic sprinklers systems, bailing machines, hydraulic jacks, and other machinery production. Plastics Manufacturing: plastic and rubber products, chemical manufacturing, and plumbing fixtures. This cluster is strongly linked to production technology, machinery, and other chemical manufacturing. Metal Product Manufacturing: prefabricated metal building and component manufacturing, ornamental and architectural metal work manufacturing, bathtubs and sinks, metal pipe hangars, fire escapes, grills and grill work, and all other miscellaneous fabricated metal product manufacturing. Food Processing and Manufacturing: baked goods, fruit and vegetable canning, frozen foods, confectionary manufacturing, and other food related manufacturing. Employment patterns in Woodburn, Marion County, and the Portland Region suggest that Woodburn has competitive advantages and opportunities for business development in these rapidly growing clusters: Apparel Manufacturing: cutting and sewing apparel, embroidering on textile products, carpet cutting and binding, sleeping bag manufacturing, hats and glove manufacturing, and other apparel manufacturing. Distribution and ECommerce: wholesale trade, farm supplies and merchant wholesalers, refrigerated warehousing and storage, packaging and labeling services, or other warehouse and distribution. Information Technology and Analytic Technology: software publishers, electronic computer manufacturing, semiconductor manufacturing, laboratory instrument manufacturing. Year-over-Year Unemployment Rates 12.0 10.0 8.0 6.0 4.0 2.0 - 2011201220132014201520162017201820192020 OregonMarion CountyWoodburn - ii - 18 Source: State of Oregon Employment Department OregonÓs unemployment rates have dropped dramatically over the last ten years. However, the COVID 19 pandemic has impacted the economy and resulted in increased unemployment. In September 2020, OregonÓs year- over-year unemployment rate was 7.9 percent, and WoodburnÓs rate was 7.9 percent, which matches the U.S. unemployment rate of 7.9 percent for the same period. Factors contributing to WoodburnÓs low unemployment rates include peopleÓs; availability, quality, skills, 1 education/experience, and wages. Within the Woodburn Urban Growth Boundary there are 11,718 employees. Beyond Woodburn, as of October 2020, Salem Region has a labor force of 193,805 and the Portland Region of 1 1,293,685. This means that Woodburn businesses have access to a mix of highly educated skilled and unskilled workers from across the Salem and Portland Regions. MAJOR ISSUES Development of the FY 2020-21 budget continued the focus on delivery of services to the community with cautious projections due to rising costs in the areas listed below, and an external focus to create a community leadership academy and exploration of a non-profit development center in Woodburn. COVID-19 Pandemic Wages, Public Employee Retirement System (PERS), Facility maintenance, Infrastructure needs, and Technology needs The current budget includes set-asides for these anticipated costs. The future budgets will continue to be challenged with the need to balance delivery of service with fiscal prudence. LONG-TERM FINANCIAL PLANNING A five-year forecast is prepared for each primary operating fund based on current service levels and conservative assumptions. Staff uses the financial plans to make recommendations for utility rate setting, debt refinancing opportunities, capital project budgets, and projection of operating expenses. Revenues are also projected to ensure that operating and capital needs are met. RELEVANT FINANCIAL POLICIES The City of Woodburn completes an annual financial plan, which includes a review of the budget policies, fiscal strategy, and five-year forecast. Policy highlights include: Annual review to maintain fiscal responsibility, a balanced budget, and obtain policy direction. Identification of goals that maximize dedicated funding resources. Establishment of General Fund goals to set program priority, maximize City CouncilÓs discretion, establish a goal of cost efficiency, pursuit new revenue sources, and identify potential new programs. Reserve and contingency policy target levels. Compensation and benefit policies which address wages, health care and retirement costs. Capital improvement guidelines to set the importance of full cost identification, planning, and funding. Debt management policies to ensure thorough analysis of options. Investment parameters that prioritize fiscal safety, legal compliance, and a market rate of return. Annual audit policy to ensure financial compliance. Resource reduction strategy to provide guidance in fiscally challenged periods. 1 Source: State of Oregon Employment Department, August 2019 Employment and Unemployment in Oregon Counties - iii - 19 20 ORGANIZATION OF THE CITY OF WOODBURN Source: City of Woodburn, FY 2020-21 Adopted Budget - Functional Organization Chart - v - 21 CITY OF WOODBURN, OREGON JUNE 30, 2020 MAYOR AND COUNCIL MEMBERS Name Term Expires Mayor Eric Swenson December 31, 2020 Council Members Debbie Cabrales December 31, 2020 Robert Carney December 31, 2022 Mary Beth Cornwell December 31, 2022 Lisa Ellsworth December 31, 2020 Eric Morris December 31, 2020 Sharon Schaub December 31, 2022 The above individuals may be contacted at the address below. Staff Scott Derickson, City Administrator N. Robert Shields, City Attorney Anthony Turley, Finance Director City of Woodburn, Oregon 270 Montgomery Street Woodburn, Oregon 97071 - vi - 22 FINANCIAL SECTION 23 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, 2020, and the related notes to the financial statements, which collectively comprise the CityÓs basic financial statements as listed in the table of contents. ManagementÓs 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. AuditorÓs 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 auditorÓs 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 CityÓs 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 CityÓs 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 - 24 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, 2020, 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 managementÓs discussion and analysis (MD&A) and the schedules of revenues, expenditures and changes in fund balance Î budget and actual for the General, PERS Reserve, Street and Urban Renewal funds (Ðthe budgetary schedulesÑ), the CityÓs PERS schedules and the City's OPEB 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 managementÓs discussion and analysis, PERS schedules and OPEB 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 managementÓs 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 CityÓs 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 CityÓs basic financial statements. The supplementary information is presented for the purpose of additional analysis and is not a required part of the basic financial statements. The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, or other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly presented, in all material respects, in relation to the basic financial statements as a whole. - 2 - 25 Other Information The introductory and statistical sections, and other information have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Report on Other Legal and Regulatory Requirements In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have issued our report dated November 25, 2020 on our consideration of the City's compliance with certain provisions of laws and regulations, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS By: Katherine R. Wilson, A Shareholder November 25, 2020 - 3 - 26 CITY OF WOODBURN Year Ended June 30, 2020 MANAGEMENTÓS DISCUSSION AND ANALYSIS The ManagementÓs Discussion and Analysis of the City of WoodburnÓs Comprehensive Annual Financial Report (CAFR) presents a discussion and analysis of the CityÓs financial performance during the fiscal year ended June 30, 2020. 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: 20202019Change Net position140,295,337$ 131,617,868$ 8,677,469$ Change in net position8,677,469 6,895,584 1,781,885 Governmental activities net position79,813,938 74,880,614 4,933,324 Business-type activities fund net position60,481,399 56,737,254 3,744,145 Change in governmental net position4,933,324 3,461,003 1,472,321 Change in proprietary fund net position3,744,145 3,434,581 309,564 OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the CityÓs 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 CityÓs assets, deferred outflows, liabilities and deferred inflows, with the difference reported as net position. Increases or decreases in net position may indicate whether the CityÓs 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 Ðbottom lineÑ. - 4 - 27 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 development. Business-type activities are operations funded primarily through charges to external users of goods and services. Business-type activities include water and sewer. 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 two types of fund categories: governmental funds and proprietary funds. 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 sixteen individual governmental funds. Information is presented separately for the General Fund, Street Fund, and Urban Renewal 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 Water Operations and Sewer Operations. 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 - 28 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 $177,624,719 in total assets, $9,065,369 in total deferred outflows, $44,234,382 in total liabilities and $2,160,369 in total deferred inflows, resulting in combined net position of $140,295,337 for governmental and business-type activities. The largest component of the CityÓs 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 CityÓs 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, increased $4,339,067 over the prior year mainly due to renovation work at City Hall and urban renewal projects in the downtown area. Business-type capital assets, net of depreciation, decreased $1,063,973 over the prior year due to current year depreciation. Total liabilities for both governmental and business-type activities decreased by $5,174,039 from the prior year mainly due to payments on long-term debt. Overall, the CityÓs financial net position increased by $8,677,469 (7%). The majority of this increase is due to an increase in capital assets and a decrease in long-term debt outstanding. Statement of Net Position The following table reflects the condensed Statement of Net Position compared to the prior year. 20202019Change GovernmentalBusiness-typeGovernmentalBusiness-typeGovernmentalBusiness-type ActivitiesActivitiesTotalActivitiesActivitiesTotalActivitiesActivitiesTotal Cash and investments$ 22,189,818$ 27,305,966$ 49,495,784$ 26,764,428$ 27,717,274$ 54,481,702$ (4,574,610)$ (411,308)$ (4,985,918) Other assets2,757,594943,0793,700,673 2,133,650928,5773,062,227 623,944 14,502 638,446 Capital assets70,551,38153,876,881124,428,262 66,212,31454,940,854121,153,168 4,339,067 (1,063,973) 3,275,094 Total Assets 95,498,793 82,125,926 177,624,719 95,110,392 83,586,705 178,697,097 388,401 (1,460,779) (1,072,378) Deferred outflows7,402,8911,662,4789,065,369 4,333,212 840,968 5,174,180 3,069,679 821,510 3,891,189 Other liabilities14,505,3043,954,80018,460,104 14,203,2633,178,11517,381,378 302,041 776,685 1,078,726 Long-term debt6,920,67018,853,60825,774,278 8,157,84923,869,19432,027,043 (1,237,179) (5,015,586) (6,252,765) Total Liabilities 21,425,974 22,808,408 44,234,382 22,361,112 27,047,309 49,408,421 (935,138) (4,238,901) (5,174,039) Deferred inflows1,661,772498,5972,160,369 2,201,878643,1102,844,988 (540,106) (144,513) (684,619) Net position: Net investment in capital assets64,447,990 46,922,723 111,370,713 58,807,325 43,073,472 101,880,797 5,640,665 3,849,251 9,489,916 Restricted 12,238,720 17,249,531 29,488,251 13,987,334 17,081,733 31,069,067 (1,748,614) 167,798 (1,580,816) Unrestricted3,127,228(3,690,855) (563,627)2,085,955(3,417,951) (1,331,996) 1,041,273 (272,904) 768,369 Total Net Position$ 79,813,938$ 60,481,399$ 140,295,337$ 74,880,614$ 56,737,254$ 131,617,868$ 4,933,324$ 3,744,145$ 8,677,469 Governmental Activities The CityÓs net position from governmental activities increased $4,933,324 (6%) from June 30, 2019 to June 30, 2020 due to an increase in program revenues coupled with controlled program expenses. - 6 - 29 Business-type Activities The CityÓs net position from business-type activities increased $3,744,145 (7%) from June 30, 2019 to June 30, 2020 due mainly to the reduction of long-term debt coupled with an increase in charges for services and controlled expenses. Statement of Activities The following table reflects the condensed Statement of Activities compared to the prior year. 20202019Change Business- Business-Business- Governmental type GovernmentaltypeGovernmentaltype Activities Activities TotalActivitiesActivitiesTotalActivitiesActivitiesTotal Revenues Program Revenues Charges for service$ 2,642,482$ 12,112,632$ 14,755,114$ 2,446,723$ 11,863,555$ 14,310,278$ 195,759$ 249,077$ 444,836 Operating grants and contributions4,346,664 - 4,346,6642,582,883 - 2,582,883 1,763,781 1,763,781- Capital grants and contributions2,506,331425,8012,932,132 934,723376,1651,310,888 1,571,608 49,636 1,621,244 Total Program Revenues 9,495,477 12,538,433 22,033,910 5,964,329 12,239,720 18,204,049 3,531,148 298,713 3,829,861 General Revenues Property taxes 10,908,076 10,908,076- 10,467,041 10,467,041- 441,035 441,035- Franchise taxes 1,528,351 - 1,528,351 1,537,523 - 1,537,523 (9,172) - (9,172) Other taxes 491,023 - 491,023 595,650 - 595,650 (104,627) (104,627)- Intergovernmental 903,481 - 903,481 831,319 - 831,319 72,162 72,162- Other561,074 693,058 1,254,1321,051,046836,257 1,887,303 (489,972) (143,199) (633,171) Total General Revenues 14,392,005 693,058 15,085,063 14,482,579 836,257 15,318,836 (90,574) (143,199) (233,773) Total Revenues 23,887,482 13,231,491 37,118,973 20,446,908 13,075,977 33,522,885 3,440,574 155,514 3,596,088 Expenses General government4,673,660 - 4,673,6601,162,602 - 1,162,602 3,511,058 3,511,058- Public safety6,982,033 - 6,982,0337,687,490 - 7,687,490 (705,457) (705,457)- Highways and streets2,113,284 - 2,113,2842,787,782 - 2,787,782 (674,498) (674,498)- Culture and recreation4,139,885 - 4,139,8854,226,653 - 4,226,653 (86,768) (86,768)- Economic development2,025,642 - 2,025,6422,023,962 - 2,023,962 1,680 - 1,680 Interest on long-term debt59,907 - 59,90776,949 - 76,949 (17,042) (17,042)- Water - 2,679,6102,679,610 3,012,6323,012,632- (333,022)- (333,022) Sewer 5,767,4835,767,483- 5,649,2315,649,231- 118,252- 118,252 Total Expenses 19,994,411 8,447,093 28,441,504 17,965,438 8,661,863 26,627,301 2,028,973 (214,770) 1,814,203 Changes in Net Position Before Transfers 3,893,071 4,784,398 8,677,469 2,481,470 4,414,114 6,895,584 1,411,601 370,284 1,781,885 Transfers 1,040,253(1,040,253) -979,533(979,533) - 60,720 (60,720) - Change in Net Position 4,933,324 3,744,145 8,677,469 3,461,003 3,434,581 6,895,584 1,472,321 309,564 1,781,885 Beginning Net Position 74,880,614 56,737,254 131,617,868 71,419,611 53,302,673 124,722,284 3,461,003 3,434,581 6,895,584 Ending Net Position$ 60,481,39979,813,938$ 140,295,337$ 74,880,61$ 4$ 56,737,254$ 131,617,868$ 4,933,324$ 3,744,145$ 8,677,469 Governmental Activities. Total revenues for the CityÓs governmental activities were $23,887,482 for the fiscal year ended June 30, 2020. Approximately 46% of the total revenue for the governmental activities was derived from property taxes and approximately 40% of the total revenue was from program revenues. Total expenses for governmental activities were $19,994,411 and net transfers in were $1,040,253 resulting in a $4,933,324 increase in net position. General government activities accounted for approximately 23% of the total governmental activities expense. Public safety, highways and streets, culture and recreation, and economic development expenses account for approximately 76% of the total, and interest on long-term debt was less than 1% of total governmental activities expenses. Business-Type Activities. Revenues of business-type activities totaled $13,231,491 for the current fiscal year. These activities generated $12,538,433 in program revenues, and $693,058 in interest earnings and miscellaneous revenues. The total expenses for business-type activities were $8,447,093 and net transfers out were $1,040,253 resulting in a $3,744,145 increase in net position. Business-type activities for the City of Woodburn consist of operations for water and sewer services. - 7 - 30 FINANCIAL ANALYSIS OF THE GOVERNMENTÓS 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 governmentÓs net resources available. Governmental Funds. At the end of the fiscal year, there was $21,267,161 of fund balance of the governmental funds, a decrease of $1,981,978 from the prior year. The CityÓs governmental funds include the General Fund, Street Fund, Urban Renewal 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 $6,835,922 was reported by the General Fund. The fund balance decreased by $1,120,445 from the previous year due to increases in non-departmental expenditures offset by increases in transfers in and decreases in transfers out. The City reports two other major governmental funds. The Street Fund had a fund balance of $4,242,863, a decrease of $346,168 from the previous year, due mainly to an increase in transfers out. The Urban Renewal Fund had a balance of $1,354,312, a decrease of $1,217,695, due to debt service and capital outlay in excess of revenue. Proprietary Funds. At the end of the current fiscal year, net position of the enterprise funds equaled $60,481,399, an increase of $3,744,145 from the prior year, and net position of the internal service funds equaled $752,751, an increase of $147,669 from the prior year. The City reports two major proprietary funds, the Water Operations Fund and the Sewer Operations Fund. The Water Operations Fund had a net position of $9,824,690, an increase of $1,466,263 from previous year, mainly due to an increase in charges for services. The Sewer Operations Fund had a net position of $50,656,709, an increase of $2,277,882 from previous year, due to stable charges for services and controlled operating expenses. GENERAL FUND BUDGETARY HIGHLIGHTS Actual revenues (budgetary basis), were under budgeted amounts by less than 1%. General Fund expenditures ended $4,569,451 below budgeted amounts primarily due to management efforts to contain costs throughout the fiscal year. There was one supplemental budget that affected balances in the General Fund during the year, which resulted in an increase in transfers out and a decrease in contingency of $460,000. