Comprehensive Annual Financial Report for the Fiscal Year Ended
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City of Hillsboro, Oregon Comprehensive Annual Financial Report GROWING GREAT THINGS For the Year Ended June 30, 2019 CITY OF HILLSBORO, OREGON Comprehensive Annual Financial Report Year Ended June 30, 2019 Prepared by: City Finance Department Printed on recycled paper. This page is intentionally left blank. CITY OF HILLSBORO, OREGON TABLE OF CONTENTS Page INTRODUCTORY SECTION: Letter of Transmittal i Officials of the City xi Organization Chart xii Certificate of Achievement for Excellence in Financial Reporting xiii FINANCIAL SECTION: INDEPENDENT AUDITOR'S REPORT 1 MANAGEMENT’S DISCUSSION AND ANALYSIS 4 BASIC FINANCIAL STATEMENTS: Statement of Net Position 15 Statement of Activities 17 Balance Sheet – Governmental Funds 18 Reconciliation of Governmental Funds Balance Sheet to Statement of Net Position 19 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 20 Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds to Statement of Activities 21 Statement of Net Position – Proprietary Funds 23 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds 25 Statement of Cash Flows ‐ Proprietary Funds 26 Statement of Net Position ‐ Fiduciary Funds 28 Statement of Changes in Fiduciary Net Position – Private Purpose Trust Fund 29 Notes to Basic Financial Statements 30 REQUIRED SUPPLEMENTARY INFORMATION: Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual: General Fund 71 Transportation Fund 74 Parks System Development Charges 75 Building Fund 76 Schedule of Proportionate Share of the Net Other Postemployment Benefit (OPEB) Liability (Asset) – OPERS Retirement Health Insurance Account (RHIA) 77 Schedule of the City’s Contributions – OPERS RHIA 77 Schedule of Total OPEB Liability – Implicit rate subsidy plan – single‐employer plan 78 Schedule of the City’s Proportionate Share of the Net Pension Liability (Asset) – Oregon Public Employees Retirement System 79 Schedule of the City’s Contributions – Oregon Public Employees Retirement System 80 Notes to Required Supplementary Information 81 CITY OF HILLSBORO, OREGON TABLE OF CONTENTS (Continued) Page FINANCIAL SECTION (Continued): OTHER SUPPLEMENTARY INFORMATION: Non‐Major Governmental Funds: Combining Balance Sheet 82 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 83 Non‐Major Special Revenue Funds: Combining Balance Sheet 84 Combining Statement of Revenue, Expenditures, and Changes in Fund Balances 85 Schedule of Revenue, Expenditures, and Changes in Fund Balance – Budget and Actual: Police Forfeiture Fund 86 Cadet Fund 87 Parks Mitigation Fund 88 Parks Supplemental SDC Fund 89 Community Development Block Grant Fund 90 Non‐Major Debt Service Fund: Combining Balance Sheet 91 Combining Statement of Revenue, Expenditures, and Changes In Fund Balances 92 Schedule of Revenue, Expenditures, and Changes in Fund Balance – Budget and Actual: Hillsboro Economic Development Council Downtown Hillsboro Tax Increment Fund 93 Hillsboro Economic Development Council North Hillsboro Industrial Tax Increment Fund 94 South Hillsboro Local Improvement District Fund 95 Non‐Major Capital Projects Funds: Combining Balance Sheet 96 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 97 Schedules of Revenues, Expenditures and Changes in Fund Balance ‐ Budget and Actual: Hillsboro Economic Development Council Downtown Hillsboro Fund 98 Hillsboro Economic Development Council North Hillsboro Industrial Fund 99 Parks Capital Fund 100 South Hillsboro Community Service Fee Capital Fund 101 Gain Share Capital Fund 102 CITY OF HILLSBORO, OREGON TABLE OF CONTENTS (Continued) Page FINANCIAL SECTION (Continued): OTHER SUPPLEMENTARY INFORMATION (Continued): Enterprise Funds: Schedules of Revenues, Expenditures and Changes in Fund Balance ‐ Budget and Actual – Budgetary Basis: Utilities Commission Fund 103 Sewer Fund 105 Surface Water Management Fund 107 Non‐Major Proprietary Funds: Combining Statement of Net Position 109 Combining Statement of Revenues, Expenses, and Changes in Net Position 110 Combining Statement of Cash Flows 111 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Budgetary Basis: Property Management Fund 113 Intermodal Transit Facility 114 Broadband Fund 115 Internal Service Funds: Combining Statement of Net Position 116 Combining Statement of Revenues, Expenses and Changes in Net Position 118 Combining Statement of Cash Flows 119 Combining Schedule of Reconciliation of Revenues, Expenditures and Changes in Fund Balance to Changes in Net Position 121 Schedules of Revenues, Expenditures and