Comprehensive Annual Financial Report for the Year Ended June 30, 2016
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Tualatin Valley Fire and Rescue A Rural Fi re Protection District, Tigard, Oregon Comprehensive Annual Financial Report For the Year Ended June 30, 2016 Tualatin Valley Fire and Rescue 11945 S.W. 70th Avenue Tigard, Oregon 97223 Phone: (503) 649-8577 www.tvfr.com Cover photo courtesy of Claire Cooper Prepared by the Finance Department Table of Contents INTRODUCTORY SECTION Letter of Transmittal 3 Certificate of Achievement for Excellence in Financial Reporting 10 Organization Chart 11 Elected and Appointed Officials 12 FINANCIAL SECTION Independent Auditor’s Report 15 Management’s Discussion and Analysis 21 Basic Financial Statements: 35 Government-wide Financial Statements: Balance Sheet – Governmental Funds/Statement of Net Position 37 Statement of Governmental Fund Revenues, Expenditures, Other Financing Sources (Uses), and Changes in Fund Balances/Statement of Activities 39 Fund Financial Statements: Statement of Revenues, Expenditures, Other Financing Sources (Uses), and Changes in Fund Balances – Budget and Actual – General Fund 40 Statement of Net Position – Proprietary Fund 42 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Fund 43 Statement of Cash Flows – Proprietary Fund 44 Notes to the Basic Financial Statements 45 Required Supplementary Information: 81 Schedule of Funding Progress – Health Benefit Retiree Program 83 Schedule of the District’s Proportionate Share of the Net Pension (Asset)/Liability 84 Schedule of the District’s Pension Plan Contributions 85 Schedules of Single-Employer Defined Benefit Pension Plan 86 Schedules of LOSAP Plan 87 Notes to the Required Supplementary Information 88 Other Supplementary Information: 91 Schedule of Revenues, Expenditures, Other Financing Sources, and Changes in Fund Balance – Budget and Actual – Property and Building Fund 93 Combining Balance Sheet – Nonmajor Governmental Funds 95 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds 96 Schedules of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: Grants Fund 97 Debt Service Fund 98 Capital Projects Fund 99 Insurance Fund 100 Combining Balance Sheet – General Fund 102 Combining Schedule of Revenues, Expenditures, Other Financing Sources (Uses) and Changes in Fund Balances – General Fund 103 Schedules of Revenues, Expenditures, Other Financing Sources, and Changes in Fund Balance – Budget and Actual: Apparatus Fund 104 Capital Improvements Fund 105 i Table of Contents Financial Section, continued Other Supplementary Information, continued: Emergency Management Fund 106 Pension Fund 107 Volunteer LOSAP Fund 108 Schedule of Property Tax Transactions and Outstanding Balances 109 STATISTICAL SECTION Financial Trends: Net Position by Component 112 Changes in Net Position 113 Fund Balances, Governmental Funds 114 Changes in Fund Balances, Governmental Funds 115 Revenue Capacity: Assessed and Market Value of Taxable Property 116 Property Tax Rates – Direct and Overlapping Governments 117 Principal Taxpayers – All Washington County Property 118 Property Tax Levies and Collections 119 Debt Capacity: Ratio of Net General Bonded Debt to Assessed Value and General Bonded Debt per Capita 120 Computation of Overlapping Net Direct Debt 121 Legal Debt Margin Information 122 Demographic and Economic Information: Demographic and Economic Statistics 123 Major Employment Industries 124 Operating Information: Full-Time Equivalent Employees by Function 125 Operating Indicators by Function 126 Capital Assets Statistics by Function 127 INDEPENDENT AUDITOR’S REPORT REQUIRED BY OREGON STATE REGULATIONS Independent Auditor's Report Required By Oregon State Regulations 131 ii Introductory Section www.tvfr.com October 25, 2016 To Board President Hovies and Members of the Board of Directors of Tualatin Valley Fire and Rescue We are pleased to submit the Comprehensive Annual Financial Report of Tualatin Valley Fire and Rescue (District) for the fiscal year ended June 30, 2016. The responsibility for the completeness, fairness, and accuracy of the data presented and all accompanying disclosures rests with the District. To provide a reasonable basis for making these representations, the District’s management has established a comprehensive internal control framework that is designed both to protect the District’s assets from loss, theft, or misuse; and to compile sufficient reliable information for the preparation of the District’s financial statements in conformity with accounting principles generally accepted in the United States of America. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. Tualatin Valley Fire and Rescue is a special district established to provide a full range of fire protection and emergency response services to its citizens. This report has been prepared in accordance with accounting principles generally accepted in the United States of America and follows guidelines recommended by the Government Finance Officers Association of the United States and Canada. State of Oregon Revised Statutes, ORS 297.405 to 297.555, require an annual audit of the fiscal affairs of the District by independent public accountants selected by the Board of Directors. This requirement has been complied with and the Independent Auditor’s Report has been included at the front of the financial section of this report. Management’s discussion and analysis (MD&A) immediately follows the Independent Auditor’s Report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. North Operating Center Command & Business Operations Center South Operating Center Training Center 20665 SW Blanton Street and Central Operating Center 8445 SW Elligsen Road 12400 SW Tonquin Road th Aloha, Oregon 11945 SW 70 Avenue Wilsonville, Oregon Sherwood, Oregon 97078-1042 Tigard, Oregon 97223-8566 97070-9641 97140-9734 503-649-8577 503-649-8577 503-649-8577 503-259-1600 June 30, 2016 The Reporting Entity and Its Services The District operates under Oregon Revised Statutes Chapter 478 as a separate municipal corporation and is managed by a Board of Directors comprised of a President and four Directors including a Vice-President and a Secretary-Treasurer. The Board hires a Fire Chief to manage the day-to-day operations of the District. The governing Board appoints members of the community to serve on boards and commissions, which include the Budget Committee and the Civil Service Commission. Tualatin Valley Fire and Rescue, a Rural Fire Protection District, was formed in 1989, through the legal merger of Washington County Fire Protection District No. 1 and Tualatin Rural Fire Protection District. Since that time, the District has expanded through the mergers of two additional fire districts, Multnomah County Rural Fire Protection District Nos. 4 and 20, and the annexation of the Valley View Water District on July 1, 1995. The District continued to grow by the annexation of the City of Beaverton to the District’s service territory effective July 1, 1996 and the City of West Linn, which was legally annexed on July 1, 2004. Effective July 1, 2016, the District will begin serving two new service areas through fire protection contracts intended to lead to annexation of Washington County Fire District No. 2 to the west, and the combined City of Newberg and Newberg Rural Fire Protection District to the southwest at the end of the respective contract periods. The District’s total service area encompasses approximately 210 square miles but with the two new service contract areas, will expand to approximately 390 miles with the addition of District 2 (118 square miles) and the combined City of Newberg and Newberg Rural Fire Protection District (61 square miles). The District currently operates 22 career and volunteer fire stations with a complement of fire engines, ladder trucks, aerial pumpers, hazardous materials response units, technical rescue units, one heavy CBRNE unit (chemical, biological, radiological, nuclear, and explosives), water tenders, brush rigs, and several other pieces of equipment, including medics, response cars, water rescue units, a mobile command unit, and an additional fleet utilized to supplement response needs. District employees - 490 in 2016 - were supplemented by approximately 50 volunteer firefighters. The two new service areas will add two fire stations each. The District has been and continues to be focused on providing the taxpayers the highest level of service in an efficient and effective operation. The District continues to implement operational improvements in order to accomplish its strategic goals. 4 June 30, 2016 The District’s legal boundaries cover northeast Washington County, northwest Clackamas County, and the western edge of Multnomah County. The District is a special service district supported by the property owners within its boundaries. The District serves a population of an estimated 459,200 people. Assessed valuation continues to grow and to provide additional tax revenue. The District’s funding