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets. The CityÓs investment in capital assets for its governmental and business-type activities equaled $70,551,381 and $53,876,881 respectively, at the end of the current fiscal year, net of accumulated depreciation. This investment includes land, construction in process, buildings, equipment, and infrastructure. Additional information about the CityÓs capital assets is presented on pages 32-33 in the notes to the financial statements. Governmental ActivitiesBusiness-type ActivitiesTotal 202020192020201920202019 Land 23,056,538$ $ 23,055,692$ 1,783,816$ 1,783,816$ 24,840,354$ 24,839,508 Construction in progress 11,715,865 6,529,430 4,879,135 4,175,633 16,595,000 10,705,063 Buildings 17,255,382 17,255,382 62,748,380 62,748,380 80,003,762 80,003,762 Equipment 7,936,642 7,403,150 3,028,659 3,028,659 10,965,301 10,431,809 Infrastructure 44,632,537 44,562,023 32,362,730 31,746,151 76,995,267 76,308,174 Accumulated depreciation (34,045,583) (32,593,363) (50,925,839) (48,541,785) (84,971,422) (81,135,148) Net capital assets70,551,381$ $ 66,212,314$ 53,876,881$ 124,428,26254,940,854$ 121,153,168$ - 8 - 31 Long-term Debt. At the end of the current fiscal year, long-term debt outstanding for the governmental activities totaled $6,920,670, compared to $8,157,849 in the prior year. The decrease is due to scheduled debt repayments. For the business-type activities, total long-term debt equaled $18,853,610 compared to $23,869,194 in the prior year. The decrease is due to scheduled debt repayments. Additional information about the CityÓs long-term debt outstanding is presented on pages 34-36 in the notes to the financial statements. Governmental ActivitiesBusiness-type ActivitiesTotal 202020192020201920202019 General obligation bonds2,301,000$ $ 2,812,000$ -$ - $ 2,301,000$ 2,812,000 Direct borrowings 3,808,000 4,600,000 - - 3,808,000 4,600,000 Direct placement revenue b - - 17,266,543 22,158,072 17,266,543 22,158,072 Bond premium - - 1,519,698 1,657,852 1,519,698 1,657,852 Accrued compensated abse 745,849811,670 67,369 53,270879,039799,119 $ 6,920,670$ 8,157,849$ 18,853,610$ 23,869,194$ 25,774,280$ 32,027,043 ECONOMIC FACTORS AND NEXT YEARÓS 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 OregonÓs median household incomes have risen. The strong economy, coupled with steady population growth and WoodburnÓs 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 WoodburnÓs citizens, taxpayers, customers, investors and creditors with a general overview of the CityÓs finances and to demonstrate the CityÓs 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 - 32 BASIC FINANCIAL STATEMENTS 33 CITY OF WOODBURN, OREGON STATEMENT OF NET POSITION JUNE 30, 2020 GovernmentalBusiness-type ActivitiesActivitiesTotals ASSETS Cash and investments$ 22,189,818$ 27,305,966$ 49,495,784 Accounts receivable 1,521,2521,032,8342,554,086 Property taxes receivable 437,379 - 437,379 Assessment liens receivable 20,460 - 20,460 Loans receivable 497,714 - 497,714 Prepaid expenses 26,6906,859 33,549 Internal balances 131,181 (131,181) - Non-depreciable capital assets 34,772,4036,662,95141,435,354 Other capital assets, net of depreciation 35,778,97847,213,93082,992,908 OPEB asset 122,91834,567 157,485 Total Assets 95,498,793 82,125,926 177,624,719 DEFERRED OUTFLOWS Deferred outflows related to PERS 7,321,9641,639,2718,961,235 Deferred outflows related to OPEB 75,31822,304 97,622 Deferred charges on refunding 5,609903 6,512 Total Deferred Outflows 7,402,891 1,662,478 9,065,369 LIABILITIES Accounts payable 693,658 376,665 1,070,323 Accrued payroll liabilities 532,239 - 532,239 Deposits payable -138,165 138,165 Interest payable 11,814271,568 283,382 Noncurrent liabilities: Due within one year: Long-term debt1,348,000 5,098,001 6,446,001 Bond premium 138,154138,154- Accrued compensated absences324,668 26,948351,616 Due in more than one year: Long-term debt4,761,000 12,168,54116,929,541 Bond premium 1,381,5431,381,543- Accrued compensated absences487,002 40,421527,423 OPEB liability 151,154502,436 653,590 Net pension liability 12,765,1573,017,24815,782,405 Total Liabilities 21,425,974 22,808,408 44,234,382 DEFERRED INFLOWS Deferred inflows related to PERS 1,545,547464,5432,010,090 Deferred inflows related to OPEB 116,22534,054 150,279 Total Deferred Inflows 1,661,772 498,597 2,160,369 NET POSITION Net investment in capital assets 64,447,990 46,922,723 111,370,713 Restricted for: Debt service 32,604 - 32,604 Culture and recreation 170,172 - 170,172 Community development 2,292,920 - 2,292,920 Construction 9,743,024 17,249,531 26,992,555 Unrestricted 3,127,228 (3,690,855) (563,627) Total Net Position$ 79,813,938$ 60,481,399$ 140,295,337 The accompanying notes are an integral part of the financial statements. - 10 - 34 CITY OF WOODBURN, OREGON STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2020 Program Revenues OperatingCapital Fees, Fines Grants andGrants and and Charges Expensesfor ServicesContributionsContributions FUNCTIONS/PROGRAMS Governmental activities: General government4,673,660$ 243,805$ 720,761$ 73,674$ Public safety6,982,033243,3693,190275 Highways and streets2,113,2842,2751,707,1511,527,699 Culture and recreation4,139,885573,205875,410904,683 Economic development 2,025,642 1,579,828 1,040,152 - Interest on long-term debt 59,907 - - - Total Governmental activities 19,994,411 2,642,482 4,346,664 2,506,331 Business-type activities: Water2,679,6103,990,442 296,217- Sewer5,767,4838,122,190 129,584- Total Business-type activities 8,447,093 12,112,632 425,801- Total Activities$ 28,441,504$ 14,755,114$ 4,346,664$ 2,932,132 General Revenues: Property taxes Franchise taxes Other taxes Intergovernmental Gain on disposition of assets Unrestricted investment earnings Miscellaneous Total General Revenues Transfers ge in Net Position Chan ginning of year Net Position - be Net Position - end of year 35 Net (Expenses) Revenues and Changes in Net Position GovernmentalBusiness-type ActivitiesActivities Totals $ -(3,635,420)$ (3,635,420)$ -(6,735,199) (6,735,199) -1,123,841 1,123,841 -(1,786,587) (1,786,587) -594,338 594,338 -(59,907) (59,907) -(10,498,934) (10,498,934) 1,607,049- 1,607,049 2,484,291- 2,484,291 4,091,340- 4,091,340 4,091,340(10,498,934) (6,407,594) -10,908,076 10,908,076 -1,528,351 1,528,351 -491,023 491,023 -903,481 903,481 -11,060 11,060 622,056517,897 1,139,953 71,00232,117 103,119 693,05814,392,005 15,085,063 (1,040,253)1,040,253 - 3,744,1454,933,324 8,677,469 56,737,25474,880,614 131,617,868 $ 60,481,39979,813,938$ 140,295,337$ The accompanying notes are an integral part of the financial statements. - 11 - 36 CITY OF WOODBURN, OREGON BALANCE SHEET - GOVERNMENTAL FUNDS JUNE 30, 2020 Special Revenue GeneralStreetUrban Renewal ASSETS $ 6,617,203$ 4,181,442$ 1,614,325 Cash and investments 728,941 122,613 - Accounts receivable -383,469 30,516 Property taxes receivable -- - Assessment liens receivable -- - Loans receivable -23,390 - Prepaid expenses -746,961 - Due from other funds Total Assets$ 4,304,0558,499,964$ 1,644,841$ LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities $ 24,868144,934$ 253,224$ Accounts payable -532,239 - Accrued payroll and payroll liabilities Due to other funds 36,324333,903 7,841 Total Liabilities 61,1921,011,076 261,065 Deferred Inflows -652,966 29,464 Unavailable revenue Fund Balance Non-spendable 23,390 - - Restricted for: Debt service - - - Construction - 4,242,863 - Culture and recreation - - - Community development -- 1,354,312 Committed to: Public safety -- - Capital outlay -- - Planning and building- - - Unassigned -6,812,532 - Total Fund Balance 4,242,8636,835,922 1,354,312 Total Liabilities, Deferred Inflows and Fund Balance $ 4,304,0558,499,964$ 1,644,841$ 37 Other Governmental FundsTotal $ 21,061,6788,648,708$ 659,9741,511,528 23,394437,379 20,46020,460 497,714497,714 26,6903,300 746,961- $ 24,302,4109,853,550$ $ 684,185261,159$ 532,239- 595,633217,565 1,812,057478,724 540,7621,223,192 26,6903,300 32,60432,604 6,282,30110,525,164 170,172170,172 1,765,742411,430 15,13215,132 749,139749,139 1,169,9861,169,986 6,812,532- 21,267,1618,834,064 $ 24,302,4109,853,550$ The accompanying notes are an integral part of the financial statements. - 12 - 38 CITY OF WOODBURN, OREGON RECONCILIATION OF BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2020 Fund Balances$ 21,267,161 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.1,223,192 PERS net pension liability, OPEB asset and liability, 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 - PERS (12,237,824) OPEB liability (480,783) OPEB asset 117,880 Deferred outflows - PERS 7,022,693 Deferred outflows - OPEB 72,154 Deferred inflows - PERS (1,484,098) Deferred inflows - OPEB (111,664) Deferred outflows arising from refundings are not financial resources in governmental funds, but are reported in the Statement of Net Position. 5,609 Capital assets are not financial resources in governmental funds, but are reported in the Statement of Net Position at their net depreciable value. Cost 104,596,964 Accumulated depreciation (34,045,583) 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 (763,700) Accrued interest (11,814) Long-term debt (6,109,000) 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. 752,751 Net Position of Governmental Activities$ 79,813,938 The accompanying notes are an integral part of the financial statements. - 13 - 39 CITY OF WOODBURN, OREGON STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2020 Special Revenue GeneralStreetUrban Renewal REVENUES Taxes and assessments$ 9,932,526$ 101,204$ 775,881 Licenses and permits 1,999,971 353,887 - Charges for services 903,988 - - Intergovernmental 1,020,875 1,707,151 1,040,152 Fines and forfeitures 352,400 - - Miscellaneous 891,903 123,912 42,547 Total Revenues 15,101,663 2,286,154 1,858,580 EXPENDITURES Current General government4,397,582 - - Economic development849,111 - 369,189 Public safety7,574,867 - - Highways and streets - 1,654,523 - Culture and recreation3,103,380 - - Debt Service Principal 532,000 - 260,000 Interest -42,391 74,975 Capital outlay2,901 - 2,359,821 Total Expenditures 16,502,232 1,654,523 3,063,985 REVENUES OVER (UNDER) EXPENDITURES (1,400,569) 631,631 (1,205,405) OTHER FINANCING SOURCES (USES) Transfers in 90,000374,009 - Transfers out (1,067,799)(116,000) (12,290) Proceeds from sale of assets22,115 - - Total Other Financing Sources (Uses) 280,124 (977,799) (12,290) NET CHANGE IN FUND BALANCE (1,120,445) (346,168) (1,217,695) FUND BALANCE, beginning of year 7,956,3674,589,0312,572,007 FUND BALANCE, end of year$ 6,835,922$ 4,242,863$ 1,354,312 40 Other Governmental FundsTotal $ 575,048$ 11,384,659 1,542,2733,896,131 26,798 930,786 2,652,079 6,420,257 - 352,400 248,405 1,306,767 5,044,603 24,291,000 - 4,397,582 857,118 2,075,418 - 7,574,867 - 1,654,523 925,027 4,028,407 511,000 1,303,000 57,515 174,881 3,177,736 5,540,458 5,528,396 26,749,136 (483,793) (2,458,136) 1,727,049 2,191,058 (540,990) (1,737,079) 64 22,179 1,186,123 476,158 702,330 (1,981,978) 8,131,73423,249,139 $ 8,834,064$ 21,267,161 The accompanying notes are an integral part of the financial statements. - 14 - 41 CITY OF WOODBURN, OREGON RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2020 Net Change in Fund Balances - Total Governmental Funds$ (1,981,978) 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 14,440 Increases in other assets(180,963) 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(60,946) Accrued interest payable (990) Deferred charge on refunding(1,402) 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 capitalized5,791,287 Depreciation (1,452,220) 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 1,303,000 Current year PERS pension and OPEB expenses related to changes in liabilities are reported as an expense in the Statement of Activities but are not recorded as an expenditure in the governmental funds.1,355,426 Net income of internal service funds147,670 Change in Net Position of Governmental Activities$ 4,933,324 The accompanying notes are an integral part of the financial statements. - 15 - 42 CITY OF WOODBURN, OREGON STATEMENT OF NET POSITION - PROPRIETARY FUNDS JUNE 30, 2020 Governmental Activities Water OperationsSewer OperationsTotalInternal Service ASSETS Current Assets Cash andinvestments$6,107,734$21,198,232$27,305,966$1,128,140 Accounts receivable 276,815 756,019 1,032,8349,724 Prepaid leases - 6,859 6,859 - Total Current Assets 21,961,1106,384,549 28,345,659 1,137,864 Noncurrent Assets Nondepreciable capital assets 1,727,950 4,935,001 6,662,951 - her capital assets, net of depreciation9,080,21638,133,714 47,213,930 - Ot OPEB asset 19,91914,648 34,5675,038 Total Noncurrent Assets 43,088,63410,822,814 53,911,448 5,038 l Assets 65,049,74417,207,363 82,257,107 1,142,902 Tota DEFERRED OUTFLOWS Deferred outflows related to PERS 588,543 1,050,728 1,639,271 299,271 Deferred outflows related to OPEB 9,728 12,576 22,304 3,164 Deferred charge on refunding 903 - 903 - Total Deferred Outflows 1,063,304599,174 1,662,478 302,435 LIABILITIES Current Liabilities Accounts payable110,520 266,145 376,665 9,472 Due to other funds 59,685 71,496 131,181 20,148 Deposits payable 138,165 - 138,165 - Accrued interest payable 14,424 257,144 271,568 - ion of long-term liabilities Current port Long-term debt 3,696,0011,402,000 5,098,001 - Bond premiums - 138,154 138,154 - Accrued compensated absences 16,819 10,128 26,948 19,188 Total Current Liabilities 4,439,0681,741,613 6,180,682 48,808 Noncurrent Liabilities Accrued compensated absences 25,229 15,193 40,421 28,782 Long-term debt 7,378,5414,790,000 12,168,541 - Bond premiums - 1,381,543 1,381,543 - Net pension liability 1,875,4541,141,7943,017,248527,333 liability 83,88567,269 151,15421,653 OPEB Total Noncurrent Liabilities 6,024,29210,734,616 16,758,907 577,768 Total Liabilities 15,173,6847,765,905 22,939,589 626,576 DEFERRED INFLOWS Deferred inflows related to PERS 201,774 262,769 464,54361,449 Deferred inflows related to OPEB 14,168 19,886 34,0544,561 215,942 282,655 498,597 66,010 NET POSITION: Net investment in capital assets 4,617,069 42,305,654 46,922,723 - Restricted for: ion3,629,44013,620,091 17,249,531 - Construct Unrestricted 1,578,181(5,269,036) (3,690,855) 752,751 Total Net Position$9,824,690$ 50,656,709$ 60,481,399$ 752,751 The accompanying notes are an integral part of the financial statements. - 16 - 43 CITY OF WOODBURN, OREGON STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2020 Governmental Activities Water OperationsSewer OperationsTotalInternal Service OPERATING REVENUES Charges for services$ 3,990,442$ 8,122,190$ 12,112,632$ 1,888,447 Miscellaneous 61,379 9,623 71,0022,288 Total Operating Revenues 4,051,821 8,131,813 12,183,634 1,890,735 OPERATING EXPENSES Personal services1,310,062 1,735,141 3,045,203460,915 Materials and services760,029 1,185,381 1,945,4101,204,282 Depreciation 409,679 1,974,375 2,384,054 - Total Operating Expenses 2,479,770 4,894,897 7,374,667 1,665,197 OPERATING INCOME (LOSS) 1,572,051 3,236,916 4,808,967 225,538 NONOPERATING REVENUES (EXPENSES) Investment revenue137,010 485,046 622,056 14,600 Amortization of bond premiums- 138,154 138,154 - Interest expense(199,840) (1,010,740) (1,210,580) - Total Nonoperating Revenues (Expenses) (387,540)(62,830) (450,370) 14,600 NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS 2,849,3761,509,221 4,358,597 240,138 Capital contributions296,217 129,584 425,801 - Transfers out(339,175) (701,078) (1,040,253) (92,469) CHANGE IN NET POSITION 2,277,8821,466,263 3,744,145 147,669 NET POSITION, beginning of year 8,358,42748,378,82756,737,254 605,082 NET POSITION, end of year$ 50,656,7099,824,690$ 60,481,399$ 752,751$ The accompanying notes are an integral part of the financial statements. - 17 - 44 CITY OF WOODBURN, OREGON STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2020 Governmental Activities Water Sewer OperationsOperationsInternal Service Totals CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers4,046,056$ 8,011,458$ 12,057,514$ 1,894,734$ Paid to suppliers(699,271) (1,081,710) (1,780,981) (1,601,618) Paid to employees(1,463,445) (1,946,376) (3,409,821) (116,701) Net Cash Provided by Operating Activities 4,983,3721,883,340 6,866,712 176,415 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Received from (paid to) other funds 71,49659,685 131,181 20,148 Transfers out(339,175) (701,078) (1,040,253) (29,530) Net Cash Used in Non-Capital Financing Activities (629,582)(279,490) (909,072) (9,382) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets(178,082) (1,141,999) (1,320,081) (62,939) Principal paid on loans and bonds payable(1,422,000) (3,469,529) (4,891,529) - Capital contributions295,374 127,720 423,094 - Interest paid(203,151) (999,337) (1,202,488) - Net Cash Used in Capital and Related Financing Activities (5,483,145)(1,507,859) (6,991,004) (62,939) CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments137,010 485,046 622,056 14,601 Increase (Decrease) in Cash and Investments (644,309)233,001 (411,308) 118,695 CASH AND INVESTMENTS, Beginning of year 21,842,5415,874,733 27,717,274 1,009,445 f year CASH AND INVESTMENTS, End o$ 21,198,2326,107,734$ 27,305,966$ 1,128,140$ The accompanying notes are an integral part of the financial statements. - 18 - 45 CITY OF WOODBURN, OREGON STATEMENT OF CASH FLOWS (Continued) YEAR ENDED JUNE 30, 2020 Governmental Activities Water Sewer OperationsOperationsInternal Service Totals RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss)1,572,051$ 3,236,916$ 4,808,967$ 225,537$ Adjustments to reconcile the change in operating cash provided by operating activities: Depreciation409,679 1,974,375 2,384,054 - Change in assets and liabilities: Accounts receivable(8,805) (120,357) (129,162) 4,000 Deferred outflows(355,455) (466,055) (821,510) (131,784) OPEB asset(5,978) (7,834) (13,812) - Accounts payable and accrued liabilities60,758 103,674 164,432 2,773 Customer deposits3,040 - 3,040 - Compensated absences payable10,419 3,680 14,099 4,875 Net pension liability (asset) 257,001 336,772 593,773 95,228 OPEB liability 4,1653,179 7,344 1,178 Deferred inflows(62,549) (81,964) (144,513) (23,177) Net Cash Provided by Operating Activities$ 4,983,3721,883,340$ 6,866,712$ 176,415$ Noncash Transactions Transfer of capital assets-$ -$ -$ (62,939)$ The accompanying notes are an integral part of the financial statements. - 19 - 46 NOTES TO BASIC FINANCIAL STATEMENTS 47 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2020 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, 2020. 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 unitÓs 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 WoodburnÓs 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. - 20 - 48 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 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, capital projects, debt service, internal 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. - 21 - 49 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 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 CityÓs 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 ÐreservedÑ during the adoption of the annual budget. The CityÓs Finance Director uses that information to determine whether those resources should be classified as assigned or unassigned for presentation in the CityÓs 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 20% of annual operating revenue, as shown as a minimum fund balance in the General Fund, with the long-term goal of increasing the reserve to 25% as year-end savings occur. The City Council is the highest level of 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 Ðproceeds of specific revenues sourcesÑ 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). ÐMeasurableÑ means that the amount of the transaction can be determined. ÐAvailableÑ 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. - 22 - 50 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 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 CityÓs 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 Urban Renewal Fund The City reports the following major proprietary funds: Water Operations Sewer Operations 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, 2020. Actual results may differ from such estimates. - 23 - 51 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Cash and Investments The CityÓs cash and cash equivalents are considered to be cash on hand, demand deposits and certificates of deposit. 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 CityÓs 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. Inventory and Prepaid Items Inventory in business-type funds is state at cost (first-in, first-out basis) and is charged to expense as used. Prepaid items in the governmental funds are stated at cost and charged to expenditures in the period consumed. 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. - 24 - 52 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Capital Assets (Continued) 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 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-Term Debt Long-term debt directly related and expected to be paid from the enterprise funds is recorded in these funds. All other unmatured long-term debt is recorded on the statement of net position. Repayment of general bonded debt will be made from debt service funds. Bond premiums will be amortized over the life of the related debt. Payment of compensated absences will be made primarily from the General Fund, Street Fund, Water Fund and Sewer Fund. - 25 - 53 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expenditure) until then. The City reports deferred outflows of resources related to pensions and other post-employment benefits for contributions made after the June 30, 2019 measurement date, differences between expected and actual experience, and changes in proportionate share, as well as deferred charges related to refunded bonds. 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 three items that qualify for reporting in this category. The City reports deferred inflows related to pensions and other post-employment benefits for changes in projected earnings versus actual earnings and contribution versus proportionate share of contributions. The third 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 OPERSÓs 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. Post-Employment Benefits Other Than Pensions (OPEB) The City reports two components of post-employment benefits other than pensions (OPEB) - Oregon Public Employees Retirement System Retiree Health Insurance Account (OPERS RHIA) and a single-employer defined benefit post-employment health plan administered by Citycounty Insurance Services (CIS). The City reports its proportionate share of the Oregon Public Employees Retirement System Retiree Health Insurance Account (OPERS RHIA). A negative OPEB liability is reported as an OPEB Asset. For purposes of measuring the CityÓs OPEB liability or asset, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of OPERS RHIA and additions to/deductions from OPERS RHIAÓs fiduciary net position have been determined on the same basis as they are reported by OPERS RHIA. For this purpose, the benefit payments are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value. - 26 - 54 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Post-Employment Benefits Other Than Pensions (OPEB) (Continued) The City reports an OPEB liability or asset, deferred outflows of resources and deferred inflows of resources related to the implicit subsidy arising from the CityÓs single-employer defined benefit post-employment health plan administered by CIS. For the purpose of measuring the CityÓs OPEB liability or asset, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information has been determined based on an actuarial valuation provided by CIS. Benefit payments are recognized when due and payable in accordance with benefit terms. 