Changes in Fund Balance ‐ Budget and Actual – Budgetary Basis: Fleet Management Fund 122 Copier Program Fund 123 Risk Management Fund 124 Loss Reserve Fund 125 Support Services Fund 126 Sustainability Revolving Fund 128 Facilities Management Fund Combining Balance Sheet 129 Facilities Management Fund Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 130 Schedules of Revenues, Expenditures and Changes in Fund Balance ‐ Budget and Actual – Budgetary Basis: Facilities Management Operating Fund 131 Facilities Management Strategic Investment Program Fund 132 CITY OF HILLSBORO, OREGON TABLE OF CONTENTS (Continued) Page FINANCIAL SECTION (Continued): OTHER SUPPLEMENTARY INFORMATION (Continued): Trust and Agency Funds: Combining Balance Sheet – Trust and Agency Funds 133 Statement of Changes in Assets and Liabilities – Agency Funds 134 Schedules of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Budgetary Basis: Cemetery Endowment Trust – Private Purpose Trust Fund 135 Library Reserve Fund 136 Broadband Users Group Fund 137 Portland Users Group Fund 138 Other Schedules: Schedule of Property Tax Transactions 139 Combining Balance Sheet – General Fund 140 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances – General Fund 141 STATISTICAL SECTION: Net Position by Component ‐ Last Ten Fiscal Years 142 Changes in Net Position ‐ Governmental Activities ‐ Last Ten Fiscal Years 143 Changes in Net Position ‐ Business‐Type Activities ‐ Last Ten Fiscal Years 144 Fund Balances, Governmental Funds ‐ Last Ten Fiscal Years 145 Changes in Fund Balances, Governmental Funds ‐ Last Ten Fiscal Years 146 Government‐wide Expenses by Function ‐ Last Ten Fiscal Years 147 Government‐wide Revenue by Program – Last Ten Fiscal Years 148 General Government Expenditures by Function ‐ Last Ten Fiscal Years 149 General Government Revenues by Source – Last Ten Fiscal Years 149 Assessed Value and Actual Value of Taxable Property ‐ Last Ten Fiscal Years 150 Property Tax Rates ‐ Direct and Overlapping Governments – Last Ten Fiscal Years 151 Consolidated Tax Rates – Last Ten Fiscal Years 152 Principal Taxpayers ‐ Current and Nine Years Ago 153 Property Tax Levies and Collections ‐ Last Ten Fiscal Years 154 Consolidated Tax Levies ‐ Last Ten Fiscal Years 155 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years 156 Computation of Direct and Overlapping Debt ‐ June 30, 2019 157 Legal Debt Margin Information and Computation ‐ Last Ten Fiscal Years 158 Pledged Revenue Coverage ‐ Last Ten Fiscal Years 159 Demographic and Economic Statistics ‐ Last Ten Fiscal Years 160 Property Value and New Construction ‐ Last Ten Fiscal Years 161 Ten Largest Employers – Current and Nine Years Ago 162 CITY OF HILLSBORO, OREGON TABLE OF CONTENTS (Continued) Page STATISTICAL SECTION (Continued): Full Time Equivalent Government Budgeted Employees by Function/Program ‐ Last Ten Fiscal Years 163 Operating Indicators by Function/Program – Last Nine Fiscal Years 164 Capital Asset Statistics by Function/Program – Last Nine Fiscal Years 165 COMPLIANCE SECTION Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 166 INDEPENDENT AUDITOR’S REPORT REQUIRED BY OREGON STATE REGULATIONS 168 This page is intentionally left blank. INTRODUCTORY SECTION This page is intentionally left blank. November 27, 2019 Honorable Mayor Steve Callaway, Members of the City Council, and Citizens of the City of Hillsboro, Oregon The Comprehensive Annual Financial Report of the City of Hillsboro, Oregon, (the City) for the fiscal year ended June 30, 2019, is hereby submitted. The report presents the financial position of the City as of, and for the year ended June 30, 2019. Responsibility for the accuracy of the data and the completeness and fairness of the presentation, including all disclosures rests with management. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner that presents fairly the financial position, results of operations and cash flows of the various funds and component unit of the City. All disclosures necessary to enable the reader to gain an understanding of the City’s activities have been included. For financial reporting purposes the City is the primary government. Its governing Council is elected by the citizens in a general election. The City operates under the council‐manager form of government. Policy making and legislative authority are vested in the governing Council, which consists of a mayor and six‐member Council. This report includes all organizations and activities for which the elected officials exercise financial control. The financial statements of the City’s one component unit, the Hillsboro