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 program/function level for all funds. Expenditures may not legally exceed appropriations. Appropriations lapse at the end of each fiscal year. Budget amounts include original approved amounts and all subsequent appropriation transfers approved by the City Council. After budget approval, the City Council may approve supplemental appropriations if an occurrence, condition, or need exists which had not been ascertained at the time the budget was adopted. Management may not amend the budget. A supplemental budget requires hearings before the public, publications in newspapers and approval by the City Council. ORGANIZATION AND OPERATION The CityÓs 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 public safety, highways and streets, economic development, culture and recreation, and general government. In accordance with GASB Statement No. 54, the PERS Reserve fund, which is budgeted separately and accounts for the CityÓs participation in the StateÓs employer incentive program, is combined with the General fund for financial reporting purposes. Special Revenue Funds Street Fund - This fund is used to account for the CityÓs street operations. The fundÓs major source of revenue is highway gas tax received from the State of Oregon. - 27 - 55 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 ORGANIZATION AND OPERATION (Continued) Governmental Fund Types (Continued) Special Revenue Funds (Continued) Urban Renewal Fund Î This fund accounts for transactions related to urban renewal, including debt service on the URA loan. Property taxes are the primary source of revenue. Transit Fund Î This fund accounts for amounts held to be used for transportation services. Building Inspection Fund - This fund accounts for building permit revenue and associated operations. Asset Forfeiture 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 CityÓs CDBG grant program and provides low income housing and small business loans. Lavelle Black Trust Fund Î This fund accounts for the donations received to continue the police dog program. Capital Projects Funds 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. Parks SDC Fund - This fund is used to account for the collection and spending of park SDCs. General Capital Construction Fund - This fund is used to account for transfers from general services funds used for general services construction projects. Street SDC Fund - This fund accounts for the collection and spending of street SDCs. Storm SDC Fund - This fund accounts for the collection and spending of storm SDCs. 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 CityÓs 2005 GO bond (refunded in 2017). Property taxes are the major source of revenue. - 28 - 56 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 ORGANIZATION AND OPERATION (Continued) Proprietary Fund Types Enterprise Funds The City has two enterprise funds. Three individually budgeted funds are related to water, and report as Water Operations, and three individually budgeted funds are related to sewer, and report as Sewer Operations. The specific funds and their purposes are as follows. Water Operations - This operating fund includes the Water fund, the Water SDC fund and the Water Capital Construction fund. Customer usage fees and system development charges (SDCs) are the primary sources of revenue. The funds account for water general operations, water system capital improvement projects and the retirement of associated debt. Sewer Operations - This operating fund includes the Sewer fund, the Sewer SDC fund and the Sewer Capital Construction Fund. Customer usage fees and system development charges (SDCs) are the primary sources of revenue. The funds account for the operation of the CityÓs sewer system, sewer system capital improvement projects, and the retirement of related 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 Technology Fund - This fund accounts for the maintenance and replacement of the CityÓs network and technology services. Insurance Fund Î This fund accounts for the CityÓs insurance coverage. - 29 - 57 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 CASH AND INVESTMENTS The City maintains a cash and investment pool that is available for use by all funds. Each fund typeÓs portion of this pool is displayed on the Statement of Net Position as part of Ðcash and investments.Ñ CarryingFair ValueValue Cash Cash on hand$3,760 $ 3,760 Deposits with financial institutions 446,995 446,995 Certificates of deposit 7 ,233,703 7,233,703 Investments Local Government Investment Pool 41,811,326 42,179,266 $49,495,784 $49,863,724 Cash is reported in the financial statements as follows: Governmental funds$21,061,678 Internal Service funds (included in governmental activities) 1,128,140 Enterprise funds 27,305,966 $49,495,784 Deposits The book balance of the CityÓs bank deposits was $466,995 and the bank balance was $651,216 at year end. The difference is due to transactions in process. Bank deposits are secured to legal limits by federal deposit insurance. The remaining amount is secured in accordance with ORS 295 under a collateral program administered by the Oregon State Treasurer. Investments The State Treasurer of the State of Oregon maintains the Oregon Short Term Fund, of which the Local Government Investment Pool is part. Participation by local governments is voluntary. The State of Oregon investment policies are governed by statute and the Oregon Investment Council. In accordance with Oregon Statutes, the investment funds are invested as a prudent investor would do, exercising reasonable care, skill and caution. The Oregon Short Term Fund is the LGIP for local governments and was established by the State Treasurer. It was created to meet the financial and administrative responsibilities of federal arbitrage regulations. The investments are regulated by the Oregon Short Term Fund Board and approved by the Oregon Investment Council (ORS 294.805 to 294.895). The carrying value of the CityÓs position in the pool is the same as the value of the pool shares; fair value was 100.88% of the value of the pool shares as of June 30, 2020. 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. - 30 - 58 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 CASH AND INVESTMENTS (Continued) Interest Rate Risk In accordance with its investment policy, the City manages its exposure to declines in fair value of its investments by limiting the weighted average maturity of its investments. Custodial Credit Risk - Deposits This is the risk that in the event of a bank failure, the CityÓs deposits may not be returned. The Federal Depository Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) provide insurance for the CityÓs deposits up to $250,000 for the aggregate of demand deposits and the aggregate of all time deposits and savings accounts at each financial institution and credit union. Deposits in excess of FDIC and NCUA 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, 2020, $401,216 of the CityÓs 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 CityÓs 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 StateÓs 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. - 31 - 59 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 CAPITAL ASSETS The summary of capital assets for the business-type activities for the year ended June 30, 2020 is as follows: BalancesBalances July 1,June 30, 2019AdditionsRetirements2020 Nondepreciable assets Land 1,783,816$ -$ -$ 1,783,816$ Construction in progress4,175,633 703,502 - 4,879,135 Subtotal, nondepreciable assets5,959,449 703,502 - 6,662,951 Depreciable assets Buildings62,748,380 - - 62,748,380 Water and sewer systems31,746,151 616,579 - 32,362,730 Equipment3,028,659 - - 3,028,659 Subtotal, depreciable assets97,523,190 616,579 - 98,139,769 Accumulated depreciation Buildings and improvements(33,164,506) (1,717,705) - (34,882,211) Water and sewer systems(13,427,986) (532,370) - (13,960,356) Equipment(1,949,293) (133,979) - (2,083,272) Total accumulated depreciation(48,541,785) (2,384,054) - (50,925,839) Total depreciable assets, net (1,767,475)48,981,405 - 47,213,930 Net capital assets54,940,854$ (1,063,973)$ -$ 53,876,881$ Depreciation expense was allocated as follows: Water operations$ 409,679 Sewer operations 1,974,375 $ 2,384,054 - 32 - 60 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 CAPITAL ASSETS (Continued) The changes in the capital assets for governmental activities for the year ended June 30, 2020 are as follows: BalancesBalances Retirements/ July 1,June 30, 2019Additions2020Transfers Nondepreciable assets Land 23,055,692$ 846$ -$ 23,056,538$ Construction in progress6,529,430 5,186,435 - 11,715,865 Subtotal, nondepreciable assets29,585,122 5,187,281 - 34,772,403 Depreciable assets Buildings17,255,382 - - 17,255,382 Equipment7,403,150 533,492 - 7,936,642 Infrastructure44,562,023 70,514 - 44,632,537 Subtotal, depreciable assets69,220,555 604,006 - 69,824,561 Accumulated depreciation Buildings(7,751,855) (403,777) - (8,155,632) Equipment(6,227,864) (330,491) (6,558,355) Infrastructure(18,613,644) (717,952) - (19,331,596) Total accumulated depreciation(32,593,363) (1,452,220) - (34,045,583) Total depreciable assets, net (848,214)36,627,192 - 35,778,978 Net capital assets66,212,314$ 4,339,067$ -$ 70,551,381$ Depreciation expense was allocated as follows: General government$ 271,770 Public safety 233,847 Highways and streets 827,201 Culture and recreation 119,402 $ 1,452,220 - 33 - 61 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 LONG-TERM DEBT Long-term debt transactions for the year were as follows: OutstandingMatured/OutstandingDue July 1,RedeemedJune 30,Within 2019IssuedDuring Year2020One Year Governmental Activities: Direct placement general obligation bonds$ 2,812,000$ (511,000)-$ $ 2,301,000$ 539,000 Direct borrowings 4,600,000 (792,000)- 3,808,000 809,000 7,412,000 (1,303,000)- 6,109,000 1,348,000 Accrued compensated absences 745,849 726,469 (660,648) 811,670 324,668 $ 8,157,849$ 726,469$ (1,963,648)$ 6,920,670$ 1,672,668 Business-type Activities: Direct placement revenue bonds7,614,000 (1,422,000)- 6,192,000 1,402,000 Revenue bonds 14,544,072 (3,469,529)- 11,074,543 3,696,001 22,158,072 (4,891,529)- 17,266,543 5,098,001 2011 Sewer Revenue Bond premium1,657,852 (138,154)- 1,519,698 - Accrued compensated absences 53,270 80,535 (66,436) 67,369 26,948 $ 23,869,194$ 80,535$ (5,096,119)$ 18,853,610$ 5,124,949 Direct Placement General Obligation Bonds Payable - Governmental Activities General Obligation Bond Series 2017 (2005 refunding): In November 2017, the City issued bonds directly to a bank in the amount of $3,749,000 at 2.08% interest, to refund bonds issued in 2005. Bond interest is payable semiannually, while principal is due annually through June 2024. The bonds are unsecured, and the City has levied an ad valorem tax to service payments due. Amounts due are not subject to acceleration in the event of default. The balance at June 30, 2020 is $2,301,000. Annual debt service requirements to maturity for bonds payable are as follows: Fiscal Year Ending June 30,PrincipalInterestTotal 2021539,000$ $ 48,526$ 587,526 2022 568,000 37,315 605,315 2023 597,000 25,501 622,501 2024 597,000 13,082 610,082 $ 2,301,000$ 124,424$ 2,425,424 - 34 - 62 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 LONG-TERM DEBT (Continued) Loans from Direct Borrowings - Governmental Activities 2019 Full Faith and Credit Financing Agreement (City Hall): In May 2019, the City entered into a direct financing agreement in the amount of $1,700,000 at 2.35% interest, to fund renovations at Woodburn City Hall. Interest is payable semiannually, while principal is due annually through June 2023. The loan is unsecured and payable from any legally available funds of the City. Amounts due are not subject to acceleration in the event of default. The balance at June 30, 2020 is $1,168,000. 2019 Urban Renewal Note Payable: In June 2019, the Woodburn Urban Renewal Agency (a component unit of the City) entered into a note payable agreement in the amount of $2,900,000 at 2.77% interest, to fund urban renewal projects. Interest is payable semiannually, while principal is due annually through June 2029. The loan is secured by the tax increment revenues, and amounts due are not subject to acceleration in the event of default. The balance at June 30, 2020 is $2,640,000. Annual debt service requirements for direct borrowings are as follows: Fiscal Year Ending June 30,PrincipalInterestTotal 2021809,000$ 100,576$ 909,576$ 2022576,000 80,465 656,465 2023591,000 65,798 656,798 2024285,000 50,746 335,746 2025293,000 42,852 335,852 2026-20291,254,000 88,003 1,342,003 $ 3,808,000$ 428,440$ 4,236,440 Direct Placement Revenue Bonds Payable - Business-type Activities 2018 Water Revenue Refunding Bond - Direct Placement: In October 2020, the City issued bonds totaling $8,630,000 at 2.94% interest to refund outstanding loans payable. Bond interest is payable semiannually, while principal is due annually through December 2024. The bonds are secured by the net revenues of the water system. The balance at June 30, 2020 is $6,192,000. - 35 - 63 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 LONG-TERM DEBT (Continued) Direct Placement Revenue Bonds Payable - Business-type Activities (Continued) Annual debt service requirements to maturity for bonds payable are as follows: Fiscal Year Ending June 30,PrincipalInterestTotal 20211,402,000$ 161,435$ 1,563,435 20221,104,000 124,597 1,228,597 2023 1,442,000 87,171 1,529,171 2024 1,332,000 46,393 1,378,393 2025-2029 912,000 13,406 925,406 $ 6,192,000$ 433,002$ 6,625,002 Revenue Bonds Payable - Business-type Activities 2011 Wastewater Revenue and Refunding Bonds (Series A and B): In November 2011, the City issued bonds totaling $36,910,000 to refund outstanding loans payable and to finance various improvements in the Wastewater System. The Series 2011A bonds include variable interest between 3.00% and 5.00%, payable semiannually, with principal due annually through April 2031. The Series 2011B bonds include variable interest, compounded semiannually and payable only at maturity, due March 2023. Net revenues of the wastewater system have been pledged as payment for the bonds. In the event of default, the bonds are not subject to acceleration. The balance at June 30, 2020 is $11,074,543, and $1,519,698 of bond premiums are yet to be amortized. At June 30, 2020, there was $11,831,178 in unspent bond proceeds related the construction of the wastewater treatment plant. In July 2020, the City authorized a defeasance of all outstanding 2011 Wastewater Revenue and Refunding Bonds (Series A and B). Funds totaling $13,478,918, consisting of unspent bond proceeds and other funds, were placed in an irrevocable escrow to be used solely for satisfying future scheduled payments. This transaction qualifies as an in-substance defeasance, and as such, the City will not recognize an obligation for these bonds subsequent to June 30, 2020. PENSION PLAN Î OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM Plan Description Substantially all City employees are members in the Oregon Public Employees Retirement System (OPERS); a cost-sharing multiple-employer defined benefit pension plan that acts as a common investment and administrative agent for government units in the State of Oregon. Employees hired before August 29, 2003 belong to the Tier One/Tier Two Retirement Benefit Program (established pursuant to ORS Chapter 238), while employees hired on or after August 29, 2003 belong to the OPSRP Pension Program (established pursuant to ORS Chapter 238A). OPERS produces an independently audited CAFR which can be found at: http://www.oregon.gov/pers/Pages/section/financial_reports/financials.aspx. - 36 - 64 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 PENSION PLAN Î OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM (Continued) 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, 1981) or a money match computation if a greater benefit results. A member is considered vested and will be eligible at a minimum retirement age for a service retirement allowance if he or she has had contribution in each of five calendar years or has reached at least 50 years of age before ceasing employment with a participating employer (age 45 for police and fire members). General service employees may retire after reaching age 55. Police and fire members are eligible after reaching age 50. Tier One general service employee benefits are reduced if retirement occurs prior to age 58 with fewer than 30 years of service. Police and fire member benefits are reduced if retirement occurs prior to age 55 with fewer than 25 years of service. Tier Two members are eligible for full benefits at age 60. The ORS Chapter 238 Defined Benefit Pension Plan is closed to new members hired on or after August 29, 2003. Death Benefits. Upon the death of a non-retired member, the beneficiary receives a lump-sum refund of the memberÓs 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. 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. 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. - 37 - 65 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 PENSION PLAN Î OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM (Continued) Benefits Provided (Continued) OPSRP Pension Program 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 memberÓs 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, 2018 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, 2019. The CityÓs contribution rates for the period were 23.69% for Tier One/Tier Two members, 15.80% for OPSRP General Service members, and 20.43% for OPSRP Police and Fire members. The CityÓs total contributions exclusive of the 6% Ðpick-upÑ was $1,874,810. In addition, the City funded an employerÓs side account totaling $2,823,043, for which they received a 25% match of $705,761 from the StateÓs Employer Incentive Fund. These amounts will reduce future required contributions for the next 20 years. 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 employeesÓ contribution in addition to the required employersÓ contribution. The City has elected to contribute the 6% Ðpick-upÑ or $544,557 of the employeesÓ contribution. - 38 - 66 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 PENSION PLAN Î OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM (Continued) Pension Assets, Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2020, the City reported a liability of $15,782,405 for its proportionate share of the OPERS net pension liability. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2017 rolled forward to June 30, 2019. The CityÓs proportion of the net pension liability was based on a projection of the CityÓs long- term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2019, the CityÓs proportion was 0.0912%, which is an increase of 0.0056% from its proportion measured as of June 30, 2018. For the year ended June 30, 2020, the City recognized pension expense of $1,743,352. At June 30, 2020, 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 ResourcesResources $870,353 $ - Differencesbetweenexpectedandactual experience Changes of assumptions 2,141,063 - Net difference between projected and actual earnings on investments - 447,415 Changes in proportionate share 547,793 1,416,340 Differences between employer contributions and proportionate share of contributions 123,121 146,335 Contributions subsequent to measurement date 5,278,905 - Total$8,961,235 $2,010,090 Deferred outflows of resources related to pensions of $1,874,810 resulting from the CityÓs 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, 2021. $3,404,096 related to the balance of the side account at June 30, 2020 will be amortized over the next 20 years. Other amounts reported as deferred outflows and 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, 2021$1,064,738 2022(161,163) 2023288,486 2024432,086 202548,092 Total$1,672,239 - 39 - 67 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 PENSION PLAN Î OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM (Continued) Actuarial Methods and Assumptions The total pension liability in the December 31, 2017 actuarial valuation was determined using the following actuarial methods and assumptions: Actuarial Cost MethodEntry Age Normal Amortization MethodAmortizedasalevelpercentageofpayrollaslayered amortizationbasesoveraclosedperiod;Tier One/TierTwoUALisamortizedover20yearsand OPSRP pension UAL is amortized over 16 years Asset Valuation MethodMarket value of assets Actuarial Assumptions: Inflation Rate2.50% Investment Rate of Return7.20% Projected Salary Increases3.50%overallpayrollgrowth;salariesforindividuals areassumedtogrowat3.50%plusassumedratesof merit/longevity increases based on service Mortality Healthy retirees and beneficiaries: RP-2014Healthyannuitant,sex-distinct,generational withunisex,SocialSecurityDataScale,withcollar adjustmentsandset-backsasdescribedinthe valuation. Active members: RP-2014Employees,sex-distinct,generationalwith unisex,SocialSecurityDataScale,withcollar adjustmentsandset-backsasdescribedinthe valuation. Disabled retirees: RP-2014Disabledretirees,sex-distinct,generational with unisex, Social Security Data Scale. 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 2016 experience study which reviewed experience for the four-year period ending on December 31, 2016. - 40 - 68 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 PENSION PLAN Î OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM (Continued) 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 MillimanÓs capital market assumptions team and the Oregon Investment CouncilÓs (OIC) investment advisors. The table below shows MillimanÓs 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 OICÓs 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. Compound Annual TargetReturn (Geometric) Asset Class Core Fixed Income8.00%3.49% Short-Term Bonds8.003.38 Bank/Leveraged Loans3.005.09 High Yield Bonds1.006.45 Large/Mid Cap US Equities15.756.30 Small Cap US Equities1.316.69 Micro Cap US Equities1.316.80 Developed Foreign Equities13.136.71 Emerging Market Equities4.127.45 Non-US Small Cap Equities1.887.01 Private Equity17.507.82 Real Estate (Property)10.005.51 Real Estate (REITS)2.506.37 Hedge Fund of Funds - Diversified2.504.09 Hedge Fund - Event-driven0.635.86 Timber1.885.62 Farmland1.886.15 Infrastructure3.756.60 Commodities1.883.84 Assumed Inflation - Mean2.50% Discount Rate The discount rate used to measure the total pension liability was 7.20% 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 planÓs 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. - 41 - 69 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 PENSION PLAN Î OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM (Continued) Sensitivity of the CityÓs proportionate share of the net pension liability to changes in the discount rate The following presents the CityÓs proportionate share of the net pension liability (asset) calculated using the discount rate of 7.20%, as well as what the CityÓs proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.20%) or 1-percentage-point higher (8.20%) than the current rate: 1% Decrease Discount Rate 1% Increase (6.20%)(7.20%)(8.20%) Proportionate share of the net pension liability$25,274,120 $ 15,782,405$7,839,146 Pension Plan Fiduciary Net Position Detailed information about the pension planÓs 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 planÓs provisions and contribution requirements are established and amended by the City Council. The 401A is administered by ICMA Retirement Corp. to provide retirement benefits for the City Attorney. The City has established a contribution amount equivalent to approximately 7% of covered salary. The City contributed $8,424 to the plan for the year ended June 30, 2020. 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 $178,944 to the plan for the year ended June 30, 2020. POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS The other postemployment benefits (OPEB) for the City combines two separate plans. The City provides an implicit rate subsidy for retiree health insurance premiums, and a contribution to the State of OregonÓs PERS cost- sharing multiple-employer defined health insurance benefit plan. - 42 - 70 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS (Continued) Financial Statement Presentation The CityÓs two OPEB plans are presented in the aggregate on the Statement of Net Position. The amounts on the financial statements relate to the plans as follows: Implicit Rate PERS Total OPEB Subsidy PlanRHIA Planon Financials Total OPEB asset-$ 157,485$ 157,485$ Deferred Outflows of Resources Contributions After Measurement Date38,599 40,436 79,035 Change in assumptions 18,060 - 18,060 Changes in proportionate share - 527 527 Total Deferred Outflows of Resources 56,659 40,963 97,622 Total OPEB Liability (653,590) - (653,590) Deferred Inflows of Resources Differences between expected and actual experience(12,842) ( 20,768) (33,610) Change in assumptions (106,415) (163) (106,578) Net difference between projected and actual earnings (9,721) (9,721) Changes in proportionate share (370) (370) Total Deferred Inflows of Resources (119,257) (31,022) (150,279) OPEB Expense/(Income) (10,218) 61,991 51,773 Implicit Rate Subsidy Plan Description The CityÓs single-employer defined benefit postemployment healthcare plan is administered by Citycounty Insurance Services (CIS). Benefit provisions are established through negotiations between the City and representatives of the City or through resolutions passed by City Council. No assets have been accumulated in a trust that meets the criteria in paragraph 4 of Statement 75. The CityÓs postemployment healthcare plan administrator issues a publicly available financial report that includes financial statements and required supplementary information for CIS. This report may be obtained by writing to the CIS Main Office, 1212 Court Street NE, Salem OR 97301. Benefits Provided The plan provides eligible retirees and their dependents under age 65 the same health care coverage at the same premium rates as offered to active employees. The retiree is responsible for the premiums. - 43 - 71 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS (Continued) Implicit Rate Subsidy (Continued) As of the valuation date of July 1, 2018, the following employees were covered by the benefit terms: Inactive employees or beneficiaries receiving benefits8 Active employees112 120 Total OPEB Liability, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB The CityÓs total OPEB liability of $653,590 was measured as of June 30, 2019, and was determined by an actuarial valuation as of July 1, 2018. For the fiscal year ended June 30, 2020, the City recognized OPEB income from this plan of $10,218. At June 30, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to this OPEB plan from the following sources: Deferred OutflowDeferred Inflow of Resourcesof Resources Differences between expected and actual experience$ 12,842-$ Changes of assumptions 106,41518,060 Contributions subsequent to measurement date38,599 - Total56,659$ 119,257$ Deferred outflows of resources related to OPEB of $56,659 resulting from the CityÓs contributions subsequent to the measurement date will be recognized as a reduction of the total OPEB liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year ended June 30: 2021(15,521)$ 2022(15,521) 2023(15,521) 2024(15,521) 2025(15,521) Thereafter(23,592) Total(101,197)$ - 44 - 72 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS (Continued) Actuarial Assumptions and Other Inputs The total OPEB liability for the June 30, 2020 valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: inflation rate of 2.50%, projected salary increases of 3.50%, discount rate of 3.50% (change from 3.87% in the previous measurement period), medical and vision varies between 6.00% and 4.75% (due to the timing of the excise tax scheduled to affect health care benefits), dental at 4.50%, and mortality rates based on the RP-2014 healthy annuitant, sex-distinct, generational with unisex, Social Security Data Scale, with collar adjustments and setbacks. The discount rate was based on Bond Buyer 20-Year General Obligation Bond Index. Changes in the Total OPEB Liability Total OPEB Liability Balance as of June 30, 2019618,796$ Changes for the year: Service cost39,806 Interest on total OPEB liability24,532 Effect of assumptions changes or inputs20,318 Benefit payments(49,862) Balance as of June 30, 2020653,590$ The effect of changes in assumptions is the result of the change in the discount rate from 3.87 to 3.50. Sensitivity of the Total OPEB Liability The following presents the CityÓs total OPEB liability, as well as what the liability would be if it were calculated using a discount rate that is 1 percentage point lower (2.50 percent) or 1 percentage point higher (4.50 percent) than the current discount rate. A similar sensitivity analysis is then presented for changes in the healthcare trend assumption. Discount Rate:1% Decrease Current Discount 1% Increase (2.50%)Rate (3.50%)(4.50%) Total OPEB Liability$ 709,856$ 653,590$ 602,086 Healthcare Cost Trend: 1% Decrease Trend Rate (6.00% 1% Increase (7.00% (5.00% decreasing decreasing to decreasing to to 3.75%)4.75%)5.75%) Total OPEB Liability$ 582,357$ 653,590$ 739,119 - 45 - 73 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS (Continued) PERS Retirement Health Insurance Account Plan Description The City contributes to the PERS Retirement Health Insurance Account (RHIA) for each of its eligible employees. RHIA is a cost-sharing multiple-employer defined benefit other postemployment benefit plan administered by PERS. RHIA pays a monthly contribution toward the cost of Medicare companion health insurance premiums for eligible retirees. ORS 238.420 established this trust fund. Authority to establish and amend the benefit provisions of RHIA reside with the Oregon Legislature. The plan is closed to new entrants hired after August 29, 2003. PERS issues publicly available financial statements and required supplementary information. That report may be obtained by writing to Oregon Public Employees Retirement System, PO Box 23700, Tigard, OR 97281-3700 or online at: https://www.oregon.gov/PERS/Pages/Financials/Actuarial-Financial-Information.aspx. Benefits Provided Because RHIA was created by enabling legislation (ORS 238.420), contribution requirements of the plan members and the participating employers were established and may be amended only by the Oregon Legislature. ORS require that an amount equal to $60 or the total monthly cost of Medicare companion health insurance premiums coverage, whichever is less, shall be paid from the RHIA established by the employer, and any monthly cost in excess of $60 shall be paid by the eligible retired member in the manner provided in ORS 238.410. To be eligible to receive this monthly payment toward the premium cost, the member must: (1) have eight years or more of qualifying service in PERS at the time of retirement or receive a disability allowance as if the member had eight years or more of creditable service in PERS, (2) receive both Medicare Parts A and B coverage, and (3) enroll in a PERS-sponsored health plan. A surviving spouse or dependent of a deceased PERS retiree who was eligible to receive the subsidy is eligible to receive the subsidy if he or she (1) is receiving a retirement benefit or allowance from PERS or (2) was insured at the time the member died and the member retired before May 1, 1991. Contributions PERS funding policy provides for employer contributions at actuarially determined rates. These contributions, expressed as a percentage of covered payroll, are intended to accumulate sufficient assets to pay benefits when due. Employer contribution rates for the period were based on the December 31, 2017 actuarial valuation. The rates based on a percentage of payroll, first became effective July 1, 2020. The CityÓs contribution rates for the period were 0.50% for Tier One/Tier Two members, and 0.43% for OPSRP members. The CityÓs total for the year ended June 30, 2020 contributions was $40,436. OPEB Assets, Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB At June 30, 2020, the City reported an asset of $157,485 for its proportionate share of the OPERS net OPEB asset. The net OPEB asset was measured as of June 30, 2019 and was determined by an actuarial valuation as of December 31, 2017, rolled forward to June 30, 2019. The CityÓs proportion of the net OPEB asset was based on the CityÓs contributions to the RHIA program during the measurement period relative to contributions from all participating employers. At June 30, 2019, the CityÓs proportionate share was 0.0815%, which is a decrease from its proportion of 0.0825% as of June 30, 2018. - 46 - 74 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS (Continued) PERS Retirement Health Insurance Account (Continued) For the year ended June 30, 2020, the City recognized OPEB expense from this plan of $51,773. At June 30, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to this OPEB plan from the following sources: Deferred Deferred Outflow of Inflow of ResourcesResources Differences between expected and actual experience$ -$ 20,768 Changes of assumptions - 163 Net difference between projected and actual earnings - 9,721 Change in proportionate share 527 370 contributions subsequent to the MD 40,436 - Total$ 40,963$ 31,022 Deferred outflows of resources related to OPEB of $40,436 resulting from the CityÓs contributions subsequent to the measurement date will be recognized as either a reduction of the net OPEB liability or an increase in the net OPEB asset in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year ended June 30: 2021(15,854)$ 2022(13,869) 2023(1,774) 20241,002 Total(30,495)$ Actuarial Methods and Assumptions See OPERS Pension Plan footnote for additional information on actuarial assumptions and methods, the long-term expected rate of return, and the discount rate. - 47 - 75 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 PERS Retirement Health Insurance Account (Continued) Sensitivity of the proportionate share of the net OPEB liability (asset) to changes in the discount rate The following presents the CityÓs proportionate share of the net OPEB liability (asset) calculated using the discount rate of 7.20%, as well as what the CityÓs proportionate share of the net OPEB liability (asset) would be if it were calculated using a discount rate that is 1 percentage point lower (6.20%) or 1 percentage point higher (8.20%) than the current rate: 1% Decrease Discount Rate 1% Increase (6.20%)(7.20%)(8.20%) Net OPEB liability (asset)(122,092)$ (157,485)$ (187,644)$ OPEB Plan Fiduciary Net Position Detailed information about the pension planÓs fiduciary net position is available in the separately issued OPERS financial report. TRANSFERS Interfund transfers are as follows: Transfers From Governmental ActivitiesBusiness-type Activities Urban Renewal Non-major Water Sewer Internal Transfers ToGeneralStreetAgencyGovernmentalOperationsOperationsServiceTotal Governmental activities General $- $56,750 $12,290 $ 40,990$ $150,59983,850 $ 29,530$ 378,959 Street- - - - - 90,000 - 90,000 Other non-major governmental 116,000 1,011,049 - 500,000 50,000 50,000 - 1,727,049 Total$116,000 $1,067,799 $12,290 $ 540,990$ $290,599133,850 $ 29,530$ 2,196,008 Reconciliation: Total internal charges to governmental activities from business-type activities 615,804 Total governmental funds (2,196,008) Total business-type activities 424,449 $1,040,253 The primary purpose of transfers is 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. In the governmental activities column of the statement of activities, transfers between governmental funds have been eliminated. In a like manner, transfer between enterprise funds have been eliminated in the business-type activities column. - 48 - 76 CITY OF WOODBURN, OREGON NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 EXPENDITURES IN EXCESS OF APPROPRIATIONS Expenditures in excess of appropriations for the year ending June 30, 2020 occurred as follows: BudgetActual Variance Urban Renewal Debt service$268,500 $ 334,975$ (66,475) 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 CityÓs financial position. SUBSEQUENT EVENTS Management has evaluated subsequent events through November 25, 2020, the date on which the financial statements were available to be issued. As noted on page 36, in July 2020, the City authorized a defeasance of all outstanding 2011 Wastewater Revenue and Refunding Bonds (Series A and B). In addition, subsequent to year end, the City received $687,000 in reimbursement basis COVID relief funding for expenditures through December 2020. - 49 - 77 REQUIRED SUPPLEMENTARY INFORMATION 78 CITY OF WOODBURN, OREGON COMBINING BALANCE SHEET - BUDGETARY FUNDS REPORTED AS GENERAL FUND JUNE 30, 2020 Budgetary funds Total (reported as General FundPERS ReserveGeneral Fund) ASSETS Cash and investments$ -6,617,203$ 6,617,203$ Accounts receivable -728,941 728,941 Property taxes receivable -383,469 383,469 Prepaid expenses -23,390 23,390 Due from other funds -746,961 746,961 Total Assets$ -8,499,964$ 8,499,964$ LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Liabilities: Accounts payable -144,934 144,934 Accrued payroll and payroll liabilities -532,239 532,239 Due to other funds -333,903 - Total Liabilities -1,011,076 677,173 Deferred Inflows Unavailable revenue -652,966 652,966 Fund Balance: Non-spendable -23,390 23,390 Unassigned -6,812,532 6,812,532 Total Fund Balance -6,835,922 6,835,922 Total Liabilities, Deferred Inflows and Fund Balance $ -8,499,964$ 8,499,964$ - 50 - 79 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGETARY FUNDS REPORTED AS GENERAL FUND YEAR ENDED JUNE 30, 2020 Budgetary funds Total (reported as General General FundPERS ReserveEliminationsFund) REVENUES Taxes and assessments$ 9,932,526$ -$ 9,932,526-$ Licenses and permits 1,999,971 - 1,999,971- Charges for services 903,988 - - 903,988 Intergovernmental 1,020,875 - 1,020,875- Fines and forfeitures 352,400 - - 352,400 Miscellaneous 872,439 19,464 - 891,903 Total Revenues 15,082,199 19,464 15,101,663- EXPENDITURES Administration 1,289,009 - 1,289,009- Economic development 138,365 - - 138,365 Nondepartmental 284,530 2,824,043 3,108,573- Police 7,574,867 - 7,574,867- Community services 3,103,380 - 3,103,380- Planning 470,851 - - 470,851 Engineering 242,796 - - 242,796 Debt Service Principal 532,000 - - 532,000 Interest 42,391 - - 42,391 Total Expenditures 13,678,189 2,824,043 16,502,232- REVENUES OVER (UNDER) EXPENDITURES 1,404,010 (2,804,579) (1,400,569)- OTHER FINANCING SOURCES (USES) T ransfers in 1,126,299- (752,290) 374,009 Transfers out (868,290) - 752,290 (116,000) Proceeds from sales of assets 22,115 - - 22,115 Total Other Financing Sources (Uses) (846,175) 1,126,299 - 280,124 NET CHANGE IN FUND BALANCE 557,835 (1,678,280) (1,120,445)- FUND BALANCE, beginning of year 6,278,0871,678,280 7,956,367- FUND BALANCE, end of year$ 6,835,922$ -$ -$ 6,835,922 - 51 - 80 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î GENERAL FUND (BUDGETARY BASIS) YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Taxes and assessments9,943,000$ 9,943,000$ 9,932,526$ (10,474)$ Licenses and permits159,700 159,700 209,334 49,634 Franchise fees1,896,700 1,896,700 1,790,637 (106,063) Charges for services1,070,110 1,070,110 903,988 (166,122) Intergovernmental906,500 906,500 1,020,875 114,375 Fines and forfeitures456,500 456,500 352,400 (104,100) Miscellaneous706,520 706,520 872,439 165,919 Total Revenues 15,139,03015,139,030 15,082,199 (56,831) EXPENDITURES Administration1,389,700 1,389,700 1,289,009 100,691 Economic developmen t 170,290170,290 138,365 31,925 Nondepartmental339,100 339,100 284,530 54,570 Police8,078,740 8,078,740 7,574,867 503,873 Community services 3,606,040 3,606,040 3,103,380 502,660 Planning496,460 496,460 470,851 25,609 Engineering290,420 290,420 242,796 47,624 Debt service Principal500,000 500,000 532,000 (32,000) * Interest75,000 75,000 42,391 32,609 Contingency3,761,890 3,301,890 - 3,301,890 Total Expenditures 18,247,64018,707,640 13,678,189 4,569,451 REVENUES OVER (UNDER) EXPENDITURES (3,108,610)(3,568,610) 1,404,010 4,512,620 OTHER FINANCING SOURCES (USES) Transfers out(408,290) (868,290) (868,290) - Proceeds from sale of assets25,000 25,000 22,115 (2,885) Total Other Financing Sources (Uses) (843,290)(383,290) (846,175) (2,885) NET CHANGE IN FUND BALANCE (3,951,900)(3,951,900) 557,835 4,509,735 ginning of year 5,306,9005,306,900 6,278,087971,187 FUND BALANCE, be f year$ 1,355,0001,355,000$ 6,835,922 5,480,922$ FUND BALANCE, end o *Debt service is appropriated as a combined total therefore this is not an overexpenditure of appropriations. - 52 - 81 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î PERS RESERVE FUND (BUDGETARY BASIS) YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Miscellaneous60,000$ $ 60,000$ 19,464$ (40,536) EXPENDITURES Materials and services 2,089,710 2,824,710 2,824,043 667 REVENUES OVER (UNDER) EXPENDITURES (2,029,710) (2,764,710) (2,804,579) (39,869) OTHER FINANCING SOURCES (USES) Transfers in 362,710 1,097,710 1,126,299 28,589 NET CHANGE IN FUND BALANCE (1,667,000) (1,667,000) (1,678,280) (11,280) FUND BALANCE, beginning of year 1,667,000 1,667,000 1,678,280 11,280 FUND BALANCE, end of year$ -$ -$ -$ - - 53 - 82 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - STREET FUND (BUDGETARY BASIS) YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Taxes and assessments130,000$ 130,000$ 101,204$ (28,796)$ Licenses and permits500 500 369 (131) Franchise fees368,000 368,000 353,518 (14,482) Intergovernmental1,500,000 1,500,000 1,707,151 207,151 Miscellaneous 196,180 196,180 123,912 (72,268) Total Revenues 2,194,680 2,194,680 2,286,154 91,474 EXPENDITURES Street 2,787,780 2,787,780 1,654,523 1,133,257 Contingency 1,000,000 954,000 954,000- Total Expenditures 3,787,780 3,741,780 1,654,523 2,087,257 REVENUES OVER (UNDER) EXPENDITURES (1,593,100) (1,547,100) 631,631 2,178,731 OTHER FINANCING SOURCES (USES) Transfers in 90,000 90,000 90,000 - Transfers out (2,095,750) (2,141,750) (1,067,799) 1,073,951 Total Other Financing Sources (Uses) (2,005,750) (2,051,750) (977,799) 1,073,951 NET CHANGE IN FUND BALANCE (3,598,850) (3,598,850) (346,168) 3,252,682 FUND BALANCE, beginning of year 4,057,800 4,057,800 4,589,031 531,231 FUND BALANCE, end of year $ 458,950458,950$ 4,242,863$ 3,783,913$ - 54 - 83 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - URBAN RENEWAL FUND (BUDGETARY BASIS) YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Taxes and assessments785,800$ $ 785,800$ 775,881$ (9,919) Intergovernmental 1,000,000 1,000,000 1,040,152 40,152 Miscellaneous 39,200 39,200 42,547 3,347 Total Revenues 1,825,000 1,825,000 1,858,580 33,580 EXPENDITURES Personal services 228,580 228,580 202,723 25,857 Materials and services 271,120 271,120 166,466 104,654 Capital outlay 3,713,500 3,713,500 2,359,821 1,353,679 Debt service Principal 150,000 150,000 260,000 (110,000) Interest 118,500 118,500 74,975 43,525 Contingency 200,010 190,010 190,010- Total Expenditures 4,681,710 4,671,710 3,063,985 2,987,260 REVENUES OVER (UNDER) EXPENDITURES (2,856,710) (2,846,710) (1,205,405) 3,020,840 OTHER FINANCING SOURCES (USES) Transfers out (2,290) (12,290) (12,290) - NET CHANGE IN FUND BALANCE (2,859,000) (2,859,000) (1,217,695) 3,020,840 FUND BALANCE, beginning of year 3,159,000 3,159,000 2,572,007 (586,993) FUND BALANCE, end of year$ 300,000$ 300,000$ 1,354,312$ 2,433,847 - 55 - 84 CITY OF WOODBURN, OREGON SCHEDULE OF THE CITYÓS PROPORTIONATE SHARE OF THE NET PENSION LIABILITY (ASSET) OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM 1 LAST SEVER FISCAL YEARS 2020201920182017201620152014 City's proportion of the net pension liability (asset) 0.0912%0.0856%0.0994%0.1081%0.1224%0.1145%0.1145% City's proportionate share of the net pension liability (asset) $ 15,782,405$ 12,969,468$ 13,401,200$ 16,230,093$ 7,026,676$ (2,595,126)$ 5,842,512 City's covered-employee payroll 8,868,978 8,950,436 8,800,124 8,344,438 8,457,225 8,048,595 7,956,480 City's proportionate share of the net pension liability (asset) as a percentage of its covered-employee payroll 178.0%144.9%152.3%194.5%83.1%-32.2%73.4% Plan fiduciary net position as a percentage of the total pension liability 80.2%82.1%83.1%80.5%91.9%103.6%92.0% 1 10-year trend information required by GASB Statement 68 will be presented prospectively - 56 - 85 CITY OF WOODBURN, OREGON SCHEDULE OF THE CITYÓS CONTRIBUTIONS OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM 1 LAST SEVEN FISCAL YEARS 2020201920182017201620152014 Contractually required contributions $ 1,874,810$ 1,407,165$ 1,347,984$ 1,034,667$ 1,096,838$ 1,046,147$ 1,022,429 Contributions in relation to the contractually required contribution (1,874,810) (1,407,165) (1,347,984) (1,034,667) (1,096,838) (1,046,147) (1,022,429) Contribution deficiency (excess) $ -$ -$ -$ -$ -$ -$ - City's covered-employee payroll $ 10,145,281$ 8,868,978$ 8,950,436$ 8,800,124$ 8,344,438$ 8,457,225$ 8,048,595 . Contributions as a percentage of covered-employee payroll 18.48%15.87%15.06%11.76%13.14%12.37%12.70% 1 10-year trend information required by GASB Statement 68 will be presented prospectively - 57 - 86 CITY OF WOODBURN, OREGON SCHEDULE OF CHANGES IN TOTAL OTHER POST-EMPLOYMENT BENEFITS LIABILITY AND RELATED RATIOS - IMPLICIT RATE SUBSIDY 1 LAST THREE FISCAL YEARS 202020192018 Service cost$ 39,806$ 47,892$ 51,565 Interest on total OPEB liability 24,532 25,949 21,016 Effect of economic/demographic gains or (losses) - (16,512) - Effect of assumption change or inputs 20,318 (96,751) (46,746) Benefit payments (49,862) (37,144) (32,401) Net change in total OPEB liability 34,794 (76,566) (6,566) Net OPEB liability, beginning 618,796 695,362 701,928 Net OPEB liability, ending$ 653,590$ 618,796$ 695,362 Covered payroll$ 10,145,281$ 8,868,978$ 8,950,436 Total OPEB liability as a % of covered payroll6.4%7.0%7.8% Notes: The above table presents the most recent actuarial valuations for the City's post-employment health insurance benefits plan and provides information that approximates the funding progress of the plan. There are no assets accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75. 1 10-year trend information required by GASB Statement 75 will be presented prospectively - 58 - 87 CITY OF WOODBURN, OREGON SCHEDULE OF THE CITYÓS PROPORTIONATE SHARE OF THE NET OPEB LIABILITY (ASSET) OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM RETIREE HEALTH INSURANCE ACCOUNT 1 LAST FOUR FISCAL YEARS 2020201920182017 City's proportion of the net OPEB liability (asset) 0.0815%0.0825%0.0815%0.0869% City's proportionate share of the net OPEB liability (asset)$ (157,485)$ (92,049)$ (34,002)$ 23,610 City's covered-employee payroll 8,868,978 8,950,436 8,800,124 8,344,438 City's proportionate share of the net OPEB liability (asset) as a percentage of its covered-employee payroll -1.8%-1.0%-0.4%0.3% Plan fiduciary net position as a percentage of the total pension liability 124.0%124.0%108.9%94.2% 1 10-year trend information required by GASB Statement 75 will be presented prospectively - 59 - 88 CITY OF WOODBURN, OREGON SCHEDULE OF THE CITYÓS CONTRIBUTIONS OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM RETIREE HEALTH INSURANCE ACCOUNT 1 LAST FOUR FISCAL YEARS 2020201920182017 Contractually required contributions $ 40,436$ 39,580$ 40,561$ 38,765 Contributions in relation to the contractually required contribution (40,436) (39,580) (40,561) (38,765) Contribution deficiency (excess) $ -$ -$ -$ - City's covered-employee payroll $ 10,145,281$ 10,145,281$ 8,950,436$ 8,800,124 Contributions as a percentage of covered-employee payroll 0.40%0.39%0.45%0.44% 1 10-year trend information required by GASB Statement 75 will be presented prospectively - 60 - 89 CITY OF WOODBURN, OREGON NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED JUNE 30, 2020 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY Budgetary Information On or before June 30 of each year, the City enacts a resolution approving the budget, appropriating the expenditures, and levying the property taxes. The CityÓs budget is presented on the modified accrual basis of accounting which is the same basis as GAAP with the exception of interfund loans, which are not reported on the budgetary basis. Prior to enacting this resolution, the proposed budget is presented to a budget committee consisting of members of the City Council and a like number of interested citizens. The budget committee presents the budget to the City Council for budget hearings prior to enactment of the resolution. The City budgets all funds as required by Oregon Local Budget Law. The resolution authorizing appropriations for each fund sets the legal level of control by which expenditures cannot legally exceed appropriations. Appropriations of expenditures are made at the program/function level for all funds. The detail budget document is required to contain more specific information for the above mentioned expenditure categories. Unexpected additional resources may be added to the budget through the use of a supplemental budget. A supplemental budget requires hearings before the public, publications in newspapers, and adoption by the City Council. Management may modify original and supplemental budgets by the use of appropriation transfers between the legal levels of control within a fund. Such transfers require approval by the City Council. Management may not amend the budget without seeking the approval of the Council. Appropriations lapse as of year-end. Changes in Benefit Terms The Oregon Supreme Court on April 30, 2015, ruled that the provisions of Senate Bill 861, signed into law in October 2013, that limited the post-retirement COLA on benefits accrued prior to the signing of the law was unconstitutional. Benefits could be modified prospectively, but not retrospectively. As a result, those who retired before the bills were passed will continue to receive a COLA tied to the Consumer Price Index that normally results in a 2% increase annually. OPERS will make restoration payments to those benefit recipients. Senate Bill 822 lowered the COLA from 2% to 1.5% for recipients who do not pay Oregon income tax because they are not residents of Oregon. OPERS members who have accrued benefits before and after the effective dates of the 2013 legislation will have a blended COLA rate when they retire. This is a change in benefit terms was not included in the net pension liability (asset) proportionate shares provided by OPERS for the years ending June 30, 2015 and June 30, 2014. Changes of assumptions Details and a comprehensive list of changes in methods and assumptions can be found in the 2012, 2014, and 2016 experience study for the System, which were published on September 18, 2013, September 23, 2015, and July 26, 2017, respectively. These reports can be found at: http://www.oregon.gov/PERS/Pages/Financials/Actuarial- Presentations-and-Reports.aspx. - 61 - 90 CITY OF WOODBURN, OREGON NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED JUNE 30, 2020 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (Continued) Other Postemployment Benefits The tables on pages 58-60 present the activities, changes in the proportionate share and contributions related to the CityÓs postemployment health insurance benefit plans (implicit rate subsidy and retirees health insurance account) based on the most recent actuarial valuations for the City. There are no assets accumulated in a trust that meet the criteria in paragraph 4 of GASB Statement No. 75. - 62 - 91 SUPPLEMENTARY INFORMATION 92 CITY OF WOODBURN, OREGON COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2020 Special Revenue Building Asset TransitInspectionForfeiture ASSETS Cash and investments$ 1,255,728-$ 15,132$ Accounts receivable -227,923 - Property taxes receivable -- - Assessment liens receivable -- - Loans receivable -- - Prepaid expenses -- - Total Assets$ 1,255,728227,923$ 15,132$ LIABILITIES, DEFERRED INFLOWS AND FUND BALANCE Liabilities: $ 62,8124,428$ -$ Accounts payable Due to other funds 22,93088,494 - Total Liabilities 85,74292,922 - Deferred Inflows: -- - Unavailable revenue Fund Balance: Non-spendable -- - Restricted for: Debt service -- - Construction -- - Culture and recreation -135,001 - Community development -- - Committed to: Public safety -- 15,132 Capital outlay -- - Planning and building 1,169,986- - Total Fund Balance 1,169,986135,001 15,132 Total Liabilities, Deferred Inflows and Fund Balance$ 1,255,728227,923$ 15,132$ 93 Special Revenue Capital Projects Street & Storm Housing Lavelle Black Special Capital General Capital RehabilitationTrustAssessmentConstructionParks SDCConstruction $ 35,171411,525$ 29,978$ 905,159$ 713,259 -$ -- - - - 432,051 -- - - - - -- 20,460 - - - -497,714 - - - - -- - - - 3,300 $ 35,171909,239$ 50,438$ 905,159$ 713,259$ 435,351$ $ --$ -$ 119,719$ -$ 74,200$ -95 - - - 106,046 -95 - 119,719 - 180,246 -497,714 20,460 - - - -- - - - 3,300 -- - - - - - - 785,440- 713,259 251,805 - 35,171 - - - - 411,430 - - - - - - - - - - - - - 29,978 - - - - - - - - - 411,430 35,171 29,978 785,440 713,259 255,105 $ 909,239$ 35,171$ 50,438$ 905,159$ 713,259$ 435,351 - 63 - 94 CITY OF WOODBURN, OREGON COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS (Continued) JUNE 30, 2020 Capital Projects Equipment Street SDCStorm SDCReplacement ASSETS Cash and investments$ 708,8173,822,980$ 719,161$ Accounts receivable -- - Property taxes receivable -- - Assessment liens receivable -- - Loans receivable -- - Prepaid expenses -- - Total Assets$ 708,8173,822,980$ 719,161$ LIABILITIES, DEFERRED INFLOWS AND FUND BALANCE Liabilities: Accounts payable$ --$ -$ Due to other funds -- - Total Liabilities -- - Deferred Inflows: Unavailable revenue -- - Fund Balance: Non-spendable -- - Restricted for: Debt service -- - Construction 708,8173,822,980 - Culture and recreation -- - Community development -- - Committed to: Public safety -- - Capital outlay -- 719,161 Planning and building -- - Total Fund Balance 708,8173,822,980 719,161 Total Liabilities, Deferred Inflows and Fund Balance$ 708,8173,822,980$ 719,161$ 95 Debt Service GO Debt ServiceTotal $ 8,648,70831,798$ 659,974- 23,39423,394 20,460- 497,714- 3,300- $ 9,853,55055,192$ $ 261,159-$ 217,565- 478,724- 540,76222,588 3,300- 32,60432,604 6,282,301- 170,172- 411,430- 15,132- 749,139- 1,169,986- 8,834,06432,604 $ 9,853,55055,192$ - 64 - 96 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2020 Special Revenue Building Asset TransitInspectionForfeiture REVENUES Taxes and assessments$ -$ -$ - Licenses and permits - 8 23,240 - Charges for services 26,798 - - Intergovernmental 828,932 1 75,619 - Miscellaneous 9,399 2 3,948 3 31 Total Revenues 865,129 1 ,022,807 3 31 EXPENDITURES Current Culture and recreation 919,763 - - Economic development - 8 82,011 - Debt service Principal - - - Interest - - - Capital outlay - - - Total Expenditures 919,763 8 82,011 - REVENUES OVER (UNDER) EXPENDITURES (54,634) 1 40,796 3 31 OTHER FINANCING SOURCES (USES) Transfers in116,000 - - Transfers out (6,510) (34,480) - Proceeds from sales of assets 64 - - Total Other Financing Sources (Uses) 109,554 (34,480) - NET CHANGE IN FUND BALANCE 54,920 1 06,316 3 31 FUND BALANCE, beginning of year 1,063,67080,081 14,801 r FUND BALANCE, end of yea$ 135,001 $ 1 ,169,986$ 15,132 97 Special RevenueCapital Projects Street & Storm Housing Lavelle Special Capital RehabilitationBlack TrustAssessmentConstruction $ -$ -$ -$ - - - - - - - - - - - - 1,000,000 58,543 9 42 11,158 - 58,543 9 42 11,158 1,000,000 - 2,660 - - - 2,604 - - - - - - - - - - - - - 1,675,609 2,604 2,660 - 1,675,609 55,939 (1,718) 11,158 (675,609) - - - 1,461,049 - - - - - - - - - - - 1,461,049 55,939 (1,718) 11,158 785,440 355,491 36,889 18,820 - $ 411,430$ 3 5,171$ 29,978$ 785,440 - 65 - 98 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS (Continued) YEAR ENDED JUNE 30, 2020 Capital Projects General Capital Parks SDCConstructionStreet SDC REVENUES Taxes and assessments$ -$ -$ - Licenses and permits 185,033 504,314- Charges for services - - - Intergovernmental - 647,528 - Miscellaneous 12,377 11,588 81,224 Total Revenues 197,410 659,116 585,538 EXPENDITURES Current Culture and recreation- - - Economic development -- Debt service - - Principal - Interest- - - Capital outlay 1,221,540- - Total Expenditures 1,221,540- - REVENUES OVER (UNDER) EXPENDITURES (562,424)197,410 585,538 OTHER FINANCING SOURCES (USES) Transfers in- - - Transfers out- - (500,000) Proceeds from sales of assets- - - Total Other Financing Sources (Uses) -- (500,000) E NET CHANGE IN FUND BALANC (562,424)197,410 85,538 FUND BALANCE, beginning of year 817,529515,849 3,737,442 FUND BALANCE, end of year $ 255,105713,259$ 3,822,980$ 99 Debt Service Capital Projects Equipment GO Debt Storm SDCReplacementServiceTotal $ --$ 575,048$ 575,048$ -29,686 - 1,542,273 -- - 26,798 -- - 2,652,079 17,19115,006 6,698 248,405 17,19144,692 581,746 5,044,603 -- - 922,423 -- 884,615- -- 511,000511,000 57,515- 57,515 255,694- - 3,152,843 255,694- 568,515 5,528,396 (238,503)44,692 13,231 (483,793) 150,000- - 1,727,049 -- - (540,990) -- - 64 150,000- - 1,186,123 (88,503)44,692 13,231 702,330 807,664664,125 19,373 8,131,734 $ 708,817$ 719,161$ 32,604$ 8,834,064 - 66 - 100 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - TRANSIT FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Charges for services$ 53,000$ 53,000$ 26,798$ (26,202) Intergovernmental 808,600 808,600 828,932 20,332 Miscellaneous 12,640 12,640 9,399 (3,241) Total Revenues 874,240 874,240 865,129 (9,111) EXPENDITURES Transit 1,061,550 1,061,550 919,763 141,787 Contingency 166,940 166,940 - 166,940 Total Expenditures 1,228,490 1,228,490 919,763 308,727 REVENUES OVER (UNDER) EXPENDITURES (354,250) (354,250) (54,634) 299,616 OTHER FINANCING SOURCES (USES) Transfers in 116,000 116,000 116,000 - Transfers out (6,510) (6,510) (6,510) - Proceeds from sale of assets - - 64 64 Total Other Financing Sources (Uses) 109,490 109,490 109,554 64 NET CHANGE IN FUND BALANCE (244,760) (244,760) 54,920 299,680 FUND BALANCE, beginning of year 244,760 244,760 80,081 (164,679) FUND BALANCE, end of year $ -$ 135,001-$ $ 135,001 - 67 - 101 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - BUILDING INSPECTION FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits781,590$ $ 781,590$ 823,240$ 41,650 Intergovernmental 730,940 730,940 175,619 (555,321) Miscellaneous 37,400 37,400 23,948 (13,452) Total Revenues 1,549,930 1,549,930 1,022,807 (527,123) EXPENDITURES Building inspection 1,503,480 1,503,480 882,011 621,469 Contingency 1,322,040 1,294,040 1,294,040- Total Expenditures 2,825,520 2,797,520 882,011 1,915,509 REVENUES OVER (UNDER) EXPENDITURES (1,275,590) (1,247,590) 140,796 1,388,386 OTHER FINANCING SOURCES (USES) Transfers out (6,480) (34,480) (34,480) - NET CHANGE IN FUND BALANCE (1,282,070) (1,282,070) 106,316 1,388,386 FUND BALANCE, beginning of year 1,282,070 1,282,070 1,063,670 (218,400) FUND BALANCE, end of year $ -$ 1,169,986-$ $ 1,169,986 - 68 - 102 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î ASSET FORFEITURE FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Miscellaneous320$ $ 320$ 331$ 11 EXPENDITURES Asset forfeiture 15,000 15,000 15,000- NET CHANGE IN FUND BALANCE (14,680) (14,680) 331 15,011 FUND BALANCE, beginning of year 14,680 14,680 14,801 121 FUND BALANCE, end of year$ -$ 15,132-$ $ 15,132 - 69 - 103 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - HOUSING REHABILITATION FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Miscellaneous24,030$ $ 2 4,030$ 58,543$ 3 4,513 EXPENDITURES Housing rehab 20,350 2 0,350 2 ,604 17,746 Contingency 357,480 357,480 357,480- Total Expenditures 377,830 3 77,830 2 ,604 375,226 NET CHANGE IN FUND BALANCE (353,800) (353,800) 5 5,939 409,739 FUND BALANCE, beginning of year 353,800 3 53,800 3 55,491 1,691 FUND BALANCE, end of year $ -$ 411,430-$ $ 411,430 - 70 - 104 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î LAVELLE BLACK TRUST FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Miscellaneous1,180$ 1,180$ 942$ (238)$ EXPENDITURES Materials and services20,000 20,000 2,660 17,340 Contingency8,920 8,920 - 8,920 Total Expenditures 28,92028,920 2,660 26,260 NET CHANGE IN FUND BALANCE (27,740)(27,740) (1,718) 26,022 FUND BALANCE, beginning of year 27,74027,740 36,889 9,149 FUND BALANCE, end of year$ -$ 35,171-$ $ 35,171 - 71 - 105 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î SPECIAL ASSESSMENT FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Miscellaneous3,740$ 3,740$ 11,158$ 7,418$ EXPENDITURES Contingency21,720 21,720 - 21,720 NET CHANGE IN FUND BALANCE (17,980)(17,980) 11,158 29,138 FUND BALANCE, beginning of year 17,98017,980 18,820 840 FUND BALANCE, end of year $ --$ 29,978$ 29,978$ - 72 - 106 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î STREET & STORM CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Intergovernmental1,600,000$ 1,600,000$ 1,000,000$ (600,000)$ EXPENDITURES Capital outlay 5,275,000 5,275,000 1,675,609 3,599,391 REVENUES OVER (UNDER) EXPENDITURES (3,675,000) (3,675,000) (675,609) 2,999,391 OTHER FINANCING SOURCES (USES) Transfers in 3,675,000 3,675,000 1,461,049 (2,213,951) NET CHANGE IN FUND BALANCE - 785,440- 785,440 FUND BALANCE, beginning of year - - - - FUND BALANCE, end of year$ -$ 785,440-$ $ 785,440 - 73 - 107 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î PARKS SDC FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits300,000$ $ 300,000$ 185,033$ (114,967) Miscellaneous 12,320 12,320 12,377 57 Total Revenues 312,320 312,320 197,410 (114,910) EXPENDITURES - - - - NET CHANGE IN FUND BALANCE 312,320 312,320 197,410 (114,910) FUND BALANCE, beginning of year 617,030 617,030 515,849 (101,181) FUND BALANCE, end of year$ 929,350$ 929,350$ 713,259$ (216,091) - 74 - 108 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î GENERAL CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Intergovernmental-$ -$ 647,528$ $ 647,528 Miscellaneous - 11,588- 11,588 Total Revenues - 659,116- 659,116 EXPENDITURES Capital outlay 2,466,020 2,466,020 1,221,540 1,244,480 NET CHANGE IN FUND BALANCE (2,466,020) (2,466,020) (562,424) 1,903,596 FUND BALANCE, beginning of year 2,466,020 2,466,020 817,529 (1,648,491) FUND BALANCE, end of year$ -$ 255,105-$ $ 255,105 - 75 - 109 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î STREET SDC FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits500,000$ 500,000$ 504,314$ 4,314$ Miscellaneous97,830 97,830 81,224 (16,606) Total Revenues 597,830 597,830 585,538 (12,292) OTHER FINANCING SOURCES (USES) Transfers out (1,500,000) (1,500,000) (500,000) 1,000,000 NET CHANGE IN FUND BALANCE (902,170) (902,170) 85,538 987,708 FUND BALANCE, beginning of year 3,745,400 3,745,400 3,737,442 - FUND BALANCE, end of year$ 2,843,230$ 2,843,230$ 3,822,980$ 987,708 - 76 - 110 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î STORM SDC FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits25,000$ $ 25,000$ 29,686$ 4,686 Miscellaneous 19,150 19,150 15,006 (4,144) Total Revenues 44,150 44,150 44,692 542 OTHER FINANCING SOURCES (USES) Transfers out (140,000) (140,000) - 140,000 NET CHANGE IN FUND BALANCE (95,850) (95,850) 44,692 140,542 FUND BALANCE, beginning of year 642,430 642,430 664,125 21,695 FUND BALANCE, end of year$ 546,580$ 546,580$ 708,817$ 162,237 - 77 - 111 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î EQUIPMENT REPLACEMENT FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Miscellaneous21,180$ 21,180$ 17,191$ (3,989)$ EXPENDITURES Capital outlay977,040 977,040 255,694 721,346 REVENUES OVER (UNDER) EXPENDITURES (955,860)(955,860) (238,503) 717,357 OTHER FINANCING SOURCES (USES) Transfers in150,000 150,000 150,000 - NET CHANGE IN FUND BALANCE (805,860) (805,860) (88,503) 717,357 FUND BALANCE, beginning of year 805,860 805,860 807,664 1,804 FUND BALANCE, end of year$ -$ 719,161-$ $ 719,161 - 78 - 112 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î G.O. DEBT SERVICE FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Taxes and assessments562,430$ 562,430$ 575,048$ 12,618$ Miscellaneous5,970 5,970 6,698 728 Total Revenues 568,400568,400 581,746 13,346 EXPENDITURES Debt service Principal511,000 511,000 511,000 - Interest59,200 59,200 57,515 1,685 Total Expenditures 570,200570,200 568,515 1,685 NET CHANGE IN FUND BALANCE (1,800)(1,800) 13,231 15,031 FUND BALANCE, beginning of year 1,800 1,800 19,373 17,573 FUND BALANCE, end of year$ -$ 32,604-$ $ 32,604 - 79 - 113 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE Î WATER OPERATIONS COMBINING YEAR ENDED JUNE 30, 2020 Water Capital Total Water WaterWater SDCConstructionOperations REVENUES Charges for services$ 3,990,442$ -$ -$ 3,990,442 Licenses and permits - 296,217 - 296,217 Miscellaneous 61,379 - - 61,379 Interest earnings 59,579 38,172 39,259 137,010 Total Revenues 4,111,400 334,38939,259 4,485,048 EXPENDITURES Water 2,429,005 - - 2,429,005 Debt service Principal 1,422,000 - - 1,422,000 Interest 202,948 - - 202,948 Capital outlay -- 178,082 178,082 Total Expenses -4,053,953 178,082 4,232,035 REVENUES OVER (UNDER) EXPENDITURES 334,38957,447 (138,823) 253,013 OTHER FINANCING SOURCES (USES) Transfers out (133,850) - - (133,850) (76,403) 334,389 (138,823) 119,163 CHANGE IN FUND BALANCE FUND BALANCE, beginning of year 2,523,1421,628,4301,805,444 5,957,016 FUND BALANCE, end of year$ 2,446,739$ 1,962,819$ 1,666,621 6,076,179 RECONCILIATION TO NET POSITION- GAAP BASIS Capital assets, net 10,808,166 OPEB asset 14,648 Deferred outflows related to PERS 588,543 Deferred outflows related to OPEB 9,728 Deferred charges on refunding 903 Compensated absences (42,048) Accrue d interest payable (14,424) Net pension liability (1,141,794) OPEB liability (67,269) Long-term debt (6,192,000) Deferredinflows related to PERS (201,774) Deferredinflows related to OPEB (14,168) NET POSITION - GAAP BASIS $ 9,824,690 - 80 - 114 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL - WATER FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Charges for services3,982,000$ $ 3,982,000$ 3,990,442$ 8,442 Miscellaneous 55,520 55,520 61,379 5,859 Interest earnings 65,480 65,480 59,579 (5,901) Total Revenues 4,103,000 4,103,000 4,111,400 8,400 EXPENDITURES Water 2,720,490 2,652,490 2,429,005 223,485 Debt service Principal 1,422,000 1,422,000 1,422,000 - Interest 202,950 202,950 202,948 2 Contingency 128,780 128,780 128,780- Total Expenditures 4,474,220 4,406,220 4,053,953 352,267 REVENUES OVER (UNDER) EXPENDITURES (371,220) (303,220) 57,447 360,667 OTHER FINANCING SOURCES (USES) Transfers out (65,850) (133,850) (133,850) - Proceeds from sale of assets 2,000 2,000 (2,000)- Total Other Financing Sources (Uses) (63,850) (131,850) (133,850) (2,000) NET CHANGE IN FUND BALANCE (435,070) (435,070) (76,403) 358,667 FUND BALANCE, beginning of year 2,400,000 2,400,0002,523,142123,142 FUND BALANCE, end of year$ 1,964,930$ 1,964,930$ 2,446,739$ 481,809 - 81 - 115 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - WATER SDC FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits200,000$ $ 200,000$ 296,217$ 96,217 Interest earnings 44,350 44,350 38,172 (6,178) Total Revenues 244,350 244,350 334,389 90,039 OTHER FINANCING SOURCES (USES) Transfers out (902,500) (902,500) 902,500- NET CHANGE IN FUND BALANCE (658,150) (658,150) 334,389 992,539 FUND BALANCE, beginning of year 1,512,850 1,512,850 1,628,430 115,580 f year$ 854,700$ 854,700$ 1,962,819$ 1,108,119 FUND BALANCE, end o - 82 - 116 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î WATER CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Interest earnings55,130$ 55,130$ 39,259$ (15,871)$ EXPENDITURES Capital outlay 2,786,3602,786,360 178,082 2,608,278 REVENUES OVER (UNDER) EXPENDITURES (2,731,230)(2,731,230) (138,823) 2,592,407 OTHER FINANCING SOURCES (USES) Transfers in902,500 902,500 - (902,500) NET CHANGE IN FUND BALANCE (1,828,730)(1,828,730) (138,823) 1,689,907 FUND BALANCE, beginning of year 1,828,730 1,828,730 1,805,444 (23,286) FUND BALANCE, end of year $ -$ 1,666,621-$ $ 1,666,621 - 83 - 117 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE Î SEWER OPERATIONS COMBINING YEAR ENDED JUNE 30, 2020 Sewer Capital Total Sewer SewerSewer SDCConstructionEliminationsOperations REVENUES Charges for services$ 8,122,190$ -$ -$ 8,122,190-$ Licenses and permits - 129,584 .- 129,584 Miscellaneous 9,623 - - - 9,623 Interest earnings 181,494 38,904 264,648 - 485,046 Total Revenues 8,313,307 168,488 264,648 8,746,443- EXPENDITURES Sewer -4,158,818 - - 4,158,818 Debt service Principal3,469,529 - - - 3,469,529 Interest999,334 - - - 999,334 Capital outlay -- 525,420 - 525,420 Total Expenses -8,627,681 525,420 - 9,153,101 REVENUES OVER (UNDER) EXPENDITURES 168,488(314,374) (260,772) - (406,658) OTHER FINANCING SOURCES (USES) Transfers in - - 144,516 (144,516) - Transfers out (355,115) (80,000) 144,516- (290,599) Total Other Financing Sources (Uses) (355,115) (80,000) 144,516 - (290,599) CHANGE IN FUND BALANCE (669,489) 88,488 (116,256) - (697,257) FUND BALANCE, beginning of year 8,672,8671,700,42511,947,434 22,320,726- FUND BALANCE, end of year$ 1,788,9138,003,378$ 11,831,178$ -$ 21,623,469 RECONCILIATION TO NET POSITION- GAAP BASIS Capital assets, net 43,068,715 OPEB asset 19,919 Deferred outflows related to PERS 1,050,728 Deferred outflows related to OPEB 12,576 Compensated absences (25,321) d interest payable (257,144) Accrue Net pension liability (1,875,454) OPEB liability (83,885) Long-term debt (11,074,542) Bond premiums (1,519,697) Deferred inflows related to PERS (262,769) Deferred inflows related to OPEB (19,886) NET POSITION - GAAP BASIS$ 50,656,709 - 84 - 118 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - SEWER FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Charges for services8,370,000$ 8,370,000$ 8,122,190$ (247,810)$ Miscellaneous3,270 3,270 9,623 6,353 Interest earnings271,730 271,730 181,494 (90,236) Total Revenues 8,645,0008,645,000 8,313,307 (331,693) EXPENDITURES Sewer 4,284,0604,383,060 4,158,818 125,242 Debt service Principal3,469,600 3,469,600 3,469,529 71 Interest999,400 999,400 999,334 66 Contingency 798,660 798,660 798,660- Total Expenditures 9,650,720 9,551,720 8,627,681 924,039 REVENUES OVER (UNDER) EXPENDITURES (1,005,720) (906,720) (314,374) 592,346 OTHER FINANCING SOURCES (USES) Transfers out (1,046,200) (1,145,200) (355,115) 790,085 NET CHANGE IN FUND BALANCE (2,051,920) (2,051,920) (669,489) 1,382,431 FUND BALANCE, beginning of year 8,989,000 8,989,0008,672,867(316,133) FUND BALANCE, end of year$ 6,937,080$ 6,937,080$ 8,003,378$ 1,066,298 - 85 - 119 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - SEWER SDC FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Licenses and permits300,000$ 300,000$ 129,584$ (170,416)$ Interest earnings46,140 46,140 38,904 (7,236) Total Revenues 346,140346,140 168,488 (177,652) OTHER FINANCING SOURCES (USES) Transfers out(2,107,410) (2,107,410) (80,000) 2,027,410 NET CHANGE IN FUND BALANCE (1,761,270)(1,761,270) 88,488 1,849,758 FUND BALANCE, beginning of year 1,761,2701,761,270 1,700,425$ (60,845) FUND BALANCE, end of year $ --$ 1,788,913$ 1,788,913$ - 86 - 120 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î SEWER CAPITAL CONSTRUCTION FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Interest earnings354,250$ 354,250$ 264,648$ (89,602)$ EXPENDITURES Capital outlay7,830,500 7,830,500 525,420 7,305,080 REVENUES OVER (UNDER) EXPENDITURES (7,476,250)(7,476,250) (260,772) 7,215,829 OTHER FINANCING SOURCES (USES) Transfers in2,990,600 2,990,600 144,516 (2,846,084) NET CHANGE IN FUND BALANCE (4,485,650)(4,485,650) (116,256) 4,369,745 FUND BALANCE, beginning of year 11,800,52011,800,520 11,947,434 146,914 FUND BALANCE, end of year$ 7,314,8707,314,870$ 11,831,178$ 4,516,659$ - 87 - 121 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF FUND NET POSITION - INTERNAL SERVICE FUNDS JUNE 30, 2020 Information TechnologyInsuranceTotal ASSETS Current Assets Cash and investments434,461$ 693,679$ 1,128,140$ Accounts receivable9,724 - 9,724 Total Current Assets 693,679444,185 1,137,864 Noncurrent Assets OPEB Asset4,389 649 5,038 Total Assets 694,328448,574 1,142,902 DEFERRED OUTFLOWS Deferred outflows related to PERS 263,282 35,989 299,271 Deferred outflows related to OPEB 2,782 382 3,164 266,064 36,371 302,435 LIABILITIES Current Liabilities Accounts payable 7,448 2,024 9,472 Due to other funds 17,511 2,637 20,148 Accrued compensated absences 19,188 - 19,188 Total Current Liabilities 44,147 4,661 48,808 Noncurrent Liabilities Accrued compensated absences 28,782 - 28,782 Net pension liability 61,274466,059 527,333 OPEB liability 2,57219,081 21,653 Total Noncurrent Liabilities 63,846513,922 577,768 Total Liabilities 68,507558,069 626,576 DEFERRED INFLOWS Deferred inflows related to PERS 54,205 7,244 61,449 Deferred inflows related to OPEB 4,010 551 4,561 58,215 7,795 66,010 NET POSITION Unrestricted$ 98,354$ 654,397$ 752,751 - 88 - 122 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION - INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2020 Information TechnologyInsuranceTotal OPERATING REVENUES Charges for services1,133,446$ 755,000$ 1,888,446$ Miscellaneous- 2,287 2,287 Total Operating Revenues 1,133,446 757,287 1,890,733 OPERATING EXPENSES Personal services 400,109 60,806 460,915 Materials and services 553,637 650,644 1,204,281 Total Expenses 953,746 711,450 1,665,196 OPERATING INCOME 179,700 45,837 225,537 NONOPERATING REVENUES (EXPENSES) Investment revenue 6,943 7,658 14,601 NET INCOME BEFORE CONTRIBUTIONS AND TRANSFERS 186,643 53,495 240,138 Transfers out (25,840) (3,690) (29,530) Non-cash transfers out (62,939) - (62,939) CHANGE IN NET POSITION 97,864 49,805 147,669 NET POSITION, beginning of year 604,592605,082490 NET POSITION, end of year$ 98,354$ 654,397$ 752,751 - 89 - 123 CITY OF WOODBURN, OREGON COMBINING STATEMENT OF CASH FLOWS - INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2020 Information TechnologyInsuranceTotals CASH FLOWS FROM OPERATING ACTIVITIES Collected from customers$ 1,137,447$ 757,287$ 1,894,734 Paid to suppliers (948,219) (653,399) (1,601,618) Paid to employees (47,548) (69,153) (116,701) Net Cash Provided by Operating Activities 141,680 34,735 176,415 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Received from (paid to) other funds 17,511 2,637 20,148 Transfers out (25,840) (3,690) (29,530) Net Cash Used in Non-Capital Financing Activities (8,329) (1,053) (9,382) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets (62,939) (62,939)- CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 6,943 7,658 14,601 Increase in Cash and Investments 77,355 41,340 118,695 CASH AND INVESTMENTS, Beginning of year 357,106 652,339 1,009,445 CASH AND INVESTMENTS, End of year$ 434,461$ 693,679$ 1,128,140 RECONCILIATION OF OPERATING INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES Operating income 179,700$ 45,837$ 225,537$ Change in assets and liabilities Accounts receivable4,000 - 4,000 Deferred outflows(113,682) (18,102) (131,784) OPEB asset(1,911) (304) (2,215) Compensated absences payable4,875 - 4,875 Accounts payable and accrued liabilities5,528 (2,755) 2,773 Net pension liability82,147 13,081 95,228 OPEB liability1,016 162 1,178 Deferred inflows(19,993) (3,184) (23,177) Net Cash Provided by Operating Activities$ 34,735141,680$ 176,415$ Noncash Transactions $ -(62,939)$ (62,939)$ Transfer of capital assets - 90 - 124 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î INFORMATION TECHNOLOGY FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Charges for services1,124,230$ $ 1,124,230$ 1,133,446$ 9,216 Miscellaneous 6,570 6,570 (6,570)- Interest earnings 8,200 8,200 6,943 (1,257) Total Revenues 1,139,000 1,139,000 1,140,389 1,389 EXPENDITURES Information technology 1,104,720 1,104,720 1,064,233 40,487 Contingency 193,440 172,440 172,440- Total Expenditures 1,298,160 1,277,160 1,064,233 212,927 REVENUES OVER (UNDER) EXPENDITURES (159,160) (138,160) 76,156 214,316 OTHER FINANCING SOURCES (USES) Transfers out (4,840) (25,840) (25,840) - NET CHANGE IN FUND BALANCE (164,000) (164,000) 50,316 214,316 FUND BALANCE, beginning of year 334,000 334,000368,91034,910 FUND BALANCE, end of year$ 170,000$ 170,000419,226249,226$ RECONCILIATION TO NET POSITION - GAAP BASIS OPEB asset 4,389 Deferred outflows related to PERS 263,282 Deferred outflows related to OPEB 2,782 Accrued compensated absences (47,970) Net pension liability (466,059) OPEB liability (19,081) Deferred inflows related to PERS (54,205) Deferred inflows related to OPEB (4,010) NET POSITION, GAAP BASIS$ 98,354 - 91 - 125 CITY OF WOODBURN, OREGON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Î INSURANCE FUND YEAR ENDED JUNE 30, 2020 Budget Amounts Variance OriginalFinalActual REVENUES Charges for services755,000$ $ 755,000$ 755,000$ - Miscellaneous 4,490 4,490 2,287 (2,203) Interest earnings 7,510 7,510 7,658 148 Total Revenues 767,000 767,000 764,945 (2,055) EXPENDITURES Insurance 868,340 868,340 719,797 148,543 Contingency 547,970 544,970 544,970- Total Expenditures 1,416,310 1,413,310 719,797 693,513 REVENUES OVER (UNDER) EXPENDITURES (649,310) (646,310) 45,148 691,458 OTHER FINANCING SOURCES (USES) Transfers out (690) (3,690) (3,690) - NET CHANGE IN FUND BALANCE (650,000) (650,000) 41,458 691,458 FUND BALANCE, beginning of year 650,000 650,000 647,560 (2,440) FUND BALANCE, end of year$ -$ 689,018- $ 689,018 RECONCILIATION TO NET POSITION - GAAP BASIS OPEB asset 649 Deferred outflows related to PERS 35,989 Deferred outflows related to OPEB 382 Net pension liability (61,274) OPEB liability (2,572) Deferred inflows related to PERS (7,244) Deferred inflows related to OPEB (551) NET POSITION, GAAP BASIS$ 654,397 - 92 - 126 127 STATISTICAL SECTION financial e changed tanding the ion says about and the cityÓs x. in which the CityÓs rformance and well-being hav other supplementary informat rrent level of outstanding debt venue source, the property ta tailed information as a context for unders nd the environment with how the CityÓs financial report relates to the services the how the CityÓs financial pe most significant local re 128 upplementary information, and e affordability of the CityÓs cu STATISTICAL SECTION indicators to help the reader understa help the reader understand cture data to help the reader understand the reader assess the cityÓs e disclosures, required s tivities it performs. Unless otherwise noted, the information in these schedules is derived from the annual financial reports for the relevant year. This part of the City of WoodburnÓs comprehensive annual financial report presents deinformation in the financial statements, notthe CityÓs overall financial health. CONTENTS Financial Trends These schedules contain trend information toover time. Revenue Capacity These schedules contain information to help Debt Capacity These schedules present information to help the reader assess thability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economicactivities take place. Operating Information These schedules contain service and infrastruCity provides and the ac SOURCES: 129 FINANCIAL TRENDS 130 - 93 - CITY OF WOODBURN, OREGON NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) 131 - 94 - CITY OF WOODBURN, OREGON CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) 132 - 95 - CITY OF WOODBURN, OREGON CHANGES IN NET POSITION (Continued) LAST TEN FISCAL YEARS (accrual basis of accounting) 133 - 96 - CITY OF WOODBURN, OREGON FUND BALANCE OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) 134 - 97 - CITY OF WOODBURN, OREGON CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (accrual basis of accounting) 135 REVENUE CAPACITY 136 - 98 - CITY OF WOODBURN, OREGON MARKET AND ASSESSED VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS 137 - 99 - CITY OF WOODBURN, OREGON DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS 138 - 100 - CITY OF WOODBURN, OREGON PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO 139 - 101 - CITY OF WOODBURN, OREGON PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS 140 DEBT CAPACITY 141 - 102 - CITY OF WOODBURN, OREGON RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS 142 - 103 - CITY OF WOODBURN, OREGON RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS 143 - 104 - CITY OF WOODBURN, OREGON DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVIITES DEBT JUNE 30, 2020 144 - 105 - CITY OF WOODBURN, OREGON LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS 145 - 106 - CITY OF WOODBURN, OREGON PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS 146 DEMOGRAPHIC AND ECONOMIC INFORMATION 147 - 107 - CITY OF WOODBURN, OREGON DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS 148 - 108 - CITY OF WOODBURN, OREGON PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO 149 OPERATING INFORMATION 150 - 109 - CITY OF WOODBURN, OREGON FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 151 - 110 - CITY OF WOODBURN, OREGON OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS 152 - 111 - CITY OF WOODBURN, OREGON CAPITAL ASSET STATISTICS BY FUNCTION LAST TEN FISCAL YEARS 153 OTHER INFORMATION 154 - 112 - CITY OF WOODBURN, OREGON WATER SYSTEM COVERAGE CALCULATION LAST TEN FISCAL YEARS 155 - 113 - CITY OF WOODBURN, OREGON MAJOR WATER SYSTEM CUSTOMERS JUNE 30, 2020 156 - 114 - CITY OF WOODBURN, OREGON SEWER SYSTEM COVERAGE CALCULATION LAST TEN FISCAL YEARS 157 - 115 - CITY OF WOODBURN, OREGON MAJOR SEWER SYSTEM CUSTOMERS JUNE 30, 2020 COMPLIANCE SECTION 158 INDEPENDENT AUDITORÓS 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, 2020, and have issued our report thereon dated November 25, 2020. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of WoodburnÓs 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 Î no money was collected or received by elected officials. In connection with our testing nothing came to our attention that caused us to believe the City was not in substantial compliance with certain provisions of laws, regulations, contracts, and grants, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules 162-10-000 through 162-10-320 of the Minimum Standards for Audits of Oregon Municipal Corporations except expenditures in excess of appropriations as noted in the footnotes to the financial statements. - 116 - 159 Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the CityÓs 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 CityÓs internal control. Accordingly, we do not express an opinion on the effectiveness of the CityÓs 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: Katherine R. Wilson, A Shareholder November 25, 2020 - 117 - 160 Woodburn Urban Renewal Agency (AComponentUnitoftheCityof Woodburn,Oregon) Comprehensive Annual Financial Report For the year Ended June 30, 2020 161 WOODBURN URBAN RENEWAL AGENCY (A COMPONENT UNIT OF THE CITY OF WOODBURN, OREGON) ANNUAL FINANCIAL REPORT Year Ended June 30, 2020 162 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) TABLE OF CONTENTS JUNE 30, 2020 Page INTRODUCTORY SECTION FINANCIAL IMPACT REPORT i-v AGENCY OFFICIALS vi FINANCIAL SECTION INDEPENDENT AUDITORÓS REPORT 1-2 MANAGEMENTÓS DISCUSSION AND ANALYSIS 3-6 BASIC FINANCIAL STATEMENTS GovernmentÎwide Financial Statement Statement of Net Position Î Governmental Activities 7 Statement of Activities Î Governmental Activities 8 Fund Financial Statements Balance Sheet Î Governmental Fund 9 Statement of Revenues, Expenditures and Changes in Fund Balance Î Governmental Fund 10 Notes to Basic Financial Statements 11-17 REQUIRED SUPPLEMENTARY INFORMATION Schedules of Revenues, Expenditures and Changes in Fund Balance Î Budget and Actual Urban Renewal Fund 18 COMPLIANCE SECTION Independent AuditorÓs Report Required by State Regulations 19-20 163 INTRODUCTORY SECTION 164 Woodburn Urban Renewal Agency Financial Impact Report Fiscal Year Ended June 30, 2020 )­³±®£´¢³¨®­ Urban renewal agencies are required to prepare an annual report for the governing body and the public in accordance with Oregon Revised Statute 457.460 (ORS 457.460). The report includes a financial summary of the preceding year and the budget for the new fiscal year. It also includes an analysis of the financial impact of carrying out the urban plan on the tax collections for all taxing districts. The following elements must be included as part of the financial summary: the amount of money received during the preceding fiscal year; the purposes and amounts for which any money received were expended during the preceding fiscal year; an estimate of moneys to be received during the current fiscal year; a budget setting forth the purposes and estimated amounts for moneys that are to be expended during the current fiscal year; an analysis of the impact, if any, of carrying out the urban renewal plan on the tax collections for the preceding year. 4§¤5±¡ ­2¤­¤¶ «#®­¢¤¯³ Urban renewal is a process authorized by Oregon law (ORS 457) to finance improvements in those neighborhoods and districts in need of revitalization with the intent to improve underdeveloped areas or areas that have declined resulting in stagnated private development or investment. More specifically, urban renewal is a funding method used to economically revitalize areas of ÐblightÑ through public investments that stimulate private development. Examples of blight include buildings that are unsafe or unfit for occupancy, inadequately maintained streets, or areas with environmental impacts. Due to these ÐblightedÑ conditions, private developers, property owners or business owners are unable to generate sufficient returns on potential development in the area. As a result, private investment stalls and the blighted conditions remain. The types of urban renewal activities undertaken generally include development of infrastructure and public amenities (i.e., streetscape and infrastructure improvements, lighting, public open spaces, building improvements, parks, etc.) and with these publicly funded efforts, investment becomes achievable for private developers. Urban renewal allows a city to increase the level of public investment by providing funds that can be used to match regional, state or federal funds for specific projects. The goal is encourage private sector investment for the majority of the redevelopment funding by selectively investing over a period of time. With the initial commitment of public funding the plan can achieve the goals to construct necessary streetscape infrastructure improvements and provide public amenities and to attract private investment. - i - 165 Woodburn Urban Renewal Agency Financial Impact Report Fiscal Year Ended June 30, 2020 4 ·)­¢±¤¬¤­³&¨­ ­¢¨­¦ The major source of funding for urban renewal projects has been tax increment financing. Once an urban renewal district is established, the tax valuation for the district is ÐfrozenÑ. As properties appreciate, the increase in taxes (the ÐincrementÑ) generated above the frozen base are used to pay for the outlay or debt on specific projects within the urban renewal plan. This tax increment financing identifies an area where property values are not rising as rapidly as the rest of the community; drawing a line around it; planning for major public improvements like roadways, street lighting, parks, and other amenities; securing funds to finance the public costs; implementing the plans for public improvement; and encouraging private investment in the area. Then, as property values rise and bring an increase in tax revenues, that increase sets the limit for the property taxes levied to pay off urban renewal bonds. During the 1990Ós, three Ballot Measures: Measure 5 (1990), Measure 47 (1996), and Measure 50 (1997) made significant changes to OregonÓs system of property taxation influencing urban renewal programs and tax increment revenue calculations. Those provisions provide the basic framework for revenue calculations in this report. To determine the amount of the taxes levied, the total assessed value within each urban renewal area is segregated by the County Assessor into two parts: (a) the total taxable assessed value in the district at the time the Urban Renewal Plan was adopted (the base or ÐfrozenÑ value); and (b) the difference between the frozen base value and the current total assessed value (the incremental value or ÐexcessÑ). The urban renewal agency is entitled to the amount of property taxes levied on the increase in property values within the urban renewal area. This revenue is used to pay for the projects designated in the Urban Renewal Plan or to repay indebtedness incurred in carrying out the projects. - ii - 166 Woodburn Urban Renewal Agency Financial Impact Report Fiscal Year Ended June 30, 2020 7®®£¡´±­Ȍ²5±¡ ­2¤­¤¶ «0« ­ The City of Woodburn established the Woodburn Urban Renewal District pursuant to Oregon Revised Statutes (ORS) Chapter 457, the Oregon Constitution, and all applicable laws and ordinances on March 13, 2001, upon adoption of Ordinance 2283. On August 13, 2001, the City adopted Ordinance 2298 establishing the maximum indebtedness of the Plan of $29.3 million. The CityÓs urban renewal redevelopment area consists of approximately 260 acres, all within the Woodburn city limits. In general, the area includes the historic downtown, Front Street to Highway 214 and Highway 214 to redevelopment sites on Stacy Allison, Young Street to Highway 99 and Highway 99 to Highway 211. The WoodburnÓs urban renewal is governed by the Urban Renewal Agency, which consists of the CityÓs Mayor and City Council members. The Urban Renewal Plan states the following overall renewal goals: Public improvements Redevelopment through new construction Preservation, rehabilitation, development and redevelopment Property acquisition and disposition Plan administration The Core Values created by the Urban Renewal Agency are as follows: Ensure positive return on investment Cultivate resources and investment in underutilized or blighted areas Job creation Economic vitality Establish downtown as a destination Historic preservation and cultural interpretation 5±¡ ­2¤­¤¶ «)¬¯ ¢³ The Woodburn Urban Renewal program has played a key role in revitalization. Through public investments and business development partnerships, urban renewal will continue to be a catalyst for making Woodburn a more economically vital, livable and sustainable place. The number of significant public investments include Downtown Plaza, Historic Locomotive, Front Street, Fire Station, First Street, Downtown Alleyways, Downtown Public Restroom, Bungalow Theater, and Building Improvement Grant/Loan Program. - iii - 167 Woodburn Urban Renewal Agency Financial Impact Report Fiscal Year Ended June 30, 2020 Major Project Costs by Year Budget Actual Actual Actual Capital Outlay Project Description2017-18 2018-19 2019-20 2020-21 Construct Downtown Public Restroom150,515 Pix Building311,954 Land Purchase43,172 846 First Street Design/Reconstruction 2,549,51296,303 2,059,662 74,500 Alleyway Beautification 36,821 1 6,785 2,102,660 17,500 Historic City Hall Building 200,000 Historic Locomotive Shelter 50,000 First & Cleveland Public Parking Lot 58,000 Downtown Plaza Water Fountain Rehab 20,000 Bungalow Theater/Museum Restoration 29,923 303,845 114,140 200,000 Public Arts and Mural Program 30,632 4 5,387 100,000 313,562 3,255,900 4,322,695 720,000 %¥¥¤¢³®¥5±¡ ­2¤­¤¶ «®­4 ·¨­¦$¨²³±¨¢³² Carrying out an urban renewal plan has an effect on the amount of property taxes received by the overlapping taxing districts of WoodburnÓs urban renewal areas. A portion of property taxes that were to be received by the taxing bodies that levy property taxes within WoodburnÓs urban renewal areas are redirected to WoodburnÓs Urban Renewal Agency for the agencyÓs projects and programs. Passage of Ballot Measure 50 (Article XI, Section 11 of the Oregon Constitution) resulted in converting most property taxes (i.e., tax bases) from a levy-based system to a rate-based system. Schedules provided later in this Report reflect the ÐpostÑ Measure 50 financial impact by taxing district for WoodburnÓs Urban Renewal. The following schedules show the impact of the division of taxes on the overlapping taxing jurisdictions for the prior fiscal year and the current fiscal year. The schedules include each taxing entityÓs: Permanent taxing rate is the levy imposed on every thousand dollars of assessed property value Adjusted district rate is the rate that the district will receive net of the URA calculation URA division of tax rate is the rate redirected from the taxing entity to the urban renewal agency Shared value is the common value of the underlying properties within the URA and the overlapping taxing entities Calculated property taxes from each taxing entity that is redirected to the urban renewal agency - iv - 168 Woodburn Urban Renewal Agency Financial Impact Report Fiscal Year Ended June 30, 2020 Woodburn Urban Renewal Agency (URA) Financial Impact of the Division of Taxes on Overlapping Taxing Jurisdictions Fiscal Year Ending June 30, 2020 AdjustedURADistrict Division District Division ofShared of Taxing District Permanent Rate Rate Tax RateValueTax Marion County3.0252$ 2.93590.08931,701,142,608151,946$ City of Woodburn6.05 5.870.181,701,142,608304,042 Woodburn SD4.52 4.390.131,701,142,608227,261 Woodburn FD1.60 1.550.051,701,142,60880,408 Willamette Regional ESD0.30 0.290.011,701,142,60814,902 Chemeketa Community College0.63 0.610.021,701,142,60831,437 Regional Library0.08 0.080.001,701,142,6084,109 Marion Soil & Water0.05 0.050.001,148,455,4411,248 MC & 4-H Extension Service0.05 0.04860.00141,701,142,6082,511 Totals16.309$ 15.828$ 0.481$ 817,863 % of Total Permanent Rate2.95% Less: Truncation Loss - Less: Compression Loss - Total URA Levy$ 817,863 - v - 169 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) AGENCY OFFICIALS JUNE 30, 2020 MAYOR AND COUNCIL MEMBERS Name Term Expires Mayor Eric Swenson December 31, 2020 Council Members Debbie Cabrales December 31, 2020 Robert Carney December 31, 2022 Mary Beth Cornwell December 31, 2022 Lisa Ellsworth December 31, 2020 Eric Morris December 31, 2020 Sharon Schaub December 31, 2022 The above individuals may be contacted at the address below. Staff Scott Derickson, City Administrator N. Robert Shields, City Attorney Anthony Turley, Finance Director City of Woodburn, Oregon 270 Montgomery Street Woodburn, Oregon 97071 - vi - 170 FINANCIAL SECTION 171 INDEPENDENT AUDITORÓS REPORT Board of Directors 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 Woodburn Urban Renewal Agency (a component unit of the City of Woodburn, Oregon) as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the AgencyÓs basic financial statements as listed in the table of contents. ManagementÓs 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. AuditorÓs 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 auditorÓs 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 AgencyÓs 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 AgencyÓs 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. 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 Woodburn Urban Renewal Agency, as of June 30, 2020, 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. - 1 - 172 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that managementÓs discussion and analysis (MD&A) and the schedule of revenues, expenditures and changes in fund balances - budget to actual (budgetary schedule) 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 managementÓs 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 AgencyÓs 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 subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the budgetary schedule is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Report on Other Legal and Regulatory Requirements In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have issued our report dated November 25, 2020, on our consideration of the AgencyÓs compliance with certain provisions of laws and regulations, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS By: Katherine R. Wilson, A Shareholder November 25, 2020 - 2 - 173 MANAGEMENTÓS DISCUSSSION AND ANALYSIS 174 WOODBURN URBAN RENEWAL AGENCY MANAGEMENTÓS DISCUSSION AND ANALYSIS As management of the Woodburn Urban Renewal Agency (the Agency), we offer readers of the AgencyÓs basic financial statements this narrative overview and analysis of the financial activities of the Agency as of June 30, 2020 and for the fiscal year then ended. We encourage readers to consider the information presented here in conjunction with the AgencyÓs basic financial statements in the financial section of this report. Financial Highlights Following are the financial highlights of the Agency for the year ended June 30: June 30, 20202019Change Net position (deficit)$(1,256,224) $(300,189) $(956,035) Change in net position (956,035) (2,629,624) 1,673,589 Overview of the Basic Financial Statements The AgencyÓs 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 AgencyÓs 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 AgencyÓs 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 AgencyÓs 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. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 11-17. - 3 - 175 Required Supplementary Information The required supplementary information includes the schedule of revenues, expenditures, and changes in fund balances Î budget and actual for the Urban Renewal fund. Statement of Net Position The following table reflects the condensed statement of net position compared to the prior year. June 30, 20202019 ASSETS Cash and investments$1,614,325 $3,804,747 Accounts receivable - 53,301 Property tax receivable 30,517 30,565 Total Assets 1,644,842 3,888,613 LIABILITIES Other liabilities261,0661,288,802 Long-term liabilities2,640,0002,900,000 Total Liabilities 2,901,066 4,188,802 NET POSITION (DEFICIT) Unrestricted$(1,256,224) $(300,189) The AgencyÓs liabilities exceeded assets by $1,256,224. The Agency has recorded the following assets as of June 30, 2020: Cash and investments of $1,614,325 and property taxes receivable of $30,517. Liabilities are comprised of accounts payable and amounts due to the City for personnel and other costs of $261,066 and long-term debt of $2,640,000 at June 30, 2020. - 4 - 176 Statement of Activities The following table reflects the condensed statement of net position compared to the prior year. Year Ended June 30, 20202019 REVENUES Property taxes777,541748,476$ Intergovernmental1,040,152117,078 Miscellaneous42,547 64,074 Total Revenues 1,860,240 929,628 EXPENSES Economic development369,189304,983 Interest on long-term debt74,975 - Total Expenses 444,164 304,983 REVENUES OVER EXPENSES 1,416,076 624,645 TRANSFERS TO CITY OF WOODBURN (2,372,111) (3,254,269) CHANGE IN NET POSITION (956,035) (2,629,624) NET POSITION (DEFICIT), beginning of year (300,189) 2,329,435 NET POSITION (DEFICIT), end of year $ (1,256,224)$ (300,189) Property taxes totaling $777,541 comprise 42% of the AgencyÓs revenue and are derived from the tax increment assessment within the AgencyÓs boundaries. The remaining revenue is comprised of $1,040,152 in intergovernmental revenue and $42,547 in interest earnings. Economic development expenses for the year ended June 30, 2020 consisted of $369,189 in reimbursements for materials and services and $74,975 in interest on long- term debt. Financial Analysis of the Fund The Agency maintains a single fund used to account for activities supported by the property tax increment. As of June 30, 2020 the AgencyÓs governmental fund reported a fund balance of $1,354,312 or a decrease of $1,217,695 over the prior year. This is due mainly to urban renewal capital projects and debt service. Budgetary Highlights The budget was amended to decrease contingency and increase transfers out in the amount of $10,000. The changes were amended through a supplemental budget. - 5 - 177 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). At June 30, 2020, the Agency had $2,640,000 in long-term debt outstanding compared with $2,900,000 in the prior year. The decrease is due to scheduled debt repayment. June 30, 20202019 Note payable2,640,000$ $ 2,900,000 Additional information about the AgencyÓs debt is presented on page 16 in the notes to the financial statements. Financial Contact The AgencyÓs financial statements are designed to present users (citizens, taxpayers, customers, investors, and creditors) with a general overview of the AgencyÓs finances and to demonstrate the AgencyÓs accountability. Any questions or request for additional information should be directed to the City of Woodburn at 270 Montgomery Street, Woodburn, Oregon. - 6 - 178 BASIC FINANCIAL STATEMENTS 179 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) STATEMENT OF NET POSITION Î GOVERNMENTAL ACTIVITIES JUNE 30, 2020 ASSETS Current assets Cash and investments$1,614,325 Property taxes receivable 30,517 Total Assets 1,644,842 LIABILITIES Current liabilities Accounts payable 261,066 Noncurrent liabilities - long-term debt Due within one year262,000 Due in more than one year2,378,000 Total Liabilities 2,901,066 NET POSITION (DEFICIT) Unrestricted$(1,256,224) The accompanying notes are an integral part of the financial statements. - 7 - 180 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) STATEMENT OF ACTIVITIES Î GOVERNMENTAL ACTIVITIES YEAR ENDED JUNE 30, 2020 REVENUES Taxes and assessments$777,541 Intergovernmental1,040,152 Miscellaneous 42,547 Total Revenues 1,860,240 EXPENSES Economic development369,189 Interest on long-term debt74,975 Total Expenses 444,164 REVENUES OVER EXPENSES 1,416,076 TRANSFER TO CITY OF WOODBURN (2,372,111) CHANGE IN NET POSITION (956,035) NET POSITION, beginning of year (300,189) NET POSITION (DEFICIT), end of year $(1,256,224) The accompanying notes are an integral part of the financial statements. - 8 - 181 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) BALANCE SHEET Î GOVERNMENTAL FUND JUNE 30, 2020 Urban Renewal Fund ASSETS Cash and investments $ 1,614,325 Property taxes receivable30,517 Total Assets $ 1,644,842 LIABILITIES, DEFERRED INFLOWS, AND FUND BALANCE Liabilities Accounts payable $ 261,066 Deferred Inflows Unavailable revenue29,464 Fund Balance Restricted for economic development1,354,312 Total Liabilities, Deferred Inflows, and Fund Balance $ 1,644,842 RECONCILIATION TO THE STATEMENT OF NET POSITION Fund Balance$1,354,312 The Statement of Net Position reports receivables at their net realizable value. However, receivables not available to pay for current-period expenditures are reported as unavailable revenue in governmental funds. 29,464 All liabilities are reported in the Statement of Net Position. However, if they are not due and payable in the current period, they are not recorded in governmental funds. Long-term debt (2,640,000) Net Position (Deficit) of Governmental Activities$(1,256,224) The accompanying notes are an integral part of the financial statements. - 9 - 182 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Î GOVERNMENTAL FUND YEAR ENDED JUNE 30, 2020 Urban Renewal Fund REVENUES Taxes and assessments$775,881 Intergovernmental1,040,152 Miscellaneous42,547 Total Revenues 1,858,580 EXPENDITURES Current Community development369,189 Debt service Principal260,000 Interest74,975 Capital outlay2,359,821 Total Expenditures 3,063,985 REVENUES OVER (UNDER) EXPENDITURES (1,205,405) OTHER FINANCING SOURCES (USES) Transfers out (12,290) NET CHANGE IN FUND BALANCE (1,217,695) FUND BALANCE, Beginning of year 2,572,007 FUND BALANCE, End of year $1,354,312 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Net Change in Fund Balance$(1,217,695) 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 1,660 Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of long-term debt obligation principal is an expenditure in the governmental funds, but the repayment reduces long-term obligations in the statement of net position. Principal payments on long-term debt260,000 Change in Net Position$(956,035) The accompanying notes are an integral part of the financial statements. - 10 - 183 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2020 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity The Woodburn Urban Renewal Agency (the Agency) was created to provide for rehabilitation of blighted and deteriorated areas within the CityÓs 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 CityÓs mayor and other council members and is included as a component unit in the CityÓs financial statements. Urban Renewal Areas Tax Allocation bonds for urban renewal plan areas are authorized by state law to 1) ÐÈeliminate 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.Ñ 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 ÐfreezesÑ the assessed value of property within the urban renewal area. This is referred to as the ÐfrozenÑ value. Any increase in assessed value above the frozen value is called the Ðincremental value.Ñ 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 AgencyÓs 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, if any. Net position, representing assets less liabilities, is shown as unrestricted. - 11 - 184 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 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 AgencyÓs fund. The single major fund, Urban Renewal fund, accounts for general administration of the AgencyÓs 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 fundÓs 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 AgencyÓs 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 ÐreservedÑ during the adoption of the annual budget. - 12 - 185 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 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 AgencyÓs 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, bankersÓ acceptances, general obligations of U.S. Government and its agencies, certain bonded obligations of Oregon Municipalities and the State TreasurerÓs 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 AgencyÓs property tax collection records show that most of the property taxes due are collected during the year of levy and delinquent taxes are collected in the next few years. Property tax receivables not available are recognized as deferred inflows in the governmental funds balance sheet. Long-term Debt Long-term debt is reported in the Statement of Net Position as noncurrent liabilities. The governmental fund financial statements do not report long-term debt because it does not require the use of current financial resources. Budget and Budgetary Accounting The Agency budgets in accordance with requirements of State law. Annual appropriated budgets are adopted in accordance with the modified accrual basis of accounting. - 13 - 186 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Budget and Budgetary Accounting (Continued) 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 AgencyÓs Board by resolution prior to the beginning of the AgencyÓs 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. 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 AgencyÓs 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 CityÓs financial statements. Other disclosures about the CityÓs 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. Investments The State Treasurer of the State of Oregon maintains the Oregon Short Term Fund, of which the Local Government Investment Pool is part. Participation by local governments is voluntary. The State of Oregon investment policies are governed by statute and the Oregon Investment Council. In accordance with Oregon Statutes, the investment funds are invested as a prudent investor would do, exercising reasonable care, skill and caution. The Oregon Short Term Fund is the LGIP for local governments and was established by the State Treasurer. It was created to meet the financial and administrative responsibilities of federal arbitrage regulations. The investments are regulated by the Oregon Short Term Fund Board and approved by the Oregon Investment Council (ORS 294.805 to 294.895). The carrying value of the City's position in the pool is the same as the value of the pool shares; fair value was 100.88% of the value of the pool shares as of June 30, 2020. 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. - 14 - 187 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 CASH AND INVESTMENTS (Continued) Interest Rate Risk In accordance with its investment policy, the City manages its exposure to declines in fair value of its investments by limiting the weighted average maturity of its investments. Custodial Credit Risk - Deposits This is the risk that in the event of a bank failure, the CityÓs deposits may not be returned. The Federal Depository Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) provide insurance for the CityÓs deposits up to $250,000 for the aggregate of all demand deposits and the aggregate of time deposit and savings accounts at each financial institution and credit union. Deposits in excess of FDIC and NCUA 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 pledge110% 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. At June 30, 2020, none of the Agency'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 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. 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. - 15 - 188 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 LONG-TERM DEBT Long-term debt transactions for the fiscal year ended June 30, 2020 were as follows: OutstandingMatured/Outstanding July 1, RedeemedJune 30,Due Within 2019IssuedDuring Year2020One Year Direct borrowing$ 2,900,000 $ - $ (260,000) $ 2,640,000 $ 262,000 2019 Urban Renewal Note Payable: In June 2019, the Agency entered into a note payable agreement in the amount of $2,900,000 at 2.77% interest, to fund urban renewal projects. Interest is payable semiannually, while principal is due annually through June 2029. The loan is secured by the tax increment revenues and amounts due are not subject to acceleration in the event of default. The balance at June 30, 2020 is $2,640,000. Future maturities of long-term debt are as follows: Fiscal Year EndingUrban Renewal Agency Note, Series 2019 June 30,PrincipalInterestTotal 2021 $ 262,000 $ 73,128 $ 335,128 2022 269,000 65,870 334,870 2023 277,000 58,420 335,420 2024 285,000 50,746 335,746 2025 293,000 42,852 335,852 2026-2029 1,254,000 88,002 1,342,002 $ 2,640,000 $ 379,018 $ 3,019,018 DEFICIT NET POSITION The Agency reported a deficit net position of $1,256,224 at June 30, 2020, due to the issuance of a note payable in the prior year. - 16 - 189 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) NOTES TO BASIC FINANCIAL STATEMENTS (Continued) YEAR ENDED JUNE 30, 2020 EXPENDITURES IN EXCESS OF APPROPRIATIONS Expenditures in excess of appropriations in the Urban Renewal Agency for the year ended June 30, 2020 occurred as follows: BudgetActual Variance Debt service$268,500$334,975$(66,475) 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. SUBSEQUENT EVENTS Management has evaluated subsequent events through November 25, 2020, the date on which the financial statements were available to be issued. As a result of the recent coronavirus pandemic (COVID-19), numerous sectors of the community are suffering damage, and long-term economic consequences remain unknown. - 17 - 190 REQUIRED SUPPLEMENTARY INFORMATION 191 WOODBURN URBAN RENEWAL AGENCY (A Component Unit of the City of Woodburn, Oregon) SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Î BUDGET AND ACTUAL - URBAN RENEWAL FUND YEAR ENDED JUNE 30, 2020 Budgeted Amounts OriginalFinalActualVariance REVENUES Taxes and assessments$785,800 $ 785,800$ 775,881$ (9,919) Intergovernmental 1,000,000 1,000,000 1,040,152 40,152 Miscellaneous 39,200 39,200 42,547 3,347 Total Revenues 1,825,000 1,825,000 1,858,580 33,580 EXPENDITURES Personnel services228,580228,580202,72425,856 Materials and services271,120271,120166,465104,655 Capital outlay3,713,5003,713,5002,359,8211,353,679 Debt service Principal150,000150,000260,000(110,000) Interest118,500118,50074,97543,525 Contingency200,010190,010- 190,010 Total Expenditures 4,681,710 4,671,710 3,063,985 1,607,725 REVENUES OVER (UNDER) EXPENDITURES (2,846,710)(2,856,710) (1,205,405) 1,641,305 OTHER FINANCING SOURCES (USES) Transfers Out(2,290) (12,290) (12,290) - NET CHANGE IN FUND BALANCE (2,859,000)(2,859,000) (1,217,695) 1,641,305 FUND BALANCE, Beginning ofyear 3,159,0003,159,0002,572,007(586,993) FUND BALANCE, End of year $300,000 $ 300,000$ $1,054,3121,354,312 - 18 - 192 COMPLIANCE SECTION 193 INDEPENDENT AUDITORÓS REPORT REQUIRED BY OREGON STATE REGULATIONS Board of Directors 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 Woodburn Urban Renewal Agency as of and for the year ended June 30, 2020, and have issued our report thereon dated November 25, 2020. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Woodburn Urban Renewal AgencyÓs 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, except a deficit net position and expenditures in excess of appropriations as disclosed in the notes to the financial statements. - 19 - 194 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 Woodburn Urban Renewal Agency 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: Katherine R. Wilson, A Shareholder November 25, 2020 - 20 - 195 COUNCIL MEETING MINUTES NOVEMBER 23, 2020 DATECOUNCILCHAMBERS,CITY HALL, CITY OF WOODBURN, COUNTY OF MARION, STATE OF OREGON, NOVEMBER 23, 2020 CONVENEDThe meeting convened at 7:00 p.m. with Mayor Swenson presiding. ROLL CALL Mayor Swenson Present Councilor CarneyPresent -via video conferencing Councilor Cornwell Present -via video conferencing Councilor SchaubPresent -via video conferencing Councilor MorrisPresent- via video conferencing Councilor EllsworthPresent -via video conferencing Councilor Cabrales Present -via video conferencing Staff Present(via video conferencing):City Administrator Derickson,City Attorney Shields, Assistant City Administrator Row, Economic Development Director Johnk, Police Chief Ferraris, Finance Director Turley,Deputy Police Chief Pilcher, Assistant City Attorney Granum, Human Resources Director Gregg, Parks and Recreation Manager Cuomo, City Recorder Pierson ANNOUNCEMENTS City Hall and the Library will be closed November 26 and 27 for the Thanksgiving Holiday. Transit Services will be closed on November 26 but will be open normal business hours on Friday, November 27. CONSENT AGENDA A. Woodburn City Council minutes of November 9, 2020, B.Purchase and Acceptance of a Statutory Warranty Deed for Right-of-Way Dedication at 1251 W. Hayes Street, Woodburn, OR 97071 (Tax Lot 051W07CC02200), C.IGA with the City of Silverton, D.Oregon Main Street Revitalization Grant Re-funding Letters. Carney/Cornwell… adopt the Consent Agenda. The motion passed unanimously. COUNCIL BILL NO. 3137 –AN ORDINANCE PROVIDING FOR THE MANAGEMENT OF UTILITY SERVICES WITHIN THE CITY AND ACCESS TO AND USE OF THE CITY'S RIGHTS-OF-WAY Mayor Swenson stated that since the vote on this item at the last meeting was not unanimous, a second reading is required. City Recorder Pierson provided a second reading of the bill by title only since there were no objections.Ken Lyons provided comments on behalf of AT & T in opposition of the proposed Utility Services Ordinance. Kim Allen provided comments on behalf of Verizon in opposition of the proposed Utility Services Ordinance. On roll call vote for final passage, the vote was 5 to 1 with Councilor Carneyvoting no. MayorSwenson declared Council Bill No. 3137 duly passed. COUNCIL BILL NO. 3138- A RESOLUTION SETTING THE RIGHT-OF-WAY UTILITY LICENSE AND USAGE FEE RATES WITHIN THE CITY OF WOODBURN Carney introduced Council Bill No. 3138. City 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 Swenson declared Council Bill No. 3138 duly passed. Page 1 - Council Meeting Minutes,November 23, 2020 196 COUNCIL MEETING MINUTES NOVEMBER 23, 2020 CALL-UP BRIEFING: PLANNING COMMISSION APPROVAL OF A DESIGN REVIEWAND EXCEPTION TO STREET RIGHT-OF-WAY AND IMPROVEMENT REQUIREMENTS (“STREET EXCEPTION”) APPLICATION PACKAGE FOR WOODBURN URGENT CARE AT 2902 TOM TENNANT DRIVE (DR 2020-06 & EXCP 2020-07) The Council declined to call this item up. CALL-UP BRIEFING: PLANNING COMMISSION APPROVAL OF CONDITIONAL USE, DESIGN REVIEW, PROPERTY LINE ADJUSTMENT (AS LOT CONSOLIDATION), STREET EXCEPTION, AND VARIANCE APPLICATIONS FOR TEMPLETON APARTMENTS ON FIVE LOTS AT 1430 E. CLEVELAND STREET (CU 2020-01, DR 2020-02, EXCP 2020-04, PLA 2020-02, & VAR 2020-02) Community Development Director Kerr provided a staff report. The Mayor stated that he had two people that wanted to provide comments on this item. City Attorney Shields stated that no testimony should be taken on this item tonight. The Council declined to call this item up. CITY ADMINISTRATOR’S REPORT The City Administrator reported the following: City is working on the new OSHA rules and safe work environments which has required morepeople to work from home and staggering going to City Hall.Mask is required in City Hall at all times unless you are in an office alone with the door closed. Love Santa is not collecting item for distribution there will only befood baskets. Theyhave signed up 450 families. The City is providing assistance to some of the local non-profits through the economic development programs. Love Inc. will be moving in to the Family Resource Center in December. MAYOR AND COUNCIL REPORTS Councilor Schaub wished everyone a happy Thanksgiving and added that the CERTprogram along with the Aware food bank have distributed 41 tons of food since April. Councilor Cabrales stated that PCUN is doing a stipend program for small Latinx businesses and wished everyone a happy Thanksgiving. Councilor Morris wished everyone a happy Thanksgiving. Councilor Ellsworth wished everyone a health Thanksgiving. Councilor Cornwell stated that she will be seeing limited family and they will be masking up. Councilor Carney stated enjoy Thursday. Mayor Swenson stated that the Governor invited City Councilors and Mayors to a preview of the COVID metrics and that adraft of the metrics being proposed was sent out. He alsostated that December 3 there will be roles and responsibility training for Councilors and Mayors provided by the League of Oregon Cities for those who are interested in attending. ADJOURNMENT Mayor Swenson adjourned the meeting at 8:07 p.m. Page 2 - Council Meeting Minutes,November 23, 2020 197 COUNCIL MEETING MINUTES NOVEMBER 23, 2020 APPROVED ERIC SWENSON, MAYOR ATTEST Heather Pierson,City Recorder City of Woodburn, Oregon Page 3 - Council Meeting Minutes,November 23, 2020 198 Agenda Item December 14, 2020 TO:Honorable Mayor and City Council through City Administrator FROM:Eric Liljequist, Public Works Projects & Engineering Director SUBJECT:Acceptance of a Public Utility Easement at 591Gatch Street, Woodburn, OR 97071(Tax Lot 051W18AA05700) RECOMMENDATION: Authorizethededication of a public utility easement granted by Mid-Valley Community Church, owners of the property located at 591 Gatch Street, Woodburn, OR 97071 (Tax Lot 051W18AA05700). : BACKGROUND The property owner is required to provide a 16-footpublic utility easementin order to satisfy the conditions of approval of Design Review (DR 2017-01). DISCUSSION: The16-foot wide public utility easement dedication is located within the existing propertyboundary andextends from the new development to Young Street.The 16-foot wide public utility easementprovides apermanent easement and right- of-wayto construct, reconstruct, and operatepublic waterlines. : FINANCIAL IMPACT There is no cost to the City for thePublic Easement. ATTACHMENTS ACopy of thePublic Easement document is included asExhibit “A” and Exhibit “B”. Agenda Item Review:City Administrator ___x___City Attorney __x____Finance _x____ 199 200 201 202 203 Agenda Item December 14, 2020 TO:Honorable Mayor and City Council through City Administrator THRU: James C. Ferraris, Chief of Police FROM:Andy Shadrin,Lieutenant SUBJECT:Liquor License Application RECOMMENDATION: Recommend that the OLCC does approve theLiquor License Application for Las Islas. : BACKGROUND Applicant: JuanGerardo Arciniega 1615 Mount Hood Avenue Woodburn, OR 97071 323-681-1888 Point of Contact:Juan Gerardo Arciniega 1615 Mount Hood Avenue Woodburn, OR 97071 323-681-1888 Business:Las Islas 1615 Mount Hood Avenue Woodburn, OR 97071 503-982-3134 Owner(s): Juan Arciniega Agenda Item Review:City Administrator __x____City Attorney __x____Finance ___x__ 204 Honorable Mayor and City Council December 14, 2020 Page 2 License Type(s): Full On-Premises, Commercial - May selland serve distilled spirits, beer, wine and cider for consumption on the licensed premises. May sell beer, wine, and cider in a secure container, “growler”, for consumption off licensed premises On November 5, 2020,the Woodburn Police Department received an application forFull On-Premises, Commercial salesliquor license for Las Islas. The business will operate as a restaurant. The business will be located at 1615 Mount Hood Avenue, in Woodburn, Oregon 97071. The hours of operation are from 10 AM to 10PM on Sundaythrough Saturday. The establishment will haveno music or other forms of entertainment. The business will have seating for up to 80 persons. The business will have no outside seating. The Woodburn Police Department has not received any communication from the public or surrounding businesses in support of or against the proposed change. : DISCUSSION The Police Department has completed a background investigationon the subject listed on the OLCC application,Juan Gerardo Arciniega.Juan Gerardo Arciniega has a valid California driver’s license and no criminalhistory. Juan Gerardo Arciniega was clear in all other police database checks. : FINANCIAL IMPACT None 205 Agenda Item December 14, 2020 TO:Honorable Mayor and City Council through City Administrator FROM:Heather Pierson, City Recorder SUBJECT:CERTIFIED ELECTION RESULTS – November 3, 2020 General Election RECOMMENDATION: Accept thecertified results from Marion County Elections. DISCUSSION: Marion County Elections has provided the City with the certified results of ballots cast within the City on the following Mayor and Council positions: MayorCouncilor–WardI Eric A. Morris2,494Debbie D. Cabrales1,056 Eric Swenson 5,558Write-In 29 OverVotes Write-In 59 0 Over Votes3 Under Votes 597 Under Votes1,162 Councilor – Ward II Councilor – Ward VI Lisa Ellsworth326Benito PuenteJr.823 Ali Swanson632 Write-In 31 Write-In15Over Votes0 Over Votes 0Under Votes 235 Under Votes 147 Agenda Item Review:City Administrator __x____City Attorney __x___Finance __x___ 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 Agenda Item December14, 2020 TO:Honorable Mayor and City Council (acting in its capacity as the Local Contract Review Board) through City Administrator FROM:Eric Liljequist, Public Works Projects & Engineering Director SUBJECT:Award of Construction Contract for the Parr Road Municipal Water Supply Well Project RECOMMENDATION: Awardthe construction contract for theParr Road Municipal Water Supply Well Project to the lowest responsible and responsive bidder,Holt Services, Inc., in the amount of $434,683.00. BACKGROUND: This project is included in the approvedFY 20/21budgetand includes the drilling of a new well that will supply the Parr Road Treatment Plant. Bids were publicly opened November 19, 2020. Two (2)responsible and responsive bids were received as follows: Holt Services, Inc. $434,683.00 Schneider Water Services $466,740.00 The Engineer's Estimatefor the project is: $469,255.00 The recommended award is approximately 7%lowerthan the Engineer’s Estimate DISCUSSION: The new well to be drilled under this initial construction contract is the first of two construction phases of the overall approved capital improvement project, and includes welldrilling activities and well casing installation. The second project phase is currently in the design process and includes the well housing, raw Agenda Item Review:City Administrator ___x___City Attorney _x_____Finance _x____ 225 Honorable Mayor and City Council December 14, 2020 Page 2 waterline piping,pump, lighting, site security, standby power, andother required features that will complete the project as a whole and allow for the new water source to come online for full utilization at the Parr Road Water Treatment Plant. This second construction contract will be brought to City Council for award sometime next year. The newwater supply well will be an additional water source for the Parr Road Water Treatment Plant and will provide much needed future water capacity to the Citizens of Woodburn as development expands throughout the City.The contract award is in conformance with public contracting laws of the State of Oregon as outlined in ORS Chapter 279C and the laws, regulations of the City of Woodburn, therefore, staff is recommending the contract be awarded. FINANCIAL IMPACT: The subject project is identified in the adoptedfiscal year 2020/21Budget and funded by the Water Fund. 226 Agenda Item December14, 2020 TO:Honorable Mayor and City Council (acting in its capacity as the Local Contract Review Board) through City Administrator FROM:Eric Liljequist, Public Works Projects & Engineering Director SUBJECT:Award of Construction Contract for the Santiam Lift Station Removal Project RECOMMENDATION: Awardthe construction contract for theSantiam Lift Station RemovalProject to the lowest responsible and responsive bidder,Canby Excavating, Inc., in the amount of $60,950.00. BACKGROUND: This project is included in the approvedFY 20/21budgetand includes the removal of the existing lift station on Santiam Drive. Bids were publicly opened December 3, 2020. Fifteen (15) responsible and responsive bids were received as follows: Canby Excavating, Inc. $60,950.00 Pacific Underground Co. $69,690.00 The Saunders Co., Inc. $69.805.00 Landis & Landis Const.$69,999.00 Black Rock Underground, LLC$70,475.00 Richie Wrecking $78,800.00 Wildish Paving Co.$84,362.00 R.L. ReimerCo. $88,775.00 D&I Excavating, Inc. $89,130.00 Pleasant Hill Development Co. $102,112.12 Trench Line Construction, Inc.$108,400.00 Jesse Rodriguez Construction, LLC $109,049.00 Clackamas Construction, Inc. $115,875.00 Elk Mountain Construction, Inc.$128,200.00 Emery & Sons Construction Group, LLC$145,899.00 The Engineer's Estimatefor the project is: $111,125.00 Agenda Item Review:City Administrator __x____City Attorney __x____Finance _x____ 227 Honorable Mayor and City Council December 14, 2020 Page 2 The recommended award is approximately 45% lowerthan the Engineer’s Estimate DISCUSSION: The existing lift station located on Santiam Drive was initially installed as a temporary means of providing sanitary sewer service to the adjacent subdivision until an easement could be obtained through the Smith property that would allow gravity sewer flow to Harvard Drive. Due to the recent Smith Creek development, the City was able to negotiate the necessary easement required to allow this transition to occur. The removal of the lift station will lessen overall sewer maintenance costs for the City. The contract award is in conformance with public contracting laws of the State of Oregon as outlined in ORS Chapter 279C and the laws, regulations of the City of Woodburn, therefore, staff is recommending the contract be awarded. FINANCIAL IMPACT: The subject project is identified in the adoptedfiscal year 2020/21Budget and funded by the Sewer Fund. 228